Rob Roy (photograph by Anthony Collins)
AdventHealth, based in Altamonte Springs, Florida, operates more than 52 hospitals across nine states, along with more than 1,200 care sites that include urgent care centers, home health and hospice agencies, physician practices and skilled nursing facilities. It identifies itself as the largest not-for-profit Protestant health care provider in the U.S. The size and scope of AdventHealth also make it a resource-intensive entity. The system maintains its own fleet of vehicles, as well as an extensive global supply chain sourcing treatments, medical devices and medical supplies.
One of the sustainability solutions AdventHealth adopted came about due in part to its investment portfolio management.
In an era of extreme climate events, of pressure on the global supply chain and of pricing volatility for everything from electrical power to medical supplies, a system this large is also uniquely vulnerable to external events. For these reasons, an internal team led by CIO Rob Roy and Chief Supply Chain Officer Marisa Farabaugh are working to transform the system and make it more resilient and adaptable in the face of change.
In February, AdventHealth announced its first virtual power purchase agreement (VPPA), in partnership with Colorado-based renewable energy developer Scout Clean Energy LLC, a portfolio company managed by Brookfield Asset Management. The deal will support the health system by matching electricity usage from a portion of Scout’s 14,000-acre, 180-megawatt Heart of Texas Wind Farm, located in north-central Texas.
Identifying the Problem
Roy tells CIO that the deal came as part of a broader internal transformation effort the health system is undertaking to become more sustainable.
“We started to realize that there was a lot of opportunity for us to think about the ways that we were doing our work and how to be a bigger part of the solution,” Roy explains. “A little more than two years ago, our board updated our enterprise risk management framework, which are the top 10 risks that the company faces. In that edit, they put on the list that we needed a comprehensive framework for environmental sustainability.”
Roy and Farabaugh were tapped to lead development of that framework as well as its attendant projects. The team started by gathering data to understand what the full emissions footprint of the health system looked like.
“We went through a process of understanding the different kinds of emissions that the hospital system has and how we measure those,” Roy says. “We did a full scope 1, 2, and 3 carbon accounting. Scope 1 is all of the things within your control—backup power generators, the fleet. Scope 2 is purchased electricity. In scope 2, you’re assuming the emissions that were created when you purchase electricity. Scope 3 is everything out of your direct control upstream and downstream that you are exposed to—things like the supply chain or the investment portfolio. Changing these items requires influence.”
The data gathering took almost a year. The health system purchases electricity from approximately 30 different utilities. The results of the carbon accounting showed that the hospital was responsible for approximately 3 million metric tonnes of emissions across scopes 1,2, and 3—essentially 6 billion pounds of toxins. When AdventHealth’s team looked at the results, it saw that it needed to start finding ways to make the health system less resource-intensive and more sustainable, Roy says.
New Approach, New Partners
The team started by going to market in search of a renewable energy deal that would allow the health system to reduce emissions from its purchased electricity. The resulting deal with Scout means AdventHealth will now be able to get 40% of its purchased electricity from renewable resources. The deal came about in part due to how the health system manages its investment portfolio, Roy says.
“The investment portfolio exists to support the operating business—–it doesn’t live on an island,” Roy says. “We’ve always constructed the portfolio in a way that prized partnerships, which means we have few investment managers—around a dozen in total. We manage about half the portfolio internally and we allocate the other half to external managers. We spend time engaging with them on how they are trying to transform their portfolio companies and how that aligns with our goals.”
Roy says the health system is currently working on a partnership that will allow it to get the remainder of its purchased electricity from a solar energy provider. The project will provide 600 gigawatt hours of clean power to AdventHealth by the end of 2025. There are other plans in the works, including making the health system’s fleet of vehicles more energy efficient and looking for even more creative solutions.
“Close to 4% of our total emissions come from anesthetic gasses,” Roy says. “One of the most common gasses is called desflurane, and it’s 2,500 times worse for the atmosphere than carbon dioxide. But you can change the way that you utilize the various gasses and get massive reductions. We’re working with our physicians this year to find ways to make improvements and limit our environmental impact.”
Spreading the Word
The early results have created positive momentum internally for the health system to continue making changes. Roy says buy-in from AdventHealth’s board and CEO, Terry Shaw, has freed his team up to continue to pursue transformative projects and to refine processes and procedures.
“It’s really difficult the first time around, because the level of data that’s required is pretty intense,” Roy says. “If you’ve never done it before, you don’t necessarily know where the data is, right? And it might not be in a single system. For each point of data, you might have to collect data from different systems from different regions. We have 93,000 employees; you don’t necessarily know exactly the right person to call at each hospital to get the amount of data that you need. The good news is: After you’ve done it once, you know where to go to get the data a second time. … You’ve also identified ways that you can collect and manage your data better in ongoing years. The process starts to get smoother.”
Roy and the team are also building on their partnerships and sharing lessons learned with peers. AdventHealth has started working with Watershed, a carbon accounting platform, to track data. The health system is a signatory of the U.S. Health and Human Services Health Sector Climate Pledge and is committed to reducing scope 1 and 2 greenhouse gas emissions—those from on-site operations and purchased electricity—by 50 percent by 2030. With the Scout deal and forthcoming solar partnership, the health system is on track to be at 100 percent renewable energy by 2026.
“We realized more recently that the bigger impact to the planet—which is why we’re doing all of this —that impact was going to come from the ripples of our actions, not just the actions themselves,” Roy says. “So we know that we have to talk about what we are doing—not to bring glory to AdventHealth for itself—but to influence other people who are on the same journey.”
Tags: AdventHealth, Emissions, Marisa Farabaugh, Rob Roy, Scope three emissions, Sustainability