It is also important for healthcare organizations to understand the impact of climate on their operations—what the risks are that are most material to the organization and where they are—and to identify opportunities for energy efficiencies and green capital. The framework for climate reporting to disclose climate-related risks and opportunities developed by the Task Force on Climate-related Financial Disclosures (TCFD) is quickly becoming the standardized format for climate reporting.
“Hospitals and health systems will need to conduct a climate risk assessment and consider disclosing it in line with TCFD as investors and regulators continue to demand more insights into how climate risks will impact their business, the financial implications of those climate change risks, and how they are being managed,” Friedman said. “TCFD has basically four dimensions, but they really want to know two things: What are your climate-related impacts and how are you assessing and managing those risks? There are no targets and no reductions required. It’s simply a snapshot.”
Healthcare organizations that are more advanced in their GHG and ESG reporting will be focused on reporting, compliance, and assurance. “They will need to make sure that they are in a good place for the reporting that will be required by emerging regulations in both the U.S. and internationally,” Friedman said.
CSRD adopted rules and the proposed SEC climate disclosure rule were designed to ensure that reporting organizations provide consistent, comparable, and reliable information about climate risks. They include complex requirements for assurance of the disclosure of GHG emissions data. As a result, healthcare organizations are increasingly choosing to have their ESG disclosures undergo an assurance readiness engagement to identify gaps and develop prioritized recommendations they can address before pursuing assurance. “It will be important for them to focus on their GHG emissions data, collection, and disclosure and ensure they are using valid data and have necessary and appropriate controls in place,” Freidman added.
“A lot of healthcare organizations are realizing that they need to refine their processes to have more quality checks and controls in place to ensure the information they’re disclosing is accurate and reliable,” said Knudson. “They will need to make sure that the ESG data being publicly shared, is complete and transparent. At Grant Thornton, we are helping clients assess their existing processes with our assurance and reporting readiness solutions. This provides them with a focused list of priorities for preparing for future reporting and assurance requirements.”