Green initiatives in hospitals in Ontario : is there a business case

Ueckermann, Julius (2011-12)

Thesis (MBA)--Stellenbosch University, 2011.


This study was conducted to investigate on what basis hospitals in Ontario could justify the capital and resource requirements needed to implement green initiatives. The study used two theoretical references as the basis for the literature review as well as for the interpretation of the results. The one reference used was a report released by the World Health Organization (WHO) and Health Care Without Harm (HCWH) in 2009, that addressed the responsibility of hospitals towards reducing greenhouse gas emissions. The second reference looked at a theoretical model that discussed four potential competitive environmental strategies that businesses can use to differentiate themselves based on green initiatives. The literature review more specifically discussed the seven opportunities that were identified by the WHO and HCWH that hospitals can use to reduce their carbon footprint. These were: (1) energy efficiency; (2) built environment; (3) alternative energy; (4) transportation; (5) waste; (6) water; and (7) food. Each opportunity was discussed in detail and was evaluated in both a competitive and non-competitive environment. In addition, each opportunity was evaluated in light of its ability to be used in one of the competitive environmental sustainability strategies. In order to assess what the regulatory pressures are on Ontario hospitals, the Canadian Environmental Protection Act was evaluated. No major environmental legislative pressures on hospitals could be identified. Another important part of the literature review was the evaluation of the funding model for Ontario hospitals. It was seen, that hospitals in Ontario received around 85 percent of their funding from the Ontario government and that hospitals and the ministry are both under financial pressure. This is an important indicator that funding to hospitals is very restricted. The research data for this study was obtained through a survey that was conducted among hospital representatives who have already implemented some form of green initiatives. The results from 33 questionnaires indicated that hospitals primarily implemented green initiatives to obtain cost savings. In this regard, an eco-efficiency strategy would be a logical competitive strategy for Ontario hospitals to follow. This is a clear indication that green initiatives are seen more as a cost reduction tool than a direct attempt to reduce greenhouse gas emissions. Projects that are quick to implement, require low capital and have a quick payback, are favoured. The areas on which hospitals have focused, were energy efficiency, waste management and water savings. In general, it seems that most green initiative projects were still in an immature stage. Further results also showed that hospitals had no opportunity to increase revenue by making use of the benefits of green initiative projects. The research concluded that the only basis on which Ontario hospitals could justify the capital and resource required to implement green initiatives, were on a cost savings basis. This report concludes with a discussion on the use of certain competitive strategies in a non-competitive environment before recommendations are made on how to improve the current situation. The study concludes with shortcomings of this study and recommendations on further research to be done.

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