WHEREAS: The Intergovernmental Panel on Climate Change has advised that greenhouse gas (GHG) emissions must be halved by 2030 and reach net zero by 2050 in order to limit global warming to 1.5 °C. Every incremental increase in temperature above 1.5 °C will entail increasingly severe physical, transition, and systemic risks for companies and investors alike.
The health sector accounts for an estimated 8.5% of U.S. carbon emissions.1 Climate change is expected to increase the cost of healthcare services, making it more expensive for healthcare organizations to operate due to damage to infrastructure, supply chain disruptions, and increased complexity of care. Climate-related health conditions are also expected to increase and drive up the total cost of care, affecting profits for both healthcare systems and plans.2 In its 10-K, Centene acknowledges that the "the effects of climate change ... could reduce our ability to accurately predict and effectively control the costs of providing health benefits."
Despite acknowledging this risk, the Company has not published GHG or other relevant targets aimed at reducing its emissions. By contrast, peers Cigna, CVS Health, Humana, and UnitedHealth Group have set or committed to set science-based targets with the Science Based Targets initiative. HCA Healthcare aims to reduce its scope 1 and 2 emissions by 2030 in line with 1.5 °C, Elevance Health plans to decrease direct operational emissions by 50% by 2030 and reach net zero by 2050, as well as have 75% of indirect spend suppliers set science-based targets by 2028.
Centene must take additional action to catch up with peers, comprehensively address its climate impact, and mitigate both the physical risks to its operations and the transition risks associated with the global shift to a clean energy economy.