ENVIRONMENTAL
SUSTAINABILITY

ENVIRONMENTAL
SUSTAINABILITY

We recognize the importance of environmental stewardship and we demonstrate our commitment to sustainability through initiatives at our corporate operations, development projects and to the extent possible our triple-net or absolute-net lease properties.

Therefore, our environmental sustainability initiatives focus on environmental improvements to our corporate operations, environmental risk management in our development projects, and dialoging with our tenants to deliver environmental improvements across our hospital portfolio. We recognize that our operations generate waste and use energy which results in greenhouse gas emissions, and that these actions have an impact on the environment which we strive to reduce.

CORPORATE OPERATIONS

Our commitment to environmental protection and sustainability is confirmed in our company-wide environmental policy. Additionally, the following highlights reflect several environmental sustainability features at our corporate headquarters:

Energy Star Rated

122,533 kWH
reduction in energy use

Increased Recycling Rates

corporate headquarters building in 2017 and 2018

through energy efficient lighting and other energy saving initiatives

through introducing recycling program across a number of waste streams

Energy Star Rated

corporate headquarters building in 2017 and 2018

122,533 kWH
reduction in energy use

through energy efficient lighting and other energy saving initiatives

Increased Recycling Rates

through introducing recycling program across a number of waste streams

This year, we have established a formal Environmental, Social and Governance (“ESG”) committee with responsibility for driving further environmental performance improvements across all aspects of our business. To ensure that we hold management accountable when it comes to fulfilling our sustainability commitments, we have incorporated an ESG performance measure into our executive compensation program.

TENANT RELATIONSHIPS

Key to our ability to deliver sector-leading growth are the deep, strategic relationships we establish with our tenants. Materially all of our leases are triple-net or absolute-net leases, which means our tenants have ultimate responsibility for deciding when and how to implement environmentally sustainable practices at the hospitals they operate. Our strong relationships, and the work we do to support them and to promote the environmental awareness of our tenants, have led to notable environmental improvements in operations across our portfolio.

We actively engage with our largest tenants regarding the environmental sustainability of their properties and operations. Initiatives include a dedicated sustainability section in our regular tenant questionnaires, specifically designed to encourage ongoing environmental performance improvement, and ongoing engagement meetings, during which sustainability initiatives are routinely discussed.

We undertake due diligence on all new and existing tenants, and evaluate environmental risks associated with all real estate investment transactions. In the event that our due diligence uncovers environmental contamination, we work with our tenants to mitigate any issues through:

  • Prior owner or tenant remediation commitments in accordance with regulatory requirements;
  • Property submission into a voluntary compliance or clean-up program;
  • The use of environmental or other insurance policies as recommended by outside counsel and risk management firms; and
  • The use of third-party firms that conduct physical inspections of our facilities to understand the operations and environmental improvements needed.

To illustrate the impact of our efforts, we gather environmental performance information from our largest tenants.

CLIMATE CHANGE RISK

As part of our commitment to environmental sustainability, we also consider climate change related risks to our business. Extreme weather and changes in precipitation and temperature as a result of climate change, could cause physical damage to, or a change in demand for, the properties which our tenants operate. To mitigate these risks, we will continue to collaborate with our tenants and other relevant stakeholders to ensure we are sustainably managing our business and to minimize our impact on the environment.

SPOTLIGHT ON TENANT RELATIONSHIPS

Steward Health Care, Healthscope, Prime Healthcare Services, and LifePoint Health, together representing 66% of our portfolio’s revenue, are making investments to reduce their carbon footprint. Through our ongoing engagement with our tenants and as a result of our discussions regarding sustainability efforts, we are pleased to report the following environmental impact data.

Mountain Vista Medical Center, Steward’s 178-bed general acute care hospital in Mesa, Arizona.

Mountain Vista Medical Center, Steward’s 178-bed general acute care hospital in Mesa, Arizona.

STEWARD HEALTH CARE

By investing in various building improvements throughout their hospital portfolio (ventilation, plumbing, lighting etc.), Steward has been able to achieve:

  • >15% annual energy savings;
  • Over $3.75 million annual cost savings;
  • Reduced electricity demands by 52 gigawatt-hours, which equates to taking 8,376 cars off the road for one year and by 8.5 million therms of natural gas which equates to the sequestration of carbon dioxide by 1.2 million trees; and
  • Steward has avoided the emission of 86,278 metric tons of CO2 per year.

Campbelltown Private Hospital, Healthscope’s 92-bed full-service acute care facility in New South Wales, Australia.

Campbelltown Private Hospital, Healthscope’s 92-bed full-service acute care facility in New South Wales, Australia.

HEALTHSCOPE

Healthscope’s environmental initiatives are focused on energy- and water-efficient equipment, sustainable building design and development, education and training to staff on environmental practices, and waste minimization. Recent energy savings initiatives implemented by Healthscope:

  • Installed LED lighting at exits (Campbelltown Private Hospital);
  • Replaced inefficient air-handling units and air-conditioning ductwork (Mount Hospital);
  • Rollout of water-efficient shower heads and tapware (Campbelltown Private Hospital);
  • Rolled out more efficient Central Sterile Service Department washers and sterilizers (Campbelltown Private Hospital); and
  • Provided education and frequent reminders to staff in an effort to raise awareness to conserve power (such as switching off lights and computers).

Healthscope is included in the Dow Jones Sustainability Index and the FTSE4GOOD Index, which recognize leading sustainability performance.

 

Solar panels above employees’ parking lot at Desert Valley Hospital, Prime’s 148-bed general acute care hospital in Victorville, California.

Solar panels above employees’ parking lot at Desert Valley Hospital, Prime’s 148-bed general acute care hospital in Victorville, California.

PRIME HEALTHCARE

Prime Healthcare has been installing combustion-free, solid-oxide fuel cells to take significant portions of Prime’s energy usage off the power grid, including:

  • 600-kilowatt fuel cell installed at Chino Valley Medical Center in Chino, California, with annual energy cost savings of $360,000;
  • 250-kilowatt fuel cell installed for the data center at Centinela Hospital Medical Center in Inglewood, California, with annual savings of $122,000;
  • 742-kw solar photovoltaic panels over a parking lot at Desert Valley Hospital in Victorville, California, with annual energy cost savings of $358,000;
  • Two fuel cell projects installed at other MPT-owned California locations, expected to save over $12 million over the length of the 20-year power purchase agreement; and
  • Fuel cell projects are expected to reduce carbon dioxide emissions over the life of the contracts by a total of 51 million pounds.

Other energy-saving projects include:

  • The addition of variable frequency water chillers and hot water heaters at a number of hospitals. Annualized cost savings from the VFDs and related economizing steps exceed $398,000.
  • The replacement of high-pressure sodium lighting in the parking lot at Providence Medical Center in Kansas City, Missouri, with new energy-efficient LED lighting. Annualized cost savings exceed $96,000.

Conemaugh Memorial Medical Center, LifePoint’s 537-Bed Flagship Facility in Johnstown, Pennsylvania.

Conemaugh Memorial Medical Center, LifePoint’s 537-Bed Flagship Facility in Johnstown, Pennsylvania.

LIFEPOINT HEALTH

LifePoint Health implemented a new energy management program:

  • Comprehensive monitoring for energy consumption;
  • The development of energy scorecards for each hospital location to monitor use for electricity and natural gas on a monthly basis;
  • The identification of several energy reducing projects in 2019 including LED lighting, Room Ventilation Schedule (RVS), Retro-Commissioning and revised design specifications for infrastructure projects to aide in more efficient equipment purchases; and
  • Implementation of Greenhouse Gas reduction strategies that include equipment selection with a focus on efficiency, including steam systems, energy management controls and large cooling system components.

* All information above is based on data provided by our tenants.