Healthcare decarbonization is no longer a narrow facilities issue or a peripheral sustainability exercise. In this session of People and Planet United, a Global Health and Purpose Summit, Aharon Kestenbaum, Director, Energy and Sustainability at Montefiore Health System, joins host Brianne Chai-Onn, Senior Partner and Head of Sustainability at FINN Partners, for a leadership conversation on how hospitals can turn emissions reduction into an operating strategy. The session uses New York’s regulatory environment as a practical blueprint for health systems seeking to align community health, infrastructure modernization, financial discipline, and climate responsibility.

Chai-Onn frames the conversation around a core leadership question for healthcare institutions: how local efforts can serve as a model for broader change while helping health systems take meaningful steps toward a more sustainable future. That frame is important because Kestenbaum’s presentation does not treat decarbonization as a technical project alone. It positions energy infrastructure, governance, data, incentives, and frontline engagement as connected elements of a health system’s mission.

Healthcare systems occupy a difficult and important position in the transition to a lower-carbon economy. Hospitals must operate continuously, protect life-safety systems, preserve redundancy, and maintain high standards of patient care. At the same time, their buildings, energy systems, purchasing decisions, waste streams, and clinical operations carry material environmental consequences. Kestenbaum’s presentation places those realities inside a disciplined management framework. The work begins with mission, becomes measurable through data, advances through building-level analysis, and reaches scale when incentives, governance, and frontline engagement reinforce one another.

The conversation also establishes a clear managerial premise. Operational infrastructure decisions shape the sustainability of healthcare systems, and those decisions become more powerful when they are linked to patient care, community health, regulatory compliance, and capital planning. Chai-Onn’s framing gives the session its broader relevance, while Kestenbaum’s presentation shows how a large healthcare system can translate that relevance into measurable action.

The Health Mission Behind Decarbonization

Kestenbaum begins by grounding the discussion in the public health responsibility of healthcare itself. The session moves quickly beyond compliance and cost avoidance. Healthcare accounts for a meaningful share of global emissions, and Kestenbaum notes that the percentage is higher in the United States. He then connects that global issue to the local realities of the Bronx, where Montefiore serves a community experiencing high asthma hospitalization rates. The argument is direct: institutions that treat the effects of pollution and climate-related stress have a responsibility to reduce their own contribution to those conditions.

This framing gives the session its strategic clarity. The financial mechanisms matter because they help projects move forward, but they do not replace the institutional rationale. Kestenbaum describes the work as both a responsibility and a business interest. That distinction is important for health system leaders. Sustainability becomes stronger when it is not treated only as a compliance response or brand position. It becomes more durable when it is aligned with the operating mission of the organization, the health of the population it serves, and the long-term viability of the institution.

Brianne Chai-Onn reinforces this leadership frame by returning the discussion to the connection between health, climate, and scalable institutional impact. Her role as host is not simply to introduce the session; it is to draw out the management implications of Montefiore’s work and connect them to a broader health system audience. The result is a session that moves between mission and execution without separating one from the other.

Local Law 97 Turns Emissions into a Management Issue

New York City’s Local Law 97 provides the regulatory foundation for much of the session. Kestenbaum explains that the law applies to covered buildings over 25,000 square feet and assigns carbon emissions allowances by building type. Emissions above the threshold produce penalties, calculated in the session as $268 multiplied by the amount of carbon above the cap. The structure transforms emissions from an externality into a measurable operating exposure.

Kestenbaum emphasizes that the limits become more stringent over time as the city moves toward the goal of zero carbon by 2050. The early period may affect a smaller percentage of covered buildings, but future periods create a growing liability for institutions whose emissions remain flat. For large healthcare systems, this creates a recurring financial risk that can reach millions of dollars. That risk becomes a forcing mechanism for capital planning, infrastructure modernization, and strategic energy management.

The significance of Local Law 97 is not simply that it creates penalties. Its broader effect is that it changes how leadership evaluates building performance. Carbon becomes a factor in investment decisions. Avoided penalties become part of the project economics. Future exposure becomes part of the institution’s risk profile. For hospitals and healthcare systems operating in other geographies, the specific regulation may differ, but the management logic is increasingly relevant wherever decarbonization requirements, energy costs, and climate-related health risks converge.

From Liability to Value Creation

One of the session’s central contributions is Kestenbaum’s explanation of the financial shift from regulatory liability to value creation. A large infrastructure project, such as a heat pump system or major lighting project, may have a strong return on investment on its own. Yet hospitals must weigh many competing capital priorities. The economics become more compelling when avoided penalties, state incentives, utility programs, insurance rebates, and operating savings are combined into a single investment case.

Kestenbaum describes incentive stacking in concrete terms. New York State Energy Research and Development Authority funding supports projects such as heat pumps, electrification, and major infrastructure upgrades. The New York State Insurance Fund offers rebates tied to emissions measurement, emissions reduction planning, and annual reporting. Con Edison provides incentives through its commercial and industrial program for projects that include electrification of chillers and boilers, high-efficiency boilers, and heat pump-based systems. These mechanisms are not mutually exclusive. They can support one another and materially improve the economics of a major project.

This approach reframes sustainability from a cost center into an enterprise value discipline. It also gives sustainability leaders a more effective language for executive decision making. The business case is not built on aspiration alone. It is built on penalties avoided, incentives captured, energy costs reduced, infrastructure modernized, and community health impacts addressed.

Chai-Onn identifies the broader leadership challenge with precision. Sustainability professionals must create a business case that decision makers can act on, connecting decarbonization to efficiency, risk management, compliance, and the ability to move major infrastructure projects forward. Kestenbaum’s incentive-stacking model answers that challenge by turning avoided penalties, rebates, utility incentives, and energy savings into a more complete capital case.

Infrastructure as a Platform for Better Performance

Kestenbaum presents decarbonization as an infrastructure agenda. He describes a 5 megawatt cogeneration facility that reflects Montefiore’s earlier leadership in energy systems, and he points to current heat pump projects at three sites. He also describes free cooling, which uses outdoor conditions when possible to meet internal cooling needs, reducing the need to burn fuel or run engines unnecessarily. These projects require investment in building management systems, programming, equipment replacement, insulation, windows, and lighting.

The operational lesson is that decarbonization is not one project. It is an integrated portfolio of technical opportunities. Some measures may appear modest when viewed individually, but they become powerful when implemented at scale and supported by incentives, disincentives, and governance. Hospitals, with their continuous operating profile and specialized systems, are difficult buildings to decarbonize. Kestenbaum notes that they run 24 hours a day, function as life-safety buildings, and include built-in redundancy. Those same conditions create inefficiencies, but they also create larger opportunities for efficiency when the work is approached systematically.

Montefiore’s results provide the clearest evidence of the management value of this approach. Kestenbaum reports that since 2007 the sustainability program has reduced carbon emissions intensity by 31%, generated almost $40 million in revenue from projects, and avoided $172 million of liabilities in Local Law 97 penalties over the period extending to 2050. He also notes $20.1 million in short-term avoided liabilities over the first five to ten years. These figures matter because they make sustainability legible to leadership in financial terms while preserving the public health rationale that motivates the work.

Data, Audits, and Investment Discipline

The session’s operating framework begins with measurement. Kestenbaum outlines a process for building a sustainability program from scratch, starting with a greenhouse gas inventory. The inventory establishes a baseline for emissions, potential penalties, and the expected impact of reductions. The next step is to understand the building through energy audits and technical analysis. Teams must examine building systems, cost drivers, emissions sources, and the areas with the greatest opportunity for improvement.

That sentence captures the discipline behind the session. Data is not only a reporting requirement. It is the foundation for funding, approval, incentive capture, and execution. Without reliable data, a technically strong project may still fail to secure support. Without building-level understanding, the organization may not know where investment will deliver the greatest reduction in emissions or costs. Without credible financial modeling, leadership cannot compare sustainability investments against other institutional priorities.

During the discussion, Kestenbaum explains that organizations need investment-grade rigor when building proposals. They must understand the current system, the costs the organization incurs, and the technological solution being proposed. They must then incorporate incentive opportunities and avoided disincentives into cash flows only when those benefits are sufficiently certain. This combination of technical due diligence and financial discipline makes the sustainability case stronger because it treats decarbonization as a serious capital allocation decision.

Frontline Engagement Expands the Scope of Action

Montefiore’s decarbonization work does not stop with building systems. Kestenbaum describes clinical sustainability initiatives that arise from doctors, nurses, operational staff, and other frontline employees who see waste in everyday practice. This engagement expands the sustainability agenda from facilities and infrastructure into the fabric of the organization. It also creates opportunities that central sustainability teams may not be able to identify alone.

One example involves desflurane, an anesthetic gas with high global warming potential. Kestenbaum explains that Montefiore has worked with the leadership of its anesthesia department to reduce its use substantially, reaching more than a 93% reduction and moving toward approximately 99%, while preserving it for cases where it may be most beneficial for patient care. Another example involves medical device reprocessing, where used devices are collected, processed by partners, restored to required standards, and potentially purchased back at a discount.

Kestenbaum also describes how doctors identified unnecessary printing of requisitions and helped shift the process toward an opt-in model when patients want printed copies. The result is approximately 2.5 million pages saved annually across the system. Additional examples include e-waste and radiology waste reduction through changes in contrast bottle ordering. The common pattern is that frontline knowledge reveals inefficiencies that broader governance structures might not see.

Chai-Onn’s synthesis makes the governance lesson clear. Montefiore’s approach is not limited to a central sustainability office or a facilities team. It engages departments across the organization and builds from the ground up through grassroots initiatives generated by employees who see operational inefficiencies in daily clinical and administrative work. That framing elevates the session from a facilities case study to a model of organizational change.

Governance Makes the Work Scalable

The session repeatedly returns to governance because major decarbonization work requires coordination across departments. Kestenbaum describes executive leadership, engineering, facilities, and the Office of Sustainability as part of the structure, with reporting to a committee that includes environmental health and safety, design and construction, risk, engineering, and other departments that need to understand the work. The governance structure ensures that when a project is brought forward, decision makers are not encountering the subject for the first time.

Kestenbaum also explains that the structure does not end with top-down leadership. Grassroots leadership is an integral component. Montefiore uses newsletters, Earth Day events, and monthly open-hour sessions to invite ideas from across the organization. That ongoing channel helps surface opportunities that sit outside traditional building decarbonization, including clinical and operational initiatives. It also reinforces the idea that sustainability is not a specialized function isolated from the organization’s main work.

In context, the essential leadership requirements are strong data and broad engagement. Data provides credibility. Engagement provides reach. Governance connects both to execution. This is a useful management lesson for healthcare leaders in any geography. The regulatory environment may differ, but successful decarbonization still depends on leadership commitment, stakeholder education, technical due diligence, credible financial modeling, and the participation of people who understand where waste occurs inside the organization.

The Broader Blueprint for Healthcare Systems

The New York blueprint is not a template that other regions can copy without adjustment. Kestenbaum is careful to recognize that each geography has its own incentive ecosystem and disincentive structure. He points to federal, state, and global mechanisms, including resiliency incentives and decarbonization requirements in other countries. The transferable lesson is the operating model: measure emissions, understand buildings, stack economics, execute projects, and engage the full organization in identifying waste and opportunity.

For healthcare systems, this model carries special relevance because hospitals are among the most complex buildings to transform. They operate continuously, require redundancy, and must protect patient care. Yet those same characteristics increase the importance of disciplined infrastructure planning. Kestenbaum’s closing reflection brings the session back to the moral center of the work.

That statement, kept here in the exact language of the transcript, captures the practical and ethical force of the session. Healthcare decarbonization is not merely about lower emissions. It is about aligning the built environment of care with the health outcomes healthcare institutions exist to advance. The New York experience shows that regulation can accelerate change, incentives can improve project feasibility, and governance can convert ambition into execution. The broader implication is clear for health systems everywhere: sustainability becomes most powerful when it is managed as mission, infrastructure, finance, and frontline practice at the same time.

Session Intelligence

This session identifies healthcare decarbonization as a leadership discipline that integrates community health, building performance, regulatory compliance, financial returns, and organizational engagement.

Core Leadership Insight

Healthcare systems can treat decarbonization as a mission-aligned operating strategy when community health, emissions reduction, and infrastructure modernization are managed together.

Execution Model

The practical sequence is measurement, building analysis, incentive and penalty economics, project execution, and sustained engagement across departments and frontline teams.

Strategic Relevance

New York’s regulatory and incentive environment offers a blueprint for other geographies, even when the specific policy tools differ by city, state, country, or region.

Healthcare Decarbonization Local Law 97 Energy Infrastructure Hospital Sustainability Community Health Incentive Stacking Greenhouse Gas Inventory Clinical Sustainability Frontline Engagement Building Performance Risk Management Value Creation