Pharmaceutical giants launch new science-based target requirements for suppliers

Seven of the world’s largest pharmaceutical companies have partners with the World Health Organization (WHO) to introduce a new set of requirements for suppliers to abide by, including the uptake of science-based targets for carbon emissions.

Pharmaceutical giants launch new science-based target requirements for suppliers

Supply chain accounts for more than half of the global healthcare sector’s emissions

The pharmaceutical companies have worked with the WHO through the Sustainable Markets Initiative, to introduce new requirements for suppliers in a bid to accelerate the transition to net-zero in the healthcare sector.

The chief executives of AstraZeneca, GSK, Novo Nordisk, Merck, Roche, Sanofi and Samsung Biologics have penned a joint letter outlining the new supply chain requirements. Supply chain accounts for more than half of the global healthcare sector’s emissions.

The letter outlines new “minimum” supplier targets. Suppliers will need to assess and disclose emissions across all three Scopes by 2025 and commit to near-term targets aligned with the 1.5C pathway through the Science Based Targets initiative (SBTi). Also by 2025, suppliers will need to set targets to reduce waste, including solvents, and energy in manufacturing processes and commit to switching to at least 80% renewable power by 2030.

Suppliers will also be tasked with exploring ways to reduce emissions from heat by 2030, set standards for their own suppliers and introduced targets to increase water efficiency and adopt water stewardship practices and standards.

Transport suppliers will also need to make SBTi-aligned commitments by 2025 and include green transportation solutions in their core offerings by 2030.

“Healthcare supply chains must become greener, more efficient and circular,” the letter states. “We must work across the value chain to decarbonise operations and do all we can to move away from fossil-fuelled heat and power. Having launched a set of core commitments at COP27, we are scaling our impact above and beyond the actions we are taking within our own organisations.

“As part of this, we have set joint, minimum climate and sustainability targets for suppliers which aim to address emissions across the value chain and reduce the complexity of multiple asks.”

The seven companies also act as partners to the WHO-led Alliance for Transformative Action on Climate and Health (ATACH), which aims to share learnings and advice with other healthcare organisations across more than 70 countries.

The supplier focus follows 12 months of internal action from the companies as part of their work with the Sustainable Markets Initiative.

The companies agreed in November 2022 to launch a new roadmap for their operations. Included in the roadmap are commitments to jointly explore renewable power purchase agreements (PPAs) in China and India in 2023 and to evaluate the use of low or zero-carbon heat solutions by 2025 as part of work to shift to 100% renewable energy for operations. The roadmap also states that companies will switch all car fleets to 100% zero-emission vehicles this decade.

Scope 3 focus

Last month, the SBTi published new guidance to outline how larger companies can engage with the supply chains and get suppliers to set their own science-based targets.

The supply chain is often part of a business’s value chain where the greatest deal of negative impacts occurs. CDP estimates that the average large multinational corporation will generate 11.4 times more emissions in its supply chains than in its operations. Supply chains can also be hotspots for waste, water use, deforestation, modern slavery and child labour, depending on the sector.

During a day of insight, inspiration and innovation at edie’s Scope 3 Emissions Workshops in London, multiple roundtable discussions were held between sustainability, energy and supply chain professionals to tackle one of the most critical aspects of the net-zero transition: calculating, reporting and minimising value chain emissions. The result was a new report published on edie, focusing on Scope 3 emissions.

This report, developed with assistance from supporting partners Altruistiq and Persefoni, outlines why Scope 3 emissions are such a big part of the net-zero transition and what steps businesses can and should take to accelerate progress in this area. It also features a timely state of play on the voluntary and legislative frameworks businesses will need to consider when looking to set and perform against Scope 3 emissions.

Click here to read the report.

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