Getting the pharmaceutical supply chain fully focused on net zero

Published on : 1/29/24
Reading time : 5 min

    • The pharma sector is committed to decarbonisation and already translating commitments into action. Emissions have fallen, but the bigger challenge is yet to come. In this article, we explore the critical role of the pharma supply chain in reducing Scope 3 emissions, particularly in the workplace, and to sustaining momentum on the road to net zero.

    Net zero remains a major challenge for the pharma sector 

    The health of people and planet are inextricably linked, so pharmaceutical companies understand the science of climate change more than most. The sector’s leading businesses were early signatories to the UN’s Race to Zero campaign, and quick to calculate their carbon footprint. They’ve set science-based targets, joined the Health Systems Task Force created by His Majesty King Charles III, and continue to invest in decarbonisation. 

    The results are impressive. One of our clients, AstraZeneca, cut its Scope 1 and 2 greenhouse gas emissions in half within seven years and is investing $1 billion in its Ambition Zero Carbon programme. This programme includes engaging with its partners to address the challenge that lies ahead: reducing Scope 3 emissions throughout its value chain.  

    Scope 3 emissions reduction is as complex as it is critical  

    As with global businesses in other sectors, most of the greenhouse gases generated by pharmaceutical companies can be found in complex networks of customers and suppliers. Unlike the switch to renewable energy and green transport that’s delivered heavy reductions in Scopes 1 and 2, these Scope 3 emissions are bigger and also harder to control. 

    Take Sodexo’s role as a food and workplace management provider for some of the biggest names in pharma. Every day, thousands of our colleagues are helping to create exceptional employee experiences in manufacturing facilities, R&D hubs and corporate offices. As a result, the carbon emissions associated with every coffee we brew, every dish we serve, every product we use and every ounce of waste we generate become part of our clients’ Scope 3 emissions.  

    How incentivising supply chains offers a way forward 

    How to undo these Scope 3 knots is something we’ve been exploringNetZero_Pharma_office.jpg with like-minded [pharma] companies in our new community of practice. We’re also accelerating our work with our own supply chain, which includes 4,000 partners in the UK alone, accounting for £800m annual spend and 34% of our emissions.  

    As part of our net zero suppoy chain engagement strategy, by January 2030 we will only work with supply partners who can demonstrate tangible progress through published reporting. We’re already engaging with partners that account for 75% of our supply chain emissions and helping SMEs to decarbonise and work with their own suppliers more effectively. This is vital to reaching our own goal of net zero by 2040 and also to supporting our pharma clients as they strive to reach theirs. Even in pharma’s tight regulatory environment that often dictates who can provide what, the sector is increasingly asking suppliers to take demonstrable action. 

    It’s not all stick and no carrot: net zero is key to commercial success 

    Setting deadlines for suppliers doesn’t just help tackle the climate crisis, it can also provide competitive edge. Sustainable supply chains are resilient supply chains, supporting longer term continuity and cost certainty. And with the next generation of talent thinking carefully about their employer’s green credentials, every company in the pharma value chain should be paying attention if they want the best people on their side.  

    In April 2023, research we conducted with YouGov showed that 75% of UK private sector workers expect their employer to operate sustainably. Gen Z in particular is looking for companies to take action and for opportunities to make better choices themselves. In turn, this creates opportunities for pharmaceutical companies to win the war for talent while they decarbonise. 

    The workplace is a showroom for net zero ambition 

    From our YouGov research, we know that workers’ top three sustainability expectations are reductions in plastic usage, sensible energy consumption and responsible waste management. Reducing food waste in particular will be critical, because food systems are responsible for around a third of all greenhouse gas emissions. 

    The modern workforce is looking for clear commitments, visible action and the chance to make sustainable choices. In short, they’re looking for a net zero culture. This puts the workplace at the centre of the fight against climate change, and requires all supply partners to be working to the same goal.  

    What could the net zero office look like? 

    The net zero office can be split broadly between back office functions and employee-facing services.

    In the back office, it could mean: 

    • Using sensors and sub-metering to provide granular data on energy use 

    • Optimising building energy management systems to create the right environment in different zones 

    • Redistributing unused food and also preventing food waste using management systems like WasteWatch. Between May 2022 and May 2023, we prevented 7,661 meals going to waste at AstraZeneca’s site, saving 29 tonnes of carbon emissions. 

    • Segregating consumer waste to avoid landfill where possible 

    • Considering on-site power generation where possible 

    For employees, it could mean:  

    • Enjoying food that’s seasonal, locally sourced and plant-forward 

    • Switching to reusable cups, refillable drinks and bean-to-cup coffee  

    • Finding clear signage and carbon-labelling on bins, stationery, printers and meals 

    • Seeing more information on the environmental impact of their choices 

    • Being incentivised to commute differently by being active, using public transport or choosing electric vehicles 

    To extract the biggest benefits and reduce costs as well as emissions, the net zero workplace will require a solid strategy, strong governance, the right partners and the right data. We’re already helping some of our clients to bring the net zero office to life, creating a solution that’s tailored to their particular needs. 

    Engaging supply chains to support the transition 

    Companies aiming for a net zero workplace can take action straight away by engaging their workplace suppliers. This involves reviewing the available data, finding the gaps and making a plan to get the insight that’s missing. The focus can then move to governance, including setting a strategy that inspires and working with suppliers to develop shared ambitions and plans. 

    Then, the focus can shift to implementation. This is about embedding sustainability into all standard operating practices, like nudging employees towards climate-friendly options and building the right metrics into supplier contracts. Moving forward, it’s reporting progress openly and celebrating success that will help companies to accelerate their plans.   

    Creating better pharma workplaces for people and planet 

    The net zero workplace can offer an employee experience that exceeds expectations on sustainability. One that speaks to growing concern about the urgency of climate change, particularly among Gen Z, and one that takes full advantage of people’s willingness to consider lower-carbon (and often lower cost) choices. 

    The emission reductions that pharma workplaces need can’t all be delivered overnight. The employee experience remains paramount. So, while cutting meat from menus is not yet on the cards, the growing popularity of plant-based dishes shows that change is in the air. By working with the right suppliers in the right way, pharmaceutical companies can stay ahead of the curve.  

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