Business
Accelerating towards net zero: Transforming the pharmaceutical supply chain
Global Banking and Finance Review
Company
August 2024 – The pharmaceutical industry is making remarkable progress in its quest for decarbonisation, with emissions already on a significant decline. Yet, the journey to Net Zero remains fraught with challenges, particularly in curbing Scope 3 emissions within the workplace. Now more than ever, it is crucial for industry partners to drive improvements that support this global goal.
Pharmaceutical companies are uniquely aware of the interconnected health of people and the planet. As early signatories to the UN’s Race to Zero campaign, these companies have swiftly calculated their carbon footprints, set science-based targets, and invested heavily in decarbonisation initiatives. Leading businesses like AstraZeneca have achieved notable results, halving their Scope 1 and 2 greenhouse gas emissions in seven years, and investing $1 billion in the Ambition Zero Carbon programme to tackle Scope 3 emissions throughout their value chain.
Tackling Scope 1 and 2 emissions through renewable energy and green transport is relatively straightforward, but Scope 3 emissions – stemming from intricate networks of customers and suppliers – are far more complex and difficult to control. This is where facilities managers, like those from Sodexo, play a pivotal role. Every coffee brewed, dish served, product used, and ounce of waste generated by facility management providers adds to their clients’ Scope 3 emissions. In a mission to support clients, Sodexo is actively working with like-minded companies to address Scope 3 emissions through a new Community of Practice. In collaboration with FuturePlanet, the Community of Practice is a collaborative group through which professionals share knowledge, best practices and solutions related to common challenges within the ESG and sustainability sector. Through this initiative, issues within the sector have been reviewed and prioritised by participants to ensure a focused and tangible strategy to tackle them.
In addition, Sodexo is accelerating efforts within its own supply chain, which includes 4,000 partners in the UK alone, accounting for £800 million in annual spend and 34% of its emissions. By January 2030, Sodexo will only collaborate with suppliers who demonstrate tangible progress on achieving a net zero supply chain through published reporting. Already, 75% of their supply chain emissions are being addressed. Sodexo is providing mentoring and support to help suppliers, with the first major requirement being a detailed annual Carbon Reduction Plan, with a focus on helping Small and Medium Enterprises (SMEs) and Voluntary, Community and Social Enterprises (VCSEs),decarbonise effectively.
Net zero is a major factor in determining commercial success and therefore these activities are becoming integral for pharma companies globally. Setting deadlines for suppliers not only addresses the climate crisis but also provides a competitive edge, and sustainable supply chains support long-term continuity and cost certainty. With 75% of UK private sector workers expecting their employers to operate sustainably, and Gen Z particularly focused on green credentials, pharmaceutical companies have a prime opportunity to attract top talent by prioritising sustainability.
The workplace is an ideal setting to showcase pharma companies’ net zero ambition. Research shows that workers’ top sustainability expectations include reductions in plastic usage, sensible energy consumption, and responsible waste management. Reducing food waste is especially critical, as food systems contribute to around a third of all greenhouse gas emissions. Building a net zero culture in the workplace requires clear commitments, visible action, and opportunities for sustainable choices.
A net zero office encompasses both back-office functions and employee-facing services. This includes using sensors for detailed energy data, optimising energy management systems, preventing food waste through initiatives like WasteWatch. WasteWatch, for example, works by rapidly capturing food waste data and giving clear insights into what is being wasted and why. Teams can then bring in operational and behavioural changes to help end avoidable food waste, whether generated in the kitchen or by consumers. For employees, it means enjoying locally sourced, plant-forward food, using reusable items, and receiving clear information on the environmental impact of their choices.
Pharmaceutical companies can take immediate action by engaging their workplace suppliers. This involves reviewing data, identifying gaps, and creating strategies that inspire. Embedding sustainability into operating practices, encouraging climate-friendly options, and incorporating the right metrics into supplier contracts are crucial steps. Transparent reporting and celebrating successes will help accelerate plans.
By fostering a net zero workplace, pharmaceutical companies can exceed sustainability expectations, addressing the urgency of climate change and promote lower carbon choices. While immediate emission reductions are challenging, the growing popularity of plant-based dishes indicates a shift towards sustainable practices. By working with the right suppliers, pharmaceutical companies will remain ahead of the curve and significantly contribute to the fight against climate change.
Decarbonisation refers to the process of reducing carbon dioxide emissions associated with energy production and consumption, aiming to mitigate climate change.
Scope 1 emissions are direct greenhouse gas emissions from owned or controlled sources. Scope 2 includes indirect emissions from the generation of purchased electricity. Scope 3 encompasses all other indirect emissions.
A net zero supply chain is one that balances the amount of greenhouse gases emitted with an equivalent amount removed from the atmosphere, aiming for zero net emissions.
A Community of Practice is a group of individuals who share a common interest or profession and collaborate to share knowledge, best practices, and solutions.
Renewable energy sources, such as solar and wind, are crucial in decarbonisation as they produce little to no greenhouse gas emissions compared to fossil fuels.
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