GSK puts suppliers on the hook as it amps up sustainability crusade

Drugmakers have increasingly put their environmental footprint under a microscope, rolling out power purchase agreements, renewable energy installations and more in a bid to clean up their operations. But a company’s own emissions are only the tip of the iceberg. To make a real dent, it’s essential to loop in suppliers, distributors and other actors across the supply chain.

That's something GSK is taking to heart with its latest ecological push.

Starting next year, the British pharma will require and help suppliers to make sustainability commitments and chart improvements on emissions, energy, heat, transport, waste, water and biodiversity, GSK said Tuesday. The plan, unveiled at Climate Week in New York City, builds on the company’s established mission to achieve net zero climate impact and provide a net positive impact on nature.

“Supply chains represent a significant proportion of the pharmaceutical industry’s environmental footprint, particularly the manufacturing of active pharmaceutical ingredients (APIs) which are resource intensive to produce in terms of heat, energy and water,” GSK said in its release.

In GSK’s case, 40% of the drugmaker’s carbon footprint is shackled to its supply chain, and suppliers make up a “substantial part” of GSK’s global effect on water, waste and biodiversity, the company explained in a release.

GSK’s so-called Sustainable Procurement Programme has already launched and will specifically push suppliers to disclose emissions, set carbon reduction and delivery targets, switch to renewable power and heat, achieve water neutrality in water-stressed areas, achieve 10% waste reduction and align with GSK’s responsible sourcing minimum standards. Further, GSK expects its transport suppliers to seek out greener alternatives, too.

The company’s suppliers won’t be flying solo, either. GSK says it will support its partners with education and adoption of new sustainability measures. In October, meanwhile, GSK will summon more than 160 suppliers to hash out strategies for its procurement program. This should also give the Big Pharma an idea of the support its suppliers might need on the path to a greener future.

GSK is far from the only pharma homing in on the E in Environmental, Social and Governance (ESG)—a measure of corporate sustainability that’s risen to even greater prominence thanks to increased industry visibility during the COVID-19 pandemic.

Japanese pharma Takeda, for instance, said Monday that it’s inked a 12-year virtual power purchase agreement with Enel North America expected to generate up to 350,000 megawatt hours of renewable energy per year—or about the amount of electricity needed to power some 30,000 U.S. homes annually. That energy haul accounts for roughly 20% of Takeda’s current Scope 1 and Scope 2 greenhouse gas emissions, the company said.

Scope 1 emissions refer to direct emissions from sources owned or controlled by a company, such as manufacturing plants or sales fleets. Scope 2 refers to indirect emissions from the generation of electricity, steam, heating and cooling bought by a company.

Scope 3, by comparison, hinges on the indirect environmental footprint that comes from a company’s value chain.

While it makes sense to start with a focus on your own operations, companies must also account for indirect emissions if they hope to make a significant impact on long-term sustainability, multiple sustainability executives said on a Fierce Biotech panel earlier this year.

“If you look at our industry, the majority of companies, over 80% of their carbon footprint is scope three, and so that’s the area where we have to focus as companies,” Jim Weidner, executive director of engineering technical authority and sustainability at Amgen, pointed out.