Climate change, caused by man-made greenhouse gas (GHG) emissions, is harming societies and our planet. We must act now, and fast, to eliminate emissions.
Most (94%) of our GHGs are emitted when our products are made by our suppliers and used by our customers (known as Scope 3). We are working with them to reduce those emissions and have developed a detailed plan to make sure we meet our goals by collaborating.
We have long recognised the urgent need to prevent and minimise emissions from our business. Between 1995 and 2020, we reduced our operational GHG emissions by 77%. Almost all our GHG emissions are carbon dioxide from burning fossil fuels to power factories and offices. Less than 2% is from gases used in cooling and refrigeration equipment.2
Our challenge is to reduce all emissions, including those from our products and suppliers.
As is common in the pharmaceutical industry, we use contract manufacturers to make most of our products and we have long-term relationships with over 60,000 suppliers around the world. We are exploring the best ways to partner with them to reduce their GHG emissions for our mutual benefit.
In 2020 we developed a global method to measure Scope 3 emissions. This showed that purchased goods and services account for 79%, which means we can make the biggest difference by partnering with our suppliers to reduce their emissions. The data is being integrated into our procurement system so that we can understand how our buying decisions influence emissions.
To ensure we focus on where we can make the biggest reductions quickly, we have identified ~100 strategic suppliers who are responsible for nearly a third of our total carbon footprint (31.8%).
In 2021, we formed a partnership with Manufacture 2030 to support our companies to measure, manage and improve their environmental performance. We started with 100 suppliers based in Penzberg, Germany.
Based on our successful experience there, in October 2021 we launched a global supplier improvement programme which will reach ~100 in-scope suppliers that produce 43% of our Scope 3, category 1 and 2 emissions.
By using our buying power to support our suppliers, irrespective of their size, we can help lower emissions for our mutual benefit. For example, in the UK we used our influence to negotiate a competitive rate for renewable electricity with our energy provider, and extended it to include all our UK-based suppliers.
Tackling climate change demands that buyers and suppliers work together to reduce and eventually eliminate carbon emissions. This means extending traditional commercial relationships to include partnership in carbon reduction. Our suppliers have welcomed our approach and we look forward to collaborating for a better world.