Why GSK's new procurement scheme demands more of suppliers

Pharmaceutical firm GSK has launched a Sustainable Procurement Programme to achieve net zero goals.

Under the programme suppliers will be required to take action on carbon, power, heat, transport, water, waste, and commit to sustainable, deforestation-free sourcing of materials.

The specific actions GSK is requiring suppliers to take include:

  • Disclosing emissions
  • Setting carbon reduction targets and delivery plans aligned to the 1.5C Science-Based Targets initiative
  • Switching to renewable power and heat
  • Achieving water neutrality in water stressed areas
  • Achieving 10% waste reduction
  • Aligning to GSK’s responsible sourcing minimum standards
  • Transport suppliers providing green transport solutions

GSK’s supply chain accounts for 40% of its carbon footprint, particularly in the manufacturing process of active pharmaceutical ingredients (APIs). The company said it would “actively support” suppliers with education on the adoption of the new measures. 

Next month, GSK will bring together over 160 suppliers to discuss how to work together towards these shared goals and understand the support they will need. These goals include 100% renewable electricity usage, good water stewardship at all GSK sites, 100% of materials sustainably sourced and deforestation-free, and transitioning to 100% usage of electric vehicles by GSK sales representatives worldwide.

A spokesperson for GSK told Supply Management: “At this event more details will be shared with suppliers on the sustainability commitments as well as educational resources and training. These resources will help suppliers make the changes required to meet the new sustainability targets. The procurement programme will help suppliers reduce their scope two emissions, which will in turn help GSK reduce its scope three emissions.

“GSK announced new sustainability goals in November 2020 to have a net zero impact on climate change and a net positive impact on nature by 2030, across our entire value chain (for instance, about 92% of our carbon footprint is beyond our own operations). We are on track to achieving these goals. GSK is taking action such as developing carbon neutral inhalers in the UK, increasing use of renewable electricity through on-site generation, and transitioning our sales fleet to low-carbon vehicles. 

“The announcement this week builds on previous supply chain collaborations GSK is part of such as Energize. Energize is a collaboration of 12 global pharmaceutical companies with the aim to engage their supply chains to collectively contract renewable energy, via aggregate power purchase agreements.”

Energize aims to accelerate renewable energy adoption and climate action within the pharmaceutical value chain. It will enable suppliers to pharmaceutical companies to learn more about renewable energy adoption and contracting and give suppliers without the internal resources or expertise the opportunity to participate in the market for power purchase agreements.

Lisa Martin, chief procurement officer at GSK, said: “[The] launch of the Sustainable Procurement Programme is a major step in bringing our supplier partners on the sustainability journey and GSK achieving our goals on climate and nature. As a global biopharma company committed to getting ahead of disease together, we must work closer than ever with our supply chain and beyond to catalyse positive change across environmental systems and protect the health of the planet and people.”

GSK was one of the first pharmaceutical companies to set environment targets in 2010. In 2019, across its operations GSK had reduced carbon emissions by 34%, waste to landfill by 78% and total water use by 31%.

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