The journey toward sustainability in the life sciences sector is marked by a series of strategic initiatives aimed at reducing carbon footprints and enhancing energy efficiency. Part 2/3 of this series focusses on scope 2 - transitioning to renewable energy sources, and scope 3 - decarbonizing the supply chain.
Renewable Energy Transition (Scope 2)
As momentum builds towards a greener future, life sciences manufacturers are also facing the pivotal shift from fossil fuel-based energy to renewable sources. This transition is an environmental imperative and a long-term strategic advantage that can support operational efficiencies, resilience against volatile fossil fuel markets, and alignment with escalating regulatory and customer expectations for sustainability. The journey toward embracing renewables – namely solar, wind, and bioenergy – involves a multifaceted approach encompassing onsite generation, purchasing green energy, and evaluating renewable options tailored to manufacturing.
Onsite Renewable Energy Generation
Onsite renewable energy generation offers the promise of energy autonomy and the capacity to significantly reduce carbon footprints. Solar panels have a strong case for rooftops or open spaces within manufacturing sites. The technology has advanced, offering higher efficiencies and lower costs than before. Wind turbines might also have their place in large facilities located in wind-rich areas, generating substantial power to meet considerable chunks of energy demands. Some Life Sciences manufacturers have also started looking beneath their factories for geothermal energy opportunities.
Yet, the feasibility of these implementations must be meticulously evaluated. Factors such as geographic location, available space, and local climate conditions play key roles in determining the potential energy yield. Integration into existing power systems necessitates a detailed technical assessment and potential infrastructure upgrades to handle the intermittency of renewable sources and ensure continuous, reliable power supply.
Power Purchase Agreements
However, the energy demand of large Life Science manufacturing sites is often much higher than what can be achieved through a couple windmills and roofs covered in solar panels. For scenarios where onsite generation is constrained by physical or economical limitations, purchasing green energy emerges as a viable bridge towards sustainability goals. Life sciences manufacturers can turn to power purchase agreements (PPAs) with renewable energy providers, locking in stable energy prices and guaranteeing a cleaner energy profile without the upfront costs of installing renewable infrastructure.
Green certificates or renewable energy credits (RECs) also present an accessible avenue for manufacturers to support renewable energy expansion indirectly. By purchasing RECs, companies can claim their electricity consumption as being renewable, even if the actual electrons powering their operations are sourced from the grid's mix. This method, while not affecting direct emission reductions, fosters broader adoption and investment into renewable projects.
Selecting the right mix of renewable sources requires a comprehensive understanding of each site's energy requirements, operational needs, and environmental conditions. A nuanced evaluation might reveal that certain forms of bioenergy, leveraging organic waste from manufacturing processes, offer both waste disposal solutions and opportunities to produce electricity and heat.
Collaboration & Thinking Ahead
In planning the transition, life sciences manufacturers must also contemplate future expansions, evolving technological landscapes, and regulatory shifts that could influence energy strategy. Adapting to renewable energy is as much about forecasting future needs as it is about addressing current demands.
Partnerships play a pivotal role in this transition. Collaborating with energy experts, local governments, and industry consortia can provide valuable insights, shared learnings, and potentially cooperative ventures for larger renewable projects unattainable by single entities. These relationships foster a collective push towards a more sustainable industry, leveraging shared goals for greater impact. A great example of this is Philips, DSM, Google and Nouryon forming the Dutch Wind Consortium and opening the Krammer Windpark in the Netherlands in 2019. This initiative and the associated PPA agreement enabled Philips’ Netherlands-based operations to be 100% powered by renewable energy.
Transitioning to renewable energy sources represents a strong step for life sciences manufacturers in their sustainability journey. By blending onsite generation with strategic green energy purchases, these companies contribute to climate action and fortify their market position in an increasingly eco-conscious corporate landscape.
For more information on the role technology can play in optimizing utilities management in industrial settings, check-out our previous blog post on this topic.
Supply Chain Decarbonization (Scope 3)
The complexity of tackling Scope 3 emissions lies in their externality – emissions from sources not directly owned or controlled by an organization. Yet, within the supply chain, these indirect emissions often represent the largest portion of a life sciences manufacturer's carbon footprint. It is here that impactful strides toward sustainability and net-zero targets can be made through deliberate strategies focused on engaging suppliers, promoting sustainable sourcing, and adopting robust green procurement policies.
Engage with Suppliers
A key first step in decarbonizing the supply chain involves the holistic engagement of suppliers. This requires more than mere transactional relationships, favoring a collaborative approach to identify and exploit emissions reduction opportunities. Key to this engagement is the development of clear communication strategies that emphasize the importance of emissions reduction, not only for compliance reasons but as a mutual benefit for both parties involved.
Establishing partnership-based programs can incentivize suppliers towards greener practices. For instance, implementing a tiered recognition system rewards suppliers who achieve or exceed predefined sustainability metrics. Such programs can be bolstered by providing training and resources to suppliers, aiding them in overcoming technical or financial barriers in emissions reduction efforts. Organizing workshops or sharing best practices exemplifies the proactive role companies can assume in fostering a supply chain-wide culture geared toward sustainability.
Sustainable Sourcing
Sustainable sourcing can have a strong impact for reducing Scope 3 emissions. It demands a detailed assessment of procurement policies with a keen focus on the environmental credentials of sourced goods and services. Life sciences manufacturers can pivot towards suppliers who demonstrate verifiable commitments to sustainability, employing production methods and supply chain practices that are eco-friendly.
A significant angle of sustainable sourcing lies in the prioritization of materials and inputs with lower carbon footprints. For bio-based materials, this might mean ensuring they are coming from sustainably managed resources that comply with deforestation-free standards and contribute to carbon reduction. Alternatively, recycled or upcycled materials can be interesting options for packaging specifically, substantially lowering the demand for raw materials and consequently reducing the associated extraction and processing emissions.
Green Procurement Policies
The implementation of green procurement policies serves as an overarching framework guiding buying decisions. These policies institute sustainability as a primary criteria in supplier selection, evaluating environmental performance with the same rigor as cost, quality, and delivery metrics. Incorporation of clauses mandating the disclosure of carbon emissions and adherence to environmental standards in suppliers' bids encourages transparency and aligns procurement practices with emissions reduction goals.
Life sciences manufacturers can leverage their purchasing power to not only demand but also support suppliers in transitioning towards greener operations. Engaging in long-term contracts with suppliers committed to sustainability can provide them with the financial stability required to invest in low-carbon technologies. In parallel, such arrangements promise manufacturers a continuous and sustainable supply chain that adheres to net-zero ambitions.
Through meticulously crafted and implemented green procurement policies, the door is opened to a synergetic relationship between manufacturers and suppliers—a dynamic that can increase trust and collaboration while simultaneously driving down Scope 3 emissions and uplifting the cumulative environmental standards across the industry.
Confronting Scope 3 emissions within the supply chain is an intensive but necessary endeavor for life sciences manufacturers steering towards a sustainable future. It requires a cultivated collaboration with suppliers, purpose-driven policies focused on sustainable sourcing, and green procurement frameworks that collectively underpin decarbonization efforts. This holistic approach not only decouples operational growth from carbon emissions but also solidifies a company's standing as a champion for change in the battle against climate instability.
The path forward is characterized by innovation, strategic planning, and partnership, illustrating the industry's commitment to forging a sustainable future where health care and environmental stewardship converge.
In part three of this series, we will dive into Carbon Capture & Offset Strategies as well as Monitoring, Reporting & Verification (MRV).
Do you have anything to share on the topic of sustainable transformation in industry, or anything that relates to driving a sustainable industrial revolution, please don't hesitate to reach out to us.
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