Healthcare Supplier Engagement to Scale Sustainability Action in LMICs

The initiative was launched with the overarching goal of supporting manufacturers in Low- and Middle-Income Countries (LMICs) to adopt sustainability practices, particularly aimed at reducing emissions to combat global climate change. LMICs are disproportionately affected by climate change, making them prime beneficiaries of mitigation efforts. This context underscored the urgency and importance of implementing climate resilience and low-carbon sustainability interventions. 

The following sections elaborate on the strategies and implementation taken by AKU since 2021, and the key learning from each. 

Key learning: Accounting of operational and supply chain emissions to focus action

Undertaking comprehensive annual emissions accounting for both operations and supply chains is crucial for identifying hotspots to target action and engagement and tracking progress. Internal expertise is vital for accurate data collection. Staff in each AKU and AKHS country of operation have been calculating supply chain emissions annually since 2020, which has provided a clear baseline and identified key focus areas. For our operations, the procurement emissions hotspots include pharmaceuticals, medical supplies, lab consumables, and medical/surgical equipment, while construction materials have also been found to be important in our expanding operations, though more varied across time. Data in these hotpots has further been segmented by international suppliers, distributors, and LMIC based manufacturers, which has allowed us to focus engagement where it will be most targeted and useful. 

More information on the AKDN Carbon Management Tool and its innovative approach of combined top-down (EE-MRIO) and bottom-up (supplier carbon intensity) procurement emissions accounting can be found here. 

Key learning: Developing emissions reduction targets for consistent direction and ambition

Ambitious targets can drive substantial progress, and shared responsibility between buyers and manufacturers fosters collaboration and accountability. Our metrics include:   

1. spending with companies that monitor their emissions,  
2. spending with companies that have science-based net zero targets for their operations;  
3. spending with companies that have science-based net zero targets for their full value chain.  

These targets are aligned with the NHS, to ensure global consistency, while maintaining locally-appropriate approaches. High targets, such as achieving 90% of our spending with companies who monitor their emissions by 2025, have driven significant engagement and action, even in challenging environments, like Afghanistan. 

Key learning: Communicating with suppliers early on

Clear communication of goals are essential for supplier alignment, and early engagement helps set expectations. In early 2022, we communicated to more than 5000 of our suppliers about our own net zero targets for operations and engagement targets for procurement, to ensure suppliers were aware of AKU’s sustainability goals. This transparency encouraged suppliers to reach out and share their own sustainability actions, as well as to reach out and request support to get started.  

More recently, we have included a short paragraph related to our procurement engagement targets and commitment to work on sustainability together in all tenders as well as requests for proposals and quotes (RFPs and RFQs). The goal is to ensure that sustainability is built into communication and conversation from the outset. 

Key learning: Training internal procurement staff  

Training builds internal capacity and expertise, and educated staff who feel they share ownership can better support sustainability goals. Training sessions were tailored to local knowledge baselines and rolled out since 2021 to become an annual activity to educate procurement staff on relevant terminology, purposes, and approaches and to co-design the next steps and share achievements.  

Key learning: Supplier surveys for understanding starting points 

We designed an online survey in late 2022 that included questions on emissions, energy, water, and packaging, to gather supplier data on emissions accounting and sustainability measures. Nearly 400 manufacturers responded, which provided valuable insights for further engagement. Importantly, the survey questions included links to informative resources, thereby building knowledge of the suppliers as they filled out the questionnaire. An associated learning for us and the companies was that most LMIC manufacturers had no focal person on sustainability (yet), which compounded data collection but prompted some companies to designate such roles.  

Key learning: Sustainability workshops to foster shared ownership 

Based on the learnings from the survey as well as bilateral conversations with suppliers, we organized our first half-day workshop in March 2023 with Pakistan-based manufacturers to share experiences and discuss needs and incentives, followed by another workshop in October 2023, and a workshop in Kenya in May 2023. These engagements focused on who should take sustainability action, and quick wins from carbon accounting. Group discussions fostered a community around shared sustainability goals and challenges, and facilitated knowledge exchange. The key learnings from the survey and workshops are: 

1. Vast majority of LMIC manufacturers want to progress on sustainability work. 
2. Few manufacturers know where to start. 
3. The majority of the manufacturers don’t know there is a business case. 
4. There is a huge need for skilled capacity. 
5. There is a need for alignment, at least within the sector, or where possible with public procurement, and clarity on expectations. 
6. There is a need to ensure equal access and opportunity for LMIC-based suppliers. 

Key learning: Designing step-by-step pathways and incentives

Given all the above learnings, we developed pathways of supplier expectations over time, readying the suppliers to become compliant with the NHS pathway. This creates alignment and maintains ambition while being able to get LMIC-based manufacturers started on the journey with smaller steps, and at low cost. For example, we encourage and train companies to start their Scope 1 and 2 carbon accounting, and then to develop medium-term targets, before moving to public disclosure, etc. Alongside, incentives such as recognition letters or events are being designed to support supplier sustainability journeys.  

The pathway is in finalisation and will become available by end 2024.