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Technical Case Study

from NHS England

Approach:

  • Engaging with suppliers early to understand barriers to supply chain decarbonization and how best to support them

  • Setting clear expectations of suppliers with a publicly available roadmap outlining key milestones and requirements in advance

  • Supporting suppliers and procurement teams to understand and implement change

  • Accelerating progress by recognizing supplier achievements

 

1. Why take action?

Healthcare supply chains account for between 60-80% of the carbon footprint of health services.123 In the NHS in England, medicines, medical equipment and other goods and services the NHS buys account for 66% of its total carbon footprint.4

Reducing emissions in the supply chain is therefore essential to delivering low carbon healthcare. While health systems do not control these emissions directly, their purchasing practices can influence change.

The NHS has committed to reaching net zero by 2045 on its entire carbon footprint, including the emissions embedded in the goods and services it buys from its partners and suppliers. This scope is referred to as the “NHS Carbon Footprint Plus”.

Mapping the interventions required to reach net zero in the NHS supply chain has demonstrated that, in addition to changing the way healthcare systems consume goods and services, a significant part of the decarbonization actions needs to be driven by suppliers themselves.5  This is likely to be mirrored in other health system settings.

 

KEY MESSAGES:

  •  Global healthcare supply chains account for between 60-80% of the heath sector’s carbon footprint

  •  Reducing emissions in the supply chain is essential to addressing scope 3 emissions and is an area where health services can have significant influence

  •  Supplier driven action is needed to reduce carbon emissions in the supply chain

 

2. How to get started

This section highlights the key steps being taken by the NHS in England to encourage suppliers to take action to decarbonize the healthcare supply chain and draws out key lessons for adaptation by other health services.

Relevant resources are referenced and included in endnotes, and a list of key references is provided at the end of this case study.

 

2.1. Key learning: Engaging stakeholders

About the NHS in England:

  • Managed through 1 national team, 7 regional teams and 42 local Integrated Care Systems*
  • Publicly funded through taxation – free at the point of use 
  • 229 healthcare provider organisations (‘trusts’) and 6,925 GP practices
  • Comprehensive service, including hospital, mental health, community & primary care

*Integrated Care Systems (ICSs) are partnerships of organisations that come together to plan and deliver health services locally. 

The NHS in England works with approximately 80,000 suppliers across a broad range of sectors. Various forms of engagement, as well as a set of consistent, easy to understand messages are vital for clear communication.

Early engagement with suppliers showed that many were either already on the journey to decarbonize their operations or willing to begin. Suppliers expressed support and strongly emphasized the need for early visibility of new requirements and their practical impact on tenders and day-to-day business. They also emphasized that embedding requirements directly in the procurement process would help make sustainability a strategic business objective. This formed the basis for the development of the supplier roadmap, outlined in the next key learning.

Engagement also highlighted the diversity of NHS suppliers and the need for policies to account for the broad variety of challenges they face – in particular for small and medium-sized businesses.

Initial engagement was carried out via forums and attendance at trade body and supplier events. For targeted engagement, a survey of suppliers to the NHS in England was carried out in 2021. The results showed that most respondents already had emissions targets for scopes 1 and 2 and out of these, just under half had targets that aligned with or exceeded the NHS ambition.

For scope 3 emissions, a fifth already had a target aligned with the NHS ambition and of the remainder, the majority planned to publish their scope 3 target in the next 1-3 years.

Following a pilot with a small number of suppliers in 2021, in 2022 NHS England also invited 500 of its key suppliers from several sectors to disclose their environmental performance via CDP – a global non-profit organisation specializing in environmental reporting. For the NHS, the data supported a better understanding of where suppliers were on their sustainability journey and how they were tackling scope 3 emissions within their own supply chain. It was used to identify opportunities to collaborate, identify trends and tailor future engagement to support suppliers in the most effective way.  For suppliers, taking part in the CDP process helped them uncover environmental risks and opportunities, benchmark progress and enhance their company’s reputation through transparency.  As CDP is globally recognized and used by multiple investors, companies and regions, it also provided suppliers with the benefit of a standardised method of environmental disclosure that could be completed once and then used again in other settings.

Suppliers were asked to complete the CDP Climate Change Questionnaire which collected information on emissions, management strategies including targets, actions taken to reduce emissions, and their risks and opportunities associated with climate change. After formal invitations to participate had been received, webinars were held to explain the CDP context to suppliers and the value it provided to the NHS and to answer questions.

 

KEY LEARNING: Early engagement with suppliers and trade organisations made it possible to set an ambitious yet realistic policy and gain support. Ongoing engagement continues to provide further insight and is vital to inform the ongoing approach.

 

2.2. Key learning: Setting clear expectations

The NHS Delivering a Net Zero National Health Service report published in 2020, set the vision for a sustainable NHS supply chain by making clear that by 2030, the NHS would no longer purchase from suppliers that are not aligned with its net zero ambitions. In response to supplier feedback on the need for early visibility on new requirements, a supplier roadmap was developed and approved by the NHS England Board. The roadmap sets out clear expectations in a phased approach with steadily increasing ambitions to give suppliers time to prepare.

To avoid duplication for suppliers and minimize burden, the approach builds on UK Government procurement policies (PPN 06/20 and PPN 06/21).

While all suppliers are asked to prepare for the roadmap milestones, the specific barriers that some may face is taken into consideration – in particular, the NHS has been considering specific support for small and medium enterprises (SMEs) and voluntary, community and social enterprises (VCSEs) at each stage of the roadmap.

KEY LEARNING: Outlining upcoming sustainability requirements early responded to supplier feedback on the need for visibility and allowed them to prepare.

 

2.3. Key learning: Supporting implementation

Guidance, information and training were vital to raise awareness of the supplier roadmap overall and at the implementation stage of each milestone.

The key activities to support implementation are summarized below.

 

Suppliers:

  • Sustainable supplier forum. Set up in the early stages of policy development, the supplier forum brings key trade bodies and representative groups together to discuss upcoming policies, gather feedback on proposed approaches and share information with suppliers.
  • Guidance. Ahead of each roadmap milestone, detailed guidance is published to inform both suppliers and procurement teams of the policy, its scope and how it will be implemented.
  • Supplier webinars. Once guidance is published, regular webinars are set up and held for suppliers for ongoing engagement and support. This includes specific explanations on the policy as well as time for questions and answers.
  • Focused support. Suppliers are also given support to respond to specific policies as they are introduced. For example, for the Carbon Reduction Plan (CRP) requirements (introduced in 2023 and 2024), a CRP checking service – free and open to all suppliers – is offered by the national NHS England team.  The service allows suppliers to submit their CRP and receive feedback outside of the procurement process to ensure it meets key criteria.
  • Support for small and medium enterprises (SMEs) and voluntary, community and social enterprises (VCSEs). NHS England convenes an SME advisory group which provides a forum for two-way feedback on NHS England policies, including those aimed at reducing emissions in the supply chain. Support for SMEs and VCSEs has also been made available at each stage of the roadmap.

SMEs are also regularly signposted to relevant resources from other organizations – links are included throughout this case study and in the key references section.

 

Procurement teams:

  • Training and webinars. Regular webinars are held for staff involved in procurement, with additional, targeted training sessions provided to coincide with the introduction of each of the roadmap milestones. A one-hour net zero and social value e-learning course is also available for procurement staff at all levels to help them implement the net zero and social value weighting implemented in 2022. Staff are also signposted to other relevant government training and professional development opportunities.
  • Sustainable Procurement Forum. Since October 2020, a regular forum has been held for NHS leads in procurement and sustainability, as well as clinicians and operational managers interested in driving forward sustainable procurement initiatives.
  • Focused support. In addition to the published guidance, supporting documents are produced to help staff implement the supplier roadmap milestones as they come into effect. For the 2022 milestone, net zero and social value buying guides were produced highlighting the relevant net zero and social value themes within certain areas of procurement and how to take action in these themes to drive meaningful change. For the Carbon Reduction Plan requirements, an easy-to-use checklist has been developed to support the CRP assessment by the procurement teams.
  • Other practical resources. A set of resources including a standard set of slides explaining the supplier roadmap and milestones and social media assets was developed for local and regional procurement professionals to support them to explain the approach to their suppliers.

 

KEY LEARNING: The development of tailored resources that are easy to use by both suppliers and procurement teams, along with regular opportunities for interaction through webinars, continues to support the implementation of this policy.

 

2.4. Key learning: Accelerating change through recognition

Finding a mechanism to signpost and recognize good practice among suppliers has helped to support and accelerate change.

Evergreen is an online self-assessment tool developed by the NHS that provides suppliers with a maturity score in relation to their alignment with NHS sustainability priorities. On completing the assessment, suppliers can use the score publicly to demonstrate and add credibility to their sustainability commitments. The Science Based Targets Initiative (SBTi) – a global body enabling businesses to set emissions reductions targets in line with climate science – was one of the resources and criteria used to develop the tool. Questions are also aligned to the CDP Climate Change Questionnaire mentioned in the previous “Key learning: engaging stakeholders”.

A summary of the maturity criteria is provided below.

As sustainability initiatives evolve, the assessment will be adjusted to take into account any changes required to reflect best practice, NHS priorities and feedback received.

 

KEY LEARNING: Recognizing and supporting the sustainability ambitions of suppliers can accelerate change.

 

3. Tracking progress

Tracking supply chain emissions presents several challenges. At present, the NHS in England's emissions are calculated using a hybrid method that combines two modelling approaches: 

  • Activity-specific (“bottom-up”) modelling where activities can be measured and accurately converted to emissions. Activities include the use of specific products such as inhalers, walking aids or anaesthetic gases, which can be converted to carbon emissions through the use of activity-specific emissions factors.
  • Expenditure-based (“top-down”) modelling where the specific nature of activities or their related emissions can currently only be measured in cost terms. In some instances, items are purchased that are responsible for supply chain emissions, but the description is not precise enough to determine the specific products (for example: ‘general office supplies’ spend in financial accounts). In other instances, even when the specific product is known, there may be few product-specific emission factors currently available (for example: for individual medical devices or pharmaceuticals). In both cases, cost proxies are used based on the average emissions associated with expenditure in different economic sectors.

This type of hybrid modelling is commonly used to calculate carbon emissions. It is a pragmatic solution that takes maximum advantage of the accuracy associated with “bottom-up” physical modelling, while providing the broad coverage of system-wide “top-down” modelling.

Work is underway to continuously improve modelling of supply chain emissions, and the approach will be adjusted as new opportunities become available to refine monitoring of progress in this area.

Expenditure-based approaches are not well suited to monitor year-on-year progress because they can only describe an average carbon impact. However, other evidence can also be used in tandem to demonstrate impact and monitor progress. For example, supplier engagement focuses on measuring the proportion of suppliers with a net zero target and the proportion of spend covered by suppliers with net zero targets. This type of approach to monitoring is recommended by SBTi for reporting entities where:

  • there is limited access to primary supplier or product specific emissions data
  • the supply chain or variety of products bought is complex
  • the reporting entity predominantly consumes the resources

These proxies can help understand the impact of specific policies (for example, the NHS England policy related to Carbon Reduction Plans for suppliers).

The Evergreen Sustainable Supplier Assessment is a valuable source of this type of evidence. It allows a detailed understanding of suppliers’ sustainability maturity, measured in a consistent way, against pre-set criteria (see previous “Key learning: Accelerating change through recognition”). A summary of the detail associated with each level of the maturity criteria is provided in the matrix below.

4. In practice

Aligning sustainable healthcare procurement requirements across different health systems would help drive action from international suppliers and ensure consistency.

Collaboration is underway between health systems across the world to align procurement standards and accelerate the decarbonisation of healthcare supply chains.

The Alliance for Transformative Action on Climate and Health (ATACH), established by the World Health Organisation following COP26, includes the Supply Chain Working Group, which is focused specifically on building low carbon and sustainable supply chains for the healthcare sector.

 

5. Key resources

More information
For more information, please contact the Greener NHS team at greener.nhs@nhs.net

 

6. References

  1. Delivering a net zero health service. NHS England. (Greener NHS » Delivering a ‘Net Zero’ National Health Service (england.nhs.uk)
  2. Eckelman MJ, Huang K, Lagasse R, Senay E, Dubrow R, Sherman JD. Health care pollution and public health damage in the United States: an update. Health Affairs. (Health Care Pollution And Public Health Damage In The United States: An Update | Health Affairs)

  3. Decarbonising Healthcare Supply Chains. Sustainable Markets Initiative (SMI). (smi-hstf-supply-chains-whitepaper.pdf (storyblok.com)

  4. Delivering a net zero health service. NHS England. (Greener NHS » Delivering a ‘Net Zero’ National Health Service (england.nhs.uk)

  5. Delivering a net zero health service. NHS England. (Greener NHS » Delivering a ‘Net Zero’ National Health Service (england.nhs.uk)

  6. Engaging supply chains on the decarbonization journey: a guide to developing and achieving scope 3 supplier engagement targets. Science based targets (SBTi) Supplier-Engagement-Guidance.pdf (sciencebasedtargets.org)

 

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