Roche’s approach to tackling Scope 3 greenhouse gas emissions

SL Staff

Roche, the Swiss multinational healthcare company, is investing in quantifying and reducing the emissions associated with the goods and services it buys

2021 World Sustainability Awards Shortlisted Initiative

This example was shortlisted for the Carbon Reduction Award at the 2021 World Sustainability Awards after being reviewed, scored and discussed by a panel of 17 global Chief Sustainability Officers. The judging panel was impressed by the progress being made and felt this initiative was one that should be shared and celebrated.

Challenge

Addressing a company’s indirect environmental impact is a major challenge, with emissions difficult to assess and reduction programmes requiring commitment from a huge range of stakeholders. Roche, a Swiss multinational healthcare company, sought to tackle these challenges by developing a robust methodology, investing in visibility and engaging with their supply-base.

The company has had a highly successful corporate greenhouse gas emissions (GHG) reduction program for over a decade. This programme has helped deliver some 57% reduction in Scope 1 and 2 GHG emissions from 2004 to 2020

A radical 10 year ambition

In 2019, the company announced a new bold 10 year ambition to reduce Roche’s environmental impact by half by 2029,  and continuing their program to further reduce GHG emissions towards real-zero GHG emissions by 2050

Roche’s environmental footprint is made up of approximately two-thirds by emission to air, so these 10 year ambitions include a 40% reduction for scope 1 and 2 emissions by 2025, a 75% reduction of scope 1 and 2 emissions by 2029, and an 18% reduction for scope 3 emissions by 2025, against a 2019 baseline. This includes the goal for sustainably sourced electricity at all sites by 2025 and a commitment to decarbonising their fleet by 2030.

These commitments offered Roche a new challenge, in quantifying and reducing the emissions associated with the goods and services that they buy:

Scope 1: Direct emissions from owned or controlled sources

Scope 2: Indirect emissions from the generation of purchased energy

Scope 3: Indirect emissions in the value chain. Including emissions upstream and downstream

Scope 3 emissions are critical to Roche as they represent over 90% of their greenhouse gas emissions. Roche needed oversight of these emissions and a new strategy to address them

Approach

Managing the project

Operating through a decentralised delivery model, everyone in Roche shares in the delivery of sustainability objectives. The delivery model is coordinated and led by Group functions, and heavily supported by the company’s extensive network of sustainability delivery partners in Roche’s affiliates.

Responsibility for delivering on sustainability commitments is shared across relevant Group functions: Group Corporate Social Responsibility, Group Safety, Security, Health & Environment (SHE) and Group Finance. The most senior sustainability governance body, overseeing these activities is the Corporate Sustainability Committee, which reports to the Board of Directors.

Additionally accountability exists at a site-level for Roche’s largest sites. In 2019 Group SHE requested that all sites develop an individual roadmap towards the sustainable energy future, that  large sites, with more than 3,500t Scope 1 & 2 CO2e emissions, needed to submit for review.. Seventeen sites, covering 83% of the total Scope 1 and 2 emissions, submitted plans in 2020, which demonstrate how Roche can transition towards a sustainable energy future. Staff across the business also have sustainability goals embedded within their bonus structure.

To address the challenge of value chain sustainability, compliance and regulatory requirements, human rights risk, environmental stewardship and Scope 3 emissions, a new Sustainability and Risk (S&R) team was established in 2019. The team has led and enabled initiatives, which require supply chain involvement for their delivery. This team executes on the strategy set out by the Supply Chain Sustainability Council, an internal decision making body at executive level. The S&R team’s role is to identify sustainability opportunities and to allocate resources, people and expertise to those opportunities.

Visibility and tracking

In 2020, Roche formalised a global methodology for Scope 3 measurement. This methodology involved multiplying spend volumes by the estimate of all emissions from every process throughout the supply chain for sourced items, a model provided by the UK Government’s Department for Environment, Food & Rural Affairs. Using this model, global procurement and a working group focused on Scope 3 emissions, created a greenhouse gas emissions dashboard.

The dashboard is available to everyone at Roche, and can be used by General Managers, country affiliates, departments and functions to understand the impact they are having on Scope 3. This provides visibility into the carbon emissions for every good and service purchased at Roche – which in 2020 accounted for 79% of Roche’s scope 3 emissions. The data is also used by the procurement category and supplier management teams, in meetings with suppliers to prompt discussion on reporting and reduction initiatives, and by the Sustainability and Risk team to inform reporting and communications. The dashboard is being integrated into procurement systems to better influence decision making and has been designed to be visually engaging to help employees understand the impact of their purchasing habits.

Further data to drive decision-making comes from suppliers, with procurement proactively engaging to gather data on emissions at their source. Suppliers are asked to share their site-specific carbon data through an online reporting platform, provided by Manufacture 2030. This data is then used to set targets, and to proactively monitor reductions.

The supplier reporting initiative started with a pilot at Roche’s Germany sites, focusing on 100 suppliers which represented 65% of Germany’s total scope 3 emissions. Following the pilot’s success, the supplier environmental improvement programme has been scaled globally, with a focus on 90 suppliers which represent 43% of Roche’s total global scope 3 emissions. Suppliers were selected based on their emission levels, strategic importance to Roche and levels of spend. The data provided is used to determine the maturity levels of suppliers, who are then provided with a classification that establishes the steps Roche needs to take to drive improvements. This can include a combination of setting targets for site emissions, offering capability improvement through training programs, best practice sharing and the identification of collaborative projects.

Mitigation and reduction

Roche engages heavily in identifying and executing reduction strategies for lower emission solutions. These strategies have included;

  • Reducing, reusing and recycling: Of highest priority are emission reductions at source by introducing energy conservation and efficiency improvement measures. In addition, this has involved influencing business travel behaviours, reducing spend on non-essential goods and services and recycling or reusing materials. SHE and procurement has been working on attitudes towards business travel, alongside the travel and operations team to highlight the benefits of virtual meetings and rolling out MarCO2Polo, a CO2 emission dashboard to provide an overview of air travel emissions from individuals and teams.
  • Substituting and innovating: This has involved substituting non-sustainable energies with sustainable energies, switching to digital printing solutions, considering environmental stewardship in product designs and alternative logistics methods and routing – for instance driving a shift from airfreight to sea freight.
  • Engaging and partnering with suppliers and supply chains: This involved transitioning suppliers towards renewable electricity and incorporating sustainability as a core element of global supplier relationship management strategies .

One of these supplier partnership strategies involved partnering with E.ON to offer Roche’s supply chain partners renewable energy at a combined, and more competitive rate. The offer was extended to high spend, high emission suppliers, representing 80% of the UK’s spend, as well as smaller and diverse suppliers. In addition, an online portal was set up for any current or potential suppliers who would be interested in participating. Of suppliers that have been engaged around the offer, 80% have expressed an interest. The offer involves not only being able to take advantage of fully wind-backed electricity at a competitive rate but also having access to E.ON’s portfolio solution which provides advice on purchasing strategies and a report on carbon impact.

Another area of focus for these partnerships has been around reusing materials. A number of ongoing supplier collaboration projects have been established to understand opportunities to reduce levels of waste. An interactive workshop was held with a key supplier to focus on single use technology and filters, looking at ways to recycle, reuse and substitute materials. With another supplier, a partnership project has been established around reducing plastic waste. One way in which Roche is working with this supplier is in the evaluation of recycling technologies

Outcome

The reductions in Scope 3 are contributing to a continuation of the company’s overall success, with the company having reduced their greenhouse gas emissions in Scope 1 & 2 by some 57% since 2004.

Roche’s approach not only provides visibility into the emissions of their suppliers, but also drives a long lasting, trusting and sustainable relationship with those organisations. The approach provides the levels of transparent site-specific data required to work collaboratively in developing joint reduction plans. Dialogue has begun with many suppliers and in a short space of time these initiatives are receiving a highly positive reception.

The partnership with E.ON has been particularly effective. In the first 3 weeks, 5% of invited suppliers started the process of signing up to the EON deal. Roche predicts that if 20% of their top UK suppliers take up the offer, that they will achieve Scope 3 reductions of around 3.2% of their total UK footprint.

Next steps

Building on these achievements, over the next few months Roche plans to formalise sustainability deliverables in strategic supplier relationships. This will help Roche move from opportunity-driven approaches to systematic consideration of environmental and socio-economic impacts in their supply chain. The team are also working on a methodology that will enable expansion of the impacts recorded, and mitigated, beyond carbon, so that they can have a more holistic view of how to improve their sustainability footprint. The team is working with third parties to make sure that they develop a robust approach to quantifying the value Roche and its supply chain can deliver.

Advice for others

Lucy Pickett, Senior Global Sustainability Manager at Roche, highlighted the following learnings for other organisations:

Design: executives should think big, be ambitious, and try, even with the risk of failure. As Ricky Gervais famously articulated “We are not a failure because we didn’t succeed, we are a failure because we didn’t try”

Sell & Simplify: Illustrate the benefit of sustainability to business stakeholders, treating “sustainability as a form of currency”. If you can put a price on sustainability, and incorporate it as part of the framework of business decisions without too much additional analysis being needed, it suddenly becomes a valuable commodity.

Engage: Engage your people, your industry and leaders from other industries. Engage your people who will become your strongest champions. They will help co-design, co-own and co-deliver sustainability. We need to move to a place where it becomes unacceptable for a business not to make sustainable choices. To make a difference we need to work together to tackle difficult challenges within our industries. Engage with leaders from other sectors. There are plenty of transferrable industrial practices.

Pick your battles: Start with the low hanging fruit, having some quick wins encourages both management and employees to do more. Don’t put everything in the ‘too difficult box’ but do communicate your successes to create momentum and credibility before tackling the complex areas.

Image: Michael Vi / Shutterstock.com

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