Five steps for a net-zero supply chain

Supply chain activities represent 65% of the emissions the trust produces (Annual Shine Report, 2022). They are categorized as Scope 3 emissions, meaning they are outside the control of the health care sector (Health Care Without Harm Europe, 2022). NHS England uses NHS-eClass spend codes to calculate supply chain emissions, a bespoke classification system for products and services that analyzes expenditure. Basing hospitals’ emissions calculations on this classification can be misleading – for example, higher spending means higher emissions. This method does not consider other factors, such as suppliers' efforts and actions to reduce their emissions. The Newcastle upon Tyne Hospitals NHS Foundation Trust adopted a more precise and reliable method for calculating emissions produced by supply chain activities.

• Achieve net-zero carbon by 2040, five years ahead of the NHS England target.
• Develop a more precise and reliable way to calculate our carbon footprint.
• Track and monitor emissions from supply chain activities, including Scope 3.
• Engage and support hospital suppliers to reduce their emissions.
• Include carbon reduction goals in procurement processes.
• Sustain the local supply chain.

Newcastle upon Tyne hospitals are committed to net-zero energy by 2040, five years ahead of NHS England’s target (2045). The trust is also the first organization to align with the global carbon reduction target of 1.5 degrees. To achieve this goal, improve our sustainability performance, and reduce our emissions, we launched a local enterprise partnership with SmartCarbon Ltd.

Thanks to the partnership with SmartCarbon Ltd., we have developed a new method for calculating our hospitals’ emissions, which revealed that they were 43% higher than previously calculated. The new calculations also showed us that while hospitals have successfully reduced emissions from energy production by 20%, emissions related to hospital procurement have increased by 50%.

The next step was to pilot a new method for calculating the emissions coming from supply chain activities. For this scope, we established a sustainable procurement working group that focuses on the suppliers' involvement, commitment, and alignment with the hospitals’ sustainability goals.

Together with SmartCarbon Ltd, we created a bespoke SmartCarbon calculator platform for the health care sector and a five-step program for a net-zero supply chain. This would address the shortcomings of previous methods and actively involve and support suppliers.

The five-step program

1. Contact suppliers and provide them with a five-question survey.
2. Provide a support package with information and webinars to inform and engage suppliers about the action plan and Carbon Footprint Plus reporting, which includes emissions that the NHS has control or influence over, such as those from the supply chain. Involving suppliers in the development of the reporting tool will help the NHS obtain more accurate data on its emissions.
3. Invite suppliers to register their carbon footprint performance via the SmartCarbon platform.
4. Require suppliers to commit and publish net-zero targets by 2030, aligned with Newcastle Hospitals’ 2040 ambition.
5. Encourage suppliers to publish a carbon reduction plan to reduce their emissions to the greatest possible extent and consider offsets for the remaining emissions.

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The program received generally positive feedback. A recent survey of 489 suppliers showed that 98% pledged support to help Newcastle Hospitals achieve their net-zero emissions goal – 64% already have carbon reduction targets or plans, 68% already measure and report their carbon footprint and 57% were interested in attending an online workshop.

Two years after the start of the project, there was growth of 50% in supplier involvement, and of the 3,000 suppliers in Newcastle, 756 answered the survey (23%). The program was awarded the procurement award 2021, the ASHN Innovate Award in the net-zero innovation of the year category in 2022, and the Towards Net Zero Award at the HSJ Awards 2022.

Several NHS organizations and suppliers have adopted the model developed by Newcastle upon Tyne Hospitals. Many other NHS trusts interested in learning more about this approach have attended the webinars.

• Five-step program for a net-zero supply chain developed.
• Supplier dashboard to calculate supply chain emissions developed.
• Hospital suppliers involved and committed to net zero.
• Reliable supply chain emissions data collected.

Regardless of the methodology, calculating emissions related to supply chain activities remains particularly challenging, as these emissions lie outside the control of the hospitals. Despite our best efforts, the existing method does not allow us to achieve net zero.

To expand the five-step program for a net-zero supply chain, together with SmartCarbon Ltd we have settled on the following next steps: 

• Increase engagement with suppliers, with the goal of 10% of suppliers finalizing step 3 outlined above.
• Suppliers must have step 4 in place by 2030.
• Launch supplier webpage with guidance and support for suppliers to progress to net-zero carbon.
• Focus action on supplier engagement in carbon hotspots, such as medicines and construction.
• Introduce a contract requirement for key suppliers to commit to action on the climate emergency.
• Establish opportunities to embed sustainability and climate action into processes and procedures.

Adopt the UK government's social value model, meaning all NHS tenders must include an assessment of how suppliers will contribute to net-zero targets and social value.

• Designing a net-zero roadmap for health care (Health Care Without Harm Europe, 2022)
• You can find more information on this initiative in the trust’s Annual Shine Report
• Sustainability Showcase SmartCarbon Ltd 
• SmartCarbon
• UK Government's Social Value Model