Hong Kong-based Zuellig Pharma gets top marks on carbon disclosure

With ESG (environmental, social, and corporate governance) fast moving from a buzz word to a regulatory and fiduciary responsibility, Zuellig Pharma is placing increasing importance on its disclosure and reporting

27 April 2023 | Company Release (Image supplied)

Zuellig Pharma, one of the largest healthcare services groups in Asia, has announced its score of “A-” for Supplier Engagement from global carbon disclosure platform CDP, making it the first and only company worldwide in its activity group to receive this recognition. This comes on the back of scoring “B” on CDP Climate Change earlier in the year. Zuellig Pharma first participated in this voluntary disclosure in 2021 and has improved their Climate Change score from “C” to “B”, and their Supplier Engagement score from “B” to “A-” within a year. Their improved scores set them well above the global, Asia and industry averages and is a testament to their long-standing commitment to sustainability and driving climate action across the value chain.

CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impact.

“These ratings affirm our decarbonisation efforts in an industry where 70% of greenhouse gas emissions sit within the value chain. We are proud to receive recognition and are grateful to our suppliers for their commitment to sustainable business, which has enabled us to navigate the complexity of coordinating these efforts in an operationally diverse environment. We will continue working closely with our clients, customers and suppliers to drive our sustainability agenda and make a positive impact on the communities we serve,” said John Graham, CEO, Zuellig Pharma.

Active engagement with suppliers to reduce carbon footprint
Zuellig Pharma is the first and only company worldwide in their activity group (Road Transport) to make it to the A-list for CDP’s Supplier Engagement Rating (SER). The SER acknowledges that purchasing organisations have the potential to incentivise significant environmental changes in their supply chain through supplier engagement best practices. A significant portion of Zuellig Pharma’s efforts to reduce greenhouse gas (GHG) emissions focuses on Scope 3 emissions[1] through procurement policies. The company incorporates sustainability criteria within its supplier selection processes and contracts and prioritises working with suppliers that demonstrate commitment to reducing their carbon footprint. Suppliers are required to report the carbon impact of activities, and the company’s largest suppliers have environmental targets that Zuellig Pharma maps against its own carbon reduction targets.

Sustainability initiatives with suppliers to reduce Scope 3 emissions include the use of biofuel and newer generation engines, driver training and monitoring to promote emission-reducing driving habits, innovative insulation in cold trucks to reduce the use of aircon blowers, aerodynamic improvement to achieve fuel savings, and constant refinement of asset utilisation rates and routes. These efforts are tracked and assessed on the IntegrityNext platform, which provides insights on suppliers’ sustainability practices and enables Zuellig Pharma to flag improvement areas and mitigate issues through ongoing dialogue and education.

In addition, Zuellig Pharma runs Sustainability Development Programmes to drive concrete and timebound actions to improve sustainability performance. It also works with suppliers on one-off sustainability initiatives, such as co-developing the use of solar panels to power refrigeration units in delivery vehicles in Malaysia and launching an electric-powered fleet in South Korea to reduce its carbon footprint and increase fuel efficiency.

Organisation-wide commitment to reducing greenhouse gases recognised by CDP
The score of “B” on Climate Change awarded by CDP for 2022 recognises Zuellig Pharma’s commitment to reducing absolute scope 1 and 2 GHG emissions by 42% as well as a 25% reduction in absolute scope 3 GHG emissions by 2030, in addition of its goal to be carbon neutral in its own operations by that year. These targets have also been validated and approved by the Science-Based Targets initiative (SBTi). The company has gained a comprehensive view of its total direct, downstream and upstream GHG and identified opportunities for emissions reduction by screening all Scope 3 categories listed by the GHG Protocol to identify those relevant to its activities. This has enabled it to initiate actions such as:

  • Reducing energy use from IT infrastructure by moving most of its regional services from on-premises hosting to cloud-based Microsoft Azure data centres, achieving greater energy efficiency of up to 93% and greater carbon efficiency of up to 98%.
  • Rolling out solar panel installation starting in Taiwan and Vietnam with installation planned for Singapore, Thailand, and Cambodia in 2023. This has so far generated 5.4M kWh, covering 5% of electricity needs.
  • Switching to electric vehicles – The company is actively moving towards greener transport fleets in selected markets. By 2030, internal combustion engine (ICE) delivery vehicles will be phased out in Singapore, while Korea will use electric vehicles for all short-distance deliveries.

Apart from CDP ratings, Zuellig Pharma’s sustainability efforts have also been recognised with the EcoVadis Platinum certification for two years running, placing the company at the top 1% of all assessed companies worldwide and ranking it #1 globally in their industry amongst 2,800 logistics leaders