How Providers Are Cutting Carbon Through Supply Chain Innovation

The care sector is on the cusp of a major transformation; as environmental concerns take centre stage, care providers are facing increasing pressure from local authorities and the NHS to reduce their carbon footprint throughout their supply chains if they want to secure contracts. This shift isn’t just about being eco-friendly or ‘seen to be green’ – it’s becoming a necessity for continued compliance in an industry where ESG (Environmental, Social, and Governance) factors are rapidly gaining importance, impacting both reputation and profitability.

Where is the drive coming from?

Being “green” is much more than merely a marketing opportunity, it has become a key requirement in public sector tenders and selection criteria. ESG scoring, e.g., on social values and emission reporting is now more prevalent and important for those wishing to win public funded contracts and indeed appeals to discerning self-funding clients.

Local authorities have identified social care providers as significant contributors to scope 3 emissions – indirect emissions that occur in a company’s supply chain. This realisation has sparked a chain reaction, with authorities tightening their grip on environmental credentials.

But it doesn’t stop there. The CQC is expanding its’ assessment criteria to include ESG factors, and the NHS is also pushing its’s focus to ESG principles. These developments along with expected government reporting obligations to become mandatory for not just the larger organisations (ESOS) signal a clear message: ESG compliance is likely to become mandatory for care providers.

Sustainable Sourcing

For care providers, the supply chain presents the most significant opportunity for reducing CO2 emissions and is where the more forward-thinking care providers are leading the change.

Local Purchasing

Care home operators are increasingly partnering with local suppliers to reduce transportation emissions. By sourcing food, medical supplies, and other essentials from nearby providers, not only reduces carbon emissions and air miles but also helps to support local economies, thereby adding real social value. Where goods can’t be sourced locally, purchasing from near-shore providers rather than overseas also helps to reduce time-to-deliver and emissions. Some organisations within the consumables industry are starting to shift manufacturing away from the Far East and toward Europe to support reducing CO2 emissions.

Exploring ways within the supply chain to identify opportunities to purchase UK or locally manufactured products can drive emissions and door-to-door delivery times down and in some cases reduce the total cost.

Green Transportation

Innovative providers are reimagining their logistics. Electric vehicles for deliveries, optimised routing systems, and consolidated shipments are becoming the norm, significantly reducing the carbon footprint of supply chain operations. Working with suppliers to consolidate deliveries into single weekly “Drop Days” can also significantly reduce overall CO2 emissions – especially given multiple sites, multiple providers.

Waste Reduction

Care providers are adopting circular economy principles with their suppliers. They’re working with suppliers to minimise packaging, implement take-back schemes e.g. for medical equipment, and find creative ways to repurpose or recycle materials that would otherwise end up in landfill sites. Working closely with waste partners, care providers can ensure recycling practices are up to date, and suppliers route as little as possible to landfill and even use local contractors to lower emissions and generate income from waste material.

More and more Care providers are introducing an ESG dialogue with their suppliers and are making ESG criteria a critical and integral part of their supplier selection decisions.

The Route Forward

As the care sector grapples with these changes, it’s clear those who adapt quickly will thrive. The supply chain is a huge part of the ESG transformation process.

Care providers which take proactive steps towards green supply chains won’t just be reducing their carbon footprint, they’ll be positioning themselves as industry leaders, ready to meet the evolving demands of regulators, local authorities, and an increasingly environmentally conscious public.  They will increase their ability to win new business and to drive social value by supporting their local communities and supply networks.  Other benefits include reducing costs and the need to offset carbon emissions. Organisations with strong and demonstrable ESG principles may also find it easier to recruit new employees, especially from the Millennial and GenZ generations.

If you’d like to learn more about how to integrate ESG into your supply chain and to deliver savings at the same time, please join the Care England/Marr Procurement webinar on 10 December. Register Here.