AmerisourceBergen Aims to Cut Greenhouse Gases By 56% By 2032. Here’s How

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by | Feb 24, 2023

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AmerisourceBergen Corporation distributes pharmaceuticals, over-the-counter medicines, and healthcare supplies and equipment to healthcare providers throughout the United States. It provides about 20% of all pharmaceuticals sold and distributed in this country. It has 26 distribution centers in the United States, nine in Canada, and 150 company-owned offices globally. The Pennsylvania-based company has 44,000 workers in 50 countries and more than $230 billion in annual revenues.

 It changed its name to Cencora this year. But this case study examines the successes it has had as AmerisourceBergen. Unless otherwise noted — for the reasons stated — this analysis will refer to AmerisourceBergen.

In 2021, AmerisourceBergen committed to setting a science-based target aligned with the Science Based Target initiative guidance. It aims to cut its Scopes 1 and 2 greenhouse gas emissions by 54.6% by 2032 from a 2019 baseline. To that end, in 2022, it finished 11 lighting retrofit projects while adding more renewables.

It also achieved an 80% waste diversion across its U.S. human health and at its wholly-owned subsidiary Alliance Healthcare locations. As such, it has removed more than 230 metric tons of single-use plastic secondary packaging since announcing the campaign in 2019. It also diverted more than 52,000 pounds of plastic stock bottles from landfills.

The company also introduced several sustainability initiatives in 2021, including adding an automated packaging solution that reduces void space and cardboard use by sizing packages appropriately. Its subsidiary, Alliance Healthcare UK, invested in reusable totes, reducing single-use plastic and cardboard by 2 million units each year. It also partnered with a third party to give customers access to tools to improve their packaging solution.

“Every year, our ESG reporting gives stakeholders a better understanding of the progress we are making against our environmental, social, and governance initiatives, and it helps hold us accountable as we work to continuously improve. Working as a united team around the world embodying one purpose makes a significant impact on the planet and our communities,“ says Susan Lorenz-Fisher, AmerisourceBergen’s Senior Vice President, Global Sustainability & ESG Integration, in the 2022 sustainability review. 

The successes: 

— Reduction of greenhouse gases by 5% in 2019.

— The piloting of electric vehicles. In 2021, it started using hybrid vans to deliver medicines and medical products to customers in the Netherlands.

— The deployment of more sustainable packaging for cold shipping, such as using reusable totes and non-toxic plant-based refrigeration.

— Conducting climate risk assessments at more than 100 locations to ensure supply chain resiliency.

— Working collaboratively across the enterprise to implement efficiency opportunities and share best practices and lessons learned to further the cause of sustainability.

— Aligning disaster response initiatives with climate analysis. “As the distributor of tens of thousands of products, our infrastructure is built to enable secure, daily ordering and distribution,” the company says. “AmerisourceBergen also seeks to buy goods and services from suppliers, contractors, and vendors who share our responsible-sourcing goals, and we expect partners to uphold our values as exemplified in our Supplier Code of Conduct.”

— Alliance Healthcare in the UK — its wholly-owned subsidiary — reduced single-use plastic secondary packaging within the business by 60% over three years.

Jim Cleary, executive vice president, and the chief financial officer, spoke with 3BL CSR Wire about the company’s progressive tilt toward environmental, social, and governance policies — living the mission inside and outside the company’s four walls. He said investors are incorporating ESG into their decisions. And regulators such as the US Securities and Exchange Commission require more disclosures, such as those centered on climate risks.

 The company has signed on to the U.S. Department of Health and Human Services Health Care Sector Climate Pledge. AmerisourceBergen also commits that 82% of its suppliers will have science-based targets by 2027.

“With respect to our customers, they’re managing their supply chains to ensure that their ESG goals are met, and AmerisourceBergen can add significant value by helping upstream and downstream customers with their environmental impact measurement,” he told the publication. “ESG is deeply ingrained into our business operations, from focusing on operational efficiency to reducing emissions to investing in diversity, equity, and inclusion initiatives.”

Interestingly, the healthcare sector makes up about 8.5% of the United States’ greenhouse gases, which has caught the eye of the Biden administration, which wants the industry to hit net zero by 2050. While distributors like AmerisourceBergen have gone to great lengths to cut their emissions, the hard part is getting their suppliers to do the same.

According to a Bloomberg L.P. story, hospitals and distributors can use their buying power to encourage their supply chain to become more sustainable. “If one large hospital system or one of these groups pushes their suppliers on addressing emissions, that could affect a supplier’s bottom line, and “these companies will start to take notice,” says Matthew Meyer, co-chair of the University of Virginia health sustainability committee and a professor of anesthesiology.

“Vendors are going to have the option to either be public about this information and work to make their product the most sustainable, or they are going to risk losing the contract,” Meyer concludes.

The story points to the UK’s National Health Service, which plans to decarbonize by 2045 and has already cut its CO2 emissions by 26% between 1990 and 2020. It requires its largest suppliers to report their greenhouse gases before benchmarking those results against others. The aim is for each to be carbon neutral.

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