Dive Brief:

• Schneider Electric recently announced a partnership with GlaxoSmithKline to manage the GSK Supplier Exchange, an online community meant to help the big pharma's supply chain partners share ideas for cutting greenhouse gas emissions.
• The Exchange is a members-only, free platform for GSK's more than 500 suppliers to connect with experts, consultants and peers, and benchmark results of sustainability initiatives. As community manager, Schneider Electric will create and curate content for supplier exchange members.
• The big pharma notes that, as more than 50% of its emissions are directly tied to its supply chain, it needed a way to address its entire community at once. So far, more than 700 members from 360 suppliers have signed up for the service.

Dive Insight:

As worldwide regulations on carbon emissions tighten, global companies are beginning to realize the path to sustainability will require help from their supply chain partners and thought leadership.

GSK's Supplier Exchange, and partnership with Schneider Electric, is a case study on how companies and suppliers can go beyond compliance when it comes to sustainability. When the program first launched, the company stated 65% of suppliers did not have an "active programme in place to reduce energy costs," Matt Wilson, head of GSK's global Environmental Sustainability Centre of Excellence said in a release at the time. 

Yet, despite the company's £2 billion ($2.6 billion) spend on materials, and the fact that more than 50% of GSK's carbon footprint is tied to its supply chain, not "one single supplier had more than 1% impact on our carbon footprint." GSK's own operations only account for 19% of the company's emission footprint, according to the GSK Responsible Business Supplement 2016.

In other words, GSK, like many other companies whose supply chains extend to hundreds of suppliers worldwide, faced the challenge of aligning hundreds of competing priorities to reduce emissions. The company, and its suppliers, would require new ideas applicable to all if it sought to meet its goal of being carbon neutral by 2050.

The Supplier Exchange does just that, but outsources the process to the supplier community itself. "As our largest value chain impact, we focus on helping our suppliers make environmental improvements," the company wrote in the 2016 supplement. At that time, 350 companies participated in the exchange, and an additional 188 reported sustainability data separately on an online monitoring platform.

However, neither ideas nor regulations guarantee success. It takes a commitment to change processes, a particularly difficult task for manufacturing facilities with age-old equipment and practices.

For example, certain materials — like "Venotlin propellant-based inhalers, which emit greenhouse gases during use" — are disproportionately unsustainable, but widely used, per the supplement. Companies would need to dedicate a significant investment in R&D, or new relationships with more sustainable original equipment manufacturers to correct such issues.

Working with established supply chain partners to improve sustainability efforts can be as effective — if not more effective — than trying to build out new relationship. In fact, purchasing trends are favoring sustainable suppliers: other large pharmaceutical companies like Novartis and Pfizer also have materials-focused sustainability goals. As a result, pharmaceutical suppliers are incentivized to innovate, and learn from others' success.

GSK's strategy of building a community of green suppliers, and its focus on innovation given its partnership with Schneider, will only help cement that trend.