Thermo Fisher’s Path to a More Sustainable Supply Chain

Scope 3 emissions are a hot topic in sustainability – how can companies collaborate with suppliers and partners to reduce Scope 3 emissions while still driving commercial value in the supply chain?

Global companies with complex networks of partners, suppliers, distributors and customers face the challenge of identifying, quantifying and determining their level of influence towards actioning emission reduction across the supply chain.

Leading the charge in supply chain sustainability at Thermo Fisher Scientific are Chris Shanahan, VP Global Sustainability Supply Chain, Alyssa Caddle, Director Procurement Sustainability and Matthew Yamatin, Sustainability Program Director. 

As the world leader in serving science, Thermo Fisher’s Mission is to enable its customers to make the world healthier, cleaner and safer. Naturally, sustainability plays a big part. 

“Our customers primarily operate in the life science, diagnostic and research sectors,” Chris explains. “They're solving complex analytical challenges, looking to increase productivity in their laboratories and improving patient health through diagnostics and development and manufacturing of life-changing therapies – and we’re here to support them.”

“We serve a wide variety of customers including those in academics, healthcare, pharmaceuticals, and industrial applications,” Matthew adds. “Many of the sustainability goals that we're getting asked about are Scope 3 and circularity targets. Our aim is to understand and internalise the challenges and needs of our customers and develop solutions to directly contribute to customers meeting their own sustainability targets – and often those solutions contribute to Scope 3 reductions for Thermo Fisher at the same time.”

Thermo Fisher’s sustainability strategy

Thermo Fisher’s approach to environmental sustainability centres around three key pillars:

• Climate: Guided by the company’s foundational target to reach net zero emissions by 2050. To drive down carbon emissions, the company is focused on transitioning away from fossil fuels, accelerating renewable electricity, and engaging with suppliers. “Because a significant portion of our environmental sustainability strategy is developed in service to our customers, climate is a large component of our overall CSR story,” Alyssa adds. “As a company dedicated to enabling our customers’ success, we're equally committed to enabling our customers’ success when it comes to their sustainability objectives.”
• Nature: For Thermo Fisher, this centres around waste and water management. “We have developed targets, such as ensuring that we are assessing water usage in water scarce regions,” Matthew says. “We are also looking to achieve certified zero waste at 30 of our facilities by 2025.” 
• Greener by design™: “Greener by design centres on integrating sustainable design thinking into our products and services,” Matthew explains. “We are actively pursuing various strategies to that end, including lower carbon materials such as biobased plastics, implementing recycling solutions, enabling our products to be shipped at ambient temperatures, and fostering a more circular approach in our operations and the products and services we offer.”

“When we talk about environmental sustainability versus the broader sustainability strategy – which also has social components and governance components – I think we're really taking the lead on how we operationalise and guide our businesses in how to achieve these aspirations,” Alyssa says. “We're doing that well in the environmental space and are using that momentum and learning to cascade into the other social and governance components.”

Supply chain sustainability solutions

As Thermo Fisher offers end-to-end solutions from lab products to clinical trials to contract manufacturing, “it is imperative we partner with our customers to design sustainability solutions that are both impactful and achievable,” Matthew says.

“To develop solutions, we need to ensure that we're working upstream with our suppliers to understand what opportunities exist and how we can bring them forward to our customers to help them with their sustainability goals.”

The most appropriate sustainability solution for each customer may be different. For some, a key decarbonisation lever could be implementing renewable energy into clinical trials, while for others it could be a product using biobased resin instead of fossil-based resin.

Thermo Fisher works with companies at various stages in their sustainability journey. 

“We have customers that are very mature around how they think about sustainability, and they're very advanced and they're also very realistic about what's achievable and what can be done,” Chris says. “Then you have customers that are new, sometimes we have to explain that we can’t reach the aspirational goals at the pace they expect, but we educate as part of our process. We are as transparent with our customers as we are with our suppliers and our own internal groups. And that's a commitment we all must make.”

Being a complex global company comes with a diverse web of supply partners spread around the world with a wide range of regulations and reporting requirements. For many companies – including Thermo Fisher – the value chain accounts for more than 90% of emissions. 

“We spent the first year or so starting to track our Scope 3 emissions to gain insights into our most significant relationships and how we can think differently about them, not just in terms of spend, but also in terms of how they contribute to our emissions profile,” Alyssa says.

Like many other companies, Thermo Fisher uses carbon accounting as a guide to understand and segment its supply chain.

“We need to understand their current climate literacy,” Alyssa continues. “That was the next step in the process – to get out into that supply base, have meaningful conversations, collect information and meet suppliers where they are. It is incredibly important for us to understand their challenges when we make these kinds of asks of them or bring these kinds of requirements into the marketplace.” 

Within the complex network of suppliers, partners, customers and distributors, there are instances where companies are ahead of Thermo Fisher, in which case Chris and his team work to learn from them. In other cases, when stakeholders in the value chain are able to learn from Thermo Fisher, the team supports with capability building. 

“As a manufacturer, we have experience and expertise in how we are approaching our own decarbonisation,” Alyssa says. “We’re really seeking to share best practices with our suppliers, to provide them with real examples.”

Reducing emissions in Scope 1 and 2

Thinking closer to home, Thermo Fisher has two key strategies to reach net-zero Scope 1 and 2 emissions – transitioning away from fossil fuels and accelerating the adoption of renewable electricity. 

As a large company, Thermo Fisher is actively leveraging its purchasing power to enhance the availability of renewable energy within the grid.

For example, in the US and Spain, Thermo Fisher has created partnerships with renewable energy developers. The benefits are twofold – it secures the supply of the renewable electricity for Thermo Fisher’s operations, and also gives a boost to renewable electricity in the area with guaranteed business for often spanning over a decade. 

Matthew sums up Thermo Fisher’s perspective on emissions: “At the end of the day, Scope 3 is made up of everybody else’s Scope 1 and 2.

“If each company can deal with their Scope 1 and 2, technically you can solve Scope 3. This is a very interesting connection and shows how partnerships and learnings can really drive change.”

EY: A key strategic partner

A pivotal partner for Thermo Fisher Scientific is EY. 

“Partnerships are incredibly important,” Chris confirms. “I think everybody needs to work together and that’s the way we’re approaching our sustainability work.”

EY is Thermo Fisher’s chosen partner on the assessment of the company’s readiness for the European Union’s Corporate Sustainability Reporting Directive (CSRD) including the Double Materiality Assessment activity. Introduced in 2023, the directive aims to modernise and strengthen the rules concerning the social and environmental information that companies have to report. EY has helped Thermo Fisher to comb through more than 1000 disclosure requirements and data points across 12 standards to understand what the company will need to report on.

“The regulatory landscape is changing all the time” Chris explains. “Because of this, we really need thought partners alongside us to help us parse out what this is going to mean for business. That’s where EY has helped us to move from exploring the new law that came onto the market to working out what this means for our business.”

Although Thermo Fisher is headquartered in the in the US and CSRD is a European legislation, the company recognises the importance of understanding, engaging with and reporting on CSRD, given its revenue streams in Europe.

“With EY, the partnering here is one of learning together,” Chris says. “It’s proving to be really important from an external reporting perspective.” EY also provides technical consultation on other ESG-related regulations such as the EU Deforestation Regulation, Carbon Border Adjustment Mechanism (CBAM) and others.

In practical terms, the partnership has involved a gap analysis to the regulation and a double materiality assessment.

Chris reflects on the unique experience of navigating through a process where the playbook is being developed as they progress. This is because the implementation of sustainability practices is relatively new for many companies, including Thermo Fisher.

“We’re learning, they’re learning and we’re both accepting feedback – it’s been very constructive as we’ve gone through the process. It’s been a positive engagement so far. 

“But if I think about CSRD generally, companies shouldn’t underestimate the work that’s involved.”

As Thermo Fisher continues to grow and refine its sustainability strategy, the future looks bright. The company remains dedicated to fostering strong partnerships, providing support to its customers, and championing sustainable practices throughout the supply chain.

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