What is driving AstraZeneca to be ‘100% renewable’?
“The long-term health of the planet and of society are inextricably linked. AstraZeneca can help to achieve both by ensuring that we deliver life-changing medicines in a way that protects the planet – ensuring the long-term health of our company too.
“The 2015 Lancet Commission report states that failure to address climate change would put at risk the last half century of development in health, and AstraZeneca has a critical role to play in ensuring this does not happen.
“While our focus is on our strategy of returning to growth, we have also developed a 2016-2025 Safety, Health and Environment – ‘SHE’ – Strategy that includes a set of challenging targets to minimise our contribution to climate change.
“We follow the greenhouse gas hierarchy and seek to avoid emissions wherever we can; be as efficient as possible with the energy we do consume; and, through our 100% renewable power target, ensure that the power we do use is generated from renewable sources. We see this multi-faceted approach as key, not only to reducing our direct contribution to climate change, but also as a positive message for all our stakeholders.”
How did you decide on this goal?
“Over our previous SHE strategy period from 2011-2015, we successfully met our target to increase renewable power supply as a proportion of total energy consumed. On reviewing our goals for the new strategy period, the RE100 campaign appeared to match our own ambitions and provided quality criteria for sourcing clean, renewable power which contributes to carbon footprint reduction.
“RE100 was also engaged directly and answered questions that arose during discussions about future targets that involved our global SHE team, procurement managers in our major power consuming markets, site energy managers at our biggest sites, as well as our internal energy network stakeholder group. Subsequently, a proposal was put before senior leadership to confirm both the level of our ambition and the alignment with RE100.
“Our target is to source 100% renewable power across all our sites globally by 2025. However, we identified that we have already made much progress in both the US and Europe, where there are established market instruments and renewable power support mechanisms. Therefore, an interim target has been set to achieve 100% in both these regions by 2020 which account for over three quarters of our global power consumption.”
What have been your achievements so far?
“In 2015 we sourced 14% of electricity globally from certified renewable sources by way of a combination of tariffs directly with our suppliers and sourcing market instruments – renewable energy certificates – from the national markets in which our sites are located.
“This is why we were able to achieve our 2011-2015 strategy goal of increasing by 50% the share of renewables in total energy consumption, while the carbon benefit helped us exceed our 20% absolute carbon reduction target.”
What challenges and opportunities are you experiencing?
“Like many others in the sector, AstraZeneca is facing challenges in the markets in which we operate that mean we have to work hard to justify projects or initiatives that may increase costs in the short-term, such as the premium to be paid for certified renewable power. In response to this we find that our focus on winning in the medium and longer-term in the face of short-term challenges resonates across the sustainability community, both internally and, increasingly, externally in the investor community.
“As regards our renewable power target, we know we are able to achieve 100% by 2020 in the US and Europe. However, the unknowns are greater in the remaining markets that form part of our 2025 commitment. It is also in these same markets that we expect significant growth and where grid power is typically more carbon intensive. This means they represent a growing proportion of our power consumption and carbon footprint.
“However, this also means they represent a greater opportunity to intervene and have the greatest impact, both on our site greenhouse gas emissions and the local demand for renewable power. We believe we can achieve this through pro-active procurement combined with the engagement and co-operation opportunities presented through membership of RE100.”
Why do you think it is important that companies help to increase demand for renewable energy?
“It was clear from Paris COP in December 2015 that, although governments made historic progress, the aggregated level of ambition and the timing of emissions control are currently insufficient to prevent dangerous levels of warming - the ‘ambition gap’.
“Some of the strongest declarations made at the time were by the private sector, including commitments to initiatives such as the CDP’s Road to Paris, including RE100. We believe that we are able to create the necessary demand for renewable energy that will give investors and governments the confidence to grow existing markets and develop new ones. Companies such as ourselves, who operate globally, can work together through organisations like RE100 to work with these new and emerging markets.”
Why do you think RE100 is a good initiative to join?
“RE100 provides a robust and high quality framework within which we can plan our journey to 100% renewable power. Whilst still in the early stages, our communications to our site leads and staff more generally can reference the initiative as the external benchmark by which we will align our strategy. The initiative provides us with a number of routes to 100% with varying degrees of effort and investment, and this made it particularly attractive.
“As we develop our strategy, the knowledge-sharing opportunities will be vital to connect our global procurement specialists with key stakeholders, particularly in locations where certified renewable power markets don’t currently exist.”
What else is AstraZeneca doing to help develop a low carbon economy?
“On completion of our 2011-2015 SHE Strategy, a new long-term strategy was launched in 2015 which sets out our 2016-2025 targets. The scope of the strategy was shaped in part through our Environmental Advisory Board, consisting of independent thought leaders, while the ten-year timespan aligns with our financial ambitions.
“Our goal is to limit 2025 extended operational footprint to 2015 baseline levels, and reduce the carbon intensity of our entire value chain footprint by 30%, despite our targets of doubling revenue over the same period. As part of our extended operational footprint target, we have committed to source 100% renewable power, reduce all other site emissions sources, plus some key supply chain sources like goods distribution, by 20% by 2025, and improve the greenhouse gas impact of our inhaler therapies – a significant, and growing, proportion of our carbon footprint.
“We have been engaging our key first tier suppliers of active pharmaceutical ingredient and formulation and packing services to provide energy data for a number of years and have included this impact within our extended operational carbon footprint for the first time. We gather information from these suppliers on renewable energy consumption and their related strategies, and will seek to engage them further as we progress on our own journey to 100% renewable power.”