Thermo Fisher: Prioritising Sustainability in Supply Chain
Scope 3 emissions— indirect emissions that occur across a company’s value chain—have become a hot topic in the world of sustainability. As companies seek to minimise their environmental impact, many are looking to reduce these emissions while maintaining commercial value across their supply chains.
However, for global companies with vast networks of partners, suppliers, distributors, and customers, the challenge lies in identifying, measuring, and influencing emission reductions across this complex ecosystem.
At the forefront of Thermo Fisher Scientific’s efforts to enhance supply chain sustainability are Chris Shanahan, Vice President of Global Sustainability Supply Chain, Alyssa Caddle, Director of Procurement Sustainability, and Matthew Yamatin, Sustainability Program Director. Thermo Fisher, a world leader in serving science, is deeply committed to its mission of enabling customers to make the world healthier, cleaner, and safer. Sustainability, therefore, is integral to its operations and goals.
Thermo Fisher’s sustainability strategy
"Our customers primarily operate in the life sciences, diagnostics, and research sectors," explains Chris. "They are tackling complex analytical challenges, working to boost productivity in their laboratories, and improving patient health through diagnostics and the development and manufacturing of life-changing therapies. We're here to support them in these efforts, ensuring that our sustainability practices align with their needs."
Matthew adds, "We serve a broad spectrum of customers, including those in academia, healthcare, pharmaceuticals, and industrial applications. Increasingly, we are being asked about sustainability goals, particularly related to Scope 3 emissions and circularity. Our objective is to understand our customers' challenges and develop solutions that help them achieve their sustainability targets. Often, these solutions contribute to Scope 3 reductions for Thermo Fisher as well."
Thermo Fisher's sustainability strategy revolves around three key pillars: climate, nature, and a programme known as Greener by Design™.
Climate: The company is guided by an overarching goal to reach net zero emissions by 2050. To achieve this, it is focused on reducing carbon emissions through a transition away from fossil fuels, accelerating the adoption of renewable electricity, and engaging closely with suppliers. "A significant portion of our environmental sustainability strategy is developed in service to our customers," notes Alyssa. "As a company dedicated to enabling our customers' success, we are equally committed to supporting them in achieving their sustainability objectives, particularly in the area of climate."
Nature: This pillar focuses on waste and water management. "We have set specific targets, such as assessing water usage in regions experiencing water scarcity," explains Matthew. "Additionally, we aim to achieve certified zero waste at 30 of our facilities by 2025. By addressing waste and water management, we are contributing to a broader environmental stewardship that aligns with our sustainability goals."
Greener by Design™: This initiative is centred on integrating sustainable design principles into Thermo Fisher’s products and services. "Greener by Design involves a variety of strategies," says Matthew. "These include the use of lower-carbon materials, such as biobased plastics, the implementation of recycling solutions, the development of products that can be shipped at ambient temperatures, and fostering a more circular approach in our operations and the products and services we offer."
When discussing Thermo Fisher’s approach to environmental sustainability versus the broader sustainability strategy—which also includes social and governance components—Alyssa underscores the company’s leadership in the environmental arena. "We are leading the way in how we operationalise and guide our businesses to achieve these sustainability aspirations," she says. "We're excelling in the environmental space and using that momentum and experience to address the social and governance aspects of our broader sustainability strategy."
Tailoring supply chain sustainability solutions
Given Thermo Fisher’s extensive offerings—from lab products to clinical trials and contract manufacturing—collaborating with customers to design sustainability solutions that are both impactful and achievable is essential.
"To develop effective solutions, we must work upstream with our suppliers," explains Matthew. "This allows us to understand the opportunities that exist and how we can leverage them to help our customers achieve their sustainability goals."
The sustainability solution that works best for each customer can vary widely. For some, a critical lever for decarbonisation might be the implementation of renewable energy in clinical trials. For others, it could be the use of a product made from biobased resin instead of fossil-based materials. By tailoring solutions to the unique needs of each customer, Thermo Fisher helps them progress on their sustainability journeys.
Thermo Fisher engages with customers at different stages of their sustainability evolution. "We have customers who are very advanced in their sustainability efforts and are realistic about what can be achieved," Chris says. "Then, we have customers who are just beginning their sustainability journey. In those cases, we sometimes have to explain that their goals might not be achievable at the pace they expect. Education is a key part of our process. We strive to be as transparent with our customers as we are with our suppliers and internal teams. This transparency is a commitment we all share."
As a global company with a complex web of supply partners spread across the world, Thermo Fisher must navigate a variety of regulations and reporting requirements. For many companies, including Thermo Fisher, the value chain accounts for more than 90% of total emissions. "We started by tracking our Scope 3 emissions to gain insights into our most significant relationships and to think differently about these connections, not just in terms of spend, but also in terms of how they contribute to our overall emissions profile," Alyssa explains.
Like many other companies, Thermo Fisher uses carbon accounting as a tool to understand and segment its supply chain. "We need to assess the climate literacy of our suppliers," Alyssa continues. "The next step in our process involved engaging with our supply base, having meaningful conversations, collecting information, and meeting suppliers where they are. Understanding their challenges is crucial when we make sustainability demands or introduce new requirements to the marketplace."
Within Thermo Fisher's extensive network of suppliers, partners, customers, and distributors, there are instances where companies are ahead of Thermo Fisher in terms of sustainability practices. In these cases, Chris and his team are eager to learn from these partners. Conversely, when Thermo Fisher is more advanced, the team works to share their expertise and support capability-building efforts within the value chain.
"As a manufacturer, we have valuable experience and expertise in how we approach our own decarbonisation efforts," Alyssa says. "We are committed to sharing best practices with our suppliers and providing them with concrete examples that they can apply to their own operations."
Strategies for reducing Scope 1 and 2 emissions
While much of the focus is on Scope 3 emissions, Thermo Fisher is also implementing strategies to reduce its Scope 1 and 2 emissions, which refer to direct emissions from owned or controlled sources and indirect emissions from the generation of purchased energy. The company’s two primary strategies to reach net-zero Scope 1 and 2 emissions are transitioning away from fossil fuels and accelerating the adoption of renewable electricity.
As a large corporation, Thermo Fisher is leveraging its significant purchasing power to enhance the availability of renewable energy on the grid. This approach not only secures the supply of renewable electricity for Thermo Fisher’s operations but also contributes to the broader adoption of renewable energy in the regions where the company operates.
For example, in the United States and Spain, Thermo Fisher has entered into partnerships with renewable energy developers. These partnerships provide a dual benefit: they guarantee a supply of renewable electricity for Thermo Fisher’s facilities while simultaneously supporting the growth of renewable energy production in these areas, often through long-term agreements that span over a decade.
Matthew summarises Thermo Fisher’s perspective on emissions reduction: "At the end of the day, Scope 3 is essentially everybody else’s Scope 1 and 2. If each company takes responsibility for their Scope 1 and 2 emissions, we can collectively address the challenges of Scope 3. This connection highlights how partnerships and shared learning can truly drive meaningful change."
EY: A strategic partner in sustainability
A crucial partner in Thermo Fisher's sustainability journey is EY, a global leader in professional services. EY plays a pivotal role in helping Thermo Fisher navigate the complexities of sustainability reporting and regulation, particularly concerning the European Union’s Corporate Sustainability Reporting Directive (CSRD). This directive, introduced in 2023, aims to modernise and strengthen the rules around the social and environmental information that companies must disclose.
"Partnerships are incredibly important in our sustainability work," Chris confirms. "We need to work together, and that’s exactly how we are approaching our collaboration with EY."
EY has been instrumental in helping Thermo Fisher prepare for the CSRD by conducting a Double Materiality Assessment and assessing the company's readiness to meet the directive’s requirements. This process involved combing through more than 1,000 disclosure requirements and data points across 12 standards to determine what Thermo Fisher will need to report on.
Although Thermo Fisher is headquartered in the United States and CSRD is a European regulation, the company recognises the importance of understanding and engaging with this legislation, given its significant revenue streams in Europe. "With EY, the partnership is very much about learning together," Chris says. "This collaboration has proven to be crucial from an external reporting perspective."
EY also provides technical consultation on other environmental, social, and governance (ESG) regulations, including the EU Deforestation Regulation and the Carbon Border Adjustment Mechanism (CBAM). The partnership has involved a thorough gap analysis and a double materiality assessment, which have been vital in aligning Thermo Fisher’s practices with the latest regulatory requirements.
Reflecting on the partnership with EY, Chris notes, "Navigating sustainability reporting is a new experience for many companies, including us. We’re learning, EY is learning, and we’re both open to feedback. 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."
