UNDP's approach to sustainable procurement for health products
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In close collaboration with governments, UN agencies, manufacturers, freight forwarders and partners, UNDP is adopting incremental measures and models in its health procurement practices to minimize environmental impact and to incorporate economic and social sustainability.
UNDP Sustainable Health PSM Programme
UNDP is participating in the United Nations Informal Interagency Task Team on Sustainable Procurement in the Health Sector (SPHS). The taskforce brings together seven United Nations agencies and three multilateral health financing institutions. The annual cumulative purchasing power of the taskforce for health products is around US$5 billion, which gives opportunities to influence and pilot business models for improving environmental, social and economic sustainability.
UNDP’s Sustainable Health Procurement programme strives to promote sustainable production and consumption practices by ensuring products and services purchased have the lowest environmental impact and contribute towards positive social results. The UNDP approach to sustainable health procurement also leads towards considerable cost benefits and resource efficiencies in health procurement.
UNDP is committed to sustainable procurement as a gradual approach through working in partnership with manufacturers and other partners and by strategically leveraging the health procurement architecture as a market mechanism for change. This will foster a market transition towards more sustainable production, procurement and consumption practices for health products
UNDP has been developing different approaches to include sustainability in its health procurement practices. The main strategy comprises: optimizing medicines packaging; reducing CO2 emissions by optimizing health product procurement transport scenarios; and influencing suppliers in long-term agreements with UNDP to introduce sustainability in their business models through the monitoring and review of sustainability criteria. These sustainable approaches to procurement are carried out closely with national counterparts; the work at a country level serves as a basis for countries to start to include sustainable practices in their own procurement activities.
Pharmaceutical packaging optimization
Rethinking the necessities of packaging helps to reduce waste, optimize shipments and save costs which can be reinvested in health activities and in strengthening national supply chains.
UNDP is engaged in packaging optimization of health products and further investigating areas for innovation of product waste management. The packaging reduction project is conducted in partnership with manufacturers and freight forwarders to identify areas of opportunity, redesign packaging specifications and to calculate metrics to measure the impacts through capacity increases, reduced emissions and cost savings achieved.
UNDP has worked extensively with antiretroviral (ARV) manufacturers and national regulatory authorities on packaging optimization in order to reduce product waste and increase cost-effectiveness. During 2016-2017, the reduced packaging initiative was piloted in Zimbabwe, South Sudan, and Equatorial Guinea. The new packaging resulted in a 55% increase in shipping capacity per container and an additional reduction of 57% of CO2 per unit for the Zimbabwe trade lane. For 2.5 million packs delivered under the UNDP reduced packaging initiative, savings had generated up to US$1.20 million. Work is ongoing to extend this approach to other countries and to a wider range of ARVs procured through UNDP. This entails substantive work with national regulatory authorities to ensure compliance with labelling requirements.
With increased experience and lessons learned on medicines packaging optimization, UNDP’s approach could be replicated into national procurement systems and by other players in health procurement.
CO2 emissions reporting and reduction
Monitoring, measuring, reporting health product transportation’s CO2 footprints and rethinking procurement planning and transport help reduce environmental impact and gain cost efficiencies.
UNDP is committed to reducing its CO2 footprint including the CO2 footprint of health procurement to reduce climate change impact. UNDP collects and reports on CO2 data from specified long-term agreements to measure, monitor and reduce CO2 impacts in partnership with freight forwarders. All collected data are captured as business intelligence analytics and visualized through a dashboard that is monitored on a quarterly basis. The UNDP procurement planning capacity engagement and data provided by UNDP Country Offices is also used to switch to more efficient freight options that provide reduced emissions per shipment, which has led towards significant CO2 reductions and freight cost savings.
UNDP has analysed data on CO2 reports for procurement and supply to countries of first-line ARVs since 2015.
UNDP CO2 report for procurement and supply of first-line ARVs 2015-2017
CO2 emissions reduction scenario for specified transport freight
A transport scenario determines the potential CO2 reduction through air versus sea/road freight to establish key performance indicators. During 2015-2017, UNDP had focused on dedicated health procurement planning with the fixed-dose combination of Tenofovir, Lamivudine and Efavirenz (TLE) for the countries of Zambia and Zimbabwe to prioritize sea/road freight over air freight. The approach will incrementally be extended to other countries to monitor the CO2 reduction and other categories of health products.
Environmental and social sustainability scorecard initiative and call off criteria for tendering
Leveraging through UNDP health procurement architecture, this initiative incrementally builds a dialogue and a demand for sustainable pharmaceutical production and procurement.
UNDP is committed to working in partnership with manufacturers to meet demand for better social and environmental due diligence in pharmaceutical manufacturing and procurement. The UNDP environmental and social sustainability scorecard initiative leverages the UNDP health procurement architecture within its signed long-term agreements and contract management process. By strategically selecting health products of high-volumes, this approach encourages manufacturers to follow sustainability manufacturing criteria under the UNDP Sustainable Health Procurement Programme, as part of the ongoing procurement contracts.
UNDP has designed an environmental and social sustainability scorecard initiative, which, as specified within the suppliers’ contract, requires manufacturers to provide comprehensive information, data and supporting documentation about manufacturing facilities.
The questionnaire enquires information is in the following areas:
- environmental management systems
- energy management
- waste management
- social, labour and human rights
- other international health supply chain norms
- water management
- chemicals and hazardous substances management
- packaging details and specifications
- green house gas and other hazardous emissions
The information provided is compiled in a UNDP Sustainability Scorecard and regularly reviewed to identify opportunities to include environmental sustainability within pharmaceutical manufacturing facilities and processes. Through the collection of relevant data on suppliers’ environmental practices, it is possible to establish and monitor the baseline of adopted environmental criteria. A continuous two-way dialogue is opened with manufacturers to discuss challenges and potential for improvements in pharmaceuticals manufacturing, therefore setting incremental industry best practices.
The Global Fund and the new Responsible Procurement Framework.
The Global Fund is currently developing a Responsible Procurement Framework that will advance environmentally and socially responsible procurement in line with the` Global Fund Strategy.