Fostering Sustainable Procurement How Procurers Can Change the Global Health Sector

UNDP Global Fund Health Implementation Support Team – PSUAlfonso Buxens, Procurement Specialist, Copenhagen

AGENDA

How the UNDP Global Fund Health Implementation Support Team (UNDP GF-HIST) is facilitating change in the Global Health Sector. 1. Sustainability Baseline Initiative

2. Sustainability Call-Off Mechanism

3. CO2 Emissions Reporting for Logistics

4. Packaging Optimization and Innovation

5. Measuring Performance

Sustainability Baseline Initiative

The UNDP GF-HIST views sustainable procurement as a practice and performance measurement that can lead to considerable cost benefits and resource efficiencies.

Our activities are as follows: Sustainability Baseline initiative: Working together with

suppliers to collaboratively develop and monitor sustainability initiatives within the supply chain

Sustainability Call-off Criteria: Creating incremental call-off mechanisms for the UNDP Global Fund LTA framework

CO2 Emission Reporting for Logistics: Decreasing CO2

emissions by streamline planning and creating environmental performance metrics

Packaging Optimization and Innovation: Working together with manufactures and regulatory authorities to streamline packaging.

Sustainability call-off criteria

CO2 emissions and logistics

Sustainability baseline

Packaging optimization and innovation

Sustainability Baseline Initiative

The UNDP GF-HIST Sustainability Baseline (2014) includes a matrix of over 9 categories to monitor TLE-ARV suppliers in the LTA framework. This framework represents 5% of overall UNDP procurement with a total volume of $137 Mill. USD in 2015.

The Sustainability Baseline has been constructed via research, questionnaires and discussions together with TLE-ARV suppliers to understand their current market positioning for sustainability initiatives

The Sustainability Baseline is used to create realistic criteria for sustainable procurement initiatives with TLE-ARV suppliers and to help move future business in the right direction

The UNDP GF-HIST is currently working together with the SPHS Secretariat to incrementally harmonize the key focus areas with the Sustainability Baseline.

Sustainability Call-Off Criteria

By evaluating the Sustainability Baseline, incremental call-off mechanisms for sustainability initiatives have been designed in order to facilitate transformation within the LTA framework

The first set of sustainability criteria were officially released in January 2016 and are currently listed as mandatory criteria in the RFQs under the TLE-ARV LTA framework

The next set of sustainability criteria are planned for release in January 2017.

Formal written Environmental policy Initiation of an ISO 14 001 certification or equivalent (or process leading towards the

commitment) Shipping Pallets are Heat Treated and follow ISPM 15 standard No PVC plastic is used in TLE production or packaging Chemicals are in compliance of the EU REACH list Engagement of local CSR activities.

Sustainability RFQ Criteria

CO2 Emissions Reporting for Logistics

In partnership with Kuehne + Nagel A/S, data and analytics for our CO2 emissions are collected on a quarterly basis. The CO2 emissions below are from the TLE/ARVs LTA framework in 2015.

Transport Number of Shipments Total C02 Emissions (kg)

Air 9 72,902.10

Sea 39 372,796.53 Air Sea0

0.5

1

1.5

2

2.5

3

3.5

2.89

0.33

Average CO2 Emission per kg for 2015

CO

2 E

mis

sion

per

kg

Air16%

Sea84%

Total CO2 Emission (kg) for 2015445,698.62 CO2/kg

2015 CO2

Report TLE-ARV

CO2 Emissions Reduction Scenario

A trade lane scenario determines the potential CO2 reduction through air versus sea freight in order to establish environmental performance metrics.

AIRTotal CO2

0.27 kg of CO2 per TLE pack

Freight cost$0.51 per TLE pack

SEATotal CO2

0.052 kg of CO2 per TLE pack

Freight cost$0.26 per TLE pack

Trade lane scenario: Mumbai to Harare 2015Represents 95% of total procurement with orders to Zambia and Zimbabwe within the TLE/LTA framework.

An example for 80,000 ARV standard units in USD

A reduction in 0.21 Kg of CO2 per TLE pack and US$0.26 per TLE pack is acquired by switching from air to sea freight for the specified trade lane.

Decrease in CO2 81%

Cost Savings49%

Packaging Optimization and Innovation

The UNDP GF-HIST are currently working together with TLE/ARV suppliers on packaging optimization in order to reduce product waste and cost effectiveness.

For 2016 Q2, the following criteria has been piloted:

Bottles to be delivered without individual outer package Bottles to be delivered without individual leaflets glued to bottles Bottles to be shrink wrapped and packed in carton boxes / shippers Leaflets in the amount of 5-10% of bottles shipped in the carton boxes

Example: Package reduction pilot for South Sudan / Zimbabwe 2016

Old packaging New Packaging

11.16 kg per shipper 9.78 kg per shipper

72 bottles in a shipper 96 bottles in a shipper

Total Packs in a 40ft reefer container = 79,488 Total packs in a 40ft reefer container = 92,736

The new packaging results in a 16.7% increase in shipping capacity and a additional reduction of 13% kg of CO2 per unit for the Mumbai - Harare trade lane.

Waste reduction12%

Cost Savings15%

Packaging Optimization and Innovation

New packaging examples provided by one of our TLE/ARV suppliers.

Measuring Performance for 2015/2016

The UNDP GF-HIST is working towards using established metrics to measure overall performance for the Sustainability Baseline initiatives for 2015/2016 and onwards.

Sustainability Initiatives Environmental highlights, resource efficiencies and cost savings

Establishing new criteria and a incremental roadmap for changes in sustainability for the global health sector

Reducing the CO2 per trade lane, establishing environmental metrics and measuring results

Optimizing packaging, reducing waste, increasing shipping capacity and contributing to overall CO2 reduction.

Ex. Trends in CO2 emissions and trade lanes

Example

C02 Savings + Transport and Fuel Savings + Packaging Savings = Cost Savings $ Sustainability Criteria +

Thank you.UNDP GF Health Implementation Support Team – PSU

Alfonso Buxens, Procurement Specialist, Copenhagenalfonso.buxens@undp.org