Medtronic targets supply chain for greenhouse gas emission reductions

Medtronic (NYSE:MDT) plans to reward suppliers that help reduce greenhouse gas emissions throughout its supply chain, citing “the risks that climate change poses to human health and long-term global financial stability.”

Fridley, Minnesota–based Medtronic said the efforts will help the biggest company in medtech achieve net-zero emissions across scopes 1, 2, and 3 — which categorize a business’s direct and indirect emission sources — by fiscal year 2045.

The plan — outlined in Medtronic’s Decarbonization Roadmap — starts with steps to get Medtronic’s business operations to carbon neutrality by fiscal year 2030. Carbon neutrality means that even if a business is still emitting gases that contribute to climate change, it can pay for other entities to reduce their own emissions in exchange, or fund projects (like reforestation) that pull carbon dioxide out of the atmosphere.

Medtronic’s next step is a reduction of greenhouse gas emissions by its suppliers, such as setting and achieving science-based targets, which rely on the latest climate science to take steps to limit global warming to well below 2°C above pre-industrial levels and efforts to limit warming to 1.5°C.

Medtronic said it will engage and educate up to 500 high-spend and critical suppliers, tap suppliers to share best practices, and establish “environmentally preferred purchasing criteria to influence supplier selection based on environmental performance and climate impact.”

Medtronic also seeks emission reductions through logistics improvements, such as changes in product network design, packaging weight reductions, order consolidations, modal shifts and denser shipments. The company will work with carriers that meet Medtronic’s emissions expectations, report annual performance and utilize greener practices such as electric vehicles, route optimization and biofuels.

The global healthcare industry accounts for around 4% of global carbon dioxide emissions, Philips said in a recent announcement of its own supply chain initiative.

“As a global healthcare technology leader, our goal is to transform industry expectations and behavior where health and climate change intersect,” Medtronic CEO Geoff Martha said in a news release announcing the initiative. “Our teams across 150 countries are actively working to protect our planet by reducing our energy use, investing in renewables, and now moving toward net-zero emissions throughout our operations, supply chain and logistic partners, by pursuing science-based targets.”