Decarbonizing Pharma: How Industry Leaders Are Tackling Scope 3 Emissions
- J&K Team
- Feb 9
- 5 min read
The Energize Program and the Pharma Supply Chain Decarbonization Consortium are collaborative initiatives aimed at reducing carbon emissions in the pharmaceutical and healthcare sectors, with a focus on transitioning to renewable energy and addressing Scope 3 emissions (indirect emissions from supply chains).
Energize Program
The Energize Program was launched in 2021 as a collaborative effort between Schneider Electric and leading pharmaceutical companies. Its primary goal is to accelerate the adoption of renewable energy within the pharmaceutical value chain. Key features of the program include:
Virtual Power Purchase Agreements (VPPAs):Energize enables companies to aggregate electricity demand, making large-scale renewable energy procurement more financially viable and environmentally impactful. This approach allows suppliers with smaller energy loads to participate in renewable energy projects collectively.
Global Reach: The program has facilitated renewable energy procurement in North America and aims to expand opportunities in Europe and the Asia-Pacific region.
Industry Participation: Initially supported by seven companies, it has grown to include 15 major pharmaceutical sponsors such as AstraZeneca, Pfizer, Johnson & Johnson, and Novartis. Together, these sponsors represent over 22 terawatt-hours (TWh) of electricity demand.
By providing education and procurement support at no cost to suppliers, Energize helps reduce operational Scope 1 and 2 emissions for suppliers while indirectly reducing Scope 3 emissions for sponsor companies. This initiative has been recognized for its sustainability impact, winning awards like the 2023 CPHI Sustainability award.
Pharma Supply Chain Decarbonization Consortium
The Pharma Supply Chain Decarbonization Consortium builds on the goals of the Energize Program by fostering deeper collaboration across the pharmaceutical sector. Key aspects include:
Power Purchase Agreements (PPAs): The consortium recently signed a 10-year agreement with renewable energy developer X-ELIO to provide 245 GWh of clean energy annually to companies like GSK, Thermo Fisher Scientific, Haleon, and Gilead Sciences. This marks its second PPA cohort.
Scope 3 Emissions Focus: Tackling Scope 3 emissions—those generated across the supply chain—is one of the most challenging aspects of decarbonization. The consortium serves as a model for other industries facing similar challenges.
Collaboration with PSCI: Managed in partnership with the Pharmaceutical Supply Chain Initiative (PSCI), this effort aligns with broader decarbonization goals across healthcare systems globally.
John Powers, Vice President at Schneider Electric, emphasized that this initiative not only drives sustainability within pharmaceuticals but also serves as a "playbook" for other sectors seeking to address Scope 3 emissions challenges.
How does the Energize Programme support the transition to renewable energy in the pharmaceutical industry?
The Energize Programme supports the transition to renewable energy in the pharmaceutical industry by fostering collaboration, education, and innovative procurement strategies. This initiative, launched in 2021 by Schneider Electric in partnership with leading pharmaceutical companies, aims to decarbonize the industry's supply chain and reduce greenhouse gas emissions, particularly Scope 3 emissions (those from suppliers).
Key Ways the Energize Programme Supports Renewable Energy Transition
Facilitating Access to Renewable Energy:
Energize enables suppliers to participate in renewable energy markets through Virtual Power Purchase Agreements (VPPAs) and other procurement mechanisms. By aggregating electricity demand across multiple suppliers and companies, it makes large-scale renewable energy projects financially viable and accessible.
The program has supported suppliers in procuring renewable electricity through Power Purchase Agreements (PPAs) and Energy Attribute Certificates (EACs), adding significant renewable capacity to grids, such as 280 MW of solar power in Europe.
Education and Capacity Building:
Energize provides free educational resources and functional support to suppliers who may lack expertise or resources for renewable energy adoption. This includes training on renewable energy procurement processes and market engagement.
Suppliers are empowered to take independent climate action, which indirectly helps sponsor companies reduce their Scope 3 emissions.
Collaborative Procurement Models:
The program organizes suppliers into multi-buyer cohorts for joint renewable energy procurement. For instance, recent agreements have facilitated the purchase of hundreds of gigawatt-hours (GWh) of renewable electricity annually, avoiding significant CO2 emissions.
These agreements have supported new solar projects across Europe and North America, strengthening renewable energy infrastructure.
Industry-Wide Impact:
Energize has grown to include 24 sponsoring companies and over 750 participating suppliers as of 2025. Collectively, these efforts represent a significant portion of the pharmaceutical industry's electricity demand, driving systemic change toward sustainability.
The program also serves as a model for other industries aiming to tackle Scope 3 emissions through collaborative action.
By providing resources, fostering partnerships, and leveraging economies of scale, the Energize Programme accelerates the adoption of renewable energy within the pharmaceutical sector while addressing one of its largest environmental challenges—decarbonizing supply chains.
What are the key benefits for pharmaceutical companies participating in the Energize Programme?
Pharmaceutical companies participating in the Energize Programme benefit in several key ways, ranging from advancing their sustainability goals to improving operational efficiencies and reducing costs. Below are the primary benefits:
1. Accelerated Decarbonization
The program helps companies reduce Scope 3 emissions, which are among the most challenging to address, by enabling suppliers to transition to renewable energy. This aligns with corporate sustainability goals and global net-zero commitments[5][6].
By aggregating electricity demand through Virtual Power Purchase Agreements (VPPAs), Energize facilitates large-scale renewable energy procurement, significantly reducing the carbon footprint of supply chains.
2. Cost-Effective Renewable Energy Access
The cohort model allows companies to pool their electricity demand with others, achieving economies of scale that result in more favorable pricing and contract terms for renewable energy projects. This is particularly beneficial for smaller suppliers who might otherwise lack the resources to negotiate such agreements independently.
Participation in multi-buyer cohorts also reduces the financial and administrative burden of renewable energy procurement.
3. Enhanced Supplier Engagement and Collaboration
The program fosters collaboration between pharmaceutical companies and their suppliers, creating a unified approach to tackling climate change. This strengthens relationships across the value chain and promotes mutual learning.
Suppliers gain access to free educational resources, training, and expert guidance on renewable energy procurement, empowering them to take independent climate action while aligning with sponsor companies' sustainability objectives.
4. Industry Leadership and Reputation
Participation in Energize positions pharmaceutical companies as leaders in sustainability within their industry. It demonstrates a proactive commitment to addressing climate change, which can enhance corporate reputation among stakeholders, investors, and consumers.
The program's recognition through awards like the 2023 CPHI Sustainability Award further highlights its impact and the leadership of participating companies.
5. Risk Mitigation and Future-Proofing
Transitioning to renewable energy reduces exposure to future regulatory risks related to carbon emissions and energy use. It also mitigates risks associated with volatile fossil fuel prices by securing long-term renewable energy contracts.
By supporting suppliers in decarbonization efforts, companies ensure a more resilient and sustainable supply chain.
6. Contribution to Systemic Change
Energize serves as a model for system-level change by leveraging the collective scale of the pharmaceutical industry's supply chain. This pre-competitive collaboration inspires broader adoption of renewable energy solutions across industries.
In other words, the Energize Programme provides pharmaceutical companies with a comprehensive platform to achieve sustainability goals, reduce costs, enhance supplier relationships, and lead systemic change in combating climate change.
Significance and Broader Impact
Both initiatives highlight the pharmaceutical industry's commitment to combating climate change by addressing its significant environmental footprint—healthcare accounts for nearly 5% of global emissions. By leveraging collective action and innovative procurement models like VPPAs, these programs aim to make renewable energy more accessible and affordable for suppliers while setting a precedent for other industries.
Moreover, these efforts align with global net-zero targets, such as those set by individual companies like Chiesi Group (Net Zero by 2035) and broader healthcare coalitions under initiatives like the Sustainable Markets Initiative Health Systems Task Force.
Here are some suggested links to more information:
Energize Program Landmark Pressrelease https://www.wiztopic.com/download-pdf/66fd11131acd8ffdff0458e9
Businesswire - Energize Supports Four Global Healthcare Companies Collaborating on a Multi-buyer PPA for a Long-term Supply of Renewable Electricity
Energize Website:
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