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Sustainable Procurement in the Health SectorThe nexus between climate change, the environment and sustainable health procurement
UNDP Global Fund Health Implementation Support Team – PSU
Alfonso Buxens, Procurement Specialist, Copenhagen
Sustainable Procurement in the Health Sector
Sustainable Procurement in the Health Sector (SPHS) initiative is to reduce the environmental and social impact of health procurement by
UN member and partner agencies in order to contribute towards a more sustainable global health sector.
The impact of sustainable health procurement
UN Health Procurement and Supply Overview
Total Health Goods and Services procured by the SPHS Member Agencies
(in USD Millions)
All data is extracted from the 2015 Annual Statistical Report on United Nations Procurement.
Environmental Questionnaire: a user friendly and dynamic tool that
provides an overview of the environmental performance of suppliers and
manufacturers.
International Conventions on Chemical compliance: a guide for
procurement practitioners on how to monitor compliance of healthcare
procurement with relevant International Conventions for environmental
safeguarding.
Sustainable Procurement Guidelines: comprehensive guidelines on
sustainable procurement recommendations in the health sector that
includes healthcare commodities and services.
Capacity development, training and webinars: support government
officials to design and implement sustainable public health procurement
policies that equally factor in the social, economic and environmental
impact of their operations. Trainings are conducted in partnership with
UNDP, UNEP and Health Care Without Harm (HCWH).
Key Products, Tools and Deliverables of the SPHS
The UNDP/SPHS Green Procurement Health Index (GPHI) project is a flagship project designed to harmonize
green criteria with UN Health Procurement and to develop monitoring tools that enable continuous improvement
and benchmarking of green procurement practices.
Interagency Engagement Strategy
Interagency statement on engaging with suppliers and manufacturers on Sustainable Health
Procurement – signed in Geneva on December 7th, 2016.
SPHS members’ commitment to work in collaboration with suppliers and manufacturers to introduce
green procurement in the health sector.
UNDP Senior Management is committed to the adoption of sustainable
procurement practices Recent release for the UNDP GF/HIST Annual Report 2016-2017
A practical approach for the implementation of sustainability initiatives To identify concrete opportunities and pursue a gradual adaptation of new
practices
Document and disseminate positive impact of sustainable practices adopted on
the principles of VFM
By leveraging volume to achieve a significant impact A number of initiatives are anchored on the UNDP LTA framework for supply of
ARVs of TLE formulation. The intention is to gradually adapt and harmonize the
initiatives to other UNDP supplier engagement frameworks
Solar for Health (S4H) initiative is aiming to power significant number of health
facilities through solar power.
GF/HIST Sustainable Health PSM practices
How UNDP GF/HIST is facilitating a gradual implementation of Sustainable Health PSM practices
UNDP views sustainable procurement as a practice and performance measurement that can lead
to considerable cost benefits and resource efficiencies.
Focus placed in the following activities:
Sustainability Scorecard initiative: Working together with
manufacturers to gradually embrace / adopt sustainability
initiatives within their ARV/TLE supply chain.
Sustainability Call-off Criteria: Determining incremental
minimum sustainability requirements applicable to secondary
bidding.
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
Fostering Sustainable Procurement Practices: TLE/ARV
Sustainability Scorecard Initiative
The UNDP GF-HIST Sustainability Scorecard was developed initially in 2015 as a baseline and
further developed into a scorecard for 2016-2017.
To measure progress by the 5 ARV manufacturers collaborating with UNDP under the TLE LTA on the
adoption of key sustainability parameters within a matrix of 9 categories.
The Sustainability Scorecard has been constructed via research, questionnaires and discussions
together with TLE-ARV manufacturers to understand their current market positioning on sustainability
initiatives.
The Sustainability Scorecard is used to create realistic criteria for sustainable procurement initiatives with
TLE-ARV suppliers and to help progressive adoption of these practices.
The UNDP GF-HIST works together with the SPHS Secretariat to incrementally harmonize the key focus
areas with the Sustainability Scorecard.
Minimum Sustainability Call-Off Criteria
By evaluating the UNDP GF-HIST Sustainability Scorecard, 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 2017 sustainability criteria is planned to be released by the end of the year, with the next release
planned for April 2018
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
Minimum sustainability RFQ Criteria 2016
Confirms and ensures adherence to the UN Supplier Code of Conduct
All product packaging does not contain Polystyrene (PS)
Waste-water is treated and recycled at manufacturing facilities through
primary, secondary and tertiary treatment systems
Analyses the composition of the wastewater effluent discharged out
of the facilities with third party auditing
Energy consumption is monitored at the factory-level
Installation of steam pipes to reduce/recycle energy at facilities
Minimum sustainability RFQ Criteria 2017 (New!)
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 from 2015 to date.
Transportation mode Total shipped volume of TLE/ARV to date (Kg)
Air 175,407.20
Sea 2,467,584.16
2017 CO2
Report
TLE-ARV
6%
94%
Total Gross Weight of TLE/ARV Shipped
by transportation mode 2015-2017 (to date)
2.20
0.37
0
0.5
1
1.5
2
2.5
Air Sea
Average of CO2 Emission per Kg of TLE/ARV 2015-2017 (to date)
Air
Sea
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.
AIR
Total CO2
0.27 kg of CO2 per TLE pack
Freight cost
$0.51 per TLE pack
SEA
Total CO2
0.089 kg of CO2 per TLE pack
Freight cost
$0.26 per TLE pack
Trade lane scenario: Zimbabwe & Zambia (Mumbai-Harare/Lusaka)Represents 90% of total procurement volume within the TLE/LTA framework.
An example for 80,000 ARV standard units (one fully loaded 40” HC Container under standard packaging)
A reduction in 0.18 Kg of CO2 per TLE pack and US$0.25 per TLE pack is acquired by switching from
air to sea freight for the specified trade lane. For 26 Million packs, 99% was conducted by sea freight.
Calculated overall savings amount to $6.5 Million USD.
Decrease in CO2
67%
Cost Savings
49%
Packaging Optimization and Innovation
UNDP has worked extensively with TLE/ARV manufacturers and regulatory authorities on packaging
optimization in order to reduce product waste and increase cost effectiveness.
In 2016/ 2017, the UNDP TLE “reduced packaging initiative” was piloted in South Sudan and Zimbabwe.
Bottles to be delivered without individual outer package
Bottles to be delivered without individual leaflets glued to bottles
Bottles to be shrink wrapped / packed in carton boxes / shippers
Leaflets in the amount of 5-10% of bottles shipped in the carton boxes
In 2017, bottles were increased in capacity size (e.g. from 30 to 100 tabs)
Old packaging (30 tabs) Reduced Packaging (30 tabs) Reduced Packaging (100 tabs)12.03 kg per shipper 11.21 kg per shipper 8.60 kg per shipper
99 bottles in a shipper 120 bottles in a shipper 36 bottles in a shipper
Total Packs in a container = 81,972 Total packs in a container = 132,480 Total packs in a container = 55,200
Total tabs in a container = 2.46 Mill Total tabs in a container = 3.97 Mill Total tabs in a container = 5.52 Mill
*UNDP GF/HIST calculated averages of metrics between TLE/ARV suppliers
The new packaging results in a 55% increase in shipping capacity per container and a
additional reduction of 57% of CO2 per unit for the Mumbai - Harare trade lane. For 3.04 delivered under
the UNDP reduced packaging initiative, savings generated up to $1.20 Mill USD.
Waste reduction
29%
Capacity Increase
55%
Packaging Optimization and Innovation
UNDP TLE Reduced packaging initiative.
Packaging Optimization and Innovation
UNDP is committed toward exploring the adoption of biodegradable materials for the health sector
UNDP organized a workshop on the Optimization and Innovation of Packaging and
using Biodegradable Packaging Materials, which took place in Delhi in March 2017 The purpose of the workshop was to discuss the application of biodegradable packaging
material within the supply of UNDP pharmaceutical products
Participants included research and academia, major TB and ARV manufacturers and the
packaging industry
Main outcomes of the biodegradable packaging workshop included: Acknowledgement that the technology is currently available
The cost is not as a high-barrier as originally thought (e.g. $0.01 - 0.05 USD per bottle)
The importance to conduct stability studies for any new material to be used and the timeframe
of the related requirements
Awareness raised of the importance to complete and file variation dossiers with PQ and SRAs
Industry would prefer to see buyers leading the process
There is a need to discuss and agree on technical requirements and minimum quality standards
There is an identified opportunity to look into the manufacturing process of medical
consumables and disposables (syringes, blood bags, etc.) in order to reduce sorting
requirements / toxicity via incineration.
Solar for Health Initiative
UNDP is committed towards filling the critical gap of energy demand needs for health
Health and medical facilities need energy for:
Light and clean water
Surgery, lab and medical equipment
Information systems
Objectives for the Solar for Health project:
Providing power to the health sector through solar energy systems
Reduced volume of carbon emissions of the health sector
Strengthening the market for manufacturers and service providers of solar
energy equipment combined with institutional regulatory capacity development
Using solar technologies beyond the health sector under the principle of leading by example
Benefits of Solar for Health:
Saving lives: Improved quality and access to health services
Saving environment: Reduction of 700K tons of CO2 emissions per year
Saving money: Reduced operational cost for health facilities/ write-off time: 3.3 years
Other benefits: Creation of green jobs, development of local manufacturing and markets for solar
equipment, health personnel retention in rural areas
Solar for Health Initiative
Solar for Health is one of the main priorities for GF-HIST in 2017:
There is an overall budget requirement of $1 Billion USD
Project documents are available for over 25 countries ranging from Fiji, Comoros,
Guinea, Chad, Afghanistan, Tajikistan, Namibia, Liberia, Mali, Cuba etc.
As there is a lot of interest from countries and donors, it is expected that both CO’s
and HQ will launch major fund raising efforts to promote the project.
To get donors on board beyond the governments of interested countries: GF, Norway
and EU
Health facilities with PV systems installed or projects initiated:
$700,000 USD project from NOREPS (11 Health Facilities of different sizes) Zambia
and for 2017-2019 another $3 Million USD for the solar laboratories/innovation project
elements.
Funds secured for 500 HF in Zimbabwe for around $15 Million USD
South Sudan secured funding for 15 HF ($200 Thousand USD)
Sudan had first approval for 60 health facilities ($1.33 Million USD)
Zambia received $1.2 Million USD for PV systems for medical stores
Namibia received $200,000 USD for 5 clinics with contracting to start at the end of
November.
Sharing lessons learned in Health PSM
Conducting sustainability implementation works best through a gradual
adaptation process
Adequate supplier engagement frameworks and partnerships facilitate
collaborative approach towards the adoption of sustainable procurement
Suppliers need to be notified well in advance of our intentions i.e. what do we intend to do, what is the expected framework, what are the
envisaged benefits, what is in it for them, etc.
Sustainable procurement practices require a pragmatic approach i.e. we learn that some vendors do not know of the UNGC.
Sustainable procurement actions should be prioritized that have a direct
impact in cost reduction and increased VFM
Benchmarks and environmental metrics achieved need to be
documented and measured i.e. how better procurement planning has led us to significant savings due to
transition from air freight to sea freight deliveries.
Thank you.
UNDP GF Health Implementation Support Team – PSU
Alfonso Buxens, Procurement Specailist, Copenhagen
