Sandoz Sets SBTi-Validated Climate Targets for Operations and Supply Chain

Sandoz has announced a new set of interim climate goals covering its own operations and upstream supply chain, marking a more formal step in the company’s decarbonization strategy. The Swiss pharmaceutical company, focused on generic and biosimilar medicines, said the targets have been validated by the Science Based Targets initiative, placing them within a recognized corporate climate target-setting framework.

The new targets require Sandoz to reduce greenhouse gas emissions from its own operations, covering Scope 1 and Scope 2, by 42% by 2030 and by 63% by 2035, using 2024 as the baseline year. Scope 1 emissions generally refer to direct emissions from company-controlled sources, while Scope 2 covers indirect emissions from purchased electricity, steam, heating, and cooling.

Sandoz has also set a supplier engagement target for Scope 3 emissions. By 2030, the company aims to ensure that at least 79% of suppliers by emissions, covering purchased goods and services, capital goods, and upstream transportation and distribution, have their own science-based targets. This is significant because for many pharmaceutical companies, a large share of climate impact sits outside direct operations, particularly in raw materials, active pharmaceutical ingredients, packaging, logistics, and contract manufacturing.

Why Supplier Engagement Matters

The supply chain target is likely to be one of the most important parts of the announcement. SBTi guidance states that companies must set Scope 3 targets when these emissions are material, and that supplier engagement or reduction targets should collectively cover at least 67% of total Scope 3 emissions where Scope 3 represents more than 40% of total Scope 1, 2, and 3 emissions.

For Sandoz, the 79% supplier target means climate action will need to move beyond internal energy management and into procurement, supplier data, contract terms, and long-term supplier collaboration. Pharmaceutical supply chains can be complex, with multiple tiers of chemical suppliers, manufacturing partners, packaging providers, and freight operators. This makes supplier-level target setting a practical challenge, but also an important lever for emissions reduction.

The target does not mean that all supplier emissions will automatically fall by 2030. It means that suppliers representing a defined share of relevant emissions must set their own science-based targets. In practice, this can help improve emissions visibility, create stronger expectations for suppliers, and encourage lower-carbon sourcing decisions. However, the credibility of progress will depend on the quality of supplier data, the pace of actual reductions, and the integration of climate criteria into procurement processes.

Operational Measures and Sustainability Blueprint

Sandoz said it has developed a sustainability blueprint to support its 10-year climate objectives. The company identified several areas of action, including energy efficiency, increased use of renewable energy, packaging circularity, materials innovation, logistics optimization, and supplier partnerships.

These actions are closely aligned with the main emissions reduction levers available to pharmaceutical companies. Energy efficiency can reduce demand at manufacturing and laboratory sites, while renewable electricity procurement can lower market-based Scope 2 emissions. Packaging circularity can support reductions in material-related emissions, especially where companies reduce virgin material use, redesign packaging formats, or increase recyclability. Logistics optimization can reduce transport-related emissions through improved routing, modal shifts, load efficiency, and lower-carbon freight options.

Sandoz also reported progress between 2023 and 2025, stating that it reduced absolute emissions by 3% and emissions intensity by 15%. The company’s 2025 reporting also highlighted reductions in Scope 1, Scope 2, and Scope 3 emissions during the year, although the new SBTi targets use 2024 as the baseline for the 2030 and 2035 objectives.

Relevance for Healthcare and Net-Zero Procurement

The announcement comes as healthcare systems, public buyers, investors, and corporate customers are placing more emphasis on credible emissions data. Medicines are essential products, but the sector faces pressure to reduce the environmental footprint of manufacturing, packaging, and distribution while maintaining quality, affordability, and supply security.

For procurement teams, Sandoz’s supplier target may lead to more climate-related requirements in supplier engagement, tenders, and contract discussions. Suppliers may be asked to calculate emissions, disclose energy use, set science-based targets, or demonstrate progress against decarbonization plans. Smaller suppliers may need support to build emissions inventories and understand target-setting requirements.

For investors and sustainability analysts, SBTi validation provides an external reference point for assessing whether near-term targets are aligned with climate science. The SBTi says its standards, tools, and guidance are designed to help companies and financial institutions set greenhouse gas reduction targets consistent with limiting global heating and reaching net zero by 2050 at the latest.

However, validation is not the same as delivery. The next stage will be implementation, including annual progress reporting, capital allocation, renewable energy procurement, supplier adoption, and evidence of real emissions reductions across the value chain. Stakeholders will likely monitor whether reductions are achieved through operational changes and supplier decarbonization, rather than relying mainly on accounting adjustments.

A Step Toward 2050 Net-Zero

The new targets follow Sandoz’s 2024 commitment to set interim science-based carbon reduction targets with the SBTi, as part of its broader ambition to work toward net-zero by 2050.

For the pharmaceutical sector, the announcement reflects a wider shift from general climate commitments toward more measurable interim targets. The practical challenge will be to connect these goals with day-to-day business decisions, including site investments, supplier selection, product design, packaging choices, and transport strategy.

If implemented effectively, Sandoz’s targets could help reduce operational emissions while also pushing climate expectations further into the pharmaceutical supply chain. For customers, healthcare systems, and policymakers, the key question will be whether validated targets translate into measurable emissions reductions, stronger supplier accountability, and lower-carbon access to essential medicines.

Source: www.esgtoday.com