Drive Supplier Sustainability: From Assessment to Action

This case study is part of the “Beyond The Guide Deepdive: Pharma & Life Sciences Supply Chain,” an initiative that connects the dots between the Sustainable Procurement Pledge Champion Program and the Pharmaceutical & Life Sciences Chapter. It brings together real-world insights and experiences from across the industry to support procurement teams in transforming sustainability goals into tangible actions. Learn more here.

Syngene International is a contract research, development, and manufacturing organization (CRDMO) that provides integrated scientific solutions across discovery, development, and commercial production for pharmaceutical, biotechnology, animal healthcare, consumer goods, and agrochemical companies.

Syngene has set Science Based Targets initiative (SBTi)-aligned emissions reduction goals covering Scope 1, 2, and 3 emissions. As part of its Scope 3 target, Syngene is working towards having 82% of its suppliers (by emissions in high-emission categories) commit to SBTi-aligned targets.

A key challenge lies in balancing supply chain resilience with decarbonization. While Syngene’s customer base is global, local suppliers in India are prioritized to strengthen supply chain resilience. However, many Indian suppliers have low ESG maturity, making it challenging to build an ESG-compliant supply chain at the required pace. An aggressive push for compliance is not practical, requiring a focus on capability building and bringing suppliers along on this journey. Additionally, influencing suppliers and demonstrating the tangible business benefits of ESG alignment remain ongoing challenges.

To address these, Syngene assesses suppliers’ environmental, social, and governance (ESG) performance to gauge their readiness and segment them for targeted engagement in the decarbonization journey. This ESG assessment framework aligns with the Business Responsibility and Sustainability Reporting (BRSR) guidelines mandated by the Securities and Exchange Board of India (SEBI), ensuring regulatory alignment while advancing Syngene’s decarbonization strategy.

Syngene recognized that the majority (approx. 50%) of the suppliers are Micro, Small, and Medium Enterprises (MSMEs) with limited awareness of sustainability and decarbonization. Engaging suppliers was essential to embed Syngene’s sustainability vision throughout its supply chain, supporting progress toward Syngene’s SBTi targets and enabling tangible Scope 3 emission reductions.

Key Steps

1. Introduce Sustainability Vision to Suppliers through Training

2. ESG Assessment Covering Greenhouse Gases (GHG) Emissions and Decarbonization

3. Data-Driven Scoring and Analysis by Third Party

4. Targeted Corrective Action Plans

5. Periodic Reassessment and Continuous Engagement

Figure 1: A 6-step Process for Driving Supplier Sustainability: From Assessment to action

Sustainability Impact

Climate

This initiative targets Scope 3 emissions, specifically focusing on the following GHG Protocol categories:

• Category 1: Purchased Goods and Services

• Category 2: Capital Goods

• Category 4: Upstream Transportation and Distribution

While the initiative does not directly result in quantifiable absolute or percentage GHG reductions at this stage, it serves as a foundational enabler for ESG performance improvement and decarbonization across the supply chain.

Through ESG assessments and targeted supplier engagement, the initiative:

• Enables systematic data collection of suppliers’ on ESG and GHG emissions.

• Consolidates a library of GHG emission reduction initiatives implemented by suppliers across industries and geographies.

• Supports the development of a basic decarbonization strategy template that suppliers can adapt based on their operational realities.

By building supplier-level emissions visibility and readiness for emission reductions, the initiative lays the groundwork for measurable Scope 3 emission reductions in the future, enabling informed target setting and tracking for Syngene and similar organizations.

Nature

The initiative helps suppliers understand how their operations affect nature, climate and biodiversity, enabling them to take actions that reduce these impacts including water use, operation optimization for waste and pollution reduction.

Social

The initiative helps suppliers understand their social impacts, enabling them to take actions that improve working conditions and health and safety and benefit people and communities.

Business Impact

Benefits

This initiative creates business value beyond sustainability by positioning the company as a leader in sustainable procurement, aligning the company with customers’ sustainability priorities, and providing a competitive edge in the market. It also strengthens the company’s reputation as a responsible organization that cares about the environment and society, while boosting employee morale and pride in the workplace.

In addition, the initiative supports the company in improving ESG ratings on platforms such as EcoVadis and DJSI and contributes to fulfilling disclosure requirements under the Global Reporting Initiative (GRI) reports, further strengthening transparency and stakeholder trust.

Costs

The cost of this initiative depends on the number of key suppliers targeted for ESG assessments, with an estimated cost of $150–$200 per supplier.

• Impact on operating costs: The initiative leads to moderate additional operating costs, which scale based on the number of suppliers assessed.

• Investment required: The primary investment involves supplier assessment fees and internal resources for supplier engagement and follow-up actions.

• Relevant dependencies: Costs are primarily dependent on the number of suppliers targeted and the method of assessment used (manual vs. digital platform).

Cost Minimization and Trade-Offs:

1. Technology Adoption

• Using a digital hosting platform to conduct assessments and provide targeted action plans can reduce per-supplier costs.

• Trade-off: Potential challenges in assuring the accuracy of supplier-provided data and lower confidence in the assessments compared to direct assessments.

2. Leveraging Existing ESG Scores

• Suppliers with accredited ESG scores from international agencies (e.g., EcoVadis, CDP) can be exempted from additional assessments, using their existing scores to reduce assessment costs.

• Trade-off:

  Existing scores may not capture ESG risks specific to the organization, and it may not be possible to generate customized corrective action plans (CAPAs) for these suppliers.

Impact beyond sustainability and business

Co-benefits

The initiative strengthens supplier awareness of equity, labor practices and talent attraction and retention while fostering a culture of sustainability and trust across the supply chain.

Potential side-effects

Small suppliers may face capacity and capability challenges, and there may be costs associated with improving their ESG performance. Expectations could feel burdensome, so the company plans to address this through clear communication and phased, supportive implementation.

Typical business profile

This initiative is relevant for companies across all sectors, as ESG risks can significantly impact operations and reputation, leading to potential business loss. However, the specific ESG risks and corrective actions will vary by industry, geography, and where a company is on its Net Zero or Nature Positive journey. It is particularly valuable for companies with complex supply chains or high exposure to supplier-related ESG risks.

Approach

This initiative can be implemented through the following step-by-step approach:

1. Identify Key Suppliers and ESG Risks

• Map and prioritize suppliers based on spend, criticality, and ESG risk exposure.

2. Supplier Training

• Conduct training sessions to build supplier awareness of ESG principles, GHG emissions, and sustainability goals.

3. Framework for Supplier ESG Assessments

• Apply a structured assessment framework aligned with organizational ESG priorities to support suppliers in completing ESG assessments.

4. Analyze Results and Score Suppliers

• Review assessment data to identify ESG risks, improvement opportunities, and supplier performance levels.

5. Develop Corrective Action Plans (CAPAs)

• For lower-scoring suppliers, co-create targeted action plans to address gaps and improve ESG performance.

6. Monitor Progress and Engage Continuously

• Track improvements, provide capacity-building support where needed, and refresh assessments periodically.

Alternative Approaches:

• Digital Platform Implementation

• Leverage Existing ESG Ratings

• Phased Rollout: Start with high-risk or high-spend suppliers before expanding to the broader supplier base.

Stakeholders involved

• Program Leads: Strategy Lead, Strategic Sourcing & ESG Lead, Strategic Sourcing

• Company functions: Strategic Sourcing

• Main providers: Chief Financial Officer and Chief Procurement Officer

• Others: Suppliers, ESG assessment service providers (if applicable)

Key parameters to consider

This initiative is an ongoing, well-established practice within sustainable procurement and ESG supplier engagement.

Additional specificities:

• Applicable globally across sectors, particularly those with significant Scope 3 emissions.

• Requires clear supplier prioritization.

• Requires list of ESG risks as per the organizational priorities.

• Implementation depends on supplier ESG maturity and the availability of reliable data across different regions.

Other considerations:

• Successful implementation requires strong alignment between program lead and procurement teams for consistent execution.

• For low-scoring suppliers, the business case for ESG improvements may not be immediately clear, and the company may need to engage and support them to encourage participation.

Implementation and operations tips

Main challenges:

• Securing active participation from suppliers and internal teams.

• Some suppliers may not see the value in improving ESG performance.

How to overcome:

• Work collaboratively with suppliers, providing guidance and support.

• Align ESG and procurement teams for consistent follow-up.

Tips for success:

• Recognize and reward high-performing or improving suppliers to encourage engagement.

• Highlight the business benefits of ESG improvements to suppliers.