GHI Column Part 3: Scope 3 and Sustainable Procurement (GHI.04) — A Practical Approach to the Most Challenging Area

In Part 1 of this GHI column series, we explained the overall concept and significance of GHI. In Part 2, we introduced the seven steps for implementation. In the supplementary column, we also clarified Scope 1, Scope 2, Scope 3, and the calculation methods (location-based and market-based).

By this point, you may have gained a clearer understanding of how to proceed from an operational perspective.

The next step is to move toward strategy:

Where should we focus first to reduce emissions?

Where are the largest sources of emissions?

One of the key areas to consider is Scope 3.

(Scope 3 is specifically addressed in GHI.04.)

1. What is Scope 3 and Why It Matters

Scope 3 refers to greenhouse gas emissions generated across the entire supply chain.

Typical examples include:

• Manufacturing of medical supplies and pharmaceuticals

• Outsourced services (such as linen and food services)

• Waste treatment

• Transportation and logistics

These emissions occur outside the healthcare facility.

Position in Healthcare

In many industries, Scope 3 tends to be the largest source of emissions, and GHI.04 includes various requirements related to it.

However, healthcare facilities have unique characteristics:

• 24-hour operations

• High energy demand for air conditioning

As a result, Scope 2 (electricity) is also significant and should not be overlooked.

Why Scope 3 is Challenging

The difficulty of Scope 3 lies in the fact that emissions occur outside the organization.

• Limited direct control

• Difficulty in data collection

• Dependence on suppliers

For these reasons, both measurement and improvement are not straightforward.

Why It Still Must Be Addressed

GHI.04 clearly requires management of environmental impact through procurement.

Scope 3 is not an area that can be ignored simply because emissions are not directly generated within the facility. Even external emissions must be managed in a practical and structured manner.

2. What GHI.04 Requires

GHI.04 focuses on sustainable procurement and includes the following requirements:

• Establishment of procurement guidelines including environmental criteria

• Supplier evaluation

• Identification of unnecessary items (at least three categories)

• Evaluation of shifting from disposable to reusable products

The key point is not to change everything at once, but to establish policies and systems.

3. Practical Approach to Scope 3

The most important principle is not to aim for perfection.

Step 1: Categorize Scope 3

Break down Scope 3 into major categories:

• Medical supplies

• Pharmaceuticals

• Outsourced services

• Waste

A rough classification is sufficient to understand the overall picture.

Step 2: Identify Hotspots

It is not necessary to analyze everything in detail.

Focus on the top 3 to 5 emission sources and prioritize them.

Step 3: Use Proxy Indicators

Accurate data is often difficult to obtain for Scope 3.

In such cases, proxy indicators can be used:

• Estimation based on procurement cost

• Waste volume

• Order quantities

The key is not perfect accuracy, but the ability to explain why the indicator was chosen.

Step 4: Establish Procurement Guidelines

Procurement guidelines are central to GHI.04.

Examples include:

• Prioritizing environmentally friendly products

• Reducing excessive packaging

• Considering reusable products

Clear purchasing criteria define organizational direction.

Step 5: Build Relationships with Suppliers

Strict requirements are not necessary in the early stages.

Start with:

• Requests for environmental information

• Simple questionnaires

Building a foundation for dialogue is essential.

Step 6: Accumulate Small Improvements

Scope 3 cannot be transformed all at once.

Focus on continuous improvements such as:

• Reducing disposable items

• Optimizing inventory

• Reducing waste

4. Common Questions and Misconceptions

Do we need to measure everything?

-No. Prioritization is essential.

Do we need to change all suppliers?

-No. It is more realistic to improve within existing relationships.

Do we need immediate results?

-No. GHI does not focus only on short-term results.

What matters is:

• Having policies

• Having processes

• Continuing improvements

5. Evaluation from a GHI Perspective

JCI does not evaluate Scope 3 solely based on emission volume.

The focus is on:

• Whether procurement policies are in place

• Whether evaluation systems exist

• Whether improvement efforts are ongoing

In other words, the key question is whether environmental impact is being managed.

Conclusion: Scope 3 as a Management Area

Scope 3:

• Often has a large impact

• Is difficult to manage

At the same time, it is a critical area for management.

Understanding it, setting direction, identifying improvement processes, and establishing systems for continuous improvement are important steps for both sustainability and management.

Looking Ahead to Part 4

So far, we have covered:

• Measurement (GHI.03)

• Procurement (GHI.04)

However, these do not end once implemented.

They must be sustained.

In Part 4, we will focus on:

• Education (GHI.02)

• Resilience (GHI.05)

• Staff engagement

and explain how to embed GHI into organizational culture.

If you would like to receive immediate notification when Part 4 is released, please enter your email address in the “Subscribe to our info” section at the bottom of the page.

Note: This column is based on publicly available information and current survey trends regarding the newly introduced GHI chapter in JCI 8th Edition. As GHI is a new standard, interpretations and survey practices may evolve over time. The content may therefore be updated and should be used for reference purposes only.

Thank you for reading.

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