Healthy Environment

• We require our suppliers to comply with all applicable environmental laws and regulations, maintain current any required environmental permits, licenses, and registrations and comply with operational and reporting requirements related to air emissions.
• We encourage our suppliers to make best commercial efforts to track, report and minimize their greenhouse gas emissions associated with their operations and value chain.
• We encourage our suppliers to join us in setting greenhouse gas emissions reduction targets that are science-based and aligned with limiting global warming to 1.5°C above pre-industrial levels.
• We encourage our suppliers to engage with their other value chain partners on sustainability and climate-related issues to cascade and incentivize environmental ambition.

Specific requirements for greenhouse gas emissions data disclosure, reduction targets and attained reductions may be set forth in supplier contracts where appropriate.

To reduce survey fatigue and improve consistency and accuracy, we evaluate suppliers directly from their annual CDP Climate Change Questionnaire response. CDP is the leading global nonprofit organization that allows companies to measure, manage, and disclose their environmental impacts. 

While we encourage all our suppliers to track, report, and minimize their greenhouse gas emissions, CDP responses will only be requested from, and our evaluation criteria will only apply to, suppliers that represent a significant share of our upstream supply chain emissions. Suppliers will know they are a part of this cohort if they receive an invitation from UnitedHealth Group to complete the CDP Climate Questionnaire. We also evaluate sustainability performance in select UnitedHealth Group RFPs.

We will score the climate ambition and progress of our suppliers based upon their CDP response status, disclosed emissions inventory quality and completeness, science-based target setting, demonstrated emissions reduction progress, and their own supplier engagement efforts. This scoring will be incorporated into our supplier performance and risk evaluations. Please view the FAQs below for further details.

We understand that emissions disclosure and decarbonization is a journey and our suppliers are at various stages of maturity. We aim to work with our suppliers to help them realize ambitious, yet achievable targets and reward demonstrated progress.

We require our suppliers to comply with all applicable environmental laws and regulations, maintain current any required environmental permits, licenses, and registrations and comply with operational and reporting requirements related to all waste streams and water use. We require our suppliers to conduct their operations in a manner that minimizes their adverse impact on natural resources by minimizing water contamination and excess water consumption, particularly in water-stressed regions of the world. This also includes implementing waste reduction measures, recycling programs and pursuing efforts to reduce reliance on virgin material in production processes.

We look forward to collaborating with our suppliers to further develop innovative waste reduction and water and natural resource conservation strategies.

Greenhouse gas emissions are the heat-trapping gases that contribute to climate change such as carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂0), and fluorinated gases.

• Scope 1 emissions are direct emissions from owned or controlled sources. This includes emissions from on-site fossil fuel combustion, generation of electricity, heat, or steam, fleet fuel consumption, transportation of materials, products, waste and employees using company owned or controlled sources.
• Scope 2 emissions are indirect emissions from owned or controlled sources. This includes emissions deriving from the generation of purchased electricity, heat, cooling or steam. Scope 1 and 2 emissions are collectively termed “operational emissions”.
• Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company. This includes both upstream and downstream emissions categories such as purchased goods and services, upstream transportation and distribution, business travel etc. Scope 3 emissions typically represent the largest share of company emissions – on average 11 times larger than direct emissions.

• CDP offers the following helpful trainings to help you begin developing your emissions inventory - CDP Scope 1 Training Webinar, CDP Scope 2 Training Webinar
• The National Academy of Medicine also offers a training series on emissions accounting for health care organizations.
• The Greenhouse Gas Protocol Corporate Standard is the most widely used corporate emissions accounting protocol and contains all the detailed information you need to track scope 1 and 2 emissions.
• The Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard contains information on how to track scope 3 emissions.
• If you are a small or medium-sized company the SME Climate Hub contains free tools and resources to help you disclose and reduce emissions in a simplified manner.

The Climate Drive from the World Business Council for Sustainable Development (WBCSD) is an online platform that supports businesses and their suppliers in speeding up decarbonization efforts. The platform includes a Net Zero Guidebook, which covers the fundamentals of decarbonization for businesses and an Action Library of almost 100 decarbonization actions and case studies across various sectors. Please see below for some additional common emissions reduction levers.

Scope 1

Levers for reducing scope 1 emissions are mostly aimed at increasing efficiency and decreasing energy consumption of company facilities, operations and vehicles as well as switching to low or zero emission alternatives. Common levers include:

Reduce energy consumption and increase energy efficiency

• Use building-automation systems, occupancy sensors, daylighting and energy-efficient lighting
• Update existing heating, ventilation, and air conditioning units to increase system efficiency
• Create guidelines for purchasing energy efficient equipment
• Undergo professional energy audits on buildings
• For more ideas: the EPA’s ENERGY Star Program is a leading source of technical information and tools that organizations can leverage to choose energy-efficient solutions and best management practices
  

Electrify or switch to low-emissions alternatives

• Electrify heating, air conditioning and hot water systems and if not feasible, switch to lower-emission fuel alternatives
• Transition your company’s fleet vehicles to electric vehicles
• Replace medical gases and refrigerants with less emission intensive alternatives where feasible

Transition real estate portfolio to more energy efficient buildings

Scope 2

Scope 2 reduction efforts focus on improving the energy efficiency of company facilities as mentioned above and decarbonizing purchased electricity, steam, heating, and cooling for the company’s own use, through clean energy procurement and generation. There are numerous strategies available for companies to leverage and should be chosen based on factors such as location, market, and type of industry and business activities involved. A direct way to reduce your Scope 2 emission is to incorporate renewable energy in your corporate supply mix. Some tactics include:

On-site renewable power generation

Companies can install on-site renewable power generation and storage capacity such as solar panels and battery storage systems. This can replace the purchase of more GHG intensive electricity from the grid or electricity supplier. Additional benefits can include lower-cost energy and improved energy resilience in the event of grid outages.

Off-site power purchase agreements (PPAs) and virtual power purchase agreements (VPPAs)

Offsite power purchase agreements are renewable energy contracts between a project developer and a company, where the renewable energy installation is not sited at the location of the company’s electricity usage. PPAs can deliver energy physically to a company through the grid or can be financially settled transactions (i.e., virtual PPA or vPPA). Off-site PPAs are valuable for large companies where on-site renewable installations alone cannot provide enough energy.

Certificates- Purchase renewable energy credits (RECs)

RECs, also known as renewable energy credits and tradeable renewable certificates, represent proof that one megawatt-hour of electricity was generated from a renewable energy source and fed into the grid. Purchasing unbundled RECs (meaning that the RECs are not directly attributable to a single renewable energy project), is one way to reduce Scope 2 emissions; however, RECs are increasingly considered a weak form of green credential for corporations. To learn more about RECS, click here.

Utility programs such as green tariffs, green rates, and community solar may be applicable in regulated markets but are not offered by every utility.

Direct investment in renewable energy projects (through either a tax or sponsor equity position) is a less common but not unprecedented approach.

Scope 3

A large component of an organization’s scope 3 emissions are typically the scope 1 and 2 emissions of its upstream suppliers. An effective way to reduce these emissions is to engage with your suppliers to set and achieve science-based emissions reduction targets by having them utilize the scope 1 and 2 reduction strategies outlined above. The SBTi Supplier Engagement Guidance contains a wealth of information and links to additional resources to help you implement a supplier engagement strategy.

Other scope 3 emission reduction levers include:

• Procure low-carbon products and services and reduce excess purchasing. Some examples include switching to recycled raw materials, digitizing paper-intensive processes, optimizing and switching to lower carbon transportation and logistics services
• Switch to less emissions-intense suppliers
• Embed sustainability criteria in procurement decision-making
• Implement policies that reduce business travel and employee commuting or incentivize lower-emission modes of travel

Disclosing and reducing GHG emissions will support long-term, positive impacts for your company. Your company can see cost savings through increased efficiencies and risk resiliency, while improving your brand reputation and customer and employee loyalty. Voluntary disclosure can prepare you for future mandatory disclosure regulations. Taking a wider view, these efforts will help provide numerous ecological, economic and public health benefits as expressed in the latest UN IPCC (Intergovernmental Panel on Climate Change) assessment report cycle.

The inflation reduction act is the largest, most ambitious climate legislation ever passed by the US Congress and offers a whole host of tax credits and subsidies to help your organization decarbonize. Check out these EDF resources to understand what incentives may be available to your organization.

To help you prepare for your disclosure, CDP provides the following resources:

• Online guidance for suppliers to help you respond to the questionnaire
• Capacity Building Showcase is a collection of webinars designed for new responders
• CDP Company FAQs
• Technical Support – refer to the new CDP Help Center to search knowledge articles and raise any technical support issues regarding your disclosure.

UnitedHealth Group is not expecting perfection for this reporting. There is no minimum requirement, and a partially filled-out questionnaire is preferred over no information.

While we encourage you to respond to the questionnaire as completely as possible to best evaluate and improve your own environmental management, our primary focus will be the questions we highlight in your CDP invitation. We utilize these questions to evaluate ongoing supplier performance and future partnership opportunities.

Allocation provides an approximation of your emissions that occur as a direct result of UnitedHealth Group’s business. We seek to use this data to help us improve the accuracy of our own Scope 3 inventory. A simple way to allocate emissions is to divide your revenue from UHG by your total revenue and then multiply this percentage by your total emissions for scopes 1, 2 and relevant scope 3 activities. There are further methods discussed in the resources below that may be more accurate. Emissions can be allocated to UnitedHealth Group in the Supply Chain module of the CDP questionnaire.

Check out this CDP webinar to learn the basics of allocation: CDP: How to allocate emissions to your customers. Refer to chapter 8 of the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard for further information on how you can allocate emissions to your customers.

We accept all emission verification standards accepted by CDP as outlined in the CDP Criteria for Third Party Verification Standards.

The Science Based Targets initiative (SBTi) publishes standards for corporate target setting aligned with the latest climate science, offers resources and guidance to reduce barriers to adoption, and independently assesses and approves companies’ targets. These targets show how much and how quickly organizations need to reduce greenhouse gas emissions to prevent the worst effects of climate change. The initiative is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) as well as one of the We Mean Business Coalition commitments. At the end of 2022, more than 4,000 companies covering over a third of the global economy’s market capitalization, were setting targets or committing to do so via the SBTi. Visit the SBTi website to learn the process of committing, setting, and achieving science-based targets.

No, but we will require evidence supporting your claim in your CDP response that your targets meet the latest criteria published by SBTi to receive credit in our performance evaluation and RFPs. Required target components include a target boundary, target coverage, target type, baseline year, target year and your targeted reduction/ambition.

Please email sustainableprocurement@uhg.com or your UHG relationship manager.