120 2021 ESG Report Transparency Appendices Responsible supply chain Product impact Climate change Introduction Healthy workforce and communities Where the opportunity occurs in the value chain Downstream Opportunity type Products and services Climate-related driver Shift in consumer preferences Potential financial impact Increased revenues resulting from increased demand for products and services Time horizon Medium-term Likelihood More likely than not Magnitude of impact Medium Description We face changing customer preferences and requirements, including increased customer demand for more environmentally preferable products as they become more concerned about climate change and its impacts. While climate change criteria are not currently used as a purchasing criterion by our customers, we receive a significant number of requests for sustainability information. While no formal tracking mechanism exists, we estimate sustainability criteria to be included in most of the RFPs from European-based customers, some from Australia/New Zealand and a significant portion from U.S.-based customers as well. Particularly notable is the U.K.’s NHS, which in October 2020 became the world’s first health service to commit to reaching carbon net zero. The NHS’ Net Zero Supplier Roadmap will require suppliers to publish a carbon reduction plan and to meet requirements for product carbon footprinting. Also, from 2030, suppliers will be able to qualify for NHS contracts only if they can demonstrate their progress through published progress reports and continued carbon emissions reporting. We have also had increased interest from, and engagement with, our pharmaceutical customers around our carbon reduction plans and how we can assist in lowering carbon emissions across the pharmaceutical value chain. As a company with a proven reputation for maintaining the quality and safety of our products while reducing our carbon footprint, we are strategically positioned to manage this opportunity. We also benefit from reducing the energy-related costs associated with a product as it increases our competitiveness in a market that increasingly looks toward low-cost solutions. Strategy to realize opportunity As part of our 2030+ commitment to climate change and product impact, we have set a number of goals to realize this opportunity. First, we are committed to setting targets to reduce Scope 3 emissions that result from the use of, and end-of-life disposal of, our products. Second, we have set a number of goals to realize our commitment to reducing the environmental impact of our portfolio and addressing the sustainability needs of our customers. T hese priorities led us to form the Sustainable Medical Technology Institute . Case study: We see the value of partnerships and evolving discussion with coalitions. Our memberships in the Sustainable Healthcare Coalition and Healthcare Plastic Recycling Council have allowed us to gain insights into developing and evolving customer expectations.