Sustainability in pharma: how do we measure up?

Michael Earl, Director of Pharmaceutical Services at medical device company Owen Mumford, explains that the pharmaceutical is ahead of the average in many areas of sustainability, but there are some surprising omissions.

In 2021, EcoAct – an international sustainability consultancy – took a deeper look at what it considered to be the four key sectors playing a vital role in global net-zero transformation. The biopharmaceutical sector outperformed the overall average, with only one company in the bottom 50 of the companies analyzed.

This positive view was echoed in the report, Drive to Net Zero, published by the Association of British Pharmaceutical Industries (ABPI). The report highlighted that leading pharma companies are achieving significant sustainability targets in carbon emissions, water sustainability, waste management and sustainability “by design”.

Owen Mumford Pharmaceutical Services conducted its own analysis of the pharmaceutical industry, for ESG (environmental, social and governance) factors specific to the sector and to the supply chain that serves it. The analysis looks at the top 25 pharmaceutical companies reporting ESG scores.

What did the study reveal?

The review looked into who “walked the talk”, not only assessing where ESG policies had been put in place and published, but also where the pharma company had publicly set hard targets, where appropriate.

Our study reveals that the performance of individual companies varies widely, with over 40 percentage points between the top performers and those who are at an earlier stage in their sustainability journey. Interestingly, the top performing smaller firms are only a few percentage points short of the top performing giants, demonstrating that corporate will and commitment to ESG improvements are arguably more important than large budgets.

Where is sustainability well established in pharma?

Energy, water, waste and air emissions are the most mature areas in pharma according to our review, meaning that hard targets have been set and publicly shared:

• Pharmaceutical manufacturing is energy-intensive so energy policies tend to focus on a combination of renewable energy sources, self-generation, and increasing efficiency in the manufacturing process.
• 50 percent of pharma companies have set hard targets around water, of which the pharma sector is a major consumer, often focusing on cleaning and reprocessing water in addition to reducing consumption.
• 28 percent of pharma companies have set targets to reduce their waste emissions by at least one quarter with some pursuing a zero-waste approach and others aiming to reduce their landfill waste.
• Air emissions are also a major focus with almost 70 percent of pharma companies pursuing specific targets that focus on carbon emissions and other gaseous pollutants.

Which areas are lacking attention?

There are two key areas which appear to have surprisingly lower commitment. In particular, while 84 percent of companies have a policy on Pharmaceuticals in the Environment (PiE) and 36 percent have a policy on the related issue of Anti-Microbial Resistance (AMR), almost none have published actual measurable targets for the results of these policies. Clearly, this area is a work in progress. However, with the UN Environment Programme identifying AMR as one of the greater threats to global public health, more action is needed on this front.

Packaging is another area where 76 percent of pharma companies have a policy but only 13 percent of companies in our review had translated policy into actual targets. With the pharmaceutical sector as one of the largest contributors to greenhouse gas emissions, transitioning to sustainable packaging solutions will be a key step for industry players to reduce their carbon footprint.

A few companies in the sector have gradually shifted towards eco-friendly materials for their packaging - including recycled paper, glass, plastic made from sugarcane, and cardboard. One pharma company, for instance, started using sugarcane-extracted polyethylene as 50 percent of their raw material in the development of blister packaging. As more companies convert to sustainable packaging alternatives, we expect these to become widespread in the next few years.

What else could be done to increase sustainability?

Many measurements for ESG compliance specifically scrutinize standards throughout the supply chain and distribution channels. The rules on Scope 3 emissions explicitly reference the supply chain in total, affirming that no company can claim to be part of a sustainable ecosphere unless its whole supply chain (and distribution channels) has similar standards.

Key partners in combination products (device plus drug) should take a collaborative approach to achieving Scope 3 emissions addressing environmental aspects across sourcing, manufacturing, packaging and distribution.

Here at Owen Mumford, we have taken a holistic, multifaceted approach, with multiple measures in place to reduce our environmental footprint, including a net-zero target (2045), re-usable device development, renewable energy use in manufacturing and office environments, freight journey minimization, zero waste to landfill initiatives, and various others.

The pharmaceutical sector is working hard towards sustainability, and upstream partners are stepping up to the mark to improve ESG standards. This has led to pharma being above average for many sustainable policies, but momentum needs to be maintained by working closely with industry counterparts and partners for better and faster results.

Quick links: 

• How the pharma sector must address sustainability
• Top 10 pharma execs leading sustainability efforts
• Five ways pharma is reducing its carbon emissions

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