A Prognosis of Sustainability in the Pharmaceutical Industry

The pharmaceutical sector is a key player in the race for a more sustainable future, and pharmaceutical companies are endeavouring to reduce their carbon footprint, eliminate pollution, conserve water, and use sustainable components. Suppliers and partners for drug delivery products are also working hard to ensure the entire supply chain improves its environmental, social and governance (ESG) standards. ESG credentials are becoming essential to pharmaceutical tenders at every step of the supply chain. Pharmaceutical companies want to demonstrate action, and not just ambition, in moves towards greater sustainability, to customers, policymakers and healthcare system stakeholders.

As a key delivery device partner for pharma companies, Owen Mumford Pharmaceutical Services has reviewed the current state of play on ESG compliance in the pharmaceutical industry among the top 25 companies reporting ESG scores. This article will underline the achievements made to date as well as key areas for improvement.

 

Outlining Targets

To really understand the progress of the pharmaceutical industry in its drive towards sustainability, it is valuable to begin by identifying what success would look like. Reports frequently focus on the same four main goals for achieving sustainability:

1. Reducing carbon emissions by improving energy use and setting net-zero targets.

2. Improving water sustainability by reducing manufacturing consumption and eliminating pharmaceutical waste from the water system.

3. Improving waste management by cutting down on excess packaging and more effectively recovering and disposing of used products.

4. Becoming more sustainable by design, through green chemistry initiatives, chemical recovery and creating re-useable delivery devices.

The analysis focuses on ESG targets specific to the pharmaceutical sector and its suppliers. Additionally, the report not only focuses on where ESG policies have been put in place, but also where corporations have publicly set themselves concrete targets.

 

Areas of Progress

The pharmaceutical industry has begun to make significant strides towards a more sustainable future, with the October 2021 Climate Reporting Performance report from Ecoact featuring three biopharmaceutical giants in the global top twenty companies for sustainability. As an industry, biopharma performed considerably better than many other industries in each of the key categories, which included ambition and targets, governance and achievement. We can see important improvements in four areas in particular. With regards to energy, water, waste, and air emissions there have been valuable steps taken across the industry.

Air emissions are the area where pharma companies are most focused on pursuing targets. Close to 70% of pharma companies have specific targets for lowering air emissions, focusing both on reducing carbon emissions and gaseous pollutants. Typical pollutants to be filtered are acid gases, dust and aerosols, pharmaceutical ‘actives’ and volatile organic compounds which can all cause harmful damage to the environment.

Secondly, the energy intensive sector has made steps to reduce usage. Most energy policies focus on a combination of renewable energy sources, self-generation and increasing energy efficiency by reducing energy requirements in the manufacturing process.2 Reducing energy use in the manufacturing process can be either production line or industrial building focused – in both cases, savings of 25% are typical and are often much higher.3

Next, moves to improve water usage not only focus on reducing consumption but also on cleaning and reprocessing water – either for re use or putting back into the water grid. One international giant aims to achieve 100% water neutrality by 2025, meaning all wastewater will be recycled, re-used and captured from rainwater. Our review shows that around 50% of pharma companies have already set hard targets in this category.

Lastly, progress on waste is trending in the right direction with goals being set by a large number of companies. Over a quarter of pharmaceutical companies have already set targets to reduce their waste emissions by at least 25%. Companies are trying to avoid reliance on landfills for waste disposal, while others pursue a zero-waste approach. Moreover, commercial incentives may become a factor as waste becomes more expensive to dispose of.4

To address the controversial subject of disposable plastic components in drug delivery devices, alternatives such as degradable plastics are being debated and scrutinised, but for now immediate progress is being made by reducing the number of disposable components. An example of sustainable design is Auto which will help partners reduce plastic waste within their supply chain.

 

Areas for Improvement

While there are certainly improvements being made in the industry, areas remain that need change; the statistics can hide underlying issues that need addressing. For example, although the industry as a whole achieves an ESG score of 61% in the Ecoact review considered earlier – well above the all-industries average of 53% – the performance of individual companies varies massively.

Our study uncovered a variance of 40% between top performers and those who have a way to go. The industry must focus on narrowing this band of variance before big pharma as a whole can be considered firmly on the path to sustainability. Furthermore, it appears that neither geography nor size are important to whether a corporation has begun to make improvements. Top performing small firms are not far behind the most committed multi-nationals – implying that corporate will and commitment are as important as bigger budgets in the race to improve ESG scores.

As well as the large differential in ESG scores between the best and worst performing firms in the pharmaceutical industries, there are some areas where improvement is required industry wide. One such area of concern is with contamination. While 84% of companies have a policy on Pharmaceuticals in the Environment (PiE) and 36% have a policy on the related issue of Anti-Microbial Resistance (AMR) there are very few concrete targets in these areas.

The AMR Alliance, an industry initiative to address anti-microbial resistances, states “Manufacturing emissions from both the production of active pharmaceutical ingredients (APIs) and their formulation into drugs is another source of environmental emissions... In countries where discharges are not well controlled some studies have found very high levels of active residues in the discharge vicinity of antibiotic factories.”5 Various studies share these findings, which is just one of several in safeguarding the environment from pharmaceutical contamination.6Clearly there is much work to be done in the area of contamination.

Another area where the lack of progress is concerning is packaging. This is a much less complex area in which to take action. In many other industries, we have seen efforts to alter packaging in the distribution phase in particular. While 76% of pharma companies have policies on packaging, only 13% have actually set concrete targets. Packaging could be converted to sustainable alternatives – where clinically acceptable – and reductions in weight and packing efficiency could help to reduce the resources used in the shipping process.

A few of the leading companies have set themselves specific targets – focussing heavily on converting from plastic to sustainable paper packaging. They have begun to assess where replacements bring the biggest net environmental gain and where original packaging should be retained. This area should begin to gain traction within the rest of the industry within the next few years and large-scale changes should begin to take place.

 

Conclusions

While a variety of studies have confirmed that the pharmaceutical industry is on the right track with regard to sustainability – and performing better than other industries – there is certainly still work to be done. Standards need to be adopted throughout the supply chain of the pharmaceutical industry to meet scope 3 emissions if further progress is to be made. A collaborative approach between pharma companies and their suppliers, or between suppliers themselves, could help to speed up the rate of change and facilitate action. Areas such as contamination and packaging need concrete targets for real progress to be made; those that being to formulate initiatives now will pave the way for other businesses to follow suit.

 

REFERENCES

1. Ecoact, The Climate Reporting Performance of the DOW 30, EURO STOXX 50 and FTSE 100: 11th edition, 2021 https://info.eco-act.com/en/ climate-reporting-performance-research-2021

2. Fierce Pharma, The energy switch: Big Pharma harnesses sun, wind and water in quest for a low-carbon future, 15 October 2021 https://www. fiercepharma.com/pharma/solar-wind-waterpharma- go-planet-astrazeneca-novo-nordisknovartis- and-amgen-talk-renewable

3. PwC, Towards a Net Zero future in pharma – the role of continuous manufacturing, 17 February 2021 https://pwc.blogs.com/health_ matters/2021/02/towards-a-net-zero-future-inpharma- the-role-of-continuous-manufacturing. html%20

4. Let’s Recycle.com, Waste bills to rise as costs jump, 28th January 2020, https://www. letsrecycle.com/news/waste-bills-to-rise-ascosts- jump/

5. AMR Industry Alliance, Making antibiotics responsibly: A common manufacturing framework to tackle antimicrobial resistance https://www.amrindustryalliance.org/wpcontent/ uploads/2019/11/Making-antibioticsresponsibly_ A-common-manufacturingframework- to-tackle-AMR.pdf

6. See, for instance, Pharmaceutical waste and antimicrobial resistance, Ahmad, Akram et al. The Lancet Infectious Diseases, Volume 17, Issue 6, 578–579 https://www.thelancet.com/journals/ laninf/article/PIIS1473-3099(17)30268-2/fulltext