A Prognosis of Sustainability in the Pharmaceutical Industry

Suppliers and partners for drug delivery products are also working hard to raise environmental, social, and governance (ESG) standards all along the supply chain. ESG credentials are now essential for pharmaceutical tenders at every stage. Pharmaceutical companies want to show action, not just ambition, in their efforts toward greater sustainability to customers, policymakers, and stakeholders in the healthcare system.

As a key device delivery partner to pharma companies, Owen Mumford Pharmaceutical Services has taken a look at the current level of ESG compliance among the 25 largest pharmaceutical companies reporting ESG scores. This article will highlight what has been achieved so far and point out main areas that need improvement.

Outlining Targets

To really understand how the pharmaceutical industry is progressing toward sustainability, it helps to start by defining what success looks like. Most reports focus on the same four main goals for achieving sustainability:

1. Cutting carbon emissions by improving energy use and setting net-zero goals.
2. Improving water sustainability by reducing water use in manufacturing and keeping pharmaceutical waste out of water systems.
3. Bettering waste management by reducing extra packaging and recovering/disposing of used products more effectively.
4. Building sustainability into design, through green chemistry, chemical recovery, and making reusable delivery devices.

The analysis looks at ESG targets that are specific to the pharmaceutical sector and its suppliers. The report also looks at not just where ESG policies are in place, but where companies have made public, concrete targets.

Areas of Progress

The pharmaceutical industry is making important progress toward a more sustainable future. The October 2021 Climate Reporting Performance report by Ecoact featured three large biopharmaceutical companies among the top 20 global companies for sustainability. Biopharma overall performed much better than many other industries in all the main categories, such as ambition and targets, governance, and results. Especially, there have been key improvements in energy, water, waste, and air emissions.

Air emissions are where most pharma companies focus their targets. Around 70% of companies have set specific targets for reducing air emissions, including both carbon footprints and gas pollutants. Typical emissions targeted include acid gases, dust, aerosols, pharmaceutical actives, and volatile organic compounds — all of which can harm the environment.

Second, this energy-heavy sector has made moves to use less energy. Most energy strategies are based on a mix of using renewables, generating their own power, and increasing efficiency by cutting back energy used during manufacturing.² Cutting energy use can involve production lines or facilities — and either way, typical savings are around 25% and often even higher.³

Third, efforts to improve water use are focusing not only on using less but also on recycling and treating water — either for reuse or for returning to the water supply. One international leader plans to reach 100% water neutrality by 2025, meaning all wastewater will be recycled, reused, or captured from rain. Our review found that about 50% of pharma companies have already set firm targets for water use.

Finally, waste reduction is trending in the right direction, with many companies setting goals. More than a quarter have pledged to cut waste emissions by at least 25%. Companies are moving away from using landfills and some are aiming for zero waste. Also, as disposal becomes more expensive, commercial incentives to reduce waste are growing.⁴

To address concerns about single-use plastic parts in drug delivery devices, alternatives like biodegradable plastics are being discussed and reviewed, but for now, companies are making immediate progress by simply reducing the number of throwaway components. One example of sustainable design is Auto, which will help partners decrease plastic waste in their supply chains.

Areas for Improvement

Even with the progress being made, there are still areas in the industry that need improvement, and statistics can often hide issues that need attention. For instance, though the sector as a whole has an ESG score of 61% in the Ecoact review — well above the all-industry average of 53% — individual company performance varies a lot.

Our research found as much as a 40% gap between industry leaders and firms that still have a long way to go. To truly make progress, the industry needs to close this performance gap. The data also shows that company size and location don’t matter much; small top-performing firms keep pace with the largest multinationals. That means corporate commitment is as important as budget.

Besides the big difference in ESG scores among drug makers, some challenges span the whole industry. One key area is contamination. Even though 84% of companies have a policy on Pharmaceuticals in the Environment (PiE), and 36% have a policy on Anti-Microbial Resistance (AMR), very few have set concrete targets in these areas.

The AMR Alliance, an industry effort to address anti-microbial resistances, says: “Manufacturing emissions from both producing active pharmaceutical ingredients (APIs) and drug formulation are another source of environmental emissions… In places where discharges are not closely monitored, some studies found very high levels of active substances near antibiotic factories.”⁵ Multiple studies point to similar findings, highlighting the need to protect the environment from pharmaceutical contamination.⁶ Clearly, there is lots of work left to do here.

Another area where progress is lagging is packaging. This is an area where action can be taken more easily. In other industries, there has been a push to change packaging, especially during distribution. Though 76% of pharma companies have packaging policies, only 13% actually have specific targets. Packaging could be shifted to more sustainable materials when clinically acceptable, and reducing weight or packing more efficiently could save resources during shipping.
Some leading companies have set clear targets, with the main focus on switching from plastic to sustainable paper. They’re also assessing where the biggest environmental gains are, and where original packaging still makes sense. This area is expected to gain momentum across the industry and see large-scale changes in the coming years.

Conclusions

While many studies show the pharmaceutical industry is headed in the right direction when it comes to sustainability — and doing better than most other industries — there is more work to be done. Standards need to be adopted throughout the pharmaceutical supply chain to achieve scope 3 emissions cuts and further progress. Collaboration between pharma companies and their suppliers, or among suppliers themselves, could help drive change and make real action happen. Areas like contamination and packaging need concrete targets before true progress can be made; those who act now will set the stage for others to follow.