Michael Earl, director, Pharmaceutical Services at Owen Mumford describes the steps the industry has taken so far in relation to sustainability and the remaining possibilities.
The pharmaceutical industry has an important role to play as the world strives to create a more sustainable future. The significance of big pharma’s impact is highlighted by the fact it produces 13% more carbon emissions than car manufactures do assembling vehicles. Pharma companies are now determined to reduce their carbon footprint, eliminate pollution, conserve water, and use sustainable components.
This means the entire supply chain will need to improve environmental, social and governance (ESG) standards as businesses seek to work with sustainable partners to strengthen their own credentials. Additionally, the ‘Greener NHS’ programme includes a commitment to be net zero with any emissions it can influence by 2045. All healthcare suppliers looking to have a continued relationship with the NHS must adapt as quickly as possible to remain a viable choice as the NHS seeks to meet this goal. In line with this, Owen Mumford Pharmaceutical Services has committed to achieving net zero emissions by 2045 and to achieve a 50% reduction in emissions by 2030.
To get a clearer picture of the measures being taken by the pharmaceutical industry, Owen Mumford Pharmaceutical Services has reviewed the current state of play on ESG compliance among the top 25 pharmaceutical companies reporting ESG scores. This article will look at the key areas where progress is being made and where improvement is needed to create a sustainable industry for the future.
Progress so far
This article focuses on four key areas of activity: carbon emissions, water use, waste management and sustainability by design. Owen Mumford Pharmaceutical Services’ analysis focuses both on ESG policies that have been put in place as well as where companies have publicly set concrete targets.
Air emissions
Almost 70% of pharma companies have specific targets for reducing carbon emissions and gaseous pollutants. Acid gases, dust and aerosols, pharmaceutical ‘actives’ and volatile organic compounds are typically being targeted for filtering.
Energy
Most energy policies have a threefold approach –combining use of renewable energy, self-generation and increasing energy efficiency in the manufacturing process. Reducing energy use in the manufacturing process can be focused on either the production line or industrial buildings, with savings of 25% or more common in both areas.
Water
Water usage focuses both on consumption as well as cleaning and reprocessing water. One international generics giant aims to achieve 100% water neutrality by 2025 meaning all waste water will be recycled, reused, or captured from rainwater. Our review shows an impressive 50% of pharma companies have set hard targets in this category.
Waste
Over a quarter of pharmaceutical companies have already set targets to reduce their waste emissions by 25%. Companies are attempting to remove reliance on landfills or pursue a zero-waste approach. Additionally, commercial incentives are becoming a factor as waste becomes more expensive to dispose of, while rising commodity prices may encourage firms to recognise waste as a source of scarce resource.
For medical device suppliers, reducing the footprint of their products is particularly challenging since infection control often demands that devices are single use and immediately disposed of after use. One strategy to mitigate this is to review the entire manufacturing process and product life cycle for inefficiencies. Meanwhile, alternatives to disposable plastic components in medical devices are being explored, and immediate progress is being made by reducing the number of disposable parts.
At Owen Mumford Pharmaceutical Services, we are using our experience in auto-injectors to develop new designs for re-useable auto injectors, which will help our partners reduce plastic waste considerably.
Areas for action
Although the industry achieved an impressive ESG score of 61% in the Ecoact’s October 2021 Climate Reporting Performance report –well above the all-industries average of 53 % –the performance of individual companies varied significantly. Our study shows a 40% difference between top performers and those behind the curve. Moreover, it appears that neither size nor location impede progress; corporate will and commitment to improve ESG scores are as important as big budgets, allowing smaller firms to progress at similar levels to large multi-nationals.
Contamination
The Anti-Microbial Resistance Alliance reports that emissions from the production of active pharmaceutical ingredients and their formulation into drugs are a further source of emissions –particularly in countries where discharges are not well controlled. Yet, while 84% of companies have a policy on Pharmaceuticals in the Environment (PiE) and 36% have a policy on Anti-Microbial Resistance (AMR), there are very few concrete targets in these areas.
Packaging
Since this is a relatively straightforward area for setting targets, many other industries reviewed packaging as a first step in their journey, particularly in the distribution phase. Meanwhile, in the pharma industry, 76% have policies for packaging, but only 13% have set concrete targets. Progress could be made by converting to sustainable alternatives or reducing weight and increasing packing efficiency to reduce shipping resources. Some leading companies have set specific targets –focused on converting to recyclable/sustainable paper where possible, to replace plastics. It is likely that this area will gain traction within the rest of the industry in the coming years.
Conclusions
Studies show the pharmaceutical industry is heading in the right direction in the drive for sustainability –with performance better than many other industries. Regardless, policies have to turn into targets – particularly within the areas of contamination and packaging – and targets must continue to be met if they are to remain ahead of the curve. Initiatives such as the B Corp certification achieved by Owen Mumford help companies to set achievable targets, and then set milestones to stay on track. Third party audits hold businesses accountable and make sure they don’t lose sight of their goals. Collaboration between pharma businesses and their suppliers may help to narrow ESG variance and consolidate sustainable action in the industry.