13 - SUSTAINABILITY: Reality Checked

COP27 has brought environmental policy back to the fore. As natural innovators, pharma and biotech have an opportunity to be world leaders in sustainability. Indeed, the biggest pharma companies have made solid sustainability progress.

A study from MyGreenLab and Urgentem, presented at COP27, highlights a different reality – that generally the pharma and biotech industry is not aligned with ‘keeping 1.5 alive’. Of 382 pharma and biotech companies included in the analysis, 91% lack carbon reduction targets aligned with the Paris Climate Agreement. Alarmingly, emissions from publicly listed pharma and biotech companies have actually increased by 15% since 2015.

James Connelly, CEO of MyGreenLab, reflected: “While it is encouraging to see the leading companies in the biotech and pharma industry starting to drive year-on-year reductions, we need to get the entire industry engaged, and we need to rapidly scale up our efforts if the industry is going to be part of the climate solution.”

A separate report about supporting green pharma in the UK from the Office of Health Economics (OHE) and Association of the British Pharmaceutical Industry (ABPI) notes that coordination and collaboration will be essential to navigate pharma’s complex supply chains.

Graham Cookson, Chief Executive of OHE and co-author of the report, explained: “Healthcare has a significant impact on the environment, and it is time that this is recognised in the decision-making process. Without better structures for decision-making the market will continue to generate myopic incentives for innovation with little regard for the environmental impact.”

For future action to be more meaningful, the reasons for seeking improved sustainability will need to transcend the competitive environment.

The OHE and ABPI report identifies five key recommendations for the pharma industry:

Report and disclose sustainability metrics
Investment in product-level life cycle assessment
Partner with health services on waste management
Invest in improvements in energy efficiency
Engage in industry-wide collaboration

Recommendations 1-3 provide power to downstream users to make informed choices about the environmental impact of the pharmaceutical products that they buy. When those users are public services like the NHS, this creates a framework for environmental legislation to have a greater impact on supplier choices.

On the other hand, recommendations 4 and 5 push industry stakeholders to use less energy and seek greener alternatives as well as collaborate to improve access to sustainable solutions. As energy prices and inflation continue to rise across the globe, many companies may naturally find themselves looking to energy efficiency measures to reduce costs while simultaneously reducing their environmental impact.

The reports suggest that there is still much to be done and the reasons to implement robust sustainability strategies have never been more pressing. However, the global economic backdrop means that the gap between the financial and social reasons for sustainability is narrowing. In the world of business, this seems to signal that change is close by.

Reality checked