Global health is intrinsically linked to the environment,
and with extreme heat, air pollution and changing weather patterns, climate
change is impacting our lives in increasingly debilitating ways.
So, with COP27 currently filling out news feeds, and WHO
calling for health to be at the heart of the climate change negotiations, we’re
taking a look at how Life Sciences has embraced sustainability.
Sustainability is generally defined as, ‘development that
meets the needs of the present without compromising the ability of future
generations to meet their own needs.’ Still, in the business sense, it’s a term
that seems to grow more complex each and every day.
I’m sure any business-savvy brain or consumer-conscious mind
will agree that ‘green’ initiatives place a competitive modern edge on a
company, but for Life Sciences it’s even more tricky. Due to the social impact
of the industry, we’ve previously existed in a separate kind of bubble from the
rest of the business world, and its immense environmental impact is often
For example, did you know that labs around the world
typically use 5-10 times more energy per square meter than office buildings?
More shockingly, an estimated
30,000 single-use biopharma products are landfilled or incinerated each year,
and the industry produces
55% more greenhouse gas emissions than the automobile manufacturing sector!
So, while we can all appreciate the positive role Life
Sciences has in ESG, there is so much opportunity to have a better impact on
the environment too. Let’s look into it in a little more detail…
Life Sciences on Sustainability: An Overview
Typically, the progress of the sustainability movement has
coincided with Life Sciences’ transition into a significantly more connected and
technologically advanced era. However, for the industry to continue moving
forward, it’s of utmost importance that we pause, reflect and act on major
sustainability concerns such as waste, energy and water consumption.
Ever since the Covid-19 pandemic, there’s even more pressure
and urgency for businesses to become ‘greener’. That’s because with the ongoing
climate crisis, 61% of consumers say they’d be less inclined to buy a product
if the company had harmful environmental practices and 81% believe that their
consumer choices impact the environment.
Of course, prescription drugs and treatments are more
necessary than say, fast fashion, but that doesn’t negate the fact that
consumers can easily boycott OTC medications and vaccines if they believe
they’re damaging the environment. In fact, it was throughout the pandemic that
those outside of the industry developed major concerns about the sheer mass of
medical waste by being exposed to the likes of single-use plastics like PPE and
With the sector now on a global stage, and environmental
issues being spoken about more than ever before, a shift in attitude is
resonating throughout the industry. Just last week, CEOs from AstraZeneca, GlaxoSmithKline, Merck KGaA, Novo Nordisk, Roche, Samsung
Biologics, and Sanofi announced joint
action to achieve near-term emissions reduction targets and accelerate the
delivery of net zero health systems.
This is the first time the global Life Sciences industry has
joined forces to collectively address greenhouse gas emissions across supply
chains, patient care pathways and clinical trials through the Sustainable
Markets Initiative (SMI) Health Systems Task Force – a public-private partnership
that was originally launched at COP26.
So, as the industry leans in to becoming more environmentally
conscious, let’s take a look at how sustainability initiatives in Life Sciences
affect the planet, people and profits…
How is the industry adopting sustainability ideas with
respect to the planet?
For Life Sciences, unsustainable practices begin at drug
development, when labs typically use almost ten times the amount of energy as
an entire office building. If successful, we’ll then move on to the manufacturing
stage where large amounts of power and water are used. Then, if we look further
into the process, the supply chain contributes a significant amount of carbon
emissions from transporting pharmaceuticals and chemicals across the globe. In
fact, did you know that 30% of the industry’s carbon footprint comes from
All of this environmental harm does make us wonder, if Life
Sciences is razor sharp in terms of testing and scientific profiling, why don’t
we use our data-driven expertise to sway more sustainable manufacturing and
To truly embed ESG into the corporate culture, we must think
about adding measurable goals for emissions across the value chain. Some
companies have already taken a step in the right direction, collecting and
reusing materials in medical equipment and devices and employing sustainable
packaging for their products.
For leadership teams ahead of the curve, they understand
that building resilience into supply chains and addressing the importance of
sustainability gains a long-term competitive advantage, attracts investors, and
can lead to cost-savings. Plus, organisations with a sustainability agenda are
better situated to anticipate and react to social, environmental, economic and
regulatory changes as they arise.
With this in mind, some of the biggest names in pharma have
all made progressive pledges with a 2030 vision. AstraZeneca have invested $1 billion
into their Ambition
Zero Carbon programme with the hopes to become carbon negative and Novartis
aim to become carbon neutral. Plus Takeda
achieved carbon neutrality in 2020, which was a major milestone in their pledge
to become carbon-zero by 2040.
Although promising to become carbon neutral is a great step
in becoming more environmentally friendly, Deloitte points
out that for Life Sciences to become truly sustainable, we must also look to
suppliers with zero-carbon landfill policies, sustainable packaging and parts,
and those who recycle waste and water.
ISPE has also taken an
active role in promoting sustainability in the industry, offering guidance on
policymaking for environmental objectives and recognising and rewarding the achievements
of those making a difference. Most recently, Catalent
and Janssen Biologics
were awarded the Facilities
of the Year Award for their social impact, Takeda for their supply chain, CRISPR Therapeutics for innovation.
What’s more, the sector has also recently pushed for more
M&As as a means to improve their sustainability footprint and strengthen
their ESG ranking by adding environmental expertise and capabilities. In fact,
according to EY,
82% of CEOs named strategic reasons such as long-term value creating and
competitive advantage when asked how sustainability factors were driving their
What are Life Sciences doing
about sustainability in regard to people?
It’s no secret that the industry is currently driven
by talent, and younger generations tend to hold environmental, social, and
ESG issues in high regard. Because of this, industry frontrunners are designing
models and sustainability initiatives to help protect and create value for their
stakeholders, boost brand trust, reduce costs, and attract and retain talent. Dr.
David Callaway (Deloitte) puts it best, “20-30-year-old professionals all
want to be in a purpose-driven corporation and they’re willing to walk if they
don’t get that.”
A great example of a Life Sciences name understanding the
societal shift is Biogen,
who also happened to secure the no.1 spot on Corporate
Knights’ 100 Most Sustainable Corporations list. That’s because if we strip
it back to basics, the sole purpose of the Life Sciences industry is to improve
the lives of patients. For Biogen, their forward-thinking mindset helped them
realise that along with their patients, they could also impact the lives of
their employees and the communities in which they operate as well as the wider
environment. This kind of thinking has not only facilitated getting employees
behind the initiative but has also helped to attract high-calibre talent.
According to American
Pharmaceutical Review, between 2006 and 2013, Biogen reduced its water
usage by 66%, energy usage by 57%, and greenhouse gas emissions by 64%. During
this same timeframe, the company’s solid waste to landfill was reduced by 100%,
helping them achieve zero-waste by 2012! What’s more, 97% of their 7000
employees said that they were ‘proud to be associated with Biogen.’
Although talent acquisition and corporate responsibility are
some the major driving forces behind Biogen’s sustainability strategies, it’s
not only employees that companies need to think about when it comes to their
sustainability plans. Biogen reported that they were asked about their
environmental initiatives by a principal investor who’s focused on social
responsibility. This only goes to show that sustainability is becoming more
mainstream and increasingly more important to the investment community.
In fact, investors now have the ability to track ESG high
performers and are correlating improved financial performance with a better ESG
score. This suggests that companies who embrace sustainability as a fundamental
business strategy will drive innovation and loyalty from employees, investors,
customers, and suppliers.
How do sustainability strategies affect Life Sciences profits?
reports that business leaders from Life Sciences companies with annual revenue
below $1 billion plan to use sustainability to drive revenue growth and
increase business efficiency. That’s because linking ESG to long-term value
creation – including financial value – can help win over investors. In order to
do so, Life Sciences companies must get better at articulating their value
beyond developing innovative medicines and treatments.
With that said, when it comes to sustainability, it can be
difficult to decipher which metrics matter most. Not only do multiple
sustainability frameworks exist, but a large number of measurement systems are
in use – even within the same organisation.
This creates issues as it results in companies, and
divisions within companies, handpicking the metrics that show their
sustainability efforts in the best light. What’s more, it makes objective
comparisons across businesses completely impossible.
To help companies and investors, EY’s Health Sciences
and Wellness has analysed existing sustainable value metrics and organised
the initiatives into eight different categories. This facilitates an
understanding of how different companies in the industry compare, makes meaningful
comparisons, and creates a standardised way for public measure.
Out of the eight categories, all generally fall into two
primary areas: the social value associated with medical products/services that
reduce the burden of acute and chronic disease, and, the environmental value
associated with reducing global warming given the well-documented health
effects associated with climate change.
From the analysis, EY
found that there was a poor correlation between sustainable value and commercial
value, which suggests companies with high sustainability scores are not being
rewarded financially. Going forward, its essential that companies within Life
Sciences communicate their sustainability strategies, so investors give them
the correct credit for their efforts.
Although an increasing number of leaders report accelerating
climate change impacts, 57% say they have encountered investor pushback to
their environmental transition – usually relating to costs and long-term ROI.
The reason behind this is probably
because companies must invest large amounts of money to research, engineer and
implement sustainable options. However, dealing with short-term pain to achieve
enormous and lasting long-term gain by implementing operational and process
improvements can result in better environments, a reduction of risks, decreased
inefficiencies in R&D and cheaper facility operations. Not only that, but
employees and surrounding communities can also benefit from cleaner operations.
Understandably, the introduction
of new processes can be tricky due to old equipment being in constant demand
for continuous manufacturing and businesses not wanting to interrupt
production. Still, it is in our best interests to improve global and
environmental health – essentially the purpose of Life Sciences – even if that
means a small hindrance in the process.
The core of Life Sciences and the
reasons why the industry exists is to address and improve health issues in the
communities we serve. Climate change is a major public health crisis because
the environment and the air we breathe has been linked to our health ever since
the very first person set foot on Earth.
Placing sustainability central to
the incredible work we do in Life Sciences will only help create meaningful
change, protect the long-term future of the sector, and signpost a new dawn of
sustainability. But it’s up to each of us to seize the opportunity and get
things done before it really is too late.