Despite living in an ever-changing world amid complex geopolitical and economic shifts globally, the importance of the sustainability agenda remains at the forefront of governmental and business strategy.

Bringing Environmental, Social and Corporate Governance (ESG) together and embedding sustainability into your business is as important in the pharmaceutical industry as any other. However, with diverse supply chains and transport playing such a vital role in the smooth operation of manufacturing and transporting vital medicines to consumers, it remains important that businesses recognise that an ESG strategy must be close to everything they do.

When considering the three traditional pillars of sustainability, namely environmental, social and economic, the pharmaceutical sector can develop and deploy initiatives that integrate sustainability into the heart of everything individual businesses do.

Whether it be the reduction of Scope 1, 2 or 3 emissions or increasing the use of recycled materials in packaging, it is important that there is sector-wide recognition that a comprehensive ESG strategy does not just result in a more environmentally sustainable industry but can also have an impact on efficiency within your business.

These principles similarly exist in social and economic sustainability, across employee engagement programmes, diversity and inclusion initiatives as well as the more historically considered aspects of economic sustainability and financial viability.

Given this, many pharmaceutical companies throughout the pharmaceutical supply chain are currently wondering what a roadmap to a more sustainable future looks like and how it can implement an effective strategy to address environmental, social and economic sustainability.

Setting achievable goals and prioritising your environmental impact

In October 2021, the UK Government outlined ambitious proposals in its “Net Zero Strategy: Build Back Greener” for decarbonizing all sectors of the UK economy and meeting the target of net zero by 2050.

It is incumbent upon businesses in the pharmaceutical sector, if they are to survive and thrive, that they make active efforts to achieve a more sustainable business model. However, if companies are to be successful in this transition, they must set realistic and achievable goals.

Throughout the industry, this can vary greatly dependent on the business model and area of operation. Manufacturers of pharmaceuticals, which are energy intensive, should look towards deploying new technology to reduce emissions, whilst logistics companies within the sector may look to new and innovative freight options.

In the instance of community pharmacies and direct to consumer pharmaceutical companies, a focus on other principles is required. A reduction in waste and the adoption of more environmentally friendly infrastructure such as electric vehicles and alternative energy providers will allow pharmacies, in particular, to practice a more sustainable future.

At Pharmanovia, through the detailed assessment of our own business operations, we recognised that global transportation was having one of the biggest impacts on our carbon footprint. With this in mind, we piloted a scheme in 2022 which saw us move from air to sea freight on a route from Spain to Australia. The air-to-sea pilot project avoided c.470,000kg of potential CO2, amounting to a reduction of 18% in Scope 3 upstream emissions.

Owing to the success of this pilot, Pharmanovia is planning on increasing the number of shipments by sea freight to 40% by the end of 2023, and 75% by the end of 2028. This is an ambitious yet achievable target, which we believe focuses on prioritising the impact our business has and how we can transition towards a more sustainable future.

However, when it comes to environmental sustainability, it is not enough to rely on the credentials of your own company, it is vital that pharmaceutical companies make a concerted effort to work with partners and in a supply chain that also adopts sustainable practices.

A recent report from a leading intelligence organisation highlighted that only 16 out of 500 pharmaceutical companies measured their Scope 3 emissions. Businesses must look at their partners and conduct comprehensive due diligence on not just whether those within their supply chain are measuring their impact but actively looking to improve their environmental credentials. This is especially key for non-manufacturing companies such as Pharmanovia, where our direct impact on the environment is limited to our office operations and the transportation of our medicines.

Our Know your Business Partner (KYBP) programme at Pharmanovia involves robust due diligence processes and principles, which sees us regularly review the ESG credentials of our partners to ensure they are setting ambitious and achievable targets to continuously meet our expectations. Sustainability practices are also a key component of our decision making with any new partners.

Three Pillars of Sustainability

The importance of the environment and climate change is evident in the pharmaceutical sector. Environmental sustainability is one of the greatest challenges of our time and a global industry such as ours should focus on developing new and innovative ways to tackle the climate crisis. However, an effective ESG strategy and practicing sustainability as part of a corporate strategy goes beyond the impact your business has on the environment.

Sustainability should also focus heavily on the pillar of social equity, and how organisations are taking care of their employees. This can take the form of training, education and wellbeing programmes, which have become increasingly important for staff retention and productivity since the pandemic and the move to a hybrid working model.

Regarding health and wellbeing, pharmaceutical companies can implement corporate health checks and wellness programmes to ensure employees feel both physically and mentally healthy. This isn’t only a benefit for the long-term wellness of your staff but is also crucial to high productivity levels and staff retention.

Alongside this, training and diversity programmes play an important role in upskilling your workforce and incorporating various perspectives into the decision-making process. Increasing the number of employees from traditionally unrepresented backgrounds in the pharmaceutical industry will result in diversity of thought and ultimately more considered and measured decision-making for your business.

Finally, the importance of economic viability for business sustainability is where pharmaceutical companies may feel on firmer ground. Strong governance in terms of financial decision making is naturally important to the success of any business, however, in increasingly uncertain times it cannot be underestimated. With geo-political tensions leading to long-term challenges for many business, resilience, agility and a long-term perspective on how issues such as energy costs and international trade can be navigated will be crucial to the prosperity of the pharmaceutical industry.

Looking ahead

The long-term sustainability of the pharmaceutical sector will be contingent on addressing the environmental, social and economic challenges facing the industry. Whether it be deploying innovative techniques to accelerate a reduction in carbon emissions or new and improved welfare programmes for employees, it is important that pharmaceutical companies prioritise their impact, and address the challenges they see within their own company.

Neeshe Williams is General Counsel and Head of ESG at Pharmanovia.


Please enter your comment!
Please enter your name here