March 8, 2024 PAO-03-24-CL-03
We are all aware of the importance of ESG plans and concerted action for manufacturers like BIOVECTRA. These are no longer optional, and manufacturers must walk the path toward making investments and overall ongoing improvements across our operations. For these reasons, manufacturers need to demonstrate their commitment to formal sustainability action plans.
For a CDMO like us, this can start with an internal task force commissioned to develop sustainability goals and actions to support them. Once we’ve developed an ESG playbook, we are able to consult it for time- and performance-based milestones, and leadership can share its concrete commitments internally to all employees.
The next step can be — and should be — to collaborate with clients to make sure our stated plans align with their sustainability goals. We need to respond to partner-specific requirements in sustainability planning and, beyond that, continue to have an internal task force and resources committed to executing the company’s ESG action plan.
Then, once all of this is in place, the C-suite and operations leadership need to continue to evolve a sustainability mindset for continuous improvement. In these ways, employees and customers are aware of the company’s goals and action plan and can hold the leadership accountable.
ESG principles have become an important differentiating factor in today’s highly competitive global landscape. This is not just true for investors but for all participants along the pharmaceutical value chain. ESG principles are rooted in practiced transparency across all production steps — from supplying raw materials to production processes, packaging, and proper disposal or reuse.
Suppliers to the pharmaceutical industry, such as upstream chemical production companies like Evonik, have an important role to play, as our emissions, for example, account for more than 70% of our customers' emissions. In turn, our suppliers’ emissions account for the majority of our emissions. The strength of the ESG principles for pharmaceutical products is the sum of the individual contributions of all market participants involved.
Pharmaceutical and biopharmaceutical companies can demonstrate their commitment to ESG principles in manufacturing through transparency and accountability. I believe companies should commit to ambitious targets that are in line with international goals or standards. The way to achieve these targets is to transparently measure and report on business activities from the perspective of Scope 1-3 emissions. For example, Evonik's ESG principles are in line with the Paris Climate Agreement. This was scientifically verified by the independent Science Based Targets initiative (SBTi) and confirmed in July 2023. The Health Care business at Evonik, by the way, has set the goal of being carbon neutral in Scope 1 and 2 emissions by 2030.
Biopharmaceutical companies can demonstrate their commitment to ESG principles in biologics manufacturing in several ways:
1. Environment sustainability: Implement sustainable practices in manufacturing processes, such as reducing energy consumption, minimizing water usage, and managing waste responsibly. Adopting renewable energy sources and eco-friendly technologies and reducing carbon footprint can also demonstrate a dedication to environmental stewardship.
2. Social responsibility: Providing a safe and healthy work environment for employees, ensuring fair labor practices through promoting diversity and inclusion, supporting local initiatives, and providing access to healthcare and education programs can showcase social responsibility.
3. Governance practices: Upholding strong governance and ethical practices, including transparent decision-making processes, ethical supply chain management, and adhering to industry regulations and reporting on ESG metrics, can further demonstrate a commitment to ethical business conduct and accountability can also enhance trust and credibility.
By integrating these ESG principles into their manufacturing operations and quality management, biopharmaceutical companies can showcase their commitment to sustainable, responsible, and ethical practices, ultimately benefiting both their business and broader society.
Companies can demonstrate their commitment to ESG principles in manufacturing by using sustainable raw materials, reducing waste, reducing water usage, reducing energy usage, investing in employee well-being, and ensuring ethical business practices.
Through implementation of a quality-by-design approach (QbD), processes are more efficient at producing higher quantities of the product with specific, predetermined quality attributes. This minimizes waste and utility demands during production, which all contribute towards taking accountability of their production processes. Use of process analytical tools (PAT) as part of a QbD approach during research and development into the use of more sustainable raw materials will ensure critical quality attributes (CQAs) of the bioproduct match the expected targets at a lower environmental cost. Furthermore, implementation of intelligent sensors to monitor and control bioprocesses in real-time enable better understanding of bioprocesses: this can result into clearer insights regarding their environmental impact. For example, with the recent introduction of reliable technology to measure in-line dissolved CO2, Hamilton enabled biomanufacturers to have better control of their pH without the continuous addition of base: with one technology, CO2 emissions and consumption of aggressive chemicals is reduced. Additionally, intelligent technologies, data collection, documentation, and archiving become automated and paperless and readily accessible for regulatory body compliance.
The pharmaceutical industry is becoming more environmentally and socially conscious. Most companies have established ESG strategies for decreasing emissions, sustainable supply chains, and waste disposal management, but a successful, socially responsible, and impactful ESG strategy should include the entire value chain, including manufacturing.
Drug developers increasingly focus on capturing long-term value by collaborating with outsourcing partners with a track record of implementing ESG strategies across their entire manufacturing footprint. This can include continuous innovation, sustainable supply chains, and novel infrastructure.
We are striving to reduce Lonza’s environmental impact with a particular focus on energy, greenhouse gases, water, and waste. Our emission reduction strategy included submitting a letter of commitment to the SBTi with plans to reduce absolute Scope 1 and 2 greenhouse gas (GHG) emissions by more than 40% by the end of 2030 (from a 2021 base year).
In our Small Molecules division, organic solvents play an essential role in the manufacturing process, and we continue to improve the efficient use, reuse, and recycling of solvents. We have also worked with some of our major customers to establish this practice for the benefit of our company, our customers, and the environment. In addition, we give our customers visibility on raw material, CO2 footprint, and water intensity for each process step and provide potential process improvements to enable informed decision-making and promote sustainable production methods.
We aim to show our partners that using recycled solvents is feasible from a technical and quality perspective and that utilizing sustainable production methodologies is key to achieving our common decarbonization plans.
They can show their dedication to ESG principles in manufacturing by implementing sustainable practices, such as reducing waste and energy consumption, sourcing materials responsibly and investing in eco-friendly technologies.
Along the path we have firmly set out on, 2022 was marked by great strides toward environmental sustainability and energy transition, significant investment in systems that harness alternative energy sources, and social and economic involvement and support for the communities in which we operate. We reaffirmed our commitment to creating an increasingly sustainable and certified supply and production chain by transferring our values and standards to our global suppliers, and we continued our efforts to develop innovative production processes with an ever-decreasing environmental impact through research and development projects. Finally, we must mention the essential support of our people, the people who are part of our organization and are our real driving force. Inclusion, diversity, development, and safety are the themes we focused on and engaged in across the board, by integrating our strategy and operational decisions. We have achieved important results in cutting electricity and water consumption: our aim is to reduce electricity and water use and carbon dioxide emissions by 6%0 between 2015 and 2025.
We employ second-generation processes and green chemistry, while researching various sustainable technologies to reduce energy consumption and waste production while ensuring the maximum safety of our products. All these numerous efforts and initiatives resulted in progress and successes around sustainability. This has been recognized by independent institutions.
Pharmaceutical and biopharmaceutical companies can demonstrate their commitment to ESG principles by incorporating sustainable practices in their regular business activities. Companies can manage their ESG strategy by focusing on areas that are most relevant to them. At OXB, we manage our ESG commitments through several pillars, including people, supply chain, innovation, community, and the environment. For example, by implementing people policies that embrace diversity, equality, and inclusion, organizations can create a more inclusive workplace.
Our commitment to upholding the highest ethical standards has always been embedded in all of our research and development activities. Innovation plays a crucial role in maximzing productivity on a large scale while minimizing the environmental impact. We have pledged to the SBTi to reduce greenhouse gas emissions and report to the Carbon Disclosure Project (CDP) emissions for stakeholder transparency. We have also implemented a supplier code of conduct that outlines our company’s expectations of suppliers in relation to bribery and corruption, animal welfare, child labour, data privacy and protection, ensuring responsible management of all aspects of the supply chain.
Pharmaceutical and biopharmaceutical companies can exhibit their dedication to ESG principles in manufacturing through various avenues:
Materiality assessment: Directly engaging your stakeholders will help companies identify material ESG issues that may impact the company’s financial performance. The Double Materiality Assessment process considers both internal and external perspectives, ensuring alignment in business and ESG strategy while meeting stakeholder expectations.
Aligning to global standards and industry Initiatives: Committing to leading global standards like the United Nations Global Compact and Science Based Targets reinforces responsible business principles across human rights, labor, environment, and anti-corruption. Involvement in initiatives like the Pharmaceutical Supply Chain Initiative (PSCI) enables companies to standardize practices and reduce supplier requests, fostering efficient and sustainable approaches.
Achieving Recognition and Ratings: ESG-related lists and indices, such as EcoVadis and CDP provide an objective assessment of a company’s sustainability program, lending credibility. Investors can use these ratings to assess how companies compare within the same industry or sector.
Data Gathering and Reporting: Comprehensive data gathering provides valuable insight into company efforts, and this can inform decision-making processes. Public disclosures signal accountability, enhancing confidence among stakeholders. Regularly and accurately communicating ESG efforts through reports and disclosures to investors and stakeholders builds trust with stakeholders, which include investors, customers, employees, and regulatory bodies.
Devising actionable plans for reducing a product's carbon footprint and maintaining reliable manufacturing supply chains are two of the most decisive factors that define a pharma/biopharma's ESG commitment. Decarbonizing the entire cycle of drug manufacturing from scope 1 to 3 emissions requires a long-term collaboration among drug makers, contract development and manufacturing organizations (CDMOs), and raw material suppliers. The role of CDMOs in facilitating this collaboration is critical.
CDMOs must work with suppliers to source carbon-free raw materials while also addressing their own emissions, which contribute to pharma companies’ scope 3 emissions, making up about 80% of their entire GHG emissions. Through the Sustainable Markets Initiative's Health Systems Taskforce, Samsung Biologics, together with its industry partners, helps build a viable framework for net-zero healthcare within the supply chains. We have been proactively engaging suppliers with practical solutions to decarbonizing supply chains. In November 2023, we held our inaugural ESG seminar with suppliers, exchanging solutions-oriented approaches to reducing a raw material’s carbon footprint.
Moreover, the establishment of a tenable ESG infrastructure is critical for sustainable governance, part of which involves transparent reporting of carbon emissions reduction targets to global authorities, such as the European Commission and the International Financial Reporting Standards Foundation, as well as the Carbon Disclosure Project, where corporate ESG disclosures are made voluntarily.
As a sustainable CDMO partner, Samsung Biologics is tackling global climate challenges by engaging with our suppliers and partners to amplify our collective impact and find solutions to decarbonize at all levels.
Pharmaceutical and biopharmaceutical companies can demonstrate their commitment to ESG principles in manufacturing through a variety of measures. Firstly, they can prioritize environmental sustainability by implementing eco-friendly manufacturing processes, reducing waste, and minimizing their carbon footprint. This may involve investing in renewable energy sources, optimizing water usage, and adopting sustainable packaging practices. Secondly, a focus on social responsibility can be showcased by ensuring fair labor practices, promoting diversity and inclusion within the workforce, and actively contributing to the well-being of the communities in which they operate. This could involve supporting local healthcare initiatives, providing access to medicines in underserved areas, and upholding ethical labor standards. In terms of governance, companies can demonstrate transparency and accountability by adhering to stringent regulatory standards, maintaining robust ethical guidelines, and ensuring board diversity. By disclosing comprehensive ESG reports and actively engaging with stakeholders, pharmaceutical and biopharmaceutical companies can underscore their dedication to these principles, thus building trust and credibility with investors and the broader community.
Companies can demonstrate their commitment to ESG principles in manufacturing by becoming more efficient, more responsible for their activities and undertaking better conservation of resources. The adoption of Pharma 4.0 integrates greater digitalization into the pharmaceutical and biopharmaceutical industries, addressing these challenges. Pharma 4.0 results in greater connectivity, increased productivity, simplified compliance, and the ability to monitor real-time processes. This consequently allows companies to respond quickly should problems emerge.
Pharma 4.0 goes well beyond what happens on the production floor and allows for anticipation of supply chain needs, ensuring that the right resources are available when needed. Thus, reducing the increased environmental burden of rushed delivery or adapting processes to accommodate alternative materials, which in turn would increase certification requirements.
The ultimate deliverable of Pharma 4.0 is a more resource-efficient drug production process. Hence, reducing the cost and time to clinic, resulting in a higher rate of return for investor and patient alike.
Key ESG topics are often determined by large-scale trends, as well as by the nature of the company´s operations. ESG key topics include general themes like vision and governance, business ethics, human resources, environment, value chain, and societal relations. 3PBIOVIAN´s material ESG topics include corporate and governance, occupational health and safety, talent attraction and loyalty, GHG emissions and climate transition, product quality, and customer health and safety. Often, companies are establishing ESG roadmaps with quantitative targets.
To summarize a few main topics for 3PBIOVIAN, our company has a code of conduct in place determining behavioral standards and policies promoted by the company. Our company has focused on employee health and safety, with proper processes and policies in place according to industry standards and regulations.
From a value chain and product quality point of view, a formal supplier code of conduct ensures that all the company´s suppliers abide by the applicable rules and regulations.
3PBIOVIAN´s environmental footprint is limited with proper policies in place for waste management and hazardous waste management. Our company is also actively working on the processes to better understand environmental impacts and risks.
Additionally, renewable energy sources and energy saving solutions are used in the new state-of-the art manufacturing facility.
As ESG principles increasingly take center stage in the business world, their adoption has shifted from optional to necessary. ESG is deeply intertwined with the best practices that forward-thinking companies already embrace. Sustainability, involving efficient resource utilization (akin to Lean manufacturing), and governance, ensuring high quality, are all part of this integrated approach.
Pursuing ESG aligns seamlessly with the pursuit of manufacturing excellence; therefore, manufacturers must actively incorporate ESG practices into their operations to ensure sustainable growth and meet evolving market demands. Manufacturers can demonstrate commitment by implementing eco-friendly practices, reducing emissions, optimizing resource usage, prioritizing employee welfare, fostering a positive workplace culture, and ensuring ethical conduct. By integrating ESG principles into their business models, manufacturers contribute to a more sustainable and resilient future for all stakeholders.
Examples include:
Biopharmaceutical organizations need to establish internal practices and initiatives that demonstrate commitment to ESG principles. Incorporating these principles into internal processes ensures implementation and demonstrates commitment to stakeholders and investors, with the relevant key indicators for tracking progress.
A significant part of manufacturing operations at Astrea Bioseparations reduces environmental impact from the factory through the design and continual improvement of our manufacturing processes, demonstrating our commitment to sustainability. Implementing changes to manufacturing processes within biopharmaceutical manufacturing can be lengthy, due to regulatory checks and controls. If more organizations increased early investment into waste-recycling initiatives, smarter transport, and distribution set-up, the environmental footprint of the supply chain could be reduced.
Manufacturing factories have significant energy demands, investing in renewable energy, improving infrastructure, and putting schemes in place to encourage employees to support renewable energy goals and exemplify how organizations can further demonstrate their commitment toward environmental and social responsibilities.
Ethical raw material sourcing is a must-have for biopharmaceutical manufacturing organizations. At Astrea Bioseparations, this is embedded in our organization’s quality management system. We ensure that our procurement and supplier audit processes are aligned with our organization’s commitment to social responsibilities, which includes upholding rights, decent working conditions, anti-slavery, deforestation, health and safety, good business ethics, and more.
Reducing carbon emissions has become a crucial focus for pharmaceutical companies as they address sustainability. Pharmaceutical products alone account for a significant portion, ranging from 20% to 33%, of emissions within the health sector. In response to this issue, many pharma companies have joined the SBTi and committed to reducing their emissions in line with the goals of the Paris Agreement.
One key area of concern for pharmaceutical companies is the indirect value chain emissions, also known as "Scope 3" emissions, which contribute the largest percentage (80–95%) of total emissions. These emissions are primarily driven by the purchase of raw materials, including active pharmaceutical ingredients (APIs) and excipients. It is estimated that these materials make up 40–50% of the environmental footprint of a pharmaceutical product. Therefore, reducing the carbon footprint of these raw materials is crucial for meeting emission reduction targets.
BASF, a leading chemical company, offers product carbon footprints (PCFs) for its pharma product portfolio upon customer request. The methodology used to calculate these PCFs is certified according to international standards. Moreover, BASF can support customers by providing products that have a high potential for CO2 avoidance.
A benchmark study conducted by BASF, independently verified by Ecovamed, revealed that the product carbon footprint of BASF's Ibuprofen and Povidone Kollidon® 30 is at least 30% lower than the industry average. This achievement is attributed to the high process efficiency in production and lower utility consumption.
BASF aims to maintain this competitive advantage in the future by implementing measures to reduce emissions. This includes entering long-term renewable energy agreements and optimizing operational yield.
In conclusion, pharmaceutical companies are actively working toward reducing their carbon emissions. BASF's commitment to providing products with low carbon footprints and supporting customers in their emission reduction efforts is a step in the right direction for a more sustainable pharmaceutical industry.
In our efforts to embody ESG principles within our operations, we are taking significant steps, particularly in our manufacturing processes. These processes are characterized by complex supply chains that frequently rely on single-use consumables. To affirm our commitment to ESG, we have intensified the integration of ESG criteria into our vendor assurance programs. This strategic move ensures that we prioritize engaging with vendors who demonstrate responsible practices, such as employing sustainable packaging, maintaining safe working environments, and adhering to stringent data security measures. Such criteria are not just checkboxes for us; they are essential components of our ethical and sustainable business model.
Moreover, as we endeavor to scale our business, enhance our processes, and broaden our operational footprint, our focus sharply turns toward significantly boosting operational efficiency while concurrently reducing associated costs. The dynamic nature of our industry, marked by continuous innovation and the frequent introduction of new technologies, presents us with a plethora of opportunities to enhance our efficiency. These advancements are not merely about cost savings; they are pivotal in ensuring that our operations are more reliable and environmentally friendly. By leveraging these innovations, we align our growth and operational strategies with ESG principles, underscoring our commitment to not only being effective and efficient but also responsible stewards of the environment and society.
The ease of managing the environmental impact of a biopharmaceutical company is dependent on the type of production. Energy consumption, waste generation, natural resource use, and the impact on our environment vary company to company and are often a matter of economic concern. In fact, most countries now have strict environmental policies that businesses must comply with. However, communication of environmental policy, both within a business and with external stakeholders, is often neglected, with it seeming more obvious to communicate around the management of extraction and waste treatment, especially when dealing with dangerous compounds.
Social impact is the ultimate goal of biopharmaceutical companies involved in health, which often drives the work and communication carried out by biopharma. But social performance is also measured by a company's commitment to its employees, customers, suppliers, and local community, which should be the easiest and first action for management to take.
In today's social media–driven world, companies with unethical practices can quickly become the target of consumer and shareholder anger. Repeated failures in corporate governance, such as failing to meet the moral obligations of external stakeholders or even complying with the law, have led to a loss of public confidence in big business. This causes difficulty attracting top talent and a loss of business.
Stakeholders are demanding greater transparency and action on the full range of ESG issues, and those who take ESG seriously will be better placed to succeed in the future. Honesty, transparency and communication, in that order, are essential to BioSenic’s ethos.
ESG criteria play a pivotal role within the financial sector, guiding investment decisions toward not only financial gains but also societal betterment. This is particularly true for the pharma industry, which aims at creating value for all, impacting on universal health and long-term well-being.
A recent GlobalData poll of pharmaceutical industry professionals shows that 70% of 343 respondents believe that the pharma industry is not doing enough to be more environmentally sustainable. On the social side, after COVID-19, some topics have taken on renewed urgency, such as pricing, fair access to medicine, and quality of supply chains. Despite important moves toward sustainable governance, the industry is still plagued by compliance and integrity issues.
Against such huge challenges, the answer cannot lie on single organizations but should be shared across the whole supply chain, also including pharma packaging manufacturers like our company. Being aware of this responsibility, at Bormioli Pharma, we commit every year to accurate and measurable ESG targets, among which the most challenging are reaching the goal of 50% sustainable raw materials in sold products by 2025, reducing the use of water by 41% by 2030 and cutting CO2 emissions by 30% by 2030. We also have a strong focus on gender pay gap and stringent compliance standards, which are detailed in our ESG report. In conclusion, ESG factors are increasingly crucial in establishing business relationships with clients and suppliers, ensuring sustainable growth throughout the entire pharmaceutical supply chain.
At Charles River, our purpose is to get new treatments to market safely and faster. Health is about more than medicines; it includes a healthy planet. That's why we are committed to sustainability. Companywide, 90% of our electricity comes from renewable sources, and, by the end of 2023, Charles River slashed our GHG emissions by 40%. Our ESG commitment extends to our manufacturing business with the intent to improve as an ESG stakeholder while not compromising on operational compliance and product quality. Our manufacturing sites are deploying multiple electronic manufacturing systems, and this digitization will reduce waste and improve employee satisfaction. Charles River is also exploring other ESG avenues to improve our operations, for example, by utilizing liquid nitrogen–free freezing platforms where possible to further reduce GHGs.
The industry adoption of ESG practices is nothing but an act, lacking genuine commitment. It is plagued by hypocrisy, and the thin marketing veneer is beginning to reveal its true colors. Greenwashing is pervasive: forcing suppliers to sign ESG statements on one hand, while on the other, continuously squeezing them financially.
It is an exercise of securing commitments on paper, but when it comes to supporting them, pharmaceutical purchasing organizations will not hesitate to swap out responsible manufacturers against cheaper ones with no ESG track record operating in countries overlooking ESG altogether. An industry of snake-oil consultants and ESG rating agencies flourished only to create the impression of substance where there is none. If ESG is to be taken seriously, then a tax, similar to the carbon tax, needs to be implemented for all imports from countries with low ESG track records and legislations.
Pharmaceutical and biopharmaceutical companies can demonstrate their commitment to ESG principles in manufacturing through the implementation of multiple strategic initiatives, including evaluating the impact of their supply chain operations on the environment. The best way for these companies to demonstrate their commitment to ESG principles in manufacturing is to ensure equitable access to their innovative therapeutics. With the advances in modern medicine, we live in a world where potentially curative therapeutics have been developed for a wide variety of diseases that previously had very poor outcomes with clinical response and overall survival. Nonetheless, there have been several manufacturing chemistry, manufacturing, and controls (CMC) challenges, as the case with cell and gene therapies (CGTs), that have hindered access to these therapies. In some instances, patients have died on waitlists due to supply constraints and manufacturing bottlenecks. It is a strategic imperative for pharmaceutical and biopharmaceutical companies to invest in technologies that accelerate access to lifesaving therapies to ensure that every patient in need has access to safe, efficacious, and high-quality drug products when needed. Only when all patients in need have access can you truly say that a therapeutic is curative.
DWe believe sustainability should be a core corporate pillar. Core Biogenesis was created to provide an alternative source of production for recombinant proteins through molecular farming, the use of entire plants as expression hosts to produce recombinant proteins.
It is important for young industrial startups like us to constantly question ourselves on the best approach to tackle ESG issues and build sustainable leadership. Anchoring ESG principles at the heart of corporate policies as early as possible is key, through an appointed person responsible for the subject within a company.
There are three steps companies can use to center and project their ESG commitments:
First, diagnose –– develop a reading framework specific to the company's activities, starting from which ESG commitments correspond to your activities and potential impacts. Utilize reference tools and guidelines starting with the United Nation’s Sustainable Development Goals but also other tools that may be better adapted to the company's stage of development. The B Corp framework is an excellent starting point to get a structured overview of the underlying issues.
Next, measure –– choose the relevant key indicators that will make up the company's dashboard. These are objectives and key results (OKRs) relating to ESG themes but ultimately relate to the day-to-day work of employees in various departments. Start measuring early.
Last, identify areas for improvement and quantitative targets, and turn to external partners for expertise on crucial issues. We have turned to My Green Lab, which brings its experience of good laboratory management practices to bear in reducing our impact.
Decreasing carbon emissions is key to mitigating climate change. Regardless of which country produces them, reducing carbon emissions will take a global collective effort. So how can you tell if one biopharma company is committed to doing their part?
First, look at a company’s decarbonization plan. Scope 1 and 2 emissions are largely within direct control of the manufacturer. Their plan should lay out the operational efficiencies being implemented, how they are transitioning to electric fleet, and the ways they are transiting to renewable energy.
Second, review their Scope 3 emissions. These are emissions produced along the value chain upstream and downstream of direct operations. For most in our industry, they make up the majority of emissions. For example, at Cytiva, approximately 95% of our CO2 emissions are Scope 3 emissions, primarily from purchased goods and services and distribution. This makes sustainability a “team sport.” Everyone across the value chain has to work together. Look for a responsible sourcing program. Find out if they strategically spend with suppliers that have strong third-party ratings, such as an EcoVadis rating. Are they transitioning their mode of transport?
Third, look at the products themselves. Has the company started to incorporate circularity into product design? Are they using virgin materials or recycled content? What materials are being used in packaging? What end-of-life options exist to minimize waste?
Each company must do their part in the decarbonization of our planet. It’s no longer a matter of should we act; rather, it’s how fast can we act.
We are actively implementing sustainable practices in our manufacturing processes to align with ESG principles at IGC Pharma. Sourcing raw materials sustainably and ethically through a deep understanding of our supply chain is incredibly important. We work with restricted materials and so need to ensure compliance at every level, including transparency with our licensing protocols.
Our use of artificial intelligence (AI) to identify effective dosage and formulations should reduce the impact of wasted product on the environment. As socially responsible AI use becomes more of a focus for investors and stakeholders, we have chosen a partnership centered around ethical AI use with the CINFONIA research center, which aims to integrate ethical principles and responsible research.
Our commitment extends to investing in research and development of sustainable hemp and cannabis farming practices. By incorporating environmentally conscious practices, we aim to minimize our impact on the planet while meeting the growing demand for pharmaceutical products. Additionally, we believe it is our social responsibility to create therapeutic candidates with diverse applicability. There is historic underrepresentation of women and people of color in the clinical development process –– so we are increasing diversity in our clinical trials to ensure that we are creating therapies that are effective for all races and genders. This is particularly important when you consider that there is a higher rate of Alzheimer’s disease in South Americans and in women. This multifaceted approach underscores our responsibility as a pharmaceutical company to contribute positively to both the environment and society at large. Lastly, we are proposing to bring a drug to market that can be sold to patients in the $100–200 a month range to improve accessibility.
It will be important for pharmaceutical manufacturers to put in place governance systems to monitor and mitigate their environmental impacts. In fact, governments are likely to start requiring them to meet net zero targets. For example, the UK government’s Life Sciences Vision has set a target of net zero in the National Health Service by 2045, which will potentially raise questions on emissions in the medicines supply chain.
One way pharmaceutical companies can demonstrate their commitment to ESG principles in manufacturing is to document and reduce single-use plastics. Single-use plastics play a significant role in pharmaceuticals manufacture, particularly in multisite, small-batch manufacture of products such as vaccines and cell and gene therapies, and those plastics are subsequently incinerated.
Quantifying, measuring the impact of, and putting in place mitigation strategies for plastics use will be hugely valuable for demonstrating good governance practices. Following that, it will be possible to seek interventions to reduce or, in some instances, even reuse single-use plastics, which will become an important benchmark for growing the industry in a way that aligns with net-zero targets. It’s inevitable that such approaches will become expected and enforced in the next 10 years, and so those companies who adopt fastest will benefit from being at the forefront of the change.
We must shake the reputation of a greedy, male-dominated, environmentally reckless industry through top-down ESG-related changes.
This can be demonstrated to stakeholders quite literally through a change in leadership. When I took over as CEO for Likarda last year, it signaled to investors and customers the seriousness of our commitment to bucking the industry’s reputation. It helps when leaders don't look like the CEOs of old, signaling a fresh perspective based on different experiences.
We have sought to expand upon Likarda’s long-standing approach to putting culture in the forefront. That meant assembling a team with a wide variety of backgrounds and enabling everyone to voice their thoughts regardless of experience, helping to create a culture where we embrace new ideas and push boundaries.
Likarda’s technology is aimed at optimizing cold-chain delivery of drugs, thereby removing the need for using non-environmentally friendly cryopreservation agents like liquid nitrogen. But regardless of a company’s product, we can all adhere to certain ESG principles through product development and day-to-day operations.
This can mean looking inward at manufacturing practices related to water or energy use and waste creation. It can reflect internal investments in employee health and well-being. It may also mean prioritizing product safety and quality assurance and reflecting all progress through transparency and qualitative reporting.
Companies also have a responsibility to insist that suppliers and partners comply with environmental regulations, adhere to ethical labor practices, and respect human rights. We can also demonstrate our commitment to ESG improvement through community engagement and corporate philanthropy.
Prioritizing ESG practices is not just a responsibility but a vital opportunity to create sustainable growth, foster stakeholder trust, and contribute positively to our environment and society. At Navin Molecular, our environment management and energy management systems are accredited with ISO 14001:2015 and ISO 50001:2018, respectively.
As manufacturing is typically an energy-intensive process, we utilize renewable sources wherever possible while also employing efficient technologies, such as variable frequency drive motors that can reduce the speed of a motor as required. Use of LED lighting has been adopted universally throughout our plant, and, when combined, these actions have lowered our annual energy consumption by nearly 14% since 2021.
Reverse osmosis technology allows process water backwash to be reused, and segregating of effluent streams allows wastewater to be recovered through modern, multi-stage membrane technologies. Over the same period, monitoring and managing effluent release and water discharge in this manner has reduced our annual overall water consumption by ~6%.
Two-stage scrubbers installed on equipment, including reactors, centrifuges, filters and driers, eliminate the risk of gases escaping directly in the environment, while condensers on solvent storage tanks also avoid emissions.
Over half of the waste generated at Navin Molecular is recovered through recycling and reuse processes, with hazardous waste pre- or co-processed for use as fuel rather than being sent to a disposal site. Since 2021, the amount of waste being pre-processed has more than doubled to over 500 metric tons per annum.
ESG parameters are also factored into our supply chain management logistics, with over half of our input materials sourced from neighboring districts to further cut the environmental impact of shipping.
Some ESG policies speak for themselves, like reducing energy consumption and emissions; minimizing waste and water usage; prioritizing employee well-being and safety; pursuing diversity, equity, and inclusion (both for employees and board representation); and managing risk.
It can be harder to demonstrate responsible sourcing. To do so, choose suppliers that align with your company's values, evaluated with due diligence through independent audits, certifications, and supplier engagement.
In our space, it is important to review a tissue and blood supplier’s informed consent practices. Seek suppliers who inform donors fully of the risks, benefits, and alternatives to donation, including potential physical and psychological impacts –– coupled with policies to offer emotional support and appropriate follow-up care to address any potential complications. Their donors must understand the choice to donate or not and withdraw consent at any time, and donors' personal information and medical records must be kept confidential.
During the donation process, thorough medical evaluations should be conducted to ensure donor suitability and well-being before proceeding. Procedures should be performed by qualified healthcare professionals using safe and evidence-based practices to minimize risks and discomfort. Where financial assistance is needed to cover expenses related to travel, childcare, or lost wages incurred due to donation, suppliers’ handling of fair donor compensation should be evaluated.
Biopharma companies should continuously evaluate suppliers, adapt strategies based on evolving standards and risks, and communicate commitment to stakeholders to build trust and credibility. By doing so, they can ensure a truly responsible supply chain that benefits their business, the environment, and society.
For life science companies, it is increasingly crucial to adopt sustainable manufacturing practices, ensure social responsibility, and maintain transparent governance. Many are making environmental commitments like reducing GHG emissions, conserving water, and implementing green chemistry solutions. Managing employee satisfaction, ensuring workforce diversity, and maintaining transparency in practices such as gender pay ratios can show the company is serious about its social obligations. Governance strategies should focus on transparency and accountability in reporting, especially on ESG principles.
Perhaps the best way to show ESG commitment is through products that enable others to reduce environmental impact and improve operational efficiency. For example, our work with the G-Rex system is motivated by the need to simplify manufacturing processes, efficiency that inevitably leads to more sustainability and less waste. The G-Rex system allows for more flexible, streamlined, and environmentally sustainable production of cell therapies. Its gas-permeable, rapid cell-expansion technology provides an ideal environment for cell growth, minimizing waste and reducing the need for complex bioreactors.
Additionally, the standardization and automation of processes, inspired by other industries like automotive manufacturing, enhance repeatability and efficiency. This is in line with the global shift toward sustainable manufacturing processes in the pharmaceutical industry, as seen with the increasing adoption of green chemistries and continuous processing.
By simplifying manufacturing processes with innovative technologies like G-Rex and adopting sustainable, socially responsible, and transparent practices, pharmaceutical companies can effectively demonstrate their commitment to ESG principles, contributing to the industry's long-term sustainability and ethical integrity.
ESG principles should permeate every part of a business, guiding decisions from the very top of the organization through to its core operational teams. It is a long-term commitment: a journey that a business will go on and learn from as its strategy develops.
There are two key aspects: a material review to identify which factors are the most important to or are affected by the business and the measurement of impact as milestones are met against an initial benchmark. Impact is not only environmental but includes how well a business looks after and engages its stakeholders, how it is governed, and all ethical responsibilities for its people, the planet, and communities.
By its very nature, pharmaceutical manufacturing is resource intensive, so innovation, creativity, and full employee engagement are needed to make positive changes. Recognizing that this will take time, and investment is the first challenge, while setting out clear, time-bound objectives is key to success. By reducing a company’s carbon footprint, major aspects of sustainability through the supply chain of materials and services, operational efficiency, emissions, and waste reduction and management can be addressed.
At Sterling, we focus on continual improvement and regularly measure impact so that positive changes that meet our business objectives can be seen. Nurturing a culture that empowers employees to develop new ways of working will bring about change faster. Sterling’s employees have the most knowledge about how their processes and systems work and align with everyday life, so their suggestions and changes bring significant value to our ESG journey.
Like so many companies, Thermo Fisher Scientific is working closely with our customers, colleagues, and other stakeholders to demonstrate our commitment to ESG principles in manufacturing.
Environmental sustainability: As a leading manufacturer of scientific instruments, laboratory equipment, and consumables, we are addressing our Scope 1, 2, and 3 emissions by transitioning away from fossil fuels and investing in renewable energy, waste management, and sustainable design of our products, processes, and packaging. Our approach includes strong customer collaborations and specialized supply chain programs that support progress toward our near-term, science-based targets and our ultimate goal of a net-zero value chain by 2050. Through our clinical research business, new initiatives include self-administered home blood tests, a patient travel carbon footprint calculator, and a tree-planting program for enrolled patients.
Social responsibility: Supporting local communities is core to our purpose and starts with creating meaningful employment opportunities in a vibrant culture where colleagues can pursue long-term, mission-driven careers. We prioritize the health and safety of our teams, invest in well-being and mental health programs, support their involvement in philanthropic initiatives, and foster a diverse and inclusive work environment where different perspectives fuel innovation to benefit both science and society.
Ethical governance: Guided by principles of integrity, transparency, and accountability, we have a strong governance framework. Our skilled and diverse board provides independent oversight of company strategy and operations, including our ESG priorities, initiatives, and disclosures, and our robust stakeholder engagement program provides us regular insight into ESG matters most important to our customers, investors, and others. With rigorous standards and policies guiding how we work, we actively foster a culture of responsible business practices and ethical behavior across our workforce.
The best way to signal ESG principles is through transparency, which means utilizing systems with the ability to offer insight into a process from end to end. This is the bread and butter of what TrakCel’s product OCELLOS does for advanced therapy developers, ensuring that all the actions and documents that relate to a therapy and its manufacture are collated and auditable.
Having genuine data that are available for analysis and inspection helps qualify best practices. In this way, companies can demonstrate initiatives to stakeholders that are backed by strong data, not just good intentions.
Transparency and data accessibility are also critical when looking to maximize efficiency, with clear benefits for environmental impact. For example, the data gathered from effective supply chain management tools could be used to power analytical and predictive algorithms that identify where there is waste in a process and how it can be avoided.
Patient scheduling is a particularly good example of one of these key areas. Many variables can impact this, from the patient’s ill health to transportation difficulties. Due to the limited availability of manufacturing slots and the scarceness of certain raw materials, the knock-on impact of unforeseen delays can waste significant manufacturing resources –– and potentially reduce the total number of patients that can be treated. Understanding where to respond to change earlier in the process, or even harnessing advanced technologies like predictive AI for better efficiency, could optimize the use of manufacturing slots and reduce both the environmental and patient impacts.
As a leading global contract research, development, and manufacturing organization (CRDMO) that enables partners to discover, develop, and manufacture biologics, WuXi Biologics has always adhered to a strong ESG commitment, enabling its clients for greater ESG success while continuously promoting environmentally and socially responsible progress within the whole value chain.
In the pursuit of excellent ESG performance, WuXi Biologics has established an effective ESG management mechanism, from the board-level ESG committee to each employee. The company has prioritized its ESG metrics into four themes: enhancing governance, giving back to society, empowering its people, and greening the business. After self-evaluation and industry benchmarking, tangible targets and refined roadmaps are in place under each theme to help ensure task implementation and progress tracking. For example, to tackle climate change challenges, the company has committed to SBTi and set the target to achieve net-zero emissions from overall operations by 2050.
With all necessary resources allocated and the collaborated taskforces for different material issues facilitated by ESG department, the company has made notable progress over the past years. Across the entire CRDMO business model, it embeds sustainability into the different stages of the biologics life cycle, from research and development to commercial manufacturing, achieving both environmental and economic benefits by leveraging cutting-edge technologies, green innovative development processes, and Lean management systems.
WuXi Biologics has been recognized by various major ESG rating agencies, including but not limited to a Platinum Medal from EcoVadis, a score of A for Water Security and A- for Climate Change from CDP, a member of the 2023 Dow Jones Sustainability™ World Index and Emerging Markets Index, a highest AAA rating from MSCI, and an Industry Top-Rated and Asia-Pacific (APAC) Regional Top-Rated Company by Sustainalytics.
Pharma’s Almanac is the go-to source for industry news and analysis, spanning the industry and topic areas of pharma-biotech, research, discovery, manufacturing, supply chain, regulatory, and M&A.
.svg)