Pharma’s Growing (R)evolution: Sustainability and Innovations Shaping the Industry

TIME and Statista have developed a ranking of the world’s most sustainable companies for 2024, evaluating firms based on their participation in climate programs, emissions reductions, renewable energy usage, and overall environmental performance. Leading pharmaceutical companies, such as Illumina, Sanofi, and Novartis, have demonstrated significant progress in reducing their environmental footprint through ambitious goals and sustainable practices. As the industry faces increasing pressure to address its carbon emissions and environmental impact, these companies are setting the standard for sustainability, driving innovation, and committing to long-term eco-friendly solutions in the fight against climate change. However, the sector still faces challenges in scaling these efforts globally, particularly in developing regions where resources for sustainability are limited. Additionally, navigating regulatory complexities and maintaining a balance between sustainability and profitability remains an ongoing hurdle for many pharmaceutical firms.

Sustainable Progress: Leading Pharmaceutical Companies Tackling Carbon Emissions

As is well-known, the pharmaceutical industry significantly contributes to greenhouse gas (GHG) emissions, accounting for approximately 4.4% of global emissions. A study revealed that the sector produced 48.55 tonnes of CO2 equivalent (CO2e) for every $1 million earned, with projections indicating that emissions could triple by 2050 without intervention, according to the World Economic Forum (WEF). Notably, the industry’s emission intensity exceeds that of the automotive industry by about 55%, with considerable variability among companies. Some firms even emit up to five times more CO2e than their peers, despite similar revenue levels.

Pharmaceutical Companies Lead Sustainability Efforts with Ambitious Emission Reductions, Renewable Energy Goals, and Waste Minimization Initiatives

Of note, Merck has taken proactive measures by launching a Low Carbon Transition Playbook, achieving a 17% reduction in water usage, and diverting 60% of landfill waste from its operations. Pfizer has set ambitious targets, aiming for net-zero emissions by 2040, with plans to reduce Scope 1 and 2 emissions by 46% by 2030 and cut Scope 3 emissions by 90% within the same timeframe. STADA has reduced its GHG emissions by 16.5% since 2020 while producing 1.2 billion packs of affordable medications annually, emphasizing its commitment to accessibility.

Apart from Merck, rare and ultrarare disease drug developer, Ultragenyx Pharmaceutical has made strides by purchasing 1,988 megawatt-hours of renewable electricity, installing electric vehicle charging ports, and launching a medical waste takeback program. Eisai participates in RE100, working towards 100% renewable energy by 2030 and aiming for carbon neutrality by 2040. Looking at the Dow Jones Sustainability Indices, Roche has garnered recognition by focusing on sustainable buildings and reducing packaging waste.

Weight-loss giant Novo Nordisk targets net-zero emissions by 2045, boasting a 78% recycling rate of its waste and committing to 100% renewable energy usage. Novo Nordisk’s biotech spinout, Novozymes, dropped in ranking on Corporate Knights’ list, falling from 23rd place in 2023 to 58th in 2024. Here, it sets its sights on net-zero emissions by 2050, having achieved a 67% reduction in GHG emissions since 2018. Sanofi aspires to carbon neutrality by 2030 and plans to achieve 80% renewable energy usage by 2025. Finally, AstraZeneca has successfully reduced its Scope 1 and 2 GHG emissions by 67.6% since 2015, with an ambitious goal to attain a 98% reduction by 2026.

Customer Engagement and Partnerships in Healthcare: Advancing Priorities in Prevention, Equity, and Sustainability

Pharma must align with broader healthcare goals, focusing on prevention, health equity, and sustainability. Preventive medicine contributes to the quintuple aims of healthcare, including reducing spending and improving population health. Collaborations like Novartis and The Fred Hollows Foundation’s blindness program highlight progress.

Health equity remains a critical priority. Disparities faced by women and disadvantaged groups need urgent attention. Pharma companies are working to diversify clinical trials and improve medicine access. 

Aging Populations and Declining Birthrates Impact Global Economies

Many countries are facing economic challenges due to rapidly aging populations and declining birthrates. Spain expects a reversal in its labor force’s contribution to GDP, dropping from +0.6% (2000-2018) to -0.6% by 2040. This shift will burden the economy as fewer workers support the growing elderly population. Switzerland anticipates a 30% increase in public health expenditures by 2050, driven by rising costs for long-term care. Most Asian countries, especially Japan, Taiwan, South Korea and China are already experiencing the strain of fewer working-age adults supporting healthcare services. As these nations age, fewer taxpayers will fund services for their expanding elderly populations. In response, many governments see an urgent need to invest in prevention and “well care” strategies. These measures aim to reduce future sick-care costs and manage the economic burden of aging societies.

The pharmaceutical sector increasingly recognizes the necessity of sustainability to minimize environmental impact while enhancing corporate responsibility and achieving potential cost savings. By implementing innovative practices and committing to ambitious goals, these companies work diligently to mitigate their carbon footprint while delivering essential healthcare solutions.

Author

Bernice Lottering