The complex relationship between biopharmaceuticals and sustainability

EcoAct has released its Climate Reporting Performance of the FTSE 100, DOW 30 and EURO STOXX 50.¹ Coinciding with the COP26 climate summit in Glasgow, the report, which includes a leader board ranking the top 20 companies for climate disclosure, lifts the lid on sustainability reporting, net zero commitments, science-based targets and climate impact of business across the industries.

The power of three: biopharma companies make the top 20

Three major pharmaceutical companies made the top 20 of the highest performing climate reporting companies in the combined DOW 30, EURO STOXX 50 and FTSE 100 analysis – GlaxoSmithKline (GSK) took the top position at 9th place, AstraZeneca at 12th and Sanofi scraped in at joint 20th place.¹

The average score for the sector as a whole was 61 percent, significantly above the overall average of 53 percent. However, EcoAct’s report states that only 50 percent of pharmaceutical companies are reporting climate risks as principal risks in their annual reports, indicating that there is still a long way to go for climate change to be a central issue in the sector.

This considered, 75 percent of pharmaceutical companies are using the Climate Scenario Analysis (CSA) to inform their business plans, which is slightly above the overall average of 71 percent, and 76 percent are also assessing climate-related opportunities.

Step 1: Carbon emissions

One of the key factors of the report was cutting carbon emissions in regard to ambition and current action. Greenhouse gas emissions are categorised into three groups or ‘scopes’ by the most widely-used international accounting tool, the Greenhouse Gas (GHG) Protocol.

Scope 1 covers emissions that a company makes directly. Scope 2 emissions cover those that the company makes indirectly, for example when the electricity it uses is produced on its behalf by a different company. Scope 3 emissions cover those not generated by the company itself, but by any organisation or person they are indirectly responsible for across the supply chain. Scope 3 represents the most significant amount of emissions.

All the biopharmaceutical companies in EcoAct’s study reported their Scope 1 and 2 emissions, and 63 percent disclosed their Scope 3 footprints with transparency on all relevant Scope 3 categories.¹

In regard to the three companies in the top 20, AstraZeneca and GSK are in the top ten companies overall in terms of their score in the Ambition & Emissions reduction targets category. Specifically, in setting a verified 1.5°C-aligned science based target (SBT) for their Scope 1, 2 and 3 emissions and targets to be carbon negative across all scopes by 2030, AstraZeneca was outstanding. The company also reported a 60 percent reduction their Scope 1 and Scope 2 greenhouse gas emissions in 2020.¹

GSK recently invested £50 million in renewable energy at global manufacturing sites in the UK and US and is launching a new initiative to reduce greenhouse gas emissions from its rescue metered dose asthma inhalers.² The company has also committed to net zero impact on climate and net positive impact on nature by 2030.³

Meanwhile, Sanofi is using 100 percent renewable electricity at all its French sites and aims to expand this to all its sites by 2030. Sanofi also reduced water withdrawals by 22 percent between 2015 and 2020.⁴

Other pharmaceutical companies not mentioned in the report but also claiming impressive carbon targets include Takeda, which has committed to being net zero by 2040 and has already reduced its greenhouse gas emissions by 51 percent for Scope 1 and 2 since 2016, while Lundbeck switched from fossil fuels to biofuel and this reduced CO2 emissions by 3,000 tons per year, a 16 percent absolute reduction of total scope 1 and 2 emissions.⁵

However, sustainability performance is lacking in terms of the sector’s offering of low-carbon products or services with only 38 percent of companies offering them – significantly below the global average of 78 percent as reported by EcoAct.¹

Step 2: Saving water

While the report did not include water conservation in its analysis, the biopharma industry is already taking steps to establish responsible and sustainable water management.

Impressively, AstraZeneca has already reduced water use by 20 percent since 2015 and has been ranked on the CDP A list for Climate Change and Water Security for the fifth consecutive year.⁶ Despite being below AstraZeneca in the climate rankings, Sanofi boasts a 22 percent water withdrawal reduction between 2015 and 2020.⁴

GSK aims to reduce overall water use by 20 percent and water use in high water stress locations by 30 percent by 2030. GSK claims it will achieve this by investing in water-efficiency projects at all of our sites such as behaviour change programmes, introducing water-efficient cleaning procedures, identifying and repairing leaks, and investing in efficient equipment. Although the company do not report current reductions, it has outlined its water footprint throughout its value chain in a recent report and is a member of the Alliance for Water Stewardship.⁷

Step 3: Cutting waste

Pharmaceutical waste includes the waste produced both on-site and from packaging. AstraZeneca has reduced its hazardous and non-hazardous waste since 2017, to 10,500 tones and 19,762 tonnes produced in 2020 respectively. However, the company did report a slight increase in both categories in 2019.⁸ Meanwhile, Sanofi strives for 100 percent of their sites to be landfill-free and states that they are 59 percent towards that target.⁴

Again, GSK has not reported current reductions, although it has ambitious targets. It aims for zero operational waste and to reduce the environmental impact of their products and packing by 25 percent by 2030, as well as a 10 percent waste reduction from supply chain by 2030.⁹

Other honourable mentions include Astella who has begun using biomass-based plastics made from sustainable plant-derived materials in blister packages as the primary packaging for pharmaceutical products, representing the world’s first use of biomass plastic for drug blister packages.¹⁰ Lundbeck has also achieved an 83 percent reduction in packaging waste which is equivalent to 1.4 million pieces less waste in the form of cartons, labels or leaflets.⁵

Sustainability targets: Ambitious goals or simply green-washing?

While many pharmaceutical companies are making quantifiable progress in terms of sustainability, it is clear that much of their internal reporting relies on targets. While The Association of the British Pharmaceutical Industry (ABPI) recently released a report on the ways in which the industry is helping tackle climate change, the question remains if they are doing enough and, importantly, whether they will in fact meet the many impressive goals they have set out to achieve.⁵

References

1. EcoAct, The Climate Reporting and Performance of the DOW 30, EURO STOXX 50 and FTSE 100 Annual Research October 2021 [Internet]. [cited 3 November 2021]. Available from: https://info.eco-act.com/hubfs/0%20-%20Downloads/SRP%20research%202021/Climate-reporting-performance-research…
2. Begley, A. GSK invests £50 million in renewable energy for Climate Week NYC [Internet]. European Pharmaceutical Review. 21 September 2021 [cited 3 November 2021]. Available from: https://www.europeanpharmaceuticalreview.com/news/162905/…
3. gsk.com. Carbon [Internet]. 2021 [cited 3 Nov 2021]. Available from: https://www.gsk.com/en-gb/responsibility/environment/carbon/
4. sanofi.com. How Sanofi is Building a Sustainable Environment [Internet]. 2021 [cited 3 Nov 2021]. Available from: https://www.sanofi.com/-/media/Project/One-Sanofi-Web/Websites/Global/Sanofi…
5. abpi.com. COP26: How pharmaceutical companies are helping the fight against climate change [Internet]. 2021 [cited 3 Nov 2021]. Available from: https://www.abpi.org.uk/our-ethics/drive-to-net-zero…
6. astrazeneca.com. Sustainability [Internet]. 2021 [cited 3 Nov 2021]. Available from: https://www.astrazeneca.com/sustainability.html
7. gsk.com. Water [Internet] 2021 [cited 3 Nov 2021] Available from: https://www.gsk.com/en-gb/responsibility/environment/water/
8. astrazeneca.com. Analyst interactive reporting: Waste management [Internet]. 2021 [cited 3 Nov 2021]. Available from: https://www.astrazeneca.com/investor-relations/AIR/sustainability/…
9. gsk.com. Waste [Internet]. 2021 [cited 3 Nov 2021]. Available from: https://www.gsk.com/en-gb/responsibility/environment/waste/
10. Begley, A. Revolutionary biomass-based plastic used for blister packaging [Internet]. European Pharmaceutical Review. 11 October 2021 [cited 3 November 2021]. Available from: https://www.europeanpharmaceuticalreview.com/news/…