Include Sustainability in your Strategy to Drive Growth

THE CASE FOR ESG IN PHARMA

Growing Pressure to Focus on Sustainability

Pharmaceutical manufacturing has been evolving to meet global demands, while maintaining high quality. Each company products to patients safely and increase profits in the process.

Competition and regulatory requirements to bring innovative products to patients are driving the industry to look beyond profits. A Triple Bottom Line approach, looking at People, Planet, and Profit based initiatives are now the sustainable keys to ensuring long-term growth and profitability in our industry.

People-focused initiatives require both an internal and an external view on social responsibility. Providing research sponsorship to solving the world’s most crucial health challenges helps to bolster a company’s reputation and respect. Also, offering programs that increase accessibility globally for their products anchors the delivery of those solutions even to those less fortunate and unable to afford lifesaving and quality of life medicines. Internally, world-class employee benefits and programs that provide feelings of well-being and value to the organization ensure we can attract and retain top talent. Simply manufacturing the top-tier drugs and having them on pharmacy shelves or in hospitals no longer enough to stay ahead of the competition. Consumers and providers will make purchase and prescription choices based on more than just quality; price, availability, and company sustainability reputation will also influence those selections.

Investors are also viewing their investments similarly, and company R&D funds will be unavailable without their funding.

Best in Class in Sustainability

Time Magazine recently released its 2024 list of the Most Sustainable companies. Several pharmaceutical manufacturers, life sciences, and biotechnology companies are on the list, and the industry can learn from these leading companies. The on carbon emission and energy consumption reductions and how the companies on their list integrate sustainable initiatives into their strategy.

• lllumina (U.S.-based, Chemicals, Drugs & Biotech) ranks 5th overall.

• Sanofi and Novartis both place in the top 20.

• Others high on the list:
  • Novo Nordisk ranks 27th
  • Merck ranks 28th

ESG in Action

Key Industry Trends in Sustainable supply chains, carbon reduction, etc.

Examples of sustainable initiatives driving success:

Novo Nordisk

• Donates to research foundations such as the Novo Nordisk Foundation, Juvenile Diabetes Research Fund, and American Diabetes Association to advance healthcare solutions.
• Member of the World Wide Fund for environmental conservation and have set a goal of zero carbon emissions by 2030.
• Plans to attain LEED Gold Certification for Construction and Commissioning at their Clayton, NC Fill Finish Expansion site.

Abbott Laboratories

• Fortune Magazine’s 2020 #1 on their Change the World List due to their packaging material volume reductions and bottle recycling programs.
• They have reduced shipments just in their BinaxNow COVID-19 test kits by 9500 20-foot shipping containers annually through these volume reductions.

Thermo Fisher Scientific and Merck

• Two of the strongest in Sustainalytics’ analysis of how well management develops and delivers on their ESG policies, as evidenced by their Annual Reports.

The Business Case for ESG

With a comprehensive strategy that focuses on all aspects of the Triple Bottom Line, top talent is attracted to our companies and is retained with world-class benefits, feeling that they add value and can contribute to the success of the company. Local community and global social programs drive respect and enhance the company’s positive recognition. The media sensationalizes recalls and environmental incidents, so we should all strive to over-communicate our CSR and ESG programs, metrics, goals, and accomplishments. This transparent approach and sustainability driven project portfolios will drive profits and growth well into the future.

Regardless of where a site, division or company is in its maturity and life cycle, incorporating Corporate Social Responsibility (CSR) into strategy is a key component to driving growth. Adding a new product line or an entire facility needs to include environmentally conscious requirements, such as water conservation, critical utilities management, carbon emissions/greenhouse gas (GHG) emissions, and overall energy usage. Supply chain partnerships should also factor into strategy decisions, such as ensuring raw material composition and their manufacture are contributing to your company’s sustainability goals, as well as looking at transportation efficiencies that reduce global carbon footprints. The cost savings alone from these initiatives will increase profits, but sharing the results of projects that keep these ideas in mind will elevate company reputation in the eyes of patients and providers. This all leads to long-term growth for a company that keeps sustainability high on its strategy view and a key part of its project portfolio.

Looking Ahead

We need to attract and retain top talent in our production facilities, research centers and in our patient-centric field service and information representatives. Substantial benefits and total compensation packages will set companies apart. Focus on strong social and environmental programs as well. Some additional recommendations:

• Celebrate cultural and experiential diversity and inclusion through awareness programs.
• Remain on the journey with subsequent initiatives until zero emissions are achieved.
• Create a sustainability organization in your company with the head of it driving its inclusion in corporate strategy and site representatives doing so at their sites globally.
• Become a local and national leader in environmental target setting and encourage peers to do the same for the betterment of the planet for generations to come.

Incorporate recycling and waste reductions into site and supply chain operational excellence programs.

Written by Rog Ouimet