Tackling pharma’s emissions starts with admissions
By Chris Wheal
February 12, 2024
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Polluting pharma companies produce more carbon dioxide equivalent than the car industry
Sustainability is soaring in importance in a sector responsible for swathes of climate change emissions. We want to know what steps you are taking to make a green impact and hit net zero targets. Tell us about your innovations. Because the situation is grave.
Scientists reported back in 2019 that the total global emissions of the pharma sector hit 52 megatonnes of carbon dioxide equivalent (CO2e) in 2015. Shockingly, this was more than the 46.4 megatonnes of CO2e generated by the automotive sector in the same year. The value of the pharma market, however, was 28% smaller yet 13% more polluting than the automotive sector.
The report said the pharma sector produced 48.55 tonnes of CO2e per million dollars. That was about 55% greater than the automotive sector at 31.4 tonnes of CO2e/$m for that same year.
Alarmingly the scientists said: “More than 200 companies represent the global pharmaceutical market, yet only 25 consistently reported their direct and indirect greenhouse gas emissions in the past five years. Of those, only 15 reported their emissions since 2012.
There was huge variation between companies, even those in similar product lines and markets.
The scientists said: “We found that by 2025, the overall pharma sector would need to reduce its emissions intensity by about 59% from 2015 levels. While this is clearly a far cry from their current levels, it is interesting to note that some of the 15 largest companies are already operating at that level.”
Supply chain (scope 3) emissions
In January 2023 clinical research and analytics provider IQVIA looked at the environmental, social, and governance (ESG) reports of the top 100 pharma companies by value. It said: “Reporting from the top 100 companies was sparse, with 46 companies reporting more than two years of scope 1 and 34 with more than 2 years of scope 3 data, most of which is incomplete. There is a lack of data being reported across the industry.”
· Scope 1: all direct emissions from activities under the company’s control
· Scope 2: indirect emissions from purchased energy
· Scope 3: all other indirect emissions from sources outside a company’s control.
There was some progress. IQVIA said: “Electricity is the largest of the fuel types purchased and targeting its reduction can drive scope 2 success. RE100, an initiative to use 100% of all electricity from renewable sources, has tracked 10 pharma corporations as of 2021 and a further 10 new signees will begin reporting in future. In their latest reports, Biogen, Novo Nordisk and AstraZeneca led the pack with over 90% of purchased electricity from renewable sources.”
But the supply chain is crucial. IQVIA said: “The comparatively larger scope 3 requires more focus, firstly on measuring it, then on breaking it down further. The limited data from companies shows that indirect upstream emissions tend to be the largest source and within that, ‘purchased goods and services’ is the largest category. For example, this category contributes 81% of Novartis’ and 83% of Gilead’s scope 3 figures.
“Here the industry needs to work with supply partners to bring greater transparency and incentivise them to set carbon reduction targets. As an example, pharma companies can engage with their suppliers and provide favourable terms and greater weighting to greener goods and services.”
OQVIA also said policymakers should set a strategic direction, coordinate across multiple operators and employ incentives at a national level. Only 21 countries had committed to net zero healthcare systems.
Greenhouse gases
A paper published by the National Library of Medicine in February 2023, reported that health systems produce 4% to 5% of national greenhouse gas (GHG) emissions contributing to climate change. Reduction targets, such as the UK National Health Service (NHS) net zero by 2045 target, will only be achieved with support from health system suppliers, such as pharmaceutical companies, which contribute a significant proportion of health sector GHG emissions.
In 2019, the paper said, 20% of the carbon footprint of the NHS was due to medicines and chemicals and an additional 5% was due to anaesthetic gases (2%) and inhalers (3%). In other national estimates, the contribution of pharmaceuticals to health systems GHG emissions range from 10% to 55%, it said.
Green energy
In March 2023 the Nuffield Department of Primary Care Health Sciences and others examined the top 20 pharmaceutical firms. They found that 17 companies (85%) had reduced emissions from their own sources and 19 (95%) had reduced emissions from purchased energy. But it warned that fewer than half (45%) had reduced emissions from their supply chain, which typically make up the majority of a company’s emissions.
Companies have successfully reduced their greenhouse gas emissions by purchasing or generating renewable energy, using electric vehicles and promoting energy efficiency, the researchers showed. Companies were starting to work with their suppliers to reduce greenhouse gas emissions from their supply chain, but only 11 (55%) were comprehensively reporting these emissions.
Carbon impact rising
In November 2023, My Green Lab reported that 91% of biotech and pharma companies did not have carbon reduction targets aligned with the 1.5C warming targets that the United Nations Framework Convention on Climate Change (UNFCCC) says will avoid the worst impacts of climate change.
It also said the total carbon impact of public companies in the industry sector increased 15% to 227 million tCO2e, or metric tons of carbon dioxide equivalent. Adding in private companies increases the total another 15%, with the total carbon impact of the industry equalling 260 million tCO2e.
Six-point plan
Back in November 2022, the World Economic Forum listed six ways the pharmaceutical industry could reduce its climate impact:
1. Invest in research and development to fight emerging infectious diseases that spread faster and further in a warming world.
2. Invest in research and development to ensure better use of medicines, including heat-stable products for hot countries and innovations that simplify packaging and transportation.
3. Expand access to healthcare products globally, so people hardest hit by health and climate get equitable access.
4. Reduce greenhouse gas emissions from manufacturing, operations and facilities.
5. Ensure suppliers, distributors and contract manufacturers meet high sustainability standards, including in reducing emissions and waste.
6. Innovate on renewable energy in worldwide operations and transportation, using electric sources wherever possible.
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Tell us what your company is doing to improve sustainability.