Pharma companies getting serious about sustainability

As little as 12 months ago, it was hard to imagine that businesses like pharmaceutical companies would begin to seriously address sustainability, but in a recent study, UK-based consultancy Envirowise, an independent advisory service that helps businesses reduce their environmental impact, found that financial and environmental benefits from resource efficiency could be achieved for pharmaceutical companies. Working closely with the sector, Envirowise says that it has become clear that growing legislation has had a fundamental impact on the drive to improve environmental management and resource efficiency in the industry.

One example that Envirowise discusses is the ‘Integrated Pollution Prevention and Control (IPPC) Directive'. This applies to pharmaceutical companies with manufacturing facilities operating over a certain scale. Critical factors here include (but are not limited to) solvent use, energy consumption and chemical production.

In early 2006, many companies submitted permit applications under the IPPC that included details of how they would demonstrate a reduction in environmental impact by incorporating environmental concerns into the development of new pharmaceutical products. To comply with IPPC legislation, companies now need to show that they are considering the environmental impact of a new drug at the design phase — not just at the ‘end-of-pipe' manufacturing stage as required by the former regime.

Envirowise says that by working closely with the pharmaceutical companies, it has been able to identify a number of opportunities for resource efficiency, savings in packaging, water, energy, raw materials and waste.

In another report conducted in the United States, it was found that there is a positive correlation between environmental and stock market performance for pharmaceutical companies which indicates that environmental performance is both cost effective and an excellent proxy for management quality.

The pharmaceutical study conducted by Innovest Strategic Value Advisors, a New York-based financial services firm that rates corporate environmental performance to project stock market returns, rated the top 23 pharmaceutical companies from the S&P 500 and FTSE 350 and found that companies with better than average environmental performance outperformed other companies on the stock market.

Innovest investigated the companies’ response to increasing environmental regulations, growing market demands for more environmentally responsible products and corporate policies, and numerous stakeholder issues.

The report stated that recent EPA regulations call for a 65% reduction of air toxin emissions from current levels, and companies that have cleaner processes will be better equipped to meet these new regulations at the least cost. The report also found that scientific uncertainty poses a complex challenge to pharmaceutical company management, especially in the areas of biodiversity, genetic engineering and patents on living organisms.

For large pharmaceutical companies like Swiss-based Novartis, sustainable practice is slowly becoming part of their business acumen. At the recent Association of Regulatory and Clinical Scientists (ARCS) conference in Sydney, Novartis Australia discussed the local and global policies that the firm is implementing to ensure their impact on the environment is kept to a minimal.

While these are steps in the right direction, it was alarming to see the results from the Australian company’s first carbon footprint assessment, which showed that 80% of their emissions are generated by air travel alone with another 14% by their car fleet.

On a global scale, the pharmaceutical sector is unique and implementing resource efficiency is complicated, but with policies like those found in the Envirowise study, steps to reducing the sectors environmental impact are well underway.