Global health is intrinsically linked to the environment, and with extreme heat, air pollution and changing weather patterns, climate change is impacting our lives in increasingly debilitating ways.

So, with COP27 currently filling out news feeds, and WHO calling for health to be at the heart of the climate change negotiations, we’re taking a look at how Life Sciences has embraced sustainability.

Sustainability is generally defined as, ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’ Still, in the business sense, it’s a term that seems to grow more complex each and every day.

I’m sure any business-savvy brain or consumer-conscious mind will agree that ‘green’ initiatives place a competitive modern edge on a company, but for Life Sciences it’s even more tricky. Due to the social impact of the industry, we’ve previously existed in a separate kind of bubble from the rest of the business world, and its immense environmental impact is often overlooked.

For example, did you know that labs around the world typically use 5-10 times more energy per square meter than office buildings? More shockingly, an estimated 30,000 single-use biopharma products are landfilled or incinerated each year, and the industry produces 55% more greenhouse gas emissions than the automobile manufacturing sector!

So, while we can all appreciate the positive role Life Sciences has in ESG, there is so much opportunity to have a better impact on the environment too. Let’s look into it in a little more detail…

Life Sciences on Sustainability: An Overview

Typically, the progress of the sustainability movement has coincided with Life Sciences’ transition into a significantly more connected and technologically advanced era. However, for the industry to continue moving forward, it’s of utmost importance that we pause, reflect and act on major sustainability concerns such as waste, energy and water consumption.

Ever since the Covid-19 pandemic, there’s even more pressure and urgency for businesses to become ‘greener’. That’s because with the ongoing climate crisis, 61% of consumers say they’d be less inclined to buy a product if the company had harmful environmental practices and 81% believe that their consumer choices impact the environment.

Of course, prescription drugs and treatments are more necessary than say, fast fashion, but that doesn’t negate the fact that consumers can easily boycott OTC medications and vaccines if they believe they’re damaging the environment. In fact, it was throughout the pandemic that those outside of the industry developed major concerns about the sheer mass of medical waste by being exposed to the likes of single-use plastics like PPE and testing kits.

With the sector now on a global stage, and environmental issues being spoken about more than ever before, a shift in attitude is resonating throughout the industry. Just last week, CEOs from AstraZeneca, GlaxoSmithKline, Merck KGaA, Novo Nordisk, Roche, Samsung Biologics, and Sanofi announced joint action to achieve near-term emissions reduction targets and accelerate the delivery of net zero health systems.

This is the first time the global Life Sciences industry has joined forces to collectively address greenhouse gas emissions across supply chains, patient care pathways and clinical trials through the Sustainable Markets Initiative (SMI) Health Systems Task Force – a public-private partnership that was originally launched at COP26.

So, as the industry leans in to becoming more environmentally conscious, let’s take a look at how sustainability initiatives in Life Sciences affect the planet, people and profits…

How is the industry adopting sustainability ideas with respect to the planet?

For Life Sciences, unsustainable practices begin at drug development, when labs typically use almost ten times the amount of energy as an entire office building. If successful, we’ll then move on to the manufacturing stage where large amounts of power and water are used. Then, if we look further into the process, the supply chain contributes a significant amount of carbon emissions from transporting pharmaceuticals and chemicals across the globe. In fact, did you know that 30% of the industry’s carbon footprint comes from supply chain?

All of this environmental harm does make us wonder, if Life Sciences is razor sharp in terms of testing and scientific profiling, why don’t we use our data-driven expertise to sway more sustainable manufacturing and supply?

To truly embed ESG into the corporate culture, we must think about adding measurable goals for emissions across the value chain. Some companies have already taken a step in the right direction, collecting and reusing materials in medical equipment and devices and employing sustainable packaging for their products.

For leadership teams ahead of the curve, they understand that building resilience into supply chains and addressing the importance of sustainability gains a long-term competitive advantage, attracts investors, and can lead to cost-savings. Plus, organisations with a sustainability agenda are better situated to anticipate and react to social, environmental, economic and regulatory changes as they arise.

With this in mind, some of the biggest names in pharma have all made progressive pledges with a 2030 vision. AstraZeneca have invested $1 billion into their Ambition Zero Carbon programme with the hopes to become carbon negative and Novartis aim to become carbon neutral. Plus Takeda achieved carbon neutrality in 2020, which was a major milestone in their pledge to become carbon-zero by 2040.

Although promising to become carbon neutral is a great step in becoming more environmentally friendly, Deloitte points out that for Life Sciences to become truly sustainable, we must also look to suppliers with zero-carbon landfill policies, sustainable packaging and parts, and those who recycle waste and water.

ISPE has also taken an active role in promoting sustainability in the industry, offering guidance on policymaking for environmental objectives and recognising and rewarding the achievements of those making a difference. Most recently, Catalent and Janssen Biologics were awarded the Facilities of the Year Award for their social impact, Takeda for their supply chain, CRISPR Therapeutics for innovation.

What’s more, the sector has also recently pushed for more M&As as a means to improve their sustainability footprint and strengthen their ESG ranking by adding environmental expertise and capabilities. In fact, according to EY, 82% of CEOs named strategic reasons such as long-term value creating and competitive advantage when asked how sustainability factors were driving their M&A agenda.

What are Life Sciences doing about sustainability in regard to people?

It’s no secret that the industry is currently driven by talent, and younger generations tend to hold environmental, social, and ESG issues in high regard. Because of this, industry frontrunners are designing models and sustainability initiatives to help protect and create value for their stakeholders, boost brand trust, reduce costs, and attract and retain talent. Dr. David Callaway (Deloitte) puts it best, “20-30-year-old professionals all want to be in a purpose-driven corporation and they’re willing to walk if they don’t get that.”

A great example of a Life Sciences name understanding the societal shift is Biogen, who also happened to secure the no.1 spot on Corporate Knights’ 100 Most Sustainable Corporations list. That’s because if we strip it back to basics, the sole purpose of the Life Sciences industry is to improve the lives of patients. For Biogen, their forward-thinking mindset helped them realise that along with their patients, they could also impact the lives of their employees and the communities in which they operate as well as the wider environment. This kind of thinking has not only facilitated getting employees behind the initiative but has also helped to attract high-calibre talent.

According to American Pharmaceutical Review, between 2006 and 2013, Biogen reduced its water usage by 66%, energy usage by 57%, and greenhouse gas emissions by 64%. During this same timeframe, the company’s solid waste to landfill was reduced by 100%, helping them achieve zero-waste by 2012! What’s more, 97% of their 7000 employees said that they were ‘proud to be associated with Biogen.’

Although talent acquisition and corporate responsibility are some the major driving forces behind Biogen’s sustainability strategies, it’s not only employees that companies need to think about when it comes to their sustainability plans. Biogen reported that they were asked about their environmental initiatives by a principal investor who’s focused on social responsibility. This only goes to show that sustainability is becoming more mainstream and increasingly more important to the investment community.

In fact, investors now have the ability to track ESG high performers and are correlating improved financial performance with a better ESG score. This suggests that companies who embrace sustainability as a fundamental business strategy will drive innovation and loyalty from employees, investors, customers, and suppliers.

How do sustainability strategies affect Life Sciences profits?

SAP Insights reports that business leaders from Life Sciences companies with annual revenue below $1 billion plan to use sustainability to drive revenue growth and increase business efficiency. That’s because linking ESG to long-term value creation – including financial value – can help win over investors. In order to do so, Life Sciences companies must get better at articulating their value beyond developing innovative medicines and treatments.

With that said, when it comes to sustainability, it can be difficult to decipher which metrics matter most. Not only do multiple sustainability frameworks exist, but a large number of measurement systems are in use – even within the same organisation.

This creates issues as it results in companies, and divisions within companies, handpicking the metrics that show their sustainability efforts in the best light. What’s more, it makes objective comparisons across businesses completely impossible.

To help companies and investors, EY’s Health Sciences and Wellness has analysed existing sustainable value metrics and organised the initiatives into eight different categories. This facilitates an understanding of how different companies in the industry compare, makes meaningful comparisons, and creates a standardised way for public measure.

Out of the eight categories, all generally fall into two primary areas: the social value associated with medical products/services that reduce the burden of acute and chronic disease, and, the environmental value associated with reducing global warming given the well-documented health effects associated with climate change.

From the analysis, EY found that there was a poor correlation between sustainable value and commercial value, which suggests companies with high sustainability scores are not being rewarded financially. Going forward, its essential that companies within Life Sciences communicate their sustainability strategies, so investors give them the correct credit for their efforts.

Although an increasing number of leaders report accelerating climate change impacts, 57% say they have encountered investor pushback to their environmental transition – usually relating to costs and long-term ROI.

The reason behind this is probably because companies must invest large amounts of money to research, engineer and implement sustainable options. However, dealing with short-term pain to achieve enormous and lasting long-term gain by implementing operational and process improvements can result in better environments, a reduction of risks, decreased inefficiencies in R&D and cheaper facility operations. Not only that, but employees and surrounding communities can also benefit from cleaner operations.

Understandably, the introduction of new processes can be tricky due to old equipment being in constant demand for continuous manufacturing and businesses not wanting to interrupt production. Still, it is in our best interests to improve global and environmental health – essentially the purpose of Life Sciences – even if that means a small hindrance in the process.

The core of Life Sciences and the reasons why the industry exists is to address and improve health issues in the communities we serve. Climate change is a major public health crisis because the environment and the air we breathe has been linked to our health ever since the very first person set foot on Earth. 

Placing sustainability central to the incredible work we do in Life Sciences will only help create meaningful change, protect the long-term future of the sector, and signpost a new dawn of sustainability. But it’s up to each of us to seize the opportunity and get things done before it really is too late.