Embedding environmental sustainability into pharma’s DNA
By Emily May, Deloitte Centre for Health Solutions and Dylan Powell, Deloitte Centre for Health Solutions
Last week, James Gregson, Deloitte UK’s Life Sciences & Healthcare industry leader, moderated a panel of leaders from four ‘big pharma’ companies who are known for championing environmental sustainability. The Reuters webinar, ‘Drive environmental sustainability across biopharma to create meaningful, system-wide change’ explored the transformational innovation required to move from ambition to action, including cultural changes, incentives, technology solutions and collaboration. To coincide with the webinar we launched our overview report ‘Embedding environmental sustainability into pharma’s DNA’ which draws on insights from literature reviews, Deloitte subject matter experts and 57 senior stakeholders from across the pharma ecosystem. Our report provides a high-level assessment of the findings in our full report, scheduled to be published next month. This week’s blog highlights the key themes from both our overview report and the panel discussion.
The importance of tackling climate change and the challenges in sustainability
Concerns about climate change and environmental, as well as social and governance issues, affect all stakeholders in pharma (governments, healthcare systems, companies, employees, investors, suppliers, patients and the public). Although pharma companies are adopting ambitious and measurable goals and setting out a plan of action, the choice of targets, measurement of achievements and the pace of progress is variable and there is often a critical gap between aspiration and action. Yet, actions taken this decade will determine the level of warming over the course of this century, and the severity of the subsequent impacts that will be felt around the world.
The healthcare industry contributes nearly five per cent of all greenhouse gas (GHG) emissions, with over 70 per cent of the emissions stemming from the supply chain.1 Moreover, the UK’s NHS estimates that 25 per cent of their emissions are due to medicines.2 The panellists highlighted, the huge challenge facing pharma companies because of their reliance on good and services purchased from 1,000s of suppliers from across the world, otherwise known as Scope 3 emissions (emissions that are not produced by the company itself, and not the result of activities from assets owned or controlled by them, but by those that it’s indirectly responsible for, up and down its value chain).
Historically, the spotlight on emissions reduction has focused mostly on industrial sectors, such as mining, energy and automotive industries, with the carbon footprint of the pharma sector, receiving minimal attention in peer-reviewed literature. Despite lagging behind these industries, the pharma industry is increasingly acknowledging the need to take action and, indeed, to learn from the bold actions being taken in these other industries. While several leading pharma companies are already making notable progress, others are still at the early stages of identifying actions to take. Currently, pharma lacks low-carbon products and services compared to other industries and most underestimate the size of the challenge.3
The panellists highlighted the tidal wave of emotional response underpinning the need for environmental sustainability and the expectations of their stakeholders for more immediate results. However, they also acknowledged that the scale of the change management required, needs a burning platform. Moreover, that crucial challenge was the long product development cycles and pressure from investors and other stakeholders to deliver short-term improvements. All panellists mentioned the importance of leadership and the need to ignite passion and create a shared sense of purpose, “no one can be healthy living on an unhealthy planet”.
Influencing the pace and scale of change
For the pharma industry to reach their net-zero targets, limit their use of natural resources and reduce waste, a fundamental overhaul of processes is needed across the entire product life cycle and value chain. Momentum across the multi-year business cycles will need to be maintained as new, transformative approaches are adopted while, at the same time, questioning the existing manufacturing processes and products. Our panel members highlighted that a unified passion for improving both planetary and human health is essential to keep moving forward at pace. In our overview report, we explore six cross cutting themes that will affect the extent and pace with which pharma can achieve measurable progress towards their sustainability targets, shown in figure 1.
Figure 1: Critical themes that will influence the pace and scale of change in sustainability
During the discussion, our expert panel touched on many of these cross-cutting themes, particularly focusing on the fast pace of innovation, the role of digitalisation, and the need to embed sustainability throughout organisations, the role of regulators and the crucial requirement to collaborate across the industry. For example, our panellists recognised the vast amount of innovation in technology to measure impactful change and the requirement to continually analyse the benefits of each solution and to work with others as an industry to ensure the best innovations are used. They acknowledged the importance of having a common taxonomy, standards and principles; and the power of drawing on multiple data sets in an integrated, common insight platform to inform, forewarn and measure environmental action across the value chain.
The discussion also emphasised the delicate balance that needs to be reached when embedding sustainability into the pharma industry while maintaining the high levels of safety and regulation. This requires a lot of understanding, harmonisation and collaboration between health authorities, regulators and the industry. While the abiding imperative is the safety of medicines, regulations should enable and support change, rather than enforce the change. Some of the challenges include a medicines shelf-life, the reliance on printed information leaflets and general waste across the value chain which require a collective approach across all stakeholders if they are to be tackled effectively. By sharing solutions, companies can save time, effort and costs, increase the pace of change, and in doing so improve the industry’s reputation.
Tackling today’s net zero challenges
For pharma companies to achieve their net zero ambitions, and optimise their use of natural resources, the entire product value chain needs to be overhauled, from drug discovery and procuring consumables, through to the disposal of medicines. In our report we showcase initiatives and quick wins that can be adopted across the product life cycle, alongside longer term cultural changes and larger investments, see Figure 2. The quick wins can provide the license to make transformative, more fundamental changes that are necessary to achieve pharma’s targets
Figure 2: Initiatives and quick wines to reduce the environmental footprint of a medicine’s lifecycle
Realising a net zero future, ensuring progress and embedding change
Our finding demonstrate unequivocally that the pharma industry will need to fundamentally reimagine existing drug development and manufacturing processes, business models, supply chains and digital infrastructure to collectively reach their commitments, and they need to do this now given the long product development cycles.
As highlighted by the panel discussion and explored in our report, the health of the planet and health of people are inextricably linked with the race to net zero being a race to a healthier, cleaner and more resilient future. The pharma industry has begun to make significant commitments and take action to
achieve a net zero ecosystem that consumes minimal natural resources, but bold actions are required to reach their ambitious targets. Although there are complex challenges to overcome, there are also many opportunities to accelerate the pace of change and unlock new business prospects.
To achieve their sustainability ambitions and achieve the common goal of reducing the environmental footprint, pharma companies need to improve data management, share successful initiatives, champion successes across the industry and embrace cross-sector collaboration. The fundamental transformation of processes will need to be spearheaded by strong leadership, enhanced collaboration and a willingness to innovate with evidence-based improvement initiatives embedded across the company. This overhaul needs to occur across the entire pharma ecosystem at all parts of the medicine lifecycle, from the R&D labs to the regulators and from the procurement teams to the third party logistics. The environment, investors, employees and, of course, patients will benefit from those companies that move effectively from ambition to measurable action across their entire company. This in turn will increase trust and overall perception of the industry, attracting investment and helping the company win the race for, and retaining, talent.
We will explore the above issues further in our in-depth full report launching soon which presents a full analysis of our interviews, case studies and innovative solutions across the pharma ecosystem.
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1 https://www.bmj.com/content/377/bmj.o1301
2 https://www.england.nhs.uk/greenernhs/publication/delivering-a-net-zero-national-health-service/
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