Making biopharma’s supply chains more environmentally sustainable
Survey findings provide insight into how some biopharma companies are making progress with their sustainability initiatives.
While biopharma companies tend to play an important role in the health care ecosystem, the supply chain activities required to make and move drugs considerably impact the environment. More than 70% of the emissions produced by life sciences and health care companies originate in their supply chains.1
Beyond emissions, the biopharma industry generates 300 million tons of plastic waste annually.2 As biopharma companies continue to develop new therapies and bring them to market, they may want to consider employing more sustainable ways of doing so.
Over the past few years, biopharma companies, in general, have set ambitious sustainability goals and launched efforts to reduce their environmental footprint.3 To get a better sense of what companies have accomplished and what they’re working on for the future, the Deloitte Center for Health Solutions surveyed 105 globally based biopharma supply chain executives in 2023. More than half of our respondents said their organizations are actively scaling or undertaking efforts to minimize their impact on water quality (64%), source sustainable raw materials (59%), and design sustainable value chains (57%). Furthermore, 47% of the executives we surveyed said their organizations are actively scaling or undertaking efforts on building smart factories. These initiatives could help the industry to optimize energy consumption and manufacturing efficiency while reducing emissions and waste.
Some companies are also aiming to leverage technology capabilities to improve sustainability reporting while better articulating their sustainability efforts to stakeholders. Twenty-four percent of the surveyed executives said that their organizations expect in the next two years to be able to provide external stakeholders with a real-time view of how their sustainability initiatives are progressing.
Meeting evolving sustainability reporting standards may require biopharma companies to leverage digital technologies (such as the cloud, artificial intelligence, and the Internet of things) for the cost-effective and efficient collation, analysis, and reporting of data across the supply chain. Twenty percent of the surveyed executives said their organization is likely to use technology solutions for sustainability reporting in the next two years.
Putting tracking and reporting capabilities in place could provide greater visibility and accountability into sustainability efforts to help scale investments and capabilities. Biopharma companies are generally making progress on several initiatives and are planning to implement others. However, there still may be significant effort required to scale sustainability initiatives to reach their desired impact.
Here are four considerations (“the 4Cs”) for biopharma companies as they scale their sustainability initiatives to try to meet current goals while preparing for future ones.
Craft value cases: Building a value case that financially quantifies an initiative’s impact could elevate its consideration by leadership alongside other strategic investments. Additionally, leadership should broaden the definition of value when prioritizing investments to consider materiality and non-financial impact. This could facilitate closer alignment of sustainability investments with strategic goals, not just financial ones.
Commit to focus: To help deliver on sustainability commitments, organizations can develop a vision and strategy with a supporting road map to build the capabilities likely required for success. Companies can also institute formal governance models that help drive sustainable outcomes by monitoring industry-leading metrics.
Commence quickly: Embedding ESG initiatives into strategic plans as firm commitments appears to be essential to responding to current regulations and preparing for future ones.4 Moving from strategy to execution to impact can take years. While many sustainability targets are set for years in the future, acting now could be important to securing the support and resources required to meet these targets.
Collaborate: Organizations are not likely to have capabilities in place today to address sustainability commitments. While developing these capabilities internally is an option, companies should consider collaborating with external parties (e.g., ESG-focused technology providers or supply chain advisors) to help them quickly get on the right path and accelerate the return on investment.
The steps we take today and every day, both as individuals and industries, could have a pivotal effect on climate change. Pharma companies have the potential to create a measurable impact on the environment and for their patients, employees, and investors.