Near field view of large green plant leaves

Life-saving drugs and vaccines. Medications to help those with mental illness. Medications to manage chronic diseases like diabetes and high blood pressure. These are the things we often consider when thinking about the pharmaceutical industry.

The Impact: But as Forbes notes in December 2021, pharma has avoided the scrutiny of its environmental impact as a major manufacturer of goods1. Citing research published in 2019 by McMaster University, Forbes goes on to note that the 15 largest pharmaceutical manufacturers emitted 55% more carbon dioxide equivalents per million dollars of revenue than the automotive sector in 2015, the year of the Paris Agreement. The impact on the ground is environmentally persistent pharmaceutical pollutants (EPPPs) which are non-degradable waste products of pharmaceuticals that inadvertently impact organisms from plants to wildlife.

The Change: While there are some aspects of proper drug manufacturing that are less environmentally friendly than others, such as paper leaflets accompanying drug packets and vaccine cold storage, there is hope on the horizon. The United Nations Framework Convention on the Climate Change (UNFCCC) Race to Zero emissions-cutting initiative has gotten collaboration across 15 major pharmaceutical and medical technology companies to cut emissions across their value chains by adopting renewable energy strategies. Strategies like zero-emissions buildings and transport and production of low-carbon pharmaceuticals will be critical in driving down sector emissions2. Additionally, the United Nations Environment Programme is working across the globe to identify EPPPs hotspot locations, better disposal methods of unwanted medicines, and ways to learn more about the impact of EPPPs on non-target organisms3.

Further, the SEC’s recently proposed rule to enhance and standardize climate-related disclosures will prompt pharmaceutical companies considering a future IPO to step up their ESG practices.

The Target: The Paris Agreement overarching goals - limiting global warming to well below 2º C above pre-industrial levels and pursuing efforts to limit warming to 1.5ºC - is a commitment that will take efforts by all industries, pharma included. Pharmaceutical companies can follow the standards set by organizations such as the Science Based Targets initiative (SBTi ). This requires actively communicating a commitment to decrease emissions by certain percentages and validating those numbers using SBTi’s guidelines within a 5-year timeframe4. Beyond this, pharmaceutical companies can examine their supply chains. The Pharmaceutical Supply Chain Initiative is a collective of pharma and healthcare companies committed to promoting “responsible supply chain management and better business conditions across the industry” through educational initiatives. This group focuses on ESG-related areas such as ethics, labor, health and safety, environment, and management systems5. Pharmaceutical companies, as innovators, must consider unique ways to protect wastewater and show their commitment to a better future for the environment.

How FORVIS Can Help

FORVIS works with companies across all sectors, including pharma, to assess their environmental impact and design methodologies intended to achieve their ESG goals. Learn more about our ESG practice or contact Jared Foreman for more information.


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