Chemical Firms Helping Pharmaceuticals Go Green
Sustainability, but not at the price of efficiency
In 2015, following the COP21 in Paris, over a thousand companies joined the Science-Based Target Initiative (SBTi), aimed at bolstering corporate action for limiting climate change. In life sciences, pharmaceutical products alone account for a significant portion of emissions, ranging from 20-30%, and, as over 90% of all manufactured products rely on chemicals, the sector has a crucial role to play in helping the pharmaceutical industry lower its carbon footprint. While most industries aim to be carbon neutral by 2050 according to SBTi goals, life sciences set the target for 2030. But while big pharma with deep pockets seems increasingly willing to make multi-million capex investments in sustainable solutions, they have made it clear that going green will not occur at the price of efficiency.
Technological and regulatory changes
Having been paid “lip service” for many years, sustainability and ESG goals are today fundamental for pharmaceutical firms. In the EU, which has had a head start in ESG practices compared with the US, ESG reporting is no longer a voluntary practice. This has repercussions for the many US-based pharma firms doing business in there: As of January 2023, the EU adopted the Corporate Sustainability Reporting Directive (CSRD), which requires EU and non-EU companies with activities in the EU to file annual sustainability reports. For specialty chemical firms, such regulatory shifts are not necessarily seen as hindrances. According to Lubrizol’s Chief Sustainability Officer, Elizabeth Grove: “There is a presumption that as the pharmaceutical space is extremely regulated, there is very little you can do from a sustainability and ESG standpoint, but this could not be further from the truth.”
For specialty chemical firms, the future will be a balancing act between sustainability and efficiency. The development of more efficient catalysts that can be recovered, and the implementation of purification techniques that can further reduce waste and improve the efficiency of the manufacturing process are great advances in sustainability. Another example is the use of biocatalysts (enzymes that can catalyze reactions with high selectivity and efficiency) that reduce the need for harsh chemicals and solvents. Lubrizol brought two products to market in 2023 – Apinovex and Apisolex – to achieve the balance between efficacy and sustainability for their pharma customers. As Grove explained: “One can have the most sustainable product in the world, but if it does not work, it does not matter.”
“In the industrial environment, sustainability is becoming a crucial aspect as our clients want partners who are conscious of ESG, and they want us to be there in the future to avoid any risk and disruption.”
Riccardo Anzuini, Chairman and CEO, Trifarma
Technological advancements allowing for cleaner and more efficient practices are increasingly common as pharma’s innovative energy is invested in green chemistry. An illustration of technological progress is seen in the adoption of continuous flow chemistry, enabling meticulous management of reaction parameters and diminishing waste generation. Similarly, leveraging renewable resources such as sugar cane for fermentation and employing eco-friendly solvents like ethanol and 2-MeTHF illustrates another significant advancement, lessening dependency on fossil fuels and mitigating environmental repercussions in the production process. Chen Zhou, CEO and co-founder of specialty chemical firm Chempaficic, detailed: “Over the past few years, especially in large-scale production, we have seen a shift towards greener processes. One example is our recent development in chemical synthesis. Previously, a product like synthetic latex heavily relied on organic solvents. However, we have completely revamped the process to utilize water instead, making it much more environmentally friendly.”
Going forward, ESG regulation and digital governance seem increasingly intertwined. A Global Data study of 2023 showed that 68% of respondents working for pharma firms believed their organization did not have an ESG strategy. Digital governance will be about sharing firms’ sustainability journey with their clients. Leading chemical firms like BASF have noticed this surge in demand amongst their pharma customers for ESG data, and in September 2023 released “MyCarbonFootprint”, a dashboard for sustainable procurement. Pharma firms can now determine how adjustments in their purchasing portfolio affect their sustainability status in terms of CO2 emissions and the use of renewable raw materials.
Beyond big pharma companies, which account for most GHG emissions in the industry, smaller pharmaceutical firms have noted the need for government incentives to facilitate the adoption of sustainable practices. “Reducing Scope 1 and 2 emissions requires several large CapEx investments that smaller and mid-sized firms find challenging. Government support and incentives would be instrumental in facilitating their transition towards sustainable practices,” noted Riddhi Javeri, director of India-based Intermed.
The age-old view that aligning with ESG goals will hurt profits is no longer accurate, and more than ever, compromise is not a dirty word. Two decades since Pfizer and Merck released their first ESG reports, ESG’s importance today is considered as fundamental by all stakeholders. For life sciences, specialty chemical companies are essential partners in their sustainability journey.
“ESG is a topic at the forefront of discussions in the medical technology sector. There is a delicate balance between implementing necessary changes without disrupting critical operations, but also a recognition that action is needed.”
Chad Rohrer, President, ASP
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