ESG in Pharmaceutical Manufacturing: A Comprehensive Guide

Posted by Manisha S on November 13th, 2023

Pharmaceutical manufacturing has repeatedly stepped up during global crises, including the COVID-19 pandemic and the Russia-Ukraine conflict. Industry leaders are recognizing the significance of environmental, social and governance (ESG) pillars, including climate change, diversity, equity & inclusion (DEI), product innovation, business ethics, equitable access & pricing and product quality. The need to embed and align responsible business practices for strategic decisions, governance and business operations will augur well for purpose-driven pharmaceutical manufacturing organizations.

Leading companies are exploring the United Nations Sustainable Development Goals (UN SDGs) and Global Reporting Initiative to help pharmaceutical players assess their impacts on corruption, climate change and human rights and pursue opportunities to solve societal challenges.

The global push to develop and build a resilient, equitable and sustainable health system has encouraged stakeholders to achieve a safe, ethical and responsible culture by harnessing the power of innovation and science.

Surmounting Climate Change Concerns—Environmental Pillar

Pharma companies are navigating the environmental challenges that have become notorious for causing a surge in health inequalities, chronic diseases and the burden on the health system.  The environmental impact of drug manufacturing can lead to carbon emissions, pollution and water depletion. Accordingly, access to healthcare and environmental sustainability has come to the fore as an invaluable proposition.

Stakeholders are expected to use emission control practices, technologies, and environmental risk assessment methodologies to limit the discharge of active pharmaceutical ingredients to wastewater from manufacturing processes. For instance, in 2021, Pfizer forged a virtual PPA with Vesper Energy (Vesper), wherein the latter will provide a minimum of 310 MW of renewable energy to the grid from the Hornet Solar project (in west Texas).

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Emphasis on Expanding Healthcare Access—Social Pillar

The havoc wrecked by the COVID-19 pandemic proved to be a litmus test for healthcare workers, frontline employees and the public amidst soaring demand to bolster healthcare resilience, boost access to life-saving treatments and foster sustainable healthcare solutions. A buoyant ESG approach alludes to expanding geographies where rare disease medicines are available, ramping up patient access, addressing unmet medical needs and enhancing product life cycle management.

Data analytics can be instrumental for early diagnosis, medical research and training. In 2022, AstraZeneca joined forces with the EDISON Alliance of World Economic Forum to enhance the lives of 1 billion people by 2025 through digital inclusion. The pharmaceutical giant is committed to using AI-based technology to screen 5 million patients for lung cancer.

Ethics and Transparency Vital to Embed ESG Culture—Governance Pillar

Decision-making that complements ethics, quality, transparency and integrity serves as a precursor to governance goals. As the industry moves towards a sustainable future, sound corporate governance will be pivotal to underscore ESG performance. With the pharma industry investing in life-saving drugs, incumbent players are well-positioned to underpin their governance portfolio.

Robust ethical behavior speaks volumes of how industry leaders are doing the right thing—reporting and investigating concerns. For instance, 87% of employees at GlaxoSmithKline believe they “can and do speak up if things don’t feel right.” In 2022, the behemoth reportedly conducted 1,060 quality audits of its suppliers, emphasizing active pharmaceutical ingredient suppliers and propelling product governance.

Corporate governance warrants commitment to high ethical standards to underscore trust among stakeholders and underpin transparency and integrity. Sustainability-focused decision-making will help companies bolster their brand position through ethical decision-making, accountability, supply chain transparency, data privacy & protection and risk management. Notably, audit programs in manufacturing, clinical, preclinical and logistics will ensure that products are compliant with regulatory requirements. Bullish governance policies will muster up the confidence of investors, entrepreneurs, shareholders and other stakeholders.

Reaping Benefits of ESG—a Vital Cog for Business

The future of the pharma industry alludes to a sustainable approach to building a healthier planet. Investments in net zero buildings, renewables, patient engagement, reducing the environmental footprint of the supply chain and manufacturing and medicine optimization will engineer ESG growth. Stakeholders are pushing to the limits to create an atmosphere to impel DEI, provide decent work and economic growth, gender equality, minimize inequalities, foster corporate governance and communicate ESG goals to the public. Prevailing trends exhort the valuation of the global pharmaceutical manufacturing market size at USD 405.52 billion in 2020 and back the expected CAGR of 11.34% between 2021 and 2028.

About Astra – ESG Solutions By Grand View Research

Astra is the Environmental, Social, and Governance (ESG) arm of Grand View Research Inc. - a global market research publishing & management consulting firm.

Astra offers comprehensive ESG thematic assessment & scores across diverse impact & socially responsible investment topics, including both public and private companies along with intuitive dashboards. Our ESG solutions are powered by robust fundamental & alternative information. Astra specializes in consulting services that equip corporates and the investment community with the in-depth ESG research and actionable insight they need to support their bottom lines and their values. We have supported our clients across diverse ESG consulting projects & advisory services, including climate strategies & assessment, ESG benchmarking, stakeholder engagement programs, active ownership, developing ESG investment strategies, ESG data services, build corporate sustainability reports. Astra team includes a pool of industry experts and ESG enthusiasts who possess extensive end-end ESG research and consulting experience at a global level.

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