For many years, high energy use and its impact on the environment by businesses within the life sciences sector had been generally overlooked in national and global efforts to combat climate change. But with “carbon neutrality” the new buzzwords, how is the sector embracing this push for change?
For many years, high energy use and its impact on the environment by businesses within the life sciences sector had been generally overlooked in national and global efforts to combat climate change. Largely because this industry has always been seen as a benevolent one that provides the products and services required for health. Instead, environmental efforts have predominantly focused on the non-renewable energy sector, transport, agriculture and manufacturing; allowing the high levels of pollution to the environment by the wider life sciences sector to escape the spotlight.
Energy expenditure only represents a small fraction of overall costs to many large corporates, so cost-cutting, which is the usual enticer, has failed to be the driver for real change. With “carbon neutrality” the new buzzwords, how is the life sciences sector embracing this push for change?
Generally, the shift for corporate sustainability policies is being driven by governments and supra-state organizations, who over the years, have made the environment a priority.
In the UK, Theresa May’s Government, with almost nothing in the way of prior consultation or warning, legislated that the UK must be “Net Zero” by 2050 (the previous target was an 80% reduction in emissions relative to a baseline). As the Committee on Climate Change has consistently bemoaned, the Government has since been very slow to map out its strategy for delivering that commitment. But this has not stopped many corporates, regional authorities and public institutions announcing their own net zero targets, generally in much more ambitious timescales than the UK's overall target. The UK also has the NHS Sustainable Development Unit, a government agency with the purpose of embedding the principles of sustainable development, social value. The wider determinants of health across the health and social care system in England have been working with a range of pharmaceutical and medical devices companies to find ways to reduce the carbon footprint of pharmaceuticals and medical devices. A clear sign that if businesses want to continue working with the NHS, robust policies to counter a negative impact on the environment and proof that they are working, is likely to be an expectation.
The UN has identified pharmaceutical pollution as an emerging global priority under its Strategic Approach to International Chemicals Management. At the EU level, last year the European Commission published a strategy to address pharmaceuticals in the environment 2019’s Strategic Approach to Pharmaceuticals in the Environment by the European Commission.1 It commits to encourage, through dialogue and cooperation, action in third countries where pharmaceutical emissions from manufacturing and other sources are suspected of contributing to the development of antimicrobial resistance. The strategy identifies six action areas concerning all stages of the pharmaceutical life cycle, where improvements can be made. The six areas identified include actions to raise awareness and promote prudent use, improve training and risk assessment, gather monitoring data, incentivize “green design,” reduce emissions from manufacturing, reduce waste and improve wastewater treatment.
The research, development, production, supply and distribution of pharmaceuticals and medical devices inherently consumes large quantities of natural, human and economic resources. That's why in recent years attention has gone to the environmental sustainability of the life sciences sector and they seem to be responding positively.
Globally, pharmaceuticals and medical devices contribute a significant proportion of healthcare associated greenhouse gas (GHG) emissions. Issues such as, incorrectly disposed medicines may contribute to the serious problem of antimicrobial resistance, and pharmaceuticals discarded in the environment have been shown to pose a risk to fish or other wildlife. With these and other environmental factors in mind, industry has been vocal in its commitment to self-imposed targets and initiatives to reduce the impact of their activities and products on the environment while keeping the patient and product efficacy at the forefront of activities.
Medical device and pharmaceutical companies are continuously looking at ways they can produce their products more efficiently and in a sustainable way; such as implementing ‘green’ IT practices designed to lower costs, improve sustainability, and reduce energy consumption in their data centers, as well as clean rooms and laboratories. The pharmaceutical industry traditionally uses classical batch chemistry. While this is effective when discovering new materials, when it comes to large-scale production, batch chemistry can be problematic, with issues such as heat and waste management. In contrast, flow chemistry (in which reactions take place in a tube or pipe) is often safer, cleaner and much more cost effective and is being implemented in many laboratories.
Internal initiatives are increasingly being put in place by companies to identify and address the environmental impact of products from discovery in early R&D through to launch of a new product and during its commercial lifetime to end-of-use. Common target focus areas include the promotion of practices to create environmentally responsible R&D activities, ensuring responsible supply chains, minimizing greenhouse gases and reduce pharmaceuticals in the environment. Other focus areas include water and waste sustainability and plastic neutrality in an effort to design out negative environmental impacts, including natural resource depletion, waste and emissions to air, water and land.
The UK's 2050 target and many of those espoused by international organisations require the volume of greenhouse gasses we remove from the atmosphere to be equal to or greater than the emissions we continue to produce. Despite the name, it does not actually entail moving all emissions down to zero – although that should obviously be the aim for each of the main emitting sectors of which the life sciences sector is one.
In addition, many businesses and organisations within the life sciences sector and others with pressure and encouragement from these institutions then cling onto sustainability policies that mainly focus on carbon offsetting. This principle relies on continued emissions in one area being “offset” by an environmental project in another area that avoids or reduces the same amount of emissions.
While an important aspect of promoting environmental awareness, carbon offsetting should not be used as the primary method of achieving carbon neutrality. There are two main reasons for this: first, offsetting does not avoid the immediate problem (namely, the continued release of emissions) and, second, it is often difficult to secure 100% confidence in the quality of offsets.
Leaders in the area of sustainability include for example, GSK, which has slashed operational greenhouse gas emissions and it is implementing plans to reduce its water use by 30 per cent at high-risk sites by 2030. AstraZeneca too has been recognized for its actions to reduce emissions, cut climate risks, develop the low-carbon economy and manage water resources sustainably. The Japanese based company Takeda conducts reviews of its medium and long-term environmental targets each year and has already exceeded its previously established 2020 environmental goals well ahead of schedule. This included cutting CO2 emissions by more than a third compared with 2005 levels. Furthermore, in November 2020, Roche was recognized as the most sustainable company in the Pharmaceuticals index of the Dow Jones Sustainability Indices (DJSI), for their strategy and continuous progress in areas such as social responsibility, environmental protection, supply chain sustainability, and climate strategy.
The approach should be for businesses and organisations in the life sciences sector to focus first and foremost on its own activities. Looking at how they can reduce their own emissions those of its supply chain in a meaningful way.
One exciting development towards meaningful sustainability has come from large energy users, increasingly looking to procure their power needs directly from clean energy projects through Corporate Power Purchase Agreements (rather than just through their incumbent energy supplier) and with the growing interest in “on-site” forms of power generation (rooftop solar and ground source heat pumps being good examples).
There is plenty of potential in both these approaches to allow businesses, genuinely interested in making a meaningful impact on their climate footprint, to take meaningful steps towards carbon neutrality. Carbon offsetting, through high quality, well audited programmed, can then be used to supplement any residual emissions until longer-term reduction options can be found.
Environmental issues in the wider life sciences sector are extremely complex, ranging from how drugs are used and expelled from the body to pollution to air, land and water.
Sustainability initiatives in the pharmaceutical and medical device sector is part of a global movement and while awareness of the impact business activity has on the environment and actions to address this are to be encouraged, we have to be careful that 'carbon neutrality' doesn't fall into the pits of becoming a fad, with baseless claims and targets in behind performative announcements. But with many key players in the industry taking huge strides, this is likely to ripple throughout the sector and change will need to be embraced by others in this industry and those businesses that work with the sector.
Many environmental attempts by businesses are thwarted by regulatory hurdles, especially when it comes to how waste is processed and reduced and navigating the legal landscape in different jurisdictions.
A greener future will depend on technology and often times, innovation is way ahead of the law, so companies can find themselves in a legally sticky situation when being ambitious with sustainability policies. The Guardian published an article on how Unilever's environmental collaboration with Proctor & Gamble to reduce packaging for laundry detergent led to a £218m fine, with the EU Competition Commission report stating that this move led to a conflict and argued that both businesses were 'colluding on the price of washing powder'. While this is an extreme case, environmentalism can still be risky for businesses and this example shows that environmental policies need to be formed in partnership with solid legal counsel that are embedded in the life sciences sector and knowledgeable on sustainability best practices.
Furthermore, in reality, for global businesses it may not be possible for business wide sustainability policies, instead they will need to be tailored for different countries.
Many “carbon net zero” announcements are unintentionally empty and do not face up to public scrutiny. While there's a buzz and applaud around the original announcements, speculation soon follows swiftly after when proof of how targets will and are being achievement is expected. Also, in 2020 many businesses came under the spotlight for the unfavorable actions of businesses in their supply chain. Lawyers are able to assist with developing and implementing robust policies which are measurable and tailored to the business itself and also other than it works with.
Working with expert life sciences and energy lawyers who work closely with a variety of clients also implementing this change and the regulatory bodies that oversee it means that they are best placed to guide businesses on not only the latest trends in sustainability but all the proven energy technologies and processes that actually work.
Hugo Lidbetter is partner and energy lawyer and Cliodhna McDonough is legal director and life sciences lawyer, both at Fieldfisher.