Climate change, supply chains, resource scarcity and other ESG focus areas for the life sciences sector

“I firmly believe that life science companies can be part of the cure.” That was the overarching message from Pinder Sahota, the Vice President of the Association of the British Pharmaceutical Industry (ABPI), in a speech given at the Pharma Sustainability Integrates conference earlier this year. The message is representative of an ongoing discussion in the life sciences sector regarding what the industry is doing to address climate change, sustainability, resource scarcity and other contemporary social and environmental issues. We examine the latest trends in this post and provide an update on some recent legal developments.

Climate change is undoubtedly a challenge facing the life sciences sector, with some estimating that it contributes up to 4-5% of global greenhouse gas (GHG) emissions each year. The industry has, however, made considerable progress towards reducing its Scope 1 – 3 emissions and has set ambitious targets for the future. Indeed, prior to COP26, the pharmaceutical and medical technology sector achieved the Race to Zero target of having 20% of major companies by revenue committing to net zero emissions by 2050. Some recent efforts to reduce GHG emissions, many of which were discussed by Mr Sahota in his speech, include the following:

• Development of medicines: While the discovery and development of new active pharmaceutical ingredients (APIs) can be carbon intensive, several pharmaceutical companies are working on greener laboratories with, for example, low carbon refrigeration.
• Clinical trials: The use of more streamlined clinical trial processes is helping to reduce emissions derived from the freight miles of clinical trial products. The emphasis on efficiency corresponds well to the policy objectives of the MHRA in its recent consultation on the topic.
• Manufacture of medicines: Pharmaceutical companies are increasingly seeking to use “green chemistry” in the medicine manufacturing process, which aims to maximise efficiency (e.g. by choosing the least energy-intensive chemical route for a reaction) and minimise hazardous effects on human health and the environment (e.g. by prioritising waste prevention).
• Renewable energy: Life science companies are increasingly seeking to use renewable energy in their operations and many in the sector are members of RE100, a global renewable energy initiative committed to 100% renewable energy. Similarly, several companies in the industry are increasing the proportion of electric vehicles in their fleet, with many having targets to transition their entire fleet to electric in the next decade (see, for example, the number of life science companies that are members of EV100). 
• Research and development: The industry is investing in research into novel solutions to particular sustainability challenges including, for example, the development of next generation inhalers (currently many pharmaceuticals release GHG on use, some of which have a stronger warming effect than CO2).
• Supply chain emissions: Several life science companies are encouraging suppliers to transition to renewable energy in order to cut GHG emissions from their supply chains (e.g. the Energize initiative in which ten large pharmaceutical companies seek to engage with their suppliers to decarbonise their supply chain).

Aside from climate change, and looking to the future, the global reach and expertise of large life science companies does mean that they are well positioned to take a leading role in addressing some of the world’s most important sustainability and social issues. These issues include the following:

• Antimicrobial resistance (AMR):  The latest AMR Industry Alliance Progress Report, published in February 2022, found that the pharmaceutical industry has made “significant progress” since 2019 across antimicrobial R&D, access, appropriate use and manufacturing. Similarly, the AMR Action Fund, a collaboration between 20 large pharmaceutical companies, has an ambitious target to bring two to four new antibiotics to patients by 2030. Further progress may be aided by additional measures to reduce the financial risk of developing new antimicrobials (e.g. the UK Government’s new antibiotic subscription model), to enhance the harmonisation of applicable regulations (a current focus of the AMR Industry Alliance), or in respect of plans by the UK HSA to develop a UK surveillance system for AMR data.
• Sustainability and human rights in global supply chains: There is a continued and increasing focus on transparency and due diligence in supply chains. For example, the UK Modern Slavery Act focusses on transparency within the supply chain and creates reporting obligations, whereas other legislation, such as the French Duty of Vigilance law and the German Supply Chain Duty of Care Act, establish more onerous obligations to address supply chain environmental and human rights issues. In addition, the Pharmaceutical Supply Chain Initiative, which has over 60 pharmaceutical and healthcare members, establishes Principles for Responsible Supply Chain Management covering environmental sustainability, sourcing of raw materials, human rights, animal welfare, health and safety and ethical issues in pharmaceutical supply chains.
• APIs in the environment: The discharge of APIs into the environment from, among other sources, the manufacture of medicines, patient use, incorrect disposal of medicines, hospital waste and agriculture can affect human health or ecosystems. For this reason, new medicines are subject to environmental screening, either through formal Environmental Impact Assessments (such as in the EU) or through industry initiatives such as the Innovative Medicines Initiative’s Prioritisation and Risk Evaluation of Medicines in the Environment (PREMIER). Several pharmaceutical companies also participate in programmes that seek to raise awareness of the improper disposal of medicines (e.g. MEDSdisposal).
• Water consumption: The sector uses large volumes of water for cleaning and cooling and many pharmaceutical processes require highly purified water that meets strict regulatory standards. As climate change increases the prevalence of water scarcity, many pharmaceutical companies are adopting ambitious targets to cut water consumption. Some are seeking to achieve this by implementing more efficient cleaning programmes whereas others are investigating new ways to increase water re-use in pharmaceutical production while at the same time balancing the need to maintain compliance with regulatory requirements.
• Equitable access to medicines, vaccines and healthcare: Around two billion people do not have access to the medicines they need. Pharmaceutical companies are taking a lead on addressing this by, for example, adopting innovative pricing structures, entering into partnerships with healthcare providers, training healthcare workers, adopting progressive patent policies, contributing to the COVAX facility or Gavi, the Vaccine Alliance to improve access to vaccines, and incentivising senior management to achieve access-to-medicine goals. Pharmaceutical companies must also navigate frequent regulatory changes when seeking to improve access to medicines in multiple low and middle income jurisdictions (e.g. changes to restrictions on the ability to provide discounts on medicines).
• Diversity: There is a general global move towards trying to improve diversity in healthcare including with respect to underrepresented or underserved groups in clinical trials, healthcare datasets and AI and algorithms which rely on such datasets, or even in medical devices themselves (see further analysis here and here). The UK Government is considering legislative options to ensure diversity is accounted for in medical devices as part of its ongoing review.

As key priorities for the future, Mr Sahota identified the need for harmonised global standards and further efforts to enhance the greening of pharmaceutical supply chains. He also emphasised the need for regulators to set the regulatory framework within which life science companies can reduce their carbon intensity and enhance the sustainability of their activities, while at the same time ensuring that safety and patient choice are maintained. For this reason, Mr Sahota called for greater collaboration between life science companies, governments, national healthcare services and the global regulatory community on climate change and sustainability in future.

Increased international regulatory collaboration coupled with clearer regulatory guidelines would indeed be welcome. That being said, there is plainly much that the life sciences sector has to offer proactively towards promoting sustainability goals, and many companies are already stepping up to the plate.