In an era where sustainability is no longer an option but a necessity, the pharmaceutical industry finds itself grappling with significant challenges in its commitment to sustainable practices. A recent survey by Cytiva and FT Longitude paints a complex picture of the industry’s sustainability efforts, revealing that while sustainability has become a key priority for many companies—62% of over 800 biopharma executives from 18 countries identify it as such—substantial obstacles still hinder progress. Among these barriers are weak collaboration across the value chain, difficulties in measuring sustainability objectives, and the challenge of accurately tracking Scope 3 emissions, making the quest for sustainability a convoluted journey for pharma companies.
Positive Business Impact of Sustainability
One recurring theme from the survey is the significant business benefits that sustainability efforts can bring to pharmaceutical companies. More than half of the sustainability leaders surveyed reported improvements in several areas over the last year. Enhancements in brand reputation were noted by 58% of respondents, profit margins saw an uptick for 57%, share prices climbed for 56%, revenue increased for 55%, and talent attraction improved for 54%. These statistics affirm the positive impact of sustainability initiatives on overall business performance and underscore the practicality of integrating sustainable practices into corporate strategies. Indeed, sustainability isn’t merely a moral imperative but a business advantage that can foster growth, differentiation, and resilience against market fluctuations.
However, the statistics only tell part of the story. Sixty-three percent of executives see sustainability as essential for differentiating their businesses from competitors and fostering growth. Simultaneously, 64% recognize that failing to meet sustainability targets poses a critical risk to their firms, underlining the high stakes involved. Therefore, while the benefits of pursuing sustainability are clear, the obstacles remain daunting. Achieving these ambitious targets requires not only vision but pragmatic strategies and effective execution, which has proven challenging for many in the industry. The balance between immediate business rewards and long-term sustainability commitments presents a complex puzzle that requires a multifaceted approach.
Overcoming Measurement and Collaboration Challenges
Despite these evident benefits, the pharmaceutical industry struggles with several ingrained challenges. One of the primary issues is the lack of accurate methods to quantify and forecast the financial impact of sustainability measures. An overwhelming 76% of respondents admitted that their firms do not have adequate tools to measure these impacts effectively, indicating that measurement issues are a significant barrier to sustainability. The intricacies involved in calculating the financial benefits of sustainable practices often deter companies from fully committing to these initiatives, leaving them in a catch-22 situation. Accurate measurement is crucial for demonstrating the real value of sustainability, yet, the tools required for this task are often lacking or underdeveloped within the industry.
Furthermore, the survey highlights a critical bottleneck in collaboration along the value chain. Seventy percent of executives mentioned a lack of collaborative efforts in setting and achieving sustainability goals. This lack of synergy can stymie progress, as sustainability is a collective endeavor that requires concerted efforts from all stakeholders, including suppliers, manufacturers, and distributors. The absence of cohesive collaboration hampers the ability to implement and scale sustainable practices effectively. Addressing this issue necessitates robust communication and strategic alignment across the entire supply chain to ensure that sustainability goals are understood, shared, and actively pursued by all parties involved.
Tracking Scope 3 Emissions and Innovative Efforts
The capability to track and manage emissions, particularly Scope 3 emissions, presents another formidable challenge. While larger companies are making strides in key areas such as reducing water consumption, switching to renewable energy, reducing single-use plastics, creating more sustainable packaging, and adopting greener chemicals, only 41% have the means to effectively track their carbon footprint. Even more daunting is the complexity of Scope 3 emissions, which encompass indirect emissions that occur in a company’s supply chain. Only 17% of companies expressed confidence in their ability to track these emissions accurately, underscoring the enormity of this task.
Innovative efforts are being made to tackle these challenges head-on. Some companies are investing in advanced technologies and data analytics to improve their tracking capabilities and provide greater transparency. This technological investment aims to bridge the gap in information and align sustainability metrics with business performance indicators. Furthermore, initiatives like industry-wide collaborations and partnerships are being fostered to enhance collective efforts and share best practices. These endeavors not only facilitate better tracking and reporting of emissions but also build a more robust framework for achieving sustainability goals.
The Path Forward
In today’s world, where sustainability is essential rather than optional, the pharmaceutical industry faces notable challenges in adhering to sustainable practices. A recent survey conducted by Cytiva and FT Longitude highlights the complex landscape of the industry’s sustainability efforts. The survey reveals that while sustainability has become a high priority for many companies—62% of over 800 biopharma executives from 18 different countries peg it as a key focus—numerous significant obstacles still impede progress. Some of the main barriers include poor collaboration across the value chain, problems in measuring sustainability goals, and the difficulty of accurately tracking Scope 3 emissions, which encompass indirect emissions that occur in a company’s value chain. These hurdles make the journey toward sustainability particularly challenging for pharmaceutical companies, requiring more strategic efforts and innovative solutions to overcome. Despite these barriers, the industry’s commitment to sustainable practices signals a positive shift toward more environmentally responsible operations.
