Why Are So Few Pharma Companies Ranked Among The 100 Most Sustainable Companies In The World?
Updated: Oct 11, 2022
The pharmaceutical industry has the 17 UN Sustainable Development Goals as its guiding light. These global goals should be achieved by 2030 – But out of the big pharma companies, only three make it to the top 100 in the latest Corporate Knights index of the world's most sustainable companies: Sanofi, Astra Zeneca, and Biogen, all found on the lower half with stagnant or even losing positions compared to 2021.
By comparison, two examples from the steel and chemical industries; Schnitzer Steel Industries Inc and Sekisui Chemical Co Ltd are doing much better. So, how can so many traditional companies in other industries perform so much better than their pharma counterparts?
Good health is in the top 3 of the 17 UN goals and indeed a crucial one for the pharmaceutical industry. After all, people must have access to effective treatments to lead an as healthy life as possible, but there are other sustainability goals to be achieved by 2030 as well, and for the future well-being of humanity and saving our planet, all goals must be achieved.
Global investment giants like Blackrock require sustainability, or rather proactive sustainability strategies with clear goals and sub-goals from their investment objects and authorities and governments around the world follow suit. So, the issue is indeed very much on the agenda, not least in the pharmaceutical companies' annual reports.
In today´s transparent world consumers are increasingly taking a step forward. The consumerization of pharma is here, meaning a broad shift in focus from the healthcare market in general to the individual consumers who naturally will care primarily about their health but for sure also have sustainability in mind.
Authorities and consumers are already concerned about the pharmaceutical pollution of the world’s waters. Aquatic life is swimming in a cocktail of antidepressants, amphetamines, birth control, and antihistamines, just to name a few. Research shows that these compounds alter organisms and put ecosystems, and by extension, human health at risk.
The obvious question is subsequently why pharmaceutical companies do not perform better? Is it because they have just been late starters? Or possibly because they have been so focused on their primary goal of saving lives and improving health that other sustainability issues have been forgotten? Or could it be because these companies are bad at communicating their ESG (Environmental, Social and Governance) efforts and progress to their various stakeholders?
This is not solely the responsibility of the pharma industry, but it does play a pivotal role in this environmental challenge.
Consumers are increasingly also demanding fossil free packaging and want to limit the usage of disposables, especially plastic such. These are areas where proactive pharma companies can make a difference and get an early advantage. The tide is really moving in this direction but are pharma companies really up for the challenge?
At Opticom we have solid experience of understanding sustainability requirements throughout the value chain and helping our customers to drive the industry forward!