s the health impacts of climate change become harder to ignore, biotechnology and pharmaceutical companies are facing increasing pressure from investors, employees, and government regulators to reduce their carbon emissions, and to make environmental sustainability a core part of their business.
Globally, large public biotech and pharmaceutical companies are responsible for more than 200 million metric tons of carbon dioxide and equivalent emissions, according to estimates from one 2022 report. The bulk of those emissions are tied to companies’ products and supply chains, which can be hard to measure. In the U.S., about 8.5% of the national carbon footprint can be attributed to the health care industry at large.
While other sectors, such as the financial industry, have been developing environmental standards for years, often in response to pressure from shareholders, this work is just getting started for biotech and pharma companies. But venture capital firms that invest in health-related biotech, employees and other stakeholders are starting to demand that companies take climate action, and that they provide data showing they are making progress toward emissions reduction goals.
Younger employees in particular, “want to work in an organization where they know they’re doing something about sustainability,” said James Connelly, CEO of My Green Lab, a nonprofit focused on sustainability in science. Incorporating environmental programs, Connelly said, can help companies with recruiting and retention.
Pam Cheng, executive vice president global operations, IT and chief sustainability officer at AstraZeneca, said she has also noticed this generational trend. A worker recently asked her about the company’s climate action at a manufacturing site town hall, she said. And some of AstraZeneca’s climate initiatives, such as removing single-use plastics from packaging and developing metrics to track sustainability across a product’s lifestyle, have been informed by employees’ ideas, according to a spokeswoman for the company.
Related: ‘If I were a hospital, I’d be reading the tea leaves’: Pressures grow on the health care industry to reduce its climate pollution
A 2022 report from the biotech law firm Fenwick, which surveyed 100 executives and investors, found that 78% of investors said they expected that environmental, social, and governance (ESG) disclosures would become “significantly” or “moderately” more important in the next year. Among the investors who said they expected more ESG disclosures, more than half said they faced increasing pressure from their clients to “include ESG-focused companies in portfolios” and that they expected standards in this area to “become more uniform.”