Environmental, social and governance (ESG) reporting in the healthcare sector has received a further push with the European pharmaceutical industry players confronting climate change and exploring challenges and opportunities, including strategies for product marketing and developing technologies and policies. In April 2021, the European Commission issued a legislative proposal for the Corporate Sustainability Reporting Directive (CSRD), requiring companies to report in line with European Sustainability Reporting Standards (ESRS). Furthermore, in July 2023, the EC adopted the first set of ESRS — companies will need to report in compliance with the new ESRS as early as 2024.
A rising chorus of voices is pitching for net-zero goals. In retrospect, the EU’s audacious move to become the first global market to roll out financial penalties for emissions in 2005 was a shot in the arm. So much so that companies that are leaving no stone unturned to reduce carbon are overcoming waste in packaging and production and encouraging suppliers to minimize emissions.
Stakeholders, including investors, clients, partners and the public, perceive transparency, diversity, equity & inclusion (DEI), corporate governance, business ethics, tax transparency, social opportunity, and pollution and waste as a game-changer for a better tomorrow. Predominantly, the circular economy is a riposte to the stiff challenge the 21st century presents — providing people’s needs without putting a burden on the environment and exhausting natural resources.
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Healthcare facilities, such as hospitals, are responsible for a large chunk of environmental pollution. Citing Dutch government data, a U.K.-based Law company — Pinsent Masons — noted (in November 2022) that the healthcare sector contributed around 7% of the CO2 emissions. The emergence of the Green Deal has brought a seismic shift in the healthcare system by minimizing the sector’s negative effects on the environment and climate and achieving a shift towards green and climate-neutral healthcare. The 3rd Green Deal, effective from 2023 through 2026, will gear up to help the Netherlands be carbon neutral by 2050, minimize the environmental burden of pharmaceuticals, promote more sustainable, healthier and plant-based diets for consumers and minimize the use of new materials and reuse more materials.
Novartis Explores Environmental Challenges and Opportunities
As medical technology continues to accelerate to keep up with the soaring demand for high-quality healthcare, European pharmaceutical companies are banking on proactive decisions to underpin sustainability goals. A leap toward ESG business practices and reduction targets of scope 1, 2 and 3 emissions will propel long-term environmental goals. For instance, in 2022, Novartis claimed it minimized scope 1 and 2 emissions by 23% from the preceding year.
The Switzerland-headquartered company is committed to using 100% renewable electricity across its operations by 2025. In 2022, renewable power purchase agreements helped the healthcare giant cover electricity consumption across its operations in Europe and North America. Amidst its scope 3 emissions rising by 20% (from the preceding year), Novartis has set a bullish target of becoming carbon neutral by 2030.
Bristol-Myers Squibb Advances Inclusion and Diversity Efforts
Pharma companies are fostering ESG strategies — enhancing health & well-being and underscoring diversity, equity and inclusion (DEI). Commitment to a patient-centric culture and just society that respects and values people from all backgrounds will boost sustainably responsible investing. In 2023, Bristol-Myers Squibb bolstered workforce representation goals to include executive directors and above to impel the next generation of leadership. In March 2023, the company inferred that 85% strongly agreed or agreed that they felt they worked in diverse and cross-cultural teams at BMS UK.
The pharmaceutical industrial company asserted it enrolled more than 6,800 employees (in 2022) into professional, manager, and leadership development programs. The company claimed in its 2022 ESG report that 100% of its leadership development programs are inclusive and address topics pertaining to women and underrepresented ethnic groups.
AstraZeneca Encourages Transparency
Robust corporate governance warrants greater transparency, the integrity of risk management, internal controls and financial information. Embedding sustainability from the lab to the patient will strengthen the healthcare system and herald an ESG-powered future. AstraZeneca alluded to its commitment to high ethical standards and full compliance with laws, regulations and internal policies in its Sustainability Report 2022.
The U.K.-headquartered company has set an audacious 2025 target of maintaining 100% of active employees trained on the Code of Ethics. Besides, the stakeholder group has a keen interest in exposure to macro-economic risk, R&D productivity and successful pipeline, commercial operations, financial performance and strategy, climate and sustainability matters and culture, values and behaviors.
European pharmaceutical companies are striving to fuel high standards of conduct and accountability, including anti-corruption, anti-bribery, human rights and use of human tissue and animals for research. Businesses are centered on trust — seeking feedback and providing inputs on diversity, equity & inclusion and leadership structure — which will further align sustainability strategy with business strategy. Grand View Research estimates the Europe pharmaceutical market, which stood at USD 282.75 billion in 2020, to grow at 5.4% CAGR between 2021 and 2028. With ESG becoming a common denominator, stakeholders are poised to prioritize sustainability issues and propel ESG reporting.
About Astra — ESG Solutions By Grand View Research
Astra is the Environmental, Social, and Governance (ESG) arm of Grand View Research Inc. — a global market research publishing & management consulting firm.
Astra offers comprehensive ESG thematic assessment & scores across diverse impact & socially responsible investment topics, including both public and private companies along with intuitive dashboards. Our ESG solutions are powered by robust fundamental & alternative information. Astra specializes in consulting services that equip corporates and the investment community with the in-depth ESG research and actionable insight they need to support their bottom lines and their values. We have supported our clients across diverse ESG consulting projects & advisory services, including climate strategies & assessment, ESG benchmarking, stakeholder engagement programs, active ownership, developing ESG investment strategies, ESG data services, build corporate sustainability reports. Astra team includes a pool of industry experts and ESG enthusiasts who possess extensive end-end ESG research and consulting experience at a global level.