Senior Director of Strategic Planning at Marken.

Craig Wilson, Marken 

As the benchmark of a successful business, sustainability and being environmentally focused is more than a symbol of advancement and efficiency; it is an absolute necessity for a world facing growing ecological concerns. Modern organizations must remain cognizant of their inefficiencies and their peripheral effects on our planet. To bring sustainability to the forefront, environmental, social, and governance (ESG) initiatives are the measures for which modern organizations achieve functional success. Only years ago, many companies would consider sustainability extraneous to more immediate performance indicators, but after years of research and catastrophic climate events, ESG is now a major criterion for weighing a company’s longevity.

The pharmaceutical industry is a global powerhouse, delivering healthcare and life-saving treatments to billions of people around the world. As such, this vital sector must contend with making a significant carbon footprint. According to one study, the pharma industry puts out 13% more pollution than the automotive industry—at a market size less than 30% pharma’s value.

In the same study, it was determined pharma manufacturing’s annual carbon dioxide emissions were 48.55 tons of CO2e (carbon dioxide equivalent) per million dollars of revenue—55% greater than auto manufacturing in that same year.

 The supply chains for life sciences and healthcare are estimated to contribute 70% of the overall emissions pharma companies expend, highlighting an imperative for change.

Recent scientific evidence suggests climate change is rapidly accelerating, placing ESG initiatives in the spotlight as an inherent component of business.

 In the race to curb further damage from pollution, pharma and its supply chains are positioning themselves to lead the way. Fortunately, awareness of environmental degradation has accelerated along with the adoption of new innovations, and this confluence could not arrive at a better time.

Accelerating sustainable solutions through technology

At every level in the pharma industry, innovative technologies are being integrated to improve and assist in developing complex, ground-breaking novel therapies. These same technologies are also capable of analyzing big data and developing processes for sustainability. While the supply chain is integrating these technologies to optimize processes and elevate the movement of ultrasensitive drugs, it simultaneously offers the opportunity to improve sustainability initiatives through advanced data analysis and improved efficiencies. Digitalization for this new age of healthcare, in the form of automation, artificial intelligence (AI), blockchain, and the internet of things or more specifically, the internet of supply chains (IoSC) (also referred to as a connected supply chain), is shaping new processes and daily operations, presenting opportunities to greatly influence directives for ESG.

IoSC offers a major uptick in control, efficacy, and optimization by fully integrating components of the supply chain with the internet. This allows operations a robust set of informed solutions combined with faster, possibly instantaneous, decision-making. When combined with data analysis from other developing technologies, it will lead to a smarter, more intuitive supply chain with endless applications for determining ESG initiatives. By elevating the supply chain’s connection to the internet, we take a major step toward the next industrial revolution—Pharma 4.0—optimized visibility, traceability, predictive maintenance, streamlined transport operations, and increased cross-organizational communication.

AI joins IoSC to open even more opportunities for sustainability. It assesses big data sets to define processes, like analyzing routes and carriers to determine best practices to limit emissions, simulated clinical trials, or other virtual simulations, thus eliminating product loss and unnecessary lengthy studies. Also, AI will cut out laborious manual processes impacting traditional systems that churn out paper waste. It promises to bring many other technologies together as the computational power of standard systems is elevated to new heights through machine learning.

Blockchain, in tandem with these other technologies, has the potential to create some of the most balanced and well-kept supply chains. Blockchain acts as a digital ledger made infallible by connectivity across multiple channels to provide a deeper, impeccable look at inventory, status, and integrity of medical products across the entire supply chain.

Blockchain logs every step, preventing deficiencies in stock products and where they are available for relocation in times of demand. These elevated records facilitate sustainability by preventing oversupply and stockouts, maximizing accuracy of quantities for transport, which translates to less trips and fewer carbon emissions.

Closed loop and reverse logistics solutions

The World Health Organization estimates that the pharma industry produces over 300 million tons of plastic waste annually—with single-use plastics estimated to represent half this number.

 To circumvent this enormous amount of waste, supply chains use strategies to maximize the lifecycle and reuse of packaging assets.

Through collaborative efforts with partners, an ESG initiative to return this packaging by taking steps to track, return, and recondition in a process of reverse logistics not only saves resources, but prevents these containers from remaining indefinitely at a partner’s facility and potentially the landfill. By bringing all stakeholders together through a closed loop process, we maximize savings on transport expenditures and CO2 emissions while keeping partners supplied with packaging and returning assets to their original destination.

To enhance this process, radio frequency identification tags (RFID) have been incorporated into packaging for tracking and data collection, assisting managers by providing a robust view on regional quantities that perpetually drive this cyclical process. The smoothness of a well-maintained, closed-loop system is an orchestration of operations teams and sensors collecting copious data on assets that, when enhanced with other technology, such as AI and blockchain, organize, manage, and alert when an asset is nearing the end of its lifecycle.

Human insight fueling processes and accountability

The data for climate change has reached a pinnacle in recent years, after elevated media coverage and the release of extensive research from the Intergovernmental Panel on Climate Change in 2021 and the World Meteorological Organization’s State of the Global Climate Report from 2022 showing overwhelming evidence that global temperatures have reached an extreme level and our current processes are inadequate. Acknowledging the severity of the issue is the first step to bringing about change, and while our advancing technology will play a significant role in our future, human insight defines the direction, purpose, and adaptability needed to create a truly sustainable industry.

The best ESG practices are designed by experts familiar with the frontlines—scientists, logisticians, and project managers using detailed understanding for designing strategies to address inefficiencies. For our part in the supply chain, decarbonization strategies are important to conserving resources, and we take every chance to consolidate shipments and reduce fuel consumption whenever possible. Internal initiatives play a large part in implementing ESG into daily activities, such as eliminating waste, recycling programs, choosing reusable materials, and ensuring we get the most out of a product.

As headway in ESG is made through these areas and record keeping is formalized, global organizations are in place to create standards, judge progress, and assess a business’s ESG actions to determine success.

Founded in 2011, EcoVadis is an innovative solution that empowers businesses with assessments and scores to award sustainability status. It offers a novel approach by collaborating to adopt new standards, implementing plans for controlling waste, cutting emissions, and keeping track of all sustainability initiatives. Savvy organizations are assessed by their plan of action and the resulting data collected from their ESG efforts.

At Marken, we view ESG as a long game and are in the late stages of a five-year campaign assessed by EcoVadis. We began with a robust communication program the first year to alert and educate employees and external service providers of our initiatives and their roles in them. This was followed by increased involvement the following year with targeted areas and metric goals. In the final stages, we implemented solutions for areas that did not achieve objectives. By following this strategy, Marken met the specifications for its EcoVadis reporting and adopted additional strategies to move from a bronze to silver status within a few years, a unique designation only the top 25% of reporting companies achieve.

A transparent approach with elevated communication to stakeholders is crucial for allowing outside processing to also become familiar with ESG initiatives and processes, building on the collaboration necessary to create change on a large scale. It is important to keep in mind as a global organization, different countries have various approaches to sustainability.

With so many touchpoints in the supply chain for different projects and regions, an individual company’s initiatives and ability to lower waste is often only as good as the next player in the process. This is why a well-informed and staged approach brings teams together with a common mission—eliminating unnecessary events and building reciprocal services to deliver the most out of resources.

To address the inefficiencies in the pursuit of optimizing sustainability, we must master our individual roles throughout pharma, revealing where there is room for improvement and taking action to implement changes to make a difference in concern of our environment.

By strategically combining human expertise, cutting-edge technology, and efficient processes, the pharma industry and its supply chains are reaching a new era of sustainable practices. Likewise, by focusing on ESG factors throughout the pharma supply chain, companies ensure the medications we rely on are produced responsibly. This translates to a healthier planet and a more sustainable industry with better access for patients. While challenges remain, the growing focus on ESG initiatives presents a significant opportunity for the pharma and its supply chains to become leaders in responsible manufacturing and distribution. 

Craig Wilson is Senior Director of Strategic Planning at Marken.

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https://theconversation.com/big-pharma-emits-more-greenhouse-gases-than-the-automotive-industry-115285

2. Heim, M.; Entrup, C.; Miranda, W. Making Biopharma’s Supply Chains More Environmentally Sustainable. Deloitte. September 20, 2023. 

https://www2.deloitte.com/us/en/insights/industry/health-care/scaling-pharmaceutical-supply-chain-sustainability-efforts.html

https://science.nasa.gov/climate-change/evidence/

4. Seethamariah, S. The Power of a Smart, Connected Supply Chain.

https://www.forbes.com/sites/forbesbusinesscouncil/2023/02/17/the-power-of-a-smart-connected-supply-chain/?sh=172929691b18

5. The Pharmaceutical Industry is Prescribing More Sustainable Practices. OWL ESG. November 22, 2022. 

https://owlesg.com/2022/11/22/the-pharmaceutical-industry-is-prescribing-more-sustainable-practices

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