2030 OUTLOOK ON SUSTAINABILITY
IN THE BIOPHARMA INDUSTRY
White Paper
June 2016
Acknowledgements
Project Leaders
• Hector Rodriguez, Senior Director, Global Facilities Management, Massachusetts – Biogen
• Johanna C. Jobin, Director, Global EHS & Sustainability – Biogen
• Annie White, Associate Director, Research Products - Sustainalytics
• Hazel Goedhart, Sector Manager, Healthcare and Chemicals - Sustainalytics
Advisory Panel
We gratefully acknowledge the effort and insight of the panelists who contributed to this project.
Rebecca M. Henderson
John and Natty McArthur University Professor
Harvard Business School
John Warner
President, Chief Technology Officer, Board Member
Warner Babcock Institute for Green Chemistry
Jorg Thommes
Senior Vice President, Technical Development
Biogen
Lawrence Weiner
Senior Director, Innovation & Program Management
Biogen
Cary Krosinsky
Executive Officer
Neto
Jason Jay, Ph.D.
Senior Lecturer and Director
Sustainability Initiative at MIT Sloan
Chuck Pappalardo
VP, Global Facilities Management
Biogen
About Biogen
Through cutting-edge science and medicine, Biogen discovers, develops and delivers worldwide
innovative therapies for people living with serious neurological, autoimmune and rare diseases.
Founded in 1978, Biogen is one of the world’s oldest independent biotechnology companies and patients worldwide benefit from its leading multiple sclerosis and innovative hemophilia therapies.
For more information, please visit www.biogen.com. Follow us on Twitter.
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About Sustainalytics
Sustainalytics is an independent ESG and corporate governance research, ratings and analysis firm
supporting investors around the world with the development and implementation of responsible
investment strategies. With 14 offices globally, Sustainalytics partners with institutional investors
who integrate environmental, social and governance information and assessments into their investment
processes. Today, the firm has more than 250 staff members, including 170 analysts with varied
multidisciplinary expertise of more than 40 sectors. Through the IRRI survey, investors selected
Sustainalytics as the best independent responsible investment research firm for three consecutive
years, 2012 through 2014 and in 2015, Sustainalytics was named among the top three firms for
both ESG and Corporate Governance research. For more information, visit www.sustainalytics.com.
Disclaimer
All rights reserved. No part of this report may be reproduced, transmitted or published in any form or by any
means without the prior written permission of Sustainalytics and Biogen.
This report was drafted in accordance with the agreed work to be performed and reflects the situation as on
the date of the report. The information on which this report is based has – fully or partially – been derived from
third parties and is therefore subject to continuous modification. Sustainalytics observes the greatest possible
care in using information and drafting reports but cannot guarantee that the report is accurate and/or
complete. Sustainalytics will not accept any liability for damage arising from the use of this report, other than
liability for direct damage in cases of an intentional act or omission or gross negligence on the part of
Sustainalytics.
Sustainalytics will not accept any form of liability for the substance of the reports, notifications or communications
drafted by Sustainalytics vis-à-vis any legal entities and/or natural persons other than its direct principal who have
taken cognizance of such reports, notifications or communications in any way.
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Foreword
Biopharmaceuticals present enormous opportunities both economically and for society
and human well-being at a global scale. At Biogen, we have a passionate commitment
to discover, develop and deliver innovative therapies that improve the lives of patients,
but we know that the successful pursuit of this mission is underpinned by also ensuring
environmental sustainability.
With the increasing attention being paid to the 2030 Sustainable Development Goals
(SDGs), we were inspired to think about what the long-term implications of environmental
sustainability (or lack thereof) could mean for companies in the biopharma industry.
The variables driving the potential answers to this question are numerous, and the
perspectives needed to appropriately answer it demanded the inclusion of relevant
external stakeholders. We were thrilled to be able to secure the meaningful engagement
of several respected sustainability leaders with business, science, finance, and academic
backgrounds. Their input will certainly influence our strategy going forward and we hope
that it will inform that of many others.
The intent of this paper is to share Biogen’s view of key long-term sustainability trends
and challenges, begin a conversation on a shared vision for the path to sustainability
through the year 2030, and to inspire the biopharma industry to join us in making
transformational improvement in environmental sustainability across the industry
and throughout its value chain. Biogen is committed to using innovation to drive great
advances in sustainability but we recognize that true transformation will also require
industry-level collaboration and dedicated leadership. Many of the challenges we face
on our path to sustainability are shared by the industry and are best addressed through
collaboration. How this innovation and collaboration will look and work is not fully known
at this time, and this paper does not attempt to predict the results. The goal is to begin
to ask the challenging questions that our industry will need to answer to do our part to
establish long-term industry, society, and environmental sustainability.
At Biogen, we have proudly aimed to lead through our sustainability-focused actions,
utilizing the same intellectual discipline and rigor that drives our science, and we are
pleased to have been recognized by organizations like DJSI, Newsweek, and Corporate
Knights. We also know, however, that achieving this sense of sustainability we must
attain as an industry, society will require new ways of thinking and new forms of
collaboration. We hope this paper will help in moving that critical conversation forward,
and encourage you to join us on the journey.
We hope that you the reader will find value in this discussion and encourage you to
directly engage with us to continue this conversation.
Hector R. Rodriguez
Johanna C. Jobin
Senior Director,
Director,
Global Facilities Management, Massachusetts-
Global EHS & Sustainability
Biogen
Biogen
225 Binney Street | Cambridge, MA | 02142
225 Binney Street | Cambridge, MA | 02142
[email protected]
[email protected]
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Introduction
Pharma vs. Biopharma
This paper examines the role of biopharma companies in long-term
environmental sustainability . Inspired by the Sustainable Development
Goals (SDGs), this paper is unique in that it seeks to take a long-term
view - outwards to 2030 - in answering the following questions:
• What is the role of biopharma companies in contributing to long-
term environmental sustainability in a significant and meaningful way?
• Which macro trends are likely going to have the greatest impact on
biopharma companies? Which environmental sustainability risks
and opportunities are potentially the most significant?
• What actions can biopharma companies take to drive innovation in
environmental sustainability and ensure resilience?
The expectation for business to contribute to sustainable development
in transformative ways is outpacing current approaches to corporate
sustainability programming and strategies. Across industries,
progressive companies are seeking to define the next evolution
of sustainability leadership.
This paper seeks to explore this next realm of leadership for the
environmental dimension of biopharma. However, it does not claim
to put forth definitive answers. Rather the hope is to spark a dialogue
at the industry level and further engage companies, employees,
scientists, professors, students, and other stakeholders on defining
what transformative environmental leadership will look like in 2030
for the biopharma industry.
This paper is largely based on the results of one-on-one interviews with
a small panel of experts, facilitated by Sustainalytics, followed by a halfday workshop at Biogen’s head office in Cambridge, Massachusetts.
In Section One, we explore the macro trends that are projected to
impact the industry through 2030. Section Two explores environmental
focus areas expected to gain prominence, from both a risk and
opportunity perspective. Section Three concludes the paper by
pointing biopharma in the direction of next steps.
© 2016 Biogen. All rights reserved. 6/16
Biopharmaceuticals represent
some of the most sophisticated
achievements of modern science.
The primary difference between
biopharmaceuticals and traditional
pharmaceuticals is the method by
which the products are produced.
Biopharma products are
manufactured through chemical
synthesis in living organisms such
as bacteria, yeast and mammalian
cells, whereas traditional
pharmaceutical products are
manufactured through chemical
synthesis in non-living reactors
The interconnection
of human health and
environmental sustainability:
It is fully recognized that
biopharma has a tremendous role
in ensuring positive impact within
the social dimension of sustainable
development, such as through
improving access to medicine. The
industry must continue to invest
and innovate in these areas. This
paper aims to give due focus to
environmental aspects by
recognizing the connection
between the environment and
society. When clean air, fresh
water, soil, biodiversity, and the
climate are threatened, so too is
nutrition, health and, ultimately,
human well-being. A clear link has
been established between societal
well-being and the environmental
performance of the healthcare
industry.
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Section One: Global Macro Trends
The imperative for sustainable development is driven by a series of global trends that lie
outside of the control of industry or any one group. Here we consider which of these macro
trends are most likely to influence the direction of biopharma over the coming 15 years.
Momentum Trends: Important today and projected to gain momentum by 2030
Population and Demographic Shifts: Thanks to sophisticated treatments, evolving
research and new therapies put to market, the pharmaceutical industry has been a major
catalyst in advancing reproductive rights and life expectancies around the world. Yet as
lifespans continue to increase, so too does the rate of chronic disease, brought on in part,
by increased affluence and resource consumption. To demonstrate environmental
leadership under these conditions, while still serving an ever changing population,
biopharma companies will need to develop new business models and ideas that go
beyond incremental improvements to existing environmental programs.
Employee Awareness and Values: By 2025, it is estimated that the Millennial generation–
the cohort of people born between 1980 and the mid-2000s - will make up roughly 75
percent of the workforce. When it comes to recruiting and retaining Millennial talent,
this generation is motivated less by traditional monetary incentives and instead place
a higher value on the societal significance of their work and the products that they
consume. Biopharma companies need to visibly demonstrate to Millennials that their
organizational goals and plans are consistent with those of this generation. A mechanism
within the academic context is essential to make the alignment early, so as to stand out
from other sectors early. Companies that demonstrate strong sustainability efforts,
namely through technology and transparency, will be best positioned to earn the
attention of Millennial talent.
More Stringent Regulatory Environment: Biopharma companies spend an increasing
amount of money on sustainability-related regulations. Chemists and scientists may
increasingly need to be aware of the regulatory environment. This is a trend that has been
gaining momentum for decades, and will remain important, particularly if the precautionary
principle applied in Europe is adopted more broadly. Many biopharma companies’ current
sustainability strategies are based on responding reactively to this trend, through a
compliance-based approach. While adopting more forward looking sustainability
strategies, companies should actively participate in regulatory debates to help
maintain rational and effective compliance mechanisms.
Climate Change: Climate change is a fundamental threat to development. An ever-greater
understanding of the risks and opportunities it presents for businesses and society have
contributed to a willingness among corporate leaders to help shape solutions. Companies
are acting on their own to reduce greenhouse gas emissions and explore new low-carbon
market opportunities. Additionally, a growing number of businesses are calling on the
government to provide investment certainty through clear climate policy. The biopharma
supply chain may need to adapt in order to ensure resilience to climate-related disruptions–
important from both an operational perspective, as well as to ensure access to medicine.
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Changing Investor Expectations: The world of investment is shifting. There is a realization
that the environmental, social and governance (ESG) impacts of economic activities, both
positive and negative, are relevant and material to investment decisions and management. There is mounting evidence — produced by leading brokerage firms, academics
and others — that the incorporation of ESG impacts and risks into the investment process
leads to better outcomes for the investment process itself, as well as better outcomes
for society. Environmental issues such as climate change, water scarcity and
deforestation are putting a strain on natural resources, which has direct implications
for corporate financial performance across industries.
Emerging Trends: Not so important today, but likely to become so by 2030
Accumulation of Toxins in the Environment: The release of toxic or synthetic substances,
even in small quantities, can radically alter ecosystems and introduce new risks
to human health. Businesses play a significant role as the producer of these
substances, yet their full impact has yet to be quantified, particularly when it comes to
nanomaterial and plastic particles. Compounding this issue is that academic institutions
are not currently training scientists destined to work in biopharma to have a working
knowledge of these issues. Unless we fill this education gap, we are ill prepared to tackle
this critical issue.
Sustainability as a Platform for Innovation: Across industries, there are increased
efforts to seek, define, and quantify the business case for environmental sustainability.
In the coming years, corporate sustainability leaders will increasingly demonstrate that
improved environmental performance not only lowers costs through resource efficiencies,
but also presents new models and approaches to spurring innovation. Companies will
experience an ever increasing commercial pull from existing and future customers to help
them meet their own sustainability objectives. This is a great opportunity, if companies
are sensitive to their customer’s needs, to help them articulate and meet their own
sustainability objectives.
Consumer Trust and Awareness: On average, projected populations will be better
educated, with more affordable access to secondary and post-secondary education.
One impact of improved education is the development of a more informed consumer
base. At the same time, the rapid adoption of online connectivity, user-generated digital
content and mass communications means that consumers are increasingly turning to
each other for trusted information and to help frame their opinions on the impacts made
by large companies. These trends have had a particularly noticeable impact on
consumer-facing brands and at times, have led to a mistrust of corporate claims.
For the biopharma industry, however, customers are not yet very outspoken about the
industry’s environmental impact. In fact, 2030 may be too short a time frame to capture
this as a significant trend. Still, environmental advocacy may accelerate if environmental
impacts start to manifest themselves as social issues, for example, drinking water
polluted with pharmaceutical byproducts.
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Section Two: Environmental Focus Areas, Present - 2030
This section explores those areas that have the potential to be high on the radar of
biopharma by or before 2030, given the key macro trends discussed above. Unlike
trends, the focus here is on areas that are to a large extent within the industry’s sphere
of control and/or influence. Biopharma companies may consider how these areas map
to each phase of their value chain, how they link to drivers of business value (risks and
opportunities), and the relative degree of environmental impact. The materiality matrix
illustrates, at an industry-level, how these areas may relate. Companies are strongly
encouraged to conduct a similar exercise within their own specific context, and apply
as long-term a view as possible.
Significant
Impact
ENVIRONMENTAL IMPACT
PRODUCTION
WASTE
ENERGY USE/
INTEGRATED
ENERGY
SYSTEMS
NANOPARTICLES
& other emerging
technologies
INTEGRATION
& COLLABORATION:
Sustainable Science
Education
PHARMACEUTICALS
IN THE
ENVIRONMENT
(PIEs)
WATER
USE
PACKAGING
& DELIVERY
SYSTEMS
RAW
MATERIAL
USE
Negligible
Impact
LINK TO BUSINESS VALUE (RISK/OPPORTUNITY)
Negligible Link
Strong Link
Figure 1 - Biopharma materiality matrix (Biogen workshop in 2015, Cambridge, MA)
The issues plotted above in the matrix can be clustered into three overarching
environmental focus areas:
•Sustainability Integration and Collaboration
•End-of-Life Impacts
• Environmental Impacts of Manufacturing
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Sustainability Integration and Collaboration
Transformative environmental sustainability in biopharma in 2030 significantly depends
on the degree to which it is integrated into academia. One of the biggest challenges
for the biopharma industry is to overcome the current lack of sustainability training
across various scientific disciplines. Throughout undergraduate and graduate levels,
science-based degree programs typically do not provide students with industry-oriented
training on how to identify, measure, and quantify sustainability impact – starting at the
molecular level to the product or drug development phase.
This sustainability knowledge gap among scientists may lead to new products being
developed that, at a later stage, need to be reformulated to adhere to environmental
regulations. Such costly readjustments can be avoided by investing in the capacity to
develop new products that are both sustainable and innovative from the outset. On the
opportunity side, the biopharma industry can collaborate with universities and colleges
to ensure relevant training is provided for up and coming scientists. By helping to train
future talent, companies can position themselves to take advantage of the projected
growth of the global “green chemistry” market, which is predicted to increase significantly
by 2030. The future workforce should be able to proactively respond to positive
opportunities for growth areas, such as the development of tools to allow for a sensitive
and appropriate response to these unmet sustainability needs.
End-of-Life Impacts
Any well-designed product stewardship strategy must identify both environmental risks
and opportunities from the conceptual phase of research, through to disposal and the
end-of-life of the product. One significant environmental risk to biopharma companies is
pharmaceuticals that end up in surface and ground waters through end-of-life disposal
or patient excretion. Known as “pharmaceuticals-in-the-environment” (PIE), these waste
elements can negatively affect ecosystems and biodiversity. To date, few studies have
determined precisely how pharmaceutical by-products interact with ecosystems, and
what their ultimate impact might be on people and the environment. Every increase in
efficacy, something a well-managed company naturally strives toward, correlates to less
pharmaceuticals in the environment. Building in a plan for after-use destruction and
degradation is the new opportunity, but unfortunately, regulatory requirements are not
currently aligned with this approach and in some cases, are posing direct barriers. Over
the next few decades, a major opportunity for biopharma companies will be to create
design processes and pathways that prevent pharmaceuticals from reaching the
environment in the first place.
Similar to the disposal of medicines, the disposal of “single-use devices” (SUDs) presents
environmental challenges. SUDs, such as injection devices or delivery pumps are
processed as waste after one use despite being, in some instances, fully functional for
one or more additional uses. And, with the growing number of at-home, self-administering patients, demand for SUDs is only expected to increase. Though challenges related to
public perception and safety exist, the rise of SUDs presents biopharma companies with
an opportunity to design devices that are widely eligible for green disposal options or to
define new, industry-wide rules for safe reuse.
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Finally, nanoparticles present one of the most difficult challenges related to end-of-life
design. It is widely held that nanoparticles possess groundbreaking applications in
medicine, yet the long-term effects of nanoparticles within ecosystems will continue to
raise important questions. Unknowingly contributing to this potentially detrimental
impact constitutes a risk that should be on the radar of the biopharma industry.
Environmental Impacts of Manufacturing
During the manufacture of biopharmaceuticals, companies use water, energy, and raw
materials. Biopharma companies should strive to eliminate manufacturing inefficiencies
and waste. Significant efficiency gains are still to be made in each of these areas, and
also in terms of reducing waste generation during production. This would not just reduce
environmental impact, but also enhance business value in terms of direct reductions
of operating costs, and helping to maintain a social license to operate in regions where
resources, such as freshwater, are scarce. Some environmental issues, such as waste
and energy, may be viewed as having a less significant connection to business value,
perhaps because they represent a small fraction of costs compared to other sectors or
other areas of value such as human capital. However, these issues can be expected to
become more salient to the extent that they can create operational disruption through
delays in the development and delivery processes. The industry should thus continue to
invest in technical solutions to environmental issues, such as integrated energy systems
or single-use manufacturing technology.
Section Three: Future Directions
In light of the current and emerging trends and challenges related to establishing and
maintaining a sustainable environment, society, and industry in 2030 and beyond,
biopharmaceutical companies must strive to innovate and collaborate in new and
different ways. While we do not know how this innovation and collaboration will work
entirely, our goal is to begin asking the questions to challenge our industry to do our part
in establishing long-term sustainability. We have focused questions in the following areas.
Aligning long-term sustainability strategy with long-term business and innovation strategies
Considering the long-term nature of the biopharma industry in general, where breakthroughs are the result of decades-long planning and innovation processes, biopharma
companies should be conditioned to take a long-term view to sustainability as well. 2030
can provide an aspirational timeframe for big objectives, while allowing for the development of plans with 3, 5, and 7-year milestones. Some questions to consider include:
• How can the industry encourage companies to integrate sustainability into their
business strategy and encourage companies and investors to adopt a longer-term view?
• What would it take for the biopharmaceutical industry to not just reduce environmental impacts, but to actually become restorative to resources – to have a net positive impact on the environment as well as human health?
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• What is needed to demonstrate true accountability, and innovation, in relation to
substances of concern, end-of-life product responsibility, and similar issues?
• What innovative pharmaceutical product and delivery mechanisms will need to be developed to help cure disease more effectively and sustainably? (Example: highly targeted delivery so as to reduce required doses, minimize waste and cost).
• What type of innovative distribution and/or pricing models may be needed to address issues of equitable access to medicine while respecting intellectual property and R&D investments?
Investing in sustainability training and work with academic institutions
In the past decade, there has been a proliferation of sustainability degree programs in
higher education, and in general, “sustainability” has emerged as a recognized academic
field. Further, there is a trend to develop interdisciplinary programs which seek to
incorporate sustainability theories and principles into a wide variety of foundational
disciplines, including environmental science, economics, and social studies, but it is not
clear that it has branched deep enough into the curriculum of chemical and biological
science programs. The science behind sustainability is critical for developing and
implementing sustainable developing strategies, and thus must be part of the education
of future leaders and innovators.
•How do we inspire students to not only pursue careers in science and engineering, but also to encourage academic institutions to include sustainability as part of
regular coursework?
• What incentives are needed to embed sustainability teachings into science curriculum?
• At what age should we start sustainability teachings in science programs?
Collaborating internally on sustainability, and partnering externally
Investing in sustainability only makes sense if the business case is clear to all. From
an internal perspective, sustainability must therefore be thoroughly embedded into
corporate structures, through measures such as having operations and R&D work
together on the innovation/sustainability nexus. Companies can garner internal support
by defining how sustainability strategies support the business, and by formalizing internal
sustainability governance structures. Further, companies would be well-advised to
leverage any momentum brought by the sustainability-minded Millennial generation.
External partnerships, on the other hand, are critical for ensuring transformational
improvement and new ways of thinking to drive industry-level collaboration.
• How can we further improve collaboration with external stakeholders such as NGOs, regulators, and academia, to deal with these complex emerging issues?
• How can we work together and with relevant stakeholders to set environmental impact reduction goals across our full value chains that are rooted in the science of climate change, resource depletion, and biodiversity?
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• Given that more than an estimated 70% of the environmental impact of a product
is outside a biopharma company’s direct operations, how can we expand our
collaboration and influence with upstream suppliers, downstream customers
and partners to more aggressively improve products while reducing impacts?
• What type of industry collaboration will be needed to address other important issues like access to medicine, pricing and distribution in 2030 and beyond, Extended
Producer Responsibility requirements, and others?
Concluding Notes
In order to stay ahead of the curve and be ready for 2030, the industry needs to take
a proactive stance and start integrating sustainability into its core business today. This
will require a well thought-out product stewardship strategy that encompasses the entire
product value chain. Sustainable product design, as well as end-of-life impacts will likely
gain importance in the coming years. The future leaders in the biopharma industry will be
those who start teaching stakeholders about sustainability today, so that they can drive
the conversation ahead of their competitors.
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