The pharmaceutical industry produces more carbon emissions than the automotive sector—55% more in 2015, according to a 2019 study—despite its smaller size. Energy-intensive production, constant sanitation, and precise climate control in facilities drive high water and chemical use. Global vaccination efforts have increased scrutiny of the sector’s environmental impact.
Progress, but not enough
EcoAct’s 2021 Climate Reporting Performance Report found that 75% of pharmaceutical companies in the analysis reduced their Scope 1 and 2 emissions in line with a 1.5°C warming pathway. Half also cut Scope 3 emissions, which cover upstream and downstream activities and make up most of the industry’s footprint. That performance exceeds the global average, where only 22% of companies achieved similar Scope 3 reductions.
The report also identified shortcomings. Only 38% of pharmaceutical firms have developed low-carbon products or services, compared with 78% of companies across all sectors. Switching from batch to continuous manufacturing, for instance, can reduce water and chemical use by over 90%. Sanofi has already invested in such facilities.
Most companies now adopt science-based targets for Scope 1 and 2 emissions, with 88% of those analyzed setting them. Scope 3 targets and net-zero commitments trail slightly behind the average. AstraZeneca leads with a verified 1.5°C-aligned target covering all emissions scopes and a pledge to become carbon negative by 2030. The Science Based Targets initiative’s new Net-Zero Standard, introduced this year, will soon provide a framework for evaluating such commitments.
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Transparency as a tool
Three-quarters of pharmaceutical companies analyzed in the report are using Climate Scenario Analysis to inform their business plans. The Task Force on Climate-Related Financial Disclosures considers scenario analysis essential for understanding how businesses position themselves amid climate risks.
Disclosing emissions allows markets, investors, and consumers to assess progress and demand accountability. It also exposes risks and opportunities tied to climate change. For pharmaceuticals, value chain emissions—often the largest share—are particularly complex. Without clear data, companies risk making misleading sustainability claims, as supplier assertions can be difficult to verify.
Large pharmaceutical companies setting strong examples can drive progress across the sector. All companies in the report now use renewable electricity. Recent commitments from 10 major firms, including GSK and Sanofi, to improve energy efficiency signal growing collaboration.
The urgency remains clear. CO₂ levels are at record highs, and no industry’s efforts are enough. While pharmaceuticals lead in addressing Scope 3 emissions, they still lack consistent net-zero strategies. The new Net-Zero Standard will help by requiring long-term targets and reductions beyond corporate value chains. The goal extends beyond 2030 to 2050, and the window for meaningful change is closing.
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Industry progress exists but remains uneven. Tools like science-based targets, scenario analysis, and transparency are available, yet adoption is not universal. The challenge involves not just cutting emissions but ensuring those cuts happen quickly enough. Supply chains, where most emissions originate, remain a persistent obstacle. Without deeper engagement there, even the most ambitious targets may not succeed.
At COP26, calls were made for stronger commitments to transparency and accountability across all emission scopes, with a focus on supply chains. Many outsourced manufacturing processes occur in developing countries, where environmental regulations are weaker and carbon intensity is higher. Businesses are beginning to work together more, both within and across sectors, to address these gaps. The numbers are clear: without bolder action, the Paris Agreement’s goals will become unattainable.
The sector has improved, though expectations continue to rise. The pace of change must accelerate to meet growing demands.
AstraZeneca’s efforts reflect a broader trend toward sustainability in high-profile commitments, where transparency and measurable goals set the standard for others to follow.
