Pharma’s Green Evolution

Big Pharma has gone green, but smaller manufacturers have yet to flip the switch, say industry experts and our own survey.

By Paul Thomas, Senior Editor

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You’ll hear people say that pharma is “going green,” but in many ways it’s already there. The drug industry has taken great strides in environmental conservation. In Newsweek’s recently released Green Rankings, pharma places third among all sectors. J&J places third among all manufacturers with Bristol-Myers Squibb and Allergan in the top 20.

The drug industry is on the cutting edge of green, says Walt Tunnessen, national program manager for the Environmental Protection Agency’s Energy Star program. “Corporate social responsibility is extremely important in the pharmaceutical sector,” he says. “Big pharma companies are at the forefront of climate initiatives, and yet the sector is a blip on the radar in terms of overall emissions.”

We conducted some informal surveys of our online readers (see Boxes), and found some interesting data:

  • Three-quarters of respondents said their companies’ executives are committed to sustainability and have communicated a clear green strategy to employees.
  • More than three-quarters said that all of their company’s facilities have green initiatives in place and contribute to idea-sharing across facilities.
  • Roughly two-thirds say that employees are appropriately rewarded and recognized for furthering corporate green and sustainable initiatives.
  • Roughly two-thirds say that their companies’ carbon footprint has shrunk within the past year, and that their facilities have significantly increased investments in energy-efficient and other green technologies.
  • More than 50% say that their companies have dedicated corporate energy directors and energy teams

While our numbers are not statistically significant, they do provide a broad picture of how green pharma manufacturers are, and in what areas.

Not all the numbers were glowing:

  • Just 40% said that there is accountability for employees and projects that do not meet green or sustainable expectations.
  • Only 50% said that their facilities are participating in government/nonprofit initiatives to encourage green manufacturing.

Still, pharma has energized its green efforts, especially in the area of energy management. Most major manufacturers have comprehensive energy management programs, and this year, for the first time, four pharmaceutical plants—two from AstraZeneca and one each from Schering-Plough and Allergan—were given Energy Star ratings for top performance. “Five or six years ago, there was a lot of variability within big pharma companies,” says Tunnessen. Not so any more, as energy prices have continued to rise, companies have committed to reducing their carbon footprints, and to reducing operating expenses across the board.

Green Manufacturing
Green Manufacturing
Green Manufacturing
Green Pharmaceutical Manufacturing

 

It’s an ongoing process. “We’re still working to improve methods of tracking and trending energy,” says Chaz Calitri, senior director of Pfizer Global Engineering. “Some sites in our network are very sophisticated, but most still use a hybrid of manual and automated systems. Our ultimate goal is to be able to track all of the sites centrally in real time. I am not aware of any companies of our size that do this today; however, we believe that this long-range goal is reasonable and achievable.”

And Pfizer, like many large manufacturers, realizes that its green goals are rooted in culture change. “If we can mobilize every Pfizer colleague to be more conscious of energy use (and energy waste), we will realize tremendous energy savings and accompanying business benefits,” Calitri says.

What happens at Pfizer and its peers has not necessarily trickled down to small and mid-sized manufacturers, who may lack the wherewithal to systematize their energy practices.

Our informal survey reflects this:

  • Roughly 85% of respondents at large companies (those with over 1,000 employees) say that executives have formulated and begun to implement a meaningful, corporatewide green strategy, whereas less than 50% said this is the case at smaller manufacturers (less than 1,000 employees)
  • Roughly three-quarters of those at large manufacturers said their company’s carbon footprint was smaller than a year ago, while half at smaller manufacturers said the same.

All manufacturers will need to improve. While critics might say that corporate environmental responsibility is “greenwashing,” merely for good PR, it’s widely held that going green is a business imperative. Reduced energy usage, for instance, means lower operating costs and less exposure to fluctuating energy prices, and regulatory requirements upon manufacturers to reduce carbon footprints will increasingly pressure small and large manufacturers to step up. There is really no choice.

The Stars Are Aligned
Many factors are conspiring to bring energy issues to the fore of drug manufacturing, not the least of which has been elevated energy prices. At Wyeth’s 300-acre Pearl River facility, its largest, last year’s surge in prices kicked the facility’s green initiatives into high gear, says Bill Edsall, the site’s energy manager. “Cost was the big driver,” he says. (In our survey, 90% said that cost savings were driving their green initiatives.)

The key green metric by which Wyeth gauges itself is CO2 output, and Edsall says Pearl River’s emissions have dropped 14% in two years. (The company’s goal is to reduce overall emissions by 10% by 2012, though the bar may be raised following the Pfizer-Wyeth merger. “From an energy management perspective, I’m looking forward to the merger,” Edsall says. “Pfizer’s always been a bit more aggressive than we have.”)

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