Seven drugmakers agree to work together to hit emissions goals

Seven drugmakers pledged to work together to reduce carbon emissions in supply chains, health-care delivery and clinical trials, saying a joint effort will enable the industry to achieve more than individual companies could alone.

AstraZeneca Plc, GSK Plc, Merck KGaA, Novo Nordisk A/S, Roche Holding AG, Sanofi and Samsung Biologics Co. signed on to the cooperation, part of the health systems task force of the Sustainable Markets Initiative.

The companies have already made individual climate pledges. By working together, the group hopes to gain crucial leverage with suppliers, because supply chains are responsible for about half of health-care emissions, AstraZeneca Chief Executive Officer Pascal Soriot said. Health care drives about 4.4% of global emissions, according to a 2019 Arup report.

“If one of us as an individual company tells suppliers, you’re not going to supply us if you’re not carbon free, they may decide to give up on us,” Soriot said in an interview. “But if the entire industry or a large chunk of the industry tell them, ‘These are the standards we want you to meet,’ it’s hard for them to ignore those standards.”

The most carbon-intensive parts of the supply chain involve extracting and processing raw materials to manufacture medicines, said Merck CEO Belen Garijo. The initiative’s approach to suppliers is “more of a carrot than it’s a stick,” Novo Nordisk chief Lars Fruergaard Jorgensen said.

Some 40% of health-care emissions are linked to patient-care settings, and research and development accounts for less than 5% of emissions, Soriot said. The companies promised to help in those areas as well and collaborate with hospitals, health policy makers, regulators and others, including by building a tool to calculate greenhouse gas emissions for specific diseases and by measuring emissions for mid- and late-stage clinical trials.

“We are targeting 90% of the trials starting in 2025 to include a review of how digital solutions can reduce emissions,” Merck’s Garijo said.

As part of the joint initiative, six of the seven companies committed to achieve net zero emissions, or a balance between the greenhouse gases produced and taken out of the environment, by 2045, according to a white paper issued Thursday alongside the task force plans. Samsung Biologics promised to reach net zero and switch to fully renewable power by 2050 at the latest, given local market constraints, according to the paper. – BLOOMBERG