A story about a woman named Lauren Singer made its way through social media recently. The 23-year-old recent graduate lives in New York City and has kept 2 years’ worth of trash in her apartment. You read that correctly: 2 years of trash. Fortunately for Ms. Singer’s health and well-being, as well as her neighbors’ olfactory benefit, she keeps all of it in a single Mason jar on her kitchen counter. The seemingly impossible endeavor is heralded as exemplary accomplishment by sustainability advocates. Meanwhile, others are baffled by the practicality. Most people produce more waste by lunchtime than Ms. Singer has generated in 2 years.
Sustainability has become an increasingly prevalent theme in the business world. By extrapolating population growth and current consumptive habits, economists and ecologists have predicted that the Earth will ultimately run out of renewable and nonrenewable resources. While the date may vary and civilizations have faced dire predictions for centuries, it is minimally prudent to preserve and allocate our resources to the best of our ability. In business, if for no other reason, it at least makes good economic sense adding to the profit line.
In theory, sustainability in the business world creates long-term value for customers, employees, and society as a whole by focusing on “green” strategies and minimizing the impact we have on the natural environment. By looking at product life cycles from inception into the supply chain, through production and ultimately disposal, sustainability considers the total impact on every dimension of business operations in the social, cultural, and economic environment. But there is not a broad consensus on personal, industry, or even governmental obligations. Optimizing the effective allocation of resources is one aspect of economists’ livelihoods, and the sustainability movement grows as the world shrinks. But while sustainability sounds like a good idea, where do companies even begin? How does one start to develop an economic argument for implementing a comprehensive sustainability program?
At a recent executive management conference for the pharmaceutical industry, the topic of sustainability was afforded its own slot, complete with roundtable discussion and breakout sessions. Divided into groups, senior leadership discussed challenges and corporate efforts related to sustainability. The attendees posed questions and presented case studies in an open forum discussion. The first evident problem is that many companies have varying interpretations of sustainability. One company only considered business sustainability with the logic being that if the business is not sustainable, it could have no impact elsewhere. This company pursued sustainability programs only if it provided manufacturing operational vitality, improved product performance, or further guaranteed employment opportunities. So in this interpretation, business sustainability was paramount with environmental and societal considerations secondary, if considered at all.
Other companies were quick to point out their recycling efforts for environmental sustainability, but had no directives for business or societal sustainability. One large pharma company touted its collection of rubber that was shredded for use in playgrounds. Another showcased its plastics recycling to turn plastic waste into park benches. Both of the aforementioned recycling initiatives were relatively low cost and easy to implement. As an obstacle, both pointed out that there were not an infinite number of playgrounds and parks in their immediate geography, making future outlets for this more challenging. In other words, was their environmental sustainability effort even sustainable?
One vendor to the industry asked how price increases would be received by the industry if vendors implemented sustainability initiatives that resulted in a higher cost of goods. This was met with an uncomfortable silence. All these efforts prove that “low hanging fruit” on the sustainability “tree” is easily picked and graciously consumed. The real challenge becomes how to capture the rest of the fruit without cutting down the tree.
There is some good news. While some companies are struggling with strategic direction and tactical plans, others in our industry are leading the way. The media company Corporate Knights focuses on self-proclaimed “clean capitalism,” and produces an annual survey of “The 100 Most Sustainable Corporations.” In the most recent 2015 survey, Biogen Idec and Allergan took the number 1 and 2 spots, respectively. While the banking sector was the most prevalent industry, pharmaceutical and life sciences were the second biggest presence. Of the 42 different industries represented on the Corporate Knights list, pharmaceutical and life science companies achieved 9 of the top 100 spots. This is outstanding when you consider some of the challenges specific to the pharma world.
Potentially toxic biological and chemical substances are commonplace in our industry and the nature of our manufacturing results in significant consumption of water and energy. Laboratory and manufacturing operations experience the challenges of safe disposal for a vast variety of potentially harmful wastes. Sizable production facilities may also have large carbon footprints, impacting both the environment and surrounding communities. Lastly, with the significant risks involved in sponsoring new and innovative therapies, business sustainability is also a challenge. Product pipelines have to be filled constantly with fresh ideas and revenue streams to keep business thriving.
If businesses make decisions based on risk and reward analysis, what drives companies to champion sustainability? In the case of Biogen Idec, it was initially fostered by economics. One of Biogen Idec’s principal investors is focused on social responsibility and asked the company about its sustainability initiatives. This tactic evidences the increasing importance of sustainability to the investment community. If investors put their money behind a business venture, they want to be sure that the venture is not only profitable in the short term, but sustainable over time. If resources were ever to become scarce, those that make the best use of them will be the ones to endure. The company and the investor want to keep the money flowing.
Secondly, Biogen Idec also realized that there is shift in society. The purpose of our industry is to improve the lives of patients suffering from health issues. Biogen Idec’s purpose is to impact the patient, but the company also realized that it could impact the lives of its employees, the communities where it operates, and the environment. Leveraging the sustainability story gets employees behind the initiative, but it also attracts high-caliber, talented people. In a business driven by intellectual property, attracting and retaining the best and the brightest is critical for success. Sustainability initiatives give employees a chance to be part of something that can affect customers and surroundings beyond the basic business function.
Economics, corporate responsibility, and talent acquisition drove the strategic initiative for Biogen Idec, but strategic plans require operational and tactical efforts. Just as others asked, where does one start? Biogen Idec started with water, energy, and materials. Water consumption for pharmaceutical production can be significant considering manufacturing operations and CIP systems. Key areas like this became the focus of its efforts. Starting in 2009, Biogen Idec also conducted a “materiality assessment” using the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines, known as “G4.” This helped the company identify and prioritize key issues for the organization.
The results associated with Biogen Idec’s efforts have been remarkable. A resource’s “intensity” is its usage as a function of the size of the organization. One would expect that as a business grows, its consumption of resources would be proportional. Resource intensity normalizes this equation. Between 2006 and 2013, Biogen Idec was able to reduce its water intensity by 66%, energy intensity by 57%, and greenhouse gas emissions intensity by 64%. During this time, solid waste to landfill was reduced by 100% and, in 2012, the company achieved its zero waste to landfill goal, an impressive feat. From the employees’ perspective, 97% of the approximately 7000 employees were “proud to be associated with Biogen Idec.” The company’s internal efforts to control energy consumption and waste production resulted in dramatic reductions, an even bigger accomplishment for a rapidly expanding enterprise.
Biogen Idec then looked externally to its supply chain. Its top 5 suppliers, determined by spend, were asked to evaluate their greenhouse gas emissions. Biogen Idec expected this to result in questions and discussion, but its goal was to raise awareness for upstream sustainability. Its sustainability efforts have become part of the supplier audit process. Lastly, Biogen Idec supports STEM (science, technology, engineering, and math) in its communities with direct funding, grants, laboratory resources, and employee contributions. These efforts help secure a pipeline of prospective researchers to sustain its business efforts in the future.
The pharmaceutical and life sciences industry has taken a leadership position in the sustainability movement. With a solid presence in sustainability, the industry recognizes its importance and is striving to improve. But the industry needs ideas and bigger scope. Those looking for direction can look towards the successful efforts of industry peers and tap sustainability organizations for ideas as to how to move beyond single silo aspects of environmental, business, and societal sustainability. We will look forward to the day when the pharmaceutical and life science industries can keep years of waste in a single mason jar on the counter.
Author Biography
Ken Seufert is Managing Director, North America, for MEGGLE USA Inc., a global leader in excipient products and technologies. Mr. Seufert has over 25 years of experience in the pharmaceutical and specialty chemical industries. He has four published papers on economics and technology, owned several companies, and been elected to public office. In addition, Mr. Seufert holds degrees in Economics and Chemistry from the University of Delaware.