Partnering for a more sustainable industry: DCAT Sustainability Summit 2024

The inaugural DCAT Sustainability Summit 2024 is taking place in Lugano, Switzerland, 21–22 May. The intimate conference invited speakers from key players in the pharmaceutical industry to share their experiences and best practices to support businesses in a greener and healthier future. 

Day 1

Donna Gruol and Kelsey Achenbach, the DCAT First Vice President and DCAT Second Vice President respectively, open the speeches with a brief welcome and introduction. 

They introduce the first content session, Sustainability: the business imperative—a global overview, with Suraj Mathew, Partner, Life Sciences, Kearney and Sarah Kerrigan, Director, Sustainability, also from Kearney. 

Mathew opens the presentation with a succinct statement: 'Sustainability can be a challenge yes, but it can be an opportunity, you just need to tailor your strategy and your approach, it’s not one size fits all.'

Some of the challenges mentioned include disruptions from regulation, supply disruptions, R&D costs are up and productivity is down. Through all this, sustainability is becoming more imperative. There are many challenges but still much progress, and sustainability needs to be a part of that. GLP-1 products are used as an example here, it's an intensive manufacturing process, it requires a lot of energy, and there is a lot of waste in the synthesis of these products, so Mathew asks us to consider the cost of these new developments, not just looking past these to their benefits. Companies are striving for sustainable, profitable growth, so these costs need to be taken into account given the complexity of the topic. 

Mathew says that for industries, climate change is a very popular topic now, with the pharmaceutical industry responsible for 4.4% of global carbon emissions, and companies are turning to focus on this. He passes the conversation over to Kerrigan to go into more detail on emissions from partners in the industry. 

Sarah Kerrigan gives an overview on Scope 1, 2 and 3 emissions, and talks in more depth about specific companies reduction targets and achievements. 

In 2015, 116 companies had signed up to SBTi targets, by 2022, 4,230 companies had signed up, representing companies that make up a third of the global economy. Pharma manufacturers are highlighted as the ones pushing to decarbonise, but the industry as a whole is still lagging behind. Many companies are struggling to meet their Scope 1 and 2 targets, let alone their Scope 3 emission reduction targets. 

Thermo Fisher Scientific have been working tirelessly on reducing emissions, very successfully so far and in fact in 2022 upped their initial target from a 30% reduction by 2030 to a 50% reduction. They have figured out where their emissions are coming from (they've really looked at the data Kerrigan emphasises), then they made targeted interventions to make meaningful change.

Scope 3 poses real challenges for the indsutry as they are not under the direct control of companies. Companies are now starting to set supplier engagement targets, working more collaboratively with their partners and suppliers to reduce Scope 3 emissions.

Kerrigan gives examples of how emissions challenges can present differently for different companies, demonstrating how they have to develop very individualised plans to tackle them:

GSK – most of their emissions come from one product – an inhaler, now they know this they can focus on reducing that. Conversely, Sanofi, only 1% of their emissions come from product use, the majority then comes from manufacturing processes – this highlights the importance of getting to grips with where their emissions are coming from in the first place. 

Sarah impressed the importance of understanding your marketplace position to figure out the changes that can be made to capture the opportunity that sustainability represents, stated: ‘always always always think about the business value of sustainability imperatives, either through cost reduction or revenue increase.’ 

The pair sum up by saying that critical action needs to be taken end-to-end in the value chain, Mathew emphasising that this action has to be hollistic and comprehensive. 

Next, a roundtable on sustainability reporting and metrics.

Involving, Anette Quincy, Global Director of Sector Initiatives, EcoVadis, Nelleke Barning, Vice President, Global Head of Sustainability, dsm-firmenich, Luca Dalla Torre, Chief Legal Officer, Siegfried, and moderated by Kelsey Achenbach, Vice President, Pharma and Medical Nutrition, dsm-firmenich, and DCAT Second Vice President. 

Quincy asks why focus on supply chains? Because 90% of global B2B exchanges take place in the supply chain. 

For EcoVadis, now they have 130,000 companies are rated on sustainability – they have a scorecard and a sustainability rating and 1,200 companies requesting ratings for their suppliers, showing there is a demand for this.  

There are four key trends EcoVadis are seeing in demand evolution, across politics, technology and the environment. These are:

- A regulated ESG market
- A hyper-digital world
- Commoditised ESG data
- Urgency of climate action 

Some further key points Quincey highlights are that areas such as data and procurement process integration (manual vs digital) is an area of transition, but digital integration still relatively low. On speaking to companies on this, 46% of companies say sustainability is important to them but not necessarily integrated into every conversation, aspect or partnership. 

Barning from dsm-firmenich atests to some tactics from her company – they have created impact cards for all of  their products where they input every detail, this prevents them and their customers and partners from greenwashing. Every step is out in the open, every metric is determined, so in this way they have the data to back up their claims. 

Data is also needed to establish a baseline to determine goals and what to improve on. But, as the panel points out, you also need to have an idea of what you need to collect metrics on. They suggest using studies and research to decide where this will be. 

Quincey also claims that intermediate targets are an important initial step once you have a baseline. Then, once the first-round data comes in, you can adjust targets accordingly and continue on the sustainability journey of continous improvement. 

Sustainability Edge – Supplier Best Practices 

In an interesting discussion, two 'competitors' come together to speak about their best practices as suppliers in this pharmaceutical market.

Christian Seufert – Lonza President – Capsules and Health Ingredients starts things off with a short presentation on Lonza Capsules and Health ingredients' sustainability overview: 

-    Every employee is involved in the ESG journey and the ESG benefits.
-    Partnering for renewable energy – want to use 100% renewable energy by 2025, across Europe, US, and China, in fact they have lots of different strategies in all regions/countries.
-    They nurture a continuous improvement mindset across the company, with people signing up for Together for Sustainability courses for one thing – people want to know more. 
-    Thinking about sustainability in different projects, personalised healthcare and beyond. 
-    Scope 3 practices are a hgih priority on their list of aspects to reduce. 

Seufert highlights some challenges they come across: end-to-end collaboration, across organisational boundaries is needed, but it’s not easy. There is a greater need for transparency, especially with suppliers, but shockingly some people have policies that state they will only report averages (which is not good enough Saufert states).
Pointing out some areas for improvement Seufert advises looking at regional challenges/differences and trying to work on those. He also states that there is a limited talent pool when it comes to this niche in the industry, so we need to increase education and ablement. He wants to see more collaboration on investing in new technologies. They are finding that customers are willing to pay higher prices for more sustainable options – co-investing on improved product carbon footprints.

Ultimately the indsutry needs to adapt to emergency preparedness/disruption and displacement risk, increase infrastructure and supply chain resilience. We all have to adapt to new conditions due to climate change – it's no longer something to mitigate on the off chance, it's a real and present part of routine strategies now. 

Jon Hamer , Vice President of Global Procurement at Curia gives his own overview. 

First, by asking the audience:

‘Is pharma here to improve patients lives? Yes, but we should be much more than that – we are here to improve the lives of people.’ 

As a procurement specialist, Hamer focused on this aspect of the supply chain, and the hazards to look out for. Taking a closer look at safety, 83% of global fatalities in the procurement stages were in India and China (between 1985 and 2019). Suppliers and procurement specialists must be aware of what can go wrong and Hamer states the need to be critical on practices stating: 'If practices cause harm, you need to be harsh and there must be consequences.' 

He outlines some of the challenges in supplier conditions including in construction, storage, and modern slavery. There are 40-50 million victims of modern slavery – 18 million in the supply chain (not limited to pharma, but it shows the scale of the issue). India and China have the highest figures but it really can occur anywhere, with cases in the UK for example not unheard of. Hamer states that you need to really question suppliers, be critical and suspicious, because comapnies could say anything to get the business. He puts the situation into blacka nd white terms, with a cost vs price analysis, what is the cost of human life comapred to the price of the work? It's a question of morality and ESG risk. 

He states that the industry needs to be performing ESG assessments at supplier sites and this must be funded to ensure it is taking place as a routine and imperative part of business. 

A question from the audience: 'Public sustainability goals – when bringing a product to market, will companies choose product over people?'

Jon starts: 'If a company is turning a blind eye to slavery there is no other answer apart from it’s wrong. There is no other way, it is unacceptable. If it happens with the development of a product you have to address it/stop it immediately. If there is a product on the market already that has been manufactured using slavery, still, completely unacceptable, it has to happen immediately, if you come across this you have to be strong and hard and give time-bound deadlines, not long time periods, it has to be a week. Otherwise the damage is too high. 
If companies are cutting costs and turning a blind eye, if it’s discovered, think of the damage that would cost the company there.'

Christian: 'Looking at it from a different perspective, looking at different boundaries, how they are set and what come into that. If a leader starts to undermine those boundaries, you undermine the entire spirit of the organisation. You need to give people clear guidance on your values and those boundaries.'

Jon add resolutley, 'Setting the boundaries are so important, and these aren’t flexible, when it comes to slavery and ESG, these are absolute.' 

Day 1 closing remarks from Charles Davies – President of DCAT and CEO of Brand-Nu Laboratories 

Thanks the speakers and attendees, and the city of Lugano for hosting. He remarks that hopefully the first day has started everyone thinking, whether its yes, this is what we’re doing and we’re excited to continue, or whether you’re just at the start of the journey and thinking wow there’s so much for us to learn and work on.