Pharmaceutical companies put out 13 per cent more carbon emissions making medicines than car manufacturers – despite having a market that is 28% smaller.
Researchers analysed existing public data on the carbon emissions of around 200 pharma companies worldwide.
They also did a more focused analysis on emission reports from 15 leading drug manufacturers in the industry, including Bayer AG, Johnson & Johnson and Pfizer.
Emissions levels were highly variable, they found, even accounting for the differences between larger and smaller companies.
Drug manufacturers emit greenhouse gases directly into the atmosphere from their factories as a result of their production processes, and indirectly through power use.
Despite this, financial performance does not mean firms have to pollute, with the three most successful firms also the least polluting.
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Pharmaceutical companies put out 13 per cent more carbon emissions than car manufacturers despite having a market that is 28 per cent smaller (stock image)
WHY DOES BIG PHARMA HAVE A BIG CARBON FOOTPRINT?
Emission reduction measures have traditionally been focused on industrial sectors such as energy production, car manufacturing and mining.
However, studies are beginning to highlight that the carbon footprint of the healthcare industry — and particularly the pharmaceutical sector — is also a big problem.
In 2007, for example, researchers found that the US Healthcare sector accounted for eight per cent of the nation’s total greenhouse emissions.
Drug manufacturers directly emit greenhouse gases into the atmosphere from their factories as a result of their production processes.
In addition, these companies produce emissions indirectly through the carbon dioxide emitted in the production of the electrical power which they use in their manufacturing systems.
Drug companies can also cause other forms of pollution, such as the accidental leak of medicines into the environment.
Environmental engineers Lotfi Belkhir and Ahmed Elmeligi of McMaster University in Ontario, Canada, set out to analyse the carbon emissions put out by big pharma.
Alongside considering existing data on emissions by the around 200 pharmaceutical firms worldwide, researchers focused in their analysis on the 15 firms that have consistently reported both their direct and indirect greenhouse gas emissions since 2012.
Indirect emissions are those that come not as a result each company’s operations, but from the emissions resulting from their share of the electricity produced by power companies.
As larger businesses will inherently generate more emissions than their smaller counterparts, the researchers assessed each firm’s emission intensity per million dollars of revenue.
‘One immediate and striking result is that the pharmaceutical sector is far from green,’ Professor Belkhir wrote in The Conversation.
The researchers found that the global pharmaceutical sector puts out around 48.6 tonnes of carbon dioxide equivalent per million dollars in 2015.
Professor Belkhir reports that this is ’55 per cent greater than the automotive sector, at 31.4 tonnes of carbon dioxide equivalent per million dollars for that same year.’
‘Yet our recent study found the global pharmaceutical industry is not only a significant contributor to global warming, but it is also dirtier than the global automotive production sector,’ he added.
The total global emissions from the pharmaceutical sector about to around 52 megatonnes of carbon dioxide equivalent in 2015, compared to the 46.4 megatonnes put out by the car manufacturing industry in the same year.
This, the researchers note, is despite drug manufacturing being a smaller market that the automotive industry.
‘By our calculations, the pharma market is 28 percent smaller yet 13 percent more polluting than the automotive sector,’ Professor Belkhir said.
Emission levels vary wildly across the pharmaceutical sector, researchers found. For example, Eli Lilly and Company (pictured, stock image) had an emission intensity in 2015 that was 5.5 times greater than their fellow firm Roche Holding AG
Alongside considering existing data on emissions by the around 200 pharmaceutical firms worldwide, researchers focused in their analysis on the intensity of emissions by the 15 firms that have consistently reported both their direct and indirect greenhouse outputs since 2012
Emission levels also vary wildly within the pharmaceutical sector, researchers found.
For example, Eli Lilly and Company’s emission intensity was 5.5 times greater than Roche Holding AG in 2015, at 77.3 tonnes of carbon dioxide equivalent per million dollars, compared with 14 tonnes.
Similarly, experts found that Procter & Gamble’s carbon dioxide emissions were around five times greater than those of competitor Johnson & Johnson, despite the two firms selling similar products and generating the same level of revenue.
Professor Belkhir and Mr Elmeligi also encountered challenges in accurately assessing the emissions from some companies, such as Bayer AG.
They were surprised to find that the German firm had reported emitting 9.7 mega-tonnes of carbon dioxide equivalent in 2015, while receiving a revenue of $51.4 billion (£40.7 billion) during the same period.
This would yield an emission intensity of 189 tonnes of carbon dioxide equivalent per million dollars — a level four times larger than the pharmaceutical sector as a whole.
Researchers found that the reason for this extreme outlier stemmed from how Bayer lumps together its emission data from across its pharmaceutical, medical equipment and agricultural product divisions, despite declaring revenue individually.
‘This level of opacity makes it impossible to assess the true environmental performance of these kind of companies,’ said Professor Belkhir.
He added: ‘It also raises questions about the sincerity of these companies’ strategies and actions in reducing their contribution to climate change.’
Researchers encountered challenges in accurately assessing the emissions from some companies, such as Bayer AG, who lump together its emission data from across its pharmaceutical, medical equipment and agricultural product divisions
Finally, the research duo estimated by how much the pharmaceutical sector would have to cut back on its greenhouse gas emissions in order to meet the targets established by the 2016 Paris Climate agreement.
‘We found that by 2025, the overall pharma sector would need to reduce its emissions intensity by about 59 percent from 2015 levels,’ Professor Belkhir said.
Although this would require a radical adjustment overall, researchers found that some of the 15 largest drug companies are already operating at compliant levels.
These firms were Amgen Inc., Johnson & Johnson and Roche — the three companies with the highest levels of profitability and revenue growth in the sector.
Lead performer Roche increased its revenue by 27.2 per cent from 2012–2015, while reducing its emissions by 18.7 per cent, for example.
Meanwhile, Amgen and Johnson & Johnson respectively reported revenue increases of 7.8 and 25.7 per cent and emission reductions of 8 and 8.3 per cent during the same time period.
‘Environmental and financial performance aren’t mutually exclusive,’ Professor Belkhir said.
‘If those performance levels are achievable by some,’ he asked, ‘why can’t they be achieved by all?’
Few previous studies have investigated the pharmaceutical industry’s environmental impacts, the researchers noted, although there have been some exceptions.
A 2014 study, for example, found that waster water from drug plants in Patancheru, India, was releasing 44 kilograms of the antibiotic ciprofloxacin into the water table every day — enough to treat around 44,000 patients
‘Clearly, there is a dire need for more extensive and sustained research as well as more scrutiny of the pharmaceutical industry’s environmental practices and performance,’ Professor Belkhir concluded.
‘Healing people is no justification for killing the planet.’ he added.
The full findings of the study were published in the Journal of Cleaner Production.
WHAT IS THE PARIS AGREEMENT?
The Paris Agreement, which was first signed in 2015, is an international agreement to control and limit climate change.
It hopes to hold the increase in the global average temperature to below 2°C (3.6ºF) ‘and to pursue efforts to limit the temperature increase to 1.5°C (2.7°F)’.
It seems the more ambitious goal of restricting global warming to 1.5°C (2.7°F) may be more important than ever, according to previous research which claims 25 per cent of the world could see a significant increase in drier conditions.
In June 2017, President Trump announced his intention for the US, the second largest producer of greenhouse gases in the world, to withdraw from the agreement.
The Paris Agreement on Climate Change has four main goals with regards to reducing emissions:
1) A long-term goal of keeping the increase in global average temperature to well below 2°C above pre-industrial levels
2) To aim to limit the increase to 1.5°C, since this would significantly reduce risks and the impacts of climate change
3) Goverments agreed on the need for global emissions to peak as soon as possible, recognising that this will take longer for developing countries
4) To undertake rapid reductions thereafter in accordance with the best available science