Respected Irish business Niall FitzGerald once said, “Sustainability is here to stay or we may not be.” A supporter of sustainable business initiatives in Europe, he has also pointed out that capital markets are mass migrating towards higher ESG scores.
The pharma industry is one of the world’s largest, accounting for nearly $1.5 trillion in revenue in 2021. It has an equally large environmental footprint, consuming enormous volumes of water, and generates chemical and material waste. Pharma is also 55% more emissions-intensive than the auto industry. As much as 80% of this consumption has been attributed to manufacturing operations.
To truly achieve sustainability, the industry will need to rethink and transform manufacturing processes – from product design to distribution of goods.
If you’re thinking “yes, we need to get started doing this,” here’s some good news: the push to discover new approaches is already well underway – both here at Neuland and in the broader drug development and manufacturing industry. Breakthroughs – like the examples below – are often refined, adapted, examined and re-examined… some may become established SOP. These three examples impact areas critical to the pharma industry, spanning energy consumption, resource utilization and waste reduction.
Researchers at the University of California Santa Barbara have developed a process for reducing carboxylic acids to aldehydes and alcohols in water, without reagents, precious metals and specialized ligands.
Researchers in Italy and the UK have developed a process which uses green reagents to selectively remove metals like nickel, then copper, silver and gold from various discarded electronic devices for re-use as catalysts in pharmaceutical chemistry.
According to Fierce Pharma, global consulting firm Oliver Wyman reports that pharma companies are making commitments to environmental sustainability, but practical barriers make it difficult to deliver on that commitment.
Pharma is Growing. Resource Requirements Need to Shrink.
As the drug industry continues to grow in size and volume, the industry’s emissions and resource usage are growing alongside it. Managing increasing energy consumption and environmental pollution at scale are no longer simply business continuity issues, they have become existential challenges. At scale, improving process design efficiency has across-the-board implications – potentially lowering waste and effluent production, energy requirements, water usage, resource extraction and more. Selectively employing single-use systems, for example, can make sense – depending on batch sizes and end-target product volumes.
Neuland Labs is proud to be a part of the journey discovering the right balance of measures the drug manufacturing industry can take.
Emphasizing Sustainability at Neuland Labs
Sustainability and environmental health and safety have been a focus at Neuland for years, but recently our commitment to sustainability was formalized among senior leadership as a guiding principle for our strategic priorities.
Communication with stakeholders has been – and will continue to be – critical to our efforts, spanning investors, board members, workers, clients, suppliers, the community and regulators.
According to Dr. Davuluri Rama Mohan Rao, Executive Chairman of Neuland Labs:
“By obtaining insights from 125 of our stakeholders across different sectors, we identified six key themes of sustainability: environmental stewardship, sustainable supply chain, employee nurturing, upholding human rights and ethics, economic value creation, and customer centricity. We used these goals to create a framework for sustainability at Neuland.”
Below we explore four of those areas in-depth.
1. Environmental Stewardship
While sustainability emphasizes the need for environmentally responsible products and services, the means to achieve it are often industry- or scale-dependent. A manufacturer, for instance, may have a very different read on sustainable practices than a consultant.
For us, minimizing the impact of manufacturing processes on environmental resources and further preserving them is a key priority. Our aim is to achieve zero landfill waste and become water-positive and carbon neutral by 2030.
Although the pandemic created some hurdles in the development of environmental protection infrastructure and improvement activities, we created a five-fold lower environmental impact in FY 21–22 over FY 20–21. To address greenhouse gas emissions and climate change, we initiated a low carbon pathway plan. Our carbon usage has gone down by 15% after a switch from double- to single-product washing cycles.
We also created a water management strategy focused on lowering water requirements and increasing the use of recycled water in our operations. All of our sites have adopted a “Zero Wastewater Discharge” policy, and we have two-stage high-pressure reverse osmosis systems that recycle 92–94% of our treated wastewater.
One area of focus for us is improving material efficiency. We’ve seen a 50% reduction in heptane and ethyl acetate use in ezetimibe manufacturing.
We are committed to the “wealth from waste” principle. One key target for us has been to achieve “zero land fill” for FY 23. As of August 2022, 100% of our total waste was being sent for recycling and co-processing in the cement industry.
2. Creating Sustainable Supply Chains
Last month, we explored supply chain sustainability and how our supplier assessment matrix includes not only delivery and quality metrics but also environmental and social measurements.
Pharma manufacturing requires key starting materials, intermediates, and specialty materials. The suppliers of these are the focus of Neuland’s sustainable supply chain efforts. Our supply chain team is trained in sustainable procurement practices and plays a key role in our development of domestic supply chains and a diversified vendor base. Our suppliers are required to adhere to a four-part code of conduct including human rights, ethical business practices, regulatory compliance, and safe operation conditions. The result has been geographical de-risking, a shortening of our supply chain, and an increased emphasis on ensuring our supply chain is diverse and inclusive.
3. Safeguarding Employee and Community Wellbeing
Employees are the heart of every company. At Neuland, we employ rigorous audit systems to safeguard employees from occupational injuries. Our team members undergo complete annual health check-ups and medical monitoring programs. To create a culture of sustainable business practices, personnel are trained on ethical compliance practices and behaviors to ensure we are adhering to regulatory policies and maintaining international quality standards.
As part of our broader focus on creating sustainable communities, we work to address community challenges through CSR initiatives targeting education, health, infrastructure development, and water availability.
4. Enabling Customer Interaction & Protecting Their Interests
Customers are a key component of the sustainability matrix. As a result, we seek customer input on specific ESG requirements.
A key aspect of protecting our customers involves the use of digital technologies. Such tools enable closer communication and interaction, improving real-time decision-making. Data-driven analysis allows us to create better, safer, more efficient and more sustainable manufacturing processes.
Our growing collective reliance on digital technology to improve our ability to drive value for customers also creates new risks. As an API manufacturer, we understand how crucial our customers’ and partners’ intellectual property rights are, as is the need to maintain strict confidentiality. Our strong digital cybersecurity and data privacy frameworks are designed based on the most relevant and highest-quality standards, and have eliminated any instances of identified leaks, thefts, or losses of customer data as well as security breaches.