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Big Pharma Emits More Greenhouse Gases Than the Automotive Industry

Insights + Opinion

By Lotfi Belkhir

Rarely does mention of the pharmaceutical industry conjure up images of smoke stacks, pollution and environmental damage.

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.


It was a surprise to find how little attention researchers have paid to the industry's greenhouse gas emissions. Only two other studies had some relevance: one looked at the environmental impact of the U.S. healthcare system and the other at the pollution (mostly water) discharged by drug manufacturers.

Our study was the first to assess the carbon footprint of the pharma sector.

More Polluting

More than 200 companies represent the global pharmaceutical market, yet only 25 consistently reported their direct and indirect greenhouse gas emissions in the past five years. Of those, only 15 reported their emissions since 2012.

One immediate and striking result is that the pharmaceutical sector is far from green. We assessed the sector's emissions for each one million dollars of revenue in 2015. Larger businesses will always generate more emissions than smaller ones; in order to do a fair comparison, we evaluated emissions intensity.

We found it was 48.55 tonnes of CO2e (carbon dioxide equivalent) per million dollars. That's about 55 percent greater than the automotive sector at 31.4 tonnes of CO2e/$M for that same year. We restricted our analysis to the direct emissions generated by the companies' operations and to the indirect emissions generated by the electricity purchased by these companies from their respective utilities companies.

The total global emissions of the pharma sector amounts to about 52 megatonnes of CO2e in 2015, more than the 46.4 megatonnes of CO2e generated by the automotive sector in the same year. The value of the pharma market, however, is smaller than the automotive market. By our calculations, the pharma market is 28 percent smaller yet 13 percent more polluting than the automotive sector.

Extreme Variability

We also found emissions intensity varied greatly within the pharmaceutical sector. For example, the emissions intensity of Eli Lilly (77.3 tonnes of CO2e/$M) was 5.5 times greater than Roche (14 tonnes CO2e/$M) in 2015, and Procter & Gamble's CO2 emissions were five times greater than Johnson & Johnson even though the two companies generated the same level of revenues and sell similar lines of products.

We found outliers too. The German company Bayer AG reported emissions of 9.7 megatonnes of CO2e and revenues of US$51.4 billion, yielding an emission intensity of 189 tonnes CO2e/$M. This intensity level is more than four times greater than the overall pharmaceutical sector.

In trying to explain this incredibly large deviation, we found that Bayer's revenues derive from pharmaceutical products, medical equipment and agricultural commodities. While Bayer reports its financial revenues separately for each division, it lumps together the emissions from all the divisions. The company also reports and tracks its emission intensity in terms of tonnes of CO2e produced for each tonne of manufactured goods, whether fertilizer or Aspirin, for example.

This level of opacity makes it not only impossible to assess the true environmental performance of these kind of companies. It also raises questions about the sincerity of these companies' strategies and actions in reducing their contribution to climate change.

Climate Compliance

We also estimated how much the pharmaceutical sector would have to reduce its emissions to comply with the reduction targets in the Paris agreement.

We found that by 2025, the overall pharma sector would need to reduce its emissions intensity by about 59 percent from 2015 levels. While this is clearly a far cry from their current levels, it is interesting to note that some of the 15 largest companies are already operating at that level, namely Amgen Inc., Johnson & Johnson and Roche Holding AG.

If those performance levels are achievable by some, why can't they be achieved by all?

These three leading companies are also the ones with the highest level of profitability and revenue growth in the whole sector. Indeed Roche, Johnson & Johnson and Amgen showed revenue increases of 27.2 percent, 25.7 percent and 7.8 percent respectively between 2012 and 2015, while managing to reduce their emissions by 18.7 percent, 8.3 percent and eight percent respectively. This supports the premise that environmental and financial performance aren't mutually exclusive.

The pharmaceutical industry is responsible for some serious environmental impacts beyond greenhouse gas emissions. For example, the wastewater from drug manufacturers in Patancheru, India has left river sediment, ground water and drinking water polluted. Researchers estimated that in a single day, 44 kilograms of ciprofloxacin, a broad-spectrum antibiotic, was released — enough to treat everyone in a city of 44,000 inhabitants.

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. Healing people is no justification for killing the planet.

Lotfi Belkhir is an associate professor & chair of eco-entrepreneurship at McMaster University.
Disclosure statement: Lotfi Belkhir does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond his academic appointment.

Reposted with permission from our media associate The Conversation.

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Protestors marched outside the Prudential Center in Newark, New Jersey on Monday, August 26, during the MTV Video and Music Awards to bring attention to the water crisis currently gripping the city. Karla Ann Cote / NurPhoto / Getty Images

By Will Sarni

It is far too easy to view scarcity and poor quality of water as issues solely affecting emerging economies. While the images of women and children fetching water in Africa and a lack of access to water in India are deeply disturbing, this is not the complete picture.

The city of Flint, Michigan, where dangerous levels of pollutants contaminated the municipal water supply, is a case in point — as is, more recently, the city of Newark, New Jersey.

The Past is No Longer a Guide to the Future

We get ever closer to "day zeros" — the point at when municipal water supplies are switched off — and tragedies such as Flint. These are not isolated stories. Instead they are becoming routine, and the public sector and civil society are scrambling to address them. We are seeing "day zeros" in South Africa, India, Australia and elsewhere, and we are now detecting lead contamination in drinking water in cities across the U.S.

"Day zero" is the result of water planning by looking in the rear-view mirror. The past is no longer a guide to the future; water demand has outstripped supplies because we are tied to business-as-usual planning practices and water prices, and this goes hand-in-hand with the inability of the public sector to factor the impacts of climate change into long-term water planning. Lead in drinking water is the result of lead pipe service lines that have not been replaced and in many cases only recently identified by utilities, governments and customers. An estimated 22 million people in the US are potentially using lead water service lines. This aging infrastructure won't repair or replace itself.

One of the most troubling aspects of the global water crisis is that those least able to afford access to water are also the ones who pay a disproportionately high percentage of their income for it. A report by WaterAid revealed that a standard water bill in developed countries is as little as 0.1 percent of the income of someone earning the minimum wage, while in a country like Madagascar a person reliant on a tanker truck for their water supply would spend as much as 45 percent of their daily income on water to get just the recommended daily minimum supply. In Mozambique, families relying on black-market vendors will spend up to 100 times as much on water as those reached by government-subsidized water supplies.

Finally, we need to understand that the discussion of a projected gap between supply and demand is misleading. There is no gap, only poor choices around allocation. The wealthy will have access to water, and the poor will pay more for water of questionable quality. From Flint residents using bottled water and paying high water utility rates, to the poor in South Africa waiting in line for their allocation of water — inequity is everywhere.

Water Inequity Requires Global Action — Now.

These troubling scenarios beg the obvious question: What to do? We do know that ongoing reports on the 'water crisis' are not going to catalyze action to address water scarcity, poor quality, access and affordability. Ensuring the human right to water feels distant at times.

We need to mobilize an ecosystem of stakeholders to be fully engaged in developing and scaling solutions. The public sector, private sector, NGOs, entrepreneurs, investors, academics and civil society must all be engaged in solving water scarcity and quality problems. Each stakeholder brings unique skills, scale and speed of impact (for example, entrepreneurs are fast but lack scale, while conversely the public sector is slow but has scale).

We also urgently need to change how we talk about water. We consistently talk about droughts happening across the globe — but what we are really dealing with is an overallocation of water due to business-as-usual practices and the impacts of climate change.

We need to democratize access to water data and actionable information. Imagine providing anyone with a smartphone the ability to know, on a real-time basis, the quality of their drinking water and actions to secure safe water. Putting this information in the hands of civil society instead or solely relying on centralized regulatory agencies and utilities will change public policies.

Will Sarni is the founder and CEO of Water Foundry.

Note: This post also appears on the World Economic Forum.

Reposted with permission from our media associate Circle of Blue.

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