At the same time, sector-specific measures – Extended Producer Responsibility, Biodiversity Net Gain, restrictions on single-use plastics, and the expansion of Environmental Risk Assessments under evolving EU pharmaceutical legislation – are tightening expectations.
Chemical regulation under REACH Regulation further adds to compliance complexity. Combined with finance system requirements around disclosure and transparency, and aligned public spending priorities (e.g. healthcare systems), these forces are cascading through pharmaceutical supply chains.
The Task Force on Climate-related Financial Disclosure framework is a key mechanism to engage the finance team providing a structured approach to assessing and reporting climate-related financial risk. It pushes organisations to integrate governance, strategy, risk management, and metrics moving sustainability firmly into core business decision-making.
Pressure across the supply chain
The challenges are substantial. Net-zero ambitions are complicated by significant Scope 3 emissions across global supply chains. These require detailed, granular understanding of GHG inventories (inc. embedded in solvents and ingredients, to cold-chain logistics).
Water stewardship is tightening under stricter effluent standards and growing scarcity. Waste and packaging regulations are accelerating the shift toward circularity.
Meanwhile, the environmental persistence of pharmaceutical compounds raises concerns for biodiversity and ecosystems. Overlaying all of this is an increasingly fragmented reporting landscape and the need to build resilience against climate-driven disruptions and cascading risks.
What can be done? A comprehensive improvement plan
Developing a comprehensive improvement plan is critical and provides a clear opportunity to drive improvement. Organisations should:
- Establish a robust baseline – with a detailed understanding of your current performance, risks and dependencies.
- Align with stakeholder requirements – what’s expected from customers, regulators, investors. How well do they align? Where are the gaps?
- Develop an integrated improvement plan with realistic targets – be clear about what can be achieved with the resources that are available (eg. finance, skills).
- Establish monitoring, data capture and reporting at both organisational and product levels.
- Skills gap – evaluate existing capability and capacity to deliver and develop workforce transition plan. Investing in the sustainability skills and capability of your workforce is a critical enabler of the transition and to enhance organisational resilience
The direction of travel is unequivocal: environmental risks are intensifying, regulatory pressure is expanding, and expectations are rising. For pharmaceuticals, sustainability is no longer just about compliance – it is central to resilience, competitiveness, and long-term value creation.
* ISEP Deputy CEO Martin Baxter was speaking at the Making Pharmaceuticals / Distributing Pharmaceuticals & Making Nutraceuticals Exhibition in Coventry, UK.
