The Latest: On January 18 2024, AstraZeneca, Lonza, Novartis, Novo Nordisk and Roche signed a three-year deal to purchase renewable energy from Envision Energy, a multination corporation based in Mainland China, to power their manufacturing facilities in the country. The aim is to stem worsening emissions in the global healthcare industry. From 2024, Envision will supply renewable energy to the five pharmaceutical companies’ factories in the eastern Jiangsu province, the southern Guangdong province, Shanghai and Beijing.
Implications: Mainland China and India are estimated to account for 50% of active pharmaceutical ingredients (APIs) manufacturing and distribution, thereby acting as major contributors to the overall greenhouse gas emissions in the pharmaceutical sector. As such, the agreement will allow the drugmakers to save 120,000 tons of carbon dioxide-equivalent emissions per year. Moreover, the collaboration is committed to developing a unified roadmap to accelerate the delivery of a sustainable healthcare system in Mainland China. To this end, the power-purchase deal will focus on implementing measurable and scalable actions to decarbonise supply chains and reduce carbon footprints in the healthcare system. The power-purchase deal is a step forward for AstraZeneca, which has pledged to halve emissions along its value chain by 2030. We believe that the power-purchase deal will encourage other global and Mainland China based drugmakers to join the cause. Currently, Mainland China based pharmaceutical companies are still trailing behind global peers in setting decarbonisation targets.
What’s Next: As pharmaceutical companies commit to achieving net-zero emissions in the medium to long term, we expect multinational drugmakers to re-evaluate their partnerships across the value chain in Mainland China, prioritising those with stronger commitment to sustainability. Furthermore, we foresee an expansion in cross-sector partnerships, with the ambition of establishing standardised practices across the entire pharmaceutical value chain. This focus on sustainability is anticipated to drive a substantial shift in the industry, leading to more transparent accountability in emission reporting and control and ultimately contributing to a more sustainable industry.
