C-suite executives and board members in the antibiotics industry have become increasingly aware of ESG and how it affects their strategy, companies’ future performance and their value. An ominous rise of antibiotic-resistant bacteria has sent shockwaves among manufacturers, compelling them to integrate ESG into their business operations. The Lancet noted in its 2021 study that antibiotics helped minimize the mortality of under-fives to 39 deaths (from 216) per 1,000 live births between 1950 and 2017. Meanwhile, the overuse of antibiotics has led to a notable outcry towards the emergence and prevalence of antimicrobial resistance (AMR). Citing the Global Research on AntiMicrobial Resistance (GRAM), the Lancet (in January 2022) suggested at least 1.27 million people succumbed to AMR in 2019.
Amidst havoc wracked by antibiotic resistance, traction for impact investing, socially responsible investing and the European Sustainable Finance Disclosure Regulation (SFDR) have risen by leaps and bounds. A report by the World Bank claimed that by 2050, drug-resistant infections could cause global economic damage akin to the 2008 financial crisis, while healthcare costs could soar to USD 1 trillion.
Stakeholders are relying on impact investing to have a positive impact on the environment and society and generate financial returns. Besides, the adoption of science-based targets, commitment to reduce carbon footprint, investments in transparency, ethics, diversity and health & wellbeing will be a step forward towards adopting ESG best practices.
Pfizer Inc. Invests in Environmental Initiatives for Value Creation
A robust ESG proposition can help organizations expand into existing markets and tap new ones. Industry leaders’ emphasis on reducing carbon footprint, minimization of waste and resource conservation have topped their agenda. Pfizer, for example, has set an audacious target of minimizing scope 1 and 2 GHG emissions by 46% (from a 2019 baseline) by 2030. In 2022, the company claimed to have eradicated around 50,000 mt of GHG emissions by transitioning other product shipments from air to ocean. Besides, in November 2022, the U.S.-based company contemplated joining “Activate,” a collective action initiative, to underscore decarbonization of major sources of GHG emissions in the pharmaceutical value chain.
Pfizer is gearing up to limit the discharge of active pharmaceutical ingredients (from manufacturing processes to wastewater) using emission control practices and technologies and environmental risk assessment methodologies. The behemoth asserts it is on course to achieve the industry-published targets (Predicted No Effect Concentrations) for antibiotics by 2025.
Merck Roots for Diverse, Inclusive and Healthy Workforce
At a time when the world is recuperating from COVID-19 and combating inequities in health outcomes, medicines and vaccine accessibility and affordability have become a vital cog in expanding healthcare access. Merck is emphasizing granting voluntary licenses to generic manufacturers and to the Medicines Patent Pool to make generic treatment available in over 100 low- and middle-income countries, provided local regulatory agencies give the nod and emergency authorization. It has also taken a giant leap in fostering diversity, equity and inclusion (DEI). The multinational company alluded to a 5% rise in the representation of underrepresented ethnic groups (UEGs) from 2020 to 2021. The pharmaceutical player is pushing for gender parity in leadership positions by 2030 and has ramped up the share of women (in leadership positions) to 38% in 2022.
The healthcare giant has expanded its employee networks with (including but not limited to) Rainbow Networks, Inclusion Networks, Well-being Communities and Women Networks. Rainbow Networks, for example, boosts an inclusive and safe environment and community where LGBTQ+ employees and allies are “recognized and valued.” In its 2022 Sustainability Report, Merck noted that the Uhlala Group chose them as one of the top 11 large companies in the LGBTIQ+ Diversity Performance Index.
AbbVie Counts on Governance for Success in the Boardroom
The confluence of environmental, social and governance pillars has allowed companies not only to survive but also thrive. To put this in perspective, strong corporate governance has become second to none to stay cut above the rest and build a culture of ethical behavior. In the 2022 ESG Action Report, AbbVie inferred that ten of its eleven directors were independent. The company claims that 99% of assigned employees are certified to the AbbVie Code of Business Conduct. The American pharmaceutical company has reinforced the risk assessment process by establishing an annual risk landscape, while the assessment results and mitigation plans are formally documented biannually.
Ethical decision-making and transparency are instrumental in promoting accountability, quality, integrity and safety. AbbVie exhorted in the report that it assesses its efforts in line with the United Nations Sustainable Development Goals (UN SDGs), the Task Force on Climate-Related Financial Disclosures (TCFD), Carbon Disclosure Project (CDP), the Sustainability Accounting Standards Board (SASB) and the S&P Global Corporate Sustainability Assessment. In 2023, the company took a meaningful step by updating its TCFD report to foster governance and strategy efforts to manage climate risks and highlight “approved” science-based targets to the Science Based Targets initiative. Besides, in 2022, it rolled out an “Acting with Integrity” initiative to undergird ethical and compliant behavior.
ESG Matters
ESG strategies have turned out to be an invaluable portfolio for responsible investors. Companies that care about their customers, people and environment can outperform their peers. A sustainable approach will help organizations enhance health outcomes, create shared value, make a positive impact on society and build trust. In November 2023, Melinta Therapeutics and Venatorx Pharmaceuticals entered into a license agreement to commercialize cefepime-taniborbactam in the U.S. The collaboration comes against the backdrop of the latter’s submission of a new drug application for cefepime-taniborbactam for the treatment of complicated urinary tract infections (cUTI). With ESG gaining traction globally, Grand View Research has predicted the antibiotics market will grow at 4.5% CAGR between 2021 and 2028.
About Astra – ESG Solutions By Grand View Research
Astra is the Environmental, Social, and Governance (ESG) arm of Grand View Research Inc. – a global market research publishing & management consulting firm.
Astra offers comprehensive ESG thematic assessment & scores across diverse impact & socially responsible investment topics, including both public and private companies along with intuitive dashboards. Our ESG solutions are powered by robust fundamental & alternative information. Astra specializes in consulting services that equip corporates and the investment community with the in-depth ESG research and actionable insight they need to support their bottom lines and their values. We have supported our clients across diverse ESG consulting projects & advisory services, including climate strategies & assessment, ESG benchmarking, stakeholder engagement programs, active ownership, developing ESG investment strategies, ESG data services, build corporate sustainability reports. Astra team includes a pool of industry experts and ESG enthusiasts who possess extensive end-end ESG research and consulting experience at a global level.
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