Industry analysis Sustainable priorities of GSK and Merck Inc. | Recommendations | References

1. DOBA DC
Sustainability Project
(Summer 2022)
Group 11
Industry - Chemical

2. Content
• Industry analysis
• Sustainable priorities of GSK and Merck Inc.
• Recommendations
• References

3. Industry Analysis
Market Analysis –
• Biopharmaceutical industry is estimated to have spent USD 179 billion globally on biopharmaceutical R&D in 2018.
• The Global Health Progress announced that more than 1200 partners are supported for Sustainable Development Goals (SDGs)
• The world spends approx: $7.5 trillion on health each year and it accounted for 10% of global GDP
SOURCE : (IFPMA, 2021)

4. Industry Analysis Cont:
Challengers in Chemical industry
• Environmental sustainability -
• Cleaner production
• Green supply chains
• Green human resource management (HRM
• Green materials
• Social sustainability -
• Supply chains
• Product packaging
• Consumer behavior
• Economic sustainability -
• Control of expenses and the need to ensure sustainability
• Development of economic logic in management

5. Industry Analysis Cont:
Key highlights in SDGs
At least one company is looking for one SDG and key players in the market contributed heavily to achieving
SDGs.
SDG 01 – No Poverty - End poverty in all its forms everywhere
GSK developed a pricing model
Pfizer. Inc offers a range of support services
SDG 02 – No Hunger - End hunger, achieve food security and improved nutrition and promote sustainable agriculture
Abbott’s new production facility in India and 80% source from locally
Eli Lilly’s animal health division
SDG 03 – Good health and wellbeing - Ensure healthy lives and promote well-being for all at all ages.
GSK announced a £25 million investment
Johnson & Johnson launched Janssen Global Public Health

6. Industry Analysis Cont:
• Current market status –
• Individually focus to achieve their agendas.
• No or less collaboration between each company
specially in sustainable development.
• Companies are develop own strategies to achieve the
goals.
• All companies are linked their sustainability goals with
SDGs.
• Promoting green value chain concept with ethical
sourcing and testing.
• Government encourages to develop and recognize the
companies.
• UN monitor the success of the goals.
Industry is in “First movers” near to maturity point

7. Background of 4 loops in
pharmaceutical industry
Pharmaceutical industry facing with similar
sustainable challenges as the chemical
industry.
Main differences are related to the market
dynamics, enabling environment
• Market Dynamics:
• Development of innovative drug is long and
costly process (up to 12 years), clinical trials
• High cost of production: need for production
scale (production and development out of
source country: Asia, China, India).
• Limited Healthcare founding resulting with
limited access to innovative medicines: push
on Governments and policy makers
• Enabling environment: lower
environmental standards in developed
countries
Picture source: Changing the Game, Lucas Simons, Andre Nijhof, 2021 7

8. Healthy Planet, Healthy People.
The first one in the pharmaceutical company to set ambitious environmental targets in 2010 since then
continuously working to reduce its environmental impact.
Since 2010, as per the reports they reduced 34% emissions, 31% water usage, and 78% waste to landfills.
GlaxoSmithKline PLC

9. Goals
The goal is to have a net positive impact on nature by 2030.
- Collaborating with partners to understand how best to measure our nature impacts and meet industry
standards. For example, working with the World Business Council of Sustainable Development to
contribute to the Science-Based Targets Network for nature.
- Other things-
- finding deforestation-free solutions
- collaborate with other stakeholders in the supply chain
- contributing to industry activities that focus on improving sustainable sourcing for the healthcare
industry.

10. Merck Inc
Merck has brought hope to humanity through our discovery of important medicines and vaccines,
exemplary social responsibility, and the positive impact on health and health equity.
The primary focus is SDG 3, Good Health and Well-being, which aligns with our core business.
Merck’s success in cultivating a diverse and inclusive workforce and a culture that inspires creativity
and promotes health and wellbeing.
Today, 46% of our company’s board of directors are women and 23% are from underrepresented
groups.

11. Goals
- By 2025, their goal is to achieve carbon neutrality across our operations—for our Scope 1 and 2
emissions (the fossil fuels we burn on-site and the electricity we purchase).
- Primary focus is SDG 3, Good Health and Well-being, which aligns with their core business
- they will also accelerate by 15 years our previous 2040 goal to source 100% renewable energy for
purchased electricity.
- committed to reducing value chain emissions by 30% by 2030, by continuing to engage with
suppliers to help reduce their emissions.

12. Review & Comparison
Several industries, notably the pharmaceutical industry, are under pressure to adopt
sustainable practices as resource consumption rises.
As per the reports, both the companies improving from the past and continue working on
reducing carbon emissions and many things which will help to move one step ahead.
Apart from this, High energy consumption, diverse supply chains, and pollution are the
things that the industry to more focused on.

13. Recommendations and more focus (both
companies)
• Opportunities for shared value in area of preventive healthcare and universal
health coverage
• Partnership and collaboration with multi-stakeholders: support on resilient and
environmentally sustainable healthcare
• Share appropriate data and expertise with policymakers

14. SDG’s development areas still to
focus
No clear statement from both companies supporting SDG 2. *Example of good practice is Novo
Nordisk: measuring environmental hotspots in the supply chain, managing through cost savings
and reduction of environmental impact
No clear statement from GSK supporting SDG 11. *Example of good practice is Merck KGaA: In
2015, an integrated bio-gas plant utilizes sewage sludge and bio-waste to generate all the energy
needed by the RRC
*Source: SDG Industry Matrix, available at: https://www.multihelix.se/files/2020-03/sdg-healthcare-life-science-1-.pdf, accesses 16/06/2022

15. Compliance with Sustainable goals-
MERCK INC. -
• Good health with decent work as well as economic growth.
• covers industry innovation.
GSK-
• Focuses on reduced inequalities.
• goals are climate action, life on land, peace, and justice.

16. Orientation and sustainability-
MERCK INC
• focused on 1400 alternatives to life science products.
• reduces 9% greenhouse gas emissions
GSK-
• Declined 34% carbon emissions
• water landfills by 78%.
• water used by 30%

17. Area Of Improvement-
MERCK INC-
• Focuses on women’s health.
GSK-
• Focusing on ESG performance
• Giving better results as investing the amount in innovations.

18. Measurement and reporting-
GSK -
• uses Non- IFRS framework for the performance.
• uses SASB- sustainability accounting standards boards for better outcomes.
MERCK INC-
• Uses IFRS for financial statements.
• invests in reporting structure for better results. ‘

19. References
• Amgen. (2021, Oct 18). Amgen. Retrieved from “Green” Chemistry Makes Pharmaceutical Manufacturing Better for the
Planet: https://www.amgen.com/stories/2021/10/green-chemistry-makes-pharmaceutical-manufacturing-better-for-the-planet
• B - Lab. (2022). B - Lab. Retrieved from Make Business a Force For Good: https://www.bcorporation.net/en-us/
• Burke, H. (2021, Jul 06). Who are the top 10 pharmaceutical companies in the world? (2021).
Retrieved from Proclinical: proclinical.com/blogs/2021-7/who-are-the-top-10-pharma-companies-in-2021
• Deloitte Centre. (2017). The future awakens : Life sciences and health care predictions 2022. UK: Deloitte Centre for Health Solutions.
• Excipack. (2022). Excipack. Retrieved from WHAT IS EXCiPACT?: https://www.excipact.org/
• Global Certification Body. (2022). CHEMICAL INDUSTRY STANDARDS. Retrieved from GLOBAL CERTIFICATION BODY: https://www.nqa.com/en-ca/certification/sectors/chemical
• IFPMA. (2021). THE PHARMACEUTICAL INDUSTRY AND GLOBAL HEALTH. INTERNATIONAL FEDERATION OF PHARMACEUTICAL ASSOCIATIONS.
• IMI. (2019, 09 11). IMI. Retrieved from CHEM21 – a step towards a greener and more efficient pharmaceutical industry:
https://www.imi.europa.eu/projects-results/success-stories-projects/chem21-step-towards-greener-and-more-efficient
• IMI. (2019). IMI. Retrieved from CHEM21:
https://www.imi.europa.eu/projects-results/project-factsheets/chem21#:~:text=The%20goal%20of%20the%20CHEM21,development%20process%20more%20environmentally%20friendly.
• KPMG and UN. (2017). SDG Industry Metrix. KPMG International Cooperative and UN Global Compact.
• Kukura, J. L., & Thien, M. P. (2019). CURRENT CHALLENGES AND OPPORTUNITIES IN THE PHARMACEUTICAL INDUSTRY (Second Edition ed.). (D. J. Am Ende, & M. T. Am Ende, Eds.)
• Martín-Matute, B., Meier, M. A., Métro, T.-X., Koenig, S. G., & Sneddon, H. F. (2021). Sustainable Chemistry and Engineering in Pharma. ACS Sustainable Chemistry & Engineering, 09(40).
• Milanesi, M., Runfola, A., & Guercini, S. (2020). Pharmaceutical industry riding the wave of sustainability: Review and opportunities for future research. Journal of Cleaner Production, 01 - 12.
• Saynor, R. (2018, Nov 20). Pharma Boardroom. Retrieved from How Can Pharma Progress the Sustainable Development Goals?:
https://pharmaboardroom.com/articles/how-can-pharma-progress-the-sustainable-development-goals/
• TFS. (2021). TFS. Retrieved from WHAT IS TFS?: https://tfs-initiative.com/
• UL. (2022). UL. Retrieved from ECOLOGO® Certification Program: https://www.ul.com/resources/ecologo-certification-program
• Zeschmar-Lahl, D. (2017). Sustainability initiatives and approaches in the chemical sector. Umweltbundesamt .