Environmental and Social Due Diligence in the Pharmaceutical Industry
Due diligence is a process adopted by companies and businesses to investigate the practices assumed and the investments made to determine the sustainability of their operations and undertakings. This is done with the objective of ensuring that the business model is as per the standards and regulations prescribed and there are no hidden risks associated with it.
One such branch of due diligence is Environmental and Social Due Diligence, popularly known as ESDD. But what is ESDD? Environmental and Social Due Diligence (ESDD) is a process that helps companies and businesses identify and mitigate the environmental and social risks associated with their activities and operations and thereby enhance their overall performance.
By investing in ESDD, the companies or businesses can actually save costs, gain a competitive edge in their industry, and at the same contribute and discharge their obligations towards the sustainability goals of the nation.
Need for Environmental and Social Due Diligence in the Pharmaceutical Industry
Environmental and Social Due Diligence in the pharmaceutical industry is becoming increasingly important as a result of countless variables affecting the industry's sustainability and viability. It is no longer a voluntary obligation that may or may not be discharged, but rather, it has become obligatory for pharmaceutical companies to invest in ESDD.
Big guns like AstraZeneca have set an example by pledging to be carbon-negative by 2030. A common household name, Pfizer has also promised to reduce emissions by 46% to become carbon-neutral. Therefore, the pharmaceutical industry is under even more pressure than ever to reduce its social and environmental impacts on the planet.
The pharmaceutical industry has some deep-rooted environmental and social issues that need to be addressed as they pose a serious challenge to sustainability. Let us take a look at a few of these reasons that make it imperative to conduct environmental and social due diligence in the pharmaceutical industry:
One of the reasons for the pharmaceutical industry to be in the spotlight is the large-scale toxic and greenhouse gas emissions. According to a study conducted by the Booth School of Engineering Practice & Technology, McMaster University, in 2019, the pharmaceutical industry's emission contribution is about 55% higher than that of the automotive industry.
These high levels of toxic gas emissions and greenhouse gas emissions are responsible for climate change and various health hazards. Therefore, addressing these concerns becomes essential for the long-term sustainability of the pharmaceutical industry.
The pharmaceutical industry can have a significant impact on society, making it crucial for it to prioritise environmental and social due diligence. Apart from the regular social risks associated with every industry, such as labour rights, safe working conditions, human rights, etc., issues like access to health care, drug development, high pricing, and unequal access to medicines, as brought to the limelight by the recent vaccine shortage, etc. have been garnering attention, especially in the post-pandemic world; therefore there is an urgent need to prioritise these social factors and exercise due control over production, distribution, innovation, and marketing of the drugs and medicines. Some of these particular concerns relate to the exploitative practices being followed, which need to be corrected by adopting environmental and social due diligence in the pharmaceutical industry.
Conducting environmental and social due diligence in the pharmaceutical industry becomes even more imperative in light of the legal issues involved. Failure to do so may result in an increase in the possibility of lawsuits, and inadvertent failures may also attract fines and other pecuniary penalties. To mitigate these concerns and issues, the companies can invest in environmental and social due diligence measures.
The pharmaceutical industry essentially works on trust and brand value. Any kind of impact or risk associated with your business operations that has the tendency to lower your reputation or can attract negative publicity and consequently cause damage to your brand value needs to be avoided. Environmental and social due diligence in the pharmaceutical industry can help you mitigate these risks by staying abreast of sudden challenges and will further help in implementing effective strategies to completely eliminate them.
Therefore, environmental and social due diligence in the pharmaceutical industry has become an essential aspect of corporate strategy. By incorporating these ESDD requirements, these companies and the businesses involved can meet the expectations of their investors and stakeholders and, at the same time, drive positive change.
What does the Data say?
Environmental and social due diligence in the pharmaceutical industry has been eliciting an enthusiastic response. According to the data furnished by the Pharmaceutical Technology Analysis, out of all the sectors, the pharmaceutical industry is leading the game, with around 32 major companies committing to reduce emissions by 45.8% over a span of 12 years.
If we were to look at the growth avenues in this industry, then the Indian pharmaceutical industry, in particular, is valued at around USD 50 billion and is expected to reach USD 130 billion by 2030, i.e. grow at a CAGR of 10.7% by 2030. In fact, it is expected to reach around USD 65 billion by next year itself. Owing to the global pandemic experienced by the world in 2020, there has been a major shift in the pharmaceutical industry. The world has witnessed the efficient role played by pharmaceutical companies to combat lethal viruses and their potential to meet the ever-increasing demands of drugs, thereby contributing tremendously to the economy.
The pharmaceutical industry in India is already the 3rd largest producer by volume and 14th-largest by value and is continuing to grow. This growth experienced by the pharmaceutical industry will be a driving force for companies to invest more and more in this sector, thereby creating avenues for further growth, revenue generation, and employment opportunities.
These numbers and statistics are a testament to the fact that the pharmaceutical Industry in India offers numerous opportunities, and with its significant share of the market, it needs to be effectively monitored. Therefore, investing and paying attention to environmental and social due diligence in the pharmaceutical industry is going to serve you well because the growth of this sector hasn't reached its peak yet.
Nevertheless, it is rightly presumed that conducting environmental and social due diligence in the pharmaceutical industry can be complex and quite challenging, and this arduous compliance necessitates expert guidance and years of professional experience, especially since certain obligations are so multifaceted that they can be out of your area of expertise. Therefore, the enterprises involved in the pharmaceutical sector often feel the need to outsource their environment and social due diligence to avoid any inadvertent failures or fiascos on their part.
How Can Businesses Prepare for the Future of Environmental and Social Due Diligence in the Pharmaceutical Industry?
The excitement for environmental and social due diligence is growing across industries. The noise around environmental and social impacts among pharmaceutical companies has ramped up and is projected to increase even further. Many companies across the globe have started prioritising their environmental and social due diligence at the top of their corporate agendas.
The challenges being faced by the companies in conducting environmental and social due diligence in the pharmaceutical industry are probably always going to be there; thus, there is a need to find a way around them to discharge your obligations and at the same create opportunities for your business to reap the huge benefits. To gain a competitive edge over your competitors, you can start preparing for the future of environmental and social due diligence in the pharmaceutical industry today by undertaking the following:
- Businesses must integrate environmental and social due diligence in their core business strategies and decision-making processes to maintain long-term sustainability and economic viability in the market.
- Try to overlook the dearth of short-term benefits and advantages and try to look at the bigger picture. With increased pressure from the concerned regulatory agencies, investors, and consumers, pharma businesses will soon need to pay heightened attention to transparency and accountability; therefore, it is only wise that you begin your environment and social due diligence in the pharmaceutical industry today.
- We understand that the overall cost-benefit analysis of conducting ESDD may not reveal such financially optimistic results right away, but to ensure sustainable and financial growth of your business, you need to strike a balance between the two and be ready to take on any new challenges or rules that might be brought up in the future.
In order to achieve the afore-discussed goals, businesses must focus on strategising for environmental and social due diligence in the pharmaceutical industry to gain that extra mile advantage against their business counterparts, who are probably already actively strategising to invest in this budding domain, considering the robust growth trajectory and the avenues for opportunities within this industry.
Challenges faced while complying with Environmental and Social Due Diligence in the Pharmaceutical Industry
The pharmaceutical industry is facing numerous challenges at the current times. While it all sounds hunky-dory and the wave of enthusiasm can be experienced across the industry, however, this does not mean achieving it all is a cakewalk. The industry is still far from its target goals due to the several reservations and challenges faced by the business decision-makers. Post-pandemic, there have been huge demands across the globe, and that has brought numerous challenges along, which have become an enormous test for the industry.
There is a wide gap between rhetoric and real action, which is only widening due to the following challenges:
Conducting environmental and social due diligence in the pharmaceutical industry requires new business models and collaborations to meet the needs and standards of the developing global market. All this necessitates the availability of ample resources, time, and money at your disposal, which might not be possible always and with everyone. This can dissuade these small stakeholders from meeting these ESDD standards and adopting sustainable practices.
Data Collecting and Data Mapping
In order to effectively discharge the environmental and social due diligence obligations, the companies are required to have access to data that can help them make wise and reasoned decisions. But that is easier said than done. Gathering relevant data can be a complex task, especially with the risk of data sprawl, in light of privacy concerns. But the struggle doesn't end here. Even if you manage to collect data, the next hurdle you need to cross is to analyse this big chunk of data, without which all these numbers are of no use to you. The analysis of the massive flow of data requires expensive software or skilled resources like data scientists and data analysts, whom you might not have access to due to budgetary constraints.
Ensuring environmental and social due diligence in the pharmaceutical industry requires access to advanced technologies and some kind of digital transformation. Many pharma businesses either lack this kind of technology or have outdated technology at their disposal, which won't suffice. Not to forget, the risks associated with the use of technology, such as privacy concerns, cybersecurity risks, etc., are some of the reasons why some businesses still choose to stay away from the robust use of technological aids.
In addition to the other problems, one of the biggest challenges that a pharma business can face is the uncertainty and lack of clarity regarding where the focus should be while complying with environmental and social due diligence in the pharmaceutical industry. Political polarisation and regulatory ambiguity further add to this complication, making it next to impossible for small businesses to navigate through this complex ESDD landscape.
Complex Supply Chains
The supply chains in the pharmaceutical industry can be very complex and fragmented, thereby making it extremely challenging for the companies to maintain transparency and trace accountability, which is an essential component of environmental and social due diligence in the pharmaceutical industry. Streamlined supply chains can effectively help in reducing emissions and waste and contribute to more sustainable practices.
Crossing these hurdles requires a concerted effort from your end in the form of conducting environmental and social due diligence in the pharmaceutical industry. Allow us to join forces with you and provide you with advanced solutions that are crucial to promoting sustainable and responsible practices.
Benefits of Outsourcing Environmental and Social Due Diligence in the Pharmaceutical Industry
With the ever-increasing interest and attention towards sustainability and environmental and social due diligence across sectors, the pharmaceutical industry cannot lag behind, as they tend to have a significant social and environmental impact. We can witness pharmaceutical influencers taking coercive steps to increase their adherence to ESDD obligations, and rightly so!
Allow us to help you tread on your path to sustainability by letting us strategise to revamping your business plans and operations and making space for environmental and social due diligence in your decision-making process, thereby opening the doors of the following benefits and advantages for you:
The pharmaceutical industry is still struggling to keep up in the sustainability game, and in addition to that, various laws and regulations are being introduced across the globe. The UN and other concerned agencies have also introduced new targets to pressure the pharmaceutical companies to invest more in ESDD, and by 2028, they are also expected to report the carbon footprint of every product on the market; that is why big pharma companies can be seen shifting towards ESDD. So, investing today in environmental and social due diligence in the pharmaceutical industry will help you prepare for the future of regulatory compliance.
Enhanced Brand Value
ESDD has become more than just a compliance obligation. It also helps in garnering support from investors and customers who value transparency and accountability. With the world becoming environmentally and socially conscious day by day, discharging your ESDD obligations effectively will help enhance your reputation in the market and gain an added competitive advantage in the corporate race. It is a tool that can be employed to showcase your commitment to corporate responsibility and sustainability. Thus, by continuously investing in improving ESDD reporting mechanisms and embracing technological advancements, pharmaceutical companies can showcase their commitment to sustainability and lead the industry by example.
Another major benefit that can be reaped by outsourcing environmental and social due diligence in the pharmaceutical industry is that your business can save unnecessary costs that you may incur in discharging this obligation on your own. Hiring your own in-house team also brings extra costs with itself, like maintaining them on payrolls, providing them health or insurance benefits, training costs, etc., which have to be paid continuously, whereas outsourcing these services allows you to not only hire experts and experienced professionals but also allows you to pay them only on need-basis.
With limited time, resources, and personnel, you can only do so much on your own. Outsourcing services pertaining to environmental and social due diligence in the pharmaceutical industry allows you to focus on your core business decisions and operations by letting someone else take care of your ESDD needs. This division of labour can increase the overall productivity and efficiency of your workforce and other resources.
Access to Innovation
As discussed, one of the challenges that small businesses and stakeholders tend to face is the lack of advanced technology and innovations, either due to the lack of access or fear of risks associated with the increased use of technology. By outsourcing services relating to environmental and social due diligence in the pharmaceutical industry, you can have access to experts and these advanced technological tools and software, which can make the entire ESDD process seamless and as per industry standards.
Therefore, as the world continues to evolve, pharmaceutical companies and businesses need to stay ahead of the curve and proactively have to make efforts and prepare for the future. This can be achieved by effectively investing in environmental and social due diligence in the pharmaceutical industry. So, change; otherwise, the change will change you!
Enterclimate is known for its profound presence in the environmental and social due diligence service domain across industries and has successfully lent a helping hand to its esteemed clients in reaching their business goals and targets. Our team of diligent experts has a successful track record of delivering 99.8% efficiency in conducting environmental and social due diligence in the pharmaceutical industry.
We at Enterclimate are motivated to combine the valuable insights of our experts with innovation in order to provide you with world-class solutions and services. Our growth-oriented approach is what allows us to have a vast global client base as we not only help you discharge your mandatory obligations but also help you fulfil your other numerous business needs. We are a one-stop solution platform for all your business queries and problems.
Our team at Enetrclimate is especially well-equipped to offer services pertaining to environmental and social diligence in the pharmaceutical industry, as our industry experts provide you with unmatched guidance and help your business stay in alignment with the best practices of your specific industry.
If you would like to discuss and learn more about Environmental and Social Due Diligence Services, please don't hesitate to contact us.
Our package for environmental and social due diligence in the pharmaceutical industry provides a range of services for your peculiar business needs. These are:
There is a range of risks that every business undertaking or operation may be susceptible to. In the enthusiasm of starting a new venture, these potential risks often end up in your blind spot, but they may end up costing you a limb, depending on their severity and longevity. To ensure this doesn't become problematic, our experts can help you identify all these potential or hidden risks distressing your business operations and supply chains in order for you to head toward unprecedented growth.
Risk Management Strategies
Risk management strategies help businesses approach the associated risks and liabilities with caution, preparation, and effective strategies that can help to significantly minimise their impacts. However, to be able to achieve this, risk management strategies need to be evolved under expert guidance as they need to be efficiently planned.
In fact, the story doesn't end here. After effective planning comes effective implementation, and sometimes, they may also require certain modifications to adapt to the changing rules and times. Our team of experts can guide you and enable you to develop actionable risk management strategies to streamline your business operations effectively.
Given the effect a pharma business is capable of having on the environment and society at large and the industry share of the market, strict monitoring of the industry is the need of the hour. In fact, stringent compliance is being introduced across sectors by the government and the concerned regulatory bodies; thus, there is a need to keep up with these frequently changing rules, regulations, and laws in order to avoid any adverse consequences like fines or penalties. Our team of experts can take care of these obligations and compliance for you and ensure that you are operating well within the bounds of the law.
Regular ESDD Audits
Environmental and social due diligence audits have become increasingly important for companies and the concerned industry. According to a study conducted, 9 out of 10 millennials will prefer switching to a brand or product that has strong environmental and social practices. These ESDD Audits help provide an insight into the approach of the brand or the company and how they manage these associated risks. That is where our team can provide you guidance to navigate through these audits at regular intervals to warrant augmented transparency and accountability, which will help you attract loyal customers and investors in the long run.
Conducting risk assessment and developing risk management strategies will not suffice. Reporting is a critical component of environmental and social due diligence in the pharmaceutical industry, as the same stands witness to your commitment to sustainable corporate practices. Our team can help you in the discharge of this obligation by providing comprehensive, transparent, and accountable ESDD Reports that can help you garner the trust and loyalty of the concerned stakeholders, which can ultimately help you attract investors who hold ESDD in high regard.
Peer and Industry Benchmarking
The process of peer and industry benchmarking can allow you to assess your worth and position against your competitors in the industry. This allows you to assess your strengths and weaknesses, which enables tactical business planning. Our team of experts can help you evaluate key performance metrics with their industry-specific knowledge, which allows you to identify the areas to be targeted for further improvement and growth.
Other Key Services:
In addition to the already-mentioned package of services, you may choose amongst the following other services that are provided by our bespoke team of experts, such as:
Enterclimate experts have years of experience and vast knowledge related to your industry, and they are very well aware of the challenges that you might face and the best practices prevalent amongst your business counterparts. Our team can guide you in finding the right solutions and strategies for your sustainability growth.
Environmental and Social Due Diligence Compliance necessitates the filing of a range of documents and summarised comprehensive reports. In a domain where, even a small mistake can you cost a limb, you cannot afford to fall behind merely because of a piece of paper. Allow our experts to handle the entire red-tapism for you and help you with proper documentation and timely submissions.
At Enterclimate, we don't believe in the 'one-size-fits-all' approach. We understand that your needs are unique and specific, and hence, so are our solutions. Our strategies and plans are carefully curated for streamlining and tracking your ESDD performance and growth on the basis of your size, needs, and future goals.
The importance of follow-ups cannot be stressed enough. Our team ensures that clients keep getting real-time updates and are kept in the loop the whole time. We don't believe in clients running after service providers for updates. We ensure that our team is the one taking follow-ups and keep the client updated all throughout.
Start your Environmental and Social Due Diligence journey with a single stride by reaching out to us at 7838390340, and we will assign a dedicated expert to discuss your requirements and clear your doubts.
We are eager to tread on this path with you and help you flourish in your industry. Join us today, and let's build an environmentally and socially responsible future together.
Frequently Asked Questions
Environmental and Social Due Diligence (ESDD) is a process that helps companies and businesses identify and mitigate the environmental and social risks associated with their activities and operations and thereby enhance their overall performance.
ESDD, i.e. the Environmental and Social Due Diligence in the pharmaceutical industry, is becoming increasingly important as a result of countless variables affecting the industry's sustainability and viability, such as its environmental impacts, social impacts, legal and reputational risks attached to the industry, etc.
Some of the environmental factors to be considered in ESDD for pharmaceuticals are pollution, overconsumption of natural resources like water, waste production and waste management, climate change due to greenhouse gas emissions, etc.
Apart from the regular social aspects associated with every industry, such as labour rights, safe working conditions, human rights, etc., issues like access to health care, drug development, high pricing, and unequal access to medicines etc. are also given importance, especially in the post-pandemic world, while conducting environmental and social due diligence in the pharmaceutical industry
Stakeholder engagement in ESDD allows businesses to discuss their concerns and incorporate them into their ESDD plans. This allows the business concerned to attract some faith and confidence of the concerned stakeholders, strengthen relations with them, and enable a collaborative approach for the future.
Environmental and Social Due Diligence in the pharmaceutical industry can help companies improve their performance by enabling them to perform an effective risk assessment before undertaking any new business operations or projects, thereby giving them sufficient time to mitigate any risks and liabilities to avoid any adverse consequences in the future.
Yes, ESDD performance can directly or indirectly affect the reputation and other rating elements of a pharmaceutical company. Ensuring ESDD compliance depicts your commitment towards environmental and social sustainability, which, in an increasingly conscientious world, helps to enhance the reputation of your pharmaceutical company.