Pharmaceutical companies and sustainability: An analysis of corporate reporting

The purpose of this research paper is to benchmark the evolution of reported sustainability activity
in the pharmaceutical sector, which has been recognized as a leading sector in industrial
sustainability. The authors examined recent published corporate sustainability activity reports for 11
pharmaceutical sector-related companies and compared this to a similar earlier study.

Sustainability has been on the radar screen of the major pharmaceutical companies for the last two
decades. This is especially true for this industry, where efforts related to sustainability are held up by
the corporations themselves as indicative of their ethics. However, as this paper will show,
sustainability is no longer just a process-based effort, and in some quarters, it is actually being
encompassed by larger corporate social responsibility (CSR) activities. Managing, measuring, and
reporting sustainability does help pharmaceutical industry companies add business value in two
main ways, by
(1) Tracking where a company’s performance is versus where it wants to be and
where the competition is (benchmarking).
(2) Demonstrating stewardship of the resources they manage and the value they
generate through transparency and dialogue with a variety of both internal and
external, traditional and emerging stakeholders

Over the years, sustainability related activity was primarily an extension of traditionally based
environmental, health, and safety (EHS) practice. This resulted in a focus on product/process, with
little understanding of the larger impact that corporations have upon society. Further, more
companies have now shifted efforts into systems that are internationally based and focused on
sustainable development. This is a sign of the growing recognition of corporate social impacts and
the need for international recognition.

The majority of pharmaceutical companies studied do participate in sustainability reporting by

participating in voluntary management systems and benchmarking. This is certainly useful to the
participants, but it is still a process focus. As CSR emerges, perhaps the pharmaceuticals will truly
begin to measure and comprehensively report their impact on society and the earth. In the shift
toward CSR, the pharmaceutical sector is using sustainability as one tool to assist in protecting the
corporate reputation and brand value (Deutsch, 2007). This shift does provide an opportunity to
demonstrate effort that responds to societal expectations and to do those initiatives that are most
pertinent to the business. Sustainability was originally measured on internal metrics and measures to
drive internal and external results and recognition. The emergence of social efforts and CSR now
includes both internal and external efforts, but the metrics are decidedly external. Sustainability has
seemingly morphed into CSR efforts, and the next step in maturation seems to be individual
companies measuring how impact of those efforts will increase their competitive advantage. Given
the unique position of the pharmaceutical sector, they will continue to be the one to watch.