A STAT analysis shows how top drug companies are starting to take action on climate

This article is adapted from STAT’s exclusive analysis in the STAT Report: “Climate rankings: How top drug companies measure up in combating climate change.”

Drug companies are major contributors to climate change, both through direct greenhouse gas emissions and especially through their supply chains. But the pharmaceutical industry has lagged behind others when it comes to understanding and cutting down on its climate impact.

In an exclusive analysis that ranks top companies on their efforts to combat global warming, STAT found that, with increasing pressures from investors and other stakeholders, many biotech and pharma companies are now starting to take action. But most companies still do not publicly report their greenhouse gas emissions. Even when companies do share such data, there is no standard protocol for measuring emissions. And a majority of companies have yet to set concrete targets for emissions reduction.

Of the 100 largest companies in the pharma and biotech sector, only 33 were taking actions that qualified them to be included in STAT’s analysis, which uses public data from a variety of sources to evaluate companies, based on 20 metrics chosen for their value in demonstrating transparency, credibility, scope, and implementation of climate policies.

And only one in four of the 100 top companies report their emissions to the Carbon Disclosure Project (CDP), a global nonprofit that is considered the gold standard for climate transparency, including some that have reduction targets verified by the Science Based Targets initiative (SBTi).

Overall, the health care sector contributes 8.5% of greenhouse gas emissions in the U.S. and about 5% of emissions globally. The sources of these emissions include everything from single-use pipette tips in research labs, to the solvents used to make drugs, to the ultra-cold freezers that store vaccines. But within the health care sector, it’s difficult to identify the specific climate impacts of drug development — much less that of specific companies.

Moreover, without reporting standards, people within biotech or pharmaceutical companies have an incomplete picture of what drives their climate footprints. And without that data, it’s hard to make concrete plans for improvement. The biotech and pharma industry is behind here, as well, according to a 2023 report from the Net Zero Tracker, a research effort that compiles data on corporate and governmental climate reduction targets, including evaluations of the top 2,000 public companies worldwide.

About 44% of major companies in the biotech, health care and pharma sector evaluated by Net Zero Tracker, the report found, do not have any emissions reductions targets. And fewer than 40% of companies in this sector have set a target for reducing emissions to net zero, compared to 71% of power generation companies, which have faced more “reputational pressure” from investors and the wider public to take these actions, said John Lang, project lead at the Net Zero Tracker. Biotech and pharma companies are just now starting to feel such pressure.

Making matters more complicated, claims by companies that they are taking climate action do not always coincide with reality, a practice often referred to as greenwashing. Pharma and biotech companies have not yet been a focus of research uncovering such false claims, but it remains a concern by outside experts evaluating the industry’s progress.

Still, drug companies are moving in a more climate-friendly direction, these experts say. In the last couple of years alone, many companies have begun reporting on their emissions and setting targets, said Stephanie Millar at My Green Lab, a nonprofit organization that advocates for improving the sustainability of scientific research. Millar also recently served as the pharma and biotech sector lead on the United Nations Climate Champions Team, working to coordinate climate goals across the industry.

“Even two years ago, we did not see the number of companies reporting” that they do now, she said, adding, “The first step is always at least taking the action to report.” As companies report their emissions over time, both independently and to standards-setting organizations, they can improve their internal practices for doing so, she said.

Some of the larger companies with more extensive resources for data collection may serve as examples for start-ups just beginning to evaluate their climate footprints. STAT’s report describes emissions reduction targets and other actions taken by large companies like AstraZeneca, which topped the rankings, and Novartis, which ranked second.

Amy Booth, a doctoral candidate at Oxford University who has studied pharmaceutical companies’ climate efforts, emphasized the need for companies to publicly disclose their emissions and for outside assessments, like STAT’s analysis, to evaluate those disclosures. “The more transparent you can get with that, and the more you can benchmark [companies] and push them to take action, the better it will be,” Booth said.

Climate experts like Booth and Millar aren’t the only people pushing for more reporting. Investors, government agencies, health systems, and companies’ own employees are among the groups asking pharma and biotech companies to estimate their climate impacts and work towards reduction. For example, large companies doing business in California will soon be required to report their greenhouse gas emissions, thanks to a bill recently passed by state lawmakers.

Despite the clear pressures, STAT’s report shows how far many pharma and biotech companies have to go toward sustainable business practices, says Nazneen Rahman, founder and CEO of Yewmaker, a start-up that does research and develops software to estimate carbon footprints of health care products.

The results “show a really broad range, from zero to 100” points, she said. For her, she said, the data prompt questions: “What’s making it hard for the people at zero to move? And what has made it important for the people in the 90s to move? And how can we translate that into action?”