Carbon Footprint and CDMOs: How is AGC Pharma Chemicals addressing it?
The production of medicines, while vital for human health, leaves a substantial environmental footprint. According to the Sustainable Markets Initiative (SMI), the Biopharmacy industry is responsible for 4–5% of all global GHG emissions, with most of its carbon footprint coming from the supply chain, manufacturing, retail and logistics.
As environmental awareness and regulatory requirements increase, companies in the sector are beginning to monitor not only their environmental impact but also that of their entire lifecycle.
Major pharma firms have committed themselves to reducing resource consumption, waste and the generation of emissions to meet goals set by the United Nations Paris Agreement. These goals include reducing both direct and indirect contributions to their carbon footprints. While the primary focus has been on reducing direct (Scope 1 and Scope 2) CO2 emissions, pharma companies are now targeting indirect (Scope 3) emissions. For drug companies, indirect contributions come from suppliers of raw materials, equipment, and manufacturing and R&D services, including contract development and manufacturing organizations (CDMOs).
As a result, companies are increasingly asking their key suppliers — including CDMOs — about the actions they are taking to reduce their carbon footprints. In today’s world, the concept of a carbon footprint holds significant importance as we strive for sustainability and environmental responsibility.
Consequently, CDMOs are also accelerating their environmental efforts, setting themselves far more ambitious targets as sustainability goals become one of the most urgent business strategies for pharma companies.
How do companies like AGC address these requirements?
AGC Group sustainability management
The AGC Group has prioritized sustainability management as a key strategy, aiming to achieve a net-zero carbon footprint by 2050. As an interim milestone, in 2021, we established targets for a 30% reduction in greenhouse gas (GHG) emissions in Scopes 1 and 2, as well as a 50% reduction in GHG emissions per unit of sales in Scopes 1 and 2 by 2030.
In 2022, we introduced a new target for a 30% reduction in Scope 3 emissions and applied for certification by the Science Based Targets initiative (SBTi), an international climate change initiative.
In addition to these targets, the AGC Group has affirmed its proactive approach to addressing issues and creating value by implementing measures to encourage our suppliers to achieve the Scope 3 reduction target.
In 2023, we submitted our greenhouse gas (GHG) emissions reduction targets to the SBTi and received “WB2°C” (well below 2°C) certification.
Furthermore, we are actively engaged in the Carbon Disclosure Project (CDP) and have been honored as a CDP “A-list” company for 2022, recognizing our advanced environmental initiatives and transparent information disclosure practices.
AGC Pharma Chemicals’ carbon footprint management
In an era where environmental sustainability is paramount, AGC Pharma Chemicals stands out for its commitment to reducing its carbon footprint and implementing eco-friendly practices throughout its operations. Our Health, Safety and Environmental Policy forms the bedrock of our commitment to reducing the impact of our activities on our collaborators, the community and the environment. This policy serves as the guiding force behind the development of our integrated management system, which adheres to ISO 14001 and ISO 45001 standards. By following these stringent guidelines, we ensure that our operations uphold the highest standards of environmental responsibility.
In line with the AGC Group, at AGC Pharma Chemicals, our commitment to carbon footprint reduction is reflected in the following goals:
- A 30% reduction in Scope 1+2 emissions by 2030 compared to 2019 levels.
- A 50% reduction in Scope 1+2 emissions based on sales by 2030.
- A reduction of Scope 3 emissions by 30% in relevant categories.
To achieve these goals, at AGC Pharma Chemicals, we walk the walk. Our proactive approach to environmental management encompasses a wide array of initiatives aimed at minimizing our carbon footprint and promoting sustainability throughout our operations.
Transitioning to renewable energy sources is a cornerstone of our sustainability strategy. By harnessing the power of renewable energy, we not only reduce our carbon footprint but also contribute to the global transition towards a cleaner, greener future.
Innovation lies at the heart of our sustainability efforts. Through ongoing research and development, we continually seek out new technologies and strategies to further reduce our environmental impact. Whether it is through the implementation of energy-efficient technologies or the adoption of sustainable production processes, we are committed to pushing the boundaries of environmental stewardship.
A vision for the future
From 2019-2022, energy efficiency investments have been implemented to decrease fossil fuel use, such as an oxidizer heat recovery boiler, an air compressor heat recovery unit and the replacement of boiler burners. This results in a natural gas saving consumption of 30%, which means a reduction of 246 metric tons of carbon emissions.
Moreover, the strategy to achieve carbon footprint goals is not only focused on fuel consumption reduction but also on minimizing greenhouse gas (GHG) emissions. In 2022, a Refrigerant Gas Replacement Plan was defined to substitute refrigerants with high global waning potential, which includes both large-capacity equipment and small air conditioning units. In the last two years, it has reduced 80% of the potential CO2 emissions by replacing refrigerant gas of the production plant’s brine compressors and changing room building chiller.
Also, we only consume electricity with a guaranteed certificate of origin and, therefore, because the energy comes from renewable sources, scope 2 emissions are zero. Nevertheless, we have detailed the main consumers, developing indicators and metrics to monitor consumption by process or installation. We hope that these improvements will enable us to calculate energy intensity per product soon. We have identified investment projects that will enable us to make more sustainable use of energy, producing solar energy or reducing the consumption of fossil fuels. Medium-term investment plans will include these projects.
In 2022, we first estimated Scope 3 greenhouse gas emissions from raw materials, transport and waste, and we laid the foundations that will enable us to meet our GHG emission reduction targets by implementing an ambitious decarbonization plan in the company.
We’ll continue our efforts along the same path with significant projects outlined in Decarbonization 2030 roadmap: plan to further reduce emissions improving refrigeration systems, implementing efficiency energy projects, and betting on photovoltaic panels as source of electricity. One notable initiative is the Hybrid Boiler set for 2026-2030, which is expected to save 441 metric tons of CO2 emissions on its own.
Achieving the Ecovadis platinum certification in 2022 stands as a testament to our sustainability efforts. This milestone underscores our commitment to environmental responsibility practices.
Companies like AGC Pharma Chemicals play a pivotal role in mitigating environmental impacts and promoting sustainability within the industry. By implementing robust carbon footprint management systems, setting ambitious emission reduction targets, and investing in sustainable technologies, AGC Pharma Chemicals exemplifies its commitment to environmental responsibility and leadership in pharmaceutical manufacturing.
As we navigate the challenges of climate change and work towards a greener future, collaboration and innovation will be key. At AGC Pharma Chemicals, we are proud to lead the way towards a healthier, more sustainable future for all.
