Published

2 years ago

February 9, 2024

Alice Rush

The Pharmaceutical industry is responsible for 4.4% of global emissions.

World Economic Forum

The pharmaceutical sector, faced with rising stakeholder expectations and tightening regulations, is accelerating efforts to reduce its environmental impact. Several major players in the industry have committed to achieving Net Zero emissions as part of their corporate sustainability strategy. These leader are blazing the trail by implementing policies and undertaking initiatives, including the purchase of carbon credits, to accomplish this ambitious objective.

The pharmaceutical industry’s carbon footprint

The pharmaceutical sector is a significant contributor to global emissions. If it were a country, its carbon footprint would rank 9th in the world. Energy-intensive manufacturing processes, extensive distribution networks, and greenhouse gas-emitting propellants in inhalers drive up the industry’s climate impacts. Experts urge pharmaceutical companies to act, as unmitigated warming could strain global health systems and hinder access to vital medications.

While daunting, the mission is not impossible. Industries like tech and retail are demonstrating that reaching Net Zero is achievable. These commitments raise the bar for pharmaceutical companies to take equally bold climate action.

Major industry players are stepping up. AstraZeneca, Novartis, and Takeda have set ambitious Net Zero targets while investing in renewable energy, green chemistry innovation, and carbon removal. Their efforts are having ripple effects as peers follow suit. With collaboration and persistence, the pharmaceutical industry can curb its emissions in line with climate science.

AstraZeneca’s U$1bn of climate commitments

With over $26 billion in annual revenue, AstraZeneca is one of the world’s largest pharmaceutical companies. It manufactures blockbuster treatments ranging from diabetes to oncology medications.

In 2020, AstraZeneca announced its Ambition Zero Carbon strategy, aiming to achieve carbon neutrality across its entire value chain by 2030. This bold pledge puts AstraZeneca at the vanguard of climate action in pharma.

To meet its goal, AstraZeneca is transitioning to 100% renewable electricity at its sites by 2025. It is also optimizing manufacturing to curb emissions while partnering with suppliers to reduce their carbon footprints. AstraZeneca also plans to eliminate fossil fuel vehicles from its fleet by 2030.

Beyond its operations, AstraZeneca is developing a portfolio of over $1 billion in green investments. These include carbon removal and storage solutions expected to offset about 2.5 million tonnes of CO2 annually by 2025.

AstraZeneca’s commitment is spurring the industry to accelerate sustainability initiatives. Being the pioneer in the pharmaceutical industry to establish a bold net-zero objective that encompasses its entire value chain, AstraZeneca is setting a remarkable example that its competitors will have to strive to emulate.

Novartis to use 100% renewable energy by end of 2023

Headquartered in Switzerland, Novartis is a leading global medicines company with over $48 billion in 2021 revenue. Its therapeutic areas span eye care, immunology, and cardiovascular treatments.

In 2021, Novartis announced its aim to achieve carbon neutrality across Scopes 1, 2, and 3 by 2040. Scope 1 and 2 cover direct emissions from Novartis’ operations, while Scope 3 includes indirect emissions across its supply chain.

Novartis’ environmental policies are publicly available on the internet. The company has made meeting its Net Zero ambition a top priority, with a strong and focused approach in four crucial areas: sourcing renewable electricity, enhancing energy efficiency, promoting innovative green chemistry, and investing in carbon removal offsets.

Novartis is already sourcing 80% of its electricity from renewables. It is also optimizing production processes, deploying automation, and modifying fleet vehicles to curb emissions. The company is on track to source 100% of its power from renewables by the end of 2023.

Additionally, Novartis is pioneering molecular design techniques to develop medicines with lower environmental impacts. The company is actively investing in projects that focus on nature-based carbon removal, such as collaborating with Carbon Direct to expand the implementation of carbon forestry offsets.

By working toward Net Zero science-based targets, Novartis is positioning itself as a leader in green pharmaceutical manufacturing. Its multipronged approach can serve as a model for other companies.

Takeda Pharmaceuticals shows the way for Asia

Japan’s largest pharmaceutical company, Takeda Pharmaceutical generates over $30 billion in annual revenue from medicines treating conditions from cancer to rare diseases.

In 2021, Takeda announced its commitment to achieving Net Zero greenhouse gas emissions by 2040. It is working to reduce and offset its entire carbon footprint, including Scope 3 emissions from its supply chain.

Takeda is achieving its goal by increasing renewable electricity usage, improving energy efficiency at its sites, electrifying its vehicle fleet, and reducing emissions from business travel. It aims to cut Scopes 1 and 2 emissions 46% by 2030.

Takeda also collaborates with pharmaceutical industry partners and suppliers to curb emissions across its value chain under the Pharmaceutical Supply Chain Initiative. And it plans to utilize carbon removal offsets for hard-to-abate emissions.

Takeda’s pledge to achieve Net Zero marks a groundbreaking moment for the pharmaceutical industry in Asia and beyond, as they lead the charge towards comprehensive decarbonization. It’s 2040 target and interim science-based milestones demonstrate meaningful leadership.

Pharma’s challenges in reaching Net Zero

Despite strong commitments from sustainability front-runners, achieving net-zero emissions poses complex challenges for pharmaceutical companies. Many production processes inherently rely on fossil fuels as heat sources and for transporting materials. Companies need major capital investments to transition these operations to clean energy alternatives.

Pharmaceutical distribution and long, complex supply chains also make emissions reductions difficult. Cold chain storage and last-mile delivery result in substantial greenhouse gas outputs. Meanwhile, developing green chemistry solutions requires years of research and development, along with new manufacturing infrastructure. These costs can be prohibitive.

Overcoming Challenges

While obstacles exist, experts emphasize they can be solved through collaboration, innovation, and policy action.

Companies can join forces and share their knowledge and resources through initiatives like the Pharmaceutical Supply Chain Initiative. This collaboration enables them to expand their renewable energy procurement, boost their efficiency, and make strides in green chemistry.

Governments can help by offering incentives for clean technology investments and funding research into pharmaceutical process improvements.

International cooperation can accelerate decarbonization of global supply chains. And standardized offset methodologies will ensure carbon removal credits have integrity.

Ultimately, reaching Net Zero will depend on persistence, investment, and cross-industry partnership. But the health and environmental benefits make it imperative for pharmaceutical companies to see it through.

Opportunities from Net Zero efforts

Pursuing Net Zero targets also opens up opportunities for pharmaceutical companies to add business value, beyond environmental benefits. Optimizing processes for energy efficiency provides cost savings from reduced power consumption and heating needs. Streamlining supply chains also cuts costs over the long term.

First movers on Net Zero goals can boost their reputations with consumers and investors, who increasingly prioritize sustainability. These companies may have better talent recruitment and retention.

Developing and marketing lower carbon medicines can become a competitive advantage. Doctors and health systems are paying more attention to the climate footprint of drugs.

AstraZeneca’s partnerships have the potential to unlock opportunities for companies to venture into the burgeoning green investment markets. Through these collaborations, businesses can not only contribute to the sustainability of our planet but also reap financial benefits by investing in carbon removal and renewable energy projects.

Finally, building climate resilience helps ensure business continuity as the physical impacts of climate change accelerate.

Government policy propels climate action

Governments are ramping up policies aimed at decarbonizing pharmaceutical value chains through incentives and requirements.

The Inflation Reduction Act of 2022 in the United States presents an extraordinary opportunity, providing over $60 billion in incentives dedicated to fostering energy efficiency, electrification, and groundbreaking advancements in green chemistry. This can offset costs for companies pursuing these strategies.

The EU’s pharmaceutical strategy aims to make drug manufacturing and distribution more sustainable by implementing green product design and procurement requirements. This will help reduce emissions.

India released a roadmap in 2022 pushing pharmaceutical companies to adopt renewable energy and assess Scope 3 climate impacts. It aims to help India meet its national climate targets.

Such policies encourage pharmaceutical companies to take ownership of their emissions and are likely to expand as more governments declare net-zero commitments.

The Road Ahead

While the 2030s and 2040s may seem like distant milestones, reaching Net Zero requires immediate action across pharmaceutical supply chains. Industry leaders have provided a blueprint – including renewable energy procurement, distribution optimization, green chemistry, and carbon removal.

New technologies and nature-based solutions are expanding decarbonization opportunities. With collective willpower, strategic investment, and transparent reporting, Net Zero is within the pharmaceutical industry’s reach. All stakeholders must maintain pressure and hold firms accountable for their pledges for a sustainable future.

Photo credit

Photo by Myriam Zilles on Unsplash

Up Next

Carbon Credit Insurance Market to Hit $1B in 2030, $30B by 2050

Don't Miss

Beyond Touchdowns and Trophies: Unveiling the Carbon Footprint of Superbowl LVIII

Alice Rush

Carbon Footprint

Carbon credit project stewardship: what happens after credit issuance

Published

1 day ago

May 18, 2026

Alice Rush

A carbon credit purchase is not a transaction that closes at issuance. The credit may be retired, the certificate filed, and the reporting box ticked. But on the ground, in the forest, in the field, and in the community, the work continues. It endures for years. In many cases, for decades.

Carbon Footprint

Industries with the biggest nature footprints and what their decarbonisation looks like

Published

2 weeks ago

May 5, 2026

Alice Rush

A corporate carbon footprint is never just an accounting figure. It maps onto real ecosystems. Before a product leaves the factory gate, something on the ground has already paid the cost. A forest has been converted. A river has been depleted. A patch of savannah that was once home to dozens of species now grows a single crop in every direction.

Carbon Footprint

Apple, Amazon Lead 60+ Firms to Ease Global Carbon Reporting Rules

Published

3 weeks ago

April 28, 2026

Alice Rush

More than 60 global companies, including Apple, Amazon, BYD, Salesforce, Mars, and Schneider Electric, are pushing back against proposed changes to global emissions reporting rules. The group is calling for more flexibility under the Greenhouse Gas Protocol (GHG Protocol), the most widely used framework for measuring corporate carbon footprints.

The companies submitted a joint statement asking that new requirements, especially those affecting Scope 2 emissions, remain optional rather than mandatory. Their letter stated:

“To drive critical climate progress, it’s imperative that we get this revision right. We strongly urge the GHGP to improve upon the existing guidance, but not stymie critical electricity decarbonization investments by mandating a change that fundamentally threatens participation in this voluntary market, which acts as the linchpin in decarbonization across nearly all sectors of the economy. The revised guidance must encourage more clean energy procurement and enable more impactful corporate action, not unintentionally discourage it.”

The debate comes at a critical time. Corporate climate disclosures now influence trillions of dollars in capital flows, while stricter reporting rules are being introduced across major economies.

The Rulebook for Carbon: What the GHG Protocol Is and Why It’s Being Updated

The Greenhouse Gas Protocol is the world’s most widely used system for measuring corporate emissions. It is used by over 90% of companies that report greenhouse gas data globally, making it the foundation of most climate disclosures.

It divides emissions into three categories:

Scope 1: Direct emissions from operations
Scope 2: Emissions from purchased electricity
Scope 3: Emissions across the value chain

scope emissions sources overview — Source: GHG Protocol

The current Scope 2 rules were introduced in 2015, but energy markets have changed since then. Renewable energy has expanded, and companies now play a major role in funding clean power.

Corporate buyers have already supported more than 100 gigawatts (GW) of renewable energy capacity globally through voluntary purchases. This shows how influential the current system has been.

The GHG Protocol is now updating its rules to improve accuracy and transparency. The revision process includes input from more than 45 experts across industry, government, and academia, reflecting its global importance.

Scope 2 Shake-Up: The Battle Over Real-Time Carbon Tracking

The proposed update would shift how companies report electricity emissions. Instead of using flexible systems like renewable energy certificates (RECs), companies would need to match their electricity use with clean energy that is:

Generated at the same time, and
Located in the same grid region.

This is known as “24/7” or hourly or real-time matching. It aims to reflect the actual impact of electricity use on the grid. Companies, including Apple and Amazon, say this shift could create challenges.

GHG accounting from the sale and purchase of electricity — Source: GHG Protocol

According to industry feedback, stricter rules could raise energy costs and limit access to renewable energy in some regions. It can also slow corporate investment in new clean energy projects.

The concern is that many markets do not yet have enough renewable supply for real-time matching. Infrastructure for tracking hourly emissions is also still developing.

This creates a key tension. The new rules could improve accuracy and reduce greenwashing. But they may also make it harder for companies to scale clean energy quickly.

The outcome will shape how companies measure emissions, invest in renewables, and meet net-zero targets in the years ahead.

Why More Than 60 Companies Oppose the Changes

The companies argue that stricter rules could slow climate progress rather than accelerate it. Their main concern is cost and feasibility. Many regions still lack enough renewable energy to support real-time matching. For global companies, aligning energy use across different grids is complex.

In their joint statement, the group warned that mandatory changes could:

Increase electricity prices,
Reduce participation in voluntary clean energy markets, and
Slow investment in renewable energy projects.

They argue that current market-based systems, such as RECs, have helped scale clean energy quickly over the past decade. Removing flexibility could weaken that momentum.

This reflects a broader tension between accuracy and scalability in climate reporting.

Big Tech Pushback: Apple and Amazon’s Climate Progress

Despite their push for flexibility, both companies have made measurable progress on emissions reduction.

Apple reports that it has reduced its total greenhouse gas emissions by more than 60% compared to 2015 levels, even as revenue grew significantly. The company is targeting carbon neutrality across its entire value chain by 2030. It also reported that supplier renewable energy use helped avoid over 26 million metric tons of CO₂ emissions in 2025 alone.

In addition, about 30% of materials used in Apple products in 2025 were recycled, showing a shift toward circular manufacturing.

SEE MORE: Apple’s 2026 Environmental Report: 30% Recycled Materials Shows a Milestone in Circular Manufacturing

Amazon has also set a net-zero target for 2040 under its Climate Pledge. The company is one of the world’s largest corporate buyers of renewable energy and continues to invest heavily in clean power, logistics electrification, and low-carbon infrastructure.

Both companies argue that flexible accounting frameworks have supported these investments at scale.

The Bigger Challenge: Scope 3 and Digital Emissions

The debate over Scope 2 reporting is only part of a larger issue. For most large companies, Scope 3 emissions account for more than 70% of total emissions. These include supply chains, product use, and outsourced services.

In the technology sector, emissions are rising due to:

Data centers,
Cloud computing, and
Artificial intelligence workloads.

Global data centers already consume about 415–460 terawatt-hours (TWh) of electricity per year, equal to roughly 1.5%–2% of global power demand. This figure is expected to increase sharply. The International Energy Agency estimates that data center electricity demand could double by 2030, driven largely by AI.

This creates a major reporting challenge. Even with cleaner electricity, total emissions can rise as digital demand grows.

Climate Reporting Rules Are Tightening Globally

The pushback comes as climate disclosure requirements are expanding and becoming more standardized across major economies. What was once voluntary ESG reporting is steadily shifting toward mandatory, audit-ready climate transparency.

In the European Union, the Corporate Sustainability Reporting Directive (CSRD) is now active. It requires large companies and, later, listed SMEs, to share detailed sustainability data. This data must match the European Sustainability Reporting Standards (ESRS). This includes granular reporting on emissions across Scope 1, 2, and increasingly Scope 3 value chains.

In the United States, the Securities and Exchange Commission (SEC) aims for mandatory climate-related disclosures for public companies. This includes governance, risk exposure, and emissions reporting. However, some parts of the rule face legal and political scrutiny.

The United Kingdom has included climate disclosure through TCFD requirements. Now, it is moving toward ISSB-based global standards to make comparisons easier. Similarly, Canada is progressing with ISSB-aligned mandatory reporting frameworks for large public issuers.

In Asia, momentum is also accelerating. Japan is introducing the Sustainability Standards Board of Japan (SSBJ) rules that match ISSB standards. Meanwhile, China is tightening ESG disclosure rules for listed companies through updates from its securities regulators. Singapore has also mandated climate reporting for listed companies, with phased Scope 3 expansion.

A clear trend is forming across jurisdictions: climate disclosure is aligning with ISSB global standards. There’s a growing focus on assurance, comparability, and transparency in value-chain emissions.

This regulatory tightening raises the bar significantly for corporations. The challenge is clear. Companies must:

Align with multiple evolving disclosure regimes,
Ensure emissions data is verifiable and auditable, and
Expand reporting across complex global supply chains.

Balancing operational growth with compliance is becoming increasingly complex as climate regulation converges and intensifies worldwide.

A Turning Point for Global Carbon Accounting

The outcome of this debate could shape global carbon accounting standards for years.

If stricter rules are adopted, emissions reporting will become more precise. This could improve transparency and reduce greenwashing risks. However, it may also increase compliance costs and limit flexibility.

If the proposed changes remain optional, companies may continue using current accounting methods. This could support faster clean energy investment, but may leave gaps in reporting accuracy.

The new rules could take effect as early as next year, making this a near-term decision for global companies.

The push by Apple, Amazon, and other companies highlights a key tension in climate strategy. On one side is the need for accurate, real-time emissions reporting. On the other is the need for flexible systems that support large-scale clean energy investment.

As digital infrastructure expands and energy demand rises, how emissions are measured will matter as much as how they are reduced. The next phase of climate action will depend not just on targets—but on the systems used to track them.