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Accelerating decarbonization in the life sciences industry
Explore the life sciences industry’s journey to net-zero emissions.
5-MINUTE READ
March 21, 2025
With all the recent political and regulatory changes impacting sustainability, I have been talking with my colleagues in the US and Europe about the need for a strong business case and practical guidance to support companies on their continued journey to net zero. Accenture has recently published several resources that support this approach that I wanted to share.
Our yearly report, Destination Net Zero, provides an analysis of the efforts of the world's 2000 biggest companies to reduce carbon emissions. It shows 55% of G2000 companies have cut their operational emissions (Scope 1 and 2) since 2016, but only 16% are on track to reach net zero by 2050. More life sciences (LS) companies are setting full net zero goals, which includes emissions from Scopes 1, 2, and 3. The percentage of LS companies with full net zero goals increased from 25% in 2021 to 39% in 2024. However, less than a quarter of these companies are on track to meet even their operational net zero goals (Scope 1 and 2 emissions).
Life sciences companies have more ambitious goals that any other industry, but most companies are not on track to meet their goals. The average Net Zero target year for life sciences companies is 2041, 7 years earlier than the average across industries.
23%
Of LS companies are on track to achieve Net Zero by 2050
41%
Of LS companies are off track but reducing carbon emissions
36%
Of LS companies are off track, and still growing emissions
The imperative to decarbonize
Reducing climate impacts is a health and economic imperative for LS companies. The World Health Organization projects that climate change will cause 250,000 more deaths each year from 2030 to 2050. A recent study estimates 83 million more deaths will happen by 2100 because of temperature alone. For LS companies, climate change risks are causing production delays, distribution challenges and higher costs because the industry depends on water, cold-chain storage and transit. These disruptions negatively impact both financial and public health outcomes for companies whose missions are to improve the health of their patients. Business on the Edge: Building Industry Resilience to Climate Hazard, a recent report by the World Economic Forum and Accenture, estimates the average life sciences company could see annual fixed asset losses of $60 million per year by 2035 and $95 million by 2055.
Increasing adoption of decarbonization initiatives:
Of the 21 decarbonization initiatives analyzed in Destination Net Zero, less than 25% of LS companies were using 15 or more of them. 23% of companies had adopted less than ten.
The insights from Destination Net Zero highlight two key areas for LS companies to improve progress toward their net zero goals: (1) increase the quantity of decarbonization initiatives adopted; (2) drive cross-organization decarbonization capabilities and accountability beyond sustainability teams. The Decarbonization Playbook for the Pharmaceutical Industry (Playbook), released in October 2024, addresses both of these challenges and highlights actionable paths forward. The Playbook, created in collaboration with the Pharmaceutical Supply Chain Initiative, identifies 24 detailed initiatives to reduce carbon emissions for pharmaceutical companies. It evaluates each initiative for the addressable portion of the company’s footprint, its potential to reduce emissions, time to implement, upfront cost, regulatory complexity, and expected adoption timeframe.
Driving decarbonization in the LS industry is inherently complex and challenging due to long, inflexible product development cycles and high R&D costs, energy-intensive equipment and procedures, rigorous regulatory pressures, far-reaching and opaque supply chains, and maximizing for sustainability while ensuring a high level of patient safety and product efficacy.
Driving cross-organization capabilities:
From our work with LS organizations developing and implementing their net-zero strategies, we have identified six critical capabilities needed to effectively activate decarbonization initiatives.
- Sustainable Value Case - Establishing and proving the business value case for sustainability interventions to secure investment and confidence of internal and external stakeholders to unlock funding and sponsorship for implementing a decarbonization roadmap.
- Sustainable Operating Model - Making sure the organization has the right leadership, governance, skills, tools, goals, and incentives to move forward with decarbonization projects. An effective operating model is important for making everyone responsible for reducing carbon emissions in the company. This is not just a sustainability department program.
- Supply Chain Collaboration - Cultivating close supply chain relationships and bespoke processes to facilitate E2E supply chain decarbonization initiatives. Scope 3 emissions make up over 90% of LS companies' emissions. This means that working with suppliers is vital to the success of any decarbonization program.
- Net-Zero Technology Adoption - Embracing and deploying a wide range of net-zero relevant technology platforms including AI to adequately manage decarbonization initiatives. The Destination Net Zero report highlights only 9% of Life Sciences companies are using AI for decarbonization. There are many ESG technology platforms available to make data collection, tracking, and reporting easier and more accurate. This allows companies to focus on prioritizing and implementing projects to drive decarbonization.
- Ecosystem Development - Working with industry peers, policymakers, healthcare providers and technology partners to share net-zero best practices and learnings. These collaborations lead to more innovation and faster execution of new initiatives. Working together on decarbonization provides efficiencies no single company can achieve alone and is key for industry-wide progress.
- Public Policy Engagement - Engaging with key regulatory stakeholders to shape effective and workable climate/net-zero regulatory policies that enable accelerated pharmaceutical industry decarbonization. Public-private collaboration can help catalyze funding or address roadblocks.
LS companies can use the lessons from Destination Next Zero and the “solutions-first” approach of the Decarbonization Playbook for the Pharmaceutical Industry to drive their decarbonization initiatives forward and ensure their net-zero strategy is embedded to future-proof the business.
Co-authored by Ellie Azolaty