Pharma Companies Set Sustainability Goals, but Emissions Are Rising

Pharmaceutical emissions continue upward despite corporate climate pledges

Pharmaceutical companies have set ambitious climate targets in recent years. However, industry emissions are still rising. The gap between corporate promises and measurable progress has grown more visible as reporting improves. Leading firms are cutting direct emissions and switching to renewable energy, but the bulk of the sector’s carbon footprint remains embedded in supply chains.

Scope 3 emissions account for the majority of pharmaceutical carbon output. These indirect emissions come from suppliers, transport networks, product packaging, and the energy-intensive production of active pharmaceutical ingredients. Consequently, most of the industry’s climate impact sits outside the direct control of brand-name manufacturers.

For UK businesses, this matters because pharmaceutical supply chains intersect with multiple sectors. Moreover, healthcare procurement is increasingly shaped by carbon performance. The NHS has stated that medicines account for 25% of its total emissions, according to the Association of the British Pharmaceutical Industry. Therefore, decarbonising pharma is not just an industry issue but a public sector priority.

Industry commitments have expanded but emissions data tells a different story

Recent analysis shows that 231 large publicly traded biotech and pharmaceutical companies emitted 227 million metric tons of CO2e in 2021. This represented a 15% increase from the previous year, according to data cited by the AMR Industry Alliance. When 151 privately held companies were included, total emissions reached 260 million metric tons of CO2e.

A peer-reviewed study published in BMJ Open examined the 20 largest pharmaceutical companies. It found that 19 had committed to reducing greenhouse gas emissions. Additionally, 10 had set carbon neutrality goals and 8 had committed to net zero targets between 2025 and 2050. Nonetheless, progress varied widely across companies and emissions categories. The study’s authors concluded there is still significant scope to track actions and accountability, particularly for Scope 3 emissions.

More recent sector analysis suggests momentum is building. My Green Lab’s 2025 Carbon Impact of Biotech & Pharma Report found that 52% of evaluated companies now have targets aligned with limiting global warming to 1.5°C. This compares to just 30% the year before. Furthermore, the top 15 and top 25 biotech and pharmaceutical companies are reducing Scope 1 and 2 emissions by approximately 10% annually. Among leading performers, Scope 3 reductions are reaching 5% to 10% per year.

Despite these gains, the sector’s overall trajectory remains upward. Research indicates that greenhouse gas emissions from the pharmaceutical industry rose by 77% between 1995 and 2019. This increase reflects both the sector’s growth and the carbon intensity of its operations.

Scope 3 emissions dominate the pharmaceutical carbon footprint

Scope 3 emissions represent 82% of the pharmaceutical industry’s total carbon footprint, according to My Green Lab. These emissions are generated across complex global supply chains, from raw material extraction through to product disposal. Consequently, reducing them requires collaboration with suppliers, logistics partners, and customers rather than changes within manufacturing facilities alone.

Active pharmaceutical ingredient production is particularly energy-intensive. Manufacturing these compounds often involves chemical synthesis, fermentation, and purification processes that consume significant electricity and heat. Meanwhile, cold-chain logistics add further emissions through refrigeration and temperature-controlled transport.

Packaging contributes substantially as well. Medicines require protective materials such as blister packs, bottles, and insulated shipping containers. Each element adds weight, volume, and embedded carbon to the final product. Similarly, the distribution networks that move pharmaceuticals from factories to pharmacies and hospitals generate transport emissions across multiple stages.

Outsourcing amplifies the challenge. Many pharmaceutical companies rely on contract manufacturers and specialist suppliers for production. This means a large portion of the carbon footprint sits with third parties. Tracking and reducing these emissions requires detailed supplier engagement and data sharing, which remains patchy across the industry.

Major pharmaceutical companies have made high-profile climate commitments

AstraZeneca has stated it expects to reduce its Scope 1 and 2 emissions by 98% from 2015 levels by 2025. The company has also targeted a 50% reduction in Scope 3 emissions. To support these goals, AstraZeneca has invested in renewable energy and energy efficiency measures across its operations.

Teva Pharmaceuticals has issued sustainability-linked financing to fund climate action. According to the AMR Industry Alliance, Teva issued $7.5 billion in bonds tied partly to greenhouse gas reduction progress. The company later followed this with an additional $2.5 billion in similar instruments. This approach links borrowing costs to environmental performance, creating a financial incentive for emissions reduction.

However, a report from the Sustainable Markets Initiative-backed Coalition found that only 4% of the world’s largest publicly traded biotech and pharmaceutical companies had climate commitments aligned with a 1.5°C pathway at the time of analysis. The research also noted that the pharmaceutical industry’s carbon footprint exceeds that of several other industrial sectors. Specifically, Scope 3 emissions were found to be nearly five times larger than direct emissions.

Why pharmaceutical emissions keep rising despite corporate targets

Several structural factors drive continued emissions growth in the pharmaceutical sector. Global supply chains are long and fragmented, spanning multiple countries and thousands of suppliers. Each link in the chain contributes emissions, from chemical precursors to finished product delivery.

Manufacturing active pharmaceutical ingredients remains inherently energy-intensive. Chemical synthesis, biological production, and purification all require significant heat, electricity, and water. While efficiency improvements can reduce intensity, overall production volumes continue to grow with global demand for medicines.

Cold-chain requirements add unavoidable emissions. Many pharmaceutical products must be stored and transported at controlled temperatures. Refrigeration units, insulated packaging, and climate-controlled warehouses all consume energy and often rely on refrigerants with high global warming potential.

Regulatory requirements also play a role. Medicines face strict quality and safety standards that can limit options for lightweighting packaging or simplifying supply chains. Traceability requirements mean additional documentation and often duplicate handling steps, each adding logistical complexity and associated emissions.

Finally, the scale of outsourcing means pharmaceutical companies have limited direct leverage over much of their carbon footprint. Suppliers may serve multiple industries and lack the resources or incentive to invest in decarbonisation without clear customer demand and support.

Healthcare system emissions increase pressure on pharmaceutical suppliers

The NHS has identified medicines as responsible for approximately 25% of its total emissions, according to the Association of the British Pharmaceutical Industry. This makes pharmaceutical supply one of the largest single sources of healthcare-related carbon. As a result, NHS procurement teams are beginning to consider carbon performance alongside cost and quality when evaluating suppliers.

This trend is not unique to the UK. Healthcare systems globally account for around 5% of total greenhouse gas emissions, with pharmaceuticals as a major contributor. Consequently, public health services are under pressure to reduce their environmental impact while maintaining patient care standards.

For pharmaceutical suppliers, this creates both risk and opportunity. Companies with credible decarbonisation plans may gain preferential access to major healthcare contracts. Conversely, those with weak climate performance could face exclusion from tenders or pressure to improve. Given the size of public healthcare procurement, this represents a material commercial consideration.

Investors are also paying closer attention. Climate-related financial disclosures are becoming standard, and pharmaceutical companies with high emissions face questions about transition risk. Firms that fail to reduce their carbon footprint may encounter higher capital costs or reduced valuations as environmental, social, and governance factors gain weight in investment decisions.

Essential facts about pharmaceutical industry emissions and climate targets

• 231 publicly traded biotech and pharmaceutical companies emitted 227 million metric tons of CO2e in 2021, marking a 15% increase from the previous year.
• When private companies are included, total pharmaceutical industry emissions reached 260 million metric tons of CO2e in 2021.
• 52% of evaluated pharmaceutical companies now have climate targets aligned with limiting global warming to 1.5°C, up from 30% the year before.
• Scope 3 emissions represent 82% of the pharmaceutical industry’s total carbon footprint, making supply chain decarbonisation the primary challenge.
• Among the 20 largest pharmaceutical companies studied in 2023, 19 had emissions reduction commitments, 10 had carbon neutrality targets, and 8 had committed to net zero.
• Top-performing pharmaceutical companies are reducing Scope 1 and 2 emissions by approximately 10% annually, while Scope 3 reductions among leaders reach 5% to 10% per year.
• Medicines account for 25% of total NHS emissions, making pharmaceutical decarbonisation essential to UK public sector climate goals.

Pharmaceutical sector needs faster progress on supply chain decarbonisation

The pharmaceutical industry faces a fundamental challenge. Corporate climate ambitions have grown substantially, but the sector’s emissions continue to rise because the largest sources of carbon sit beyond direct operational control. Scope 3 emissions dominate the industry footprint, yet they remain the hardest to measure and reduce.

Nevertheless, the direction of travel is clear. Regulatory pressure is increasing, particularly in Europe where carbon border adjustments and product-level emissions disclosure requirements are taking shape. Similarly, major healthcare buyers are beginning to factor carbon performance into procurement decisions. For pharmaceutical suppliers to UK public sector organisations, this means sustainable procurement requirements will likely tighten in coming years.

UK manufacturers supplying the pharmaceutical sector should expect growing demand for emissions data and reduction commitments. Contract manufacturers, chemical suppliers, packaging producers, and logistics providers will all face questions about their carbon footprint. Companies that can demonstrate credible progress will be better positioned for long-term contracts.

From a risk perspective, the current trajectory is unsustainable. The gap between commitments and actual emissions creates reputational exposure for pharmaceutical companies and financial risk for their suppliers. Investors are increasingly sophisticated in assessing climate performance, and weak progress on Scope 3 emissions is becoming harder to explain away.

For smaller businesses in the pharmaceutical supply chain, this may feel like additional bureaucratic burden. However, it also represents an opportunity to differentiate on sustainability credentials. Early movers that invest in carbon measurement and reduction programs will likely gain competitive advantage as buyer requirements tighten.

The pharmaceutical sector’s challenge is not unique, but its scale and complexity make it particularly instructive. Any industry with long, globalised supply chains faces similar difficulties in reducing indirect emissions. The solutions require supplier collaboration, data transparency, and sustained investment rather than one-off initiatives or offsetting alone.

Where to find authoritative information on pharmaceutical sustainability

The Association of the British Pharmaceutical Industry provides UK-specific guidance on sustainability in the pharmaceutical sector. Its resources cover emissions measurement, supply chain engagement, and regulatory developments relevant to UK manufacturers. More information is available on the ABPI sustainability page.

For peer-reviewed research on pharmaceutical industry climate commitments and progress, the BMJ Open study examining the 20 largest pharmaceutical companies offers detailed analysis. The full paper is available through PubMed Central.

My Green Lab publishes annual reports on biotech and pharmaceutical carbon performance, including company-level data and sector trends. Their analysis tracks progress against climate targets and provides benchmarking information. Details can be found on the My Green Lab website.

The AMR Industry Alliance covers environmental sustainability alongside antimicrobial resistance issues in the pharmaceutical sector. Their reporting includes updates on corporate climate commitments and financing mechanisms. Further information is available through the AMR Industry Alliance media centre.