Novartis Updates Net Zero Strategy with 2040 Target

Pharmaceutical giant sets 2040 net zero target across full value chain

Novartis has announced a comprehensive sustainability strategy targeting net zero emissions across its entire value chain by 2040. The pharmaceutical company’s plan covers direct operations, purchased energy, and supply chain emissions, while incorporating water stewardship and expanded healthcare access in climate-vulnerable regions.

This represents one of the most comprehensive decarbonization commitments in the pharmaceutical sector. The strategy extends beyond factory floors to encompass suppliers, product development, and end-of-life emissions. For UK businesses monitoring corporate sustainability standards, particularly those in pharmaceutical supply chains, these targets signal where industry expectations are heading.

The company has aligned its targets with the Science Based Targets initiative Net Zero Standard, approved in July 2024. This framework ensures emission reductions follow pathways consistent with limiting global warming to 1.5°C under the Paris Agreement. Novartis has also signed the Climate Pledge and the UN Global Compact’s CEO Water Mandate, embedding its commitments within established international frameworks.

Scope 1 and 2 emissions targets show significant early progress

Novartis achieved carbon neutrality in its direct operations during 2025. The company reduced Scope 1 and 2 emissions by 73% against a 2022 baseline, nearing its 75% interim target. Measured against a 2016 baseline, the reduction reaches 63%.

By 2030, Novartis aims for a 90% absolute reduction in operational emissions. These targets cover factories, offices, laboratories, and vehicle fleets. The company plans to eliminate residual emissions by 2040 through regulated carbon removal technologies rather than conventional offsets.

Energy consumption has fallen substantially. Total energy use dropped to 5,800 terajoules in 2024, representing a 57% reduction from 2016 levels and an 8% year-on-year decrease. The company has shifted toward renewable electricity, with its Singapore Tuas facility securing 100% renewable power from 2025 onwards. That site also installed on-site solar generation producing 3,000 megawatt-hours annually.

Novartis is investing approximately £170 million in green technology capital expenditure. Projects include transitioning to green heat sources to phase out natural gas combustion. The Singapore facility received the 2025 Excellence in Energy and Greenhouse Gas Management Award for its decarbonization efforts.

Scope 3 supply chain emissions present the larger challenge

Supply chain emissions represent more than 90% of Novartis’ total carbon footprint. Consequently, the company’s 2030 target focuses heavily on this category, aiming for a 42% absolute reduction in Scope 3 emissions. By 2040, Novartis plans to cut these emissions by 90% before neutralizing remaining emissions through carbon removal.

The company has embedded environmental criteria into supplier contracts covering more than 90% of its emissions sources. Initially targeting 80% supplier coverage by 2025, Novartis exceeded this goal, reaching 91% as of the third quarter of 2025. Revised contract terms now require suppliers to measure, report, and reduce their own emissions.

Digital platforms support data collection across the supply chain. These systems track supplier emissions and enable Novartis to monitor progress against reduction targets. The company collaborates with industry peers to establish common standards for pharmaceutical supply chain decarbonization, recognizing that isolated efforts yield limited results in interconnected manufacturing networks.

Scope 3 emissions in pharmaceuticals stem from raw material production, active ingredient synthesis, packaging manufacture, product distribution, and end-of-life disposal. The UK arm’s 2024 Carbon Reduction Plan identified total baseline emissions of 4.7 million tonnes of CO2 equivalent, with product end-of-life representing a substantial portion of Scope 3 totals.

Water consumption targets complement carbon reduction efforts

Novartis reduced water consumption by 59% in its operations against the 2022 baseline. The company targets a 50% reduction by 2030, meaning it has already surpassed this goal ahead of schedule. Water stewardship forms a core pillar of the sustainability strategy alongside carbon neutrality.

Pharmaceutical manufacturing requires substantial water volumes for synthesis, purification, cooling, and cleaning processes. Consequently, water efficiency improvements often correlate with energy savings and emission reductions. Novartis participates in the UN Global Compact’s CEO Water Mandate, committing to watershed management and water access initiatives.

The company links water sustainability to healthcare resilience in climate-vulnerable regions. Water scarcity can disrupt medicine production and distribution, particularly in areas experiencing increased drought frequency. By reducing water dependency and supporting local water security, Novartis aims to protect supply continuity while addressing environmental impacts.

What these targets mean for pharmaceutical supply chains

Novartis’ supplier requirements will affect hundreds of companies throughout its procurement network. Suppliers must now demonstrate emissions measurement capabilities, set their own reduction targets, and report progress regularly. For businesses supplying pharmaceutical manufacturers, these expectations are becoming standard commercial terms rather than voluntary initiatives.

The 91% contract coverage figure indicates that environmental performance now influences supplier selection and retention. Companies unable to measure or reduce emissions may face disadvantages in tender processes. Conversely, suppliers with robust carbon management systems and credible reduction plans strengthen their competitive position.

Similar patterns are emerging across industries. Carbon reporting requirements for public sector suppliers under PPN 06/21 demonstrate how sustainability criteria are becoming procurement prerequisites. Pharmaceutical supply chain standards often precede wider market adoption, given the sector’s regulatory sophistication and quality management systems.

Businesses in the chemical, packaging, logistics, and equipment sectors should anticipate comparable requests from other pharmaceutical customers. Industry collaboration on emissions standards, which Novartis actively supports, will likely produce sector-wide expectations rather than company-specific requirements. This collective approach aims to prevent fragmented reporting demands while raising baseline performance across supply networks.

Science-based targets provide credibility and accountability mechanisms

The Science Based Targets initiative validates corporate climate commitments against climate science rather than corporate discretion. SBTi approval, granted to Novartis in July 2024, confirms that the company’s targets align with pathways to limit warming to 1.5°C. This independent verification distinguishes substantive commitments from aspirational statements.

SBTi’s Net Zero Standard, introduced in 2021, requires companies to achieve at least 90% emissions reductions before using carbon removal for residual emissions. This contrasts with earlier approaches that permitted extensive offsetting without deep decarbonization. Novartis has committed to this more stringent framework, planning regulated carbon removal only after achieving 90% reductions.

For UK businesses evaluating corporate climate claims, SBTi validation serves as a useful credibility indicator. However, targets represent intentions rather than achievements. Progress reporting, third-party verification, and transparent disclosure of methodology determine whether companies meet their commitments. Novartis publishes quarterly progress updates and maintains alignment with CDP and GRI reporting frameworks.

The pharmaceutical sector contributes approximately 5% of global industrial emissions. Therefore, meaningful reductions from major manufacturers could yield measurable climate benefits. If Novartis achieves its 90% Scope 3 reduction by 2040, and peer companies adopt similar targets, cumulative impact across the sector becomes significant. The company’s strategy may therefore influence competitor commitments and industry standards.

Five critical points for UK businesses to understand

• Novartis targets net zero emissions across all scopes by 2040, with interim goals of 90% reduction in operational emissions by 2030 and 42% reduction in supply chain emissions by the same date.
• The company has embedded environmental criteria into contracts covering more than 90% of its supply chain emissions, requiring suppliers to measure, report, and reduce their own carbon footprints.
• Scope 1 and 2 emissions have already fallen 73% against the 2022 baseline, approaching the 75% interim target, supported by renewable energy procurement and efficiency investments totaling approximately £170 million.
• Water consumption decreased 59% against the baseline, exceeding the 2030 target of 50% reduction, demonstrating that resource efficiency extends beyond carbon metrics.
• Science Based Targets initiative approval in July 2024 validates that Novartis’ commitments align with 1.5°C warming pathways, providing independent verification of the strategy’s climate adequacy.

Practical considerations for businesses in pharmaceutical supply chains

Companies supplying pharmaceutical manufacturers should prepare for environmental performance requirements in commercial terms. This preparation involves establishing carbon measurement systems, setting reduction targets, and implementing reporting processes. Businesses without these capabilities may struggle to meet procurement criteria as sustainability clauses become standard.

Starting with operational emissions measurement provides a foundation. Carbon reporting services can help establish baseline emissions and identify reduction opportunities. Many businesses discover that energy efficiency improvements reduce both emissions and operating costs, creating immediate returns alongside compliance benefits.

Supply chain emissions present greater complexity. Businesses must collect data from their own suppliers while providing transparent information to customers. Digital systems that automate data collection and reporting reduce administrative burden compared to manual spreadsheet processes. However, even basic disclosure demonstrates willingness to engage with sustainability requirements.

Sector collaboration may simplify reporting demands. Standardized frameworks prevent each customer from imposing unique requirements, reducing duplication. UK businesses should monitor industry body initiatives that could establish common reporting formats or methodologies. Participating in these discussions allows companies to influence standards development rather than simply reacting to imposed requirements.

Training teams on sustainability concepts builds internal capability. Sustainability training programs help staff understand carbon accounting, reduction strategies, and reporting obligations. This knowledge enables more informed decision-making when evaluating investments, contracts, or operational changes.

Water and healthcare access commitments address interconnected risks

Novartis links environmental sustainability to healthcare access in climate-vulnerable regions. Climate change affects medicine production and distribution through extreme weather, water scarcity, and infrastructure disruption. The company’s strategy therefore addresses business resilience alongside environmental impact.

Water reduction targets support operations in water-stressed regions while decreasing exposure to supply disruptions. Pharmaceutical manufacturing cannot easily relocate when water becomes scarce, making efficiency improvements and watershed stewardship commercially sensible. Similarly, healthcare access initiatives in vulnerable regions protect market access and supply chain continuity.

This integrated approach recognizes that environmental and social risks interconnect. For example, drought can simultaneously reduce production capacity, disrupt raw material supply, and increase community health needs. Addressing these factors together yields more resilient operations than treating them as separate issues.

UK businesses in regulated sectors may face similar expectations to demonstrate how environmental strategies support operational continuity. Tender responses increasingly request climate risk assessments and adaptation plans. Companies that articulate clear connections between sustainability investments and business resilience provide more compelling responses than those presenting environmental initiatives as peripheral activities.

Where to find authoritative information on corporate climate commitments

The Science Based Targets initiative website provides detailed guidance on setting and validating corporate climate targets. The resources explain methodologies, sector-specific approaches, and the Net Zero Standard that Novartis has adopted. Businesses considering their own targets can access tools and case studies demonstrating various implementation approaches.

The UK government’s Net Zero Strategy outlines policy frameworks affecting businesses across sectors. Understanding regulatory direction helps companies anticipate future requirements and align voluntary commitments with likely mandatory standards. The strategy includes sector-specific pathways and support mechanisms for businesses undertaking decarbonization.

For pharmaceutical-specific context, the Association of the British Pharmaceutical Industry publishes sustainability guidance and industry initiatives. The organization coordinates sector collaboration on environmental standards and represents UK pharmaceutical interests in policy discussions. Member companies share learning on implementation challenges and effective practices.

The CDP disclosure platform contains reported data from thousands of companies, including detailed emissions breakdowns and reduction strategies. This transparency allows businesses to benchmark their performance, understand peer approaches, and identify emerging practices. CDP scores also influence investor decisions and supply chain evaluations.

Businesses seeking practical support for carbon reduction programs can access resources tailored to UK SME circumstances. These tools address the specific challenges facing smaller businesses, including limited resources, complex supply chains, and competing priorities. Targeted guidance helps translate large corporate strategies into approaches suitable for different organizational scales.