Fauna & Flora International project explores pharmaceutical industry’s links with biodiversity

The report, titled Biodiversity and ecosystem services: Risk and opportunity analysis within the pharmaceutical sector looked at 10 leading global pharmaceutical companies, such as Pfizer and GlaxoSmithKline.

Annelisa Grigg, co-author from the Natural Value Initiative, explains how the sector both depends on and impacts biodiversity and ecosystem services (BES):

“Protecting and maintaining biodiversity is important to the pharmaceutical industry. The use of natural products in drug discovery and development, although much less now than it has been historically, still provides a source of innovation and competitive advantage for the industry.  A significant number of the drugs on which we rely have their origins in the natural world.

“The sector’s  impacts include water consumption, pollution and use of inert ingredients linked with environmental degradation such as palm oil. These can pose regulatory, operational, reputational, market and financing risks.”

Significance of risks

The report was written jointly with KPMG on behalf of Dutch asset manager Robeco.

Charlotte Linnebank, co-author from KPMG Climate Change and Sustainability pointed out:

“While some organisations have begun to acknowledge these risks, little is being done to evaluate risks to their supply chains.”

The report recommends that companies expand their environmental risk assessments to consider impacts and dependence on BES.

Such assessments should address the sourcing of inert and active ingredients from nature in drug discovery (whether cultivated or sourced from the wild), development and manufacture as well as the direct operational footprint of manufacturing sites.

The Natural Value Intiative

The Natural Value Initiative is a collaboration between Fauna & Flora International, the United Nations Environment Programme Finance Initiative, Nyenrode Business University, the Dutch Association of Investors for Sustainable Development and the Brazilian Business School Fundação Getulio Vargas.

The Natural Value Initiative has four broad objectives, to:

• Build awareness of corporate dependence on ecosystem services and impact on biodiversity and the links to corporate risk;
• Build expertise both in companies and investors on evaluating and managing biodiversity and ecosystem services risks and opportunities;
• Stimulate improved performance within the private sector and encourage greater reward of responsible behaviour;
• Mainstream biodiversity and ecosystem services into investment analysis.

Download Biodiversity and Ecosystem Services – Risk and opportunity analysis within the pharmaceutical sector – NVI & KPMG.