The way the world’s leading pharmaceutical companies exploit nature is a major risk to them as it will increase biodiversity loss and degrade the ecosystem services, a recently published study reveals.
The pharmaceutical sector is dependent on biodiversity and ecosystem services. Not only 25 to 50% of the pharmaceuticals is derived from active ingredients from nature, but the use of clean water and inert raw materials such as fish oils, soya and palmoil are inevitable in drug manufacture.
Moreover, the impacts from overexploitation of natural resources like active ingredients that cannot be readily synthesised, palmoil and soybean production, and water pollution due to drug manufacturing leads to environmental degradation, which is backfiring at the pharmaceutical companies.
The past 50 years a significant shift in population, consumption patterns and natural resource extraction by human beings has been recognised. This led to unprecedented rates of biodiversity loss, which is 100 — 1,000 times faster in recent decades than the natural rate. We are experiencing unprecedented rates of biodiversity loss. Sixty percent of the ecosystem services, such as freshwater, fisheries, pollination and climate regulation, are either degraded or in decline. Predictions are that this trend will worsen. The implications for society, including businesses are clear considering that all businesses rely directly or indirectly on biodiversity and ecosystem services, according to The Economics of Ecosystems and Biodiversity (TEEB) review. TEEB estimated the economicimplications of these trends to be in the region of US$ 2 to US $4.5 trillion in 2008 (3.3 — 7.5 percent of global gross domestic product or GDP). In addition, the World Economic Forum (WEF) placed biodiversity at the nexus of a wide range of global risks including food security, water management, poverty alleviation and climate change.
In 2010 Robeco, the Dutch asset manager, identified the sustainability of biodiversity and ecosystem services as a potential risk for the pharmaceutical industry. They commissioned a broad review of 10 major global pharmaceutical companies with the aim to raise awareness on the matter and get insight on how these companies are addressing this risk. The awareness of these risk with their portfolio companies are key for Robeco to preserve shareholder value. The study conducted by KPMG, Biodiversity and ecosystem services: Risk and opportunity analysis within the pharmaceutical sector, shows that all companies reviewed have started to acknowledge the business implications of declining biodiversity and ecosystem services. Although companies are doing environmental risk assessments, biodiversity and ecosystem services are not part of it yet. Such assessments are paramount, because their natural resources and therefore their supply chains could dry up. These assessments “ should address the sourcing of inert and active ingredients from nature in drug discovery, development and manufacture as well as the direct operational footprint of manufacturing sites,” according to Ms Grigg, co-author of the study.
(Source: website Robeco, 21.07.2011)
