Contract development and manufacturing organization Samsung Biologics has made supply chain sustainability a priority in recent years. The CDMO has joined several sustainability initiatives and set targets to reach net-zero emissions across its supply chain by 2050. As part of its stepped-up environmental, social, and governance initiatives, it hosted its inaugural Suppliers ESG Day, a hybrid virtual and in-person meeting with supplier companies and external ESG specialists organized to discuss how to meet ESG requirements and to analyze case studies of successful emissions reduction efforts.
“Since a majority of health care emissions are created in the manufacturing supply chains, it is critical for us to work together at every level to become greener and more circular,” said Samsung Biologics President and CEO John Rim. “By connecting our suppliers with resources to help them assess their performance and opportunities to go beyond carbon emissions reductions, we are building a more transparent and responsible value chain.”
Sustainability and the CDMO Supply Chain
According to a recent white paper published by the Sustainable Markets Initiative led by British King Charles III, the health care industry accounts for roughly 4% to 5% of global greenhouse gas emissions. Of those emissions, the report found that 50% were tied to the pharmaceutical industry supply chain.
The supply chain for pharmaceuticals, which stretches from the sourcing of raw materials to the manufacturing and distribution of finished products, is still reliant on a system that produces significant carbon emissions. The production of active pharmaceutical ingredients relies on petroleum-derived chemicals, and energy-intensive steps and the distribution of medicines — particularly cold-chain shipping — adds to the industry’s carbon footprint.
While these concerns apply to the health care and pharmaceutical sectors as a whole, CDMOs, which develop and manufacture biological drugs for partner companies, are heavily involved in the modern pharmaceutical supply chain as they’re increasingly being used to outsource drug manufacturing.
Against this backdrop, Samsung Biologics is working to spearhead efforts to reach net-zero emissions in the long run, as well as consistently reduce emissions in the short term.
“The global climate change crisis is increasingly intensifying, with far-reaching impacts in the health care industry as well, which also impacts our clients and patients,” reads the company’s recently released Task Force on Climate-Related Financial Disclosures report.
“As sustainable management toward sustainable lives and a better future is consistent with Samsung Biologics’ mission of ‘delivering better life to mankind with high-quality biomedicines,’ we are aware of the criticality of climate change and our important role and responsibility in combating it.”
Samsung Biologics’ ESG Policies
The TCFD report details the steps Samsung Biologics has taken in recent years on the ESG front.
In addition to committing to achieving net-zero emissions by 2050, the CDMO outlined goals for a 36% reduction in GHG emissions by 2030 and 73% by 2040, with plans for reducing Scope 1 and 2 emissions at the company’s manufacturing sites, as well as Scope 3 emissions from upstream and downstream segments of the supply chain, which account for “95.8% of value chain emissions,” according to the report.
Samsung Biologics chairs the Sustainable Markets Initiative’s Supply Chain Working Group, collaborating with a range of other industry stakeholders, nongovernmental organizations, academics, and others to set tangible plans for emissions reduction.
“Continued progress also depends upon the collective efforts of the public-private sectors. We work with many coalitions, including the Sustainable Markets Initiative’s Health Systems Task Force where we’ve committed to delivering action in three priority areas — patient care pathways, digital health care, and supply chains — the latter of which Samsung Biologics champions, as well as the United Nations Global Compact,” wrote Rim in the report.
“As we pursue these objectives, we also consider the associated risks climate change presents to our business activities and investments. We are disclosing these risks to provide transparency to our stakeholders so they can better assess the long-term value creation on which we are focused.”
The CDMO is working on implementing energy-saving measures like LED replacements, flexible air-conditioning operations, and streamlined manufacturing processes. It’s also established mid and long-term targets for key environmental performance indicators beyond greenhouse gas, including water reuse and waste recycling, with plans to increase waste recycling rates to 90% by 2030 and to invest in waste treatment technological development.
Ultimately, Samsung Biologics has recognized that the CDMO industry cannot grow without a focus on sustainability and has integrated ESG into its broader approach to building a leading company in the industry.
“ESG is no longer a strategy or initiative but the competitiveness of the company itself,” said Dongjoong Kim, executive vice president and head of sustainable management at Samsung Biologics. “Accordingly, we aim to carry out the climate-related activities to achieve the net-zero declaration based on a strategy.”
