Big Pharma may be suffering greater economic pressure than ever before but Pfizer's Marty Brown, Energy and Climate Change Programme, and Dr Peter Dunn, Pfizer Green Chemistry Lead, argue that even in difficult economic times CSR issues are key to future business
Recently released survey results indicate that the global economic slump is having an impact on sustainability-related, corporate spending, with some industries and market sectors (transportation and energy verticals, for example) more negatively affected than others. According to a new Booz & Company cross-industry survey, 40% of all respondents expect spending on "green" and other corporate social responsibility (CSR) initiatives to slow significantly.
The news is not all grim for green, however; according to Booz & Co, in the healthcare and pharmaceutical sectors, just two respondents anticipate that CSR agendas will be delayed.
At global pharmaceutical organisations, such as Pfizer, the global economy's wave of red ink will not stem the "green" tide. The multinational's proactive sustainability initiatives are shrinking carbon footprints and maximising efficiencies to capture cost savings; and at Pfizer green is still the colour of sound economics, proper science and social responsibility.
As the world's largest research-based bio-medical and pharmaceutical company, with operations in 150 countries, Pfizer does business amid a profusion of regulatory responses to climate change and the relationships the company has with the public sector exist in all sorts of climates meteorological as well as political. Within Pfizer, green initiatives ranging from Energy and Climate Change to Green Chemistry have become rooted enough to survive, perhaps even thrive, during the global economic downturn.
The company began to set standards for energy conservation and reduced greenhouse gas (GHG) emissions in 1996, and in 2004 established the Energy and Climate Change Programme. This seeks to minimise the cost and operational restrictions arising from a carbon constrained environment, reduce Pfizer's contribution to greenhouse gas emissions, and facilitate the business and operational adaptation to the physical changes resulting from global warming.
The Energy and Climate Change Programme is one of several Engineering Operations Programmes initiated by Pfizer Global Engineering to drive operational excellence and reduce operating costs. The others are the Global Reliability Programme and the Utility Operations Programme. All programmes are interdependent and help drive each other through the use of common methodologies, tools and training.
Green principles and practices are increasingly embedded in the way industry functions and the way industry thinks in areas ranging from procurement to fleet management, and from development, through manufacturing and emissions reductions all the way to recycling. "Intrinsic to the way all company scientists and engineers work" is how the company describes the progress of its Green Chemistry initiative.
The company's Energy and Climate Change Programme constitutes the architecture and the 82,000 employees compose the infrastructure of a robust, proactive, holistic and cross-functional effort that combines environmental stewardship, public-private partnerships and operational efficiencies. The company realised $115m of cost-savings between 2004 and 2008 by completing more than 1,500 energy and water conservation projects at facilities from California to Ireland, Singapore to Germany.
The metrics are compelling: Pfizer voluntarily reduced GHG emissions by 43% (exceeding the 35%) per million US dollars of revenue between 2000 and 2007. This came about through projects such as the installation of combined power and heating systems at facilities in Belgium, Italy and Singapore, as well as solar and geothermal technologies at other sites. Such actions led to the company's facility at Ringaskiddy, Ireland, winning a national Sustainable Energy Award in 2008.
In reality, some of the most productive projects are less glamorous; reductions are enabled by hundreds of hugely diverse projects, with each site making a contribution to the total. These lesser-known efforts include: managing temperatures, humidity, and airflow in HVAC systems; upgrading boilers, chillers, and lighting with newer, more efficient equipment; and capturing waste energy from processes that would otherwise be lost.
At the Ringaskiddy facility energy demand site-wide was cut by 2% - a saving realised not through capital outlays or rhetorical flourishes but through co-ordinated, common sense actions, such as operating equipment more efficiently and turning off lights. And at a manufacturing facility in Belgium, water usage was reduced by 3% in 2008 while energy efficiency was increased through extensive metering and monitoring. All of this was achieved as production volumes rose.
Data collected are proving very useful and help to sustain these initiatives, despite the global recession. For example, Pfizer's Kalamazoo, Michigan, site has leveraged data related to its HVAC systems to reduce energy consumption significantly, while increasing the operational reliability for those systems.
In place since 2001, Pfizer's Green Chemistry programme yields savings of between $1m and $10m annually for some products. Over the lifetime of a small number of exceptional or "blockbuster" compounds the savings can reach $300m.
One such saving was the result of the invention of entirely new synthetic routes; two others came about through the application of biocatalysis rather than chemical catalysis. Using enzymes to do the reactions, and doing the synthesis in water proved to be not only scientifically feasible but also fiscally sound - and environmentally salutary.
solvent reduction
In the past four years, Pfizer has set goals and reduced the usage of certain undesirable solvents within the company's research division. Between 2005 and 2008, dichloromethane and pentane usage was cut by 60% and 95% respectively.
Last year also saw a major campaign to reduce chloroform usage - which, by the end of 2008 was 98% lower than in the same period the prior year. Use of di-isopropyl ether, a hazardous solvent that can form explosive peroxides, was completely eliminated in 2008 as well.
Meanwhile, regulatory agencies such as the US Department of Environmental Protection (EPA) are recognising such green work: in 2002 the EPA honoured Pfizer with a Presidential Green Chemistry Challenge Award for devising a new route for synthesising sertraline, the active ingredient in the antidepressant marketed as Zoloft. Established in 1995 under then-president Bill Clinton, the Challenge Award recognises chemical design, manufacture and use of technologies that incorporate green principles; experts convened by the American Chemical Society evaluate the nominations.
The synthetic pathway process developed by the Pfizer chemists cut the amount of solvent required to produce a tonne of sertraline from 60,000 gallons to 6,000 gallons. Equally dramatic was the reduction in annual waste production: 440 tonnes of titanium dioxide-methylamine hydrochloride salt, 150 tonnes of 35% hydrochloric acid, and 100 tonnes of sodium hydroxide were eliminated.
In companies like Pfizer, the Green cultural evolution can take many forms. The Energy and Climate Change Programme is led locally by Energy Champions and their teams at sites company-wide. They comprise a global "energy community" with a collective database of 4,200 total projects - new, ongoing and completed.
Through the Green Chemistry initiative, Pfizer offers workshops for undergraduate and graduate students and has developed curricula for green chemistry instruction in middle and high schools. Another product of the initiative is a user-friendly Green Chemistry Solvent Guide; with its "preferred", "usable" and "undesirable" categories, the guide embodies old-fashioned public service as well as state-of-the-art science.
All of the above reflect a cultural evolution encouraged by incentives for going Green including the incentive of precluding, through voluntary actions and standards, potentially draconian regulations. Long before it became convenient to recognise the inconvenient truth about climate change, Pfizer partnered with professional peers and regulatory agencies to seek solutions that are economically sensible as well as socially responsible.
Consider the relationship between the company and the US EPA. In 2002, Pfizer was one of 35 charter members of the Climate Leaders Programme, in which the EPA works with private firms to develop comprehensive strategies to address climate change. Climate Leaders is one of half a dozen voluntary industry-government partnerships, sponsored by the EPA, which aim to reduce GHG emissions by providing technical assistance and other incentives.
smarter logistics
For instance, the SmartWay Transport Partnership, in which Pfizer also participates, has begun offering federal excise tax exemptions on certain equipment. A collaboration between the EPA and some 1,000 shippers and ground transportation carriers, SmartWay's goal is to reduce dramatically diesel fuel consumption and CO2 emissions by 2012. Pfizer's Global Logistics, Engineering, and Environmental Health and Safety groups work with the company's transportation carriers, jointly helping green the supply chain.
The company was also an early member of the Green Suppliers Network, which is co-managed by the EPA and the Manufacturing Extension Partnership (MEP) of the National Institute of Standards and Technology. The multinational is one of about 30 network members designated as "corporate champions" for pledging to nominate at least five suppliers annually to the network; the champions also pledge to work across functions to fully involve their companies in green efforts.
In 2006, Pfizer won the IChemE AstraZeneca Environmental Award for Excellence in Green Chemistry for the process of synthesising pregabalin, the active ingredient in the pain medication marketed as Lyrica. Now approved in the US, the EU and more than 100 countries worldwide, the process utilises biocatalytic reactions in water rather than organic solvents, thereby cutting reagent usage as well as waste production.
This use of water-based enzymatic synthesis to make the drug - in this case, every reaction in the chemical sequence used to produce pregabalin is run in water may well be unique in the industry. "A solvent from the sky" was how one publication for chemists described it; another expert was hard-pressed to come up with a similar example in active pharmaceutical ingredient manufacturing during the past 30 years.
move to proteins
What is not unique, however, is the expected industry-wide slowdown in the development of so-called "blockbuster" drugs. The challenge the company faces is that the number of such drugs (and the accompanying potential for big green savings) looks to be smaller, and not just at Pfizer.
Despite the shift away from the blockbuster model, there is surely enough momentum to propel green programmes for some time. Moving forward, Pfizer expects to move towards the large molecule area - the protein area, which is becoming a bigger part of the business. There are significant opportunities here to reduce the quantities of water as well as energy used to make therapeutic proteins. And it is also essential to make smaller changes and more of them across the board.
One major area of change can be seen in the company's Green Buildings programme. This programme seeks to ensure that sustainable design and construction practices are incorporated into new facilities and major renovation projects. These energy-saving, environmentally friendly, cost-effective ideas and technologies will improve operational costs of the new spaces and minimise the impact on natural resources.
By putting the investment in upfront - i.e. careful siting, thoughtful material selection through to incorporating high efficiency equipment in the design - both environmental impact and costs can be minimised over the long term. Pfizer's Green Buildings Recognition Programme attracted 54 project nominations from 33 company locations in 15 countries during 2008.
The five winners of the annual award - presented in 2008 and 2009 had a combined environmental impact that included a 1,239 tonne reduction in CO2 emissions and cost savings of $1m. One of the winning projects involved renovating a 1950s manufacturing and office complex in Freiburg, Germany, as part of an aggressive undertaking to reduce site CO2 admissions by 40% by 2012.
Another winning project involved implementing an integrated recycling programme for all of the company's sites in Puerto Rico. As a result, recycling rates increased by as much as 87% - yielding $500,000 in cost-savings.
Given the heating and cooling requirements of large manufacturing facilities, the potential for savings (some of it to be gained by simple, if not prosaic, steps involving thermostat settings and the like) would seem to remain compelling, despite the global economic turmoil.
Pfizer's Energy and Climate Change Programme target is to achieve a 5% energy efficiency improvement on an annual basis. And sites are delivering projects that will reduce energy costs by $20m annually.
There is a growing sense among Pfizer's various communities and stakeholders about the importance of environmental issues, and their relationship to good business practices. Consumers expect companies to display social responsibility, and investor groups look for Pfizer to demonstrate that the company is sustainable as a business venture over the long term. Non-governmental organisations and others also are in the mix; every year, the company receives more inquiries regarding what it is doing to reduce its carbon footprint.
Even in the current economy, there is much that the pharmaceutical industry can do on the energy consumption, solvent usage, and waste reduction side to keep the momentum alive. From Pfizer's standpoint, the ball is rolling.