The pharmaceutical world is changing. Sales of personalised therapies, for example, will skyrocket from $8 billion in 2022 to a projected $106 billion by 2029 according to GlobalData, a compound annual growth rate (CAGR) of 44%. Logistics chiefs face a mammoth challenge in adapting their supply chains to make them suitable for an age of highly attuned, patient-specific treatments.
At the same time, the pharmaceutical industry faces mounting pressure to put sustainability at the heart of operations. As climate risks intensify, the industry’s resilience and commitment to Environmental, Social, and Governance (ESG) principles are being tested. A recent webinar provided valuable insights into how firms like World Courier and its parent company, Cencora, are driving sustainability, mitigating risks and fostering collaboration to navigate an evolving sector.
The Climate Challenge: Risks and Opportunities
With pharmaceutical supply chains becoming ever-more complex, why is now the time to focus on their relationship with the environment? Climate change poses significant challenges to pharmaceutical supply chains, comprising physical risks, such as severe flooding and extreme weather, and transitional risks, tied to the global shift towards a low-carbon economy. Regulatory changes, stakeholder pressure and consumer demand for sustainable products amplifies the urgency of these challenges.
The pharmaceutical industry is also contending with risks linked to ecologically harmful substances used in products like inhalers and refrigerants. Transitioning away from these substances aligns with regulatory mandates while offering firms an opportunity to innovate and lead on sustainability. With some projections suggesting that climate-related factors such as heat stress and undernutrition could result in 250,000 additional deaths annually between 2030 and 2050, the sector has an opportunity to pioneer change globally.
This duality — climate risks as both a threat and an opportunity — will be pivotal for innovation in the sector. By redesigning operations and embracing ESG principles, pharmaceutical companies can advance their business goals while contributing to a healthier, more sustainable future.
Ensuring Resilience Through ESG Strategies
A critical concern for the pharmaceutical logistics sector is maintaining business continuity while embedding ESG principles into operations. Cencora, for example, incorporates climate and ESG considerations into its enterprise-wide risk management process. This includes a global business resilience programme and physical risk assessments to identify vulnerabilities in operational assets.
Meanwhile, World Courier has prioritised innovation to enhance supply chain resilience. For instance, its real-time location monitoring solution, introduced in 2023, provides unprecedented visibility into supply chain operations. By enabling proactive responses to disruptions, this technology can help firms crack down on product waste and ensure that life-saving medicines reach patients in optimal conditions. Looking ahead, advancements like real-time temperature monitoring and data-driven supply chain design are expected to further enhance operational agility.
Such initiatives highlight a shift towards predictive, adaptive strategies. Taking a vigorous stance on these issues will be critical as regulatory imperatives ramp up. Emissions throughout operations are in the spotlight – Scope 1 (direct emissions), Scope 2 (indirect emissions from purchased energy) and Scope 3 (emissions from supply chains). For most pharmaceutical companies, Scope 3 emissions — comprising up to 90% of their total carbon footprint — represent the largest hurdle. These emissions arise from purchased goods, transportation and packaging, among other sources.
As World Courier and Cencora’s representatives pointed out in the webinar, effective approaches to Scope 1 and 2 emissions may include route optimisation, transitioning to alternative fuel vehicles and investing in renewable energy. Targeting the most impactful efforts Scope 3 emissions, meanwhile, will entail engaging suppliers to set science-based reduction targets. One innovative option involves optimising cold-chain packaging to reduce reliance on high-carbon options like dry ice – which firms can work in tandem with supply chain specialists to implement.
Pre-Empting Risks via Technology and Collaboration
Despite progress, a key discussion point in the webinar revolved around the significant challenges remaining in creating sustainable, futureproof supply chains. The transition to renewable energy requires coordinated investment and infrastructure development. Similarly, achieving fleet electrification at scale involves overcoming technical and logistical hurdles, such as ensuring refrigerated vehicles meet the latest service standards. Regulatory rigidity within the pharmaceutical sector poses another challenge, creating bureaucratic logjams and slowing the adoption of innovative solutions.
How can firms ease the transition? Technology plays a crucial role in advancing sustainability goals within the pharmaceutical sector. The use of digital twins, for example — a virtual representation of real-world processes – allows companies to simulate and predict outcomes based on simulated scenarios. By feeding real-time data, such as location and temperature monitoring, into these models, companies can anticipate disruptions, refine supply chain designs and reduce inefficiencies. Tech-driven transformation also supports decarbonisation initiatives, with data collected through digital monitoring utilised to optimise routes and reduce unnecessary mileage. And reusable monitoring solutions can contribute to waste reduction while maintaining the stringent safety and quality standards required for pharmaceutical products.
The scale of sustainability challenges in the pharmaceutical sector also illustrates the critical importance of collaboration across supply chains. Partnerships among manufacturers, suppliers, and stakeholders are essential to achieving emissions reductions and enhancing resilience against a backdrop of growing climate instability. Cencora, for example, has engaged with industry associations and collaborated on initiatives such as collection and repurposing of insulin pens. These efforts exemplify the circular economy in action, reducing waste and lowering emissions. Internal collaboration within organisations is equally critical, with cross-departmental engagement necessary to ensure teams from transport to procurement are all aligned on uniting sustainability initiatives with broader business goals.
The journey towards sustainable pharmaceutical supply chains is complex, but the potential benefits – for human health, the planet and business resilience – are immense. By embedding ESG principles, leveraging technology and fostering collaboration, companies like Cencora and World Courier are putting logistics at the heart of a more sustainable future – and they have built up a wealth of experience that could enable your firm to do the same. To find out more, fill in your details on this page.
