Towards a greener future

GSK’s Mark Rhodes examines the level of environmental awareness in the pharmaceutical industry.

“We're a very compliant industry, so pharma tends to follow things like environmental regulations and health and safety regulations. There is strong knowledge around compliance and policies and procedures”
-Mark Rhodes

As we become increasingly aware of our impact on the planet, environmental consciousness is growing across many sectors. Big pharma may not immediately spring to mind as having the greenest of business models, but Mark Rhodes, VP Sustainability Pharmaceutical and Consumer Healthcare for GlaxoSmithKline, believes the industry boasts quite a high level of awareness around environmental issues.

"I think there is quite a high degree of awareness," he says, when I catch up with him at the Next Generation Pharmaceutical summit in Bremen, Germany. "We're a very complaint industry, so pharma tends to follow things like environmental regulations and health and safety regulations. There is strong knowledge around compliance and policies and procedures.

"The gap that we have that makes us different to other industries such as the car industry is that we need to ask ourselves how we can be more sustainable when we don't have a customer demanding sustainable products. It's very different to somebody buying a car and wanting something with a low fuel consumption and low emissions. We don't have anybody saying to us, 'We want your pharmaceuticals, but we want them greener.' It has to be driven internally.

"Generally, people tend to trust their doctors. If a doctor says, 'This is what I'm going to prescribe you for your illness,' they accept it and don't question whether there's an option that has a better environment profile. A good example is dry powder in respiratory devices versus aerosols. They have very different environmental profiles, but the patient will tend to be very conservative and want to stick with what they've got. And the doctor will not necessarily prescribe based on environmental impact. Even though the molecules might be the same, it's just the way they're presented that is different."

This can pose a challenge to those charged with making their business more sustainable, but they do have one advantage: as Rhodes puts it, everyone who is internal to the company is also a member of the public.

"Everyone has their own personal feelings about recycling. They may recycle at home; why shouldn't they do it at work? Or they may choose a low-emission car at home, so why are they working in a factory with very high emissions? They're not different people when they're at work. You have to harness that enthusiasm and channel it and get everybody together to share their ideas. In fact, sometimes they want to go further than perhaps we in the environmental group want to go, because we see the challenges and we know the problems."

When asked whether he thinks there will come a time when pharmaceutical companies will promote themselves based on their environmental records, Rhodes points to the UK's National Health Service as an example of a higher consciousness within the health sector.

"The NHS has published their own carbon footprint, and they've shown that pharmaceuticals are a major part of that," he explains. "They have to take 80 percent of the carbon out of their system, which includes the supply chain. They'll be asking us about the options for a low-carbon respiratory medicine, and then we can have a discussion with them around dry powders versus aerosols and so on. They will then have to think about how they will transition from aerosols to dry powder, for instance."

Yet making these kinds of changes is not necessarily going to be easy, and involves instituting some long-term thinking from the very beginning. "If we were going to develop new molecules in the respiratory arena," Rhodes says,  "We need to ask whether we should be developing them in the future in aerosols, or should we stick to dry powder because we know carbon is going to be an issue? We're going to be constrained, we're going to be taxed, there are going to be issues with cap and trade. We have to realize that the choices we make now in R&D can have an enormous impact on our product portfolio in five or 10 years' time.

"So irrespective of the supply chain, there's the whole point around what delivery mechanisms you're going to have. In the supply chain, it's a question of asking the right questions of the suppliers; for example, asking them the carbon footprint is of the service they provide, or of a certain packaging material. Then we need to start asking what the options are to reduce or improve it.

"It's quite possible they've got something sitting on the shelf that they offered us five years ago and we said, 'No, we don't want that.' And now we're saying, 'Actually, we might want that. We'll have a discussion about it now.'"

Rhodes points out that in some cases it may take suppliers a few years to develop more sustainable options. This may result in the offer of exclusivity for a certain period of time, and then the option to open the new product or material to everyone else. Because there is an upfront investment involved, they need to see some returns. This again ties into the idea of taking a more long-term view, rather than just viewing it as a one-time transaction."

Strategic moves

In his role, Rhodes fields queries from colleagues working to make improvements in environmental sustainability. "They may say, for example, 'We're reducing the amount of packaging we use in a carton. Can you help us describe the environmental benefit of that change? We know how much cardboard it is, we know how much we've saved, but how does that equate to the carbon we produce, or the amount of trees or water we use?'

"Our brands are now also starting to work on sustainability strategies, because clearly people don't go into a shop and buy two pounds of GSK. They go in and buy Aquafresh toothpaste, or a pack of Panadol. This puts more pressure on the brands to think about their sustainability strategies, which could be from how to design their packaging, what ingredients they're using, where they're sourcing them from, and whether they are sustainable. They may aske: What's the difference between FSC-certified cardboard versus SFI-certified cardboard? Which one is better? Which one do we want? Can you help us with that?

"We help with the technical aspects. They manage the projects, cause it's their brand, and clearly they're the ones who own the budget and it's their PNL. Our role would be to guide them in that, give them the tools and advise them on things such as: recycled equals so much, virgin might be something else, what the difference is between cardboard and plastic."

Rhodes says the VP Sustainability role within GSK is quite new, although he himself has been doing environmental management since 1990; the main difference being that this once consisted mainly of an auditor visiting the factories, writing policies on the environment and checking that they were being followed. The auditor would look at whether the factories were putting waste in the right place, managing effluent, and complying with the laws.

"The shift in terms of this role is that now it's much more around the product," Rhodes underlines. "Environment health and safety management is one group in terms of operational, but now we're also looking at the impact of the product on the environment. The upstream impacts the downstream impacts which supplies are we using, are they ethical, are they not ethical? That's the difference."

The other change, of course, is the much greater awareness among the general public about environmental issues such as climate change and the effects of excess carbon being created at all stages of the manufacturing process. As Rhodes points out, back in the 1990s, ideas about the environment tended to focus on "the smokestacks" - the direct impact of factories on air quality. Now things have become much more strategic.

"We can see the beginnings of the need to internalize the external costs of carbon, where we're going to have to start paying for carbon, whether it's in the packaging that we use, the ingredients we buy, the increased cost of oil and so on. We have to be much more strategic with the environment. - again, it's looking longer term.

"A project for the environment might have a payback of five to seven years. In the past, we wouldn't have approved that. We would have said, 'Two years is our criteria." But now we're saying actually, spend it now, because it will save you an awful lot of money later on."

Ironically though, Rhodes says that when it comes to tackling climate change, it's often the smaller things rather than the big, newsworthy projects that make the difference - the boring things that no one sees and no one wants to talk about: turning lights off, improving air handling, improving air conditioning, changing boilers.

"Those are things that people don't interact with and don't get very excited with. You put a couple of solar panels on the roof and they all think you're doing a great job. That will cost you $90 a ton to recover the carbon, whereas you get your sales fleet to drive a little more efficiently and it will cost you 10 cents a ton. And you'll get that saving instantly." 

Nutritional goals

In addition to its pharma division, GSK also has a consumer division, and within that a nutritionals business, and each of these is in a different place when it comes to an environmental strategy. The nutritionals division began work on its environmental strategy a few years ago, setting targets not only on energy and water, but also on working towards making their packs 100 percent recyclable, as well as having 50 percent recycled material in their packs and looking generally at sustainable sourcing.

"You take a product like the drink Ribena in the UK," Rhodes says, "which is a very old product and has a strong heritage. Consumers want to link to that product and feel that they can trust it. And, of course, they've got a choice. When they get to the shelf in a supermarket they could have Ribena, they could have Robinsons, they could have own-brand labels. So you want to build that trust, which is why it makes sense for nutritionals to move quicker on some areas than say consumer."

Within its consumer division, GSK has made two key achievements: a 100 percent recycled plastic soft drinks bottle, and several of its consumer facilities achieving zero percent to landfill.

"With the bottle," says Rhodes, "we were using 20 percent recycled plastic and then we went to 30 percent, then 40. Each time we made a step change we had to do all the stability trials again. We had to look at the color of the bottles and we had to see whether anything was leeching out. And in the end they said, "Right, let's go for 100 percent, and then we're done. We'll do the stability and then we'll know. And if we can't get enough we'll go back to 90."

"It was great because it was iconic. It was a barrier, a bit like the solar panels on the roof. We just said, let's do it, let's go for it. And a lot of that is then having the drive and ambition. Wanting to be ambitious and take a lead as opposed to just being part of the pack. And it worked. And so they can say, "Great, we've done it now. We don't have to worry about that any more.

"The zero to landfill starts with somebody at the top saying, 'We're going to do this. And when we come to those difficult decisions, we're going to find an answer.' You get strange things happening, like in the cafeteria we had a particular type of coffee machine that produced very nice coffee using these laminated pouches, but the pouches weren't recyclable.

"Suddenly we had a waste stream we couldn't recycle, so we changed them. Then we get people ringing up and saying they don't like the coffee, and we have to tell them they can't have it any more, until they can come up with a recyclable pouch. So you do end up getting down to the minutia of trying to solve something."

Greater awareness

In terms of the future, Rhodes predicts that the big shift will be in transferring this awareness of sustainability from the consumer side, where the link with the brands already exists, into pharma. He allows that there will be hurdles, including the oft-mentioned regulatory aspects, but he counters that by pointing out that GSK has good engineers and good scientists. His feeling is that a lot of it comes down to is just saying, "This is how we're going to be."

"There are some things that will help us along the way, and one of them is partnering," says Rhodes. "Some of the key leverages are partnering with different suppliers and seeing how we can close the loop. Saying that if they provide this material, and we've got all these off-cuts, how can they take it back and use that somewhere in the process? Trying to push it and say that there has to be a solution. Chucking it in a landfill is just not sustainable. There's got to be a better way out there.

"It may mean we have to spend a bit of money on research; for example, we're spending some money at the moment with someone who's got some start up technology. If it works, then we've got an outlet for one of our waste streams that currently goes to landfill.

"We're also kicking off a trial in the US to look at recycling some of our medical devices back from the patient. We wouldn't put them back into the medical devices, but if they end up as a car bumper, well that's better than just filling a hole in the ground."

Regulatory hurdles are often cited as a barrier to increased environmental sustainability. While Rhodes concedes that there are hurdles, he believes there are not as many as some might suggest. "And whether the height of the hurdle is quite as high as we say it is is another question," he says. "We tend to exaggerate. And sometimes we don't ask the question, we just say that the regulations will never allow it, instead of going back and saying, 'Actually are you sure that's really what you want?'"

"If you get it right in the R&D phase when you register it and you've got the design in there, then that shouldn't be an issue later on. It's addressing how many changes you make as a product comes up to patent loss in terms of processing, ingredients, packaging, because you realize it's not going to be cost effective any longer. If you can do that when you're worried about the patent hurdle, why not do it at the beginning?"

Mark Rhodes is VP Sustainability Pharmaceutical and Consumer Healthcare, GlaxoSmithKline.