As sustainability regulations tighten, the life science industry faces increasing expectations from consumers and investors. Keeping track of regulations, finding enough staff resources, and showcasing the work are some of the challenges companies face.
In late 2021, the life-science industry association SwedenBIO carried out a sustainability poll among its member companies. The results, based on 108 respondents, showed that while many companies must meet sustainability targets, their capacity to do so varies greatly.
33% of the poll’s respondents said that they deliver products or services to customers with sustainability demands. In addition, 25% have faced sustainability demands from investors when seeking financing. Besides formal requirements, 72% of the respondents named their own staff as one of the most important stakeholder groups for sustainability work.
“But while 63% of companies said that they think it’s either important or very important to integrate sustainability work in their company’s business strategy, only 41% said that they already do it.”
That sustainability is a priority for many life science companies is clear. But while 63% of companies said that they think it’s either important or very important to integrate sustainability work in their company’s business strategy, only 41% said that they already do it.
Charlotte af Klercker, Program Manager Business Ecosystem Life Science at Business Sweden, who leads SwedenBIO’s task force on sustainability says, “For small- and medium-sized enterprises (SMEs), it’s difficult to find time to do sustainability work unless it’s an integrated part of the business model. A company needs to have a rather large workforce before they have resources to dedicate to sustainability tasks.”
Challenging as it may be, SMEs may not be able to afford to put sustainability on the backburner. Sustainability regulation has increased in both depth and width since the Paris Agreement in 2015.
Norway-based Anne Margrethe M. Platou, ESG analyst at DNB Markets, says that the investor market in sustainability has grown immensely, driven by consumer demands, the related regulations that investors themselves adhere to, as well as a change in time perspective where greater focus is placed on long-term outcomes.
M. Platou will delve deeper into how her expert area ESG – relating to environmental, social, and governance critera – impacts life science companies at Nordic Life Science Days in Malmö in September. In an interview ahead of the event, she explains that just doing the work isn’t enough – businesses need to get better at showing what they achieve.
“What’s new now is that in order to attract investors, companies have to demonstrate this; not only to think that sustainability is part of their DNA, but find ways to show, report, and highlight this.”
“For Nordic companies within life science, [sustainability] is something that’s embedded in the DNA. In the Nordics we are used to thinking about material issues in terms of ESG, probably more so than elsewhere in the world. What’s new now is that in order to attract investors, companies have to demonstrate this; not only to think that sustainability is part of their DNA, but find ways to show, report, and highlight this,” M. Platou says.
Charlotte af Klercker at Business Sweden emphasizes the importance of showcasing sustainability efforts as well. Her advice to companies starting their sustainability work is to begin with the corporate annual report – include sustainability data the same way financial data is included.
According to af Klercker, establishing a code of conduct in the company is also important, as is having a code of conduct for suppliers. Making expectations clear and auditing suppliers already from the get-go is crucial – not least for companies who might get into business with government agencies later on where this kind of documentation is needed.
The good news is that Nordic companies already tick many sustainability boxes. “Swedish companies get a lot for free in this respect. Protection around labor law, business ethics, and quality assurance are already built into our pharmaceutical companies. We already have these three strong cornerstones in Sweden,” af Klercker says.
“It’s worth putting effort into showing those basic things that we take for granted.”
“Our companies are competing on the global arena, where these cornerstones are not inconsequential. It’s worth putting effort into showing those basic things that we take for granted,” she concludes.
Text by Alexandra Hoegberg, Director of Communications, SwedenBIO