Business Ethics & CSRCorporate Environmental Responsibility – Indian Chemical & Pharmaceutical Sector

10/10/2011

Group 8Jagriti Gupta F – 120Jitjyoti Pegu F – 121Ashok K. Chakravarthy F – 122Nikhil Dubey F – 130Nupur Goel F – 131P. Vikram Reddy F – 132Piyush Sikaria F – 133Pranay Singh F – 135

ContentsIndian Chemicals Sector..........................................................................................................................3

Green status of Indian Chemical companies........................................................................................3

CER Laws in India...............................................................................................................................4

Global CER Laws................................................................................................................................4

Issues....................................................................................................................................................5

The Indian Green Story........................................................................................................................5

Ecopreneurs.........................................................................................................................................6

Barriers to CER in Chemical Industry.................................................................................................7

Inertia...............................................................................................................................................7

Confusion.........................................................................................................................................7

Frustration........................................................................................................................................7

GREEN CHEMISTRY........................................................................................................................7

Principles of Green Chemistry.........................................................................................................8

CSR Trend...........................................................................................................................................9

Future Scenario....................................................................................................................................9

Pharmaceutical Industry..........................................................................................................................9

Introduction: Pharmaceutical Industry in India...................................................................................9

Environmental Impacts- Pharmaceutical Industry.............................................................................11

Some Relevant Acts and Rules..........................................................................................................12

Challenges in Pharmaceutical Industry –environmental mishandling...............................................12

Contribution of Global managers to Indian Environmental Production – or the lack of it?..............13

Government Support to Environmental protection by Pharmaceutical Industry...............................13

SMERA Green Rating:......................................................................................................................14

Global Best Practices, Case Study: Pfizer.........................................................................................14

Case Study: MERCK.........................................................................................................................16

Case Study: AstraZeneca...................................................................................................................17

Pharmaceutical Industry Principles for Responsible Supply Chain Management (Pharmaceutical Supply Chain Initiative: PSCI)..........................................................................................................18

GLOBAL Scenario: Environmental pollution due to Pharma Sector................................................19

Recommended Global Steps..............................................................................................................19

Indian Chemicals Sector Some of the main characteristics of the Indian chemical sector are

1. Fragmented & Multi-faceted : Varied technologies are used for the manufacture of various products

2. Pollution & Waste Management: India is lagging behind many other industries in terms of pollution and waste management in the chemicals sector

3. Supply Chain Accountability : There is serious lack of concern about supply chain of production cycle.

4. Lack of R&D and Low Resource Efficiency : priority is not given to R&D and there is a problem of low remuneration also.

5. Low Stakeholder Engagement & Ignorance of Risk : One other major factor is the inactive participation in global conversation about sustainability by many India chemical companies.

Green status of Indian Chemical companiesSome of the recent activities undertaken by some companies in their mission towards going green are as follows

1. Taloja Manufacturing plant

Dow Advanced Materials Division secured 1st prize in National Energy Conservation, 2009

2. BASF India – Eco-Efficiency Analysis

In eco-efficiency Analysis, the economic and ecological outcomes of different processes and procedures in food production chain are compared. Recommendations were given on how to improve sustainable agriculture by lowering production costs and sparing environment. Samruddhi Campaign, 2006 started a pilot with 30,000 soybean farmers. Indian soybean productivity and yield are among the lowest in the world, due to inappropriate fertilization, excess seed rates, improper use of crop protection chemicals or a lack of knowledge or education.

3. TATA Chemicals – India

Tata chemicals has been promoting Green Products like bio fuels to reduce environmental impact. It has also been focusing on Avoid, reduce and reuse to optimize resources. It has set up a habitat for migratory birds in Mithapur. Recycle water plants are also developed at Mithapur and Haldia. Eco-Impact initiative was started to treat hazardous wastes and bringing the processes under Environmental Management System standard ISO 14001.

CER Laws in India1. The Environment Protection Act, 1986

The law states that Industry (occupier) has to submit a safety audit update report once a year and forward a copy within 30 days.

2. The Public Liability Insurance Act, 1991

Owner has to provide relief in case of death or injury or damage to property from an accident on the principle of no fault.

3. The Chemical Accidents (Emergency Planning, Preparedness, And Response) Rules, 1996

Four types of crisis group at local, district, state and national levels are to be formed

4. The Disaster Management Act, 2005

Measures are to be taken for prevention and mitigation of disasters in accordance with the National Plan.

Global CER LawsSome of the global CER laws are

1. Toxic Substances Control Act (TSCA), 1976

Authorized EPA to secure information on all new and existing chemical substances, as well as to control any of the substances that were determined to cause unreasonable risk to public health or the environment.

2. Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 1980

Authorized the Environmental Protection Agency (EPA) to identify parties responsible for contamination of sites and compel the parties to clean up the sites. Where responsible parties cannot be found, the Agency is authorized to clean up sites itself, using a special trust fund.

3. European Union’s Registration, Evaluation and Authorization of Chemicals (REACH):

Generally places the burden on companies to provide data on the chemicals they produce and to address the risks those chemicals pose to human health and the environment

Issues

NGO’s and other regulatory bodies are not properly staffed or funded to complete their mission. With inadequate manpower, insufficient technical and financial resources and rampant corruption, effective implementation of state and national environmental legislation has yet to be achieved.

Some of the problems faced by SME’s are

1. Shortage of capital

2. Limited access to technology

3. Underdeveloped infrastructure,

4. Inadequate research and development

5. Lack of awareness of the options for pollution control and prevention.

Although India has shown remarkable improvement in technological innovation, it still lags behind international standards. Now the focus is on the importance of green chemistry, which is the only sustainable way forward.

Going green will no longer be a matter of choice but will become a strategic imperative for Indian chemical companies. In India, chemical companies are fast making progress to lower the industry’s environmental footprint by adopting green chemistry strategies that reduce emissions, improve sustainability and promote the eco-credentials of manufactured products and processes. New legislation, such as Europe’s Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulations, has also affected the way that chemical companies do business around the world, including in India. Companies that take steps to ensure sustainability and go green will have unrestricted access to markets, boost their reputation and gain a competitive advantage in the marketplace. REACH and other stringent regulations expected in the future are spurring investments in green technology.

The growing bio-renewables sector, meanwhile, also presents new and potential lucrative opportunities for chemical companies in India. The US$ 11 million a year grants fund of the Indian Council of Scientific an Industrial Research (CSIR) is also helping to promote further development in the bio-renewables domain.

The Indian Green StoryThe Indian textile industry, one of the biggest consumers of chemicals, has recently adopted microbial de-colourisation and degradation procedures, and begun exploring bio-diversity for natural dyes and developing eco-friendly methodology for synthetic dyes. Hindustan Petroleum Corporation Ltd (HPCL), a public sector refiner, has stated its intent to bring to market green lubricants developed from renewable feedstock. DuPont, as part of its R&D strategy, has set up a knowledge centre in India focusing on areas like green technologies for refinery processes. Gujarat Narmada Valley Fertilizers

Company Ltd, a public sector firm, has developed and implemented an environment management system (EMS) for its fertilizers, chemicals and supporting services at Gujarat. It has reduced its energy, water and lube oil consumption and increased its revenue from scrap sale due to better segregation, following implementation of the system.

Tata Chemicals has established an Innovation Centre to focus on green technologies in emerging areas such as nano-technology, fermentation and bio-fuels. The centre plays a dual role, greening existing businesses by researching biochemical processes that are more environment-friendly and energy-efficient and developing new green products. While large companies may have the wherewithal to undertake research on their own, small and medium enterprises (SMEs) need more support. Organisations such as the Gujarat Cleaner Production Centre (GCPC) recognise this need, and in association with the United Nations Industrial Development Organisation (UNIDO) identify and provide consulting services for SME projects in the green chemistry space. Several companies have also tied up with academic institutions such as Mumbai University’s Institute of Chemical Technology, and research organizations.

EcopreneursIndian ‘ecopreneurs’ (entrepreneurs with business models built on addressing environmental concerns profitably), are providing a wide range of solutions in the areas of yield improvement and solvent recycling to minimise waste. Also, special environment funds are looking to invest in green technologies, especially in enzymatic production routes and biopolymers. CEO’s need to place their bets today on whether they will lead the way in adopting green chemistry and create a competitive advantage or be a participant in a crowded space in the future. Leading the green charge successfully will require companies to devise innovative approaches to deliver economic, environmental and social benefits.

Companies need to have a comprehensive and well thought out plan for achieving sustainability and green objectives. A three-point agenda for Indian companies to accelerate their journey to go green could be:

Build sustainability goals into vision statements with clear objectives. Cascading down to market facing goals. These could take the form of clearly defined revenue targets for green products – manufactured from renewable feedstock or fully recyclable products – and operational goals, such as a reduction in the firm’s carbon footprint.

Communicate and demonstrate top management support for green initiatives. This is necessary for innovation to flourish, which is a key enabler in the path to go green. It will also help the management resist short-term pressures from derailing long-term strategic intent.

Undertake a life-cycle assessment of existing products and look for opportunities to introduce green products/services, based on an understanding of current and evolving customer needs. This could throw up areas within the supply chain that are environmentally deficient and most probably economically inefficient.

Companies could initially face cost and scalability issues for green technologies and products. However, a clear roadmap. with prioritised actions will help to achieve their triple bottom line and realise the benefits of green chemistry long before competition steps in. Companies that understand the market, regulatory and technology trends have the potential to alter the landscape of the Indian chemical industry and will be in a better position to take advantage of the opportunities and establish a strong foothold.

Barriers to CER in Chemical Industry Like any change, CSR implementation is dependent on the presence of a number of key enablers. The absence of one or more of these leads to some common symptoms that are readily identified.

InertiaInertia results from a lack of pressure or willingness to change. Perhaps this is because there is no pressure from the outside world or because it exists but is not recognised or is resisted. The pressure for change within an organisation normally comes from the ‘top down’, from the leaders who have become convinced of the need to change. Ideally change is made proactively, in advance of the need to do it – but often it is made after a weakness has been exposed.

Enabler 1: Creating Awareness and Understanding Likely Implementation Barriers.

Enabler 2: Building a Coordinated Response to CSRChallenges.

ConfusionConfusion results from a lack of shared vision and accountability. This most commonly occurs if CSR develops without the benefit of a coherent framework, or without cross-functional input. Of course, it will also happen if the motivation for developing better CSR practices is unclear or not deeply grounded in the culture of the organization.

Enabler 3 : Developing Cross-functional Understanding Likely Implementation Barriers.

Enabler 4 : Defining the Role of Procurement Likely Implementation Barriers.

Enabler 5: Creating Policies, Standards and Shared Understanding

Enabler 6: Building Confidence, Trust and Commitment Likely Implementation Barriers

FrustrationFrustration results from the lack of capacity to change.Capacity can be simply workload or result from a shortage of skills or resource bottlenecks. Because of the cross-functional nature of CSR implementation and the involvement of external suppliers, creating the capacity to change across multiple resources is a particular challenge.

Enabler 7 : Securing Available Resource Likely Implementation Barriers

Enabler 8 : Creating a Shared Agenda and Priorities Likely Implementation Barriers

Enabler 9 : Developing the Skills to Deliver Likely Implementation Barriers

GREEN CHEMISTRYGreen Chemistry is the utilisation of a set of principles that reduces or eliminates the use or generation of hazardous substances in the design, manufacture and application of chemical products .

Green Chemistry Is About

• Waste Minimisation at Source

• Use of Catalysts in place of Reagents

• Using Non-Toxic Reagents

• Use of Renewable Resources

• Improved Atom Efficiency

• Use of Solvent Free or Recyclable Environmentally Benign Solvent systems

Principles of Green Chemistry

1. Prevention

It is better to prevent waste than to treat or clean up waste after it has been created.

2. Atom Economy

Synthetic methods should be designed to maximise the incorporation of all materials used in the process into the final product.

3. Less Hazardous Chemical Synthesis

Wherever practicable, synthetic methods should be designed to use and generate substances that possess little or no toxicity to people or the environment.

4. Designing Safer Chemicals

Chemical products should be designed to effect their desired function while minimising their toxicity.

5. Safer Solvents and Auxiliaries

The use of auxiliary substances (e.g., solvents or separation agents) should be made unnecessary whenever possible and innocuous when used.

6. Design for Energy Efficiency

Energy requirements of chemical processes should be recognised for their environmental and economic impacts and should be minimised. If possible, synthetic methods should be conducted at ambient temperature and pressure.

7 Use of Renewable Feedstocks

A raw material or feedstock should be renewable rather than depleting whenever technically and economically practicable.

8 Reduce Derivatives

Unnecessary derivatization (use of blocking groups, protection/de-protection, and temporary modification of physical/chemical processes) should be minimised or avoided if possible, because such steps require additional reagents and can generate waste.

9 Catalysis

Catalytic reagents (as selective as possible) are superior to stoichiometric reagents.

10 Design for Degradation

Chemical products should be designed so that at the end of their function they break down into innocuous degradation products and do not persist in the environment.

11 Real-time Analysis for Pollution Prevention

Analytical methodologies need to be further developed to allow for real-time, in-process monitoring and control prior to the formation of hazardous substances.

12 Inherently Safer Chemistry for Accident Prevention

Substances and the form of a substance used in a chemical process should be chosen to minimise the potential for chemical accidents, including releases, explosions, and fires.

CSR TrendConceptualization of corporate social responsibility up till the 1990’s was purely in terms of philanthropy or charity. Corporation does not commit its resources fully behind such a project. There is lack of involvement from the primary resource provider. Corporation does not feel the need for community. Participation in the designing or management of such initiatives is the only deliverable of the corporateion.

Future ScenarioCompanies should learn to market ideas not just pills. They should realize that bad public relations hurt profits and long-term monopoly of patents undermines innovation. The primary role and major social responsibility of corporate is to deliver new, innovative, medicines. Average cost for a major new medicinal innovation is around US$400 million (takes around 15 years). Collaborative efforts by the government and the pharmaceutical industry as a whole is much needed in this scenario. Appropriate business standards in a manner that insures product safety should be set up. Research-based pharmaceutical industry is the main source of all modern pharmaceutical products. Social and environmental stability and sustainability is necessary for the survival of a free-market economy in the long run. Accountability, transparency and social and environmental investment are the key aspects of corporate governance in the era of globalization.

Pharmaceutical Industry

Introduction: Pharmaceutical Industry in IndiaThe Indian Pharmaceutical Industry today is in the front rank of India’s science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. From

simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously. 

SME’s play an important role in Pharmaceutical industry in India. The Indian pharmaceutical industry is largely fragmented, with over 200,000 players, and the market share of the leader less than 7%.

Hence SMEs play an important role in the sector, especially when it comes to production of API (Active Pharmaceutical Ingredients) in case of generics.

Indian ScenarioIndian pharma companies have made a mark in the global pharmaceutical industry and enjoy a good reputation worldwide.An important thing still remains how these companies treat the environment. Every pharma company generates loads of waste which needs to be disposed of using standard set procedures. These steps if not followed ethically can cause severe damage to the environment and the people around. Below are a few reasons stating the immediate need of following environmental policies and treating pharmaceutical waste accordingly.

Environmental pollution: The pharma industry together is responsible for releasing hazardous waste in the environment in the form of solid, liquids and gaseous substances. If this waste is not treated well before being released in the environment can cause numerous air and water borne diseases and also damage the ecological system.

Need To Abide by the law: A section of the Environment Protection Act that was passed by the Supreme Court of India has made it mandatory for companies to treat hazardous wastes before releasing them in the atmosphere. Violation of this act will result in strict penalties on the companies.

Non Degradable waste: A high quantity of pharma waste consists of non degradable waste i.e. the waste that does not dissolve in the soil. Such waste is serious threat to the environment as it just keeps piling up causing an imbalance in the environment. The only solution to put an end to this problem is recycling such materials and using them all over again.

.Above mentioned are just a few major reasons why pharmaceutical Indian companies need to be kind towards the environment around. There are organizations that give certifications to companies abiding by the environmental policies and cause least possible damage with their business procedures. The ISO 14000, OHSAS 18000 are 2 such bodies that make sure the companies registered with them follow the rules. Every pharma company should undergo a certification process as the waste production cannot be avoided but can be disposed off in such a manner that it does notharm the surrounding areas.

India has 10,5632 (2007) pharmaceuticals units with 77.4% in formulation sector and 22.6% in manufacturing sector. Five states, names Maharashtra, Gujarat, West Bengal, Andhra Pradesh and Tamil Nadu combinedly account for 63.6% of the pharmaceuticals industry in India.

The Pharmaceuticals Industry consists of establishments primarily engaged in one or more of the following:1. Manufacturing medical and biological products;2. Processing botanical drugs and herbs;3. Isolating active medical principles;4. Manufacturing pharmaceutical products intended for internal and external consumption in such forms as tablets, capsules, ointments, powders and solutions.

Environmental Impacts- Pharmaceutical IndustryThe pharmaceutical & bulk drug industry has significant environment and hazard relevance posing risk to industries. This especially creates problems due to the abundance of small players on which not much regulatory control has been applied (or is feasible to be applied in the current regulatory environment and its implementation).

There a number of hazards associated with the Pharmaceuticals Industry. Brief detailsare presented in this paper.Environmental Hazards in Pharmaceuticals IndustryThe hazards from the pharmaceuticals could be categorised as:

Ecotoxic - damage is caused to the environment. Carcinogenic - contribute to the causation of cancer. Persistent - remain dangerous for a long time. Bio-accumulative – accumulates as it makes its way up the food chain.

The risks of hazards depend on the severity and likelihood of the event. The hazards pose risks to the people in the neighbourhood, to the living organisms and to the environment and to the environmental resources. There are also hazard to the workers in the plants that are exposed to toxic chemicals and emissions.

The pharmaceutical industry is not covered exclusively uner any particular environmental control act, but owing to its activities it falls under the purview of the following acts in general:

– The Water (Prevention & Control of Pollution) Act of 1974,

– The Air (Prevention & Control of Pollution) Act of 1981,

– The Environment Protection Act of 1986,

– The Manufacture, Storage and Import of Hazardous Chemicals Rules of 1989,

– The Chemical Accidents (Emergency Planning, Preparedness, And Response) Rules of 1996,

– The Disaster Management Act of 2005,

– The Public Liability Insurance Act of 1991,

– The Factories Act of 1948 etc.

Production of API is a highly polluting process if effluents are not taken care of. This is further complicated by the fact that Indian industry flourishes owing to the low cost production of API and generics at competitive prices, and any attempts at environmental pollution control only ends up increasing the overall cost of production of drugs.

The industry in India has met with tremendous progress when it comes to creation of excellent infrastructure, attending to the global supply of APIs and quality medicines. The opportunities in generics is growing at a rapid pace owing to an increased number of drugs going off - patent in the coming years throughout the globe. This implies that there would be a higher number of

manufacturing capabilities in India in the coming years as the industry expands, and hence a greater need for environmental protection from the already burdened levels.

Though the industry has been growing in India, it has not kept up with other industries when it comes to manufacturing efficiencies and overall productivity, hence increasing the burden on environment and energy.

Some Relevant Acts and RulesSome Acts and Rules relevant to hazards in Pharmaceuticals Industry are briefed below.1. Manufacture, Storage and Import of Hazardous Chemicals Rules,1989 (The Environment Protection Act, 1986)

Applicable for the chemicals handled, used and stored or imported are covered in the Schedule 1 and/or 3 of the Rules, Schedule 2 for isolated storages.

Industry (occupier) to submit a safety audit updates report once a year and forward a copy within 30 days.

Industry to prepare up-to-date on-site emergency plan before commencing a new industrial activity involving specified chemicals.

Industry shall conduct a mock drill of emergency plan every six months and submit a report.2. The Public Liability Insurance Act, 1991

Owner to provide relief in case of death or injury or damage to property from an accident on the principle of no fault.

Owner to draw insurance policies more than the paid-up capital but less than Rs. 50 crores.3. The Chemical Accidents (Emergency Planning, Preparedness, AndResponse) Rules, 1996 [The Environment Protection Act, 1986]As per these Rules, the Crisis Groups are constituted as below:a) Central Crisis Group shall be the apex body to deal with major chemical accidents and to provide expert guidance for handling major chemical accidents. They meet once in six months.b) State Crisis Group shall be the apex body in the State to deal with major chemical accidents and to provide expert guidance for handling major chemical accidents. They meet once in 3 months.c) District Crisis Group shall be the apex body in the district to deal with major chemical accidents and to provide expert guidance for handling chemical accidents. They meet once in 45 days.d) Local Crisis Group shall be the body in the industrial pocket to deal with chemical accidents and coordinate efforts in planning, preparedness and mitigation of a chemical accident. They meet every month. Managing hazards due to effluents, emission and hazardous wastes:The hazards due to effluents, emission and hazardous wastes to be handled through the environmental management initiatives proposed to be taken up by the Department of Pharmaceuticals.

Challenges in Pharmaceutical Industry –environmental mishandlingHyderabad is termed as the API capital of India, owing to the concentration of headquarters of a large number of pharmaceutical companies here, including Dr. Reddy’s, Piramal etc. A large number of manufacturing units, of large and small players are located in the surrounding towns. For instance, about 300 plants produce API in the Patancheru district, 20 miles from Hyderabad.

In 2007, Patancheru gained international notoriety: a study by Swedish researchers showed that water in the area was heavily contaminated by antibiotics. The state and national governments quickly promised to look into the problem and fix it, but there is little evidence so far that officials have made substantial changes, other than to ban new plants from setting up in the district. Samples taken from

water discharged from a local effluent treatment plant indicated that the facility was releasing about 45 kg of the antibiotic ciprofloxacin into the Patancheru environment on a daily basis.

The major problem with releasing antibiotics into the environment is the risk that human pathogens could become increasingly resistant to antibiotic treatment. Producers in Patancheru have done little to reduce their emissions of antibiotics because they are under no pressure to do so. Even if they comply with regulatory standards, it’s irrelevant to the issue of pharmaceutical release.

Contribution of Global managers to Indian Environmental Production – or the lack of it?IFC (International Finance Corporation), the private arm of the World Bank Group engaged Mercer to conduct this study to identify leading investment managers, pursuing sustainable investment in emerging markets. The Indian EME investment managers scored relatively well in terms of the level of firm-wide commitment to ESG (Environmental Social and corporate Governance) integration. Mainly through links with the international parent/holding company where a commitment to ESG had been made at the global organisation level. Where specialist ESG research staff existed at the organisation wide level, they are yet to extend their coverage to Indian companies.

Government Support to Environmental protection by Pharmaceutical IndustryDepartment of Pharmaceuticals has been established under the Central Government. It has a dedicated Environmental Cell, commissioned in July 2008. One of the mandates of the Department includes “providing technical support to deal with national hazards in the pharmaceutical sector”. The objective of the Cell is to collect knowledge and compile data on the latest technologies available for effluent treatment and disaster management and disseminate information among the pharmaceuticals industry. The Cell tries to build partnerships with the Ministry of Environment & Forests, Government of India and the Central and State Pollution Control Boards to facilitate the process of environmental compliance for the sector.

The Planning Commission is examining a proposal to address the environmental pollution caused by the pharmaceutical sector with special focus on SME units. The project is to be implemented with the support of the United Nations Industrial Development Organisation (UNIDO). "South-South Programme for improving Environmental Performance, Waste Minimization and Enhancing Productivity of Pharmaceutical SMEs through the application of Cleaner Production Technique."

This project aims at addressing environmental pollution in the pharmaceutical sector through technical support for dealing with environmental hazards, safety and waste minimization. It strengthens institutional linkage and capacity building in both the target countries-India and South Africa.

SMERA Green Rating:It is an independent body examining the processes of SME’s to rate them in terms of their eco-friendliness. These ratings in turn help SME’s attract investor confidence, ease of loans and gain manufacturing contracts by environmentally sensitive players.

Green Ratings will examine subject units’ current processes and technology and its impact on ecology i.e. air, land and water. Green Rating process would focus on  units’ processes & technology deployed from energy consumption perspective and understand various steps undertaken by the unit to become energy efficient. Green Rating would assess units’ industrial emission of air pollutants in the atmosphere due to its existing manufacturing process & technology deployed. Independent assessment of disposal of industrial waste & effluents and the re-cycling treatment, if any, would be undertaken. Assessment of hazardous material management from raw material to waste product stage will be studied. Depending on the industry, assessment of the noise management due to units’ activity will be undertaken under this study. Related process knowledge and documentation in place for consistent & efficient management of air/water/noise pollution at the unit level will be analyzed.

Global Best Practices, Case Study: PfizerPfizer considers effective management of the natural and workplace environment to be one of its highest corporate priorities. Initiatives regarding environmental friendly practices are included in its code of conduct itself. Its Code of Conduct includes the following:

• Maintain safe and environmentally sound operations with full compliance as a baseline commitment

• Contribute to local and global efforts to protect the environment

• Foster openness and dialogue with our stakeholders and partners

• Integrate principles of stewardship through the life-cycle of our products

• Ensure sourcing from suppliers that conduct operations in a safe and environmentally responsible manner

• Drive continuous improvement in our environmental, health and safety performance and report progress to stakeholders

Three key strategic priorities:

• Helping mitigate climate change and its impacts

• Leading product stewardship efforts

• Sustaining access to potable water

Specific Initiatives include:

1. Managing FootprintCarefully measuring and monitoring progress are key steps to continually improve EHS (Environment, Health & Safety) performance. This is done through:

• Data collection and verification

• Internal audits

• Facility self-assessment

• Management system reviews

2. Greenhouse GasesGoals:• Minimize costs and operational restrictions arising from a carbon-constrained

environment

• Reduce GHG emissions

• Assess risks to our operations

• Adapt to the changes of a warming global climate

It has laid out detailed guidelines to follow the same:

• Corporate Energy Conservation Guideline (established in 1996)

• internal energy and climate change program (established in 2000).

Goals for KPIs:

• Meet their second-generation GHG public goal by reducing GHG emissions by 20 percent on an absolute basis between 2008 and 2012 (baseline 2007)

• Achieve 35 percent of their electricity needs by 2012 through cleaner energy technologies

Achievements

• Obtained more than 21 %of electricity from clean energy sources as of 2010

• Pfizer remains committed to aggressive development and use of clean energy technology where it makes business and environmental sense.

2. Energy EfficiencyGreen Buildings: Pfizer emphasizes practices in all its buildings, such as

• Water conservation

• Waste management

• Renewable energy sources

• Nontoxic materials

• Recycled/reused materials

• Energy efficiency

• Reduced environmental impact on the building site

• Wise use of space/reduced building size

• Balance risk vs. life cycle energy use when specifying "spare" capacity of equipment

• Balance of environmental and economic impacts

Pfizer owns or leases approximately 58 million gross square feet of building space. Emphasize on careful land use planning and protecting natural resources, strive to increase performance of land use efficiency environmentally and energy perspective.

3. WaterIt includes facilities worldwide to quantify water use, prioritize conservation measures and support community efforts during drought conditions

4. Waste & Recycling

Reduced volatile organic compound (VOC) releases by 40 percent by 2008 — on an absolute basis from the baseline year of 2002.

Main actions to prevent contamination:

• Reducing overall waste footprint

• Strong waste management practices

• Robust due diligence to evaluate potential liabilities

If contamination is found, it mitigates any immediate risk, assesses the potential impact and takes remediation steps.

5. Air Emissions:

It Discontinued use of ODCs in the manufacture of any products. At the end of 2007, it reduced the ODP from releases of ODCs by 83 percent against baseline of 2002.

6. Using Less Packaging Elimination of inner pack trays for respiratory products, a refill package redesign for ChapStick, and entirely new packaging for multivitamins Centrum Silver and Centrum

7. EMH Management Systems:

Many facilities have achieved third party recognition of the quality of their management systems through such standards as ISO 14001 and OHSAS 18001, or regional programs that include OSHA VPP and EMAS

Case Study: MERCKCode of Conduct:

• Protection of Environment, Health and Safety:

– Employees shall take actions necessary in the course of their work to protect the environment – air, water and soils and the health and safety of themselves, fellow employees, customers and society at large. They must comply with all environmental, health and safety laws and regulations, enacted from time to time.

• Safe Use of Hazardous Substances:

– The purchase, manufacture, testing, storage, import and export, and the marketing of pharmaceutical drugs are all subject to regulations requiring complete documentation. Narcotic drugs must be exactly accounted for and all stocks and inventories of such drugs must be kept under lock and key to reliably prevent any illegal access by third parties – including unauthorized employees of the Company

Case Study: AstraZenecaIt is an ISO 14001 certified company. It has a full-fledged environment management system in place. In June 2005, it has been presented the Golden Peacock Environment Management Award from World Environment Foundation in this regard.

Its work to reduce carbon footprint and use of natural resources brings benefit for the environment and for the business because of the associated cost efficiencies. Minimise the waste produced includes improvements to production processes which can also boost manufacturing efficiency. “Safety, Health and Environmental (SHE) strategy”: clear framework for managing our environmental impact and promoting a safe, healthy and energising work environment

• Climate change : 20% improvement in operational greenhouse gas footprint

• Material resource efficiency : 15% reduction in waste; 20% improvement in packaging material efficiency; and improvement in materials usage efficiency in manufacturing processes.

• Water : 25% improvement in water usage

• Outsourced manufacture : Understand our external manufacturing footprint and prioritise targets

• Biodiversity : Conserve habitat and species on sites that we own or lease.

Its main Focus Areas include:

– Product stewardship (Taking care of a product’s end to end contribution to environmental impact, right from conceptualization & testing to use, disposal and recycling)

– Impact on environment

– Environmental sustainability

Objectives:

• Greenhouse gas: 20% reduction in greenhouse gas footprint

• Waste: 15% waste reduction (hazardous and non-hazardous)

• Water: Reduce water usage by 25%

• Supply chain: Understand the related footprint and prioritise reduction targets

Pharmaceutical Industry Principles for Responsible Supply Chain Management (Pharmaceutical Supply Chain Initiative: PSCI)Companies supporting the Principles:

• will integrate and apply these Principles in a manner consistent with their own supplier programs

• believe that society and business are best served by responsible business behaviors and practices

The companies in the consortium include:

The initiatives in regard of environmental practices include:

1. Environmental Authorizations

Suppliers shall comply with all applicable environmental regulations. All required environmental permits, licenses, information registrations and restrictions shall be obtained and their operational and reporting requirements followed.

2. Waste and Emissions

Suppliers shall have systems in place to ensure the safe handling, movement, storage, recycling, reuse, or management of waste, air emissions and wastewater discharges. Any waste, wastewater or emissions with the potential to adversely impact human or environmental health shall be appropriately managed, controlled and treated prior to release into the environment.

3. Spills and Releases

Suppliers shall have systems in place to prevent and mitigate accidental spills and releases to the environment.

With these global majors increasingly looking at India and other emerging nations to source their supplies of API and other pharmaceutical products, such practices should spill onto the Indian Pharmaceutical industry improving their overall environmental friendly practices.

GLOBAL Scenario: Environmental pollution due to Pharma SectorEnvironmental risk posed by the pharmaceuticals production facilities in India is too high, Emissions and other effluents originating from pharmaceutical manufacturing facilities were found to be at a level that could seriously affect human and animal health, besides posing definitive risks to the environment.A large number of Indian pharmaceutical firms are currently exporting drug products to European markets. Moreover, India is fast-emerging as hot-bed of manufacturing of drug products because the low-cost base and a large pool of skilled manpowerA study conducted in 90 companies in and around Hyderabad during the period 2006 and 2007, funded by the Swedish International Development Cooperation Agency, came out with the conclusion that level of harmful emissions from most of the active pharmaceutical ingredient (API) manufacturing factories were exteremely high.An analysis of the waste thrown out by the API manufacturing plants showed the presence of drugs including the antibiotic ciprofloxacin, at concentrations of up to 31,000 micrograms per litre, and the antihistamine cetirizine, at up to 1,400 micrograms per litre.

Recommended Global StepsLeading agencies like Medical Products Agency (MPA) of Sweden has raised seriuos concerns on the discharge of toxic substances from pharmaceutical production in the third world and suggested change in the regulations on good manufacturing practices to makeenvironmental certification mandatory for API units.

MPA also suggested amendment in EU legislation concerning the pharmaceutical industry so as to link drug approval process to environmental risk assessment.

If there is any risk of negative environmental effect during assessment, the marketing approval for the drug should be denied, MPA proposed.

A significant part of the current manufacture and production of raw materials or intermediate products takes place in low-cost countries and many large companies are planning to place even more of their production there.

National legislation is insufficient and these measures are better met with harmonised EU legislation, since level of requirements also may affect conditions outside the EU, as proposed by MPA.

MPA has submitted these recommendations to the European Commission for the amendment in the EU legislations.The process of pollution takes time but affects in extreme and lethal form:

After the pill has been swallowed or the injection taken, the active components of the drugs do not become inert or completely absorbed by the body.

That's because conventional sewage treatments may not be looking for drugs, and certainly don't always remove them.

Adding to the problem are prescription drugs that aren't used, then are flushed down the toilet or deposited in landfills -- ultimately ending up in the environment.

This so-called "pharmaceutical pollution" could have major implications on wildlife, agriculture and humans.

"This is an important new research area," said A. Lynn Roberts, leader of a Johns Hopkins team that began a study to determine the scope of pharmaceutical pollution in theUnited States. Roberts continued:

"Over the past few years, scientists in Europe have found pharmaceuticals in natural waterways, sewage treatment effluents and even in drinking water. Global spread of the Problem?Current estimates are still being gathered, but a study conducted by the U.S. Geological Survey (USGS) found that most waterways contain at least some antibiotics, steroids, synthetic hormones or other common drugs. Out of 139 streams in 30 states, they found:

About 80 percent contained trace amounts of contaminants Half the streams contained seven or more chemical compounds One-third of the streams contained 10 or more compounds One water sample contained 38 chemicals

What kinds of drugs Scientists believes the drugs most likely to be found at "toxicologically significant levels"include:

Antidepressants Anti-convulsants Anti-cancer drugs Anti-microbials

Antibiotic-Resistant Bacteria on the RiseJust one problem stemming from pharmaceutical pollution is antibiotic-resistant bacteria. When drugs are excreted in waste, the compounds linger in the environment. In the case of livestock waste, the antibiotic-laced manure is spread directly onto farm crops as fertilizer. From there it may run off into nearby streams.The result is that bacteria is able to mutate into strains thatare resistant to the widely spread antibiotics, paving the way for infections that cannot be easily cured."Pharmaceuticals have high biological activity," Roberts said. "We may be able to tolerate them for a short period of time, but that doesn't mean they won't hurt us – or developing fetuses or aquatic organisms -- at higher concentrations or over a long period of time."