Starting the conversation: Integrating pharmaceutical pollution into sustainable finance initiatives
Sustainable finance initiatives are designed to mobilise private sector investment to support the transition towards a sustainable global economy.
Until recently, these initiatives had been focused on addressing climate change. Now, with the international community increasingly recognising the triple planetary crises of carbon, pollution and biodiversity loss, they are expanding to integrate broader environmental issues.
So, what are the opportunities and challenges for integrating pharmaceutical pollution into sustainable finance initiatives?
To explore this topic, we ran a panel event on 30th May 2024, with experts from across sustainable finance, environmental economics and the pharmaceutical industry. We discussed:
What roles can standards and certification programmes play?
Courtney Soulsby, Global Director at the British Standards Institution, highlighted the challenges facing the finance sector in terms of the abundance of environmental sustainability data, and the important role of standards and robust certification programs in dealing with this, through aligning multi-stakeholder interests, driving consensus on pollution control and providing independent oversight of adherence.
What are the practical implications of integrating pharmaceutical pollution into sustainable finance initiatives?
Sam Maynard, Principal Environmental Risk Assessor at AstraZeneca, emphasised the need for integration with other environmental issues to maximise the overall environmental impact of interventions. He discussed the importance of incentivising pharmaceutical companies to enhance sustainability through achievable, incremental improvements rather than overly ambitious binary goals.
How effective are current biodiversity targets in driving change?
Professor Chendi Zhang, Director of the Centre for Sustainable Finance at the University of Exeter, described his research showing that current biodiversity ratings used in sustainable finance initiatives do not significantly affect investment returns or financial forecasts, and in some cases have led to more polluting companies often having higher returns on investment.
What progress has been made in integrating water usage more broadly into sustainable finance?
Rick Hogeboom, Executive Director of the Water Footprint Network, highlighted the progress of their work in supporting the integration of water footprint targets into sustainable finance initiatives, and outlined his recent research showing that, despite this progress, mainstream investment actors still largely overlook water usage in their decision-making.
What role could the international banking sector play?
Nobuko Ishikawa, an Environmental Economist with over 30 years’ experience in international development finance, outlined the potential for this sector to support pharmaceutical pollution mitigation through long-standing social and environmental risk standards and due diligence frameworks, and institution-wide commitments to environmental sustainability.
To find out more, read the full report here or watch the panel event here. A huge thank you to our fantastic panel!