Health systems contribute approximately 4.4% of global greenhouse gas emissions. The lion’s share — 71% — from the supply chain. About 90% of a pharmaceutical company’s carbon footprint, for example, is from the manufacturing, transportation and disposal of medicines.
Many shareholders have been holding pharma to account on issues like drug pricing and the opioid crisis. An emerging movement of stakeholders, at a grassroots level and beyond, are also challenging them to accelerate their work on the decarbonization of the health system.
As part of its work towards a net-zero investment portfolio, the Canadian Medical Association (CMA) is raising awareness of supply chain emissions with the pharmaceutical sector. The CMA’s responsible investing (RI) team — that helps ensure the association incorporates environmental, social and governance factors into its investment decision-making — approached several companies this year.
As a first step, the RI team is encouraging pharma companies that operate in Canada to join the Sustainable Markets Initiative (SMI), launched by His Majesty King Charles III in 2020. The SMI’s Health Systems Task Force is a collaboration between global pharmaceutical and health care companies to speed up and scale the delivery of net-zero health care beyond their own organizations.
Already, the Task Force has set joint minimum climate and sustainability targets for health care suppliers.
The CMA is also urging pharmaceutical companies to start measuring and disclosing emissions from their supply chain, as well as calculating and disclosing life cycle assessments for their products. Being transparent about the environmental impact of individual medicines, for example, would allow health care providers and patients to make more informed choices when prescribing. It would also enable climate-conscious investors to gauge the company’s commitment to decarbonizing health care.
“Over the next couple of years, other institutional investors will start focusing on sustainability in the health care supply chain – but right now, this is an opportunity for the CMA to show leadership on climate and health,” says CMA President Dr. Joss Reimer.
The responsible investing initiative is part of the CMA’s commitment to reach a net-zero investment portfolio by 2050. As of the end of 2023, the CMA had already reported a 32% reduction in its portfolio’s carbon footprint, compared to a 2019 baseline, due in large part to a motion requiring the CMA and its subsidiaries to divest their investments from energy companies whose primary business relies on fossil fuels.
Responsible investing is also an important part of the CMA’s continued commitment to fight the health impacts of climate change and create a more sustainable and climate-resilient health system for future generations.