Riding the CSRD reporting wave

The life sciences sector is navigating a complex landscape of sustainability challenges,

with companies implementing diverse strategies to address environmental, social, and governance (ESG) issues. This document provides a nuanced overview of the current state of ESG practices within the sector, highlighting key differences and trends across sub-sectors, including pharmaceutical giants, biotech & specialty pharma, and CDMO* & healthcare services. It is important to note that several of the largest players are still progressing toward Corporate Sustainability Reporting Directive (CSRD) compliance. These companies have indicated that their reporting approach is evolving and will be fully aligned with CSRD requirements starting with the 2025 reporting cycle, with publication expected in 2026.

Life sciences companies are increasingly committed to environmental sustainability, with a majority setting ambitious net-zero goals and medium- to long-term greenhouse gas

(GHG) reduction targets, particularly for Scopes 1 and 2. Renewable energy adoption is

a pivotal focus, with many targeting 100% renewable electricity by 2025–2030. Despite these efforts, gaps persist in Scope 3 emissions reporting and renewable energy target-setting, particularly among CDMO & healthcare services. Pharma giants lead in ambition and transparency, while biotech & specialty pharma show a split in progress. Biodiversity management remains a challenge, with limited reporting and target-setting, reflecting a broader industry trend.

• Environmental leadership and challenges: Pharma giants are at the forefront of environmental initiatives, leading in renewable energy adoption and GHG reduction targets. However, Scope 3 emissions and biodiversity management remain areas for improvement across the sector, highlighting the need for comprehensive strategies.
• Social disparities and opportunities: While gender diversity targets are prevalent, ethnic diversity and social protection are largely unaddressed. Training and performance reviews show significant reporting gaps, with disparities in training hours between genders, suggesting opportunities for more inclusive workforce development.
• Governance transparency and gaps: Transparency in governance practices varies widely, with limited reporting on corruption prevention and political contributions. Supplier sustainability assessments and payment practices are inconsistent, highlighting the need for improved oversight and accountability.

Overall, the life sciences sector is making strides toward sustainability, with notable leadership from pharma giants in environmental and social initiatives. However, significant gaps remain in governance practices and reporting consistency across sub-sectors. Addressing these challenges will be crucial for the sector to achieve its sustainability goals and align with global ESG standards, ensuring a balanced approach to environmental, social, and governance priorities.