ESG in life sciences and chemicals

The life sciences and chemical industries have a significant impact on the environment due to their emissions, use of natural resources and pollution from chemicals. Environmental considerations therefore focus on reducing the carbon footprint, minimising pollution, managing water resources and promoting sustainable practices.

To meet these challenges, companies need to invest in research & development, find innovative solutions, use environmentally friendly technologies, develop cleaner production processes, use alternative energy sources and demonstrate responsible use of resources.

The social aspect of ESG in the life sciences and chemicals sectors encompasses a company's workforce, the employees in its supply chains and society as a whole. The S in ESG addresses the social responsibility that a company has towards its employees and society. This includes fair working  practices, occupational health and safety, diversity and inclusion, training opportunities, respect for human rights and consumer protection (e.g. safe products). Other key drivers are social engagement and access to medicine and healthcare. 

One of the key tasks is to ensure that suppliers also comply with ESG standards. This means that companies need to monitor the sustainability of their supply chains and ensure that social and environmental standards are met. The legal framework for due diligence obligations of companies with regard to compliance with human rights and environmental protection along the entire supply chain is set out in the Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichtengesetz, LkSG), which has been in force since 1 January 2023.

The  governance aspect focuses on transparency, accountability and ethical behaviour of companies. This includes corporate governance structures that define board diversity, executive pay, humane treatment policies for animals in animal testing, payment history disclosures and anti-corruption and compliance measures.

Companies in the life sciences and chemicals sectors that integrate ESG factors into their business strategy will secure their competitive advantages while increasing their profitability and corporate value. This requires defining targets and performance indicators, implementing sustainable practices, improving transparency and involving stakeholders in the decision-making process.

Our experts will help you to better position your company for the future and support you in developing a custom-fit, value-generating ESG strategy and improving ESG performance.