Net-Zero Pharma Is a Myth Without Global Alignment on Scope 3 Emissions

The pharmaceutical sector rarely features in conversations about decarbonization. And when it does, it’s often framed as a sustainability leader—one that uses science to solve humanity’s biggest challenges. 

But this comforting narrative obscures a harder truth: the path to net-zero pharma is riddled with gaps, and until the world aligns on Scope 3 emissions, the notion of a net-zero pharmaceutical industry is a myth.

The sector’s emissions are rising—despite public net-zero commitments, science-based targets, and ambitious ESG goals. Why? Because most of the carbon footprint lies far outside company walls. The current model allows firms to make bold claims about emissions reductions while outsourcing most of their actual impact.

To be credible on climate, pharma must move from compliance to coherence—a full-system reckoning that includes the entire value chain, upstream and downstream pollution, and the unspoken structural incentives that reward volume over value.

The Scope 3 Illusion

Let’s start with carbon math. Scope 1 emissions are those from a company’s direct operations—its labs, factories, and vehicles. Scope 2 are the indirect emissions from purchased electricity. Scope 3? Everything else: supply chains, raw material extraction, packaging, logistics, product use, and disposal.

In pharma, Scope 3 often accounts for over 80% of total emissions. Yet most climate strategies focus on Scope 1 and 2, because they’re the easiest to measure and control. This creates an illusion of progress. A company can install solar panels on its headquarters and electrify its vehicle fleet while ignoring the carbon-intensive solvent production three tiers up its supply chain—or the patient waste that contaminates water systems downstream.

Some might argue that, in theory, if every company cleaned up its Scope 1, Scope 3 would be automatically resolved. But in practice, many actors in pharma’s global supply chain—especially in raw materials and chemical intermediates—are small, unregulated, or outside the reach of transparency mandates. They’re not required to report, they don’t have the resources to decarbonize, and they may operate in jurisdictions with weak climate policy.

The result? A compliance shell game where Scope 3 emissions become someone else’s problem—unreported, unregulated, and rising.

Pharma’s Growth Paradox

Even if every major pharmaceutical company achieved zero emissions in its operations tomorrow, emissions would still rise. Why? Because demand is rising even faster.

Pharma is a growth sector. Aging populations, expanded healthcare access, rising incomes in emerging economies—all are driving increased drug consumption. And while efficiency measures (like process optimization or better transport logistics) help reduce emissions per unit, they don’t reduce total emissions if volume grows faster than efficiency.

This is Jevons’ Paradox in action: efficiency enables growth, and growth outweighs the gains. The industry’s incentive structure—focused on market share and product volume—makes it almost impossible to reverse this trend under current conditions.

Worse, the business model does not reward population health—it rewards product sales. Even in markets with improved public health outcomes, pharmaceutical sales continue rising. And those products must be synthesized, packaged, transported, and used—each step carrying emissions and waste.

A Supply Chain Built for Safety, Not Sustainability

Pharma’s industrial model is optimized for one thing: quality. Not resource efficiency. Not reuse. Not circularity. In fact, the very attributes that make pharma trustworthy—controlled batch production, sterile packaging, high-purity ingredients—also make it resource-intensive.

Processes are often batch-based rather than continuous, leading to poor heat integration, high material losses, and low energy efficiency. There’s little reuse of solvents or heat. Many ingredients are derived from complex multi-step syntheses involving toxic intermediates or hazardous waste.

But the high profit margins in pharma mean there’s little economic pressure to optimize. Why shave off energy use when margins are robust and customers are price-insensitive?

In this context, net-zero targets become more about optics than transformation. Without radical innovation—like continuous flow processing, green chemistry, and low-energy synthesis—there’s no viable path to decarbonization.

Pollution: The Other Sustainability Emergency

While carbon emissions dominate ESG headlines, pharma’s environmental footprint goes far beyond CO₂. Pollution—both upstream and downstream—is an under-acknowledged crisis.

In the upstream supply chain, manufacturing pharmaceutical intermediates often involves toxic solvents, poorly managed effluents, and hazardous chemical releases. These facilities—often based in countries with lower environmental oversight—can contaminate water tables, harm local communities, and disrupt ecosystems.



Downstream, the problem compounds. After consumption, many active pharmaceutical ingredients (APIs) are excreted unchanged. These residues enter wastewater systems, bypass traditional treatment, and accumulate in rivers, lakes, and coastal zones—impacting aquatic life and, in some cases, re-entering human exposure pathways. Inadequate medicine disposal exacerbates the problem, with unused drugs often flushed, burned, or dumped improperly.

These environmental effects are more immediate than climate change. They affect human health, biodiversity, and water safety now—not decades from now. And yet, few pharma sustainability plans include pollution reduction strategies with the same rigor as carbon targets.

Regulatory compliance isn’t enough here. Like with emissions, compliance merely sets the floor, not the ambition. Responsibility must be redefined: not just meeting the letter of the law, but minimizing harm across the full product lifecycle.

Regulation: Stronger, but Still Fragmented

There are signs of progress. The European Union has introduced several policies aimed at broadening corporate responsibility:

• CSRD (Corporate Sustainability Reporting Directive) mandates disclosure of material sustainability risks and impacts across value chains.
• CSDDD (Corporate Sustainability Due Diligence Directive) requires large companies to identify and act on human rights and environmental risks in their supply chains.
• Extended Producer Responsibility (EPR) schemes are emerging to hold companies accountable for product disposal and environmental impacts post-use.

These are steps forward. But they are regional, new, and limited in scope. Most small suppliers remain exempt. Many jurisdictions outside the EU have no such rules. And these laws emphasize reporting and transparency—they don’t (yet) mandate emissions reductions or pollution prevention at the global level.

Worse, even the best frameworks can’t function without enforcement. And global enforcement is weak. COP summits come and go. Pledges are made. But emissions rise.

We cannot rely on fragmented national policies to govern a global industry.

The Corporate Conundrum

Pharma firms face a structural dilemma: they are legally bound to deliver returns to shareholders, but not to reduce emissions or pollution—unless doing so aligns with financial risk or brand value.

This fiduciary obligation limits how far sustainability strategies can go, especially if global regulations remain patchy. As long as impact reduction remains voluntary, companies will favor low-hanging fruit—Scope 1 and 2 reporting, energy efficiency, offsetting—while outsourcing the rest.

What’s needed is structural realignment: investor mandates that prioritize environmental integrity, regulatory frameworks that mandate full value chain accountability, and procurement policies that reward verifiable impact.

What Real Net-Zero Pharma Would Require

A credible net-zero pharma sector demands more than internal reporting. It requires systemic change:

1. Global Alignment on Scope 3
2. Harmonized standards and mandates across jurisdictions requiring transparent, verified Scope 3 reporting—and actionable reduction plans.
3. Full Value Chain Engagement
4. Large firms must support decarbonization of their upstream and downstream partners, sharing tools, training, and capital—not just auditing them.
5. Circular Product Design
6. Drugs and packaging must be designed for lower energy use, better degradation, and improved take-back schemes.
7. Pollution Metrics
8. Sustainability reporting must include pharmaceutical pollution KPIs, from upstream solvent handling to downstream excretion and disposal.
9. Outcome-Oriented Business Models
10. Moving from volume-driven incentives to health-outcome-based procurement, particularly for public health systems.
11. Innovation Funding
12. Prioritize green chemistry, enzymatic synthesis, and energy-efficient platforms—ensuring sustainability doesn’t remain a niche R&D effort.

Final Reflection: No Room for Half Measures

Pharma will always be essential. But essential doesn’t mean exempt. The sector’s climate and environmental footprint cannot be solved through corporate branding or carbon accounting acrobatics. Without a coordinated, global approach to Scope 3—and without serious attention to pollution—net-zero pharma is an elegant fiction.

We must replace comfort with courage. It’s time to redesign, not just report. To regenerate, not just reduce.

Until then, the net-zero badge in pharma remains a myth—reassuring to shareholders, but irrelevant to the planet.