Lactose is a primary, inactive ingredient in some 60 to 70 percent of drugs. It helps form tablets and is used as a diluting powder in certain inhalers. It comes from dairies, of course, which can have big impacts on nature — from water use to greenhouse gas production to fertilizer use and water pollution.
With those nature-based impacts in mind, global pharmaceutical company GSK is evaluating its supply chain and developing a mitigation plan as a participant in a pilot of science-based targets for nature being managed by the Science Based Targets Network (SBTN). GSK is the only drug company, out of 17 companies overall, to participate in the pilot.
Known formerly as GlaxoSmithKline, GSK produces vaccinations for shingles and other infectious diseases, HIV medications, cancer treatments, and drugs and inhalers to treat respiratory diseases from asthma to chronic obstructive pulmonary disease. It has a market cap of $72 billion and was the 10th largest pharma company by revenue in 2022.
SBTN’s voluntary science-based targets for nature, announced in May, provide a framework for companies to evaluate and transparently report their impacts and risks related to natural ecosystems, as well their progress at reducing them.
New sourcing standards focused on nature
As part of the pilot, GSK developed sustainable sourcing standards for key materials, such as lactose, gelatin, palm oil, paper and sugar. Some of these materials are used in the drugs and inhalers produced by the company, like lactose. Others are used as "adjuvants," in vaccines to help create a stronger immune response in people receiving the vaccine. Still others are used for packaging or in drug testing.
GSK’s sustainable sourcing standards cover impacts including land-use change, water stewardship, biodiversity, animal welfare, hazardous materials, greenhouse gas emissions, labor rights and impacts on local communities. They are intended to help suppliers assess, improve and verify their approach to mitigating their impacts and will be refined with feedback GSK receives during the pilot.
GSK is the front-runner [in setting nature and biodiversity standards] in the pharmaceutical industry, and meeting all those standards will not be a walk in the park,
GSK looked to existing sustainability certification schemes to develop its guidelines, said Lisa Martin, chief procurement officer at GSK. But it first went through a process of identifying and prioritizing materials that have nature and climate impacts by reviewing its entire bill of materials. GSK referred to the SBTN’s list of high impact commodities (automatic PDF download) to identify its priority materials. The company then segmented its priority materials into categories such as crop, marine and livestock, and hired different subject matter expert firms to map the supply chains for a subset of those commodities .
For the pilot, GSK selected a handful of materials with differing supply chain complexity including the supplier size and supplier maturity, in terms of their attention to climate and nature impacts.
"You can't focus on everything or you won't get anything done," Martin said.
GSK chose materials with distinct supply chain complexities to test whether its standards and overall sustainable sourcing program could be implemented across a broad range of supply chain contexts.
The impact on GSK suppliers
The company is engaging with suppliers of lactose and a few other materials to gather information for the SBTN pilot and develop its mitigation plan. DFE Pharma is one such supplier.
Based in Germany, DFE Pharma is a major producer of pharmaceutical-grade lactose. The company buys milk from dairy cooperatives, which source milk from individual dairy producers.
GSK issued "a very long list of different standards and requirements," covering more than 100 areas of biodiversity and social concerns, DFE CEO Martii Hedman told GreenBiz.
"Their standards are very demanding. They are the front-runner [in setting nature and biodiversity sta
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