Integrate or isolate: Incorporating traditional safety-related issues with wider ESG measures
Within the pharmaceutical sector, a central question is emerging: should traditional safety considerations be treated as distinct from broader environmental, social and governance (ESG) frameworks, or fully integrated within them?
That question has become more pressing as pharma businesses respond to a growing set of ESG requirements, including CSRD, CSDDD, ISSB-aligned reporting, jurisdictional due diligence obligations, and increasing scrutiny of supply chain transparency. These developments require greater and more robust ESG input in reporting, risk management, procurement, and governance. From our work across sustainability strategy and reporting, we see a consistent pattern: companies tend to fall into two broad categories. Some are integrating ESG into business planning and risk management; others are still treating it primarily as a compliance and disclosure exercise and adding ESG contribution at the end of the process.
These distinctions are often attributed to factors such as sector, size, or geography. While each plays a role, in our view the most decisive drivers of ESG quality are the timing and conviction of adoption, supported by clear leadership from the top.
Recent research on ESG commitment and compliance illustrates this dynamic effectively. It compares “pioneers” and “chasers” across the S&P 500, showing how ESG performance evolves over time. Pioneers exhibit consistently high scores clustered closely around the mean, reflecting early, embedded adoption. Chasers, by contrast, show a wider dispersion initially, followed by improvement and convergence. Even when scores appear similar at the endpoint, the underlying characteristics of the two groups remain distinct.
Although this analysis is not specific to European pharmaceuticals, it aligns strongly with our experience of the sector: a relatively small group of early adopters demonstrating consistent, high-quality reporting, and a larger group still catching up.
A sector defined by safety
The life sciences sector presents a unique case. Since its inception, it has operated under stringent regulatory frameworks designed to protect public safety, with minimal tolerance for failure. These requirements naturally align with the “S” in ESG – and occasionally the “E” – yet, they predate the modern ESG agenda and are often treated as separate from it.
Pharmaceutical companies are, understandably, primarily focused on safeguarding public health through their products and manufacturing processes. However, broadening the existing safety culture to encompass the wider ESG framework need not dilute that focus. On the contrary, it offers an opportunity to strengthen disclosures and create a more cohesive narrative that encompasses both traditional safety priorities and wider sustainability considerations, from labour standards to carbon emissions and downstream considerations such as access.
This is the opportunity for the sector. Pharma does not need to build ESG governance from scratch. It already has mature disciplines around safety, quality, evidence, and accountability. The challenge is to connect those disciplines more deliberately to ESG.
Sector-specific ESG challenges
Like other industries, pharmaceuticals face a distinct set of ESG challenges tied to the nature of their operations.
Carbon-intensive sectors such as steel or cement contend with hard-to-abate emissions, while the garment industry faces persistent social and environmental issues linked to supply chains and waste. Pharmaceuticals, although less visible in public sustainability debate, confront their own complex risks.
These range from social concerns related to the manufacture of active pharmaceutical ingredients (APIs) in developing economies, to environmental impacts such as water usage, greenhouse gas emissions from refrigerants, and the use of propellants in respiratory treatments. Packaging, often highly specialised and difficult to recycle, presents further downstream challenges. At the same time, the sector’s reliance on biodiversity for drug discovery underscores its exposure to ecosystem degradation.
Historically, these issues have been overshadowed by more immediate safety concerns. However, recent disruptions – including Brexit, the COVID-19 pandemic, and ongoing geopolitical instability – have reshaped the risk landscape. In particular, the concentration of supply chains in China and India, driven by decades of cost optimisation, has come under increasing scrutiny.
Many of the risks highlighted by these disruptions intersect with ESG considerations, including climate exposure, social standards, and resource dependency. As a result, risk mapping and scenario planning are increasingly able to address both ESG materiality and supply chain resilience. Companies that integrate these perspectives are better positioned to manage uncertainty and embed sustainability into core business risk frameworks.
Moving beyond compliance
As in other sectors, ESG maturity in pharmaceuticals varies. The research referenced earlier suggests that life sciences companies are somewhat overrepresented among “chasers”, while sectors such as food and beverage feature more prominently among “pioneers”.
We attribute this partly to the industry’s traditional focus on direct health outcomes, which can obscure broader ESG risks, and partly to the strong emphasis placed by regulators and consumers on product safety and efficacy. Together, these factors have encouraged a siloed approach to ESG, often treated primarily as a compliance and reporting exercise.
However, this is beginning to change. Growing emphasis on resilience – alongside regulatory developments such as CSRD, CSDDD, and other jurisdictional due diligence and reporting requirements – creates an opportunity to embed ESG considerations into strategic planning. By doing so, companies can improve both risk management and the quality of their disclosures, providing a clearer view of risks and opportunities.
This matters because ESG reporting is only as strong as the systems behind it. If sustainability data is disconnected from supply chain decisions, quality systems, or capital allocation, disclosures may satisfy a reporting requirement without improving how the business manages risk.
Conclusion
When effectively implemented, ESG can enhance supply chain resilience, strengthen risk management, improve operational efficiency, and build investor confidence. It provides greater visibility into critical dependencies and supports more informed decision-making.
Achieving these benefits requires a shift away from siloed sustainability functions toward full integration of ESG into core business strategy.
The organisations making the greatest progress are those that prioritise materiality. Rather than attempting to address every emerging requirement equally, they focus on the issues most relevant to their operations, stakeholders, and long-term objectives. They also recognise that sustainability must connect meaningfully with finance, procurement, risk, compliance, and operations.
This calls for clear, but not siloed, ownership, proportionate controls, and governance processes robust enough to withstand scrutiny. Ultimately, the question is no longer whether ESG should sit alongside traditional safety considerations, but how effectively the two can be brought together to create a more resilient and sustainable pharmaceutical sector.
The companies that make the greatest progress will be those that have connected ESG to the systems pharma already understands well: safety, quality, risk, evidence, and accountability. For a sector built on public trust, that integration is becoming essential.
About the authors
Alice Strevens is director of sustainability at Forvis Mazars. She leads UK sustainability consulting, focusing on inputs, supporting companies in developing environmental and social strategies.
Andrew Jones is head of narrative and sustainability reporting, and global co-head of Mazars ISSB Centre of Excellence at Forvis Mazars. He leads narrative and sustainability reporting, analysing outputs: what can be inferred about corporate strategy from annual and sustainability disclosures.
