The vast majority of the world’s drugs are produced in India and China. For the Indian economy, the pharma industry is one of the fastest growing segments and has experienced rapid and sustained expansion since the second half of the 20th Century. But pharmaceutical production is also one of the most heavily polluting industries in Hyderabad and Visakhapatnam.
Pollution from antibiotics manufacturing – an often overlooked cause of antibiotic resistance – is particularly problematic because it fuels the spread of antimicrobial resistance (AMR), one of today’s most serious global threats to public health and wealth.
Sustainable Finance at Nordea
Nordea is the largest wealth manager in the Nordics with approximately 300 billion euro in Asset under Management and 11 million customers across Nordea Group. Nordea’s sustainable finance approach is about integrating sustainability into all our business activities and products.
Driving change through engagements
Nordea engages with companies and other stakeholders, including policy makers, on different themes, individually or through collaborative initiatives. We believe that company engagement is key in order for us to be a responsible owner and drive change within an industry or market.
Water risk is one of our focus areas within stewardship and engagement. In 2016 the World Economic Forum identified water crises as one of the top five global risks of highest concern over the next 10 years. The water issue is not only a present challenge for countries, but also a risk and opportunity for the entities in which we invest, and ultimately the assets we manage.
Our decision to engage the pharmaceutical industry sector on water pollution in India is an example of how we as a financial actor practice responsible ownership to move the industry towards a more sustainable management and to protect our customer’s long-term assets.
Nordea as a game changer for water
Nordea initiated the engagement with pharmaceutical companies as a response to a field visit to Hyderabad and Visakhapatnam in 2015 where we witnessed poor wastewater management related to pharmaceutical manufacturing.
In 2016 Nordea commissioned an independent on-the-ground investigation of a number of pharma supplier sites in Hyderabad and Visakhapatnam area. The resulting report documents and show local impacts of drug pollution and severe contamination of waterways and agricultural lands, inefficient effluent treatment system and systematic dumping of chemical effluent in rivers, lakes and groundwater by the pharmaceutical sector.
The report was communicated to the CEOs of the companies as well as the industry-led Pharmaceutical Supply Chain Initiative (PCSI) together with Nordea’s expectations towards the pharmaceutical companies:
• Leading pharma companies commit to contribute to the protection of water resources in India.
• A pharma industry position and action plan which addresses pharma water pollution in India with emissions reduction targets for suppliers at relevant production sites.
• The pharma industry adopts a common approach that:
– builds on the belief that large global companies can have real influence if they cooperate with each other and work with their partners to achieve better industry-wide standards.
– recognizes the need to build the capacity of partners in the supply chain.
– involves engaging with local regulators, authorities and NGOs.
Impacting the whole industry
The feedback from companies and PSCI has been positive and constructive. A number of corporate and industry actions have been initiated to address the water waste situation in India and Nordea’s concerns. Nordea has commissioned a new investigation of the pharma production sites in Hyderabad and Visakhapatnam and will issue a report in the fall of 2017. In addition to the dialogue with the pharmaceutical industry Nordea also involved in a number of initiatives on antimicrobial resistance (AMR).
Access the report Impact on Pharmaceutical Pollution on Communities and Environment in India right here.
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