Beyond building technology solutions with various use cases, there’s an increasing demand for companies to demonstrate their commitment to sustainable and responsible business practices today. People want to do business, but they want to do good while at it — make an impact. This demand has fueled the rise of adopting Environmental, Social, and Governance (ESG) practices, as revealed in the ESG Global Study 2022. Results from the study show global ESG users reaching 89% and global investors confessing that their investment decisions are centered around sustainability and ESG considerations.
Scaling ESG initiatives
Whether it is implementing environmentally sustainable operations, closing the gender pay gap, supporting community health initiatives, or even maintaining ethical and transparent company practices in governance, enterprises operating across a broad range of sectors are locked into scaling ESG discussions and initiatives.
Pharma companies are not exempt from this conversation, especially as pressure mounts on them to become more accountable for the impact of their operations on the environment. Top players like Dr. Reddy’s Laboratories (NASDAQ: RDY) have, however, stayed ahead of their time with voluntary sustainability reports dating as far back as 2004.
Generic medicine for the greater good
Headquartered in Hyderabad, India, Dr. Reddy’s Laboratories is an eponymous multinational pharmaceutical company founded 39 years ago by prominent Indian scientist and entrepreneur Dr. Kallam Anji Reddy. Being a scientist himself, Dr. Reddy was familiar with how high prices affected equitable access to life-saving medicines. Developing active pharmaceutical ingredients and generic drugs and, eventually, new drug discovery was Dr. Reddy’s vision. The company has today grown to be one of the leading pharmaceutical companies in India and, with a presence in nearly 70 countries, a respected player in the global pharmaceutical industry.
As the first Indian pharma company to receive 180-day exclusivity from the United States Food and Drug Administration (FDA) to market a generic drug in the country in 2001 and one of India’s five largest pharma companies by market capitalization as of May 2023, Dr. Reddy’s practices and standards have always been a trendsetter in the industry. The company continues to build on the founder’s legacy of access, affordability, and patient-centered innovation while embracing sustainability and social responsibility as the mainstays of its business strategy.
Good health can’t wait
In an interview with Mckinsey & Company, co-chairman and managing director of the pharma giant, G.V Prasad, emphasized the company’s stance in purpose-driven and socially responsible activity. He says, “Today, we have embraced the credo of ‘good health can’t wait.’ From molecules and medicines, we have now enlarged our focus to health.” Hedged on this philosophy, Dr. Reddy’s Laboratories has executed ESG initiatives focused on the following goals: environmental stewardship, contributing to a fairer and more socially inclusive world, making products accessible and affordable for patients, and enhancing stakeholder trust.
Given the increasing threats of global climate change to the environment, a collective effort toward reducing greenhouse gas emissions is non-negotiable. In an attempt to play its part, the company aims to reduce its indirect carbon emissions by 12.5%, become carbon neutral in direct operations, and achieve 100% renewable power —- all by 2030. There are also plans to address the global water crisis by becoming water positive by 2025. The company plans to accomplish these plans through its climate action, water, and waste management initiatives, as well as ensuring supplier compliance with the internal ESG framework.
In addition to reducing its carbon footprint, Dr. Reddy’s Laboratories is also dedicated to building a more socially inclusive world. As part of its sustainability goals, the company has targeted a threefold increase in the number of women in senior leadership by 2030, complete gender parity by 2035, and hiring more persons with disabilities. In recognition of the company’s efforts across metrics of leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, and anti-sexual harassment policies, it has been featured in the Bloomberg Gender-Equality Index in 2023 as the only Indian pharma company for six years in a row. Still in that light, the company was recognized as one of 2023’s Best Companies for Women by Economic Times.
With nearly 20 years of leadership in sustainability in Indian pharma, the company sees it as its responsibility to set the bar high. The company has committed to impacting over 1.5 billion patients by 2030 (a nearly three-fold increase over baseline), to ensure 25% of its launches are first to market by 2027, and to introduce three innovations over the standard of care from 2027. Not only are these patient-centric social ESG goals embedded in its business strategy, but they are also measurable with clear accountabilities. It helps view the business agenda in the context of addressing societal needs. What is truly evident is how Dr. Reddy’s has built a legacy of sustainability since 2004, recognizing the importance of transparency and accountability long before it became a widely adopted practice. By expanding its ESG goals across a broad range of factors that drive societal impact, this pharma giant has proven that it is not merely following a trend but setting the trend.
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As advocates for integrating purpose into strategy and being a force for good, Prasad reiterates their credo when he says, “At Dr. Reddy’s, we say ‘Good Health Can’t-Wait.’ Similarly, actions for sustainability can’t wait. Businesses have to find ways to create a much greater positive impact and not simply do the minimum required to be compliant or to be accepted in society. We need to aim for the maximal good. This is the only way to do business in the future.”