It is our stakeholders who have actually seeded our sustainability vision and driven us to reach beyond compliance

Sustainability Outlook spoke to Mr. R. Shankar, Director of Safety, Health and Environment at Dr. Reddy’s about the drive for sustainability in the pharmaceutical industry.

What does sustainability mean at Dr. Reddy’s and for the pharmaceutical industry in general?

For the pharmaceutical industry effluent discharge from plants is an important issue. At Dr. Reddy’s, we focus on environmental discharge from our plants. Also, CSR has been an integral aspect of our operating philosophy.  We were first in the industry to publish a sustainability report. Our focus has been in accordance with the Millennium Development Goals (MDG), to create innovative affordable medicines for India and for the world. In our 3P strategy we talk of the people, planet and profit. Our sustainability strategy is focused at ensuring that economic, social and environmental aspects are taken care of together. Our concept of sustainability is to ensure that all these three areas thrive simultaneously. Economically successful, ecologically credible and socially responsible is what we aim for and the intersection of these three is the space in which we want to be. 

How would you characterize the environmental and social risks in the pharmaceutical industry and what area according to you needs dramatic improvement?

Environmental challenges in the sector we operate in are tremendous. Some of our plants, when established were distanced from habitation, due to subsequent haphazard development thereafter, these are now surrounded by
communities.The nature of the pharmaceutical industry is such that it is not usually permitted to expand further into the neighborhood. Therefore, we do try to ensure zero discharge in our plants and moderate and monitor the production within the plants so that the needs and safety of the community are taken into consideration. 

The problem that pharmaceutical manufacturers face are the treatment of effluents and the solid waste, which typically have high Chemical Oxygen Demand (COD) but less Biological Oxygen Demand (BOD) along with other non-biodegradable substances. Also, the product life cycle is very short because products constantly change and new developments take place. That is one of the big issues.

What are the drivers and the challenges to sustainability in pharmaceutical industry and what are your focus areas to that end?

Overall the community we work around is the area that we focus on. We engage with the communities around which our units are built and reassess all environmental and social parameters and ensure that we meet the expectations of the community. Around the awareness front, we try and put health education in the value chain; the doctors, nurses help in creating health awareness in these communities. Essentially our efforts are aligned to creating ownership, getting involvement from the communities and engaging the stakeholders around it.

In line with our founder chairman Dr. Reddy’s aim, our core area of concern is also to work in the area of poverty alleviation. Our social arm, Dr. Reddy’s Foundation, runs schools and we work with NGOs and our employees volunteer there. 

What kind of compliance measures does the pharmaceutical industry have to adhere to?

Compliance is defined by the Pollution Control Board which specifies the limits. Most plants need to treat 100% of their effluents with a specialized treatment and ensure a zero discharge plant. All the effluents have to be treated in a way that they get reused as fresh water.

Could you tell us something about your sustainable supply chain initiatives at Dr. Reddy’s?

We reflect on all aspects of sustainability across our entire value chain. From the supplier to the transportation aspects, to the manufacturing and packaging, use and disposal – we perform a complete assessment of our entire supply chain. We have also come out with a sustainability pilot for the industry which is a checklist with a score card. This kind of scoring creates a rating to understand the critical elements of life cycle assessments. We also have a policy and code of conduct to manage the inventories for the suppliers and vendors. As part of our management practices we look into monitoring, perform internal audits, create training and facilitate awareness.

Our customers are the ones who have actually driven the idea of compliance and sustainability.  This made us participate in activities like carbon declaration and propelled us to forge strategic sustainable partnerships to ensure quality, productivity and safety models which work for us and our suppliers as also add value to our customers.

What kind of challenges do you face to ensure compliance in your supply chain?

With suppliers we have envisioned three focus areas - first is in business partnerships. Due to capacity constraints, many of the products in the pharmaceutical industry are made in third party facilities. Since production is outsourced, we have to evaluate whether these facilities are complaint with the rules and regulations – this require us to undertake a complete risk assessment. The second is that we build strategic partnerships with who we share a symbiotic relationship. Our aim is to ensure that all production activities are sustainable. Sharing knowledge, training and awareness on regulatory frameworks, introducing different packaging options, sharing the matrix of operations so that resources are optimized, waste generated is taken care of, doing official risk assessment for the products and also of the communities is paramount to us. We also get external audits done for the quality and compliance aspects. 

What in your experience has been the response from vendors so far?

The economics of what we do also is not just about pushing the vendor to deliver what we want but enabling an environment that they see the benefits too. Our suppliers do see the value in driving sustainability, safe logistics and transportation and better quality standards. The focus is not on cost production but on sustainability, and we would certainly like to credit our suppliers for proactively engaging on this. Over all it has been a win-win situation for both. For example, safety measures also help them have a better work environment.

Given the need for sustainability, does Dr. Reddy’s have any on-going projects on green chemistry?

We have an Integrated Product Development Organization that works on green chemistry,atom efficiency, reaction mass intensity and E factor. 

Dr. Reddy’s has been involved with social initiatives under its CSR wing. What are your views on the 2% CSR spending that is soon going to become mandatory under the new Companies Bill?

We have always been a CSR focused organization and have been doing this even before the term became fashionable.  We have tried to create sustainable models to help other industries to replicate the same and adopt these practices.  So we are perfectly alright with the new mandate. We want to give back to society as much as we can. 

This interview was conducted by Anindita Chakraborty, a member of the Sustainability Outlook team.

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