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Novartis official says climate change-driven biodiversity loss poses big risk

The world's rapid loss of biodiversity due largely to climate change is a growing concern to pharmaceutical giant Novartis AG, according to the company's head of climate.

Speaking at a Sept. 26 S&P Global climate risk conference in New York City, Novartis' James Goudreau told a room of investors, CEOs and others that the company's views on climate change risks are constantly evolving — and one emerging threat is the loss of biodiversity.

A combination of related drivers, including habitat loss, pollution and climate change are contributing to an unprecedented loss of biodiversity, the United Nations' Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, found in May. The report indicated that about 1 million animal and plant species are at risk of extinction.

To prevent some of the biggest impacts of climate change, scientists in 2018 warned that the world must work fast to limit human-caused carbon dioxide emissions by 2030 and then go even further and become carbon neutral by 2050.

"While we may have generated small molecules as medicines traditionally in the past, we're moving more and more to biologics as part of the portfolio," Goudreau explained.

Biologic drugs are made up of large, complex molecules and are often produced through biotechnology in a living system, according to the FDA. The drugs are typically injectable or infused medicines derived from living cells. Small-molecule drugs are a more classic type of medicine made up of smaller molecule active substances that can be easily ingested via a tablet or capsule.

Goudreau said his company anticipates up to a 30% loss in biodiversity globally as a result of climate change. That projected loss "impacts not only the supply chain for biologics we're already sourcing; but the discovery, scaling and delivery of future medicine to patients while the patient population is changing as a result of climate change," he said.

The company is also moving to manage risks connected to existing and potential future climate- and environment-related governmental policies, he said. As a company that operates in more than 100 countries, some of those locations already have a price on carbon-related emissions and the company expects other markets may follow suit.

"So it behooves us to get ahead of that [carbon price risk] from a financial and performance perspective," including by decreasing the company's carbon footprint through increased use of renewable electricity and through "credible, transparent offset programs and portfolios," such as forestry projects.

Novartis aims to make its operations carbon-neutral by 2025 and to cut indirect emissions from its supply chain in half from 2016 levels by 2030, according to the company's website.

The Swiss pharmaceutical giant is also aware that other physical manifestations of climate change such as flooding and extreme weather events could hamper its ability to develop, produce and supply medicines.

"You can invest money in physical resilience and it can be effective in keeping the lights on or keeping the buildings dry and yet you still can't produce medicine and you still can't deliver it to a patient," he said. "At the end of the day, that duty of care is our responsibility."

S&P Global Inc. is the parent company of S&P Global Market Intelligence.