Catalent Commits to Reducing Greenhouse Gas Emissions by 2030
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Insights
From a sustainability perspective, Catalent, Inc.'s commitment to reducing greenhouse gas emissions is a significant step towards corporate environmental responsibility. The adoption of science-based targets (SBTs) indicates a strategic approach to sustainability, which is increasingly valued by investors and customers. A 42% reduction in Scope 1 and 2 emissions by 2030 suggests aggressive measures towards energy efficiency and a shift towards renewable energy sources. The impact on the business could include potential cost savings from reduced energy consumption and a stronger corporate image that may lead to enhanced customer loyalty and potentially higher market share.
Furthermore, engaging suppliers to align with SBTs is an innovative move that could drive industry-wide changes. This engagement can lead to a more sustainable supply chain, which is crucial given that over 80% of Catalent's emissions are generated upstream. This initiative might also mitigate future regulatory risks associated with supply chain emissions and position Catalent as a leader in sustainability within its sector. The challenge, however, will be in effectively managing and monitoring these supplier commitments, which requires robust governance and reporting mechanisms.
As a Financial Analyst, the announcement by Catalent can be seen as a proactive measure that may reduce operational risks and potentially lower long-term costs associated with carbon pricing and new regulations. Investors should note that the upfront costs of implementing these changes could impact short-term financials, but the long-term benefits often include operational efficiencies and resilience against climate-related disruptions. The fact that Catalent has already achieved its initial carbon reduction goal ahead of schedule is indicative of the company's operational capability to meet its targets, which could be a positive signal for its stock valuation.
Moreover, the emphasis on Scope 3 emissions is particularly relevant, as these emissions typically represent the largest portion of a company's carbon footprint. Catalent's focus here suggests a comprehensive approach to sustainability that may appeal to ESG-focused investors, potentially influencing the company's cost of capital in a favorable manner.
From a market perspective, Catalent's alignment with the Science Based Targets initiative (SBTi) may enhance its competitive position. The pharmaceutical and biotech industries are under increasing pressure from consumers and regulators to demonstrate sustainability. Catalent's commitment to SBTs could serve as a differentiator in contract negotiations, potentially attracting clients who are looking to improve their own sustainability profiles. The supplier engagement program also reflects an awareness of the importance of end-to-end supply chain sustainability, which is a growing focus for many companies.
Long-term, businesses that fail to set and work towards SBTs may find themselves at a competitive disadvantage. Catalent's proactive stance could, therefore, not only improve its sustainability credentials but also its market standing. However, the challenge will be to balance these initiatives with the need to maintain cost competitiveness, especially if renewable energy sources or other sustainability measures come with a premium.
New targets approved by Science Based Targets initiative (SBTi)
“Our mission to deliver products that help people live better lives goes hand in hand with our commitment to environmental responsibility and actions to limit climate change,” said Alessandro Maselli, President and Chief Executive Officer of Catalent, Inc. “As a leading contract manufacturing and development organization, it’s important that we are guided by science-based targets and that we hold our partners accountable to the same standards so that we can make progress for a more sustainable future.”
Below are Catalent’s SBTi-approved targets:
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Reduce absolute Scope 1 and Scope 2 greenhouse gas emissions
42% by fiscal 2030 against a fiscal 2022 baseline year. -
Reduce absolute Scope 3 greenhouse gas emissions from fuel- and energy-related activities, and employee commuting by
25% within the same timeframe. -
Commit to engaging with its suppliers, of purchased goods and services, capital goods, and upstream transportation and distribution, such that
70% of their emissions will have reduction goals aligned with science-based targets. This commitment to be achieved by end of fiscal 2028.
Catalent achieved its initial carbon reduction goal ahead of time through site-based energy reduction projects and transitioning the majority of our sites to renewable electricity. In July 2021, the company signed a letter of commitment with the Science Based Target initiative (SBTi), joining a growing list of companies setting actionable, science-based greenhouse gas emission reduction targets to limit global warming.
Since 2021, Catalent reviewed and reinforced its roadmap to reduce greenhouse gas emissions with a focus on energy efficiency and renewable energy programs.
Catalent also conducted its first Scope 3 inventory in fiscal 2023 that showed more than
To learn more about how Catalent is improving operational efficiency, reducing greenhouse gas emissions, eliminating waste, and conserving water to contribute to the health of the planet, download the most recent Report at https://www.catalent.com/about-us/corporate-responsibility/.
The Science Based Targets initiative (SBTi) is a collaboration between the Carbon Disclosure Project (CDP), the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) and one of the We Mean Business Coalition commitments. The SBTi defines and promotes best practice in science-based target setting and independently assesses companies’ targets.
ABOUT CATALENT
Catalent, Inc. (NYSE: CTLT), is the global leader in enabling pharma, biotech, and consumer health partners to optimize product development, launch, and full life-cycle supply for patients around the world. With broad and deep scale and expertise in development sciences, delivery technologies, and multi-modality manufacturing, Catalent is a preferred industry partner for personalized medicines, consumer health brand extensions, and blockbuster drugs. Catalent helps accelerate over 1,500 partner programs and launch over 150 new products every year. Its flexible manufacturing platforms at over 50 global sites supply approximately 70 billion doses of nearly 8,000 products annually. Catalent’s expert workforce of nearly 18,000 includes more than 3,000 scientists and technicians. Headquartered in
View source version on businesswire.com: https://www.businesswire.com/news/home/20240125536733/en/
Media:
Laura Hortas
+1 (609) 240 7025
Media@catalent.com
Investor Relations:
Paul Surdez
+1 (732) 537 6325
investors@catalent.com
Source: Catalent, Inc.
FAQ
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