HOW THE HEALTH INDUSTRY IN CHINA MANAGES ENVIRONMENTAL RISKS UNDER INCREASINGLY STRINGENT ESG REQUIREMENTS: A PHARMACEUTICAL SUPPLY CHAIN PERSPECTIVE

This study examines environmental risks and ESG practices in China's pharmaceutical supply chains, focusing on both Traditional Chinese Medicines (TCM) and conventional pharmaceuticals. For TCM, key input risks include biodiversity loss and habitat disruption, while output risks involve waste generation contributing to soil and water pollution. Conventional pharmaceuticals face input risks from petroleum dependence in API synthesis and output risks such as CO2 emissions and untreated pharmaceutical waste from energy-intensive manufacturing. Through a literature review, Sustainability report analysis, and a case study of Zhejiang Medicine, the research identifies gaps in companies' environmental priorities. While carbon and waste management are emphasized, critical issues like land use and biodiversity impacts, particularly in TCM, are often overlooked. Key drivers for improved practices include China’s “dual carbon” policy and international client demands for stricter environmental standards. The findings highlight the need for tailored strategies: nature-based solutions and land-use management for TCM, and enhanced supplier audits and oversight frameworks for both supply chains. This research offers actionable insights to improve environmental risk management and promote sustainable practices in the pharmaceutical industry.