How Lupin Is Advancing Sustainable Manufacturing and Equitable Healthcare

The pharmaceutical sector sits at the intersection of two critical priorities: improving human health and reducing the environmental footprint of healthcare. As the industry responds to climate risks, resource pressures and growing expectations around responsible business, sustainability is increasingly moving from the margins of corporate strategy into the core of how medicines are developed, manufactured and delivered.

For Lupin, this transition has involved integrating ESG considerations into business decisions, manufacturing, supply chains, product innovation and community programmes. The company has reduced its Scope 1 and 2 emissions, expanded renewable energy use and water recycling, and explored greener solutions such as low global warming potential inhalers. Its social initiatives through the Lupin Foundation and patient support programmes have also focused on healthcare access, livelihoods and community development.

In this interview, Ramesh Swaminathan, Executive Director, Global CFO, Head of IT and API Plus SBU, Lupin, discusses what it takes to translate sustainability commitments into measurable action and how innovation, finance and social impact can shape a more responsible pharmaceutical industry.

Read the full interview below.

Q&A

Q. Lupin began embedding sustainability into its core strategy in 2020. What were the most critical shifts needed to move from intent to execution?

A. Lupin began embedding sustainability into its core strategy in 2020, marking the start of a deliberate shift from aspiration to action. Over the last four years, this journey has translated into meaningful progress, driven by a fundamental repositioning of sustainability—from a standalone initiative to an integral part of our operating model.

1. From Aspiration to Measurable Actions and Financially-Linked Targets

Early sustainability efforts often remain qualitative. We transitioned to science-based, time-bound targets — especially on climate, water, people and waste.

• Integrated ESG KPIs into annual operating plans and budgets
• Linked sustainability metrics to business performance and risk management
• Ensured capital deployment decisions reflected ESG impact

This ensured sustainability was not a parallel agenda but embedded into financial planning.

2. Cross-Functional Ownership, Not Silos

We moved sustainability to enterprise-wide accountability:

• Manufacturing and Operations led energy, emissions, and water efficiency
• Procurement integrated supplier ESG assessments and responsible sourcing
• R&D explored greener chemistry and product lifecycle improvements
• Finance enabled governance, tracking, and capital discipline

3. Governance, Incentives & Board Oversight

Strong governance mechanisms anchored execution at Lupin 

• Regular review at Board and executive committee levels
• Integration of ESG into risk management and internal audit frameworks
• Increasing alignment of leadership and key managerial personnel incentives with sustainability goals

This ensured sustained momentum and accountability across the organization.

4. External Benchmarking & Stakeholder Alignment

We are actively engaged with global benchmarks and stakeholders, which resulted in positioning Lupin globally as no. 1 in sustainability ratings.

• Participation in ESG ratings (CDP, S&P Global, EcoVadis) to benchmark performance
• Alignment with evolving regulatory frameworks like India’s BRSR and EU CSRD
• Transparent disclosures to investors linking ESG performance with long-term value creation

This external lens helped sharpen execution priorities and improve credibility of the company. 

Q. How do you integrate ESG priorities into financial decision-making and long-term business strategy in your role as CFO and Sustainability Head?

A. At Lupin, ESG priorities are anchored to our purpose of ‘catalyzing treatments that transform hope into healing,’ and are therefore deeply embedded in every financial decision and business strategy.

Our focus is on directing investments towards initiatives that drive long-term value creation, responsible operations, and positive societal impact. We diligently track ESG performance using the same rigorous metrics applied to our financial outcomes, maintaining unwavering transparency to align our strategic and day-to-day financial choices with our sustainability imperatives. This integrated, data-driven approach transforms ESG from an abstract ideal into a tangible, measurable force for long-term value creation and responsible growth, ensuring we build a sustainable future, one patient at a time. 

For instance, our long-term investment in green inhalers reflects the convergence of sustainability and patient care. In FY25, Lupin became the first pharmaceutical company in India to adopt Solstice® Air (HFO-1234ze cGMP), a next-generation propellant with near-zero global warming potential (GWP), for the development of pressurized metered-dose inhalers (pMDIs) used in the treatment of asthma and chronic obstructive pulmonary disease (COPD). Green inhalers have the potential to reduce propellant-related emissions, significantly lowering Scope 3 emissions, while enhancing market competitiveness in regulated markets (EU/NHS).

This transition not only significantly reduces the carbon footprint of our respiratory portfolio but also positions us ahead of evolving global regulatory and market expectations, reinforcing our commitment to innovation that delivers both environmental stewardship and improved patient outcomes.

Q. What practical changes have driven Lupin’s progress in emissions reduction, water recycling, and adoption of cleaner energy solutions across operations?

A. Our progress in reducing emissions, water stewardship, and cleaner energy adoption has been driven by a combination of technology upgrades, process optimization, and a strong governance framework anchored in its sustainability commitments.

On emissions reduction, we have seen substantial gains due to transition from traditional fossil fuels to biomass briquette and agro waste boilers across manufacturing sites, dramatically reducing our reliance on conventional energy sources. Our focus on energy efficiency through widespread LED lighting, AC to DC motor upgrades, and optimized refrigeration and pumping systems has yielded considerable energy savings. To mitigate our value chain emissions, we've successfully shifted a significant portion of our logistics from air freight to more carbon-efficient sea freight. The tangible outcome of these concerted efforts is a ~41% reduction in Scope 1 and Scope 2 emissions from the FY23 baseline, reflecting steady progress against our decarbonization targets. Our dedication to responsible water management is equally robust. We've implemented advanced techniques like -  Zero Liquid Discharge (ZLD) systems at several manufacturing plants, ensuring treated wastewater is recycled and reused. Our "Water Savings League" program has actively engaged employees in initiatives such as rooftop rainwater harvesting and installing flow restrictors, fostering a culture of conservation. This holistic approach has enabled us to achieve a remarkable 45% water recycling rate of our total water withdrawn for our India operations in FY26 , contributing to our sustained "Water Positive" status for four consecutive years.

Even on the adoption of cleaner energy solutions, Lupin has made significant strides. We've expanded our renewable electricity capacity by more than tenfold by incorporating solar panels, procuring wind energy through open access, and increasing biomass use. These efforts have collectively boosted our renewable energy share to 50% of our total energy consumption in India in FY26, underscoring our resolve to power our operations sustainably.

As a result, Lupin has earned significant recognition and accolades in the ESG space. Lupin was recently ranked No. 1 globally in Pharma; it was recognized in the top 1% of companies worldwide in the S&P Global Corporate Sustainability Assessment (CSA). Lupin attained a score of 91 out of 100, well above the pharmaceutical industry average of 28; establishing itself as the leading pharmaceutical company globally, and the leader across all sectors in India, surpassing both Indian and international peers. Lupin has also attained a leadership rating of A in CDP for climate change and water. 

We aim to stay focused on these priorities in order to create enduring value for our stakeholders and improve the well-being of our people, patients and planet. 

Q. How do you evaluate the business case for sustainability investments, including renewables and process improvements, in a cost-sensitive sector like pharmaceuticals?

A. We approach sustainability investments by assessing their potential for tangible cost optimization and efficiency gains. Beyond direct cost savings, our evaluation places significant weight on risk mitigation and long-term operational resilience. Investments in areas like renewable energy, biomass boilers, and energy efficiency are delivering tangible cost savings and improved operational resilience, while also insulating companies from volatility in fuel prices and future carbon costs. Our gross margins improved to 69% in FY25 from 66% in FY24, driven primarily by renewable energy sourcing, along with technological leadership, and target costing initiatives. 

In a highly regulated industry like ours, ESG performance is an essential requirement for participating in global export markets as well as securing competitive financing. Capital markets favor this forward-looking approach, viewing it as a sign of strong governance, trustworthy reporting, and lower credit risk.

Q. How do you see sustainable product innovation, including green chemistry and carbon-neutral inhalers, shaping the future of healthcare?

A. The healthcare industry is undergoing a fundamental shift—from a singular focus on treating disease to a more holistic approach that safeguards patient access while protecting planetary health. As we move ahead, sustainable product innovation will be a defining force in shaping the future of healthcare. Green chemistry is already enabling a shift toward safer and more efficient drug development by reducing the use of hazardous substances, minimizing waste, and improving resource efficiency across the lifecycle. This not only lowers environmental impact but also enhances process reliability and cost-effectiveness, making healthcare systems more resilient and scalable. 

For instance, innovations such as low-global-warming-potential (low-GWP) inhalers have demonstrated how product-level interventions can directly address climate impact. Given that propellants contribute significantly to emissions in respiratory care, transitioning to next-generation inhalers could reduce associated emissions by up to ~90% without compromising safety, efficacy, or patient access. This is a powerful example of how Lupin balances patient outcomes with environmental responsibility.

These structural changes—spanning manufacturing excellence, resource efficiency, renewable energy adoption, and climate-conscious product innovation—have enabled Lupin to make measurable progress toward its environmental goals while supporting a broader transition to sustainable healthcare.

Q. How is Lupin using technology and digital innovation to embed sustainability across manufacturing, product design, and packaging, and what impact has this had on efficiency and environmental outcomes?

A. Digital innovation continues to be a key enabler of Lupin’s strategy to improve healthcare access and patient outcomes. We have integrated technology and digital innovation to deeply embed sustainability across our operations, making our sustainability efforts more measurable and actionable. Advanced tools such as AI, automation, IIoT-enabled dashboards, and real-time analytics help optimize processes, improve yields, reduce energy use, and strengthen supply chain efficiency.

These interventions delivered  ~10% (9.8%)  improvement in energy efficiency at our Tarapur plant in FY25, alongside the successful scaling up of GenAI pilots across quality, manufacturing, and commercial functions under robust ethical AI governance. Beyond manufacturing, technology-led innovation is also generating tangible environmental outcomes. For instance, our green chemistry initiatives have significantly reduced waste, solvent use, and hazardous inputs, while digital packaging solutions—such as replacing paper inserts with QR codes—saved nearly 10.9 million inserts annually.

Together, these initiatives have contributed to a ~41%  reduction in Scope 1 and 2 emissions from the FY23 baseline and enabled 45% water recycling across India operations in FY25, reinforcing our commitment to operational excellence and environmental stewardship.

Q. What challenges have you faced in ensuring ESG compliance across your supplier base, and what have been the key learnings from achieving full coverage of critical suppliers?

A. Our supply chain cuts across numerous geographies, and the primary challenge in managing a diverse global supply chain is navigating the varying levels of ESG maturity. Our suppliers operate with different degrees of awareness, technical capability, and alignment with our specific sustainability criteria, pertaining to different geographies, making uniformity difficult to enforce. 

To address this issue, we institutionalized a robust Supplier ESG Evaluation Program last year — integrating environmental, social, and governance parameters into both supplier onboarding and ongoing performance assessments. Through this framework, we can actively track the ESG footprint of key suppliers, focusing specifically on material vendors.

One of the biggest challenges pharma companies face is addressing Scope 3 emissions, because of limited visibility and control over supplier-level data. Unlike Scope 1 and 2, Scope 3 depends heavily on supplier disclosures, where data maturity, consistency, and accuracy vary significantly —especially across smaller vendors.

Another challenge has been driving alignment across the value chain, as emissions reduction requires behavioral and operational changes beyond our direct control. Suppliers are often at different stages of ESG readiness, making standardization and target-setting complex.

Our key learning is that managing Scope 3 is less about enforcement and more about partnership. Achieving meaningful coverage requires integrating ESG criteria into procurement, building supplier capability, and prioritizing high-impact categories through a risk-based approach. 

One of the key takeaways from achieving full coverage of our critical suppliers is that mandates are not enough. Setting expectations is only the first step; engaging suppliers through ongoing training, capability building, and transparent assessments has been critical. It proved that a collaborative, hands-on approach is the most effective way to drive real compliance.

Q. How do you plan to scale and strengthen initiatives led by the Lupin Foundation and patient support programs to drive long-term social impact and improve equitable access to healthcare?

A. Lupin continues its commitment to social impact and equitable healthcare access through its various CSR programs. To scale and strengthen these efforts for long-term social impact, Lupin plans to:

• Livelihood Programs: Deepen the impact of the legacy Livelihood program (Desh Bandhu Jan Utkarsha Pariyojana) by empowering 2.5 million individuals in over 5,000 villages by 2030. This program focuses on enhancing farmers' income through improved market access, efficient water use, and sustainable agriculture.
• Lives Programs: Improve quality of life in underserved regions through the Lives program (Desh Bandhu Jan Aarogya Seva) by screening 500,000 individuals in 3,000 villages by 2030. This includes strengthening local health systems, deploying trained health workers, organizing health camps, and focusing on early detection and awareness for chronic diseases.
• Patient Support Programs & Digital Solutions: Expand reach and improve outcomes through various patient-centric programs and digital solutions. Key plans include supporting 300,000 patients through patient assistance programs by FY30, assisting in diagnosing lung diseases for over 2 million patients, targeting the diagnosis of breast cancer in 5,000 women, and extending neuro-rehabilitation services to 100,000 sessions by 2030. 

Our scaling strategy is firmly community-led. To expand the Lupin Foundation's reach, we are deepening our collaborations with local stakeholders, health practitioners, and grassroots organizations to ensure our interventions are culturally relevant and sustainable. We are also leveraging ground-level data to accurately map access barriers, allowing us to design highly targeted programs. For our patient support initiatives, the focus is on seamless integration with existing healthcare networks to make these programs more accessible and affordable. The goal is responsible scaling—ensuring that as we grow, the long-term social impact and equity in healthcare access remain at the forefront.

Q. How do you see sustainability shaping the pharmaceutical industry in the coming years, and what key shifts are needed for it to become standard practice rather than a differentiator?

A. The Indian pharmaceutical industry has made notable progress on sustainability, particularly among leading companies. We are already seeing a shift from isolated environmental initiatives to end-to-end thinking—from responsible sourcing of raw materials and greener chemistry in R&D to energy-efficient manufacturing, optimized packaging and low-carbon logistics. 

In the coming years, there will be a stronger focus on designing medicines to be more environmentally responsible from the earliest stages of molecule development, reducing their impact across the lifecycle. Digital technologies and data analytics will also play a key role in optimizing processes, reducing waste, and improving resource efficiency at scale.

However, many sustainability challenges—such as supply chain decarbonization or responsible sourcing—cannot be solved by individual companies alone. Greater collaboration across industry players, suppliers, regulators, and academia will be essential to create shared standards and scalable solutions.