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Aragen, the first Indian company to be rated platinum by ecovadis

Among the leading CDRMOs in the global life sciences industry, Aragen integrated a sustainable development policy in 2019. This approach was crowned by the award of a Platinum rating by EcoVadis in 2024, largely due to clear targets for reducing its emissions and the use of 27% renewable energy.
– Shivaji Jadhav, Senior Vice President & Head of EHS & Sustainability, explains this strategy.

Interview by Rachelle Lemoine

Can you give us a brief introduction to your group?

SHIVAJI JADHAV: Aragen is a leading R&D and manufacturing solutions provider to the global life sciences industry offering a range of integrated and standalone solutions across the drug discovery, development and manufacturing continuum to advance small and large-molecule programs. We operate across six strategically located sites in India and the United States. Our three manufacturing facilities are based in Hyderabad, Vizag, and Bangalore, while our Morgan Hill site in California focuses on biologics discovery and development. With a workforce of over 4500 highly skilled professionals, we are committed to driving innovation and delivering high-quality solutions to our partners.Our expertise and experience have enabled over 400 customers to advance their research programs from early discovery through development and commercialization. Aragen’s innovative mindset, infrastructure, flexible business models, clear purpose, and proprietary project management platform has enabled us to effectively scale and service large pharma, biotech, agrochemical and animal health industries globally.

What services do you offer for the pharmaceutical and biotechnology industries?

S.J.: We are a full service CRDMO working primarily with the pharmaceutical and biotechnology industries,providing support across the entire drug development lifecycle.Our expertise spans drug discovery,preclinical research, IND-enabling studies, clinical trial materials, and commercial manufacturing of both small molecules and biologics, including monoclonal antibodies (mAbs),and have several projects in discovery phase for peptides, oligonucleotides and PROTACS. We also offer analytical development services,from method development and validation to bioanalytical studies and quality control testing. Our work covers a wide range of therapeutic areas, including oncology, neurology, cardiovascular and rare diseases. Essentially,we partner with companies at different stages of discovery and development, helping them navigate the complexities of drug research and manufacturing to bring new treatments to patients efficiently and reliably.

On an environmental level, what specific improvements have you made, and how did you achieve them?

S.J.: On an environmental level Aragen has made significant strides in sustainability year-on-year, achieving a 22% reduction in freshwater consumption compared to FY23 and a 38% increase in recycled water usage since FY21. We have achieved a 37% MTCO2e reduction in Scope 1 greenhouse gas (GHG) emissions and successfully increased the utilisation of energy from renewable sources to 27% of our total energy consumption. We have also reduced Scope 1 GHG emission intensity by 66% compared to FY21 and lowered overall GHG emissions (Scope 1, 2 & 3) per employee to 19.7 MTCO2e in FY24 from 23.8 MTCO2e in FY23.These improvements were achieved through various initiatives, including replacing coal with bio briquettes at our Hyderabad manufacturing unit and implementing energy efficiency measures across our operations. We have achieved zero landfill status as the hazardous waste generated in our operations is being disposed off to alternate fuel recycling facility (AFRF) since Sept 24.Aragen is committed to continuous improvement and is working towards achieving the near-term and long- term climate goals, including transitioning to 100% renewable energy and achieving net-zero emissions by 2050.

What measures have you introduced to reduce the carbon footprint of your energy consumption?

S.J.: We have been proactively working for years to reduce our carbon footprint and improve energy efficiency across our operations. Our near term and net-zero targets are approved by Science-Based Targets initiative (SBTi), and we are com- mitted to achieving carbon neutrality by 2050. Currently, renewable energy accounts for 27% of our total energy consumption, with our California campus running entirely on renewable energy. Beyond energy efficiency, we also focus on other measures such as sustainable packaging and responsible material sourcing to minimize environmental impact across the product lifecycle. We are also addressing sustainability challenges in manufacturing and logistics through in- novation and strategic partnerships. One key initiative is our emphasis on local and hyperlocal sourcing (within 200 km), which not only reduces carbon emissions but also supports local economies. To ensure we achieve sustainability throughout our supply chain, we have also introduced green procurement initiatives, evaluating input raw materials and products based on green certifications, life cycle assessments, and compliance with green chemistry principles. All our strategic supply partners are now trained to include their green procurement status in the quotes they submit, ensuring sustainability is a key factor in vendor selection. Our EnVision programme plays a critical role in embedding sustainability into our supply chain. It sets measurable goals, conducts annual vendor assessments against a Green Supply Chain Management (GSCM)checklist, and we encourage supplier participation in pharmaceutical supply chain initiatives (PSCI).As part of our logistics efforts, we introduced sustainable aviation fuel (SAF) for outbound shipments from January 30, 2024. The GoGreen Plus partnership with DHL Express India, integrates into our shipments to minimize the carbon footprint across the product journey and support the decarbonization of international logistics.To drive sustainability at the core of our innovation, we have also introduced Green Chemistry Awards to encourage scientists to incorporate green principles in molecule development.

What types of renewable energy do you use, and what share do they represent in your overall energy mix?

S.J.: Currently, 27% of our overall energy mix comes from renewable sources, with a goal to reach 100% by 2050. Our renewable energy strategy includes sourcing electricity from solar and wind power, as well as transitioning to cleaner fuel alternatives. For instance, we have replaced coal with bio-briquettes and diesel with piped natural gas (PNG) in our boilers, significantly reducing emissions. Our US facility now operates entirely on renewable energy, demonstrating our commitment to adopting cleaner energy solutions. Additionally, we are implementing energy-efficient measures across all our sites, such as investing in high-efficiency equipment, using BEE 5-star rated appliances, and transitioning to LED lighting—leading to an annual energy reduction. We also focus on fostering a culture of energy conservation through employee awareness programmes and small-scale renewable initiatives like solar street lighting and using e-vehicles for onsite logistics. These efforts collectively support our goal of reducing our carbon footprint while ensuring a sustainable and energy-efficient future for our operations.

What actions have you taken with your suppliers to reduce the carbon footprint of your Scope 3 emissions?

S.J.: Reducing Scope 3 emissions is a key priority for us, given its crucial role in achieving our net-zero targets. We have taken multiple steps to embed sustainability across our supply chain and work closely with our suppliers to drive meaningful change. One of our primary actions has been implementing a Supplier Code of Conduct, ensuring our partners adhere to strict environmental and ethical standards. Alongside this, we conduct supplier assessment for all suppliers on ESG parameters and have embedded stringent sustainability criteria into our purchase order terms and conditions. To track and improve supplier performance, we use a Green Supply Chain Management (GSCM) Scorecard, setting measurable sustainability targets and continuously evaluating progress. Beyond policies, we are actively implementing carbon reduction initiatives. As part of our commitment to the Science-Based Targets initiative (SBTi), we aim to cut Scope 1, 2, and 3 emissions by 50.4% by 2032 and reach net-zero by 2050. A major focus area is increasing our renewable energy consumption from 3.2% in 2021 to 50% by 2027.

Since committing to SBTi, what short- and medium-term objectives have you set for yourself?

S.J.: Since committing to the Science- Based Targets initiative (SBTi), we’ve set clear goals to cut GHG emissions by 50.4% by 2032 and reach net-zero by 2050 (baseline year: 2022). Key initiatives include transitioning boilers from diesel and furnace oil to PNG, phasing out high-GWP refrigerants in favor of R-32 and R-290 by 2030, adopting green building standards for all new facilities, using sustainable aviation for inbound DHL shipments, and investing in energy-efficient technologies.

What has been the cost of this initiative?

S.J.: As part of our commitment to sustainability, we have allocated a significant portion of our capital expenditure towards green initiatives, with a clear focus on projects that drive environmental impact reduction. Over the next five years, we plan to invest about 1.5 million USD in areas such as renewable energy adoption, energy efficiency upgrades, and sustainable sup- ply chain management. This financial commitment reflects our belief that sustainable practices are key to long-term value creation. We also view these investments as essential for meeting our net-zero target by 2050 and supporting our broader ESG goals, ensuring that sustainability is embedded across all levels of our business.

What competitive advantages has this approach brought you?

S.J.: Our commitment to sustainability has provided tangible business advantages, positioning us as a preferred partner for companies that prioritise ESG performance. Many of our customers now expect strong sustainability credentials, and EcoVadis ratings have become a key requirement in supplier selection. By achieving and maintaining our ESG commitments we have been able to strengthen customer trust, and build and retain long-term partnerships. Sustainability is no longer just a differentiator it has become a business necessity. As global regulations become more stringent, companies that move early on gain a significant advantage. Our active approach ensures that we stay ahead of evolving compliance requirements, giving us an early-mover advantage as more countries introduce stricter environmental laws. This not only mitigates climate-related risks but also future-proofs our business against regulatory changes. Beyond compliance, sustainability also brings financial benefits. Having a higher EcoVadis rating has allowed us to access loans at subsidised interest rates from major banks. This directly enhances our financial flexibility, enabling us to invest more in sustainable projects and innovation. Ultimately, integrating sustainability into our operations strengthens our brand reputation, customer trust, and long-term business resilience, making us a strategic partner of choice in the industry.Additionally, our CDP 2024 score for water security and climate change is improved to A- and B respectively.

Do you observe a broader environ- mental movement in your country?

S.J.: Yes, both the government and customers are driving it. India is on track to meet its 2030 climate goals and has set ambitious targets under the Panchamrit framework, part of its Nationally Determined Contributions (NDCs) under the UNFCCC. Key commitments include reducing the emissions intensity of GDP, expanding non-fossil electricity generation, and increasing forest and tree cover as carbon sinks. The country is also working towards its net-zero target by 2070.Additionally, our customers from Japan, Europe, and the US are increasingly demanding sustainable practices in our supply chains to align with their ESG commitments. This push for sustainability is shaping real change across industries.

When did your group adopt a sustainable development policy, and what motivated this decision?

S.J.: Sustainability has been a core part of our strategy since FY 2019, when we formally embedded environmental responsibility into our business approach. What motivated this decision was not just regulatory compliance, but the understanding that sustainability is a long-term imperative, one that enhances our operational resilience, strengthens customer trust, and creates a positive societal impact. To support this commitment, our $1.5 million USD investment will be used in areas like renewable energy adoption, waste management, and carbon footprint reduction. Our near-term goals include achieving zero landfill status by 2025, while our broader sustainability targets extend to 2032 and beyond. One of our most significant milestones came in recently, when we became the first Indian head- quartered company to receive an EcoVadis platinum rating, underscoring our leadership in sustainable manufacturing. This achievement puts us in top 1% of companies in the world. This achievement reinforces our commitment to continuously improving environmental, social, and governance (ESG) performance across all aspects of our business.

In 2024, your EcoVadis score reached 82 (Platinum), making you the first Indian company to achieve this level. What key efforts did you implement to reach this milestone?

S.J.: Reaching EcoVadis Platinum status was a result of focused efforts across key sustainability areas. One of the biggest improvements was in our climate strategy which we aligned with the Science-Based Targets initiative (SBTi), set clear emissions reduction goals, and increased our renewable energy usage to 27%. We also worked on responsible waste management, committing to zero landfill by 2025 and water neutrality by 2035. A strong focus on supply chain sustainability played a key role as well. We introduced a Green Supply Chain Management Scorecard, assessed suppliers on sustainability criteria, and engaged them to reduce Scope 3 emissions. We also internally monitored and reviewed our ESG policies on half-yearly basis and conducted monthly reviews on the ESG performance. Labour and human rights policies were another priority, and we took structured steps to strengthen governance and compliance. We also deepened our engagement with global platforms like CDP, UNGC, and PSCI, ensuring continuous improvement. Achieving Platinum is a big milestone, but for us, sustainability is an ongoing process, and we are committed to setting even higher benchmarks in the years ahead. We continue to advance our sustainability initiatives by improving water efficiency, reducing energy consumption, and collaborating with supply chain partners for Scope 3 emissions reduction. We are also implementing an internal carbon price (ICP) and water pricing at Aragen, executing a company-wide decarbonization plan, and increasing the share of renewable electricity from 12% to 43% in a phased approach across our Bengaluru, Mallapur, and Visakhapatnam sites.

Source – The Pharmaceutical Post