Chief Commercial Officer, HFR

From the perspective of a smaller, specialist CDMO of around 50 people working mainly on custom projects, ESG is becoming increasingly embedded into how we approach supplier and client relationships, but in a very practical, proportionate way. We are not in a position where ESG is managed through large standalone frameworks or complex contractual architecture, instead it is naturally integrated into the way we make technical and sourcing decisions on a project-by-project basis.

In practice, this means that environmental and quality considerations are often addressed together during route selection and process development, because that is where the most meaningful impact is determined. Supplier selection is still primarily driven by technical suitability, reliability and regulatory compliance, but there is increasing attention on traceability, responsible sourcing and the ability of partners to support consistent, compliant supply chains.

Rather than formalising ESG as a separate contractual layer, we are seeing it evolve more organically into longer-term, trust-based relationships where expectations around efficiency, waste minimisation and responsible material use are understood as part of good scientific and operational practice. At this stage of organisational maturity, the emphasis is less on contractual ESG enforcement and more on embedding the right behaviours early in technical decision-making, where they genuinely influence outcomes.

At this stage, the most reliable foundations for transparency still come from established quality and manufacturing systems, which provide the traceability required in a regulated environment. For smaller organisations, the implementation of machine learning and AI is still very much in its early stages and remains largely exploratory rather than embedded into day-to-day operations.

The immediate priority is therefore ensuring strong data integrity and connectivity across existing systems, rather than deploying advanced AI-driven supply-chain platforms. AI and ML may have future potential in areas such as process optimisation and predictive analytics, but at present their application is still limited and not yet a core part of operational infrastructure.

The broader challenge remains ensuring data consistency, accessibility and interoperability across systems and suppliers, which is a more pressing constraint than advanced analytics at this stage of organisational maturity.

In a smaller, project-driven organisation, we tend to think about sustainability benefits as a natural outcome of doing chemistry well rather than as something driven by large-scale digital infrastructure. The biggest impact comes from strong process design at the outset of each custom project, choosing efficient synthetic routes, minimising step count and improving yields early in development. At this scale, the most meaningful sustainability gains still come from scientific decision-making rather than advanced predictive systems.

For small CDMOs, collaboration is essential because many circular economy solutions require alignment well beyond what any single organisation can implement independently. In practice, the key barrier is often not technical feasibility but the timing of decisions and the regulatory framework that locks processes in early. Solvent recovery, for example, is entirely achievable in principle, but it requires agreement with clients at the development stage and confidence that regulatory comparability requirements will be met. The most effective collaborations are those where sustainability considerations are discussed upfront as part of route selection rather than being added retrospectively.

In a smaller organisation, governance is necessarily pragmatic and closely aligned with existing quality systems rather than built as a separate ESG architecture. Our focus is on ensuring that the data we already generate for GMP and client requirements is robust, traceable and can be extended to support ESG reporting where needed. Supplier onboarding and material traceability are therefore managed through established quality processes, with increasing attention on documenting sourcing and compliance attributes in a consistent way. The key priority is not volume of data, but reliability and audit readiness.

For a smaller, custom-project CDMO, resilience is primarily built through flexibility rather than large-scale redundancy. Because we are not operating at industrial manufacturing scale, we can adapt sourcing and process routes on a project-by-project basis, which is a natural advantage. ESG considerations are integrated into risk thinking mainly through supplier reliability, regulatory compliance and material availability, rather than through formal scenario-modelling tools. The emphasis is on maintaining strong supplier relationships and ensuring we have alternative pathways for key materials where necessary.

In a smaller CDMO context, a strategic partner is primarily defined by openness, responsiveness and willingness to collaborate technically at an early stage. Because our work is highly project-based, the quality of interaction during development is often more important than formal governance structures or complex contractual frameworks. ESG alignment is reflected less in formal incentive schemes and more in shared commitment to efficient, well-designed processes that minimise waste and avoid unnecessary iterations. The strongest partnerships tend to be those where communication is direct and technical decisions are made collaboratively.

One of the most relevant lessons from other industries is the value of standardisation and simplification in supply-chain transparency, particularly from sectors like electronics and automotive. However, in a small CDMO environment, the key takeaway is more about mindset than systems. ESG works best when it is embedded into decision-making rather than treated as an external reporting requirement. The challenge in pharma is balancing this with regulatory constraints, which means adoption tends to be slower but ultimately more robust once implemented.

From the perspective of a smaller organisation, leadership in ESG will be defined less by scale of infrastructure and more by discipline in process design and decision-making. The organisations that stand out will be those that consistently make efficient, well-informed choices at the earliest stages of development, where the environmental footprint is effectively determined. Many firms are still behind in treating sustainability as a core design input rather than a reporting output. At our scale, the focus is on embedding good scientific and operational practice, which naturally aligns with better ESG outcomes.

How

For a smaller CDMO, geopolitical volatility is felt most directly through supply availability and cost fluctuations rather than through structural supply-chain redesign. In practice, this means prioritising continuity of supply for key materials and maintaining flexibility in sourcing decisions where possible. ESG commitments remain important, but in periods of disruption there is often a need to balance them against practical constraints such as lead times and availability. The mitigation strategy is therefore rooted in agility and maintaining strong supplier communication rather than large-scale structural shifts.

Cross-border collaboration is important, but for a smaller organisation it is often experienced through direct relationships with suppliers and clients rather than complex global networks. The most effective partnerships are those where there is transparency and mutual understanding of constraints, which allows for faster problem-solving when disruption occurs. In practice, resilience comes from trust-based relationships that enable quick adjustments to sourcing or timelines when needed. These types of collaborations tend to be more effective than highly formalised structures during periods of uncertainty.

Looking ahead, the role of CDMOs, including smaller, specialist organisations, will increasingly involve contributing to better process design from the earliest stages of development. Rather than being solely execution partners, CDMOs will be expected to help shape more efficient and sustainable synthetic routes through their technical expertise. For a smaller organisation, the most important capabilities will remain strong chemistry skills, good project delivery discipline and the ability to work closely with clients in a highly collaborative way. ESG innovation will come less from large infrastructure investments and more from consistently making better scientific and process choices at project level.