Hazardous Substance Tracking for Pharmaceutical SMEs
Pharmaceutical and biotech SMEs work with chemicals that are tightly regulated under EU law — from solvents and active pharmaceutical ingredients (APIs) to cleaning agents and laboratory reagents. As larger companies begin reporting under the Corporate Sustainability Reporting Directive (CSRD), small pharma firms in their value chains will also need to show how they manage and track hazardous substances safely and transparently.
This guide explains how small and medium-sized pharmaceutical enterprises (SMEs) can build a simple, CSRD-aligned hazardous substance tracking system using the Voluntary Sustainability Reporting Standard for SMEs (VSME) developed by EFRAG (2024). For related guidance, see the CSRD guide for small chemical distributors and what pollutants SMEs need to measure.
1. Why Hazardous Substance Tracking Matters
Tracking chemicals isn’t just a compliance task — it’s a sustainability requirement.
Why it’s important:
- Worker safety: Ensures exposure limits are respected.
- Environmental protection: Prevents accidental releases and improper disposal.
- Customer trust: Demonstrates responsible operations to larger pharma clients.
- CSRD alignment: Larger partners need verified data on chemicals used across their supply chains.
🧭 Relevant CSRD and VSME Areas:
- CSRD: ESRS E2 (Pollution) and E5 (Circular Economy)
- VSME: Basic Module B4 (Pollution) and B7 (Waste and Resource Use)
2. What Needs To Be Tracked
Pharmaceutical SMEs should maintain a Hazardous Substance Inventory covering all chemical and biological materials classified under EU or national regulations.
| Category | Examples | Reporting Reference |
|---|---|---|
| Active Ingredients (APIs) | Antibiotics, hormones, cytotoxics | REACH / CLP classification |
| Solvents | Ethanol, acetone, methanol | VOC and flammability data |
| Cleaning / Sanitising Agents | Isopropanol, detergents | Safety Data Sheets (SDS) |
| Lab & Production Waste | Residuals, contaminated gloves, absorbents | Waste Framework Directive |
| Packaging / By-products | Chemical containers, filters | VSME B7 – Waste Management |
💡 Tip: Include Safety Data Sheet (SDS) reference numbers in your tracking file — this proves compliance and simplifies reporting.
3. Step-by-Step: How To Track Hazardous Substances
Step 1 – Create a Central Inventory
Start with a spreadsheet or database that includes:
| Field | Description |
|---|---|
| Chemical Name | Full name or trade name |
| CAS Number | Unique chemical identifier |
| Quantity Stored | in litres or kilograms |
| Hazard Class | Based on CLP Regulation (e.g. H225: Highly flammable) |
| Storage Location | Room, cabinet, or site reference |
| SDS Reference | Document version and supplier name |
| Waste Category | Hazardous / non-hazardous code |
Use clear, consistent naming — it ensures traceability across orders and waste logs.
Step 2 – Record All Movements
Track every purchase, use, and disposal entry.
| Movement | Data to Record |
|---|---|
| Receipt | Date, supplier, quantity received |
| Usage | Department, quantity used, purpose |
| Disposal | Quantity, collector, treatment method, EWC code |
Each entry should reference the same SDS and inventory code. This provides an auditable trail — essential for both REACH compliance and VSME B4 reporting.
Step 3 – Monitor Storage and Handling
Describe in your sustainability report how hazardous substances are managed safely:
- Segregate flammables, oxidisers, acids, and bases
- Use secondary containment and spill trays
- Maintain updated SDS and emergency contacts near storage areas
- Conduct quarterly inspections and record findings
Example disclosure: “In 2024, PharmaNova Ltd stored 240 litres of solvents in bunded cabinets with weekly visual checks. No spills or environmental incidents were recorded.”
Step 4 – Manage Waste and Disposal (VSME B7)
All hazardous waste — residues, contaminated materials, and expired reagents — must be recorded by type, quantity, and destination.
| Waste Type | Quantity (kg) | Disposal Method | Licensed Partner |
|---|---|---|---|
| Solvent residues | 320 | Recovery / incineration | CleanChem GmbH |
| Contaminated PPE | 85 | Hazardous waste incineration | EnviroMed |
| Expired reagents | 60 | Disposal via authorised carrier | EcoPharma Waste |
Track waste transfer notes or hazardous waste manifests — they serve as supporting evidence for CSRD-aligned disclosures.
Step 5 – Report Pollution and Prevention Actions (VSME B4)
Under B4 – Pollution, SMEs disclose how they manage emissions, leaks, and hazardous material risks.
Include:
- Number of spills or incidents (even minor ones)
- Actions to prevent air, water, or soil contamination
- VOC emissions (if monitored)
- Upgrades to storage or ventilation systems
Example disclosure:
“No chemical leaks occurred in 2024. The ventilation system in the formulation lab was upgraded, reducing solvent odour complaints by 40%.”
Step 6 – Summarise and Report Annually
Prepare a Hazardous Substance Summary Table for your sustainability report.
| Indicator | Metric | 2024 Result |
|---|---|---|
| Total hazardous substances handled | Tonnes per year | 1.8 t |
| Number of substances tracked | Count | 52 |
| Recorded incidents | Number | 0 |
| Waste generated (hazardous) | Tonnes | 0.47 t |
| Recycled / recovered | % | 62% |
| Staff trained on chemical safety | % of workforce | 100% |
Add a short narrative on your safety culture and risk management approach.
4. Example: VSME-Aligned Hazardous Substance Report
Company: PharmaNova Ltd Sector: Pharmaceutical manufacturing and formulation Employees: 38 Reporting Year: 2024 Module: Basic (B1–B11)
| VSME Area | Disclosure | Example Data |
|---|---|---|
| B4 – Pollution | 0 spills or leaks; VOC reduction system installed | Fully compliant |
| B7 – Waste | 0.47 t hazardous waste, 62% recovery rate | Certified disposal |
| B9 – Workforce | 100% safety-trained; 2 safety drills | Strong safety culture |
| B11 – Governance | No fines, ISO 14001 certified | Responsible Care member |
Statement:
“PharmaNova maintains an integrated hazardous substance tracking system covering 52 active chemicals. All waste is handled by licensed partners. No environmental incidents occurred during 2024.”
5. Linking to CSRD and ESRS Requirements
Under CSRD Article 19a, large pharmaceutical groups must report on their value chain pollution and waste impacts. By reporting hazardous substances under VSME B4 and B7, smaller firms provide:
- Verifiable data on chemical use and waste
- Compliance alignment with ESRS E2 (Pollution)
- Proof of environmental stewardship to clients and regulators
This strengthens your company’s credibility and supports long-term partnerships with CSRD-reporting customers.
6. Quick Wins for Pharmaceutical SMEs
| Area | Practical Action | Benefit |
|---|---|---|
| Inventory Management | Digitise your hazardous substance register | Reduce manual errors |
| Storage Safety | Label and segregate containers clearly | Prevent cross-contamination |
| Training | Conduct annual SDS and spill response refreshers | Enhance staff readiness |
| Recycling | Return solvent drums to suppliers | Lower waste volume |
| Reporting | Use VSME templates for B4 and B7 | Save time and standardise data |
Key Terms
- CSRD – Corporate Sustainability Reporting Directive (EU 2022/2464).
- VSME – Voluntary Sustainability Reporting Standard for SMEs (EFRAG 2024).
- B4 (Pollution) – Disclosure on emissions, spills, and hazardous materials.
- B7 (Waste and Resource Use) – Disclosure on waste volumes and recycling.
- REACH / CLP – EU regulations governing chemical registration, safety, and classification.
- SDS – Safety Data Sheet; provides hazard, handling, and disposal guidance.
- EWC Code – European Waste Catalogue classification for waste streams.
- VOC – Volatile Organic Compounds; pollutants from solvents and coatings.