The COVID-19 pandemic made household names of life sciences companies and some are now fast-growing brands. This has created opportunities – both financially and by helping companies to be good corporate citizens. Companies that have already built ESG strategies, measurements, and high-quality disclosures into their business models are most likely to be well positioned to capitalize on this.
Life sciences companies have been paving the way for ESG initiatives for years. It is both fascinating and inspiring to see how C-suite across the industry takes on a responsibility beyond their bottom line and that Danish companies are at the absolute forefront of this development. However, the time is not to hold back, but on the contrary to engage even deeper in the agenda and lead the way.
During a crisis, priorities typically shift, however COVID-19 has not made people any less concerned about global climate, social equity or good governance - Quite the contrary.
As outlined in the 2021 global life sciences outlook by Deloitte, major companies continue to reduce or eliminate their carbon footprints and the reallocation of capital to sustainable assets accelerated more rapidly than ever.
From my point of view, the ESG agenda is an important catalyst to sustain the present momentum in the biotech, pharma, and health care industries. Companies, that are accelerating their ESG-efforts, leading with purpose, advancing humanity and protecting the environment, will obtain goodwill and earn the trust of their customers/patients, employees and other stakeholders, which are more crucial than ever for future success.
In the 2021 global life sciences outlook, several concrete results and ambitious initiatives to achieve net zero impact are highlighted. The major Japanese pharmaceutical company Takeda achieved carbon neutrality with offset projects across 12 countries in 2020. Also, the Danish pharmaceutical company Novo Nordisk already achieved its target of using 100 percent renewable power across its global production and is now working with 60,000 of its direct suppliers to transition to 100 percent renewable energy by 2030.
The aforementioned two companies are amongst the frontrunners that are making an impact for the environment, but fortunately they are not alone: One-third of the 280 leading companies supporting the Climate Group’s global initiative, RE100, are from the biotech, pharma, and health care industries.
We also see an increasing number of life sciences companies that are shifting to electric vehicles as a force for positive change. Six companies are switching their fleets to electric vehicles and are installing charging infrastructure for employees and customers by 2030: AstraZeneca, Biogen, Genentech, GlaxoSmithKline (GSK), Novartis and Novo Nordisk.
The commitment to fight climate change aligns with the views expressed in Deloitte’s annual CXO survey; 2021 Deloitte Global Resilience Report in which Chief Execs ranked climate change as the top societal issue for business to tackle over the next decade.
Measuring and reporting make you accountable
While bold and transformative actions are essential in pulling the world in a more sustainable direction, companies need to put numbers on their impact. Measuring as well as reporting ESG progress make organizations accountable and reveal areas for improvement. This helps inform both the organization and all stakeholders and shareholders as well as help the organization deliver equitable outcomes – I know from myself that measurements play a key role in accelerating development and progress.
One way to align reporting on performance against ESG indicators can be found via the World Economic Forum and its International Business Council. Together with Bank of America, Deloitte and other professional services firms they identified new metrics for reporting on sustainable value creation. This led to the identification of four overarching pillars: Principles of governance, planet, people, and prosperity. They have an important bearing on the capacity of a firm to generate shared and sustainable value.
The past year has brought fundamental change and has set new standards across the world, but also accelerated innovations and created new ways of working and collaboration across the biotech, pharma, and health care industries. These companies should sustain the change and remain in their elevated role in society. We all have a responsibility to create a more sustainable, compassionate and equitable world and I applaud the players in the industry that are committed to making a real difference.
Spørg mig om: Pharma, medicinalbranchen, life sciences, revision af medicinalvirksomheder, børsnoteringer Sumit er dansk leder af vores Life Sciences - industrigruppe. Han har mere end 17 års erfaring som revisor for medicinalvirksomheder og børsnoterede virksomheder.