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Denise Weger |
Many companies have conducted materiality assessments to
understand the issues most important to their business and stakeholders. But,
as I heard during a webinar last week sponsored by SustainAbility, the Swiss
pharmaceutical giant Novartis has taken a much
different, deeper approach. The webinar was the fifth in a series to explore
how Novartis conducts and uses its materiality assessments. All are available
on the SustainAbility site.
In this week’s blog, I highlight
Novartis’ materiality assessment process and share perspectives from Denise Weger, Senior
Manager Strategic Initiatives Global Health & Corporate Responsibility,
at the biopharma company. For Denise,
a materiality assessment is a starting point that can inform the company’s
decision making and transform how it does business.
Novartis conducted its
third full materiality assessment in 2017. Denise explained that the company
started with basic desk research to understand trends and issues, then looked
at peer reports, risk reports, guidelines such as those published by the OECD, and
internal documents. In addition, they considered the UN Sustainable Development
Goals (SDGs) – with SDG #3 Good Health and Wellbeing being the focus indicator --
to better understand issues of importance.
During their
most recent assessment, the company identified more than 100 topics relevant to
Novartis and its stakeholders, which it went on to consolidate into the 30 “most-important”
topics in eight issue clusters. The clusters were than ranked by internal and
external stakeholders based on impact on and performance of Novartis.
At the issue
cluster level, stakeholders indicated the following four clusters as most
material:
·
Access to Healthcare
·
Patient Health & Safety
·
Ethical Business Practices
·
Innovation
One of the aspects I find most comprehensive and innovative
about Novartis’ process is how it displays the assessment results, not in the typical
plot chart format but in a circular polar chart (see
page 16 of their report). The chart’s inner circle reflects the eight issue
clusters; the middle circle indicate topics with significant differences in
perception between internal and external stakeholders (based on survey
responses); and the outer circles represent the 30 individual topics. The
relative importance of each topic is indicated by the height of the column. So,
for example, for the Patient Health & Safety cluster, the three topics most
important to stakeholders were pharmacovigilance,
safety profile & quality of drugs; counterfeit medicines; and health education & prevention. You can tell from the
chart that these three topics were seen as important by both internal and
external stakeholders with no significant difference in perception. And, from the height of the topic columns, it’s
clear that pharmacovigilance, safety profile & quality of drugs is seen as
the most important of the three.
According to Denise, one of the most added-value aspects of
their materiality assessment was the engagement with stakeholders. Their methodology
also allows the company to break down results by stakeholder group to show what
is important to each. Denise cautions that if a company is not truly open to having this dialogue it will impact
how they view and perceive the material issues they are facing.
Beyond its
global assessment, the company has rolled out an assessment process to local
country offices and provides guidance through a local country tool kit.
Novartis says local assessments will help the company identify and understand
regional differences and help country organizations define strategic areas of
focus. To date, local teams in Turkey, Greece and Portugal have completed
assessments, which, Denise said, will feed into the company’s global assessment
as well. Next up, she said, will be assessments in Latin American countries.
The company has published a detailed report on their
materiality assessment process and results on its website, and plans to
publish in January a tool kit that other companies can use to conduct materiality
assessments at the country level. Denis says the idea is to establish a practitioners’
exchange and also gather feedback for improvements.
I, for one, am looking forward to seeing it!
Happy holidays everyone. I hope you have enjoyed my blog
in 2019 and I appreciate all the feedback I have received – keep it coming! I’ll
be back with my next blog in the new year!
Happy holidays!
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