Making an impact where it matters most
We live in an uncertain and constantly changing world. To ensure we take steps to identify and prioritise the issues that have the most impact on our business, the environment, and society we conduct a formal materiality analysis each year.
How we conduct our annual assessment is set out in the diagram, which consists of four key steps:
The materiality process
Our materiality assessment is to be carried out every year, with FY21 the first year that Clinigen has conducted such an exercise. The process we have designed will help us to identify the economic, social and environmental issues that matter most to our business and our stakeholders.
Conducting a thorough assessment in this way not only helps in identifying issues to be covered in our reporting and disclosures but also helps us to decide where to prioritise our resources. The assessment also feeds directly into our enterprise risk management framework and established risk governance framework.
We have set out below the approach adopted annually in conducting the materiality assessment, which is made up of four key steps as detailed below:
FY21 represents the first year that we have formally undertaken a detailed materiality assessment as part of developing and identifying the major trends that impact our business and ultimately how we can influence and impact key ESG issues across our value chain.
To help guide the identification of topics we have drawn upon several external sources, including:
- SASB’s Materiality Map which identifies sustainability issues that are likely to affect the financial condition or operating performance of companies within our industry.
- World Economic Forum’s (WEF’s) Global Risks Report 2021.
- ESG Rating Agency (including MSCI and Sustainanalytics) areas of materiality for the Healthcare sector.
- Other external inputs (including the UN Sustainable Development Goals, CDP, and Access to Medicine Index).
We first assessed the topics in terms of their relevance before comparing them against the UN Sustainable Development Goals (SDGs) to determine the impact they have on these goals.
As a next step, we identified which additional sector-specific issues to include drawing upon our deep understanding of the Pharmaceutical and Services sector.
For each of the identified issues, we evaluated various external factors and assessed the impact they have on our business. This included relevant global regulations that impact our business group-wide.
In conducting this analysis, we drew on relevant legislation, reports and our latest ESG rating by MSCI and Sustainalytics.
As well as analysing external factors, we also evaluated our company’s contribution to sustainable development. For each of the topics identified, we reviewed the following:
- the influence we have on the sector that we operate within.
- the value chain impacted.
- our geographical locations.
- results of the analysis.
Following completion of this step, we mapped the identified topics to the UN SDGs.
In total we identified 30 topics that are of significance to our sustainability approach and reporting. We assessed them in accordance with their relevance focusing on their impact on our business and importance to our stakeholders.
The issues rated as material form the focus of our sustainability model, pillars, and reporting.
Our materiality assessment
In addition to identifying and prioritising issues from internal and external stakeholders, our materiality assessment has been integrated with Clinigen’s Group Risk Management process.
We have also engaged with our major investors and key markets to obtain their perspective on materiality. Integral to developing our sustainability approach in recent months has been our collaborative approach with our stakeholders. We continue to engage with all of our stakeholders to ensure they both contribute and are kept informed of progress.
The assessment process brought in views from external stakeholders, the Board and several Business Leaders. The Executive Management Team have engaged significantly in the development of our approach.
The assessment identified 30 issues of material importance. The issues identified were placed on a matrix, their position relative to the degree of stakeholder importance and potential business impact. These results represent the material issues facing our business, with us focusing most on those categorised and having significant impact on our business and also significant importance to our stakeholders. None of the issues identified should be considered and viewed in isolation, with most interconnected from an impact on our business perspective.
Our materiality assessment for FY21 concluded that all of the issues identified have a direct relationship to our business success, with a number of them considered essential for protecting and growing our revenues and people. However, as a global pharmaceutical and services company with a unique combination of businesses focused on providing ethical access to medicines, our assessment identified that we can make a significant contribution and impact with regard to patient health, quality of life, and access to healthcare. This links directly to our assessment that we contribute and make an impact to the UN’s Sustainable Development Goal 3 “Good health and wellbeing” of which the goal is to ‘ensure healthy lives and promote well-being for all at all ages’.
In total we have identified 7 out of the 17 UN SDGs as being most material to our business and the products and services we provide to our stakeholders. You can find further details on how the 7 SDGs link to our four pillars by following these links:
Using our materiality assessment
We use the materiality assessment to agree and define our commitments, set targets, and to identify areas for improvement. The assessment is also utilised by the Group’s Risk, Ethics, Compliance & Sustainability (RECS) Board to aid the identification of material risks and embed our sustainability model.
We also use the assessment to drive what information should be reported externally and annually within our Annual Report.