By Franca Perin, Head of SRI Research, Generali Investments Europe
In the latest issue of SR-highlight newsletter Generali Investments Europe (GIE) focuses on the SRI analysis of the Healthcare and Pharmaceutical sector. SRI stands for Socially Responsible Investments, meaning the consideration of sustainability aspects in asset management.
The Healthcare and Pharmaceutical sector has its own features as it provides care solutions to suffering patients and helps improving the lives of millions of individuals thanks to products and medicine. Therefore, the Healthcare and Pharmaceutical sector has a critical role to play in society as a whole. The civil society, and in particular consumers usually trust the industry and expect it to provide the best solution with a positive benefit-risk balance at a fair price. However, this is not always the case and several examples can prove it.
It is clear that maximizing sales and profit is the primary goal in this sector just like in any other profit corporations. But increasing competition should not lead to deceiving trust by consumers due to illegal or controversial practices targeted to improve turnover at the risk of endangering patients. Such practices, when identified and condemned by the relevant authorities, can have financial, legal, reputational and/or operational consequences, which will impact costs, revenues, and ultimately the share price. Therefore, we try to identify these risks and opportunities in order to comply with our commitment as responsible investor.
Out of the total of 34 ESG criteria we consider in our SRI analysis we have identified six issues most decisive for the assessment and rating of sustainability in the Healthcare and Pharmaceutical sector:
- · Access and Reponsible Use: Provide access to pharmaceuticals also in “bottom-of-thepyramid”-countries / R&D in neglected diseases
- · Safety: Transparency of clinical trials / Controversial drugs portfolio / Litigations
- · Purpose: Focus on R&D / Product pipeline
- · Quality: Certifications / Product recalls track record
- · Unfair competition: Marketing practices / Anti-competitive practices / Ligitations
- · Purchasing & Consumption: Energy consumption / Water consumption
Source : generali-investments-europe.com
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