We have engaged in a thorough process to understand our material sustainability issues. Our materiality process has been used to inform the development of our sustainability framework over a number of years.
Our materiality journey started with a consideration of the Sustainable Accounting Standards Board (SASB) standards for businesses operating in the Healthcare sector and Pharmaceutical industry. These standards consider materiality from a financial perspective, identifying those areas that:
- are relevant across an industry
- have the potential to affect value creation
- are actionable by companies
- are of interest to investors, and
- are reflective of stakeholder consensus
In 2020, we enhanced the definition of materiality using our own internal landscape mapping in addition to the high-level perspective provided by the SASB standards. We concluded that the four areas most likely to have a material impact on our business performance from a sustainability perspective were those centred around:
- People: Culture & employee engagement, training & development, diversity & inclusion, and health & well-being
- Customers: Access & affordability, product quality & safety, customer welfare and support for healthcare professionals
- Suppliers: Supply chain management, including human rights & business ethics
- Leadership & governance: Business ethics – existence of policies, employee training
These four areas formed the focus of the sustainability coverage in our 2020 Annual Report.
We continued to evolve our areas of focus throughout 2021, following a more in-depth review of our business against the industry specific SASB materiality assessments for relevant industry sectors and a focused investor engagement programme to understand our key shareholders’ views on materiality. We also increased our engagement with employees around sustainable business initiatives, providing an additional stakeholder perspective.
This process led to the extension from four to eight ‘areas of focus’ which together made up our sustainability framework, as presented in the Sustainability section of our 2021 Annual Report. This framework details the areas that we need to focus on in order to assure the long-term future of the business.
This regrouping allowed us to extend our focus to include broader environmental and societal impact considerations, including the impact of GHG emissions within our supply chain and logistics activities, and the lifecycle management of our product packaging.
We have now grouped our eight areas of focus and wider societal impact considerations under three broad themes: people, planet and product. This demonstrates our recognition of the need to consider materiality from a more holistic perspective, taking into account not just financial performance, but also the impact of our business activities on the environment and society as a whole.
Our approach is likely to evolve over time as we conduct further materiality assessments. These will be complemented by our ongoing stakeholder engagement.