The social dimension of ESG is complex and perhaps the most difficult to quantify for commercial organisations. For example, how a business manages its relationships with its people – ‘human capital’ – is key to a successful ESG strategy.
After all, an organisation’s staff are important advocates and enablers of ESG – it is employees that enact it and bring it to life.In this context, Inclusion, Diversity and Equity (IDE) is a critically important element. Research has shown that 35% of an employee’s emotional investment in their work, and 20% of their desire to stay, is attributable to how included they feel in the workplace. More diverse businesses will be more representative of the communities they serve and will be able to draw on a wider range of talent and insight, potentially enabling them to better align products and services to market segments.
Life sciences businesses should therefore be highly focused on a number of aspects:
Recruiting from diverse talent pools to build a diverse and inclusive workforce
Investment in diversity and inclusion training
Flexible working policies that enable staff to manage work/life regardless of personal circumstances and backgrounds
Support for wellbeing and mental health to build resilience and enable diverse talent to perform to its full potential
Diversity is important at Board level too. For example, research has shown that having a gender-diverse Board promotes discussion of social issues, climate change and work/life balance.
The social dimension of ESG reaches far beyond an organisation’s own people. Businesses have significant impacts in the societies and communities where they operate, and can act as powerful forces for social good.In the life sciences context, for example, climate change is undermining many of the social determinants for good health, such as livelihoods, equality and access to healthcare and social support structures. These climate-sensitive health risks are disproportionately felt by the most vulnerable and disadvantaged, including women, children, ethnic minorities, poor communities, migrants or displaced persons, older populations, and those with underlying health conditions.
According to the WHO, around 2 billion people lack access to basic/essential medicines across the globe.
Developing a robust model to achieve a positive impact on society is underpinned by achieving equitable access to healthcare and ensuring that clinical research includes a diverse range of trial participants that reflects the ‘real-world’ effectiveness of medicines. This was a key learning from the Covid-19 pandemic, for example, where evidence has suggested that individuals from different ethnic minorities were affected by the virus in different ways and to different degrees – an area of ongoing study and research.
There is also growing attention on pricing issues and this goes hand-in-hand with access to medicines. For example, there is a possibility that, in the US, the Institute for Clinical and Economic Review (ICER) guidance (advocating for cost effectiveness) may in the future form a component of a pharma company’s evaluation against ESG targets, with investors putting pressure on companies to align prices with ICER guidance.
Life science businesses should strive to collaborate and set up healthcare initiatives that ensure an uninterrupted supply of medicines to vulnerable groups in the face of climate-related, social, geopolitical and other pressures.
