Modernizing a pharma company’s ESG reporting to unlock new business value
Credible ESG reporting
The importance of Environmental, Social and Governance (ESG) reporting continues to rise for stakeholders as they assess business performance. Investors and the public at large want to know where an organization stands on these critical issues and they expect accountability from business executives. For one major pharma company, a holistic ESG narrative is not only a way to exceed those expectations, it’s a chance to take the lead on integrating ESG into every aspect of corporate strategy.
The company, a global pharmaceutical leader, views transparent, consistent ESG reporting as an opportunity on several levels. It’s an opportunity to deliver on a better tomorrow for its people and for society; to build trust with employees, investors and the public through responsible business practices; and to unlock business value across the company. Recently, the organization adopted a new approach to ESG reporting, establishing rigorous reporting mechanisms that align to its purpose and can aid in day-to-day decision making.
This reporting revamp was a long-term, strategic initiative that would be developed and adapted over time. The organization was focused on continuous innovation and improvement, with the goal of delivering a thorough and compelling company-wide ESG narrative. Though ESG reporting is still voluntary, the company understands the market and what its stakeholders want; in turn, it wants to be ahead of the curve in meeting investor, public and internal expectations. With a changing regulatory environment on the horizon, ESG reporting offered a chance for the company to monitor its impact on society and proactively prepare for future disclosure requirements.
The pharmaceutical company turned to PwC to help design and implement an improved reporting process that had the same level of rigor and importance as their financial reporting system. As the company’s ESG advisor since 2015, PwC was well positioned to help it make bold moves.
PwC sat down with top investors to learn what they wanted most from future ESG reports. PwC then met with department leaders to understand the challenges and opportunities within the organization. Together, the team distilled this feedback into four potential areas for improvement: 1) employee upskilling, 2) reporting speed, 3) controls and governance, and 4) technology.
Next, PwC held a workshop with core ESG leaders and stakeholders to align on a plan of action. The company’s highest priority was producing a report that its employees, customers and investors could trust. The underlying data needed to be investor-grade, which meant the team needed to address data controls and governance first.
The pharma company wanted its report to be compiled with investor-grade data. To meet that objective, PwC leaned on its experience, processes and leading practices in audit and SOX compliance to help approach the challenge. Together, PwC and the company’s controls and internal audit teams identified the data source for each metric in the ESG report and built controls to help confirm data completeness and accuracy.
PwC supported the integration of those controls into an existing enterprise system for financial reporting and detailed the data governance structure. The organization then trained its employees to better manage and monitor the data. Confident that it could now deliver investor-grade sustainability data, the company’s next step was to adopt technology that could evaluate and reveal its business value.
Automation and analytics were key to realizing the full value of investor-grade ESG data. To demonstrate the potential of these technologies, PwC built a proof of concept from a small data sample. After pulling samples of sustainability data from disparate sources, PwC used automation to reduce manual processes, then created custom analytics dashboards to show real-time ESG metrics.
The company recognized the value right away. Not only would these tools improve the speed and accuracy of the reporting process, they could also help leadership incorporate ESG data into strategic decision making across the organization. By establishing the framework to deliver investor-grade ESG data, the company had the controls and data architecture in place to implement these upgrades company-wide.
The decision to be proactive about ESG reporting is already paying dividends in trust, cooperation and awareness. Thanks to the technology upgrades, company leadership now gets monthly updates on ESG metrics, a huge step forward from the manual, once-a-year reports of the past. And the engagement has created new business value across the board by increasing cooperation and transparency at all levels.
Performing this type of reporting and communicating the results brought the ESG mindset to many different parts of the business — not just the sustainability office. The more robust report inspired employees to think about how ESG impacts the whole company and society at large.
By planning for the future of sustainability reporting rather than only focusing on present-day requirements, the major pharmaceutical company took more control of its ESG narrative. Its ESG initiatives allow it to take the lead on socially responsible issues that are critical to investors and the general public alike. These types of bold moves are what can define the company and position it for continued success.
ESG indicators established as highest priority across the organization.
Reporting that helps build a strategy to improve the environment and establish trust with stakeholders.
Consolidated, automated ESG report in place of 50 separate spreadsheets.