In March 2022, global pharmaceutical company Novartis published its first-ever Novartis in Society integrated report.
That means the company combined its report on annual financial performance together with details of its progress toward sustainability goals, or ESG. Other companies that produce integrated reports include Etsy and Ford.
From Ford’s 2022 report: “Last year we were proud to launch our inaugural Integrated Sustainability and Financial Report,building on more than two decades of sustainability reporting at Ford and giving our stakeholders a more holistic view of our performance.”
Such reporting is not new, but it’s also not universally adopted. Advocates of this type of reporting say that it deepens the connection between business strategy and sustainable goals.
Global organizations for decades have wrangled with not just what to report on sustainability goals, but how to report. Novartis’ decision to combine financial and sustainability reporting into one combined overview is something more companies may choose to do as international bodies adopt these standards.
Measuring impact on community health
Public health and sustainability goals are not new to Novartis, but the global pandemic clearly brought them under a new kind of scrutiny.
Lutz Hegemann, group head of corporate affairs and global health, told Insider about how the pandemic had impacted the company’s community health goals.
“Our priority now, more than ever before, is to ensure uninterrupted supply of essential medicines, including
, to all those who need them, wherever they may be,” he said.
Hegemann also said that the pandemic had demonstrated how fragile infrastructures and public health systems fail to reap the benefits of health innovation. “COVID-19 reinforces the need to continue to do more to strengthen healthcare systems across the globe as we implement the Novartis Access Principles across our portfolio,” he said.
To learn more about the Novartis Access Principles, Insider turned to the company’s integrated report.
“We aim to implement an access strategy for all new medicines launched,” the report reads. “These strategies include innovative pricing and access models, earlier launches in low- and middle-income countries, and approaches to strengthen healthcare systems.”
The report includes a data table of patients reached through “access approaches,” at 56.2 million in 2021, including the proportion that was funded by the company’s 2020 sustainability-linked bond.
In keeping with the principles of the integrated report, it also includes broader reporting of the company’s financial performance, reflecting $52 billion in net sales, a 4% increase over the past year.
Global reporting standards
Integrated reporting is not a new concept. According to ESG – The Report, the International Integrated Reporting Council (IIRC), issued its first global framework in 2013, following consultation with accounting, business, and investor groups.
Other acronym-heavy organizations have recently weighed in on the benefits of combining externally facing materials. On May 25, 2022, the International Financial Reporting Standards Foundation (IFRS), the chairs of the International Accounting Standards Board (IASB), and the International Sustainability Standards Board (ISSB), announced they would be incorporating the IIRC’s current framework.
“We are convinced that the Integrated Reporting Framework drives high-quality corporate reporting and connectivity between financial statements and sustainability-related financial disclosures which improves the quality of the information provided to investors,” read a statement by Andreas Barckow, chair of the IASB, and Emmanuel Faber, chair of the ISSB.
Hegemann said Novartis decided to merge its previous Novartis in Society ESG Report and Annual Review into one document to “increase the quality of our ESG disclosures by providing a streamlined and integrated view of how we create value for our stakeholders through our purpose and corporate strategy.”
Novartis tapped the Integrated Reporting Framework in developing the report, as well as SASB Standards provided by the Value Reporting Foundation.
Standards are constantly evolving, and Hegemann said the integrated approach leaves the company “well positioned to continue to enhance our ESG disclosures and adapt to emerging ESG reporting standards.”