The evolution of ESG disclosure for the biotech sector

Biotech News: Explicit consideration of ESG issues has entered public and corporate narratives in recent years, where investors are increasingly evaluating opportunities using ESG criteria, and expectations have significantly increased for companies to clearly and publicly articulate approaches to ESG accountability.

While ESG reporting is not yet mandatory in Australia, there are varied approaches to mapping and responding to ESG issues. 

Established in 2001, ACSI exists to provide a strong voice on financially material environmental, social and governance (ESG) issues. The ESG Reporting Trends report revealed that out of the 14 ASX200 companies in the healthcare sector none had a ‘comprehensive’ ESG reporting rating and only 5 had a ‘detailed’ reporting rating, highlighting a sector-wide gap.

A group AusBiotech leaders have banded together to develop an Australian biotech first, a sector-specific ESG tool to help companies attract investment and navigate ESG reporting.

A healthcare sector gap in ESG reporting should be a wake-up call

The resource will assist organisations in their approach to ESG issues relevant to their own company’s circumstances, including suggestions for how to incorporate priority ESG considerations more effectively into policies and procedures. While the resource will draw on global best practice, it has been developed by, and for, Australia’s biotechnology community, and features suggestions for metrics that can be used for measuring and communicating progress.

Acknowledging that there are no agreed standards, tools or metrics as yet, this new resource will highlight a range of existing approaches to developing an ESG strategy that can be tailored to each company’s stage along the ESG journey.

The new resource is intended to be a pragmatic, practical, easy-to-use guide for Australian life sciences and biotech companies looking to begin or to expand their ESG strategy and approach to reporting. It is also intended to be useful for investors, highlighting what the priority ESG-related considerations are for biotech companies, and what investors might expect to see from these companies when assessing their ESG credentials.

AusBiotech’s ESG Working Group will shortly be releasing a draft version of the resource, seeking feedback from the sector.