Big pharma appeals to many ethical and sustainable investors. While for many others – with often good reasons — dislike them with a passion! But leading pharma companies are in most ESG equity fund portfolios. ‘Honorable Mentions’ are given to “Engine No 1 new ETF,” “2021’s Best 50 Canadian corporate citizens,” and “Best Alternative Energy Stocks”
Transcript & Links, Episode 61, July 2, 2021
Hello, Ron Robins here. Now I hope that my fellow Canadians had a wonderful Canada Day! And for my American friends — wishing you a terrific upcoming Independence Day!
Now, welcome to podcast episode 61 published on July 2, titled “Top ESG Pharma Companies, and more…” — and presented by Investing for the Soul. investingforthesoul.com is your site for vital global ethical and sustainable investing news, commentary, information, and resources.
Remember that you can find a full transcript, links to content – including stock symbols, quotes, and bonus material – at this episode’s podcast page located at investingforthesoul.com/podcasts.
If your broker doesn’t have ESG information, then, in many countries you can sign up for free with Morningstar where you can gain access to company and fund ESG-sustainability ratings. Please note, I receive no compensation from Morningstar or anyone else covered in these podcasts.
Incidentally, if any terms are unfamiliar to you, simply Google them.
Top ESG Pharma Companies, and more…
I’m going to start with an article on an industry that’s highly controversial. It’s big pharma. Big pharma appeals to many ethical and sustainable investors. While many others — for often good reasons — dislike them with a passion! But leading pharma companies are in most ESG equity fund portfolios.Anyhow, the article’s titled The top 10 ESG pharma companies in 2021. It’s written by Beth Snyder Bulik and appeared on fiercepharma.com.
I’m going to quote extensively from the article. Beginning with some insight into the ESG status of the pharmaceutical industry.
“Alastair Pickering, co-founder and chief marketing officer at Alva market intelligence group, which collected and analyzed data for this Fierce Pharma report, agreed that… ‘While pricing is the thing that continues to undermine perception of pharma’s ESG stance, it doesn’t mean that’s the only thing it should focus on…’
RBC Capital analysts agreed in a recent investor’s note and noted the potential for change. (They said) ‘Pharma has historically been penalized for exposure to litigation (e.g. opioids and talc), corporate behavior (e.g. drug pricing), product safety and recalls, or issues with access to affordable healthcare,’ they wrote. (Continuing on RBC said that) ‘However, our analysis indicates that momentum in pharma ESG investing is improving as these ESG risks evolve.’
… (Now) for this ESG report, Alva analyzed and scored the 26 different standard ESG topics for 20 pharma companies from January 1 through April 30…”
So here are quotes from the article concerning the ten best pharma companies according to the Alva research on those ESG measures. I’ll mention the company name followed by some related quotes. Frankly, though, I suggest everyone read the original article. So…
“1. Boehringer Ingelheim
Alva Rating: +49… on a scale that runs from -100 to +100
Boehringer Ingelheim ranked highest among pharma companies for ESG in early 2021.
It earned high marks in diversity and inclusion and also human rights and community relations, but maybe more importantly in the pharma category, it had no significant negative coverage.
BI also earned kudos from Alva in environmental measures…
Alva Rating: +46
Biogen is one of a growing number of pharma companies that detail ESG plans in an annual public report…
Biogen nabbed a high score for employee engagement, diversity and inclusion…
Biogen’s Alzheimer’s drugaducanumab was approved on June 7 but got the nod after Alva’s ESG evaluation period… However, with a price tag of $56,000 amid less-than-stellar clinical trial results it’s likely Biogen’s affordability score would have plummeted.
Alva Rating: +38
Astellas was one of two pharmas—Boehringer Ingelheim was the other—among the top 10 companies that didn’t notch any significant negative coverage in Alva’s ESG study period.
Astellas’ lack of negatives, particularly when it came to affordability, contributed to its high score, Alva found…
Astellas’ human rights measurement was boosted by a perfect score in the Human Rights Campaign’s annual equity index.
4. Novo Nordisk
Alva Rating: +36
Novo Nordisk is another pharma company that reports its ESG efforts…
In Alva’s assessment, Novo Nordisk scored well in human rights and community relations…
But in its negative tally for access and affordability, Alva flagged Novo for deciding to stop distributing prescription drugs to community-based hospital pharmacies.
Another issue going against Novo was the ongoing insulin pricing debate and affordability problem.
Alva Rating: +35
Novartis publishes its annual ESG efforts in its ‘Novartis in Society’ report…
Novartis nabbed a big positive score in Alva’s assessment for competitive behavior in the first quarter as it began a new collaboration with GlaxoSmithKline in Africa… studying treatment responses for malaria and tuberculosis…
However, what ended up damaging Novartis even more—and sticking it with a -17 on affordability—was joining a U.S. group of pharma companies that plan to stop offering so-called 340B drug discounts to hospitals’ community-based pharmacies.
Alva Rating: +34
Amgen reports its ESG efforts on its website…
In 2020 highlighted the $1.5 billion worth of medicines donated…
Amgen scored well for human rights and community relations in Alva’s evaluation…
In January, Amgen pledged to spend $200 million to get to carbon neutrality, reduce water use by 40% and waste disposed by 75% over the next seven years…
Amgen fell into the negative numbers on affordability.
Alva Rating: +31
Gilead jumped into the global spotlight last year with remdesivir, now known as Veklury, the first treatment to win an FDA approval to treat COVID-19 patients… some scientists questioned the U.S. and European Union’s approval in light of several studies that showed minimal benefit, in an article in Science magazine.
Still, Gilead’s ESG rating notched a positive access score, thanks to recent steps to increase access in India.
In January, the Human Rights Commission applauded Gilead’s efforts with a 100% corporate equality index rating…
On the negative ESG side, Gilead notched a -3 score for affordability as it raised prices of more than 15 drugs.
Alva Rating: +27
The company earned high scores on human rights and community relations, thanks to a newly launched nutrient program…
Alva also noted Bayer’s effort to support CureVac’s mRNA COVID-19 vaccine candidate. [Update: see article in Science magazine titled What went wrong with CureVac’s highly anticipated new mRNA vaccine for COVID-19?]…
Bayer’s product-safety score suffered because of its Monsanto acquisition and the much-litigated herbicide Roundup…
Bayer is also being sued along with other big crop chemical makers by wholesalers and retailers for allegedly violating anti-trust laws by inflating prices of crop inputs for farmers.
In pharma, Bayer was penalized on its affordability score…
Alva Rating: +26
While Roche’s product design and lifestyle management scored exceptionally well, at +57, thanks in large measure to its rapid diagnostic tests for COVID-19, it fell to a dismal -40 in selling practices in early 2021 after settling a significant lawsuit.
Roche’s negative ESG score on affordability is due in part to its pricey Spark Therapeutics gene therapy…
Roche is playing another role in the pandemic via its partnership with Regeneron to manufacture the REGN-COV2 antibody treatment…
The combined casirivimab with imdevimab med lowered the risk of hospitalization or death in high-risk, non-hospitalized (COVID-19) patients by 70% compared with placebo.
‘Roche improved its overall ESG score fueled by its efforts being tied to the pandemic which presently garners greater praise,’ Alva researchers said.
10. Sanofi (tied with Takeda)
Alva Rating: +21
Sanofi’s thumbs-up in measures including competitive behavior, selling practices and product labeling balanced out a few negative scores in areas such as affordability and supply-chain management.
One of Sanofi’s best scores… was earned in part by its pledge to manufacture 125 million Pfizer and BioNTech’s COVID-19 vaccine doses … [and]… helping to produce Johnson & Johnson vaccine doses to the tune of 12 million per month…
Sanofi’s negative ESG ratings stemmed from pricing controversies…
Key programs… include affordable access… research for unmet needs in vulnerable communities… stepped up… environmental goals.
10. Takeda (tied with Sanofi)
Alva Rating: +21
Takeda notched the worst affordability score among the top pharmas in ESG…
On the positive side, Takeda is pushing for a more gender-equal world…
The Japanese drugmaker also committed $3.85 million over five years to work with the Children’s National Hospital Rare Disease Institute in Washington D.C…
On environmental issues, Takeda announced that it achieved carbon neutrality in its value chain…
Takeda plans to build on that by eliminating greenhouse gases from company-wide operations.” End quotes.
1) Engine No. 1 rolls out $100 mln ETF after Exxon board victory by Svea Herbst-bayliss in Reuters. Quote “a bet Main Street investors want portfolios to back …(ESG) proposals on the heels of the hedge fund’s boardroom victory at ExxonMobil (XOM.N), company executives said.” End quote.
2) Top of Form Global ESG bond issuance triples under decarbonization drive by Nikkei staff writer. Quote “Global corporate issuance of bonds specializing in (ESG) issues has reached $256.8 billion this year.” End quote.
3. 3 Sustainable Funds to Buy for Purpose and Profit by Zacks Equity Research.
5. 2021’s Best 50 Canadian corporate citizens by Corporate Knights. It’s worthwhile for ethical and sustainable investors everywhere to review this list.
So go to this podcast’s webpage to get the links to these articles.
Well, these are my top news stories with their stock and fund tips — for this podcast: “Top ESG Pharma Companies, and more…”
To get all the links, stock symbols, or to read the transcript of this podcast — and more — go to investingforthesoul.com/podcasts and scroll down to this episode.
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Thank you for listening. Talk to you next on July 16.
Bye for now.
© 2021 Ron Robins, Investing for the Soul. libsyn-upload-106620164