Overview
In 2022, many smaller biotech companies appear to be making progress toward addressing the environmental, social and governance (ESG) risks and opportunities affecting them and their industry. As a follow-up to our report Biotech’s ESG Crossroads, released earlier this year, we re-examined the ESG disclosure practices of 48 of the 50 public biotech companies that we previously researched (the subject companies).
While ESG disclosures still remain relatively brief and largely qualitative, we noted a substantial increase in ESG reporting in 2022 by the subject companies that may signal the growing realization by biotech companies of the importance of ESG to their stakeholders. This guide reviews the trends in ESG reporting for these companies in 2022 and provides suggestions for how biotech companies can initiate or enhance their ESG reporting.
2022 ESG Disclosure Trends
When we first looked at ESG reporting for biotech companies in 2021, relatively few companies had reported any ESG data. Overall, just 30% of the subject companies publicly disclosed ESG information as a unified set of risks and opportunities under an umbrella term such as “ESG,” “sustainability” or “corporate social responsibility.” Furthermore, only nine, or 18%, and five, or 10%, of the companies had provided disclosure in their proxy statements or standalone reports, respectively, with three companies providing disclosure in both documents.
In contrast, since the beginning of 2022 through September 30, at least 26, or approximately 54%, have provided ESG disclosure in their proxy statements and eight companies, or approximately 17%, provided ESG disclosure in standalone reports. Five of the companies reviewed in 2022 provided ESG disclosure in both documents.
We focused our 2022 analysis on ESG disclosure contained in proxy statements or standalone reports, as these are the platforms where companies generally provide the most extensive disclosures. Overall, 29, or approximately 60%, of the subject companies provided ESG disclosure on either platform in 2022, more than double the number providing ESG disclosure on either platform — 11, or approximately 22% — in 2021.
READ MORE »