A Guide to support Australian life sciences companies navigate their 'environmental, social and governance' (ESG) reporting has been developed, and AusBiotech is seeking industry feedback to finalise the resource for industry implementation.
AusBiotech is proud to share the draft ESG Guide for Australian Life Science Companies, after nearly a year of collaborative development with industry leaders to create a pragmatic and easy-to-use ESG tool for biotechs, and in particular for SMEs.
The draft Guide, developed with support of the AusBiotech ESG Working Group comprised of investors, life science companies, pharma, has been developed as a beneficial opportunity to increase the attractiveness of Australia's business environment to international and local investors and collaborators, having been identified in AusBiotech's Biotechnology Blueprint, the sector's decadal strategy written by the industry, for the industry.
The Guide enables a consistent approach to proactively identifying and reporting on key ESG factors that are particularly relevant to life science companies.
Due to the evolving nature of ESG reporting and regulation, and the level of subjectivity on what's most relevant and important to each company, there are no agreed universal standards, tools or metrics to guide companies on their ESG programme. The lack of standardisation underpins the rationale for this new ESG Guide: a voluntary set of guidelines tailored specifically for Australian SME companies operating in the life sciences sector.
The Guide is designed to be a reference for company executives and boards to highlight the importance of establishing ESG programmes, understand the materiality of factors specific to the life sciences industry and their own individual company, initiate a process to assess strengths and gaps, and provide a starting point for implementation and communication. It is also intended to be a useful resource for investors as a guide to understanding the priority ESG considerations for life sciences companies, as criteria for assessing their ESG credentials.
Globally, awareness of the importance of ESG factors has grown over the past decade and it is increasingly regarded as an integral aspect of contemporary best practice for companies and for investors.
The life sciences industry is distinctive by virtue of its inherent link to social good as the innovators and advancers of science and technology to deliver potentially life-changing and life-saving therapies, vaccines, diagnostics, devices and digital health solutions that have global significance for humankind.
Australia's life sciences industry currently boasts over 1,400 companies undertaking research and development, the majority of which are small to medium sized enterprises (SMEs). Supporting these nascent companies to develop and communicate proactive ESG strategies, policies and practices will enhance the reputation and credibility of our sector, lead to increased investor confidence and attraction, and assist to deliver timely and innovative health outcomes.
However, with 93 per cent of small cap companies in Australia currently not reporting on ESG, there exists an opportunity for companies to differentiate themselves within the market and in the eyes of potential investors.
This Guide intends to build reporting capabilities within life science companies, as part of AusBiotech's broader mission to increase and diversify investment into the Australian biotech sector via its investment programme.
In particular, AusBiotech is seeking feedback from industry on:
- The guide's practicality for biotech companies;
- The ESG considerations captured in Section 4.0 and whether the considerations are categorised appropriately (basic versus advance), and;
- Suggestions on recommended frameworks which have not been included in the Guide.
