Our Sustainable Governance Blueprint
In response to the changing trends, PharmaEssentia has strengthened its core strategy for global operations and aligned them with the international sustainable development goals. We also put SDG 3 - Good Health and Well-Being as the core to link our ESG actions to our sustainable development blueprint, to create greater sustainable value for the company.
Sustainable Governance Operations & Achievements
The board of directors is the highest governance and decision-making unit for the company, responding to the governance needs of sustainable development. In 2020, we set up PharmaEssentia’s ECCS with the CEO as the leader and five functional Taskforces under the CEO's leadership. The ECCS is responsible for planning and promoting cross-departmental sustainability policies, goals, strategies, and execution plans and delegate these plans to each Taskforces to implement. The ECCS reports the progress of ESG related projects to the Board of Directors on a quarterly basis.
Sustainable Governance Operations
PharmaEssentia’s Board of Directors manages various risk and impact and their corresponding material topics. The board of directors is the highest supervisory and decision-making body for risk management. The company has also established an Audit Committee as the company's internal monitoring mechanism, to assist the board of directors to control existing or potential risk issues.Currently, the ECCS is responsible for identifying non-financial impacts across the ESG dimensions and assigning each functional managers to propose suitable actions to manage the potential negative impacts. Our impact management mechanism is in place to avoid risk hazards and identify emerging risks; after impact assessment, each risk issue is dealt with by different functional department and monitored on a regular basis.
Our US subsidiary has also established risk management-related positions, and the Legal Counsel currently assists in managing related risks control and reports directly to the General Manager of the US subsidiary.
ESG Risk Management & Materiality Metrics
In our milestone of promoting the sustainable blueprint, we introduced "SMART: Specific, Measurable, Attainable, Relevant, and Time-based" as the management principle to set our goals. Putting environmental (E), social (S), governance (G) as short-term, mid-term, and long-term sustainability goals for highly significant topics which allow us to thoroughly examine the systems of the Company and take responsibility for the effective allocation of resources to promote sustainable corporate development. The Execution Center for Corporate Sustainability is in charge of coordinating non-financial risk issue identifications relate to ESG aspects. It oversees the likelihood and level of impact of risks for business operations, and provide feedback on existing management mechanisms to the management approaches to material topics.
The Process to Identify Material Topics
We have expanded diversified perspective and re-examined the material topics of ESG in the pursuit of global layout and sustainable development of enterprises. We examine the possibilities and impact potential of each risk according to the Corporate Risk Management framework published by COSO and WBCSD in 2018. In 2021, the " Material Topics Questionnaire Survey" will be released again, covering not only employees of US subsidiary but also external stakeholders.
In 2022, we also referenced the four principles laid out by AA1000 Accountability Principles, including Inclusivity, Materiality, Responsiveness, and Impact, as well as the process to identify Material Topics in the GRI 2021 Standards (GRI 3-3) to complete the actual and potential impact assessment and map the risks with material topics in our strategy. We have developed comprehensive management guidelines, actions, targets, and metrics for 11 material topics evaluated by 10 types of stakeholders.
Sustainability Risk Matrix
The Impact of Material Topics & Management Actions
According to the analysis based on PharmaEssentia's operation value chain, 11 material topics and their impact on the organization were identified. Its related risks were also evaluated from 4 aspects: strategy, operation, finance and legal. We further identified the corresponding relevant risks (probability and severity), and assessed risk events that may have an impact on sustainability objectives. Formulate a continuously optimized management mechanism, and expect enterprises to more effectively manage the risks we may face. To enhance our competitiveness and create more business opportunities in a constantly changing environment.