- 2 years ago
11 May 2022
The world today is characterised by a myriad of confronting challenges. We think we have dealt with one challenge, only to have another arrive at our doorstep. From the pandemic to climate change to the threat of war, it’s difficult to identify anything positive, comforting and future-focused in our relentless 24-hour news cycle.
We could look to political leaders to provide us with inspiration and enthusiasm. However, the lack of genuine policy reform in the current election seems to leave us with a choice between ‘do nothing’ or ‘do very little’.
Companies across various sectors are looking at the state of play and are starting to wake up to the fact that they cannot wait for others to lead. This change is being driven by many factors, not least employees and customers who want to be associated with companies who have a clear purpose and deliver social impact.
A social impact mindset is on the rise
Outside of healthcare, it is striking to witness the growth in companies with a social impact mindset. In the technology space, new players such as Canva and Atlassian are shaking up old business models by recognising companies have a social and moral responsibility to contribute towards solving the urgent challenges we face as a society. In retail, brands such as Patagonia and Who Gives a Crap have pledged a proportion of revenue to environmental initiatives.
The old model of corporate social responsibility (CSR) is evolving into a need to demonstrate more holistic and tangible impact across the environment, social and governance (ESG) pillars. Yet many companies sit several steps removed from true social impact, and as a consequence, struggle to demonstrate meaningful change.
The reputation problem
We sit here today, thanks in a large part to the actions of pharmaceutical companies in the recent pandemic. Yet pharma still has a mountain to climb in terms of reputation with the community.
Media tends to focus on Big Pharma from a business perspective and often ignores the benefits they bring for society. Good news stories can quickly sour, such as AstraZeneca’s pledge to sell its COVID-19 vaccine at cost which become totally overshadowed by safety issues. Similarly, the success of mRNA vaccines has given way to concerns around equitable access.
Yet, pharma sits in a unique position
Despite the challenges, compared to other brands, pharma is in a unique position to connect action to impact. A clothing company can source sustainable material and conduct responsible business practices, yet do their products really change lives?
Contrast this with a pharmaceutical product that meets a myriad of technical and safety standards before being rigorously evaluated for cost-effectiveness. The end result can be lifesaving and reverberates across a myriad of social impact domains.
Some companies are getting out in front
A quick scan of pharma company websites reveals numerous approaches to ESG issues including regular sustainability and responsibility reports. However, it is notable that few pharma companies actually quantify the benefits they provide through community initiatives or the products they supply. Pharma companies also often have global initiatives in place, and it is unclear how these translate to a local level.
What can be done?
In the same way blood pressure changes create social impact by connecting to the reduced chance of cardiovascular events and death, companies can connect their actions to social impact. There is a litany of examples online showing how brands purport to create social impact through creating flexible work environments, promoting sustainable travel, implementing ethical business practices and reducing environmental damage. Yet this impact pales in comparison to a new therapeutic advance for therapeutic areas like Parkinson’s, cancer or migraine.
Connections can be established through impact assessments, which use a framework to connect changes to economic, environmental and social impact. Once the connections are established, companies can use the established network to audit, improve and communicate their social impact.
Moving from ROI to SROI
Traditionally, business decisions were made based on ROI metrics which considered little beyond financial implications. Social Return On Investment (SROI), which adopts a social perspective, has progressively emerged as a preferred technique for measuring impact and outcomes.
The analysis is built from the ‘ground-up’ using direct feedback from a range of stakeholders, including patients. As a consequence, SROI offers organisations a comprehensive approach to understand and communicate impact returns, both internally and externally.
The time is now
Some – but not all – companies are starting to recognise that social impact is good for business. Around half of consumers are paying close attention to a brand’s social responsibility and two thirds want to know what the brands they support are doing to address social and financial issues.
Employees also believe it’s no longer acceptable for companies just to make money; they expect employers to positively impact society as well, providing a direct link to the impact their own role has on society.
Research shows 9 in 10 employees want companies to lead with purpose. As a result, there’s an increasing need for companies to demonstrate meaningful, positive contributions to society through impact, whether that be environmental, economic, or cultural.
If the last few years has taught us anything, it’s that the global challenges facing humanity are only going to increase. Pharma is also engaged in multiple Government reviews which could have tangible impacts for the local industry.
The time has come to get on the front foot and start demonstrating true social impact – using hard outcomes rather than vague statements.
Colman Taylor is owner and Chief Vision Officer of pharmaceutical industry healthcare partner HTANALYSTS. HTAnalysts offers SROI and impact assessment services to those who want to be pioneers by leading with purpose and ensuring impact creation is at the core of their organisation. For more information, contact colman.taylor@htanalysts.com.au.
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