Claremont McKenna College Roberts Environmental Center 2006 Roberts Environmental Center Pacific Sustainability Index Scores Pharmaceuticals Sector J. Emil Morhardt Elgeritte Adidjaja Holly E. Allen-Young William M. Ellison Claire Fowler Esbenshade Christopher David Frantz Kira Elizabeth Gaza Ina Hanna Labermeier Emery L. Mitchem James H. Vanden Bos Elliott Vander Kolk Price: $20.00 Claremont McKenna College Roberts Environmental Center Contents Page Publications from Roberts Environmental Center The Roberts Environmental Center publishes analyses of Company Rankings 3 corporate environmental and social reports—together called sustainability reports—on the web and in special The Pacific Sustainability Index in a Nutshell 4 reports. Visual Cluster Analysis 5 We also write books about environmental and sustainability reporting, the first of which is Clean, Green, Environmental Intent Element of the PSI Scores 6 and Read All Over: Ten Rules for Corporate Environmental and Sustainability Reporting, available Environmental Reporting Element of the PSI Scores 7 from ASQ Press, and publish articles in academic technical journals. Social Intent Element of the PSI Scores 8 Existing sector reports available online at Social Reporting Element of the PSI Scores 9 www.roberts.mckenna.edu: Environmental Scores Ranking 10 2006 Pharmaceuticals 2006 Chemicals Social Scores Ranking 11 2006 Electronics, Semiconductor, and Peripherals 2006 Metals, Mining, and Crude Oil Production Use of Environmental Indicators 12 2006 Colleges and Universities 2005 Forest and Paper Products Use of Social Indicators 13 2005 Consumer Food, Food Production, and Beverages 2005 Energy and Utilities Relationship between overall PSI Score and 14 2004 Motor Vehicles and Parts Companies' Economic Indicators 2004 Petroleum Refining 2004 Electronics Use of Voluntary Guidelines and Partnerships 16 2004 Chemicals 2004 Pharmaceuticals Analysts’ Comments, alphabetically listed by 17 company name To order printed copies of this report, please contact: Roberts Environmental Center, Claremont McKenna 22 Dr. J. Emil Morhardt, Director College, and The Claremont Colleges Roberts Environmental Center Claremont McKenna College 925 N. Mills Avenue Claremont, CA 91711-5916 USA 909-621-8190, Fax 909-607-1185 [email protected] Front Cover Photo: Joint Science Department Biology Lab (REC) The goal of corporate report analysis conducted by the Roberts Environmental Center is to acquaint students with environmental and social issues facing the world’s industries, and the ways in which industry approaches and resolves these issues. The data presented in this report were collected by student research assistants and a research fellow at the Roberts Environmental Center. Copyright 2006 © by J. Emil Morhardt. All rights reserved. www.roberts.mckenna.edu 2006 Roberts Environmental Center Pharmaceuticals Industry Report 2 Claremont McKenna College Roberts Environmental Center 2005 Fortune Global 500 and Fortune 1000 Pharmaceuticals Corporate Environmental and Sustainability Reporting During the past decade, large corporations have begun to report voluntarily on the PSI Overall Grading environmental issues affecting their companies and on how they deal with them. The addition of social issues to these reports has resulted in some firms designating them sustainability reports. A+ Bristol-Myers Squibb (U.S.) Some firms produce these reports yearly, others only occasionally, and some not at all. We A Abbott Laboratories (U.S.) obtain these reports and any additional information exclusively from corporate web sites. A- AstraZeneca (Britain) This report covers the largest 30 companies in the Pharmaceuticals sectors of the 2005 Fortune Global 500 and the Fortune 1000 lists, whether or not they produced formal environmental A- Johnson and Johnson (U.S.) or sustainability reports. It is based on all environmental and social information available on their A- Pfizer (U.S.) web sites during the period of our analysis. After we finished analyzing the companies' reports, B+ Eli Lilly (U.S.) we provided a draft sector report online to allow companies to review their score and provide comments. The quality of the environmental and social reporting was characterized by students B+ GlaxoSmithKline (Britain) at the Claremont Colleges using the Roberts Environmental Center’s Pacific Sustainability Index B Novartis (Switzerland) (PSI). B Roche Group (Switzerland) Analysis period: 10/20/2005 through 12/6/2005 B Allergan (U.S.) Draft sector report available for review: 3/30/2006 through 5/1/2006 B Sanofi-Aventis (France) Pharmaceuticals B Merck (U.S.) B- Wyeth (U.S.) Company PSI Rankings C+ Schering-Plough Corporation Bristol-Myers Squibb (U.S.) Abbott Laboratories C+ Amgen (U.S.) AstraZeneca D+ Genzyme (U.S.) Johnson and Johnson D Gilead Sciences (U.S.) During the past decade,Pfizer large corporations have begun affecting their companiesEli Lilly and on how they deal with them. D Chiron (U.S.) The addition GlaxoSmithKlineof social issues to these reports has resulted in some firms designating them “sustainability reports.” D Forest Laboratories (U.S.) Novartis Some firms produce these reports yearly, others only D IVAX (Teva Pharmaceutical) occasionally, andRoche some Group not at all. We obtain these reports and any additional informationAllergan exclusively from corporate (Israel) web sites. Sanofi-Aventis D- Watson Pharmaceuticals This report covers all ofMerck the companies in the energy and (U.S.) utilities sectors of the 2005 Fortune Global 500 and all Wyeth energy companies from the Fortune 1000 list, whether or D- Biogen Idec Inc. (U.S.) Schering-Plough Corporation not they produced formal environmental or sustainability D- NBTY (U.S.) reports. It is based onAmgen all environmental and social information availableGenzyme on their web sites during the period of D- Mylan Laboratories (U.S.) our analysis fromGilead October Sciences 20, 2004 through April 18, 2005, D- King Pharmaceuticals (U.S.) including annual reportsChiron and, for American companies, 10- K forms. We extended the period of our analysis by incorporatingForest feedbacks Laboratories received from companies from MayIVAX 20,2005 (Teva Pharmaceutical)through June 15, 2005. The quality of the environmentalW atson Pharmaceuticals and social reporting was characterized by students at theBiogen Claremont Idec Inc. Colleges using the Roberts Environmental Center’sNBTY Pacific Sustainability Index (PSI). Mylan Laboratories King Pharmaceuticals 0 255075100 www.roberts.mckenna.edu 2006 Roberts Environmental Center Pharmaceuticals Industry Report 3 Claremont McKenna College Roberts Environmental Center The Pacific Sustainability Index (PSI) in a Nutshell* The PSI Scoring System What do we mean by performance? The Pacific Sustainability Index (PSI) uses two systematic Topics analyzed in the reporting and performance categories are questionnaires to analyze the quality of the sustainability reporting—a identical. The performance category is used to measure the performance base questionnaire for reports across sectors and a sector-specific of the reported environmental performance (EP) or social performance questionnaire for companies within the same sector. The selection of (SP) indicators. The maximum score for each topic in the performance questions is based on the most frequently-mentioned topics in over 500 category is two points: corporate sustainability reports analyzed from 2002 through mid-2005 at the Roberts Environmental Center. - Quantitative topics get one point if there is a positive data trend and another point if data are shown to be better than peer average. An The philosophy of the PSI is described in detail in our book, Clean, additional point is awarded if the company is clearly taking a leadership Green, and Read All Over published by and available from the American position for the sector, or if the data are at maximum performance (e.g. Society for Quality Press**. The selection of PSI topics is constantly 100% recycling rate, 0 emissions, 0 injuries). adapted to include topics discussed in the world’s best sustainability reports, raising the bar for better sustainability reporting in the future. - Qualitative topics get one point if there is a discussion on the benefits or advantages from the program, another point if the program is continuously being monitored or improved by the company and another How do we collect our data? when the company is a leader or role model as evidenced by external recognition or awards. Relevant English web pages are downloaded from the main corporate website for analysis. Our scoring excludes data independently stored - Philosophical topics get one point if the company subscribes to at outside the main corporate web site. When a corporate subsidiary has least one internal or external social program that deals with a particular its own sustainability reporting, partial credit is given to the parent issue (e.g. Company's own code of conduct or Global Compact), another company when a direct link is provided in the main corporate web site. point when there is an active (action required) program or policy the company uses to enforce this principle such as a compliance mechanism, zero-tolerance ruling for non-compliance, external auditor, whistleblower What does the score mean? program, certification program, etc., and another point if the company Although our scoring uses a uniform scoring guideline, analysts’ explicitly states that these guidelines or principles are being followed. subjectivity plays