The three most material factors that can impact our ability to create value over time are defined by management as:
- product quality and patient safety
- progress in the R&D pipeline and regulatory approval
- pricing and market access environment
- Any failures in managing these are important to key stakeholders – notably the patients we serve – and could substantively affect value creation. As a result, there are robust governance processes in place and board oversight to ensure that associated risks are managed and opportunities realised.
Material issues are determined and reassessed on an annual basis by management to ensure we stay on top of issues that could substantively affect our strategy, business model, ability to access required resources or key stakeholders. For reporting purposes, this process is anchored with the Disclosure Committee, chaired by our Chief Financial Officer.
Materiality determination is informed by legal requirements, insights from stakeholder feedback such as analyst reports and investor queries, patient panels, independent assurance, reputation surveys, the AI tool, Datamaran, and internal surveys among employees. Material issues are linked to the annual strategic planning process, and material issues are reflected in the remuneration of the Executive Management and the long-term share-based incentive programme.
The materiality determination process is further validated by data-driven insights delivered by independent providers, which include assessments of sector specific issues, legal requirements, media coverage and social media conversations. The list total approximately 25 material issues across financial, environmental and social dimensions.
The filter criteria for materiality determination are based on sector-specific guidance provided by the Sustainability Accounting Standards Board (SASB) and the Future Fit Business Benchmark.
We lean on the International Integrated Reporting Council’s definition of materiality. Beyond the most material issues, all information deemed material for providers of financial capital in their decision-making is included in the Annual Report, i.e. of such relevance and importance that it could substantively influence their assessments of our ability to create value over the short, medium and long term.
Disclosures in the annual report must meet regulatory requirements and reflect issues of strategic importance. Key issues are identified through ongoing stakeholder engagement and trendspotting, informed by data-driven analysis and addressed by programmes or action plans with clear and measurable targets.
Material social and environmental issues are selected using a Disclosure Assessment Model we have developed. To assess identified issues, a scoring system is in place. This scoring system is made up of 12 dimensions of impact, within which each issue is given a score between 0 to 3. All 12 scores are totalled and those issues which score above 16 are included in our annual report.
The high level of data quality of the disclosures is ensured by applying a framework developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The COSO Framework, supported by a top-down risk based approach as stated in Audit Standard no. 5, ensures an efficient and effective control environment.
