The coronavirus pandemic has changed the world in which we live and operate. How we engage with one another, manage work and life, produce goods and services, and manage the impact of the increase in public spending incurred to support people and economic activity has changed to varying degrees and will continue to do so. The purpose of this piece is not to analyse the changes in societal norms and structural changes in economies, as this requires more time to interpret emerging trends. Rather it serves to highlight that CLINUVEL is entering a new world order in which the potential implications for people and economies are forever changed by the materialisation of a key risk – global pandemics and the way we will communicate and do business.

There is a multitude of known and unknown risks facing people, governments, businesses, and other operators in the economy. For businesses across the globe, as for other economic entities, the need for prudent risk management has been underscored by the coronavirus pandemic and its direct and indirect impact on their viability and future performance. This timely feature provides an overview of CLINUVEL’s approach to risk management and its commitment to the prudent management of Environmental, Social and Governance (ESG) criteria which are now integrated within risk management and investment decisions, and closely linked to sustainable corporate performance.


The prudent management of risk is essential to the achievement of CLINUVEL’s strategic initiatives and the progress of the Company towards a diverse and integrated biopharmaceutical aimed at providing treatments to multiple patient groups. CLINUVEL has a conservative risk culture and this is reflected in its thrifty financial management over the years to develop and commercialise SCENESSE® (afamelanotide 16mg) for the treatment of adult patients with erythropoietic protoporphyria (EPP). The Board of Directors has mandated its executive management to execute a conservative strategy while growing the Group of companies. Specifically, the development cost of SCENESSE® has been well below the cost of comparable pharmaceutical company orphan drug development focused on a new molecular entity. In addition, CLINUVEL’s decision to self-distribute SCENESSE® in Europe and the USA has proven cost effective and ensures value for shareholders. With careful cost control and prudent management decisions, CLINUVEL has strengthened its balance sheet after four years of commercial operations, with no debt and a cash position sufficient to finance its immediate future expansion. CLINUVEL is risk adverse and deliberate in its actions, and actively seeks to identify and proactively manage various risks. 

The core of our risk approach is the maintenance of a risk register that details and ranks identified risks and their mitigation. The risk register enables the formal consideration of risk by senior management and the Board, while also highlighting potential opportunities. This in turn helps to ensure that all significant risks are suitably identified, assessed, and managed. A key part of risk management is ensuring we meet societal expectations, regulations and laws on corporate standards and conduct. Thus, since ESG criteria cover essential aspects of our operations and adherence to these serves to minimise risk, these are very much a part of our risk management approach and are included in the risk register. There is a multitude of benefits to maintaining an active risk register, the most obvious being ensuring the Company is well-run and keeping Board and management alert to the risks which need attention.


The United Nations Global Compact (Global Compact) was established in 2000 by then United Nations (UN) Secretary-General Kofi Annan to implement universal principles in business that advance responsible corporate citizenship, better aligned to the UN’s global development objectives. In January 2004, Annan wrote to 55 of the world’s leading financial institutions to invite them to develop guidelines and recommendations to better integrate ESG criteria in the operation of financial markets. Twenty financial institutions participated and endorsed the resulting report, “Who Cares Wins”, in December 2004. The report was completed under the auspices of the Global Compact and contained a “call to action” to stakeholders in the financial and business world: companies were asked to lead the implementation of ESG principles and policies by providing information and reporting on related performance and to identify and communicate the key challenges and value drivers associated with ESG issues.

Since then, ESG has gained prominence throughout the global investment community, playing a key role in the analytical assessment of companies and investment decisions. (ESG-based investment is often referred to as sustainable investing, responsible investing, impact investing or socially responsible investing.) Large and influential institutional investors have aligned prudent management of ESG criteria with sustainable long-term growth and have integrated ESG criteria into their due diligence of investments. An online search for the term “ESG and company performance” reveals a multitude of studies that support a positive correlation between responsible ESG management and enhanced financial performance, efficiency, and firm value. A review by Friede, Busch and Bassen (2015) of around 2,200 individual studies since the 1970s concluded that roughly 90% of studies found a non-negative correlation between ESG criteria and corporate financial performance, with a stable link evident over time.

The Global Compact is a call to action to companies around the world to align their strategies and operations with five defining characteristics of corporate sustainability and ten universal principles in the areas of human rights, labour, environment, and anti-corruption. The UN vision is that appropriate action in these areas will support their broader sustainable development goals. The Global Compact is the world’s largest global voluntary corporate sustainability initiative with over 8,000 companies and 4,000 non-business participants in over 160 countries. The five defining features of corporate sustainability and ten universal principles promoted by the Global Compact are outlined below:

Five Defining Features of Corporate Sustainability Ten Universal Principles
1. Principled Business

Operating with integrity in alignment with ten principles in the areas of human rights, labour, the environment, and anti-corruption.

Human Rights

1. Businesses should support and respect the protection of internationally proclaimed human rights; and

2. Make sure that they are not complicit in human rights abuses.

2. Strengthening Society

Taking action and collaborating with others to advance global challenges.


3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

4. The elimination of all forms of forced and compulsory labour;

5. The effective abolition of child labour; and

6. The elimination of discrimination in respect of employment and occupation.

3. Leadership Commitment

Effective long-term change begins with a company’s leadership.

4.Reporting Progress

Transparency in business practice is crucial for sustainability.


7. Businesses should support a precautionary approach to environmental challenges;

8. Undertake initiatives to promote greater environmental responsibility; and

9. Encourage the development and diffusion of environmentally friendly technologies.

5. Local Action

Viewing sustainability through a local lense.


10. Businesses should work against corruption in all its forms, including extortion and bribery.

Source: United Nations Global Compact (2014), Guide to Corporate Sustainability, Shaping A Sustainable Future


The Global Compact and UN tenets on ESG and sustainability inform CLINUVEL’s approach. As a responsible corporate citizen and active manager of risk, CLINUVEL embraces the ESG Framework below, as outlined in the Company’s 2019 Annual Report to Shareholders.

Conscious of our World
Fairness and Equity
Responsibility and Compliance
recognise climate change
human rights
honesty and integrity
energy management
freedom of association
honesty and integrity
supplier standards
equal opportunity
corporate governance
safe and responsible materials handling
value diversity
no adverse impact on global objectives
work-life balance
training and education
supplier standards
supplier standards

CLINUVEL’s values are placed at the base of the framework to reflect their fundamental foundation in governing our behaviours and how we conduct our business. The key tenets of this framework are explained further below.


We are conscious of the world in which we operate and importantly, have no adverse impact on the achievement of the UN’s global environmental objectives. Our management of environmental risk is appropriate for a relatively small company (with less than 100 employees), striving to minimise energy and water use and exercise prudence in the management of office waste as we work towards a paperless office. SCENESSE® and its key input, afamelanotide, are manufactured by reputable contactors in developed countries under World Health Organization Good Laboratory Practice (GLP) and manufacturing standards. Our new laboratory facility in Singapore is working towards ISO 17025 and GLP certification. CLINUVEL’s product SCENESSE® is administered by subcutaneous injection and dissolves in the human body and has no adverse environmental impact. We also regularly assess the commitment of our suppliers to minimise their use of scarce resources and act in and environmentally responsible manner in accordance with ESG criteria.


CLINUVEL is a responsible corporate citizen and reflects international community standards in our policies. The UN tenets on human rights and labour standards embedded in the UN International Covenant on Economic Social and Cultural Rights (1966) and International Covenant on Civil and Political Rights (1966) are reflected in our Employee Handbook. These covenants recognise the right to work, including the opportunity to earn a living by work that is freely chosen and accepted (Article 6); the right to enjoy just and favourable conditions of work, including minimum remuneration, safe and healthy conditions of work, equal opportunities for all, rest, leisure, initiation of working hours and holidays with pay (Article 7); and the freedom of association and collective bargaining and the right to strike (Article 8). Specifically, CLINUVEL is committed:

  • on Human Rights, to
  1. freedom of association; and 
  2. supporting a diverse and inclusive workplace, with equality of opportunity of all employees regardless of race, colour, gender, religion, ethnicity, culture, political opinion, age, and disability.
  • on Labour Standards, to
  1. the right to organise and collective bargaining;
  2. zero tolerance of child labour, forced labour and discrimination, harassment, and abuse of any kind;
  3. providing a decent workplace focused on the health and safety of employees;
  4. supporting the training and education of all employees.

Opportunity is equal to all people in CLINUVEL and procedures are in place to escalate, review and address any human rights and labour standard concerns. The Group’s employees span 16 nationalities and gender representation is balanced, as reflected in the following table on the composition of genders on the Board, in senior management and across all employees.

Gender Representation in CLINUVEL
Category Date Female Male
30 June 2020
30 June 2019
30 June 2018

Top 7 salaried
employees 1

30 June 2020
30 June 2019
30 June 2018

All Employees 2

30 June 2020
30 June 2019
30 June 2018

1 excludes Executive Director.

2 consolidated entity.

Work-life balance is supported by our Employee Handbook and a new Remote Working Policy. Necessitated by the coronavirus pandemic, CLINUVEL initiated the Remote Working Policy to ensure the ongoing health and safety of all CLINUVEL employees and provides guidelines to enable an appropriate work-life balance with overall flexibility in the conduct of employees’ work, during and beyond the coronavirus pandemic. Employment security is conducted in accordance with labour laws and regulations in each of the countries in which we operate. All staff are encouraged to own an active training and development plan to support their professional fulfilment and job satisfaction.

We take a responsible approach to product development and distribution. CLINUVEL has no adverse impact on UN social objectives and makes a positive contribution through its pharmaceutical product development and distribution for unmet medical needs. 

CLCLINUVEL’s research and development program is highly ethical. We undertake the minimum studies necessary to obtain the regulatory approvals required to distribute our treatments in man. We use Ethics Committees for study approval, adhere to OECD Testing Guidelines and the principles of GLP. 

We are committed to the OECD Replacement Reduction and Refinement Principles for non-human studies and ensure all studies undertaken are responsibly designed and conducted by laboratories certified by internationally recognised and respected bodies. CLINUVEL disseminates its research and encourages the independent publication of the results of its clinical studies in peer-reviewed scientific journals.

A rigorous pharmacovigilance program is maintained and reported to the European Medicines Agency (EMA) in the European Union and the United States Food and Drug Administration (FDA) on the real-world experience of SCENESSE® for adult patients with EPP. SCENESSE® is carefully managed to ensure no off-label usage. Marketing and communications are aligned to the approval terms and conditions of distribution of the EMA and FDA.

CLINUVEL is responsible for ensuring that its suppliers are fit for purpose throughout the product lifecycle (from product development to commercial distribution), through risk-based quality control procedures and open communication. CLINUVEL qualifies suppliers and reviews existing relationships according to a range of expectations and standards before commencing or continuing supply arrangements. 

CLINUVEL has over 15 key suppliers, most of which are domiciled in well-regulated countries that are signatories to the UN standards and objectives on sustainability and ESG criteria. CLINUVEL has a high proportion of medium- to long-term supplier relationships, enabling us to develop a good understanding of their values and commitment to ESG criteria. This diligent approach also applies to the assessment of our relationship with collaborative partners.

Should an area of concern be identified during a review of a supplier, a risk assessment is conducted to ensure the supplier is functioning within contracted capacity and standards. CLINUVEL then applies a collaborative approach with the supplier to engage in discussions with the aim of improving their qualification status and strengthening the relationship. These procedures enable CLINUVEL to maintain the qualified status of its medium to long term tenured suppliers. Furthermore, it ensures CLINUVEL’s ESG principles and those of its suppliers are consistently aligned.


Corporate governance is a key to effective risk management as it provides the policy, procedures, and compliance framework for a company’s operations. Our corporate conduct and ethics are guided by our key corporate values and governed by our Corporate Governance Protocol and annual Corporate Governance Statement. 

CLINUVEL’s Board of Directors comprises the Managing Director, Dr Philippe Wolgen, and five independent Directors. They are, individually and collectively, well credentialed, with a breadth of qualifications and depth of experience in a range of fields to provide appropriate guidance to the Company. In the last year, the number of Directors has increased by one to six. The Board operates in accordance with a Board Charter that is set out in the Corporate Governance Protocol. The election and tenure of Directors is managed in accordance with the Australian Securities Exchange (ASX) Listing Guidelines. The gender representation at Board level is uniquely balanced, reflecting the broader Company. The compensation of Directors and key executives, covering key performance indicators for the assessment of short-term and long-term performance awards, are detailed annually in the Remuneration Report in the Annual Report. 

CLINUVEL is focused on the maintenance of a long-term shareholder base which includes employees and a balanced composition of private, corporate, and institutional investors. CLINUVEL seeks an active and constructive dialogue with its shareholders, in accordance with ASX Listing Guidelines. We communicate frequently with shareholders, as outlined below, by operating an active program of regulatory and discretionary disclosure of information on the Company through announcements to the ASX.  This includes regular corporate updates to keep shareholders informed on the Company’s performance and progress on key strategic initiatives.

CLINUVEL’s Corporate Governance Protocol meets the requirements of ASX principles and recommendations and includes a Code of Conduct and Ethics and policies on Conflicts of Interest, Share Trading and Shareholder Communications. CLINUVEL has zero tolerance of corruption of any kind. We operate a training schedule to ensure compliance with laws and regulations in the countries in which we operate. CLINUVEL staff are also encouraged to report any breaches of company values, regulations and laws and are protected from harassment and abuse on any reports of non-compliance or breaches. CLINUVEL engages with the leading law firms across the continents to ensure adherence to the highest level of governance.

CLINUVEL’s Corporate Governance Protocol sets out the code of conduct and ethics and other policies to ensure conflicts of interest are avoided and honesty and integrity prevails. We are law abiding and comply with anti-bribery and anti-corruption laws in the countries in which we operate.


The twenty-first century has heralded new and improved innovation in communication channels that enable the instantaneous worldwide dissemination of information – in itself, this constitutes a new world order. These advances are advantageous for the operation of capital markets and investment activities. A key part of CLINUVEL’s approach to communicating to stakeholders is the use of multiple online channels to provide up to date information on the Company’s strategy and performance. The process of dissemination starts with an announcement to the ASX, after which CLINUVEL distributes to multiple news media outlets, our ‘email updates’ list, and posts on various social media platforms. We also maintain a library of announcements and information on the Company on our website, However, the technological advances in communications and information exchange are not without significant potential risk to companies and orderly investment activities in general. 

Information dissemination online has become the social norm and has outpaced the protection of privacy and copyright regulation and enforcement. Laws and regulatory instruments have been unable to keep up with these real-world practices and trading activities on equity markets. Identified and anonymous parties can copy and post information in breach of copyright and can make false and misleading statements, either intentionally or unintentionally, in many online channels near-simultaneously. 

Parties involved in stock shorting activity actively seek to drive a company’s share price down to make a profit from share trading – they buy shares at a lower price than the shares they have borrowed to sell. Katz and Hancock (2017) of Ropes and Gray LLP note that ‘shorters’ actively use online communications either directly or indirectly through antagonists, to post reports on business platforms and discussion forums to undermine the confidence of shareholders and induce them to sell their shares at lower prices. CLINUVEL has not been immune to this type of conduct with shorting activity of CUV increasing from less than 1% of issued capital in April 2019 to a peak of 9.65% of issued capital in April 2020, before lowering to around 8.2% in late September 2020, at the time of writing this article. There has been an increase in false and misleading comment on CLINUVEL in discussion groups, which Katz and Hancock (2017) normally associate with an active shorting campaign. 

CLINUVEL’s approach in the face of this activity is to focus on the progression of publicly stated strategic initiatives and provide regular and objective information to markets on the Company’s progress. This approach enables market participants to assess an objective flow of information to appropriately inform their investment decision in CLINUVEL. In the medium- to long-term, the performance of the Company should improve the demand for CUV and curtail the activity of ‘shorters’. This approach in action is reflected in the pace of the progress of the Company which has enabled more frequent material announcements to the ASX. The number of CLINUVEL announcements to the ASX increased from 44 in the year ending June 2018 to 62 and 67 in the 2019 and 2020 financial years, respectively. The Company’s discretionary announcements providing updates of the business in Chair Letters and News Communiqués are more frequent than other companies or peers in the ASX / S&P 200 Index and are authored by the Chairman and Managing Director to communicate directly to shareholders. This is a peer group leading practice. We also play a role to point regulators in the countries in which our shares are actively traded – CUV on the ASX in Australia, UR9 on the Xetra-DAX in Germany and CLVLY in the US through over-the-counter traded American Depositary Receipts administered by the Bank of New York Mellon – to inappropriate activities.

We feel a responsibility to protect key stakeholders, patients, and doctors as well as shareholders, from inappropriate online activities. This extends to us liaising with online service providers and moderators of online channels when laws and regulations are breached. There are recent indications that regulation may be starting to make up some ground in the area of online defamation with precedent setting court decisions in Australia and the United Kingdom providing clarity of what constitutes a ‘publisher’ under defamation law. Online service providers and owners of online discussion forums have been held liable as a ‘publisher’ under defamation law with the trigger of culpability being their inaction upon being made aware of defamatory posts. Interestingly, each view, like or retweet of a defamatory post is considered a new publication and individuals who anonymously post defamatory material online are at risk of being identified by online service providers and owners of online channels in response to court orders issued during pre-trial discovery. US courts have made mixed judgements depending on the circumstances of the case, but some have held online service providers liable for defamation. In the US, plaintiffs have one year to take legal action against the initial defamation and cannot claim against successive and multiple re-publications. We will not cite the sources of legal precedent here, but they can be found online. The point of these comments is to highlight that your Company is focused on reducing the risk of misinformation and breaches of the law for the sake of objective information and the protection of key stakeholders.


CLINUVEL has a conservative and prudent risk management culture with a firm commitment to environmental and social responsibility with appropriate corporate governance as a key accountability to underpin long-term sustainability and performance. The commitment to prudently manage risk and adhere to ESG criteria as a responsible corporate citizen is strongly held at Board level, by executive management and extends to all CLINUVEL staff. The Company’s vision and values, presented in subsequent pages of this report, support effective operations aligned to the achievement of ESG and sustainability criteria. We regard our journey to sustainability as an ongoing process of continuous review and improvement to enhance our ESG performance and to share our progress with stakeholders in periodic announcements and reports, such as this Annual Report. All stakeholders should be comforted by this responsible and prudent approach, particularly as we enter a new world order.


The Global Compact (2004), Who Cares Wins, Connecting Financial Markets to a Changing World

UNEP Finance Initiative, A legal framework for the integration of environmental, social and governance issues into institutional investment, October 2005

New York Stock Exchange (2006), Principles for Responsible Investment

Gunnar Friede, Timo Busch and Alexander Bassen (2015) ESG and financial performance: aggregated evidence from more than 2000 empirical studies, Journal of Sustainable Finance & Investment, 5:4, 210-233, DOI: 10.1080/20430795.2015.1118917

United Nations Global Compact (2014), Guide to Corporate Sustainability, Shaping A Sustainable Future

United Nations Global Compact (2017), United Nations Global Compact Progress Report, Business Solutions to Sustainable Development

International Labour Organization (2015), Compendium of International Labour Conventions and Recommendations,—ed_norm/—normes/documents/publication/wcms_413175.pdf

Jeff Katz and Annie Hancock, Ropes and Gray LLP (2017), Short Activism: The Risk in Anonymous Online Short Attacks, Harvard Law School Forum on Corporate Governance, November 27