Clinuvel’s ESG Practices
CLINUVEL is committed to an annual statement of its Environmental, Social, and Governance (ESG) practices. In order to provide all stakeholders insights as to the Company’s approach to and management of ESG issues, this feature covers:
- the Company’s ESG framework;
- performance against a range of ESG measures, particularly in the social and governance fields; and
- a new initiative to assess the ESG practices of key suppliers.
CLINUVEL is a responsible adherent to the United Nations (UN) tenets on ESG practices. The UN’s ten universal principles guide our approach to ESG in the areas of human rights, labour standards, environmental responsibility, and anti-corruption1. CLINUVEL’s ESG framework is detailed above, noting the key focus in each of the ESG fields are underpinned by CLINUVEL’s values, as detailed on page 13.
Recognise climate change
Energy management
Safe and responsible materials handling
No adverse impact on global objectives
Supplier standards
Human rights
Freedom of association
Equal opportunity
Value diversity
Work-life balance
Training and education
Supplier standards
Honesty and integrity
Corporate governance
Compliance
Ethics
Supplier standards
Environment
CLINUVEL is conscious of the impact of the activities of humanity on the environment and takes a responsible approach to managing its impact on the environment. CLINUVEL embraces the UN definition of sustainability to meet the needs of the present without compromising the ability of future generations to meet their own needs.
Currently, CLINUVEL’s activities are conducted by a workforce of less than 100 and does not manufacture its products. The direct impact of CLINUVEL’s activities on the environment is therefore assessed as low. Reflecting this, CLINUVEL’s focus is on qualitative initiatives to manage its impact on the environment. Management is accountable to ensure environmental responsibility across all activities and specifically:
- handling and storage of materials and products;
- sourcing of key inputs and products from contract manufacturers who adhere to World Health Organization (WHO) Good Laboratory Practice (GLP) and the principles of current Good Manufacturing Practice (cGMP), and responsible ESG practices in general;
- conservation of resource and energy use in each of our offices;
- minimisation and management of waste, particularly in our Singapore based Research, Development & Innovation Centre; and
- responsible product packaging.
With regard to product packaging, CLINUVEL adheres to the environmental standards expected of cosmetic products in the European countries of initial distribution of CYACÊLLE. In France, for example, CLINUVEL is a member of CITEO which adheres to the principle of Extended Producer Responsibility for household paper and packaging to minimise the waste products produce. A positive start has been made as the primary and secondary product packaging of CYACÊLLE is glass and carton, respectively, and only the cap is made of plastic.
In addition to these initiatives, a split home / office working week in most locations serves to minimise the carbon footprint of employees. Whilst we are now travelling more frequently to see stakeholders in person, responsibility is vested in senior management to review and approve travel within countries of operation and internationally, to ensure sufficient tangible benefits are realised.
Quantitative measures or metricated targets are not set at this time but will be assessed and introduced as the scale and size of the business increases in the future. Given its low environmental impact, CLINUVEL has received support for this approach from a range of investors, including those institutions with an ESG focus. We are aware of plans for mandatory climate-related financial disclosure requirements by companies in Australia. If implemented, they would be phased-in from 2024/25 to 2027/28 based on three groupings of companies meeting different reporting thresholds (two out of three measures of size of employees, assets and revenues)2.
Social
CLINUVEL has no adverse impact on UN social objectives. Its key social contribution is the development and distribution of products for unmet patient and healthcare needs. The paramount focus of CLINUVEL in terms of social responsibility is on the safety of its products and the wellbeing of patients and personnel.
We ensure our products are safe for human use through thorough research and the minimum non-clinical and clinical studies necessary to ensure safety of our products and obtain regulatory approvals of pharmaceutical products in respective jurisdictions. CLINUVEL is 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. We use ethics committees for study approval, adhere to OECD Testing Guidelines and the principles of GLP.
We ensure the manufacture of goods and distribution of materials and products are undertaken responsibly and ethically. CLINUVEL works with key suppliers that adhere to global regulatory standards (including GLP and GMP) to ensure the quality of its products.
Afamelanotide, the active pharmaceutical ingredient in SCENESSE®, the Company’s first therapeutic, has a positive safety record from over 14,500 administrations over more than one and a half decades. A rigorous pharmacovigilance program is also maintained and reported to global regulatory authorities to confirm the real-world experience treating adult erythropoietic protoporphyria (EPP) patients with SCENESSE®.
CLINUVEL respects the human rights of employees and freedom of association and exceeds the minimum labour standards expected of an employer. The Company’s focus is to provide employees with
- a safe, positive, and flexible working environment to support wellbeing, active interaction and productivity, and
- competitive performance-based remuneration and employment benefits that enable financial independence and acceptable living standards. In addition, CLINUVEL provides the opportunity for positive career development, ensuring succession planning rewards performance and endeavour.
Reflecting the safe working environment provided, there was one minor injury and no time lost from workplace accidents in FY2023 (Nil in FY2022).
CLINUVEL has been able to attract new employees in a competitive market for talented people to support its growth and expansion. The number of employees has increased by 95% over the past four years. Reflecting the growth in employees, the proportion of employees with tenure of less than 2 and 5 years has averaged around 60% and 25%, respectively, over the past two years, with most of the remainder of employees being with the Company for more than 10 years.
CLINUVEL is committed to equality of opportunity which applies to all human beings regardless of gender and gender identification, sexual orientation, race and ethnicity, religion and beliefs, disability, age, and socio-economic status and background. CLINUVEL’s commitment to, and track record in, treating all employees with equality extends to its interactions with external stakeholders. Diversity in the workforce is a key indicator of an equitable and fair approach to employees. Diversity is monitored by the Board and is a key performance responsibility of the Managing Director. CLINUVEL takes pride in its leadership on diversity which is represented in gender, age, nationality, and use of languages.
CLINUVEL recruits new employees from as diverse a pool of candidates as possible and has been able to maintain its diversity as it grows and expands.
The Company’s leadership in gender diversity is clear with:
- the 43% female quotient of the Board of Directors exceeding the Australian Securities Exchange (ASX) minimum expectation of women at Board level of 30% (applicable to all listed companies in the ASX300 Index);
- the majority of the top seven salaried employees (excluding the Chief Executive Officer) are females, exceeding the 40% minimum expected by the ASX; and
- nearly two-thirds of all employees are females.
Multiple nationalities and linguistic abilities underly CLINUVEL’s diversity beyond gender. The age composition of employees further highlights the diversity of the CLINUVEL team across seasoned and younger personnel at various stages of their careers. All are committed to develop their skills and work together in a highly collaborative way to achieve the objectives of the Company, noting the ongoing stewardship of the Company is provided by Generation X and Baby Boomers and the more experienced of the Millennial generation.
Governance
The Board endorses the Company’s ESG framework and plays a key governance role to ensure ongoing compliance with ESG standards. Monthly reporting of ESG issues by management to the Board was formalised in 2022. This complemented the already heightened appreciation of ESG issues at Board level.
As mentioned above, the Group’s values (outlined on page 13) underpin the practices of the Company and its employees and align to key ESG tenets. CLINUVEL has several formal policies which support its adherence to responsible ESG practices. The Corporate Governance Protocol and the annual Corporate Governance Statement set out the code of conduct and ethics and other policies to ensure conflicts of interest are avoided and a culture of honesty and integrity is maintained which concords with the expectation of responsible management of ESG issues.
To extend this point, CLINUVEL adheres to a policy of adequate and correct communication within the Group, stipulating earnest and direct interaction with its staff and management. Human Resource policies provide guidance on conflict resolution and communication strategies to be deployed. CLINUVEL adheres to communication guidelines which promote open dialogue with those who seek to interact with CLINUVEL on relevant matters of business, and those who act fairly and openly. However, to protect the interest of CLINUVEL and the wellbeing of its staff and management, the Group reserves its rights to prosecute to the fullest extent permitted by law those who intend harm and disseminate falsified and untrue statements about the Company and its officers.
A Bribery and Corruption Policy prohibits illicit behaviour, and a Whistleblower Policy protects employees who (and who are encouraged to) report behaviours not aligned with the high standard of ethics and honesty embodied in CLINUVEL’s values and culture. There were no breaches in the Company’s Code of Conduct or Whistleblower reports submitted in FY2023 and up to the date of this Annual Report. CLINUVEL adheres to Disclosure UK, a searchable database which records annual payments and benefits in kind made by pharmaceutical companies to doctors, nurses, and other health professionals, as part of a Europe-wide initiative to increase transparency in the pharmaceutical-health sector.
Assessment of Key Suppliers
Supplier standards have relevance across each ESG area. This is explicit in CLINUVEL’s ESG framework. CLINUVEL accepts the responsibility to understand the ESG practices of its suppliers and to use its relationship with them to influence changes to any behaviours and activities considered necessary to avoid underperformance against minimum ESG standards.
CLINUVEL’s suppliers are considered responsible and active in their practice of ESG. CLINUVEL’s practice has been to assess this on an ongoing basis from regular interactions and reviews of relationships. During the past financial year, CLINUVEL initiated a project to develop a new formal process to assess the adherence of our key suppliers to responsible ESG practices. The initial focus is on the largest 25 suppliers based on their ranking in CLINUVEL’s annual expenses budget. The process has been finalised and involves scheduled annual reviews by date by management with senior executive sign-off and provision of regular briefings of issues to the Board, in line with the monthly reporting practice formalised in 2022. If the assessment finds areas to rectify or improve, actions are undertaken to discuss them with the supplier and resolve, with formal sign-off by senior executives. This process is effective from 1 July 2023.
Summary
The Company’s ESG practices are responsible and sound. Performance in ESG management, particularly against key social and governance measures, has been maintained in FY2023. The new initiative to assess the adherence of key suppliers to ESG practices is a significant step forward to encourage and support wider responsibility in each of the ESG fields. The Company’s commitment is to continue to evolve and improve ESG practices as an integral part of its focus on continuous improvement and in line with the Company’s growth and expansion.
- For details on the UN’s ten principles and approach to ESG and sustainability, access to the United Nations website and particularly refer to United Nations Global Compact (2017), Progress Report: Business Solutions to Sustainable Development, and United Nations Global Compact (2014), Guide to Corporate Sustainable Development.
- Per the Australian Government – Treasury – Government ESG Consultation Paper, June 2023, reporting would commence from 2024/25 for large companies meeting two of three thresholds (over 500 employees, gross assets of at least A$1 billion or revenue of at least A$500 million); from 2026/27 for a second group of companies (meeting two of three thresholds – over 250 employees, gross assets of at least A$500 million or revenue of at least A$200 million); and from 2027/28 for a third group of companies (meeting two of three thresholds – over 100 employees, gross assets of at least A$25 million or revenue of at least A$50 million).