Pharma ESG is up, but it’s not universal
Corporate Reputation08 Jun, 2021
The public is always watching, especially in times of crisis. As the pandemic ushered in a new way of living, the public turned its focus to Pharma to guide and protect from the great unknown. But the public wasn’t just focusing on what Pharma, BioTech, & Life Science companies were offering, but how they were conducting themselves.
In our 2021 Pharma Reputation Report, we explored Pharma’s reputation evolution throughout 2020 and into 2021. Utilizing RepTrak’s proprietary data, this reputation analyzes 7 key drivers (Performance, Products/Services, Leadership, Citizenship, Governance, Workplace, and Innovation) along with ESG-tracking metrics to provide a comprehensive evaluation of reputation and its resulting effects.
ESG (Environmental – Social – Governance) analytics reflect public perception of performance against 17 factors, including considerations like sustainability, talent management, diversity, and ethical governance.
Consumers are significantly more likely to purchase from and trust a company with a high ESG score. In fact, ESG is the most powerful indicator in determining whether or not the public is willing to trust a company and give it the benefit of the doubt.
Since the onset of the pandemic, the public has been watching Pharma for COVID-19 treatment and the vaccine solution. With an increasingly central role in public life, Pharma delivered against the increased attention. And with the vaccine essentially “free,” the consumer experience has been more pleasant that traditional transactions. Over the course of the year, Pharma transformed from dastardly price hikers and into international saviors.
As a result, Pharma, BioTech and Life Sciences received a Strong Reputation Score of 72.8, a distinct increase from their 2020 score of 69.8.
Globally, Pharma performed well in their ESG efforts. Pharma, BioTech, and Life Sciences led the ESG pack amongst the industries RepTrak monitors, earning a Strong overall ESG score of 71.0. Strong scores across all three elements of ESG support a well-rounded approach to reputation. Pharma’s Social score was the highest individual score at 72.0, reflecting the broadened social impact of Pharma efforts towards guiding the public towards the “New Normal” throughout 2020 and into 2021.
The Stateside difference
But this positive sentiment is not universal. While Pharma’s Global 2021 Reputation Score was a Strong 72.8, Pharma’s US 2021 Reputation Score was an Average 67.6. This is still a 3.8-point increase from the Pharma’s US 2020 Reputation Score, and the American audience remains cautiously optimistic.
We see a similar pattern for ESG scores. Global Pharma ESG scores were the highest across industries, while US Pharma ESG scores were near the bottom, beating only Media & Entertainment and Banks, Diversified Financials, & Insurance.
This lower Average US ESG score of 66.9 can likely be attributed to the US’ unique response to the pandemic, skepticism about both the virus and vaccine, the diverse response in protocol to the pandemic, lingering feelings of distrust from price hikes, access to healthcare, and broader anti-vax sentiment (those who refuse vaccines of all types), and higher expectations for ESG.
This regional contrast in scores reminds us that this superstar year is not a permanent stamp of approval but a call to action. COVID-19 left the public feeling vulnerable, and Pharma answered the call. But this positive bump has increased the threshold of expectations. Communications and future actions and initiatives will be held to a higher standard, and the consequences on reputation will be steeper. RepTrak will continue to monitor the resulting effects on reputation and ESG.