The PSCI publishes Materiality Assessment of the Pharma Supply Chain

In the latest installment of the PSCI blog on CPHI Online, The PSCI introduces the 2024 PSCI Supply Chain Materiality Assessment, the first public materialty assessment of the pharmaceutical supply chain they have worked on. 

These assessments are conducted periodically by the PSCI, but this year the association decided to apply a double materiality approach, based on the methodology published by the European Financial Reporting Group (EFRAG), that scores issues against two categories: business or financial impacts, and planetary impacts. 

The assessment results contain a number of key findings divided into six categories: ethics, human rights, health & safety, environment, materials, and community. 

There are several notable new inclusions this year, including: 

Ethics: responsible engagement on policy (lobbying) & substandard and falsified medicines

Human Rights: diversity and inclusion & housing conditions 

Health & Safety: workplace hazards & biosafety 

Environment: climate change resilience 

Materials: traceability of raw materials

Community: communities’ human rights 

Reflecting on the assessment, PSCI Chair & Global EH&S Supplier Operations and Business Development Lead at Viatris, Dr Deirdre O’Reilly, said:

“New regulations and investor demands are raising the bar for company reporting on supply chain responsibility. This year's assessment highlights the growing importance of robust supply chain programmes, encompassing a wider range of issues. It also reflects the changing nature of the industry’s products and markets.”

The assessment is intended to represent the sector as a whole, and is not reflective of each individual company. Pharma is a diverse industry and material issues for individual businesses will differ depending on a variety of factors like product mix, geography, ownership, etc. A full double materiality review would typically include rigorous quantification of impacts. As this is challenging to do at a sector level, this assessment from the PSCI used desk research along with member inputs to score issues using a framework aligned with EFRAG’s double materiality guidance.

Research resources for the assessment included:

-    The latest legislation, reporting frameworks, and investor indices;
-    Media reports, NGO activity, and other relevant reports and research;
-    External stakeholder input including PSCI’s advisory panel and other partner organisations;

Finally, another vital part of the process was member inputs. These inputs came through ongoing and regular discussions within the PSCI’s own topic teams, as well as through the 2023 member consultation across all PSCI Principles topics. Throughout the assessment and scoring, a patient lens was applied, considering how patients could be impacted by substantially positive or negative handling of each issue.

The PSCI intends to use the results of this assessment to ensure that new and emerging topics are considered (and top issues given due focus in their activities), that the position of important stakeholders on supply chain responsibility topics is systematically understood, and finally that PSCI members’ responsibility programmes are covering all material issues. 

For the 2024 PSCI Supply Chain Materiality Assessment, click here.