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Pfizer: What the Doctor Ordered

By Michelle Bernhart (True Blue Communications) on November 10, 2009 at 3:27pm.
Gorgeous people-focused photos. A rich color palette. An attractive layout. This report is beautiful. Fortunately, it’s not fluff and within its winning appearance, Pfizer’s 2009 corporate responsibility report, Doing the Right Things, generally gets the job done.

Content: 

Unfortunately, the results of Pfizer’s materiality analysis are not disclosed, so it’s never entirely clear which issues have been identified as material. The table of contents, however, provides a clue to the large categories: research and development; environment, health and safety; access to medicines; governance; patient safety; manufacturing and supply chain; sales and marketing; employees and community. The report covers all of these, while suggesting that the company is working hard to integrate CSR into its operations. To facilitate the integration process, Pfizer recently created a Global Corporate Responsibility Colleague Network to connect all Pfizer employees who have corporate responsibility-related roles, helping them to implement global strategies at the local level and identify and share information about emerging issues and best practices with peers around the world. 

Another positive element is the good coverage of the company’s supply chain initiatives, which is critically important given Pfizer’s disclosure that the company expects to nearly double outsourced manufacturing of products (from 17 to 30 percent over the next three years). The report notes that “key considerations” for outsourcing decisions include the ability to supply, capacity flexibility, cost competitiveness, and technology … product quality, and regulatory compliance. Let’s hope Pfizer also institutes supplier guidelines that go beyond regulatory compliance toward environmental and social stewardship, especially since regulations in some countries are weak. The report also raises doubts about the extent to which Pfizer enforces its supplier expectations. It seems to have in place strong supplier assessment systems, but the report is unclear about the fate of “ two facilities [that] unfortunately saw a rating drop from “requiring improvement” to “falling significantly below expected standards." Were they jettisoned from the list of suppliers, or is Pfizer still engaged with these companies?

The report effectively addresses pharmaceutical sales and marketing practices as well as disclosure about payments to health care providers—issues frequently raised by stakeholders about the industry. Another contentious issue, pharmaceuticals in the environment, is addressed clearly, if without resolution, and the report also notes that Pfizer has taken an active role in supporting health care reform in the U.S. as well as parts of Europe and Japan.

Another nice touch is the “Looking Forward” summary in every major section, which provides a preview of Pfizer’s future focus, based on stakeholder input and external trends.

Finally, the report provides a solid overview of environment, health and safety goals and progress (presenting these in a convenient one-page table with a self-rating), but progress against other goals in the other (presumably) material areas fails to get the same treatment. In addition, water issues get precious little coverage, despite feedback from Ceres encouraging them to do so.

Communication: 

The PDF and interactive website are well integrated. Each online section provides the ability to download that section as a PDF, as well as to link to other areas on the Pfizer site, such as the more expansive environment, health and safety section. Both the online and PDF reports are easy to read. 

Context is occasionally lacking. One example comes in the otherwise good coverage of supply chain issues. Results reported include:

- Conducted onsite quality audits of close to 400 potential and existing suppliers 
- Assessed the EHS and labor performance of 389 supplier facilities
- Provided 43 training sessions on EHS performance at 25 different facilities attended by 530 supplier colleagues 

These numbers certainly seem impressive, but it’s hard to tell, since it’s not clear what percentage of suppliers have been audited, and how many were in locations at high risk for child labor and other practices that violate international conventions or norms of behavior.

Language throughout the report is mostly clear and accessible, with occasionally confusing syntax, such as, “This allows the acquiring company to develop additional business to make the plant sustainable.” It would seem that “sustainable” in this and similar examples refers to lasting viability in the traditional business sense, but elsewhere in the report it is used to mean environmentally responsible—a common phenomenon, of course, but one that fails to clear the muddy waters of sustainability vernacular.

Every so often, the language devolves into euphemism and, surprisingly, seeming coldheartedness. The discussion of plant closings, for example, represents true, if heartless transparency. In discussing the closing of more than half of Pfizer’s internal facilities, the report says, “We never make these decisions lightly, realizing how difficult they are for our colleagues and their families who are impacted. However, we believe that the cumulative benefit to Pfizer will be a more focused, streamlined and competitive manufacturing operation.” Ouch. It’s also worth noting that in early 2009, Pfizer announced plans to acquire Wyeth, the fifth-largest biopharmaceutical company in the U.S. It will be interesting to see the corresponding impacts on employees.

To be sure, as a global pharmaceutical company, Pfizer is in an excellent position to contribute to health around the world, a message that comes through by detailing the company’s efforts to expand research and partnerships in neglected diseases and launch new approaches to improve health care and drug access. Of particular value is the consolidated overview of Pfizer’s global health investments from the late 1990s to present.

Credibility:

A section called “Clarity and Candor” makes, well, clear that Pfizer has heard the call for greater transparency from the pharmaceutical industry. The company has improved its reporting on governance, clinical trials, grants and charitable contributions (sometimes deemed by stakeholders to represent a conflict of interest), medicine safety, and pledged to begin disclosing payments to outside doctors and clinicians who “do critical work” with the company. This degree of candor in Pfizer’s communications will no doubt be embraced by stakeholders.

Speaking of which, the company has a 2009 goal to “establish an approach for regular feedback on corporate responsibility reporting and performance,” with a metric that includes an “annual multistakeholder forum focused on feedback on the 2008/09” report. Annual feedback is okay, quarterly feedback would be better, and regular, ongoing feedback would be better still. But the only regular feedback avenue is the customary—and generic—contact us feature elsewhere on the website. 

Recommendations:

1. Disclose the results of the materiality analysis.
2. Establish and disclose metrics on all material issues, such as global access to health care and drugs.  
3. Include a reader survey online to collect more frequent feedback and further inform the approach.
4. Consider assurance.

Michelle Bernhart is the founder of True Blue Communications LLC, which helps organizations strengthen sustainability performance, achieve strategic objectives, enhance brand, and manage risk through credible and engaging communications. http://www.truebluecomm.com