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Biogen Idec: Worthy First Effort

By Michelle Bernhart (True Blue Communications) on November 22, 2010 at 4:16pm.
Biogen Idec (Weston, Massachusetts USA and Zug, Switzerland) describes itself as among the world's leading global biotechnology companies. The company makes biological treatments for serious diseases, such as multiple sclerosis and rheumatoid arthritis, and in this regard, its core business is already aligned with certain aspects of corporate citizenship (the company’s preferred terminology). Notably, Biogen Idec is a growing company of 4,750 employees, even expanding its workforce between 2008 and 2009, when many companies contracted.

First-time reports are a varied bunch, ranging from light and fluffy to overzealous. Biogen Idec’s first foray into sustainability reporting falls somewhere in between. At just 16 pages, The 2009 Corporate Citizenship Report - Driving Toward a Sustainable Future, provides a brief look at the company’s approach, commitments, and performance. It’s clear that Biogen Idec is devoting time and resources to sustainability improvement, and no doubt the first time reporting process has helped to further clarify their accomplishments, risks, opportunities, and responsibilities.


Content:

The report links the company’s business to its sustainability commitments by organizing the approach and information in three very broad categories — business, environment, and society — which must represent this company’s preferred terminology for the integrated economic, environmental, and social dimensions of sustainability. Some reports struggle to articulate the business (or economic) and social dimensions, but Biogen Idec handles this adeptly; articulating some specifics within a broader context. For example, 'the Society focus of sustainability at Biogen Idec encompasses every interaction between our employees and our stakeholders. It goes beyond addressing unmet medical needs to providing educational and other support services for our patients, offering a supportive and challenging work environment to our employees, and giving back to the communities in which we live and work'.

The report is somewhat light on specifics. Some topics are covered with nicely written words but little substance. And, with two of the company’s founders having won the Nobel Prize for breakthroughs in biology, one might expect a more empirical approach, but the report is short on data. Environmental performance, for instance, is boiled down into just four metrics, although this does make for accessible presentation. It also appears the company has selected 2006 as its baseline year for performance data, which makes the limited data even more surprising. Apparently, Biogen Idec has been tracking these metrics for several years.

But what the report lacks in quantity, it makes up for in complexity. Biogen Idec has adopted a risk weighting approach to help it track progress based on its determination of each issue’s importance to their business and the environment. The risk weighted environmental index includes four key areas: water use, energy intensity, greenhouse gas emissions, and solid waste to landfill. The company then set a goal of reducing its overall footprint in these areas by 15 percent by 2015. The report explains that Biogen Idec aims to evaluate its environmental footprint in context to ensure it operates sustainably. The report does a good job of explaining how this works and providing an example that lay readers can understand.

Finally, it’s worth noting that although first time reporters sometimes skimp on assessing materiality, Biogen Idec has completed a materiality analysis and presented the results in a pretty typical materiality matrix (without ever using the word materiality). The range of issues looks fairly comprehensive and even includes the supply chain, a source of risk and responsibility sometimes overlooked by novice reporters. Good to see that Biogen Idec included it, especially given that the report says third party contractors handle all of its fill-finish and much of final product storage and packaging operations. Likewise, it’s great that the company recognizes green chemistry principles and life cycle analysis as relevant topics, but this reviewer was surprised to see them ranked as being of low impact to the business and society. Likewise, it was interesting to see climate change/GHG emissions and energy listed as being of high societal concern but not of significant impact to the business. Is there any company today that can honestly say climate change is not a chief concern to its business?


Communication:

Okay, so this is a biotech company, but their report still deserves a final proofread by a seasoned editor. Mistakes like 'comprised of 12 directors' (the correct wording options are comprises or composed of) detract slightly from the otherwise well written text. That petty complaint aside, the report is an easy read.

Interestingly, the report covers all of the topics in the materiality matrix (mentioned above), including those in the lower left quadrant. Confusingly, however, the report gives the same real estate to some of these topics, such as public policy, as it does to topics in the upper right quadrant, where the issues of greatest societal concern and business impact reside. This results in important issues like drug pricing getting a scant paragraph while issues like philanthropy, which Biogen Idec deemed of low importance to both society and the business, gets an entire page, complete with performance data, four examples, a case study, and an attractive photo. Future reports will need to do a more thorough job of addressing those issues determined by the materiality analysis to be relevant and significant (in GRI parlance) and balancing the space and attention devoted to less material issues.

Throughout, the report refers readers to Biogenidec.com for more information. This is a good reminder to readers that the company has integrated some sustainability aspects into its business.


Credibility:

The company has tried to follow the GRI guidelines and has self-declared Level C. Notably missing, however, is a clear description or list of the facilities covered in the report. GRI, including Level C, requires disclosure of the report boundary (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers), and the GRI index in the Biogen Idec effort says these are covered throughout the report. However, finding that information throughout the report requires a lot of work — too much work — and makes for a less than transparent process. It’s impossible, for instance, to determine which facilities are included in the chart showing environmental performance.

The degree to which companies are engaging with stakeholders is another useful, albeit informal, clue about credibility. Biogen Idec belongs to a number of industry sustainability groups and forums, a good sign. Overall, however, stakeholder engagement is discussed with about as much detail as other topics, which is to say, not that much. Happily, though, the company seems committed to engaging its employees in sustainability. For example, Biogen Idec developed a global sustainability award for employee projects, and the first winner, a clean - in - place acid elimination and water optimization project, not only seems worthy, but is an indication of the innovation the company is capable of applying to sustainability. Also supporting credibility are some good examples of ways in which the sustainability commitments manifest in practice, such as through the company’s 75-acre LEED Gold eligible U.S. headquarters campus, its role as the first biotech company to join the Carbon Disclosure Project Supply Chain, and its extremely high employee satisfaction ratings.


Recommendations:

1.    Cover more fully the issues determined by the materiality analysis to be relevant and significant (in GRI parlance) and  balance the space and attention devoted to less material issues.
2.    Be clear about the report boundary.
3.    Consider using assurance to further drive internal accountability and enhance credibility.

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. www.truebluecomm.com