Sustainability Strategy
Sustainability is an important factor in BB Biotech’s business strategy. It is a key component in ensuring our long-term success while creating added value for all our shareholders and other stakeholders. We seek to achieve growth while also taking into account the needs of the environment and society. As an investment company, we are in a position to promote sustainable development for the benefit of all our stakeholders.
The investment process evaluates ESG in the context of risk and opportunities as a core part of the due diligence procedure that underpins every investment decision. To our mind, the most important ESG aspect of the medical development process is the potential positive impact novel therapeutics can have on society: the aspiration of the biotech companies in which we invest is to develop drugs that address unmet medical needs. Below are our four strategic focus areas.
Full integration of sustainability into business strategy
The importance of ESG and sustainable investing is now widely recognized. BB Biotech strives to continuously expand and integrate sustainability at the Board of Director, Investment Manager as well as at the portfolio level. They form the pillars for the sustainable, responsible and value-oriented corporate practices that we live by every day and that are the basic prerequisite for generating high value for our stakeholders. Based on these core values, we apply a clear and transparent ESG policy and investment guidelines that bindingly govern our standards and conduct with regard to environmental, social and governance aspects.
Maintaining CO2 neutrality of business operations and initiating the Net-zero process
At the corporate level, the Investment Manager is committed to net zero by 2050 and therefore aims to reduce CO2 emissions per employee (FTE) by 30% as part of the 2030 climate strategy. The carbon footprint was captured for the first time in 2021. Business travel, commuting, heating and electricity account for the majority of emissions. We have taken environmentally friendly measures in these areas. For example, we give priority to video conferencing, support the use of public transportation with financial incentives, and cool and heat the office in Küsnacht with natural lake water. Thanks to offsetting CO2 emissions by supporting high-quality climate projects in Switzerland, the Investment Manager was certified as climate-neutral for the second time in 2022.
Increase gender diversity and promote inclusion
BB Biotech values the diversity of its Board of Directors and the Investment Manager’s employees and uses this element for business success. Fundamental to this are mutual respect and a collaborative work culture across language, cultural and national boundaries. Different perspectives, approaches, experiences, ideas and skills lead to innovation and ensure BB Biotech’s long-term success, also in the competition for qualified professionals. BB Biotech’s focus on having a diverse Board of Directors is key to attract members with a wide range of backgrounds, working experiences and networks, whilst ensuring that they also have the relevant experience to oversee the company and its investments in such a technical and highly regulated field as biotechnology. This diversity together with an inclusive meeting environment secures the definition of investment guidelines and monitoring of those in line with the long-term strategy of the company in the interest of the shareholders. With currently two experienced women on the Board of Directors, gender diversity is appropriately reflected. A formal diversity policy – requiring each gender to make up at least 30% on the Board of Directors – will be implemented in 2023.
Anchoring sustainability in the investment process
BB Biotech investments are systematically reviewed for sustainability risks and breaches of elementary human rights (as defined, for example, by UN Global Compact principles). Besides upholding strict exclusion criteria, environmental, social and governance factors are integrated into the fundamental analysis of every company through an ESG integration process at the Investment Manager. In this process, the ESG ratings of the leading ESG research provider MSCI ESG Research are taken into consideration. Our ESG investment guidelines tolerate an investment in an alleged «ESG laggard» provided that our rational to do so is clearly explained and documented in detail.
Sustainability Governance
Sound sustainability governance is essential to ensure that we integrate sustainability into our business practices and the investment process, and identify potential opportunities and challenges at an early stage. This requires a regulatory framework for managing and monitoring sustainability issues. The Board of Directors as well as the delegated Investment Manager take an active role in ensuring sound sustainability governance. The Sustainability and Governance Committee at Board level in collaboration with the investment management team will ensure an appropriate and sound sustainability strategy and plan for BB Biotech. The Sustainability and Governance Committee holds at least 4 meetings per year.
ESG Governance structure
A sustainability working group at the Investment Manager is tasked with leading the implementation and integration of sustainability in all business areas. This working group consists of members from different business departments as shown in the chart above. It monitors current developments in the area of sustainability and anticipates their impact on the business model of BB Biotech. It supports the Board of Directors and the Sustainability and Governance Committee in the formulation and further development of the sustainability strategy. The sustainability working group is therefore also responsible for managing and implementing projects in the business units/functions and areas of activity.
Goal 2023: Formalize implementation and integration of sustainability in all relevant business areas.
Stakeholder Engagement and Material ESG Topics
The interaction and continuous dialogue with our stakeholders are a central component for the identification, analysis, planning, prioritization and implementation of our sustainability plans going forward.
The following stakeholders were considered in 2022:
- Shareholders
- Employees at the Investment Manager
- Analysts / Distribution partners
- Suppliers
- Portfolio companies
- Regulator
- Rating Agencies
- Media
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Stakeholder |
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Engagement |
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Activities 2022 |
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Topics |
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Shareholders |
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• BB Biotech is in regular contact with its shareholders. • Throughout the year, regular dialogue with investors is maintained. In accordance with the listing rules of SIX Exchange, XETRA and Borsa Italia Regulation, important business developments are published by means of press releases or ad hoc announcements. At the same time, these announcements are published on the Company's website. • The notices to shareholders required by Swiss company law are published in the Swiss Official Gazette of Commerce SOGC. |
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• Annual general meeting • Conferences and events • Roadshows/ investor meetings • Corporate website • ad hoc publications • Media releases • Annual and interim reports |
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• Economic performance • Portfolio companies • Sector developments • Macro developments • Share performance- Sustainability |
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Employees at the Investment Manager |
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• Employees are regularly informed about business developments, changes in the company and product updates. Communication takes place through various channels such as emails and townhall meetings. • The Investment Manager also conducts company-wide surveys to monitor employee satisfaction and engagement and ensure employees understand the business. Employee feedback is forwarded to management, which uses it to drive specific actions. |
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• Employee Survey • Continuing education • Talent attraction and retention |
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• Safety and health • Sustainability • Strategy • Next Generation |
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Analysts and Distribution partners |
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• Our distribution partners are supported by a dedicated Investor Relations and Sales team. Analysts and distribution partners have regular personal contact with their key account managers and receive regular newsletters with product and business information. • You can sign up for the free email distribution list. |
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• Key Account Manager Relationships • One-on-one meetings • Conferences and events • Complaint handling • Survey |
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• Products • Sustainable products • Customer relationship and satisfaction |
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Suppliers |
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• BB Biotech and the Investment Manager are in constant contact with their suppliers and service providers. If possible, local suppliers and service providers are preferred. Each supplier or service provider undergoes pre-qualification to ensure compliance and correspondence is maintained throughout the business relationship to verify requirements, make payments and negotiate contracts. |
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• Direct dialogue |
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• Responsible procurement • Traceability |
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Portfolio companies |
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• In the interest of our shareholders, we engage with management as a professional investor. • Activities: Meetings with company representatives on all levels (top management, Board of Directors, IR, etc.) |
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• Management meetings (senior management, Board of Directors, IR) • Voting at general meetings • Exchange of experience |
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• Sustainability • Innovation • Cost structure • Capital Structure • Corporate Governance |
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ESG rating agencies |
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• We engage with rating agencies and provide transparency in order to be fairly assessed. |
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• Meetings • Participation in survey • Training of employees based on feedback |
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• Small vs. large caps • Coverage • Rating Methodology |
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Regulator |
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• BB Biotech regularly reports to regulators as part of its business and complies with rules and regulations. |
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• Exchange of experience • Events • Annual and interim reports |
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• All ESG-related topics • Reporting standards |
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Media |
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• Media office at the Investment Manager conducts active media relations with a high level of service. For balanced reputation management, the topic of sustainability has a high priority. |
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• Key Account Manager Relations • One-on-One meetings • Unofficial media roundtables |
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• All ESG-related topics • Company developments • Product and sector updates |
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Material ESG topics identified
The materiality assessment supports the Board of Directors and the Investment Manager in identifying the material sustainability issues by taking into account the expectations and needs of external and internal stakeholders.
The results of the analysis are used to continuously improve sustainability management by sharpening the understanding of stakeholders’ needs and changes in the sustainability issues which they consider to be material. The materiality matrix forms the basis for managing corporate processes and helps to identify potential opportunities and risks and initiate appropriate measures.
Goal 2023: The sustainability working group will improve and refine the stakeholder engagement process and the results of this initiative to be disclosed in the 2023 sustainability report.
Materiality matrix
BB Biotech derives eight central topics from the materiality matrix, which are taken into consideration as part of sustainability management and the strategy.
- Economic performance
Financial solidity and delivering long-term total returns to shareholders ensure that BB Biotech AG is and remains a reliable and value-adding partner for all its stakeholders. - CO2 emissions
By 2030, the Investment Manager aims to reduce the CO2 emissions of its business operations per employee (FTE) by 30%. - Corporate governance and business ethics
BB Biotech recognizes that sound corporate governance and a clear management structure with defined roles and responsibilities are critical to the long-term success of the company. - Transparency
BB Biotech’s corporate governance complies with internationally recognized standards. We disclose transparent information about our governance. This enables our stakeholders to verify the quality of the company and supports investors in their investment decisions. - Diversity and inclusion
Diversity and equal opportunities are part of the corporate culture practiced by
BB Biotech and the delegated investment manager. Accordingly, we promote potential as well as skills and competencies equally among all employees across all age groups. - Employee development and retention
Our corporate culture is based on mutual respect and trusting cooperation. Regular feedback and development meetings, as well as recognition and appreciation of performance, are important prerequisites for the company’s success. - Employee engagement
The Investment Manager commits to conduct a Group-wide employee engagement survey every three years to assess employee satisfaction and the need for improvement. - Responsible investing / Sustainable products
Our investment process implements formal ESG investment guidelines and therewith all investments are systematically reviewed for sustainability risks and breaches of elementary human rights. Besides upholding strict exclusion criteria, environmental, social and governance factors are integrated into the fundamental analysis of every company through an ESG integration process. ESG ratings compiled by the global leading ESG research provider MSCI ESG Research are incorporated in this process.
Further details on the management of material ESG topics follows in the chapters after we introduce the relevant SDGs .