Novartis

Sustainability strategy and accountability
Novartis discloses its process for identifying and prioritising its most relevant sustainability impacts as well as the outcome of this process, in relation to its sustainability strategy. The company has group-wide targets on key sustainability topics for the most material parts of its value chain based on the SBTN Sectoral Materiality Tool. Some of the key targets include achieving water neutrality in all water-stressed areas of its business by 2030, aiming for no water quality impacts from manufacturing effluents and enhancing water quality, eliminating polyvinyl (PVC) in packaging by 2025, reducing waste disposal by half by 2025, becoming plastic neutral by 2030, all new products meeting the sustainable design principles by 2030, being carbon neutral in its own operations (scope 1 and 2 emissions) by 2025, including environmental criteria in all supplier contracts by 2025, achieving full carbon neutrality across the supply chain (scope 1, 2 and 3 ) by 2030, and achieving net-zero carbon emissions across the supply chain by 2040. The company reports consistently against all its targets.

Stakeholder engagement
Novartis discloses an overview of the issues raised during its stakeholder engagement activities. It also discloses how often and through which channels it engages with various stakeholder groups.

Lobbying
Novartis discloses a list of trade associations of which it is a member wherever it operates.

Water
Novartis demonstrates it is reducing water withdrawal in its own operations. The company has a time-bound target to achieve water neutrality in all water-stressed areas of its business by 2030 and reports progress against the target. The company reports how much water is withdrawn for its own operations in water-stressed areas and engages with suppliers to reduce water withdrawal. The company reports a decrease in water pollution. Additionally, Novartis discloses its processes for managing and monitoring discharge water quality, and it regularly reports on water pollution. The company has a target aiming for no water quality impacts from manufacturing effluents and enhancing water quality. It reported that in 2020, approximately 75% of relevant Novartis manufacturing sites were fulfilling the target; the remaining sites are developing mitigation measures to fulfil the target at the latest by 2025. Novartis has a commitment to respect the right to water.

Solid and air pollution
Novartis is reducing the production of hazardous substances and hazardous waste. The company discloses the proportion of hazardous waste treated to reduce pollution compared to total waste, the hazardous waste diverted from disposal and the waste directed to disposal. Moreover, Novartis reports some activities to reduce plastic use and waste in its own operations. It has targets including eliminating polyvinyl (PVC) in packaging by 2025, reducing waste disposal by half by 2025, becoming plastic neutral by 2030 and all new products meeting the sustainable design principles by 2030. It reports progress against these targets. Additionally, Novartis reports on the amount of plastic waste generated and proportions directed from or to disposal, and it regularly reports on air quality parameters of emissions of harmful air pollutants.

GHG emissions
Novartis has several time-bound targets to reduce its scope 1 and 2 emissions, including becoming carbon neutral in its own operations (scope 1 and 2) by 2025, engaging on environmental criteria in all supplier contracts by 2025, achieving full carbon neutrality across the supply chain (scope 1 and 2) by 2030 and achieving net-zero carbon emissions across the supply chain by 2040. Additionally, the company reports progress against its targets. The company’s scope 1, 2 and 3 emissions reduction targets are aligned with a 1.5-degree trajectory.

No leading practices were identified for the company in the social inclusion and community impact measurement area

Sustainability strategy and accountability
No evidence was found that Novartis links performance criteria in senior executives’ remuneration policies to targets and objectives which cover nature, including biodiversity, and social issues. The company does not disclose whether its highest governance body has expertise regarding nature-related topics.

Lobbying
Novartis does not disclose a clear and detailed framework for assessing alignment of its trade associations with nature-positive policies and does not report (potential) misalignment between the lobbying activities of its trade associations and nature-positive policies.

Impact and dependencies assessment
Novartis is aware of the need to include biodiversity in its environmental strategy and mentioned in its latest environmental strategy report its ongoing efforts to include objectives and methodologies in this area. However, it has an opportunity to disclose any assessment of its impacts on nature, including biodiversity, within its own operations. The company does not disclose any assessment of its impacts on nature, including biodiversity, in its supply chain. Moreover, Novartis does not disclose any assessment of its dependencies on nature within its own operations or upstream business relationships.

Key areas and species
Novartis does not disclose the locations that are in or adjacent to areas important for biodiversity within its own operations or suppliers. The company does not disclose species populations existing in or adjacent to its own locations. Nor does it disclose species populations existing in or adjacent to the locations of its suppliers, or the status according to national and international conservation lists of species identified in its own locations.

Ecosystem conversion and restoration
Novartis does not have a commitment to ensure zero conversion and does not disclose activities to achieve conversion-free supply chains. The company does not have time-bound targets to achieve conversion-free supply chains or a commitment to minimise ecosystem conversion. Moreover, the company is not committed to restoring ecosystems. The company does not disclose details and outcomes of ecosystem restoration projects in areas affected by its own operations or by its suppliers.

Resource exploitation and circularity
Novartis does not disclose its inputs, including its material footprint, and does not report quantitatively on its group-wide circularity performance. Additionally, Novartis does not disclose activities to improve soil health or agrobiodiversity in its production or sourcing practices or targets to improve soil health in its production or sourcing practices.

Water
Novartis does not disclose its processes for implementing preventive and corrective action plans for identified specific risks to the right to water and sanitation in its own operations.

Solid and air pollution
Novartis does not commit to avoid developing or marketing new chemicals or products with SVHC (substance of very high concern) properties. Moreover, the company does not report time-bound targets to reduce air pollutants across the most material parts of its value chain.

GHG emissions
Novartis is not reducing its scope 3 emissions and does not report progress against its scope 3 emissions reduction target.

Invasive species
No evidence was found that the company identifies the activities that could lead to the introduction of invasive species in its own operations or its value chain.

Safe, clean, healthy and sustainable environment
Novartis is not committed to respecting local communities’ right to a safe, clean, healthy and sustainable environment. Further, the company does not track its actual or potential negative impacts on the health of local communities. Additionally, the company is not committed to zero tolerance for acts of violence, threats, intimidation or judicial harassment committed against land and environmental rights defenders.

Indigenous Peoples’ and land rights
Novartis does not disclose a commitment to respect Indigenous Peoples’ rights. Additionally, the company does not disclose a process for identifying and recognising the rights of Indigenous Peoples when activities in its own operations may impact their rights, nor does it describe how it obtains Indigenous Peoples’ free, prior and informed consent. Novartis has an opportunity to disclose a commitment to respect ownership and use of land and natural resources and related legitimate tenure rights, as set out in the relevant part(s) of the VGGTs or the IFC Performance Standards. In addition, it could require its business relationships to have a process to identify legitimate tenure rightsholders, paying particular attention to vulnerable or marginalised tenure rightsholders, and to negotiate with them to provide adequate compensation.

The company describes the process for identifying its human rights risks and impacts in specific locations or activities covering its own operations. The company also describes the process for identifying human rights risks and impacts in its business relationships. The company describes its process(es) for assessing its human rights risks and discloses what it considers to be its salient human rights issues. Moreover, the company describes its global system to take action to prevent, mitigate or remediate salient human rights issues, and this includes a description of how its global system applies to its supply chain. The company discloses categories of stakeholders whose human rights have been or may be affected by its activities. There is no evidence that the company engages with stakeholders whose human rights have been or may be affected by its activities.

The company has a publicly available policy statement committing it to respect the health and safety of its own workers and expecting its suppliers to do the same. The company discloses that it pays living wages to all its associates and adjust any wage below that standard. The company describes how it determines a living wage for the regions where it operates. While the company states that it expects its suppliers to pay wages that are sufficient for workers and their families to fulfil their basic needs, it has an opportunity to disclose how it works to support the payment of a living wage by its suppliers. The company discloses the proportion of its total direct operations workforce covered by collective bargaining agreements. While the company states that it requires its suppliers to associate freely and bargain collectively, it has an opportunity to describe how it works to support the practices of its suppliers in this regard.

Novartis discloses a global tax strategy. While the company states that it has a comprehensive compliance management system to detect and prevent systemic misconduct, it has an opportunity to describe the process for identifying its bribery and corruption risks and impacts in specific locations or activities covering its own operations. The company describes its expectation that third parties shall not bribe any public official or private person and shall not accept any bribes. However, it is not clear whether the company includes anti-bribery and anti-corruption clauses in its contracts with business relationships or not. In a public policy statement, the company discloses its approach to lobbying and political engagement. However, there is no evidence that the company has a publicly available policy statement specifying that it does not make political contributions.