Good morning and good afternoon, and welcome to the Novartis CSG Investor Event. Please note that during the presentation, all participants will be in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions by pressing star and one at any time during the conference. A recording of the conference call, including the question and answer session are available on our website shortly after the call ends. Event.
With that, I would like to hand Over to Maria Cuevas, Investor Relations, ESG Director. Please go ahead, madam.
Good morning, good afternoon and good evening everyone. Thank you so much for joining our annual ESG Investor Event and we appreciate you spending the next 1.5 hours with us. The information presented today contains forward looking statements that involve known and unknown risks, Uncertainties and other factors, these may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. For a description of some of these factors, please refer to the company's Form 20 F and its most recently quarterly results on Form 6 ks that respectively were filed with and furnished to the U. S.
Securities Change and Commission. And with that, I hand over to Var.
Thank you, Maria, and thanks Also from my side for everyone for joining today's meeting and conference call opportunity for Novartis to share our progress over the last and all of our ESG priorities and our ongoing goal to deliver lasting value to society. With me today, I have Claus Musmeyer, our Chief Ethics, Risk and Compliance Officer Karen Hale, our Chief Legal Officer Lutz Hegemann, our Group Head of Corporate Affairs and Global Health also on the line are Racy Machilwa, our Head for Sub Saharan joining us from South Africa and Pratish Machaba, our Head of U. S. Corporate Responsibility and President of our Novartis U. S.
Foundation. So moving to the next slide. In this section, I'll cover a little bit about our Novartis strategy and some of the other kind of big picture priorities with Back to ESG. There are 6 key points we want to highlight over the course of our discussion in the next 90 minutes. First, that we fundamentally believe The focusing on material ESG factors, our inspired curious non BOSS culture drives performance, drives the impact of the company.
We deeply care about patient health and safety as well as access to medicines and focus on areas that are consistent with our latest materiality analysis. Our sustainable business models and access principles enable us to get our medicines to patients around the world, we think in a differentiated way From many other companies, we are on track to triple the number of patients we reach and Lutz will tell you more about that as well as Exciting milestones such as our 1,000,000,000 courses of antimalarial treatment. Our Sub Saharan Africa model, which Racy will tell you more about, Has really shown that we can both deliver a sustainable business model and also expand access to medicines. We've also started to address some of the root causes of health and inequities in the U. S.
And lastly, we are relentlessly tracking and measuring our progress and These targets are incorporated in our performance evaluation and compensation systems. So moving to the next slide. I want to first begin with a fundamental reflection about the purpose of Novartis and how that purpose is so clearly linked To our contribution to society and the value we create for the world, our purpose is to reimagine medicine to improve and extend people's lives. We use our innovation engine to address major challenges in healthcare around the world and our focus remains as it has for nearly a century through all of our predecessor companies to develop breakthrough treatments to find and deliver medicines to as many people as possible. So the statistics I think worth reflecting on Novartis in a given year can produce as many as 70,000,000,000 doses of medicine for the world, Aspires to reach 800,000,000 patients, which we can often do with our medicines, are currently working on over 100 new Medicines within our clinical trials and clinical development programs.
So our base operation, the reason our 100,000 people come to work every day It's already tightly linked to creating value for society and truly generating sustainable value in the long term for our shareholders. Moving to the next slide. One of the things we've been reflecting on as an organization as well as as we deliver on that stated How do we balance the various components of capital to create an integrated stakeholder value proposition. The framework you see here on the slide is from Colin Myers' work on prosperity, a book that I personally greatly enjoyed. And it highlighted the 6 forms of capital that we reflect on as a management team to ensure that we are building a company that can sustainably deliver value for the long term.
Well, I won't go through each one in turn. I think it's valuable for us to think about the various sources of capital, how we manage them. And I think as you watch this presentation Over the next hour, I think you'll sense that we do take each of these areas seriously and believe that in integrating them together, we create lasting stakeholder value. Now moving to the next slide. Our strategy has remained consistent over the recent years.
We're a focused medicines company Powered by technology, leadership, commercialization and access, we think about where we want to play and want to play in areas we think we can lead in the long including 7 core therapeutic areas, a broad geographical footprint and advanced technology platforms. And we have these 5 priority areas that we've consistently communicated within the organization. I think integrate very well together to create a, I think, So on the next slide. So when we think about ESG management, this has been an area of intense focus within the management team. This is something, as Karen will mention in a little bit, we Take seriously from a governance perspective all the way up to the CEO and the Board.
And the reason we've elevated ESG Now over recent years in the company is we fundamentally believe if you manage ESG related matters well, you can reduce risk, Amplify your value, hopefully multiply your value. And fundamentally, as a science based, medically driven organization, it's the right thing to do. We watched carefully, I think, a growing amount of research, which indicates that companies that can manage their material ESG factors over the long run provides superior financial returns to shareholders. Certainly, a complex interconnected set of factors that lead to that, We certainly believe that's the case, and that's why we've elevated it at the highest levels of the organization. Moving to the next slide.
Ultimately, we hope that by thinking about this sustainably with investors that through Novartis who Where we get the resources from all of you, we can ultimately have a lasting impact on the world. This quote, I think, is important. ESG funds are measured Benchmarks for financial returns, they're not measured on the impact they deliver. We as a company have to keep asking ourselves, are we delivering impact for the world? That's the, In a sense, social contract we have with all the countries and patients that we touch around the world.
So moving to the next slide. One of the examples we are proud of and I think is a good example of our approach to impact In practice is our sustainability linked bond, which we launched last year. It was a first of its kind approach where we embedded access targets to medicines In the core of our business operations to a bond issuance that we conducted, I can say we're well on our way. We've embedded these targets. Lutz will Speak more about it, but we're on our way to reaching 200% more patients in low and middle income countries.
Our global health flagship programs And I think this is a nice example of how we align our ESG and financing together Hopefully one of many examples we can demonstrate over time. So moving to the next slide. We've also recently created completed an updated materiality analysis for that we completed this year in 2021. And it was a very helpful exercise to hear from a broad range of stakeholders, get important feedback. And you can see here the priority areas that came out of that Analysis notably patient health and safety and access to healthcare innovation places that we know we need to be leaders as well as ethical Business practice, which Claus will talk more about.
But then importantly areas that touch I think a broad range of companies, human capital, governance, Financial Performance and Environmental Sustainability. We've set clear targets in the areas that we've mentioned here. You can see them Here on the right side of the slide, just to highlight a few of them. We are now consistently ensuring that 100% of our launches have global access strategies On approval, we're investing $100,000,000 to advance R and D for next generation antimalarials. We had a release just Today, which you'll hear more about over the course of this presentation of a novel anti malarial that we've discovered and are now bringing forward into late stage clinical trials.
We have a goal of net 0 by 2,040 in terms of our carbon footprint and plastic and water neutrality by 2,030. And I'll be speaking a bit more about that So taken together, we take the materiality analysis, translate that into focus areas for the company. We have consistent targets for the long run, also a consistent target that we are transparent about on an annual basis And then create an accountability environment within Novartis. So moving to the next slide. When you look at our ESG progress, I think we're making good progress across all of our key areas.
And you can see this in our Novartis and Society report. We again Transparently put out these targets and how we progress against them. We've some of the areas I've not mentioned so far, our gender pay gap is now at 3 point 3% versus 21% for the benchmark and we're on our way to getting equal representation in management at 45 So the goal remains 50% and we have more to go. We're ranked number 2 in the Access to Medicines Index. We're Working hard on diversity in clinical trials and Patrice will tell you more about that as well.
I think these are just symbols of many things that are going on across the company to demonstrate that
we're committed to delivering
against the targets we set out from an We're committed to delivering against the targets we set out from an ESG perspective. Now moving to the next slide and I think the last slide for my section. I also wanted to note that as we've continued to focus on this, we've seen improvements in our ratings and various scores from the rating relevant rating agencies. We don't do it because of the ratings. We do it because we believe it's the right thing for the business, right thing for our impact, the right thing to do.
Nonetheless, I think it's worthwhile for us as a company to keep asking ourselves how do we stack up against our peer set. And you can see a number of the relevant metrics We're number 1 in the our industry or number 1 across industries or trending up versus where we've been in the past. In the areas where we are not doing well, we look at these honestly, ask ourselves how we can do better and put in concrete plans to improve. Overall, our aspiration remains not only to be a leader in ESG within the biopharmaceutical industry or the healthcare industry, The aspiration remains to be a leader across industries and that's what we'll be continuing to work towards over the years ahead. So with that, I will hand over the presentation to Luc Tegemann, leading our Global Group Head of Corporate Affairs and Global Health.
Luc? Yes.
Thank you very much, Vas. Good morning, good afternoon to all who are listening. Let me move to the next slide. Vasu had highlighted the focus that we have on access and innovation. And while this came out in our most recent The reality analysis, it has confirmed a path that we have been taking for the last decade almost.
But why does it matter? If we look at the world around us then there is about 2,000,000,000 fellow The citizens who do not get access to the medicines they need and there is several 100,000,000 that experience financial hardship through the fact that they need to pay for their medicines. And the current pandemic has really exacerbated, I would say the need not only as it existed in low and middle income countries, but also in high income countries. We see in the space of noncommunicable diseases very varying quality of care based on what we call the determinants of health, ethnicity, socioeconomic factors. And we see different health outcomes depending on ethnicity, depending on country and socioeconomic strata.
But also we have seen now in the COVID-nineteen pandemic, for instance, that 40% more black people have died from COVID versus white people. And that to me is really a wake up call that indicates that underserved patients exist everywhere and not only in low and middle income countries. And as Vas had mentioned and Patrice will Explain in greater detail, we have started a very comprehensive program to go beyond some of those metrics and really look into the underlying root causes and how we can contribute to correct some of those decades or even century old in equalities. And then of course, in the low and middle income countries, as we all know, the countries are struggling with the dual burden of rising noncommunicable diseases while still fighting communicable diseases where I would argue we have an unfinished agenda. And as you know, a number of our dedicated efforts, what we call the flagship programs, are specifically targeting those Challenges and Opportunities.
Next slide. This is a reminder that shows us that we've been on a journey for at least the last 20 years to address innovation and access to innovation. And like many companies in the early 2000, we started with philanthropy. And over the years, we have integrated this more and more into our core business. And we have been piloting and experimenting with sustainable business models.
Bart had mentioned our long standing commitment in malaria, And we'll get into it a little deeper, but an area that we have been very actively working on for the last 20 years, We crossed a very significant milestone earlier this year by having delivered 1,000,000,000 treatments essentially at no profit to the world to fight this global health priority. And later we'll be diving in a bit more into the Novartis The principles that I'm sure many of you are familiar we launched in 2017. Rishi Muchilva will be talking about our new business model In Sub Saharan Africa, the bond was already mentioned and then really a highlight this year and Patrice will go into it It's the co creation of solutions to address health inequity in the United States. The key point I want to make here is that we are not looking at Global Health or ESG somewhere in a corporate office totally divorced from our core business, but that we are very seriously and in earnest Finding ways to integrate ESG into everything that we do and really bringing this to the very heart of the company. Next slide.
Can I have the next slide, please? Thank you. The Novartis excess principles really guide as a framework our approach in this space. And as you had heard earlier, our commitment is to have 100% of our launches with A global access strategy defined prior to launch. And in the access principles, we have 3 Distinct but very closely connected areas that we are working on.
1st and foremost, research and development, where Our portfolio addresses unmet needs, but also takes the specific needs of resource poor settings and underserved populations into account very early on. Whether that is adaptive development, where we Consider how can we make our innovation fit for purpose in resource poor settings or the significant step that we are taking towards Trial diversity strategy initially focusing on the U. S, but with the ultimate goal that our clinical trial populations are representative of the patients who would eventually benefit from those innovations. In the space of affordability, For quite some time, we've been working with emerging market brands, and I'll give you an update in a minute. Our new business model in Sub Saharan Africa and our Pricing framework help overcome that affordability stands in the way of access.
But what we have learned now and we have many cases That indicates that even if you lower the price all to the way that you essentially donate a medicine, it doesn't mean that you are having impact. And this very often is linked to intrinsic weaknesses of health care systems. And here we earlier this year developed A one Novartis health system strengthening framework that's being deployed in all our divisions, whether it is oncology, innovative medicines and pharma or in Sandoz and also, of course, in our global health programs, but also the new mandate of Novartis U. S. Foundation to make Disparities of Care a priority for their programmatic approaches.
Next slide please. Now let me take one example and I'm sure you are all familiar with LACVIO and the approach that we are taking here. And particularly the significant impact that cardiovascular disease has on Mortality. And it's really, as we all know, the largest cause of mortality, not only in high income countries, but to a large extent also in low and middle income countries. I'm very happy to say that Lecvio, we received approval in Ghana The same week as we received it in Switzerland, which speaks to our desire to bring innovation as quickly as possible to large parts of the world and avoid historically this lag time that we had from innovation entering in different parts of the world.
For Lecture also we have a fairly comprehensive approach to pricing, tiered pricing, emerging market brands, 14 launches Within 18 months of the 1st European Union launch, further registrations being expected. And then the recent example that we have with the National Health Service of England to try a population health approach here, which essentially would give access to an entire population in a country that is eligible at the same time Rather than essentially convincing physician after physician that this is a good intervention for the patients that we are taking care of. And we are committed to working with other health systems to find similar opportunities in other countries, both high income and low- and middle income countries. We can move to the next slide. Then this is the overview across the entire portfolio how we are using emerging market brands.
And just to reemphasize a few of the messages that I shared with Leclio, you first see that we do have an emerging market brand strategy for all our major brands. You also see that the launch lag time is being greatly reduced across the portfolio. It's not always Entirely in our control, but of course also depends on approval time lines by health authorities. But our desire is to bring the innovation to as many countries across the globe irrespective of their financial status as quickly as we can. And at Tresto, here is a good case in point that we are seeing now almost half of all the Entresto patient reach coming from low and middle income countries.
And we see also that sales is nicely following through. So that's the focus that we have for low and middle income countries It's not in conflict of us driving financial performance. It's rather the contrary and Resi Muciilva will show this in a very impressive way from the African continent as well. And typically what we see is that the sales that we get in the low and middle income countries are accretive to the sales from the high income countries simply because medicines are available here and can Create the impact for patients, but also can drive financial performance. We can move to the next slide.
Then with that, let me pivot into some of the global health challenges that I'm sure you are familiar that Novartis is engaged in here. At Malaria, Seif mentioned 2 decades of commitment and continuous commitment to invest in research development, but also programmatic implementation so that we hopefully, In the foreseeable future, I will say not only control, but also elimination and eradication of malaria. And as Vas had mentioned, we just issued a press release last night on an entirely new combination of Medicines. Ganoplacids, a novel medicine with a novel mechanism of action, Partner with lumifantrine that is a component of our current antimalarial and it has met its study objective in a Phase 2b study that was That included children and of course children, as we know, are the population that is at highest risk of contracting malaria and dying of malaria. So a very significant step here.
And in fact, it is the first novel chemical entity that enters the malaria space in the last 20 years. In sickle cell disease, We're making great progress here, partnering with health systems across Sub Saharan Africa to help Attenuate and eventually cure this devastating genetic disease. You may be aware we launched a collaboration with the Bill and Melinda Gates Foundation to reimagine the way how we deliver gene therapies so that it could be applicable to low and middle income countries. But then of course other health priorities are antimicrobial resistance And as we all experience these days, of course, the COVID-nineteen pandemic. Before I go there with a quick update.
Let me also highlight that increasingly so we are using digital technologies in Global Health, where As you know, in low income countries, we often have a scarcity of reliable data to drive programmatic decision making. And we entered a collaboration with Hewlett Packard Enterprise to address this and to look at opportunities in the digital space to make our interventions even more targeted and more impactful. The next slide. Now on the theme of COVID-nineteen, we are very happy to have partnered with a Swiss biotech company called Molecular Partners, We have a very new technology called DARPINS, which you would have to imagine as a fragment of an antibody that essentially does something very similar to an antibody, but I would argue in a slightly smarter way. And we have a lead starfin currently in clinical development together with molecular partners.
We expect to see a high potency against SARS CoV-two, the virus that causes COVID-nineteen, There is a few other technical upsides that this modality has. So far in preclinical work, we have seen Remarkably ability to uphold the potency against All the new variants of concern and through a different technology, not using mammalian cells, but Using fermentation processes, we can also establish a second manufacturing line that doesn't compete with the existing manufacturing lines and would hopefully lead to high volume and that would of course be important to address particularly those countries that are currently lagging behind in their vaccination efforts and their accessibility to vaccines. So I I would invite you to watch this space, very exciting opportunity here and a very unique approach that we are following that would complement All the other interventions, including vaccines and therapeutics that we currently see in COVID-nineteen. The next slide brings us to antimicrobial resistance, which I believe is a good Case in point to see the interconnectedness of the ESG topics. If you are aware through our Generics division Sandoz, we are the largest global supplier of antibiotics worldwide.
And of course, through the global health efforts, we care about access and community based health care capabilities. And while those elements existed in the past, we have now come together to really connect the dots And to make this a more impactful program that focuses on responsible manufacturing in Kundal, where we are the last, I would say antibiotic manufacturer in the Western world. We work with partners to Address opportunities in advocacy and surveillance health care professional patient education, we are partnering with the Commonwealth Association of Pharmacists to address the point of sales or the point of distribution at the pharmacy level, Make sure that antibiotics are used as intended and according to all and the recommendations that come with responsible antibiotic use. But there is also an access opportunity that we have that in many parts of the world, the appropriate antibiotics aren't even available to the patients Who needs them? So we are working here on pediatric specific formulations, bringing our antibiotics to more countries and making sure that we have a portfolio that is allowing a tailored antimicrobial resistance response.
We believe that with those efforts and really doubling down on those, we can delay the emergence of new resistance that We are of course the current use of antibiotics could be a driving force. And then last but not least, we have joined the Antimicrobial Resistance Fund was a very significant investment to enable biotech companies to design the next generation of new antibiotics, which is not going to be a silver bullet. Eventually, we'll see resistance against those As well, but it's a very elegant way and a very needed way to buy us additional time to safeguard the medical advancements that we have made in recent history. The next slide, Apologies. That's also my closing slide.
Really, it's an area that makes me very proud and where I believe we also distinguish ourselves from other pharmaceutical companies. And that's the breadth and the depth of our R and D pipeline that is specifically targeting diseases of poverty through our Novartis Institute of Tropical Diseases in Emeryville under the leadership of a very accomplished scientist Thierry Diagana. You see here the breadth and depth in areas of malaria that we had mentioned earlier, but also other emerging health threats like Chagas disease, Dengue fever, which certainly is on the rise, last but not least, as a a consequence of global warming, cryptosporidiosis and many other conditions. But it also shows Our long standing top commitments to this space because eventually we hope that many of those drug candidates will reach the clinic and we'll see them through all the way to the benefit for patients. I'll stop here and it's a great pleasure now To hand it over to esteemed colleagues of mine, Resi Muchilva, who leads in my organization all our efforts in Sub Saharan Africa And friends and colleague and many of you know Patrice Machaba, who was my predecessor in role and is now focusing on the U.
S. Efforts. So with that, And let me hand it over to you, Reisi.
Thank you so much, Lutz, and good day to everyone on the call. In the next few minutes, I will take you through our SAPS mandate and how we are leveraging on partnerships and innovation to reach as many patients as we can. Probably before I go to the content of the slide on the screen, I would like to paint a clear picture of Afzal Africa for greater context and why We see partnerships as something that has worked very well for us. So Sathiran Africa is home to over 1,000,000,000 people at 25% of the disease global burden resides in this region. Additionally, you see that 3% it accounts for roughly 3% With roughly 1 doctor to 10,000 patients in some cases, and especially when it comes to specialists, We find that even being worse than that, whereas the recommended doctor patient ratio should be roughly 1 to 1 doctor to 1,000 patients.
So the way why I thought it would be great to paint this picture is so that not to see the dire states that we are in, but also to also provide opportunities that we have to collectively come up with sustainable solutions, levering the power of partnerships and innovation, which is essential for us to be able to deliver sustainably across the full income pyramid. So if you could just shift our focus on the slide on the screen. Our business model is pivoting from margin to patient reach, thus driving and sustainably delivering assets across the full income pyramid. And with this, we are operating at scale through a single Novartis organization. What does this mean?
We have combined all the 3 divisions. So we are talking about Sandoz, we are talking about pharma, we are talking about oncology into one single Novartis organization, Building on the leveraging and building on the strengths and capabilities across all these divisions for us to be able to deliver this mandate of reaching as many patients as possible. From this, what you can see also is, apart from the other operational staff that we are working on to improve its operational excellence internally, Externally what we've seen that we've had some very high impact partnerships with key and private sector stakeholders who are coming to accelerate help us accelerate access to medicine. I'll just name a few. One that was announced last year and is It's the Glinton Health Access Initiative.
This initiative actually works more towards expanding access to oncology patients to oncology patients. And this is across the 46 countries they are managing currently, but also with the potential of doing more. And this is across the big cancers that we talk about. So if you talk about breast cancer, prostate cancer, cervical cancer, these are the areas we are talking about. We've been able to reach quite a number of patients on the ground and this has also contributed towards reaching more patients within the public sector with an improvement of over 20% within that sector.
Also one of the partnerships I need to mention, which is also quite big, is what we call Afidumo, which is concentrating more on screening and diagnosing of diabetes and hypertensive patients. We've seen that as much as Lutz had alluded to that, that you can have donations But sometimes you can find the impact is not as is because then if the healthcare providers are not well positioned To be able to give clinical advice and clinical care to these patients, then this also lasts. What does that mean then? We need to Ensure that from all the process from screening diagnosis all the way, how can we look into that whole patient journey and see where we come in to support the patient For sure, they are reaching, they have access to the medicines to start with, but also to the right diagnosis, if we want to look at it that way. So one of the things that we do is also partnering very well with academia to build capacity and capabilities.
And I'll give a very big a good example that it's been working very well. In one of the markets within sub Saharan Africa, to be precise Kenya, you'd find that we had only 20 sonographers across the country. And we decided to come and partner with a leading university within KFC. How do we build capacity and capabilities Of these health care providers, so that then from a screening and diagnosis, they are able to screen the cardiovascular This is a smart, easily and also the hypertensive patients. Considering 1 in every 4 patients, a person within Kenya is likely to have a cardiovascular issue.
So this is something that we've seen working very well. And up to now, we have over 170 sonographers within the country We are able to reach up to the upcountry, the community, the communities, the villages. And this is what we are looking at in terms of building capacity and the capabilities. Last but not least is also the sickle cell partnership, where we are trying where we have hydroxyurea now prioritized under the health care policy. This means being able to partner not only with the private organizations, but with the public organizations, including the government.
And with this, just this change and shift in business approach, we've seen very strong results. In the first half of the year, we saw 39% Growth over previous year in terms of our patient reach numbers and also net sales is a 22% growth. So what this demonstrates is You can actually drive a business purpose, a business with a purpose and still remain sustainable. And this is what we've been able to demonstrate very well within our business in Sub Saharan Over to you, Patrice.
So thanks, Rishi, and thanks, Lutz and then Pez. And then, thank you all and good morning, good afternoon, good evening. And COVID has made it obvious and a lot of you when we engaged last year We're asking what are we going to do to address the issue of health equity, diversity and inclusion and the impact on Black and Brown Communities. And what we'll show you here, we've put the most comprehensive partnership, Taking our learnings, as Lutz articulated and raised you, from the emerging marketing brand strategies, integration of technology, bringing in multiple partners, And you will see that it is not only comprehensive, but there's an innovation component, there's a talent component, there's a data component and there's a technology component. And Beth articulated, again, we did the process of materiality analysis.
And this time, Under Tom's leadership in the U. S, we had a substantial cohort of respondents, and you for some of you who responded to our materiality analysis. Jane has first articulated, we need and we can do a better job regards to innovation, Health access, health equity, diversity inclusion in terms of the communities of color. And we know that They have suffered the most because of COVID and it comes at a huge economic cost to the country. Now our strategy then was We need to integrate these findings into our core ESG strategy in the U.
S. Across the divisions. And There's complete alignment across the U. S. Divisions in the U.
S. To do so, and we look forward to talking and giving you more details as we progress Before I discuss about the actual partnership itself and in keeping with our purpose, as Vas articulated, We're going to use science, technology and our partnerships to integrate diversity and inclusion throughout our R and D and E ecosystem. Now so for example, we've already had an extensive discussion With Jay and Neva to say, do we have the right portfolio discovery and development in translational medicine to address high impact diseases in communities of color. And the answer is yes. You know our work in heart failure, our work in sickle cell, Some work that's coming in with myeloma in breast cancer, we just released a program around that.
And then into that, Ask the question, how do we develop more investigators, 1st female investigators, Investigators of color, Hispanic, African American and Indigenous American, then we can talk about the numbers of increasing the number of patients to reflect the fabric of the racial diversity in the U. S. So that's ongoing, and I'll talk about some of the technology partners and the innovations that have come out of that. So in summary, we have talked to the President of Morehouse and All the 4 historically black medical schools are part of this partnership to develop centers of excellence for clinical trials, to allow research fellows over 10 years to have the capability to do clinical trials that are GCP compliant of high standard. We've also developed a partnership with 23 other non medical HBCUs because we want to integrate All capabilities, including technology, the ability to integrate market insights and so on throughout the breadth of careers and partnered with a Thurgood Marshall College Fund to provide scholarships, internships and mentorships that will impact and empower Close to 1200 young people from black and brown communities so that they can be integrated into our Research and Development Ecosystem.
Now this partnership is going to be open to all other pharma companies and biotechnology companies It's not about Novartis. It's about us doing the right thing and integrating research and development and rebuilding the trust in the health care system in that population. Now just 2 days ago, you are aware that we announced a partnership with the University of Philadelphia, again, trying to address the health equity issue from a population design issue, again, coming Using our experience from a better heart and better cities and the work we've been doing with Lutz and Reisi throughout the world in South America, in Sao Paulo, in And in Vietnam, and so this is the way we are going to structure it. And we are going to Ed, Edouard, in discussion with all the major technology companies because they have data And are willing to participate in this partnership. They have gated to the zip code in the U.
S. By in terms of health equity and impact of the different diseases. Now from our side, We have already implemented this year that 100% of our Phase III programs in the U. S. Must integrate diversity and inclusion into the design.
And then Because of COVID and Vas and Badri and John Tsai have mentioned extensively the technology components of our SENSE database. The teams have developed a technology now when you design a clinical trial, it automatically populates by zip code And by state and by country, the percentage ratio numbers that you need in the clinical And depending on the disease burden, in certain diseases, if you need a higher representation, for example, of Hispanic or Indigenous Americas, that is automatically populated into the clinical trial and the clinical development plan. The second 2, which will They have developed and we need to showcase in future events is that At real time, a clinical trial leader, whether they're in Sao Paulo or they're in Dhaka or they're in Cape Town or they're in New York, As they report a patient into a trial, the database is updated automatically to say you have the So that we don't get to a point where at the end of the clinical trial and we close the database, we don't have the right number of patients by race and ethnic diversity. Now just as a closing Thank you. We will be communicating with you and updating this and publishing this in the Novartis in society report Just as we've done before in terms of progress, progress in terms of the number of investigators, the number of trials that we've been published there.
Just to point out 2 last things. One is that we've introduced a component of innovation And that's related to a center of excellence and looking at data that is used that uses rates for diagnosis, prognosis, imputation, telemedicines and algorithms. You all heard about The discussion around TAROS oximeters that were overestimating the oxygen saturation of COVID And there is a recent publication from the New England Journal of Medicine that has gone through over 13 disease areas, including breast cancer, Heart failure, cesarean section, where the imputation of race is to the detriment of black and brown communities. So We will create a center and support that for 10 years working with other IV universities and big technology To readdress that component, we've also allocated 10 scholarships per year to the non medical faculty of HBCUs to publish and do research that relates to health equity. So we expect at least 100 publications to come out of this to fundamentally transform the Health Equity and Diversity and Inclusion.
Lastly, I want to say this, Doing good as Resi and Vas and Lutz have shown is the right thing to do. But also importantly, we've just seen the U. S. Census data. By 2,045, the mixed race population will be the majority population in the U.
S. So us doing this now and equipping them and integrating them into our R and D system It's the right thing to do and the right thing also for the company and the industry to do to rebuild trust. And with that, I'll pass it on to
Thank you very much, Rachael and Patrice. We could feel your Passion from Africa and U. S. To Basel. That's very, very impressive.
Yes, we can go to next slide directly. You heard Lars talking about the importance of ethical business practices from the point of our associates and also from all the stakeholders. That's beyond compliance. Compliance is important. It's part of our management system, but it's a broader scope we have started 3 years ago at Novartis.
Three distinct pillars: ethics, enterprise risk management and compliance. If I start with ethics, It also, of course, comprises a very important topic, which I know is all close to your heart. This is human rights topic. It's very close to culture impact, and it's very innovative because it also goes into areas which are not regulated. For example, artificial intelligence.
We just issued a couple of weeks ago the first position paper as a pharmaceutical company on the responsible on ethical use of artificial intelligence. If you do it right, ethics gives us the right boundaries for an integrated risk and crisis management. And crisis management, you all know what this means in a pandemic, taking care of our nearly 800,000,000 patients around the globe. So risk management is most is more in a pure risk workshop. It's a holistic system which comprises assessment of risks, but also The right link to enterprise policies and controls and I will talk about this because it's important for you, we know this, 3rd party risk management.
Compliance, of course, had as a basis a sound and effective compliance management system, which is based on data and digital. It also has an important element In the Speak Up culture and the Speak Up office, which is our investigative office, the whistleblower office, Because a good company will always see singular individual misconduct. This is part of society, but a good company is Acting on it, seeing it early and investigating it thoroughly. And that's the last point, continuous improvement. Centralized monitoring and remediation, that means acting on the shortcomings we see over time, It's part of a good and forward looking compliance system.
If I focus a little bit on our ethical journey, next slide. So we launched can go to the next slide, please, last year our new code of ethics. And we did it differently And
as we did
in the past, we said we want to cocreate this with our associates. So we literally use the voice of several thousands of our associates around the globe to talk about the ethical principles, The ethical commitments and the way how the people want to see their daily dilemmas reflected in our code of ethics. It's also more than a code. It is a code, it's commitments, but we build around the code a support platform for our associates, where we offer based on artificial intelligence a decision explorer, not a solution machine for associates, but a Decision Explorer, which helps our associates in difficult situation to reflect on their own ethical biases to get support from the ethics risk and compliance organization to solve their concrete specific dilemma therein. And now there's a lot of questions at ESG and you're asking this all the time, how do you measure success on FX?
Well, let me give you a little bit of numbers here, the trading numbers, 99% training. But maybe more important, we measure how many of our associates, how often do they visit the Codefactics platform? Is this a living platform? This is meaningful for our associates in their daily life. And you see that we had more than 100,000 visits to the Codefestics platform.
We are nearing to 200,000 visits on the Decision Explorer and have a very good feedback there. If we do it right, as I said at the beginning, this gives us the right boundaries for Enterprise Risk Management, if you go to our next slide. And also this is a comprehensive integrated standard. It's based on a common methodology of our risk assessment It's then linked to our global policies, guidelines and standards and we link it to our new centralized internal Control System because we believe that clear accountability and improved governance will help us to stay on track. I already mentioned the topic of 3rd party risk management.
If you go to our next slide, this is Off the topic in the call with investors, it's not an easy task. We have 10,000 of suppliers around the globe. How do we address them in a consistent and integrated way? So we have developed our 3rd party risk Management platform. As an integrated platform, we cover not only anti bribery risks.
We cover cybersecurity risks, Labor rights risks, animal welfare risks, health safety environment risks, data privacy and trade sanction risks. Because we believe it's important to have an early due diligence and early dialogue with our third parties, Our suppliers, our distributors, how do we want to drive together our business and together also our ESG Aspiration, because again, here it comes all together if you want to progress in our environmental goals, if you want to progress In our diversity and inclusion goals, if we want to progress in our ethical goals, we need to work together with our 3rd parties. In closing, I want to quickly touch on a topic which is also important for all of you. You all know that last We could settle most of our legacy compliance case. So that's an important task for management.
We informed you and we announced already in March last year the settlement with the Criminal Division and the DOJ, U. S. DOJ Antitrust Division. And already last year, we disclosed that we are in talks with the civil division of the DOJ Intertrust Administration to also settle and solve their claims, which are the same claims as we settled with the Criminal Division. And as transparency is important with investors at ESG, Ron, just to give you out of interest the heads up that we anticipate finalizing also the civil part of the Sandoz antitrust topic in due time.
And having said this, I hand over to my colleague, Karen.
Thank you, Klaus. I appreciate it and good day to everyone on the call. Next slide, please. As Vas has indicated, governance and transparency are key priorities for Novartis. And it actually starts At the top with our Board of Directors, specifically our governance nomination and corporate responsibility committee is charged with the oversight of Strategy and governance of our public health initiatives, our corporate responsibilities and other ESG related initiatives.
In 2021, the committee extended its oversight, including reviewing our progress against our environmental sustainability strategy, further enhancing our governance as well as reviewing our 2021 materiality assessment. Responsibility for our governance is not only with the Board, but it also resides at the level of the ECN. Specifically, we have our Trust and Reputation Committee, which is chaired by our CEO, Vas. And it's a subcommittee of the ECN that is responsible for overseeing the Progress of our ESG initiatives as well as accelerating decision making in key areas. In 2021, the Trust Reputation Committee has met 4 times already.
Topics of discussion include reviewing our progress against our environmental sustainability strategy, ESG reporting and also reviewing our 2021 materiality assessment. In 2020, we further enhanced our governance by creating our Chief Sustainability Officer role, which reports to a member of the ECN. The Chief Sustainability Officer is responsible for the strategy and execution of Environmental Sustainability across Novartis. In addition, we created the ESG Management Office. And the ESG Management Office is responsible for working with subject matter experts in the business functions and countries to help implement our ESG strategy and to lead key ESG initiatives.
Just this year, we created our ESG Council. The ESG Council is comprised of senior leaders across Novartis who report into the ECN. Specifically, the members are unit leads, Subject matter leads with respect to specific key ESG topics as well as several corporate functions. The ESG Council is charged with identifying relevant topics and making recommendations to the Trust and Reputation Committee, With co creating cross functional ESG strategies and also ensuring that our ESG activities are integrated into our operations. Not only is governance important, we are also focused on transparency.
In 2020, Novartis had its first TCFD disclosure and its first SaaSV index aligned disclosure contained in the Novartis and Society's report. In addition, Novartis comprised an index of ESG related disclosures that they posted on novartis.com. In 2021, we will be moving to an integrated report that will be published in February of 2022. Specifically, we will be integrating or merging the Novartis and Society Report and our annual review. The consolidated report will focus on describing our strategy, our business, Our performance as well as our governance, it is designed to communicate and to demonstrate the long term value that Novartis brings not only to our shareholders, but also to society.
Last but not least, this merged report will appear in February of 2022 along with our 2 regulatory filings and our year end results. With that, I'll return the program to Vas.
Thank you, Karen. So just in closing, I have a few more areas I'd like to cover with all of you: human capital, environmental sustainability and our longer term ambition. So you can see an image with our partnership with Zipline in Ghana, organization using drones to deliver medicines and support clinical trials. I want to thank example of many great partners that we've been able to work with on our ESG journey. So going to the next slide and wanted to say a word on our cultural transformation.
3.5 years ago, we set out to transform Novartis' culture to what we called an inspired, curious and unbossed organization, Building on extensive research, which shows that organizations that have a strong sense of purpose, whose people have a strong sense of autonomy And whose people also have a growth mindset, the ability to learn and improve leads to better long term innovation, better long term performance, Data sets that have been consistent over many decades. And we work to deploy this knowledge and know how through a very comprehensive approach The cultural transformation, leadership transformation, really touching almost every element of the employee experience at the company. We use a rigorous approach to measuring our progress on this front using an analytical tool called Glint. We consistently measure this on a quarterly basis, compare ourselves to external benchmarks. And as you can see, from an engagement standpoint, we've seen a Significant improvement from our initial baseline and ahead of the benchmarks that are available and but still work to do.
And we're going to continue to work To be leading across all sectors on the level of engagement. From a growth and learning standpoint as well through our various efforts and a broad range of initiatives, we've, I I think assumed a leadership role and how we enable learning at our company similarly with collaboration. And we have a very extensive leadership development program, which we call the unbossed leadership experience, which endeavors to reach 10,000 managers around the company. What that's led to is a consistent improvement on the Experience of empowerment, but also importantly now up to an 84 rating for manager recommendations at the company, which is 7 points above industry wide benchmark. As I'd like to say to our organization, if we can get leaders to grow, we can get teams to grow.
And if we can get those two areas to grow, the company will grow along with it. So moving to the next slide. Some other dimensions on our progress on human capital that we wanted to highlight. I've already mentioned the gender pay gap and how we are committed to closing it Fully by 2023, and we're working now on pay transparency and pay equity in most of our key markets. Gender balance and management, I also covered earlier, but we are now included once again in the Bloomberg Gender Equality Index, and we work very hard to ensure that we Diverse candidate panels and diverse slate.
And we also have gender neutral parental leave, which It's really been a globally recognized leadership position we took by being one of the early actors in providing broad parental leave. From a supply chain standpoint, we continue to embed DNI principles in all of our third party risk management efforts, and we're going to our goal by And lastly, with respect to racial equity, an area we need to do better on, we acknowledge it and we're working on it. But you can see some of the actions that we're taking in terms of diverse slates and focusing on better ethnic representation in our U. S. Organization.
Now moving to the next slide. I wanted to turn for a moment in the environment. Novartis had previously stated and are committed To get into carbon neutral and net 0 in our Scope 1 and 2 operations, so to be clear, we believe we can Achieve net 0 in our Scope 1 and 2 operations and carbon waste and water neutrality in the operations that we control. Scope 3, as you all well know, is a bigger challenge and one that we're very aggressively focused on. We're committed to being carbon neutral in Scope 3 as well by 2,030 and net 0 by 2,040, but of course have an aspiration to minimize the use of offsets And try to bring forward our ability to be net 0 as we work through detailed plans with our 3rd parties.
We know there are about 1,000 third parties in that we will need to focus on and now we're doing the systematic work to ensure that we get to the goals that we set out here And hopefully, again, can over deliver against them. Now some of the specific initiatives we have include driving efficiency with the electrification A third of all energy loads in our supply chain. We're consolidating our supply chain to a more limited set of suppliers. We're 100% renewable energy for the EU and U. S.
With 6 virtual power purchase agreements and 7 solar and wind projects In Europe and the U. S. As well. So a lot of effort going on here, but still a lot of work to do. Now moving to the next slide.
One thing that we are looking at more systematically and is high on our mind is we know that global biodiversity And the ability to protect the climate planet from climate change is fundamental to human health. We know that as the climate changes, We increased the risks of many forms of human health challenges, whether that's tropical diseases, whether that's because of air pollution, respiratory, cardiovascular, So we're working very hard to understand the impact of climate change on health. I'd also note that Novartis is one of the largest Libraries of naturally occurring compounds, we know nature has consistently been a source of breakthrough medicines. And so losing biodiversity will surely have an impact in the future of our ability to find such medicines. So it's an area where we know it's the right thing to do.
We want to, of course, have an impact, but also from our business of improving human health and finding new medicines is also Now moving to the next slide. And in closing, we're on track to meet our ESG aspirations in each of the areas we've outlined. We have long term goals. Short term goals you can find in the various reports that we published. I won't go through all of them here, all of them now, but you can See here very clearly the goals that we have.
And then moving to the next slide. I think we want to come back to where we started. It is our deep I believe that companies that focus on material ESG factors have better financial performance and Novartis with our clear purpose of reimagining medicine And to improve human health around the world, our core purpose ensures that fundamentally a powerful ESG Impact is embedded in everything that we do at this company as we continue to work to generate 70,000,000,000 doses of medicine and reach 800,000,000 patients. Now as a final note on the last slide, I think it's worthwhile as we've gone through so much data, so much information, it's a very human element of the work that We do. I think a great mentor of mine, Bill Foege, one of the leaders of smallpox stratification, said you have to Work on the numbers, but remember the faces.
And I think we as a leadership team really believe that in the end, it's the faces that matter. It's The impact we have on individual human beings around the world, that's the ultimate legacy we leave as a company. We're quite committed to that. We'll keep working on it. We appreciate your interest and look forward to taking your questions.
So thank you all very much. And with that, operator, we can open the line for any In the audience.
Thank We are taking our question from Charles Pittman at Redburn.
Hi. Can you hear me okay?
Yes, we can.
Yes. Hi.
I was just wondering if
you could touch on the Targets you have in place for improving your suppliers' commitments to renewable energy as you yourselves work towards your kind of longer term 2025, 2030 targets.
Yes. So thanks for the question, Charles. We are currently working with Our procurement organization to go through the 1,000 suppliers, which I mentioned, and putting in clear goals that are consistent with our own goals, Namely that they would also need to be able to achieve net 0 or carbon neutrality in their operations. So we're in the process right now of updating all of those agreements to ensure they're in place and then asking ourselves the question which suppliers are going to be able to meet those goals In which suppliers we'd have to maybe move away from if they aren't able to meet those goals. Alongside that, we're also reflecting on what additional investments We may need to make to enable or allow some of these suppliers to be able to reach these standards, which is also something we accept we may be part of the equation.
I don't think we have a full assessment yet of what that investment would be, but it's also, I think, on our minds. I mean, Lutz, anything else So it's a no,
I think that's covered it well.
Thank you for the question. Next question operator, if there is one.
Yes, we are taking our next question from the line of Paulina Kosnova at EOS Federated.
Thank you very much for taking my question and thank you for this detailed presentation on your ESG strategy and for all the efforts You are making to take a leading holistic and integrated approach. Much appreciated. I wanted to ask about AMR, so you explained your strategy to delay the operation of antimicrobial resistance, but I wonder to what extent Is AMR integrated into Enterprise Risk Management and Long Term Business Planning? I don't mean just for your antibiotics portfolio, but for the entire business. So that's my first question.
If you could expand maybe on so if you are making so because your Strategy talks about advocacy, but mostly for responsible use of antibiotics. And I wonder if you could expand on how much you engage with third parties such as public health authorities or insurance companies to create new mechanism, new incentive mechanisms. Thank you very much.
Yes, thank you for the question.
On the first part on Enterprise Risk Management loss,
I can give it a start and then over to Lutz maybe for the outreach. It's a great question. And interestingly, all of what Lutz has shown you on the efforts on AMR also, I mean, originated from a strategic With discussion, what is from a risk perspective from the company, from a reputation, from a risk for the global health population? And this came also up in our holistic risk workshops with the global health divisionals and the company. And we said, look, I mean, The one thing is on the reserves development, there must be other areas as we are leader in AMR globally and the one remaining European Producer, this has an impact, of course, on our brand and our reputation.
There, we took it from there. So I think it's a good proof that The risk management is close to our reputational and business question and you took it up, looks with your team and you made a strategy and implementation plan out of it, right?
Yes, I think it's a fair point that you are making Claus and I would potentially even go a step beyond. I think we all understand that if antimicrobial resistance Spread to levels that would really have a significant impact on the core medical interventions that essentially surgeries Couldn't be conducted anymore that transplants would be very, very challenging. I mean that would essentially Take us back many, many years in the way how we are advancing Medical Care and offset the advancements that we have made in recent years. So I think we need to look at it really from a holistic perspective and see what can we do now in order to protect The progress that we have made in treatment of diseases over so many years, and that's why it's really a burning platform To act here. But as you rightfully said, I mean, there's only so much that we can do It's an individual company here, and that's why we are reaching out wherever we can find partners who Share our vision and bring complementary skills and approaches to bear to join us in this fight.
I think we have to be clear what is it that we can control. And I mentioned the responsible manufacturing where we've made significant Investments, because you may be aware that antibiotic manufacturing is, for lack of a better term, a bit of a dirty process and we have invested very significantly with Richard Zena, our CEO of Sandoz in our manufacturing Capabilities to make sure that there is no contamination, no damage being done to the environment. And then it's really the advocacy educational part. And then last but not least, the investment in the discovery of new antimicrobials, where we believe that we need to sort of we come to a better outcome if we sort of spread and enable many different and diverse teams to look into these opportunities rather than doing it with 1 dedicated team in house, and that's why we are excited about the antimicrobial Resistance Action Fund that we invest in. I hope that addressed your question.
But with regards to partnership, Definitely, yes, looking into partnerships across sector and would be very open, of course, also to any ideas that maybe other sector players may have. Thank you both. Thank you for the question.
Operator, if there's a next question on the line.
There are no more questions on the line. Please continue.
Very good. So thank you all for joining the The CSG Investor Event. We hope the information was helpful. As you can see, we have a really dedicated team. But most importantly, we have over 100,000 associates Committed to this purpose of reimagining medicine for the planet.
We'll continue to do our best to be transparent, provide clear updates on our progress, Providing information through our website, through our annual reporting suite. And we look forward to also hearing feedback from you as to what would be most helpful as we continue to try to bring transparency about the impact we're having on the world. So thank you again, and we wish you a good day.