Healthcare companies are focused on ESG in distinct ways
Viewpoint by Larry Williamson, Head of Healthcare investment banking at Societe Generale Americas.
The life sciences industry is considered by its very nature as socially responsible given its core mission to enhance the health and well-being of both individuals and society.
How specifically, though, are they addressing ESG related objectives, and how is Societe Generale supporting these efforts?
Larry Williamson, Head of Healthcare investment banking at Societe Generale Americas, says that at a high level, life science companies have many of the same environmental and governance goals as we see with all sectors such as those tied to reducing greenhouse gas emissions, structuring of the board, and many other company-specific initiatives. But, he says, one important differentiating dimension of life sciences companies is their core role in contributing to health security and well-being globally, and this form of positive social impact is a central focus.
“It's hard to think of a recent societal contribution that has been more impactful than the development of Covid vaccines but there are many examples of drugs, treatments and medical technologies that have made real social contribution to promote and enable health and wellness,” Williamson says.
In his role as an advisor to healthcare companies, Williamson has observed companies with an intense focus on factors that go beyond the underlying science and development of the right products to bring to market.
“Responsible healthcare companies are dedicated to ensuring the safety and transparency of their products, and there is a targeted effort by these companies to have their products and technologies accessible to as many people as possible,” he says. “This can apply to individuals or communities that encounter various challenges gaining access, including for financial, cultural or, say, geographic reasons.”
Societe Generale has positioned itself to support many of these initiatives through close engagement with companies across the ESG continuum, says Williamson. “At one end of the spectrum, we often provide peer comparisons and analysis at a granular level to help inform healthcare companies how effective their own strategies are. At the other end of the spectrum, and very much related to our core banking and capital markets activities, we support companies that are interested in applying an ESG element to their funding activities in the form of sustainable finance.”
These types of financings can include green, social and sustainable bonds where the proceeds are used to finance or re-finance green and social projects or activities, or sustainability-linked bonds which include key performance indicators aligned with a company’s specific ESG-related objectives. “Sustainable finance has its own set of investor considerations and execution components, and we leverage our experience and leadership in this area to help achieve optimal outcomes on individual transactions,” he says.
Williamson believes that within healthcare, sustainable finance should reinforce a company’s underlying ESG strategy versus being constructed and developed independently. “The overall ESG dynamic continues to evolve and become more defined making it quite an interesting area for both us as bankers and the companies we work with,” says Williamson.