Material Environmental Issues for Indian Pharmaceutical Companies and their Perspectives: A Descriptive Study using Semantic Clustering

Abstract

Material issues of corporate entities convey important information on the sustainability issues that a company views as important and as such, they form a vital part of sustainability reporting. One such sustainability framework, the Business Responsibility and Sustainability Report (BRSR) requires Indian companies, that fulfil certain criteria to make it mandatory for them to report, to declare which ESG issues they deem to be material to them. Additionally, they must also report on their perspective to each issue. The existing literature, which has focused on a myriad of issues concerning material issues and materiality assessments in the larger field of sustainability has done so on sustainability reporting frameworks other than the BRSR, leaving a gap in the literature, which this study aimed to address. By semantically clustering the material environmental issues of the top ten pharmaceutical companies in the NIFTY Pharma Index, this study attempted to identify the environmental issues that pharmaceutical companies perceive as material to them. This study also examined the differences in the proportion of the issues among companies and across years. In addition, the perspective with which pharmaceutical companies view these material issues were also described in this study. With semantic clustering, the study identified eight clusters of material environment issues, with sustainable supply chain being the most frequent topic, followed by energy management, environmental sustainability, water management, waste management, environment, health, and safety and anti-microbial resistance. While the difference in proportion of the material issues were insignificant across years, they were found to be significantly different among companies, with all material environmental issues, except energy management, being viewed by the pharmaceutical companies as a risk with negative financial implications.