Home OPINIONS ESG in Clinical Research

ESG in Clinical Research


What is ESG?

ESG refers to the environmental, social, and governance factors of a company’s non-financial performance. It relates to the sustainability practices adopted for the long-term. Today, customers and stakeholders have an expectation from businesses to be cognizant of the environmental, social, and governance impact that an organization has through its operations. ESG is considered an important part of corporate sustainability and is often looked at through a prospective growth lens. There is growing recognition of the influence of ESG on the financial performance of companies.
Originally coined in 2005, ESG became a matter of discussion in the corporate and investors’ world after UN’s Sustainable Development Goals was announced in 2015.


Environmental pillars consider factors such as climate change, carbon footprint, biodiversity, toxic emissions and waste, pollution, and other indicators as the ultimate markers of sustainability. For clinical research organizations, adhering to environmental needs and reducing the impact on the surroundings is a significant aspect of driving ESG. While traditional clinical trials involve documentation and paper-work, decentralized trials are paving way for web-based documentation, limited travel for patients as well as clinical research professionals, thereby reducing the overall carbon footprint. Clinical research organizations were pioneers in concept of flexible modes of working  and the pandemic has only increased the reach to almost all employees across the globe, thus reducing the overall carbon footprint in the environment. In addition to this, the use of recyclable or reclaimed materials in new constructions is an effective way of moving towards a sustainable future. Organizations are pursuing initiatives such as Leadership in Energy and Environment Design (LEED) and building green spaces in order to bring changes in the environmental outcome and reduce any negative impact. LEED is the most widely used rating system to promote health as well as a cost-saving framework for green buildings.


The social pillar encapsulates factors such as human capital development, social opportunity, diversity in clinical trials, privacy, data security, health and safety, labor standards, and access to opportunities at an equal level. Innovation is considered to be an important growth driving factor for the healthcare industry. Yet, there continues to be a gender disparity in participation in trials with most clinical trials enrolling majority male participants.. While women have been able to achieve greater representation across government and different industries, achieving equal gender representation in clinical trials is still a long way.
Clinical research organizations serve as an anchor to drive employment initiatives amongst the community and patients. It is imperative for them to tie their efforts to a conclusive positive social impact that can be achieved. Another area where the clinical research industry excels is its strong representation of women in the workforce. Furthermore, initiatives relating to board diversity, upskilling staff, and promoting safety and security throughout the organization need implementation on a universal level. As per PWC’s CFO Pulse Report from March 2021, 58% of health leaders surveyed said they plan to increase diversity and inclusion training and reporting in the next one year.
Along with diversity, product safety is another area that can produce social consequences in the long run. It is crucial for clinical research organizations to help ensure drug delivery to the right patients at the right time.


While environmental and social aspects of ESG are widely spoken of and largely implemented by companies, governance is considered to be the subject that has the most scope for growth. Governance includes factors such as corporate behavior, board diversity, business ethics, accounting, maintaining financial system stability, and ensuring equity in executive pay. Having robust governance policies around fraud and ethics violations can help organizations safeguard their reputation in the industry. Strong governance also ensures the preservation of brand image and mitigates any risks that arise during a lapse. Over the decades, the expectations of consumers have drastically increased from the brands. With that, corporates are seen as an important responsible pillar of the society. This leads to purpose-driven communication and adding purpose to an organization’s existence.
An important aspect of governance is reporting. Frameworks such as the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) are most commonly used by pharmaceutical and life sciences companies to report on the factors that are most instrumental to the growth of the business.
Essentially, the dominant topics covered by many major biopharmaceutical companies in their ESG reports include addressing climate change and environmental impact, encouraging diversity and inclusion initiatives, and managing human capital.
According to a recent PwC report titled ‘2022: The Growth opportunity of the Century’, 77% of institutional investors surveyed by PwC shared that they plan to buy ESG products only within the next two years.
Building an executable and a tangible ESG plan translates into better chances of implementation. There needs to be a holistic approach to embedding ESG in the overall operations and value chain of an organization’s business. Starting from the most basic elements related to travel and infrastructure to moving to the more complex elements like process innovation and optimization in clinical trials, ESG will play a critical role in building long-term solutions.
With the attention that ESG has received and will continue to receive in the coming years from investors, employees, patients, and other stakeholders, the largest biopharmaceutical companies have used their vast resources and capital to create responsible committees and teams to test, improve and, often, create and install new effective ESG practices and initiatives. There is an opportunity to move to the next level of impact by implementing action-oriented ESG efforts across all areas of healthcare and clinical research organizations, from supply chains to environmental impact, and working to bring diversity to clinical trials and executive leadership.
Views of the author are personal and do not necessarily represent the website’s views.
Sanjay VyasSanjay Vyas joined Parexel’s Clinical Trial Supplies and Logistics (CTS&L) team in 2016 and leads the operational management for the organization’s global distribution centers and depots. Sanjay manages an international team with over 6,000 employees, located primarily in the Asia-Pacific region. Sanjay is a multifaceted leader with nearly 25 years of experience in global logistics supply chain management within the healthcare and clinical research sector. He brings expertise in the development and implementation of brand marketing and product positioning strategies for biopharmaceutical companies.
Dr. Annappa KamathAnnappa is the Executive Director, Project Leadership and CSR Lead at Parexel India. With over 17 years of experience in the clinical research industry including Client and portfolio management, Clinical Operations, and Project Management, Annappa has a successful track record in numerous roles that span pre-phase I, phase I, II, III, and commercial drug development activities, along with leading key CSR initiatives for the company.