Creating Value through Responsible Business

Transcription

1 Corporate Responsibility Creating Value through Responsible Business ESG Investor Call Jürgen Brokatzky-Geiger, Global Head Corporate Responsibility Eric Cornut, Chief Ethics, Compliance & Policy Officer 28 September, 2015

2 Disclaimer This presentation contains expressed or implied forward-looking statements, including discussions of our strategy, research and development activities and pipeline. Such forward-looking statements reflect the current views of the Group regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results expressed or implied by such statements. These expectations could be affected by, among other things, risks and factors referred to in the Risk Factors section of Novartis AG's current Form 20-F on file with the US Securities and Exchange Commission. Novartis is providing the information in this presentation as of this date and does not undertake any obligation to update it in the future. 2 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

3 Welcome Jürgen Brokatzky-Geiger Global Head Corporate Responsibility Eric Cornut Chief Ethics, Compliance & Policy Officer 3 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

4 Agenda 1. Dialogue Objectives 2. Novartis Corporate Responsibility Highlights 3. Integrity & Compliance Highlights 4. Questions & Answers 4 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

5 Dialogue Objectives This is our second investor call on ESG topics Our objectives are to: Move to a more proactive approach to investor ESG engagement Share important recent developments in our efforts to expand access to healthcare and to enhance our integrity & compliance policies and processes Create an opportunity to enhance dialogue 5 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

6 Corporate Responsibility at Novartis Novartis collaborates with others to help address some of the world s greatest health challenges We focus our Corporate Responsibility work in two areas: Expanding Access to Healthcare Reaching more patients Control and eliminate diseases Pioneer new business approaches and healthcare delivery models Find new treatments Doing Business Responsibly Striving for ethical and sustainable business practices Care for our associates Promote ethics and strengthen governance Strive for environmental sustainability 6 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

7 Corporate Responsibility Key progress 2014 to Implemented a Stakeholder Engagement Strategy 2. Established Access to Medicine Committee 3. Established focused Corporate Responsibility Board 4. Launched CR Performance Report and Materiality Assessment Report 5. Implemented Novartis Africa Health Alliance (NAHA) 6. Renewed Novartis Foundation s strategy 7. Enhanced our Integrity & Compliance program and processes 8. Renewed the Social Business Group strategy and installed new leader 9. Launched a Corporate Volunteer Program 10.Established CR Awards program 7 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

8 Summary of Novartis access to medicine highlights 750 million antimalarial treatments delivered without profit to patients in 60 countries since 2001 Since 2010, Social Ventures in rural areas in India, Kenya and Vietnam have brought health education to >15 million people Provided eye health education, trained physicians and brought treatments to places with limited access to care in medical missions 80 countries Since 2000, free treatments from Novartis have reached To increase our impact, in 2013 the Novartis Foundation launched a new strategy to interrupt leprosy transmission. It focuses on: restored vision treated patients 6 million leprosy patients worldwide 8 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

9 Philanthropy, Zero Profit, Social Business 1.0bn 1.5bn People 1.2bn people [$2-5/day] 1.6bn people [$1-2/day] 1.2bn people [ ~$1/day] Top of Pyramid Bottom of Pyramid Business led approach For profit Social Business Zero profit Malaria initiative Philanthropy NVS Foundation 9 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

10 Non-Communicable Diseases disproportionately impact Low- and Middle-Income Countries 28m deaths every year in low- and middle-income countries (LMICs) 82% of NCD deaths in LMICs are caused by accounting for nearly 75% of global NCD deaths CARDIOVASCULAR DISEASES RESPIRATORY DISEASES CANCERS DIABETES 80% of the global disease burden will be due to NCDs by 2020 Sources: WHO Fact Sheet noncommunicable diseases, January 2015 Noncommunicable diseases prematurely take 16 million lives annually, WHO urges more action, January ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

11 Our Contribution: Novartis Access OUR AIM TO HELP REVERSE THE TIDE OF NCDs BY ENABLING GOVERNMENTS in low- and low-middle-income countries TO PROVIDE BETTER CARE FOR PATIENTS 11 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

12 Novartis Access focuses on Availability and Affordability of Medicines A portfolio of medicines available to governments and institutional payors at a price of USD 1 per treatment per month DRIVE AVAILABILITY AND AFFORDABILITY OF HIGH-QUALITY MEDICINES Initial portfolio of 15 onand off-patent medicines for main chronic diseases and breast cancer WORK TO ENSURE STANDARD OF CARE Collaboration with governments and NGOs in an effort to ensure patients are properly diagnosed and treated CARDIOVASCULAR DISEASES BREAST CANCER RESPIRATORY DISEASES DIABETES DIAGNOSIS TREATMENT 12 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

13 30 Countries identified for Highest Impact 106 countries in Access to Medicine index Considered to be low- and lowmiddle-income countries by: High unmet NCD needs Lack of access-to-medicine programs and disproportionate impact Healthcare infrastructure and/or NGO partnerships Essential set-up to make a launch feasible Strong Novartis presence Local teams and partners on the ground to support Novartis Access 30 COUNTRIES 13 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

14 Novartis Access to target 3 Countries in 2015 Learnings to shape the Program as it expands LATIN AMERICA ETHIOPIA AFRICA KENYA ASIA VIETNAM 14 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

15 Novartis Access addresses the Needs of Healthcare Professionals and Patients in LMICs 15 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

16 Collaborations are Key to Novartis Access from Consultation to Implementation Trusted partners in academia, scientific communities and NGOs contribute throughout the development, launch and implementation process: First idea New social business model Need Field expertise and impact projections Portfolio Medical feedback on dosage form and targeted medicines Countries Greatest needs and impact, healthcare infrastructure Learning for expansion Implementation Adaptation of operating model Partnerships Definition of common operating model 16 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

17 Novartis Access five year vision: more patients, better access, a proven impact 17 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

18 Novartis Access is a new Way to tackle NCDs in disproportionately affected Countries OUR INITIATIVE 4 MAIN NONCOMMUNICABLE DISEASE AREAS 7 TOP CAUSES OF NCD DEATHS 15 TARGETED MEDICINES BETTER CARE FOR PATIENTS IN LOW- AND LOW-MIDDLE INCOME COUNTRIES 18 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

19 Corporate Responsibility at Novartis Novartis collaborates with others to help address some of the world s greatest health challenges We focus our Corporate Responsibility work in two areas: Expanding Access to Healthcare Reaching more patients Control and eliminate diseases Pioneer new business approaches and healthcare delivery models Find new treatments Doing Business Responsibly Striving for ethical and sustainable business practices Care for our associates Promote ethics and strengthen governance Strive for environmental sustainability 19 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

20 Doing Business Responsibly Building a culture of integrity key progress over last 12 months As a global leader in healthcare, we have the responsibility to serve as a role model and do the right thing. Concrete steps taken to increase transparency and to transform our culture (from rule-based compliance to judgement-based integrity) 1 continued to invest in enhancing existing programs and practices 2 focused our company Values&Behaviours (V&B) 3 launched new initiatives to further strengthen our culture of performance with integrity and to promote transparency Integrity enables us to help provide the best possible care for our patients so that people can liver longer and with better quality of life 20 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

21 1 We enhanced existing Program and Practices... Conflict of Interest Policy revised and communicated Data Privacy Policy revised; roll-out planned Anti-Bribery Policy and Third Party Guideline upgrade launched Annual Code of Conduct certification strengthened In-course segmentation with bespoke content Expand integrity modules in Leadership Learning programs Annual global and local risk assessments in the area of sales & marketing performed driving preventive measures Control self-assessment and testing performed Integrity needs to be managed as an integral part of the business 21 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

22 ... and followed up on execution as a Team Business Practices Office offers employees and external stakeholders a trusted channel to report misconduct without fear of retaliation In 2014, 1,812 reported allegations of misconduct investigated with 999 substantiated by year end and 485 dismissals and resignations related to misconduct Internal Audit enforces adherence to laws, regulations, guidelines and integrity standards and identifies improvement opportunities promotes learnings from audits by identifying root causes, leveraging lessons learned and advising management (best and needs improvement practices) Misconduct Prevention Group Quarterly cross-functional (I&C*, Legal, Internal Audit, Communications, HR, BPO) meetings to review misconduct case statistics and to determine appropriate follow-up * I&C = Integrity & Compliance 22 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

23 2 We simplified and focused our V&Bs... With strong involvement of our associates, we reduced our values from 23 to 6 to have a simpler, more memorable and inspiring framework for V&Bs. Innovation Quality Performance Poorvi Pawar Vida Zhou Stephen Oliver Collaboration Courage Integrity Paul Herrington Lukasz Tomanek Michael Braun Pictures taken by Novartis associates. 23 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

24 ... and embarked on a 3+ year journey to anchor the V&Bs Q3/ I am aware of the V&Bs and why they need to change I understand them and can apply them in my role V&B influence my decisionmaking every day INTERNALLY, AT ASSOCIATE LEVEL Create Awareness Awareness of: What V&Bs look like Why they are important for Novartis Enable Application Adaptation of: How V&Bs apply to my role How I will behave & operate differently Reinforce behavior Values-based action: Values are ingrained in how I operate I encourage others to live the Values 24 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

25 V&Bs fully embedded in our Performance Management and Reward Process Performance Management Process V&Bs are now fully embedded in the annual Novartis Performance management process Cash Incentive Payout Grid Now rewarding equally achievements of objectives and living V&Bs 25 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

26 3 We launched a series of new initiatives to strengthen our culture and... Revise compensation and bonus payment process of sales associates to better measure and reward decisions in line with V&Bs Align and standardize product promotional practices globally develop new and novel approaches to the established practice of engaging healthcare professionals to help educate their peers about the appropriate use of our medicines Continue to focus on integrity as part of our culture invest significant time and resources aspiring to lead industry practices continue to implement the necessary training and controls to uphold the high ethical standards across our business Enhance and align ethical practices across a range of business activities that focus on patients, healthcare professionals and customers 26 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

27 ... promote transparency EFPIA* Disclosure Code Company-wide adoption of EFPIA Disclosure Code in Europe - going beyond what is required by also applying it gradually to Sandoz and Alcon requires companies to disclose transfers of value to healthcare professionals and organizations first disclosures will be published on a public platform by 30 June 2016, for payments made in 2015 Novartis has put in place a comprehensive program to help Novartis Group companies collect, track and report all relevant payments to healthcare professionals and organizations in alignment with EFPIA requirements Novartis Position Novartis supports laws and regulations that promote transparency around transfers of value between organizations and healthcare professionals Transparent collaboration between industry and health professionals is in the best interests of patients, healthcare professionals, and systems * EFPIA = European Federation of Pharmaceutical Industries and Associations 27 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

28 Doing Business Responsibly Wrap-up AS A GLOBAL LEADER IN HEALTHCARE, WE HAVE THE RESPONSIBILITY TO SERVE AS A ROLE MODEL AND DO THE RIGHT THING. INTEGRITY ENABLES US TO HELP PROVIDE THE BEST POSSIBLE CARE FOR OUR PATIENTS SO THAT PEOPLE CAN LIVE LONGER AND WITH BETTER QUALITY OF LIFE. 28 ESG Investor Call Juergen Brokatzky-Geiger & Eric Cornut 28 September 2015 Business Use Only

29 Corporate Responsibility Thank you!