Pharma companies are scaling back the use of terms like “ESG” and “diversity, equity and inclusion,” much like companies in other industries.
In pharma 10-K filings, mentions of ESG, sustainability, or diversity, equity and inclusion (DE&I) dropped 15% in the first quarter of the year, compared to the same three months in 2023, according to data from AlphaSense. Of the pharma annual filings in the first three months of 2024, 65 mentioned any of those terms, down from 76 during the same period last year.
The shift follows a surge in popularity of the terms in early 2023. ESG wasn’t mentioned in the pharma filings until 2020, and DE&I wasn’t used until 2021, according to AlphaSense. Pharma companies have been more likely to talk about sustainability in recent years, though that term also saw a boom in usage in 2023.
Experts say the change is more of a shift in language than a change in strategy as companies pay close attention to the politicized backlash around ESG investing and DE&I efforts. The controversies include a swell of criticism and campaigning against alleged “woke” ESG investing and bans on DE&I initiatives in academia following the Supreme Court’s strike-down of affirmative action.
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Michael Grela“Our pharma clients have very much remained committed to ESG,” said Michael Grela, Inizio Evoke Comms’ head of reputation, public health and social impact. “What we have definitely seen is that there has been a shift in the language — with renaming of words and reframing some of the narrative.”
Several large pharma companies, including Pfizer, Bristol Myers Squibb, Gilead and GSK, have all recently published ESG or sustainability reports with bold and confident progress assessments. GSK touted “sector-leading ESG performance,” while Gilead CEO Daniel O’Day pledged “ESG principles will continue to guide every aspect of our work.”
That said, Pfizer changed the name of its ESG report to the Impact Report when it debuted the latest version last month, though the URL, title page and document are filled with ESG references. Merck also last year renamed its filing, which used to be called the Environmental, Social and Governance (ESG) Progress Report, to Impact Report.
Merck confirmed the report name change, but declined further comment; Pfizer did not respond to a request for comment.
The switch to different terms is about striking the right message, Grela said, noting that the politicization of the older words makes them less effective. He sees more companies leaning into words like “impact” or “purpose” that “communicate the same message without necessarily getting into the drama around the political side of it.”
That politicization appears to be more pronounced in the US.
“Companies in the US, including pharma companies, are talking less about ESG externally because ESG has become a political issue and part of the culture war,” Christopher Papadopoullos, principal analyst at GlobalData, said in an email. “This is part of a broader trend across all sectors, with ESG becoming less about marketing and more about compliance and long-term decarbonization.”
Editor’s note: The story has been updated with comment from Merck.
