In recent years, there has been a remarkable rise in ESG initiatives driven by heightened scrutiny from investors, governments, and consumers regarding companies’ environmental and societal impact. Consequently, integrating ESG considerations into business strategies has become indispensable for thriving in a socially conscious market.
ESG is deeply ingrained in our organizational DNA, driving relentless pursuit of excellence in sustainability. Guided by the vision and commitment of our Founder, Dr. Desh Bandhu Gupta, we have made significant strides in our ESG journey, positioning ourselves as industry leaders. Our approach to ESG fosters resilience and propels long-term value creation for all stakeholders. By embracing responsible leadership and fostering innovation, we have accelerated the implementation of impactful initiatives and processes that deliver tangible value.
Underpinning our efforts is a robust ESG framework, which shapes our sustainable value-creation goals and disclosures. We ensure alignment with global standards and harmonize our ESG strategy. Every business function and internal team plays a pivotal role in integrating ESG, reflecting our unwavering commitment to holistic value creation. While consistency remains crucial, we also recognize the need for adaptability and agility in meeting future stakeholder expectations. Strategic decision-making and prioritization propel us toward global leadership in our industry. As we embark on another year of our ESG journey, we remain steadfast in conducting business responsibly and ethically, embodying our commitment to making a positive impact.
At Lupin, we firmly maintain that integrating ESG strategy and the corresponding systems and processes that drive it must be aligned with the overarching organizational strategy and business priorities.
With the increasing importance of ESG issues in response to the shifting socio-economic landscape and climate change, creating synergies between Lupin’s organizational strategy, business priorities, and our ESG strategy is essential.
To achieve this alignment, we have established a robust governance system and a core team that oversees ESG and business as usual. Our ESG Core Committee, chaired by our Global CFO, comprises senior management and global presidents at Lupin, who are ideally positioned to take charge of ESG issues. Additionally, their business insights provide valuable guidance on the best ways to realize our ESG strategy. The committee reports on priorities and progress to the Board of Directors, and its members meet monthly to discuss progress, challenges, and next steps.
We have also focused on strengthening our capacity and capabilities in ESG risk management by providing training and awareness interventions to our employees, senior management, and board members. This periodic training ensures that each group is well-versed in ESG and aware of the impact of its decisions on the environment and surrounding communities.
Our commitment to conducting business responsibly and consciously is evident through introducing and regularly revising ESG-aligned policies, covering Environmental Management, Human Rights, Diversity, Equity and Inclusion, Biodiversity, No-Deforestation, and Environment Health and Safety. These policies provide Lupin and its stakeholders with the necessary guidance in all aspects of the business.
As we mature in our ESG journey, we have focused on areas where we can create the most significant impact. These areas include championing global health equity by providing accessible and affordable products, ensuring patient centricity, enabling supply chain efficiencies, empowering our employees, and advancing environmental health. At Lupin, we are confident that our ESG strategy will continue to drive our business priorities and organizational strategy forward, ensuring a sustainable future for all stakeholders.
The trajectory of Lupin’s ESG journey has been steep, as we have accomplished in a short period what typically takes years to achieve.
This remarkable progress in our strategic prioritization of key initiatives and measures allow us to efficiently allocate investments, resources, and time for consistent year-on-year improvements in our ESG performance.
To address our top materiality topics, either through the mitigation of risks or realization of opportunities, we have developed a comprehensive ESG framework and roadmap which helps in articulating our strategy, goals, and targets. Through this framework, we can track the progress of our ESG performance across our entire business.
ESG objectives are strategic in design and holistic to ensure we effectively contribute to both enterprise value creation and improving the environment, society, and economy. These include both short-term and long-term targets.
In FY22, we conducted a detailed materiality assessment aligned with Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and Dow Jones Sustainability Index (DJSI) to develop a more Assessmentinformed ESG strategy.
This includes understanding key stakeholder priorities and expectations. The assessment, assured by a third party, helped understand stakeholder priorities and identify key focus areas for Lupin.
Conducted a detailed study on the need for and advantage of a materiality assessment with regards to the pharmaceutical industry. This was cross examined against ESG drivers for the industry.
An in-depth desk based landscape analysis was conducted with regards to the macro trends of the pharmaceutical industry, business environment, and potential risks and opportunities that may arise. This was further corroborated through analysing peer best practices and material issues.
Through multiple meetings with senior management and external consultants we were able to shortlist the key stakeholder groups we were going to engage with as a part of the materiality assessment. This was followed by the rollout of the materiality assessment questionnaire.
Once we received responses from all 191 stakeholder we worked towards prioritising the material issues into thematic buckets to better identify strategic risks and opportunities from a business perspective.
The material issues were narrowed down to seventeen from forty and prioritized on a materiality matrix. The finalization process included senior management meetings as well as meetings with the Board.
Our engagement process was exhaustive to ensure effective communication with our stakeholders and facilitate constructive dialogue. We engaged with 191 stakeholders across various groups, including business partners, employees, customers, investors, suppliers, and NGOs. The goal was to comprehensively understand key priorities and corresponding ESG risks and opportunities that might impact our business and value chain.
The feedback from stakeholders was carefully reviewed and approved by the Senior Management at Lupin over multiple meetings, with a final consensus reached regarding the top ESG issues. ESG aspects were assessed based on their potential impact on the business and strategy over the short to medium-term.
The assessment identified forty topics based on the macro business landscape and sector-specific trends relevant to our business and operating locations. These topics were narrowed down to seventeen key material topics, categorized into six thematic areas: Environmental Performance and Climate Change, Employment Practices, Supply Chain Management, Governance, Community Engagement, Product and Consumer. Our material issues, priority areas, and metrics were discussed and approved by the Board of Directors and the ESG Core Committee.
It is important to note that our material topics are not linked to the Enterprise Risk Management Framework (ERM). However, we aim to connect our key material ESG issues with the larger ERM framework to manage risks and opportunities and properly allocate resources effectively. This process is ongoing and will be completed within FY24.
As a responsible organization, Lupin recognizes the importance of regularly re-evaluating the material issues that affect our operations. Given the constantly evolving socio-economic and environmental landscape, ensuring that the identified material topics remain relevant and aligned with our strategic goals is crucial.
To this end, Lupin has recently undertaken a comprehensive exercise to review the forty material issues initially identified in FY22. This exercise was conducted with an emphasis on the concept of double materiality, which highlights the impact of an organization on the environment and society, as well as the impact of these external factors on the organization itself.
The exercise involved a workshop with our senior management team outlining the importance of a double materiality assessment and identifying externalities caused by Lupin. Subsequently, a detailed questionnaire was rolled out to key stakeholders to gather their input on the key material topics.
The issues identified during this exercise reflect our commitment to a new outlook toward materiality and provide valuable insights that will help us redefine our strategic decision-making processes. In the future, Lupin pledges to undertake this re-examination of material issues annually to stay abreast of the evolving ESG landscape and meet the expectations of our stakeholders.
We are in the process of aligning our material issues with the organizational enterprise risk management framework. As part of this process, we have identified key risks and opportunities and our management approach to mitigating the risks and realizing the opportunities. This analysis was conducted by collaborating with our internal functions and business units.
At Lupin, we are committed to improving health outcomes for all our stakeholders. We understand that long-term planning, strategizing, and commitment are essential. We conducted a 360-degree analysis of our current material issues, business strengths, and critical opportunity areas to optimize our time, resources, and investments. Through this analysis, we have identified a set of core competencies that will drive the next wave of change at Lupin.
To drive meaningful change and create value, we recognize the need to focus on specific areas of ESG.
Subsequently, our Board of Directors and Senior Management had in-depth discussions in FY23 to identify these focus areas via the double materiality assessment. As a result of these discussions, we have strategically identified key areas that warrant our undivided attention and investment, enabling us to contribute to the greater good, positively.
At Lupin, we understand the vital role of governance in establishing trust and long-term value for all stakeholders. Our commitment to sound governance practices is deeply ingrained in our operations, influencing strategic decision-making, risk management, and ethical conduct. Therefore, our corporate governance philosophy is rooted in transparency, accountability, fairness, integrity, detailed disclosures, and professionalism.
Guided and supported by our Board, the management of Lupin implements various corporate governance initiatives. Effective leadership combined with good governance practices has been a core strength of our company. We continuously benchmark ourselves against industry best practices, ensuring that we meet and exceed the standards of corporate governance in both form and spirit.
Lupin Limited maintains a diverse and skilled Board of Directors with expertise in entrepreneurship, leadership, pharma, strategy, finance, and general management. This composition ensures that the highest standards of corporate governance are nurtured and upheld within the company. Our Board consists of a well-balanced mix of executive, non-executive, and independent directors who provide strategic guidance and valuable insights to the management team.
In addition to meeting all mandatory requirements, Lupin complies with non-mandatory requirements specified under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. These include obtaining unmodified audit opinions on financial statements, establishing a direct reporting line of the Head of Internal Audit to the Audit Committee, and maintaining separate individuals for the roles of Chairman, Chief Executive Officer, and Managing Director.
Lupin takes immense pride in becoming a signatory of the United Nations Global Compact (UNGC), an endorsement that reflects our strong commitment to good governance and ethics. As a UNGC signatory, we join a global network of like-minded organizations, enabling us to leverage collective expertise, best practices, and collaborative initiatives to address global challenges.
By becoming a UNGC signatory, Lupin affirms its dedication to upholding the ten principles of the UNGC in human rights, labor, environment, and anti-corruption. This commitment aligns with our core values and reinforces our ongoing efforts to integrate sustainability and responsible business practices throughout our operations.
We will communicate our progress to the UNGC, ensuring transparency and accountability while actively participating in sustainable development goals.
Lupin has established committees with well-defined roles and responsibilities to ensure focused attention and expedited resolution of diverse matters. Following a predetermined schedule, these committees convene regularly to deliberate on technical or specialist issues and provide guidance and recommendations to the Board of Directors.
Each committee has members from the Board who possess specific skills and knowledge relevant to the committee’s focus areas. This composition enables in-depth discussions at the committee level, with the inputs and recommendations being used to enable the broader Board’s decision-making process. Establishing these committees underscores our commitment to effective governance and diligent oversight in key business areas.
At Lupin, we foster a culture of transparent and impartial interactions with stakeholders and the public.
We uphold uncompromising integrity in all aspects of our business and maintain a zero-tolerance policy towards corrupt and immoral practices.
To support this, we have established P.L.E.D.G.E. (Preparing Lupin Employees to Demonstrate Governance and Ethical Conduct) to reinforce these values. This program enforces the Lupin Code of Business Conduct and Ethics (CODE), providing a mechanism for employees to report any actual or suspected violations of the CODE without fear of retaliation or retribution.
Our operations also are guided by robust control systems that undergo regular reviews by both internal and external auditors.
In addition to the Code of Conduct, we have implemented a Whistleblower Policy and other initiatives to prevent workplace harassment, creating awareness and empowering employees to report any unethical practices that they may encounter.
We have established specified mechanisms to ensure the swift resolution of reported concerns, including the Office of Ombudsperson. Employees can confidentially report potential issues related to fraudulent business practices, unethical behavior, discriminatory misconduct, or violations of our policies or Code. The Ombudsperson office received 22 complaints through multiple reporting channels during the reporting period. These cases were addressed by teams comprising strategic business unit heads/officers appointed by the Ombudsperson in accordance with our whistleblower policy.
Additionally, our Internal Complaints Committee investigates and resolves sexual harassment complaints within the prescribed timeframes mandated by the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013. During the year, three sexual harassment complaints were thoroughly investigated and resolved by the committee. These initiatives, aligned with our commitment to integrity and ethical conduct, foster a transparent and respectful work environment at Lupin.
Lupin Limited integrates ESG (Environmental, Social, and Governance) principles into our business model, aligning our goals with the needs of patients and society. Our commitment to sustainability, commercial viability, and community welfare drives our ESG approach. Recognizing the evolving global landscape, including challenges like climate change and rising stakeholder expectations, we consider active ESG goals as an imperative.
In FY21, we established an ESG Core Committee, which has a Board oversight. The committee is chaired by our Global CFO & Head of Corporate Affairs, which continues to drive climate-related initiatives and processes throughout our organization. This committee also assumes responsibility for ESG-related risks, opportunities and implementing our ESG strategy.
This includes all aspects related to climate change, including energy efficiency, decarbonization, renewable water management, and waste recovery.
Business function heads, align their objectives with Lupin’s ESG goals, and our part of the committee, ensuring ESG integration across all operations.
The ESG Core Committee is pivotal in reporting priorities and progress to the Board of Directors. ESG considerations now shape boardroom discussions, influencing our decision-making processes. As a cornerstone of our organization, the ESG Core Committee drives the ESG agenda, addressing climate-related issues, identifying risks, and advancing other pertinent aspects within Lupin.
Assurance Statement