Healthcare companies, comprising of pharmaceuticals, biotech, and med-tech, account for one third of the total market capitalisation of all SIX Swiss Exchange-listed businesses. It is not a coincidence why so many biotech businesses have chosen to be listed in Switzerland.
Aside from its world-leading role in cross border wealth management and deep talent pool, Switzerland has a massive domestic investor market, with a long and seasoned track record of channelling capital into cutting-edge biotech companies.
The two sector specific indices – SXI Life Sciences and SXI Bio+Medtech – have also given the industry added visibility, particularly among overseas investors - which is helping to shore up liquidity in the market ever further.
Swiss Companies Take Action on ESG
Sparked by mounting regulation, Swiss companies, including those in the world of biotech, are coming under increasing pressure to demonstrate their commitment to Environmental, Social and Governance (ESG) principles.
More companies are now required under Swiss law to publish climate reports in accordance with the global Taskforce on Climate Related Financial Disclosures (TCFD) framework and conduct thorough due diligences on their supply chain networks to ensure that they can prevent human rights abuses from happening and adopt robust environmental safety standards.
Investors are taking a growing interest in ESG matters and some are even threatening to divest from businesses which they perceive to be unsustainable.
In the case of biotech, many companies are ramping up their reporting, focusing not just on their operations’ environmental footprints, but also on the S and G impacts, including details about their patient and employee safety track records, animal testing safeguards, clinical trial safety practices and responsible research and development procedures.
However, companies noted that the preparation of relevant data and information management were among the biggest challenges when it comes to ESG reporting.
How Stock Exchanges Can Help
Stock exchanges, such as SIX Swiss Exchange, have an important role to play in helping companies achieve their sustainability targets. Firstly, stock exchanges can help channel capital into sustainable companies and projects by providing platforms, promoting transparency, and granting access to ESG data.
Stock exchanges can also offer targeted support to both local and international public companies, including assistance in fulfilling their growing non-financial reporting obligations and in fostering investors’ awareness about their sustainability credentials.
SIX Swiss Exchange, for instance, has enabled listed companies to voluntarily report on their sustainability policies and practices since July 2017. To date, around 50 SIX Swiss Exchange- listed companies have opted in to this framework, with many highlighting that the reports have helped them raise their visibility and profile among ESG conscious investors.
Other SIX Swiss Exchange initiatives include the flagging of sustainable bonds, the launch of ESG indices, access to high quality ESG data sets, the creation of a sustainability handbook for issuers and dedicated training programs/workshops as well as courses in collaboration with leading Swiss universities.
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