On April 24th, 2023, Henlius (2696.HK) released its 2022 Environmental, Social and Governance (ESG) report (hereinafter referred to as “ESG report” or “report”) for four years in a row. In 2022, the company optimized its ESG management strategy model with targeted actions taken. The report comprehensively disclosed the company's strategies, initiatives and achievements in fulfilling corporate social responsibilities and promoting sustainability in 2022 from the product, our people, environment, society, and corporate governance aspects across the aforementioned five key areas. It reflects the company's continuous efforts to further deepen the ESG implementation and build a foundation for sustainability.
Product: Quality First for Innovation and Inclusivity
Henlius has always adhered to its mission of “Improving patients' lives by timely providing them with quality and affordable protein therapeutics through technical innovation and operational excellence”. The company focuses on accelerating the commercialization of innovative technologies and products to meet unmet clinical needs. After more than a decade of continuous investment, 5 products have been launched in China, 1 in global markets, 18 indications approved, 3 marketing applications accepted for review by the National Medical Products Administration (NMPA) in China, the U.S. Food and Drug Administration (FDA), and the European Medicines Agency (EMA). As at the latest practicable date, Henlius' marketed products have benefited an accumulation of approximately 350,000 patients.
To improve the affordability of drugs, Henlius actively coordinates and communicates with multiple parties to promote product inclusion in multi-layered healthcare security system and expand the reimbursement coverage in many areas. Currently, the company has had four marketed biosimilars included in the medical insurance procurement platform. Henlius is also making active efforts in patient assistance programs (PAPs). During the reporting period, the H -Lifelong Wellbeing Program, a PAP initiated by the company has donated approximately 57,200 units of HANSIZHUANG worth about RMB320 million, benefiting 5,667 patients. To improve the accessibility of drugs, Henlius works closely with its domestic and global business partners to expand distribution channels, allowing its drugs to reach more areas.
Meanwhile, Henlius has been continuously advancing its product research and development (R&D) by increasing investment in R&D pipelines with a focus on innovative biopharmaceuticals, to accelerate its strides in marking a global presence in proprietary innovation. In 2022, Henlius continued to explore product innovation and R&D extensively and intensively. The company conducted over 30 clinical trials in countries and regions including China, the United States, the European Union, and Australia. 16 clinical trials were approved and 15 have completed the first patient dosing in 2022. Also, the company published 6 papers on international academic journals, presented 15 data results on 7 academic exchanges and had nearly 190 impact factors in total. Meanwhile, the company has formed strategic partnerships with multiple biopharmaceutical companies, joining forces to promote the R&D of antibody-based products.
Henlius is committed to ensuring product quality and safety throughout the entire pharmaceutical lifecycle, with rigorous quality control performed based on an established quality management system. In 2022, the Songjiang First Plant passed the GMP compliance inspection and became the company's second GMP-certified manufacturing base. Henlius optimized 59 existing processes and fields in the TrackWise® system, achieving effective monitoring of quality activities. Additionally, the company conducted self-inspections, internal and external audits, and underwent three successful external audits at its Xuhui Facility and six at its Songjiang First Plant during the reporting period. During the reporting period, Henlius became qualified as a UN vendor (Level 1), which was the first company in the industry to obtain this qualification.
Talent: Gathering the Power of Talents for a Shared Development
Henlius believes that being "people-oriented" is the key to talent management. The company is committed to protecting the legitimate rights and interests of employees, and strives to create an equal, inclusive, and amiable working atmosphere. Employees' sense of belonging, happiness, and engagement is enhanced by providing them with diverse communication platforms such as Leadership Face to Face Town Hall Meetings and “go Henlius” Internal Communication Platform, and conducting employee care activities. In addition, the company offers a systematic and customized career development platform to enable every employee to learn and progress. Regular talent review is conducted to identify talent development status. With priority given to building a talent pool, the Successor Plan is carried out to comprehensively deepen the talent depth. The health and safety of employees are of paramount importance in the company's talent management. While strictly complying with laws and regulations, the company has formulated multiple internal policies to standardize manufacturing operations, reduce safety risks, improve employee safety prevention and self-rescue capabilities, and enhance their awareness of self-protection and health management during manufacturing.
Environment: Preventing Pollution and Reducing Energy Consumption
Henlius adheres to the concept of green development and is committed to responsible manufacturing. During the reporting period, Henlius invested approximately RMB7.5751 million in environmental protection, an 87% increase from 2021. In 2022, the company continued its environmental initiatives around four environmental goals of greenhouse gas emissions, energy consumption, water resource utilization, and waste emission, keeping to improve its environmental management system, optimize resource and energy use, and strictly regulate the handling of various wastes generated during manufacturing. The company carried out targeted environmental performance improvement projects and continued to promote reclaimed water, review water balance, and issue water balance reports. Henlius conducted its first voluntary cleaner production audit and submitted a cleaner production assessment report to the Shanghai Office of Cleaner Production Promotion. The company also actively carried out internal environmental assessments and external audits, and 100% of identified issues were addressed. Henlius identified climate change risks and opportunities in accordance with the Task Force on Climate-related Financial Disclosure (TCFD) guidelines and developed climate risk management plans to proactively address the impacts of climate change.
Society: Safeguarding Supply Stability and Sharing Social Warmth
Staying open-minded, Henlius continues to expand its fields of cooperation in a diversified development. It prioritizes the improvement of the supply chain management system, which includes strengthening communication and management with its suppliers, to shape a sustainable supply chain together. In 2022, Henlius dedicated itself to improving business continuity by actively promoting the development of localized supply, resulting in a total saving of RMB22.16 million in procurement costs. During the period of supply chain instability caused by the pandemic, the company took preemptive measures and stationed staff at the plant for closed-off management, ensuring stable production and uninterrupted drug supply.
Henlius never forgets to give back to society and actively fulfils its social responsibilities. In 2022, the company integrated its own resources and gathered social charitable forces to develop a positive and healthy public welfare philosophy. It has launched the charitable cancer patient care program, “To Time to Life”, to advance cancer prevention and treatment. 2022 also marked the third consecutive year of its Rural Medical Service, which is dedicated to improving the healthcare infrastructure and quality of care in underserved areas. During the reporting period, the company's public welfare investment totaled RMB27.453 million. At the same time, the company was actively involved in pharmaceutical industry exchanges by participating in alliance organizations, academic forums, and industry summits, to foster dialogue between businesses and play a role in advancing the pharmaceutical industry.
Corporate Governance: Lean Corporate Governance to Empower Development
Henlius is fully aware of the importance of practicing compliant and effective corporate governance in achieving sustainable development. Adhering to the principle of legal and regulatory compliance, it continuously strengthens its compliance management system, regulates corporate behavior, practices the concept of compliant operation, and builds a sustainable business development model. By establishing a robust corporate governance mechanism, it continued to strengthen the Board's ability to manage corporate strategies and business execution, and exercise appropriate oversight. In 2022, Henlius updated its ESG management strategy in line with internal and external development trends. During the reporting period, the company held three special ESG meetings, with the ESG Working Group reporting progress to the ESG Steering Group and accepting their oversight and inquiries.
In the future, Henlius will continue to actively fulfill its social responsibilities, improve its ESG management, and implement various ESG measures. Going beyond hand in hand, Henlius will bring more affordable and high-quality products to global patients and contribute more Henlius Strength to the development of China's biopharmaceutical industry!