Investing in a greener future

Sustainability has emerged as a key factor in driving long-term profitability as well as corporate responsibility and companies are increasingly recognising the need to integrate sustainable practices into their core business strategies.

In the following article we explore the sustainable practices and financial health of four leading Swiss firms: Novartis AG, Sika AG, Geberit AG, and Belimo Holding AG and highlight how their commitment to sustainability positively influences their performance and impact.

Each company excels in its respective industry while demonstrating a strong commitment to sustainability by aligning their business strategies with broader environmental and social goals. Through innovative solutions, ethical practices, and robust sustainability initiatives, Novartis AG, Sika AG, Geberit AG, and Belimo Holding AG exemplify how integrating sustainability can lead to substantial and enduring revenue growth.

 

Novartis AG

 

Headquartered in Basel, Novartis AG is present in more than 140 countries and one of the world's largest pharmaceutical companies. It focuses on developing, manufacturing, and marketing a diverse range of healthcare products, including innovative medicines, generics, and biosimilars while prioritising ethical business practices. Novartis' sustainable revenue can be attributed to its dedication to creating value through its core business of providing access to innovative medicines.

Key factors include:

Access to medicines initiatives: Improving access to medicines in vulnerable regions, particularly in low- and middle-income countries (LMICs). In 2023, 100% of new medicines launched had a global access strategy. Patient reach: In 2023, the company reached a total of 284 million patients globally, including 33.2 million patients who benefited from targeted access programs through Novartis Access. This initiative provides essential services to governments, NGOs, and other institutional partners in low- and middle-income countries. Research and development investment: Invested USD 8.6 billion in core R&D in 2023, prioritising the development of innovative treatments to address unmet medical needs. Sustainability-linked bond: In 2020, the company issued a sustainability-linked bond, aligning its financial commitments with social targets aimed at expanding access to medicines in low- and middle-income countries (LMICs). Environmental sustainability efforts: Committed to environmental sustainability, e.g., a 63% reduction in greenhouse gas emissions since 2016. Source: https://www.novartis.com/sites/novartis_com/files/novartis-integrated-report-2023.pdf.​

 

Novartis' sustainable revenue reflects its substantial contribution to global health through innovative and essential medicines, affordable generics, and biosimilars. The company’s commitment to research and development for neglected diseases, access programs for underserved populations, and environmental sustainability initiatives all play a significant role in generating sustainable revenue.

By aligning its business practices with broader environmental and social goals in alignment with SDG 3 (good health and well-being), Novartis continues to lead in sustainability within the pharmaceutical industry, providing significant benefits to both patients and the global community.

 

Sika AG

 

Founded in 1910, Sika AG is a global leader in specialty chemicals, specialising in the development and production of systems and products for bonding, sealing, damping, reinforcing, and protecting in the construction and automotive industries. Headquartered in Baar, Sika focuses on creating sustainable solutions for the construction and automotive industries and its sustainability as well as financial viability is supported by the below key factors:

Operational efficiency: Setting ambitious targets for reducing CO2 emissions, energy consumption, and waste generation, aiming for a 12% reduction in CO2 emissions per ton sold by 2024.[1] Renewable energy adoption: Increasing the share of renewable energy in its overall energy mix, with solar installations at several production sites. In 2022, 62.7% of Sika's purchased electricity came from renewable sources.[2] Circular economy initiatives: Increasing waste recycling rates and developing products that support a circular economy.[3] Executive compensation linkage: Aligning variable executive compensation with measurable achievements in emissions reduction. Product portfolio evaluation: Assessing the existing product range according to twelve sustainability aspects, ensuring that new product launches contribute positively to sustainability efforts.

 

Sika’s commitment to sustainability is deeply embedded in its business strategy and operations. By developing innovative and sustainable products, managing resources efficiently, and engaging with communities and stakeholders, Sika not only contributes to environmental and social well-being but also ensures its financial viability. The company's focus on sustainability provides a competitive advantage, cost savings, risk management benefits, and growth opportunities, all of which contribute to its long-term financial success.

 

Geberit AG

Geberit AG, headquartered in Rapperswil-Jona, specialises in manufacturing and supplying sanitary products, piping systems, and related solutions for the residential as well as commercial construction industry. Renowned for its innovative bathroom solutions and water-saving technologies, Geberit has pursued a sustainability strategy since 1990, centered on "people, planet, and profit". This dedication earned Geberit a Gold Medal from EcoVadis for its sustainability management, placing it in the top 5% of over 100,000 evaluated companies. Its sustainable revenue can be attributed to its strong focus on environmental and social impact, particularly in the areas of water conservation, energy efficiency, and sustainable building solutions.

Geberit's green building solutions help reduce emissions in the construction industry, which account for more than a third of global carbon emissions. These solutions are instrumental in achieving green building certifications such as LEED, BREEAM, and DGNB, making them a key contributor to sustainable construction practices.

Key factors include:

Eco-Design principle: Developing over 180 new products following their eco-design principle since 2007. Energy efficiency: Reducing its CO2 intensity by 63.2% since 2015. The aim is to reduce CO2 intensity by 5% per year. Green electricity usage: In 2023, over 78% of Geberit's electricity came from renewable energy sources. Transparent environmental product declarations (EPDs): In 2023, around 34% of Geberit's Group sales were accounted for by products with transparent, externally inspected EPDs. Eco-efficiency improvements: Improving eco-efficiency by 62.6% since integrating energy-intensive ceramics production in 2015.[4]

 

Chart : Geberit product life cycle

^{[1] https://www.sika.com/en/fundamentals/environmental-dimension/environment-safety-and-sustainability.html}

^{[2] https://www.sika.com/dms/getdocument.get/af0221c1-f3b0-4496-966b-4e14cced6c80/glo-sika-esg-presentation-april-2023.pdf}

^{[3] By 2032, Sika is committed to reducing its greenhouse gas (GHG) emissions by 50.4% compared to the 2022 baseline, for scope 1 and scope 2 emissions, whilst advancing its growth strategy.  These include direct emissions from owned or controlled sources, as well as indirect emissions from purchased electricity, steam, heating, and cooling. Over the same period, the company is also committed to reducing its scope 3 emissions by 30%, which includes all other indirect emissions in the value chain, such as those from purchased goods and services, upstream and downstream transportation, and waste disposal. The combined emissions reduction target for scopes 1, 2, and 3 is 30.4% by 2032 and 90% by 2050. Sika will report annually on its progress towards meeting these targets.}

^{[4] The combination of water-efficient flushing systems with the type 212 flush valve and the latest generation of WC ceramics with TurboFlush technology enables the required flush volume to be reduced to 2.6 litres for a partial flush and 4 litres for a full flush.}