Investigating the Environmental, Social and Governance Practices in the Pharmaceutical Industry in Ghana Evidence from Selected Companies

Abstract

This study explores the Environmental, Social and Governance (ESG) practices of pharmaceutical companies in Ghana. Specifically, the study examines whether pharmaceutical companies in Ghana were engaged in ESG practices, whether they adopt a structured approach to ESG practices, how they disclose and report ESG practices and the challenges (if any) that they face in their ESG practices. A cross-sectional descriptive study design was adopted for the study. The target population for the study was thirty seven (37) licensed pharmaceutical manufacturing companies in the Ghana. The sample size of twenty (20) was drawn using convenience sampling technique. A structured interview guide was employed to collect data. The data collected was analysed using the descriptive statistics in the Statistical Package for Service Solutions. Findings emanating from the study were that the understudied pharmaceutical companies were engaged in ESG practices. However, only two of the companies understudied had a policy for ESG practices, an ESG working group which co-ordinates and supervises all ESG related activities, an ESG strategy and reporting framework, trains staff regularly on ESG policies and practices and an annual budgetary allocation for ESG activities. These two companies referred to above were both those quoted and unquoted on the GSE as at the period of the study. Findings also show that maintaining healthy relationship with external stakeholders, attracting, motivating and retaining skilled staffs, winning and retaining customers, obtaining legitimacy and gaining competitive advantage were some of the benefits their respective companies derived from engaging in ESG practices. However, some of the challenges encountered in their ESG accountability practices included obtaining reliable performance data from different parts of the company, lack of resources and effort, multiple target audiences and multiple reporting frameworks. The respondents recommended developing an ESG policy, staff training on ESG policy and practices, setting up the framework for obtaining reliable performance data as ways of addressing the challenges encountered in their ESG practices. From the study, one can conclude that most pharmaceutical companies in Ghana are engaged in ESG practices in an informal and unstructured manner. There is also an observed relationship between the listing status of a company and the extent of their ESG practices. Finally, the awareness of the benefits associated with ESG practices should encourage companies to adopt a structured approach to ESG practices.