In this section, President and CEO Timo Lappalainen and CFO Jari Karlson present their views on Orion’s corporate responsibility, the latter focusing mainly on key risks. Their views are based on interviews conducted at the time of preparation of this report. Both emphasise patient safety as a paramount concern in Orion’s responsibility and care. It is the starting point for our responsible operations.

Timo Lappalainen, President and CEO

Patient safety is at the very core
of Orion’s corporate responsibility

Patients, i.e., people and also animals in need of medication for various illnesses are the key: they are the very reason we operate in the healthcare business. Patient safety, i.e., proper and safe use of our products, is the single most important theme in our corporate responsibility.

Due to the small number of pharmaceutical companies manufacturing products in Finland, Orion is classified as operating in chemical industry, although the only part of Orion really representing chemical industry is Fermion which manufactures active pharmaceutical ingredients (APIs) through chemical synthesis. The nature of manufacturing pharmaceutical preparations is completely different, as it mostly involves combining chemically produced raw materials and exipients into forms with varied compositions and structures. Some aspects of it might even be comparable to food manufacturing.

One important priority with regard to responsibility is, of course, the personnel which develops, manufactures and markets our products. Our employees represent a very heterogeneous and multi-talented group of people, which poses some challenges. Our industry requires special expertise and we must consider carefully what we can and should do ourselves, what we should outsource and under which conditions. At Orion, it goes without saying that when outsourcing operations, we will never compromise our responsibility in areas such as the environment or employment.
 
We also have an economic responsibility towards the society, shareholders and other stakeholders, such as suppliers of goods and services. Our corporate structure is simple, which makes it is easy to recognize our economic obligations towards the society. As a large corporation, we also carry certain responsibility for promoting the development opportunities and conditions of viability of smaller service providers.

Cultural and national differences
pose challenges to corporate responsibility

When looking for suitable solutions, it is our responsibility to collect relevant information and assess areas where cultural differences are an issue, even if legislative compliance does not demand it. These are often challenging questions and rarely have only one correct answer or solution.

There are still many countries where, e.g., transparency in business operations is challenging. What one country allows, another prohibits. Every market has locally regulatedstandards, and we have to adapt to them. Our stance in relation to issues such as corruption is, however, very firm: we do not condone it and thus do not take part in projects where corruption is the means for securing tenders.

In many developing countries, challenges are included in the distribution of medicines as well as in the guidance and training for their proper use. Most of our operations are located in Europe, however, and EU-wide regulations provide a basic framework in areas such as marketing practices, working time and environmental legislation.

Times are changing,
also as regards responsibility

Increasing transparency in business is an important global trend, which has clear implications for corporate responsibility. For listed companies, open and transparent communications come almost as second nature by now, but many private companies also face demands for disclosing information about their operations to the society at large, not just to their closest stakeholder groups. Major corporations are also generally anticipated to show high ethics and moral.

Pharmaceutical industry is considered publicity-sensitive because we operate in demanding and affective health-related areas. Add to this the transparency requirements placed by regulatory authorities and the need to ensure the confidentiality of business secrets, and the situation becomes somewhat challenging. However, increased transparency does not necessarily pose a threat to competitive advantage.

Publicity is an industry trend which forces us to place even more emphasis on patient safety. Unfortunately, restrictions may be taken too far at times, which makes innovation more challenging: if fear of risks results in banning everything, the only certain outcome is that we cannot create anything new. Even the drug authorities are beginning to voice concerns over the reduced rate of new innovations from pharmaceutical research and the fact that promising projects either get delayed or cancelled. We need to find an acceptable level of risks versus safety.

Our values and strategy
reflect corporate responsibility

Quality and safety are among the key values at Orion, and they are particularly central considerations in patient safety and customer relations. Without these values, our operation would lose its basis.

Reliability in turn means that we ensure transparency towards our stakeholders, authorities and the media. I believe that Orion operates very openly and transparently with drug authorities and capital markets, thus building long-term trust.

Partners have a central role in our strategy, and their role will become increasingly important in the future. When planning our operations, we must increasingly remember to consider parties not directly employed by Orion.

Even though some areas of social corporate responsibility are already an integral part of our operation, there are also those still having room for improvement. When establishing the GRI indicators for our reporting, we have identified the need to set clear objectives and programmes in areas such as waste reduction and energy conservation. Long-term challenges include extending the scope of review beyond our operational locations and finding reasonable means for assessing the impacts of our products throughout their lifecycle. We will not be satisfied with choosing only the kind of review topics that are favourable or convenient for us.

Contribution to pharmaceutical industry’s
image challenges

Having started reporting on Orion’s sustainability development, we have gained new points of view that we had not previously considered. On the other hand, responsibility covers areas which are natural, long-term concerns in the industry, such as patient safety and continuous vigilance in monitoring safety. The transparency requirement, which is closely connected to sustainable operation, is a hallmark of pharmaceutical industry: we cannot exist without trust. Personally, I consider pharmaceutical industry one of the most ethical industries in the world.

I also believe that by reporting on corporate sustainability development, we can help the public better understand our operation. Pharmaceutical industry is often experienced as hard to approach and understand as well as closed and introvert; it is easier for the healthcare professionals to understand our products than for the patients.

Jari Karlson, CFO

Risks to reputation are increasingly relevant
to economic performance 

Loss of reputation due to negligence of responsibility is one of the most significant economic risks faced by any company today, and Orion is no different in this regard. We may face losses for example if  the way we handle a particular situation is considered  inappropriate by the public. Even if we believe that we are acting appropriately, a public rumour may claim something else.

Civic organisations, for instance, are quick to react aggressively, and the wide-spread use of the internet and social media provides them with wide-ranging scope and influence when publishing their concerns. Any company at the receiving end of such a campaign always gets the short end of the stick as it is seen as defensive and unconvincing, and its counterarguments do not spread as virally. The company’s arguments are not taken as objective, even though the organisations and opinion moulders also act based on their individual ideological views, and often tend to
think in terms of black and white.

A business cannot be managed based on extremes the way such groups can, but Orion still has to consider the approach of different parties to responsibility. We have to define our responsibility on a wide scope and be prepared for the effects of negative publicity.

Reputation is also important in terms of working atmosphere and employee commitment. Nobody wants to work in a company which receives nothing but a constant stream of negative publicity. Orion wants to be an employer its employees can be proud of.

Patient safety is
our number one concern

Patient safety is of paramount importance for the continuity of our operations. We simply cannot operate without it. In the worst case scenario, a significant risk to patient safety can result in loss of life and termination of our operation as a company. The possibility of human error cannot be eliminated completely, but we do everything in our power to eliminate errors by adopting good management approach, effective systems and consistent practices.

Environmental questions are important
in stakeholder cooperation

Legislation creates a relatively high level of assurance of appropriate operations in the Western countries, but the further away our suppliers are located, the more difficult it is to ensure that the parties we deal with operate without compromises even when we are not there to inspect their operations. Very often, we have to rely on written commitments and take the other party’s word for it.

One of our basic operating principles is that we do not outsource our problems to subcontractors or overseas, but we unfortunately do not yet have the means to verify this throughout the entire supply chain. We cannot make promises in areas where the outcome is unclear due to unknown factors. The will to ensure appropriate operations of all involved parties exists, but we still need to work on the practicalities. In my opinion, transparency and honesty in admitting any existing shortcomings is the best approach in all areas of sustainability reporting.