This is a good example of HOW to be a FFG business because it shows how a broad overall 'force for good' aim for pharmaceutical companies ("increase universal access to medicine") can be converted into a detailed, quantified analysis of their business models.
Detail:
The Access to Medicine Index is created and maintained by the Access to Medicine Foundation, based in the Netherlands. It is compiled in conjunction with Innovest - a consultancy that specialises in analysing companies’ performance on environmental, social, and strategic governance issues, with a particular focus on how these things impact competitiveness, profitability and share price.
In effect, this index provides a structured way of measuring the extent to which companies have been a 'Force for Good'. Since it is focused on the pharmaceutical industry, this is framed in terms of how well the companies concerned have contributed to improving global access to medicines.
The index looks at eight different parts of the pharmaceutical business model and assigns a weight to each:
1) Access to medicines management, 20%
2) Public policy influence & Lobbying, 10%
3) Research & Development into neglected diseases, 20%
4) Patents & Licensing, 10%
5) Drug manufacturing, Distribution and Capability advancement, 15%
6) Equitable pricing, 15%
7) Drug donations, 6%
8) Philanthropic Activities, 4%
Within each of these headings, the business model is then divided into further specific areas, each with its own weighting. For example, Patents and Licensing (10%) is split between "The company demonstrates…and discloses…non-exclusive voluntary license agreements…" (6%) and "The company publicly commits itself to respecting…the TRIPS agreement" (4%).
By rating each company against these criteria a total score is obtained.
This also helps the pharma businesses become more successful. Twelve institutional investors, who together manage assets worth over USD 1.2 trillion, have signed an Investor Statement declaring their interest in this Access to Medicine Index. To them it represents a way to assess the long term value, and risk, associated with the different companies.
(And of course, what get measured gets done. )