Pharmaceutical giant removed from investment universe

23-09-2010 | Recent controversies show that Roche’s clinical trials with transplanted organs in China do not meet Triodos criteria for selection. Earlier this year, a controversy regarding Roche’s practices in China surfaced, presenting us with a dilemma. Did we have to deselect the company that only made it into our investment universe last year?

What exactly happened?

Roche, based in Switzerland, is a biotechnology company that operates in the fields of pharmaceuticals and medical diagnostics. Former analysis by Triodos Sustainability Research found the company to be eligible for our sustainable investment universe. Our results placed the company in the best performing 50% of pharmaceutical companies in Europe. We considered Roche to be transparent about sustainability issues, with a comprehensive position regarding genetic engineering and clear ethical guidelines for clinical trials. It has systems in place to monitor and enforce social standards in its supply chains, and it favours suppliers with certified environmental management systems. Also, Roche has ambitious targets to reduce energy consumption and greenhouse gas emissions. However, in January this year, Roche received the Public Eye Award that is sponsored by the Berne Declaration and Greenpeace. The award names and shames corporations with unethical social or ecological behaviour. Naturally, we decided to investigate the case and reassess our findings. Roche received the award because of its clinical trials in China for the drug CellCept, which prevents the rejection of transplanted organs. Since a large part of transplanted organs in China originate from executed prisoners and Roche does not verify the origins of the organs in its China-based trials, its position is questionable.

Our research update

Roche’s response to our enquiries pointed out that the responsibility for obtaining organs lies with the trial centres that perform the transplants. The company claims it is not entitled in any country to learn where the transplanted organs originate from. Up to 90 percent of all transplanted organs in China come from executed prisoners. Regulation surrounding transplantation in China has improved in the last couple of years and includes better safeguards for prisoners’ rights. But even when a prisoner supposedly consents to an organ donation, such consent while imprisoned cannot be considered of free will. Consultations with experts and NGO’s such as Amnesty International and Dutch based medical industry watchdog Wemos all pointed in the same direction: Roche does not take full responsibility for its clinical trials in China. In our final assessment we balanced the gathered information and concluded that Roche’s approach to clinical trials in China is not acceptable. The company’s size and influence warrant a much clearer position on the origin of transplanted organs. Since the company no longer meets our human rights minimum standard, it has been excluded from the Triodos sustainable investment universe and will be removed from all Triodos investments within the short term.

Want to know more?

Triodos SRI Strategy
Selection process
List of eligible companies

Note: The issues explored in this article are specifically relevant for sustainable investments on the stock market. Triodos Bank believes that our socially responsible investments are a powerful means of promoting our values and working for greater sustainability, while enabling us to offer a complete range of attractive investment options to customers who choose to invest on the stock market.