MSCI ESG Controversies

FROM MSCI ESG RESEARCH LLC

MSCI ESG Controversies allows institutional investors to analyze a company’s signiﬁcant social, environmental, andgovernance impacts by identifying company involvement in major ESG controversies, adherence to international
norms and principles, and assessing company performance with respect to these norms and principles.

Key features and beneﬁts
Comply with international standards

Identify targets for engagement

Broad and in-depth Coverage

MSCI ESG Controversies can assist

MSCI ESG Controversies helps clients

Coverage extends to approximately

identify companies for further stakeholder

12,500 companies covering the MSCIengagement. Clients can use controversy

ACWI IMI Index, in addition to 95% bydetails as well as severity assessments tomarket value of the Barclays Global

determine a course of engagement with a

Aggregate – Corporate Index.

investors in determining how wellcompanies adhere to international norms
and principles such as the UN Global
Compact and ILO Core Conventions.

company in their portfolio.

Manage reputational risk withtimely alerts

Availability on multiple platforms

MSCI ESG Controversies scoring andMSCI ESG Controversies is available onflagging system alerts investors toour proprietary online platform, MSCI ESG

potential reputational risks. Clients canManager, as well as through API delivery.

set customized email alerts in order

It is also integrated within MSCI’s

to remain informed of significant ESG

BarraOne and Barra Portfolio Manager

changes to their portfolios.

platforms, as well as in FactSet andStyleResearch.

ESG Controversies

Novartis AG
TICKER: NOVN
SUB-INDUSTRY: Pharmaceuticals
COUNTRY: CH
LAST UPDATE: Nov 18, 2019LOWEST SCORELOWEST FLAG

0/10

MEDIA REVIEW: Conducted weekly; no new updates since date of Last Update*

PERFORMANCE DASHBOARD

Significant Controversies by Indicator

SummaryFlag

Environment

Score

GlobalCompact
Status10

No controversies were uncovered.

Social1Customers

1Novartis AG is involved in controversies related to its Labor Rights, HumanRights, Customers and Governance impacts. It faces significant concerns
related to Bribery & Fraud, Anticompetitive Practices, and Product Safety &Quality.

Global Compact Compliance:

1Pass

Customer Relations

4PassMarketing & Advertising

4PassEnvironment

Product Safety & Quality

3PassSocial

Human Rights & Community

9Very Severe

SevereModerateMinor

1020GovernanceThe company is involved in minor controversies.
Labor Rights & Supply Chain

Fail# of Controversy Cases by ESG Pillar (35 in total)

Anticompetitive Practices

095152530

The company is involved in minor controversies.

Governance0

Bribery & Fraud

0

Fail

MOST RECENT UPDATES (past 12 months)
Type ofUpdate

Controversy Headline

Assessment Indicator

Last Reviewed

Zolgensma: FDA Investigation into Alleged Manipulation of Product Testing Data on Drug
Biologics License Application

Moderate

Product
Safety &Quality

November 2019

United States: Legal Proceedings Over Average Wholesale Price Reporting

Moderate

Bribery &Fraud

November 2019

Global Distribution Halt of Several Lots of Zantac (Ranitidine) due to Alleged Presence ofPotential Carcinogenic N-nitrosodimethylamine (NDMA); Recall InitiatedMinor

Product
Safety &Quality

October 2019

Xolair (Omalizumab) [Recall, Canada]: One Lot due to Possible Presence of Silicone Oil in Vials

MinorProduct
Safety &Quality

September 2019

Opioid Painkillers: Local Government-Filed Lawsuit over Sales and Marketing Practices

Minor

Marketing &Advertising

September 2019*For symbols and terms used in this report, refer to the "Glossary of Symbols and Terms" section.

PAGE 1 OF 38©2019 MSCI INC. ALL RIGHTS RESERVED.

MSCI ESG Controversies | msci.com

Product overview
MSCI ESG Controversies analyses and monitors company management strategies and their actual performance:
MSCI ESG Controversies is designed

The evaluation framework is designed

Our global research analysts assess

to provide timely and consistent

to be consistent with international

performance, looking for instances

assessments of ESG controversies

norms represented in numerous widely

where companies are involved in major

involving publicly traded companies

accepted global conventions.

controversies or have breached theand fixed income issuers.

standards set by international bodies.

Red: Indicates that a

Orange: Indicates that

Yellow: Indicates that theGreen: Indicates that thecompany is involved in

a company has been

company is involved incompany is not involved

one or more very severe

involved in one or more

severe-to-moderate levelin any major

controversies.

recent severe structuralcontroversies.

controversies.

controversies that areongoing.
The MSCI ESG Controversies approach is stakeholder driven and covers the following five categories of stakeholder impact, organizedagainst 28 indicators:
MSCI ESG Controversies Coverage - Stakeholder ‘Pillars’ and ‘Indicators’
Environment

Human rights &Labor rights &community

supply chain• Biodiversity• Impact on local• Labor management& land use

communities• Toxic emissions &waste• Energy & climatechange• Water stress• Operational waste(Non‑hazardous)• Supply chain
management• Human rights
concerns• Civil liberties• Other

relations• Health & safety• Collective
bargaining & unions• Discrimination &workforce diversity• Child labor• Supply chain labor
standards• Other

Customers

Governance• Product safety• Bribery & fraud& quality• Anticompetitive• Governancestructures

practices• Controversial• Customer

investments

relations• Other• Privacy & data
security• Marketing &advertising• Other• Other

MSCI ESG Controversies | msci.com

Monitor compliance with global norms

Globalcompactcompliance• Identify news-based controversies linked to specific global norms
and conventions• Identify companies which fail a specific set of global norms• Identify Watchlist companies for monitoring purposes

Globalnorms
compliance• Use detailed reports to support engagement activities

Humanrights
compliance

MSCI ESG GlobalNorms Screening

Labor
compliance

FailWatch list

PassThe company is implicated in one

The company is implicated in one

The company has not beenor more controversy cases whereor more controversy cases that

implicated in any controversy

there are credible allegations thatare serious and warrant ongoingcase constituting a major breachthe company or its managementmonitoring but, based on informationof global norms within the last

inflicted serious large scale harm

available to date, does not constitutethree years according to ourin violation of global norms.

a major breach of global norms

methodology.

according to our methodology.

About MSCI ESG Research products and services
MSCI ESG Research products and services are provided by MSCI ESG Research LLC, and are designed to provide in-depth
research, ratings and analysis of environmental, social and governance-related business practices to companies worldwide. ESG
ratings, data and analysis from MSCI ESG Research LLC. are also used in the construction of the MSCI ESG Indexes. MSCI ESG
Research LLC. is a Registered Investment Adviser under the Investment Advisers Act of 1940 and a subsidiary of MSCI Inc.

About MSCIMSCI is a leading provider of critical decision support tools and services for the global investment community. With over 45
years of expertise in research, data and technology, we power better investment decisions by enabling clients to understandand analyze key drivers of risk and return and confidently build more effective portfolios. We create industry-leading researchenhanced solutions that clients use to gain insight into and improve transparency across the investment process.
To learn more, please visit www.msci.com.
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MSCI ESG Controversies | msci.com