Johnson & Johnson (JNJ) Environmental, Social & Governance (ESG) Investor Update (Transcript)

Johnson & Johnson (NYSE:JNJ) Environmental, Social & Governance (ESG) Investor Update June 21, 2022 8:30 AM ET

Company Participants

Jessica Moore – Vice President of Investor Relations

Joseph Wolk – Executive Vice President & Chief Financial Officer

Anne Mulcahy – Independent Lead Director, Nominating and Corporate Governance Committee Chair

Mark Weinberger – Independent Director, Regulatory Compliance Committee Chair

Mary Beckerle – Independent Director, Science, Technology and Sustainability Committee Chair

Joaquin Duato – Chief Executive Officer

Matthew Orlando – Corporate Secretary and Worldwide Vice President, Corporate Governance

Martin Fitchet – Head of Global Public Health

Lauren Moore – Vice President, Global Community Impact

Peter Fasolo – Executive Vice President, Chief Human Resource Officer

Wanda Hope – Chief Diversity, Equity and Inclusion Officer

Paulette Frank – Chief Sustainability Officer

Dirk Brinckman – Chief Compliance Officer

Carol Montandon – Chief Quality Officer

Kristen Mulholland – Head of Human Resources, Global Total Rewards & Enterprise HR

Conference Call Participants

Louise Chen – Cantor Fitzgerald

Lei Huang – Wells Fargo

Rick Wise – Stifel

Terence Flynn – Morgan Stanley

Joshua Jennings – Cowen and Company

Operator

Please note that today’s meeting may include forward-looking statements relating to, among other things, the company’s future financial performance, product development, market position and business strategy and the anticipated separation of the company’s Consumer Health business. You’re cautioned not to rely on these statements, which are based on current expectations of future events using the information available as of today’s date and are subject to certain risks and uncertainties that may cause the company’s actual results to differ materially from those projected.

In particular, there is significant uncertainty about the duration and contemplated impact of the COVID-19 pandemic. A further description of these risks, uncertainties and other factors can be found in our SEC filings, including our 2021 Form 10-K, which is available at investor.jnj.com and on the SEC’s website.

Jessica Moore

Good morning, everyone or good afternoon, evening, depending on where you’re joining us from. We’re happy to have you here with us today for Johnson & Johnson’s fifth annual ESG Investor Update.

I’m hoping that you’ve had the chance to visit our 2022 ESG Investor Update page on the Johnson & Johnson website to familiarize yourself with our 2021 Health for Humanity Report along with the progress that we’ve made towards achieving our 2025 goals that you’ll hear about from our leaders during today’s webcast. If you have not had the opportunity to review these ESG resources, we highly encourage you to do so as we believe the content is valuable information in evaluating our significant ESG efforts.

Before we get into today’s agenda, please note that some products and compounds discussed today are being developed in collaboration with strategic partners or licensed from other companies. This slide acknowledges those relationships.

Throughout today’s webcast, we have several Johnson & Johnson leaders representing a variety of focus areas related to our ESG strategy. You’ll first hear from Joe Wolk, Executive Vice President, Chief Financial Officer; and 3 members of Johnson & Johnson’s Board of Directors: Anne Mulcahy, Independent Lead Director, Nominating and Corporate Governance Committee Chair; Mary Beckerle, Independent Director, Science, Technology and Sustainability Committee Chair; and Mark Weinberger, Independent Director, Regulatory Compliance Committee Chair. Joe will moderate a discussion with Anne, Mary and Mark about our ESG and business strategy and how they think about oversight in these key areas.

We’re delighted to have Joaquin Duato, Chief Executive Officer, join us for this year’s webcast and provide remarks regarding Johnson & Johnson’s ESG strategy as well as J&J’s commitment to innovation. You will then hear from Matt Orlando, Corporate Secretary and Worldwide Vice President, Corporate Governance, who will further highlight our ESG strategy and approach as well as high-level progress against our Health for Humanity 2025 goals.

Next, Martin Fitchet, Head of Global Public Health; and Lauren Moore, Vice President, Global Community Impact, will address how we’re advancing our global health equity initiatives. Peter Fasolo, Executive Vice President, Chief Human Resource Officer; and Wanda Hope, Chief Diversity, Equity and Inclusion Officer, will then provide an update on how we’re empowering our employees at Johnson & Johnson.

And finally, Paulette Frank, Chief Sustainability Officer, will speak to our efforts to advance our environmental health goals.

Following our prepared remarks, there will be a Q&A panel with leaders from across the enterprise to address your questions live on the phone or through the Submit a Question option via our webcast platform. Again, thank you for joining us today and for your interest in Johnson & Johnson.

With that, I’m excited to turn it over to Joe for the Board member discussion.

Joseph Wolk

Thank you, Jess, and hello, everyone. I’m Joe Wolk, Executive Vice President and Chief Financial Officer of Johnson & Johnson. Thanks for taking the time to join us today.

I am so pleased to be here with select Board members from Johnson & Johnson: Dr. Mary Beckerle; Anne Mulcahy; and joining us via Zoom, Mark Weinberger. I’m so looking forward to the discussion today with a topic that’s really been part of Johnson & Johnson’s history, certainly dating back almost 80 years to our credo, and that’s the efforts around environmental, social and governance and how we run our company.

So, Anne, as someone who’s run a successful Fortune 500 company, serves on the Board of many other organizations and as Lead Director, engages most frequently with Johnson & Johnson shareholders, what can you tell us that you’re hearing regarding how J&J is positioned fundamentally to deliver on our ESG strategy?

Anne Mulcahy

Well, thanks, Joe. And I have to say that it is so much part of how Johnson & Johnson operates. It is part of our DNA. And I think over all these years, we’ve always believed that creating long-term shareholder value is inextricably linked to societal value as well. And shareholders are extremely pleased with the progress that J&J has made. They know that we’re focused on areas that are material to Johnson & Johnson. Certainly, having great governance practices is our heritage, focusing on our employees, empowering them to do the best jobs they can do, ensuring that we’re focused on climate. We know that environmental health is linked to human health and a big part of what we do. And then finally, and really importantly, focusing on health equity, which is really a strength for J&J.

Joseph Wolk

Yes. And it’s something that we’ve seen really emerge through the pandemic and just how important that is to have good health for everyone everywhere.

Anne Mulcahy

Absolutely.

Joseph Wolk

Great. So Mark, as a follow-up question. And listen, you’ve held multiple government positions. I’ve watched you on CNBC, and you established building a better working world at E&Y. What do you find most important for Johnson & Johnson when it comes to aligning our ESG strategy with our business strategies?

Mark Weinberger

Really important question, Joe, and thank you. And as you and Anne said, we’ve been on a journey at J&J to manage and report nonfinancial metrics, which drive the financials. It’s really important to remember that all of our numbers come from these nonfinancial metrics.

So our success at J&J is intertwined with the success of our — and the outcomes of our patients and the healthcare providers we provide for. It’s intertwined with the employees that drive our growth and opportunity, the communities in which we live and, of course, the shareholder return.

So all of our metrics are really tied to the strategic drivers that are important to us around innovation, excellence in execution, partnerships with the value chains of the people we deal and work with, really, really important to our success. And we have to hold ourselves accountable, and we do that through coming up with metrics in each of these areas to drive back to the important elements of ESG.

Joseph Wolk

So Mary, obviously, you’re a distinguished Professor of Biology and Oncological Sciences, CEO of Huntsman Cancer Institute in Utah. You’re really at the forefront of what Anne referenced earlier about good health for everyone. And the last few years has highlighted really the need for increasing patient access, not just to procedures, but to medicines to preventive health. How does the Board view J&J’s efforts in further supporting the overall health care system and our ability to really increase patients’ access around the world?

Mary Beckerle

Well, I think one of the things that’s most important to the Board is that at J&J, we are all about health. We’re all about health care innovation and technology innovation. But the thing that we really recognize at J&J is that all of that innovation only goes so far if it doesn’t have access to the people in need. So we are really focused on really providing health to everyone where they live, meeting them where they are.

And we appreciate that there are a lot of health disparities out there that are driven by many, many factors, socioeconomic factors, geographic factors, educational factors. And one of the things that I think the Board is so excited about for J&J is our real core commitment to bringing our life-saving medicines to people where they are.

I want to emphasize that J&J has had a commitment to global health before it was fashionable to have a commitment to global health. I mean, we’ve been working on parasite issues, Zika, Ebola, HIV, tuberculosis, many of the intractable diseases that many people around the world suffer from. And we view it as part of our responsibility, not just to help people who are close to where we are working, but really to reach everyone around the world.

Joseph Wolk

I know the audience enjoyed getting your perspectives and really just emphasizing how much emphasis you put on the level of rigor and dedication we have at the Board level and all the way throughout the organization at Johnson & Johnson in terms of our ESG efforts. Well, I want to thank Mary, Anne and Mark for sharing your perspectives and insights on Johnson & Johnson’s ESG and business strategies.

With that, I would now like to turn the webcast over to Joaquin.

Joaquin Duato

Hello, everyone. It is my pleasure to be with all of you at our fifth annual ESG Investor Update. I want to begin by thanking my colleagues across the globe for your deep commitment to improving health care outcomes. It is your tireless work that profoundly changes the future of human health and ensures that we are delivering in the areas of environmental, social and governance to enhance the long-term value of our business.

I also want to thank you for all your engagement and input, which has contributed to the continued development of our ESG strategy and priorities. This webcast is an important touch point highlighting the most impactful measures related to transparently reporting on our progress towards achieving our ESG goals.

Moments ago, you heard from members of our Board of Directors in their discussion with Joe Wolk about our focus to achieve better health outcomes for patients and health care providers, fostering rewarding opportunities for our employees and suppliers and strengthen the communities in which we live and work. These priorities are underpinned by accountability and innovation to sustain resiliency and drive growth, positioning us to continue investing for our future.

At Johnson & Johnson, one of our great strengths is our ability to take actions that are in the best interest of all our stakeholders as outlined in our credo. As a purpose-driven company, how we deliver enduring impact is foundational to our business strategy through the execution of our ESG strategy that frames our ambitions, informs our operations and creates accountability for our vision of the future.

And this slide highlights our principles and growth drivers, which are embedded in our Health for Humanity 2025 goals and focus areas, including championing global health equity, empowering our employees and advancing environmental health. Innovation is what society expects of us. It’s at the heart of human progress and is the foundation for contributing to an equitable and inclusive society.

Continued investment is critical to our business long-term success. 2021 was another record year in R&D investment at $14.7 billion, a 21% increase over our previous all-time high. We rely on the transformative power of scientific knowledge, data science, digital capabilities, emerging technologies and extensive collaboration to uncover innovative solutions across the health care spectrum.

This is exemplified by, for example, our lung cancer initiative, where we are pursuing a treatment delivering energy and drugs locally into early lung lesions. This treatment is designed to advance the standard of care with less invasive and targeted therapy for early cancers and precancers.

Also by our digital solutions where we are connecting AI and insights to create personalized treatments and less invasive interventions in med tech and by data science, which we are leveraging to advance the development of a vaccine for extraintestinal pathogenic E. coli, a leading cause of bacteremia and sepsis worldwide.

As we enter a smarter era of health care, Johnson & Johnson has a significant role to play, and we accept that responsibility. This means making all decisions that enable us to compete in an evolving market.

Last November, we announced our intention to create 2 separate companies. As independent companies, the new Johnson & Johnson and the new consumer health company will each be better positioned to create innovative solutions for those they serve and the markets in which they compete.

As we look to the future, Johnson & Johnson will continue to drive innovative solutions that deliver better health for all, creating sustainable long-term growth. Our success is not measured solely by our results but also by the drivers behind our results. That is where our true impact lives.

Thank you again for being here and prioritizing ESG. Again, Johnson & Johnson has a significant role to play, and we accept and welcome that responsibility.

With that, I will now turn it over to Matt Orlando, who will provide perspective in how we are creating accountability for our vision for the future.

Matthew Orlando

Thank you, Joaquin. I appreciate the opportunity to share more detail about our ESG strategy and the progress we’ve made toward our Health for Humanity 2025 goals. As we continue to evaluate how we can best serve our credo stakeholders, we’ve taken steps to further refine, prioritize and strategically address relevant ESG topics that can have an impact on our business and on people and society.

Last year, we enhanced the methodology and process for our 2021 Priority Topics Assessment or PTA, building upon our 2019 and 2020 PTAs, including updating our list of ESG priority topics. And we revised their approach to include the concept of double materiality in which we examined ESG priority topics from 2 standpoints: the impact of a topic on Johnson & Johnson’s business results and the impact of Johnson & Johnson’s business on people, the environment and society in general.

Based on the results, we saw similar areas of focus compared to prior years with the highest priority topics remaining in top place, including consumer health and patient safety, product quality, access and advancing public health. These insights served as a critical input into our ESG strategy.

In addition to similar methods we used in previous years to engage with stakeholders such as interviews and surveys, benchmarking and workshops, we augmented our 2021 PTA approach to include Executive Committee and Board of Directors’ engagement to further formalize our ESG strategy.

As you heard from Joaquin, our ESG strategy is embedded in how we operate. We set our ESG strategy in a deliberate way, focusing our efforts on the areas where we are well positioned to achieve the greatest impact. We champion global health equity, empower our employees and advance environmental health. And you’ll hear more about these focus areas shortly.

Leading with accountability and innovation is foundational to these efforts and to achieving our purpose. Our dedication to integrating ESG into our business strategies starts at the top. At the most senior level, our Board of Directors oversees the Executive Committee’s implementation of our ESG strategy to promote responsible business practices through a culture of integrity and accountable leadership across our company.

Significant ESG risks are reviewed and evaluated by the Board and its committees as part of their ongoing risk oversight of our company. To ensure continuing accountability, the Board also periodically conducts a review of charters and agendas to ensure comprehensive oversight of risk management.

And at the management level, responsibility for identifying and prioritizing ESG risks and opportunities is integrated across the enterprise and managed by the Enterprise Governance Council, which serves as the company’s primary governance body for ESG. The council is comprised of senior leaders who represent our 3 business segments, our independent compliance functions and our enterprise functions that have the ability to drive visibility and alignment on both managing risks and activating opportunities related to ESG priorities.

In addition, the council works in tandem with the Corporate Compliance Committee, which serves as the primary governance structure for information sharing and coordinating compliance-related risks across core independent compliance risk functions. Beyond our most senior leaders, we expect all of our employees to uphold responsible conduct in every decision and interaction every day.

Our policies such as our code of business conduct list comprehensive ethical standards for decisions and actions in every market where we operate. And in 2021, 98% of employees completed the training.

We view our ethical and values-based business practices as not only the right thing to do but as the fuel behind our investment, innovation and ultimately, long-term value creation. And we see this prove out as we look at the progress we’ve made toward our Health for Humanity goals.

In 2021, we launched our ambitious set of Health for Humanity 2025 goals, and these goals align to our ESG focus areas and to our foundation of accountability and innovation. Our goals also actively contribute to the United Nations Sustainable Development Goals as we aim to deploy our company’s collective strength to help create scalable societal impact.

We’re continuing to progress toward our 2025 goals exceeding our global supply diversity and inclusion goal in the first year, spending approximately $5.2 billion in 2021 with small and diverse suppliers. This milestone is illustrative of the value that an inclusive supply base brings to our business, our people, our innovation, our markets and our communities.

We are on track to deliver on our additional 20 goals. Our Health for Humanity report is part of a very broad and robust continuum of disclosure. Our transparent reporting includes both mandatory financial reporting and voluntary ESG disclosures.

The content sections of the report have been organized by ESG focus areas and the foundation of accountability and innovation, highlighting initiatives such as operational innovation, Consumer Health’s Healthy Lives Mission, Our Race to Health Equity, digital innovation and new metrics such as total Scope 1 and Scope 2 greenhouse gas emissions. The report also includes a disclosure of our performance on anticorruption efforts, in line with the Norges Bank’s reporting framework on measuring effectiveness of anticorruption programs. While we’ve made numerous process improvements, our purpose continues to drive us forward.

Mary Beckerle

I guess the other thing that I would say is another part about access is really having health care workers to provide those services. And I think what we’ve seen in the last couple of years is the incredible stress and strain that our health care workers are under.

And to me, these people are our heroes. All of the great technologies, all of the great medicines around the world won’t get to patients if it’s not for those amazing heroes. And I’m so proud that Johnson & Johnson is really doing a lot of work to care for those providers in addition to caring for our patients.

Joseph Wolk

Again, that’s another historical, I’d say, attribute of Johnson & Johnson really supporting the nursing community with a number of initiatives going back decades. As the son of a nurse, I certainly have a high degree of respect, just how much nurses have to do for their patients and how they can make a difference in the level of care somebody receives.

Martin Fitchet

My name is Dr. Martin Fitchet, and I lead our dedicated global public health unit within Johnson & Johnson. I’m pleased to be back to update you on the progress we’re making to enable equitable access to our medicines and other medical technologies and addressing the most pressing health care challenges for those who have been in low- and middle-income countries around the world.

The COVID-19 pandemic has presented us with an unprecedented backdrop of change with strained health systems, disrupted supply flows and drained the already limited economic resources allocated to health care in low- and middle-income countries. This has further widened the gap between those who have access to advanced health care and those who have historically been marginalized.

Overcoming systemic challenges that hinder the discovery, development and access to medicines and medical technologies for diseases that disproportionately impact people in low- and middle-income countries has never been more critical to advance global health equity. For more than 1/4 of a century, we have worked to overcome barriers to patient access and almost 100 LMICs using equity-based tiered pricing and our global public health model.

Our pharmaceuticals access and pricing principles for all therapeutic areas includes collaboration with international funders, local governments, nongovernmental organizations and other collaborators to offer accessible and affordable medicines while supporting sustainable innovation.

In 2021, Johnson & Johnson appointed its first Chief Global Value and Access Officer, underscoring our commitment to connect transformational medicines and treatments with people who need them the most around the world. Through our dedicated global public health unit, which remains a health care industry first, we apply lab-to-last mile approach to bring breakthrough science to global health and overcome non-price access barriers to advance transformational medicines and medical technologies for LMICs.

During the course of the past year, we have bolstered our global public health R&D pipeline, took steps to advance R&D capacity building in low-, middle-income countries and are unlocking the power of artificial intelligence and data sciences to predict disease outbreaks, advance diagnostics and accelerate our innovation. We’ve further developed global capabilities focused on LMICs in areas such as market access, medical and scientific affairs, external affairs and policy, regulatory and supply chain management, all in order to better understand and address last-mile barriers earlier, identify more efficient regulatory pathways and to help shape policy.

We continue to strengthen local operations in a number of LMICs and invested in local and regional collaborations to strengthen fragile health systems and supply chains, provide innovative health and educational programs in support of frontline health workers and patients and apply consumer insights, capabilities and other technologies to overcome last-mile challenges. All of these efforts are designed to maximize our impact and build on our learnings and successes over many years.

In 2021, overcoming price and non-price barriers, we reached 295 million people in low-, middle-income countries with our global health portfolio. And we expect to increase our reach further in 2022. We focus on where we can have maximum impact in tackling some of the most pressing health challenges in LMICs, and I’m proud to be able to share some of the most exciting progress we have made in these areas.

We are at the forefront of outsmarting epidemics as one of the world’s only major health care companies actively engaged to prepare for and work to prevent a broad range of entrenched and emerging threats because epidemics like tuberculosis and HIV and ongoing threats like Ebola disproportionately impact people in low- and middle-income countries. In 2021, as part of our efforts to advance global vaccine equity, we shipped approximately 70% of our global COVID-19 vaccine supply to LMICs.

Today, our vaccine is the most used in Africa. We’re contributing to the collective vaccine confidence effort in the region by leveraging our market research expertise to provide insight-based tools in support of public vaccine education programs. Over 12 months, we enabled the majority of multidrug-resistant tuberculosis patients worldwide to receive access to our MDR-TB medicine, the preferred treatment for MDR-TB and made significant progress towards making our medicine available to younger patients with TB.

We further trained 82,000 health care workers on appropriate use and supported 6 R&D collaborations to bring forward shorter, simpler treatment regimens for TB. As of December 2021, more than 262,000 people worldwide had received the first dose of Johnson & Johnson’s Ebola vaccine regimen, including 233,000 who have been fully vaccinated.

This is a backdrop to a host of first for our Ebola vaccine. In Rwanda, we completed the 4 vaccination, more than 200,000 Rwandans. We marked the first large use case of our vaccine monitoring platform. We received WHO prequalification for the first time for a J&J vaccine, and the Ghana FDA was the first African regulatory authority to approve the regimen.

We are committed to beating NTDs and have been a longstanding partner for nearly 2 decades. Neglected tropical diseases are a group of communicable, often debilitating conditions that affect more than 1.7 billion people in nearly 150 countries around the world.

Johnson & Johnson research and medicines aim to impact 3 high-prevalence NTDs: soil-transmitted helminth, STH, also known as intestinal worms, dengue and leprosy. Intestinal worms are a significant global health challenge that is particularly damaging to the health, development and well-being of children. By the close of 2021, we surpassed a total of 2 billion doses cumulatively donated VERMOX mebendazole, our medicine to treat intestinal worm infections. Since the donation program’s inception in 2006, VERMOX has been administered to people in need in more than 50 resource-limited countries worldwide.

Bolstering our NTD efforts, we’re advancing R&D for potential solutions in dengue and leprosy. Today, there are currently no treatments available for dengue, and the sole licensed vaccine is approved for limited use.

With nearly 4 billion people at risk in 128 countries, we are investigating a novel mechanism of action that could potentially treat all serotypes of dengue and provide protection against acquiring dengue, an achievement that no antiviral has delivered to date.

In leprosy, we’re investigating whether we can improve the efficacy and safety of treatment through a proof-of-concept Phase II trial that is currently running to assess the safety, pharmacokinetics and efficacy of 8 weeks treatment of bedaquiline monotherapy in patients with multibacillary leprosy. The trial is fully enrolled with an estimated primary completion date in January 2023.

Finally, we recognize the need to tackle inequities in serious mental illness and global surgery. Despite ongoing significant advancements in both areas that have allowed patients to live fuller lives, people and LMICs often do not have the same access to safe and affordable care.

In low- and middle-income countries, more than 75% of people with serious mental illness received no treatment at all for their disorder. A strong feature of our global public health commitment is our efforts to address serious mental illness in LMICs with an initial 3-pronged strategy in Rwanda.

Over the past 3 years, our partnership with the government of Rwanda has trained thousands of community health workers on mental illness, conducted the first national mental health survey and has made second-generation antipsychotics available, including oral risperidone and paliperidone palmitate long-acting. In 2021, we initiated the first interventional clinical trial for schizophrenia in Africa to assess their impact in real-world health care settings and to generate evidence that will further inform the adoption of these transformational medicines.

Leveraging our proven GPH approach, we have launched a new global surgery initiative, which brings our world-class med tech expertise and capabilities to strengthen surgical ecosystems, elevate standards and overcome significant inequities in trauma and maternal care. Today, 5 billion people lack access to essential safe, affordable surgical care. This makes seemingly simple or reparable conditions debilitating, costly or even fatal.

In the lab, we are improving and tailoring effective surgical technologies to respond to patient needs regardless of where they live. And at the last mile, we are collaborating to increase access to quality care, streamlining supply chains and better equipping surgeons and health systems.

The reach and impact of our efforts to champion global health equity is a testament to the power of enduring commitment and unprecedented collaboration across sectors and shows that together, we can tackle the most significant challenges in global health. By expanding equitable access and continuing to evolve our decades-long approach, we believe we will continue to make great progress in helping to build a healthier, safer and more just world where everyone everywhere can thrive.

Thank you for your time. I would now like to turn the webcast over to my colleague, Lauren Moore.

Lauren Moore

Thank you, Martin. Hello. My name is Lauren Moore, and I lead the Johnson & Johnson Global Community Impact team, which complements the efforts of our therapeutic area colleagues by collaborating across sectors to build effective, equitable and resilient health systems.

In low- and middle-income countries, we seek to expand access to quality community-based primary care through an ambitious commitment to support and champion 1 million nurses, midwives and community health workers by 2030. To achieve this goal, Johnson & Johnson and the Johnson & Johnson Foundation established the J&J Center for Health Worker Innovation, which draws upon expertise across our business, across sectors and across the world in service of those on the front lines of care.

In 2021, the center exceeded our benchmarks by reaching more than 731,000 health workers with skills, tools and growth opportunities and are now in a position to expand this commitment upon careful consideration over the coming months. As one example, the Johnson & Johnson Foundation supported digital training of more than 200,000 frontline health workers on COVID-19 response through partners like UNICEF and VillageReach.

Another example is our Center for Health Worker Innovation, which helped catalyze the launch of the Kenya Community Health Strategy. This multi-stakeholder coalition, led by the Kenyan Ministry of Health, acknowledges the vital role of community health workers in bridging communities to health systems that aim to integrate them formally.

Here in the United States, Our Race to Health Equity, a 5-year $100 million commitment is closing the racial health gap by investing in culturally competent community care models that aim to improve outcomes for people of color and building a generation of more representative doctors and nurses. In 2021, we supported 11 health clinics as part of the National Association of Community Health Centers Workforce Development Grant program and partnered with the foundation of the National Student Nurses Association to increase nursing scholarships for black students and other traditionally underrepresented groups.

Recognizing our scale and leadership in health care, J&J is also embedding equity into all aspects of our business through internal support to our operating companies to accelerate the most promising initiatives. Guided by our credo and driven by our purpose of changing the future of health care, we’re proud to focus on strengthening health systems and providing access to quality care for all.

Mark Weinberger

None of us could lose sight of our employees being absolutely our most strategic asset, and it doesn’t sit on our balance sheet anywhere but key to driving our great research, key to driving the incredible outcomes, key to driving our supply chain and capability to deliver our product, key to driving everything we do is our employees.

And so making sure they’re engaged, and you have a culture of inclusion is something the Board takes extremely seriously. We monitor not only the metrics about making sure we have a cognitive diverse group of people coming together, but they’re engaged.

The mental health is good. They have an excitement and understand the strategy and where we’re going. We get better outcomes from our people, and that shows up in our financial results. Our Board looks at this every year to make sure that our people are engaged, their mental health is good, they’re working together, we’re diverse and more inclusive.

Peter Fasolo

I’m Peter Fasolo, Chief Human Resources Officer at Johnson & Johnson. And I’m here today to discuss how our Health for Humanity goals are fueling our ambitions to create a healthier and more equitable workforce for tomorrow.

The past year has brought with it historic change for our company with the announcement of a CEO transition and the planned separation of our Consumer Health business, this all while navigating an ongoing global pandemic, and yet the aim of our people has never wavered. They pivoted and responded with agility to changes happening both within our organization and in the world around us to further our mission to change the trajectory of Health for Humanity.

We believe that one of our greatest differentiators at Johnson & Johnson is that we are firmly committed to living our credo. The strength we draw from these universal values provides the foundation of our culture and for every decision we make.

Our accountability to these decisions is measured every other year in our, Our Voice survey. In a year of continued unprecedented change, we’re proud to have achieved our highest participation rate to date and improved favorability.

When the pandemic hit in 2020, our teams acted quickly and strategically to meet the needs of our employees. That continued agility enabled our workforce and their families to gain efficient access to and information about COVID-19 vaccines.

We also continue to offer one additional working week of paid time off for tens of thousands of essential on-site employees and our paid leave program for medical staff who want to volunteer on the front lines against COVID-19. Recognizing our responsibility to help our employees navigate their professional and personal responsibilities, in addition to protecting their health and safety, we introduced J&J Flex, our global hybrid working model for office-based employees.

During the pandemic, we learned that we can collaborate and deliver on our work in new ways to meet the needs of those we serve. J&J Flex enables us to capture the energy, inspiration, connection and celebration that comes from being in person.

It also works in concert with our existing suite of flexible work arrangements to support personal well-being and balance and meet the broad flexibility needs of our employees. We continue to evaluate flexible work strategies and enhance our benefit offerings through access to well-being tools, on-site vaccine clinics, mental health support resources and delivery of at-home testing kits.

At Johnson & Johnson, we have a long history of supporting employee and family health because we believe that advancing Health for Humanity starts at home. We continuously evaluate and enhance our benefits to ensure they meet the evolving needs of our employees and their families.

Most notably, in 2021, we announced the global expansion of our paid parental leave benefit from 8 weeks to 12 weeks for all new parents: maternal, paternal, adoptive, foster and surrogacy assisted. We also introduced new military leave policies such as additional spousal support providing up to 10 days of paid time for employees and their families in the United States and Puerto Rico who experienced difficulties arising for military service and enabling National Guard and reserve service member employees to receive full pay and benefits during military leave for a maximum duration of 3 continuous years, an increase from the previous 2-year maximum.

We know our employees are our greatest asset, which is why we’re committed to providing tools, resources and opportunities that prepare them to thrive throughout their career at Johnson & Johnson. In 2021 alone, we hired 22,543 new colleagues across the enterprise, of whom 54% were women.

Our recruitment efforts included outreach through a wide range of channels and partners to encourage a diverse representation of candidates reflecting the communities we serve. In 2021, we maintain a hybrid learning and development approach with many of our programs being delivered virtually.

We also continue to deliver our suite of leadership and other professional development programs that engage employees in improving their skills and competencies in line with their career and personal growth objectives. As part of this, we launched 2 new leadership development programs last year: Global Business Consortium, a unique program hosted by the London Business School that brings together a network of companies and professionals from across industries to find innovative solutions to business challenges; and TRANSCEND, a 15-month long course, developing leaders in entrepreneurship and business transformation that includes in-person residencies.

We’re committed to democratizing and personalizing learning and development in Johnson & Johnson by giving every employee the tools to realize their potential and continuously enhance their sales and knowledge. Building on the significant achievement of exceeding our 2020 goals, we announced last year we were taking an ambitious next step to further embed employee well-being into every part of our organization.

In 2021, we identified our healthiest workforce score metrics, including employee perception of total health and well-being support from senior leadership, reinforcement of the energy management principles to support health and well-being across the workforce and mitigation of workplace risks and ensuring employee health protection by implementing corrective and preventative actions.

I am pleased to share that based on measurements to date in 2022, we are on track with 63% of Johnson & Johnson leaders and their managers achieving an 80% or greater healthiest workforce score. These results signal the strength of our leadership and organizational capabilities in support of employee total health and well-being, an area where we will continue to prioritize and invest.

Our continued investment in employee health, well-being and safety is built on our conviction that advancing Health for Humanity is only possible when our people are at their best. From being recognized as one of Time’s 100 Most Influential Companies to one of VETS Indexes 5-Star Employers, we’re incredibly proud of the work we do to progress workforce diversity and health equity in the communities that we serve around the world. And we will continue to prioritize the total health of our employees as we work towards becoming the world’s healthiest workforce.

Thank you for joining us today. And now I’ll turn it over to Wanda Hope, who will discuss our accelerating progress and impact in diversity, equity and inclusion.

Wanda Hope

Thank you, Peter. Hello. I’m Wanda Hope, and I’m the Chief Diversity, Equity and Inclusion Officer of Johnson & Johnson. For 136 years, the values of diversity, equity and inclusion have been a part of our culture at Johnson & Johnson. Our credo outlines our responsibility to create an inclusive environment and respect the dignity and diversity of all people.

And while these values have always been a part of our cultural fabric, diversity, equity and inclusion matter more now to our business than ever. DEI belongs to everyone at Johnson & Johnson and is everyone’s responsibility.

Our Chief Executive Officer and Executive Committee set the tone and drive consistent direction through their leadership and engagement in advancing DEI. The Johnson & Johnson Board of Directors reviews DEI progress and performance periodically. The actions from our senior leaders demonstrate our commitment and ensure that everyone at Johnson & Johnson plays an important role in bringing our DEI strategy to life.

For example, our DEI Regional Advisory Boards are comprised of senior leaders who provide strategic guidance on regional relevance and the execution of our strategy. Our 12 employee resource groups, which include more than 28,000 employees, helped to foster our culture of inclusion and make tangible contributions to our businesses.

As we look ahead, we know that our world is rapidly evolving. All of our stakeholders, our patients, customers, employees, communities and shareholders, are demanding greater accountability and transparency to accelerate DEI outcomes.

We have a responsibility to drive change within Johnson & Johnson and in the communities in which we work. Advancing DEI is a business imperative and an essential part of our success. With this in mind, we’re continuously evolving our DEI strategy to better reflect our global approach, our diverse communities and our commitment to equitable access and outcomes.

Our global strategy centers around 4 pillars that are intentionally interconnected and must work together to effectively drive DEI outcomes. Over the past year, we’ve sharpened our focus to accelerate our performance and impact.

We’re accelerating our global culture of inclusion by developing deeper insights and initiatives that meet country-level needs and drive belonging in communities around the world. We’re strengthening our inclusive leadership competencies, educating on cultural differences and providing resources to enable empathetic conversations.

We recently launched our conscious inclusion training for all vice presidents and directors. Our Exploring our Diversity immersive learning series examines the unique journeys of diverse communities with our most recent program focused on Asians in the U.S. Our employee-led Blacks in Brazil initiative aims to educate and improve access for black employees in Brazil. The country level program includes a series of webinars, a partnership with a local non-profit, mentoring programs and an awareness week.

We’re continuing to build a workforce that reflects the diversity of our communities and brings different perspectives, backgrounds and experiences together to fuel innovation and growth. In 2021, we expanded access to roles at Johnson & Johnson in a range of ways focused on underrepresented groups.

We strengthened partnerships with organizations to recruit and advance diverse populations such as our work with Hispanic Promise, a first-of-its-kind pledge to hire, promote, retain and celebrate Hispanics and Latinos in the workplace. We advanced women in STEM through our Re-Ignite Returnship program. In 2021, we welcomed more than 100 women returning to the workforce in STEM-related roles from 12 countries.

We successfully expanded DEI goals beyond our most senior leaders to all 27,000 people leaders. We had an additional 20,000 individual contributors who elected to include DEI goals as a part of their performance management.

We track progress against these goals in the year-end performance review process, which is linked to compensation. Our diverse workforce helps to drive innovation and growth within our businesses to better serve diverse markets around the world.

We strive to embed DEI into all business strategies, including marketing, planning, research and development, partnerships and supplier selection. In 2021, our Johnson & Johnson Innovation QuickFire Challenges platform was leveraged to help tackle some of the key issues driving health inequities. This included innovations in skin health for people of color and health issues impacting our veteran community.

Our CARE WITH PRIDE initiative, inspired and led by employees to champion love, equality and care for the LGBTQIA+ community, celebrated its 10th anniversary in 2021. And in 2022, the program expanded globally with products in Canada, Germany, Brazil, Japan and the UK.

We continue to advance diverse and inclusive participation in clinical trials to ensure data and insights from underrepresented populations inform the development of safe and effective products and treatments. For example, we strengthened our 20-year partnership with the National Medical Fellowships to increase the number of underrepresented minority clinicians who serve as lead research managers or principal investigators.

We’re elevating our focus on achieving equitable access and outcomes. By driving accountability for fairer, more collaborative and more inclusive cultures, we ensure that everyone has access to opportunities to reach their full potential.

We’re focused on disrupting and reimagining our talent and business systems. For example, we expanded our enterprise sponsorship program, which engages our senior-most leaders to sponsor high-performing diverse talent. In 2021, we added 400 new sponsees, bringing our total to 1,000. 2/3 of sponsees have positive career movement within 2 years, and the program’s overall retention rate is 93%. Externally, we’re committed to driving more equitable health outcomes for the communities we serve. For example, our partnership with the Valuable 500, a global movement of 500 leading corporations, elevates disability inclusion on the business leadership agenda.

Our Race to Health Equity is another important example of our broad commitment to provide equitable health care solutions for communities of color and forge partnerships to drive impact. Our DEI strategy aligns with our Johnson & Johnson ESG approach and helps to advance our ESG commitments.

In support of our ESG strategy, we are committed to 3 DEI Health for Humanity 2025 goals and are on track to achieve all of them. First, we committed to achieving 50% of women in management positions globally. In 2021, our data showed that 48% of management positions globally are held by women. And I’m thrilled to share that 2 of our 4 regions have achieved gender parity.

Second, we aim to achieve 35% ethnic and racial diversity in management positions in the U.S. We’re on track with 33.9% of management positions in the U.S. being held by ethnic and racially diverse employees in 2021.

Our final goal is to achieve 50% growth of our black and African-American employees and management positions in the U.S. We’ve made significant progress towards this goal with growth of 25% in our first year. In 2021, 6% of management positions in the U.S. were held by black and African-American employees.

To accelerate our progress and impact, we’re empowering our employees to take action by consistently demonstrating and role modeling inclusive behaviors, by enhancing their cultural competency to build a workforce that reflects our communities, by embedding DEI into all business strategies to drive innovation and growth and by transforming talent and business processes to achieve equitable access and outcomes for all. We know that with everyone working together, we can help solve today’s complex health problems and create a healthier, more equitable world.

Mark Weinberger

And really importantly is the Board overseeing when we do acquisitions, when we make investments, when we think about how we operate to consider not only the financial returns, but what is our effect on the environment and what is our effect in our communities. And so this is part of the things that we look at every year from a J&J Board perspective.

Anne Mulcahy

And apart from just our own footprint, it’s working with all of our partners both inside our supply chain and actually best-in-class partners outside of our supply chain.

Mary Beckerle

And even at the level of detail of like how we move our medicines around the globe and making sure we’re doing it in the most efficient, carbon-effective way. So at a whole host of levels, we’re really focused on this, and we want to be leaders in this space.

Joseph Wolk

Yes. And you said something there as a finance person, I really like the efficiency. Many times, these improvements are not only environmentally friendly, but they also reduce the cost of the overall supply chain or logistics that we have going on.

Anne Mulcahy

Virtuous cycle.

Joseph Wolk

Virtuous cycle, right.

Paulette Frank

I’m Paulette Frank, Johnson & Johnson’s Chief Sustainability Officer. I lead the development and delivery of our global environmental sustainability strategy, including our Health for Humanity climate goals.

Johnson & Johnson’s long-standing commitment to sustainability is rooted in our company values and in the knowledge that the health and well-being of people and the planet are fundamentally linked. Our approach to environmental sustainability focuses on 3 areas. We’re working to decarbonize our operations and value chain and investing to strengthen the resilience of our business. We’re delivering more sustainable products and solutions across all of our business segments to meet and exceed the expectations of doctors, patients, customers and consumers. And we’re looking beyond our own value chain to address global health challenges that affect the people we serve, specifically issues related to environmental health equity.

Central to our work to decarbonize our operations and value chain are our Health for Humanity climate goals, which build on more than 2 decades of setting and achieving public climate commitments. These goals are our most ambitious yet. And I’m pleased to share that we’re on track to reach all 3.

Today, over half of our electricity is procured from renewable sources. And we’re continuing to make strong progress towards our goal to obtain 100% of our electricity needs from renewable sources by 2025.

We currently maintain over 50 on-site renewable energy systems in 17 countries, and we’ve completed multiple deals for off-site renewable electricity procurement. Last year, we finalized 4 new power purchase agreements in North America and Europe. When these renewable assets are online in 2023, they are expected to provide the equivalent of 100% renewable electricity for all of our operations in Canada, the United States and Europe.

Through the use of renewable electricity as well as our ongoing investment in energy efficiency and renewable heat projects, we have reduced operational carbon emissions by 34% from our 2016 baseline. We’re well on our way to reducing our Scope 1 and Scope 2 emissions by 60% by 2030 as we work towards carbon neutrality in our global operations.

Engaging our suppliers is essential to reducing our upstream emissions. And last year, we introduced 2 programs to help accelerate our progress to reduce our upstream value chain emissions by 20% by 2030.

Together with 9 other pharmaceutical companies, we launched Energize, a new platform to educate industry suppliers on renewable electricity procurement opportunities and to help them in their transition to renewable energy. Additionally, our own onward sustainability program was created to share best practices with suppliers on topics related to sustainability and procurement such as how to track utilities and energy usage.

As I mentioned, in addition to our climate goals, we’re also focusing on designing and delivering more sustainable products and solutions across our 3 business segments. For instance, last year, in our Pharmaceutical business, we replaced the plastic trays used in TREMFYA with a fiber-based tray. This material had not been used in pharmaceutical packaging before. So it was a significant breakthrough, particularly since the new trays can be disposed of through regular cardboard recycling waste streams available in most countries. We aim to expand this new packaging innovation to all our self-injectable device platforms by 2025.

Our MedTech business is partnering with customers on a program that allows hospitals to recycle metal and plastic components from Ethicon single-use surgical instruments while also digitally capturing and communicating the environmental impacts of salvaged materials. The program, which started as a single pilot, is now expanding to hospitals across Germany and to several additional European countries.

In Consumer Health, we continue to deliver on the commitments of our Healthy Lives Mission. This includes reducing the environmental impact of our packaging by using less virgin plastic, using more recycled materials and ensuring our packaging is easier to recycle or reuse.

For example, we recently launched new Listerine mouthwash bottles made with 50% recycled plastic in the UK and 30% recycled plastic in Brazil. And we aim to use only bottles made from 100% recycled plastic by 2030.

We know that we can move faster and make a greater impact when we work with like-minded partners. That’s why collaboration is a key enabler of our environmental sustainability strategy. For example, we recently announced our participation in Beyond the Megawatt, a new initiative managed by the Clean Energy Buyers Institute. This program brings together a diverse coalition of energy customers, procurement partners and sustainability experts to work on projects that contribute to clean energy systems in the U.S.

We’re also part of the National Academy of Medicine’s Action Collaborative on decarbonizing the U.S. health sector, a partnership of leaders from across the health system committed to aligning around collective goals and actions for decarbonization. And we’re a founding member of the Sustainable Healthcare Coalition, a public-private partnership convened by the National Health Service in the UK to address some of the most pressing sustainability issues in global health care.

We’re also working with partners on issues related to environmental health equity, including a new initiative with AMERICARES and Harvard Chan School of Public Health. Together, we aim to support health care workers and bolster climate resilience in more than 100 U.S. health care clinics that serve people with limited access to care in communities that are already susceptible to the impacts of climate change. This work is also part of Our Race to Health Equity.

Everything we do at Johnson & Johnson is guided by our credo and by science, including our commitment to climate action. Climate science continues to show us that the world needs to move faster to curb carbon emissions while also accelerating efforts to adapt to a changing environment.

At Johnson & Johnson, we’ll continue to do our part by working to decarbonize our operations and value chain, to deliver more sustainable products and solutions and to support communities that are feeling the impacts of climate change on their health because our vision for a sustainable future is one in which healthy lives and a healthy planet are within reach of all people.

Now I’d like to turn it over to Jess Moore to begin the Q&A portion of the webcast.

Jessica Moore

Thank you, Paulette. I’d like to now kick off today’s Q&A portion of the webcast. I am delighted to be joined by Matt, Martin, Lauren, Wanda and Paulette, who you have heard from this morning. I’m also pleased to welcome to the call, Dirk, Carol and Kristen to address your questions. Rob, can you please provide instructions and open the line for Q&A?

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from Chris Schott with JPMorgan.

Unidentified Analyst

This is [Chris Meyer] on for Chris Schott. So a question for us. How does the announcement regarding the Consumer Health separation impact Johnson & Johnson’s ESG program?

Matthew Orlando

Yes. Thanks, Chris, for this important question, and hello again, everyone. I’m Matt Orlando, Corporate Secretary and Worldwide Vice President of Corporate Governance.

Yes, I mean, look, as we always do, we’ll continue to evaluate how we can best serve all our credo stakeholders. We’ll also continue to address relevant ESG topics. I think they can best have an impact on our business and on people and society as you heard earlier.

As part of our robust Priority Topics Assessment process and stakeholder engagements, we’ll also look at results by the sector and really don’t anticipate any significant changes for the remaining J&J Company. We’ll be evaluating our Health for Humanity 2025 goals based on the planned Consumer Health separation.

But we purposely set our ESG strategy around the focus areas where we can leverage our size and expertise to really achieve the greatest impact and that we think this strategy will remain constant with, again, the remaining J&J Company. Look, I think consumer health shares the foundational background of our credo and the Johnson & Johnson approach to ESG.

And look, I’m sure they’ll formulate their own strategy metrics and the like, but I’m very confident one can reasonably assume that the new Consumer Health Company will apply the same rigor and focus to the ESG program. Let me pass it over to Dirk Brinkman.

Dirk Brinckman

Well, thank you, Matt, and hello, everyone. My name is Dirk. I’m the Chief Compliance Officer here at Johnson & Johnson. And look, here at J&J, we are committed to continuing highest levels of integrity and ethical culture. And we have a set of comprehensive policies and procedures, compliance trainings to really help our employees and our contingent workers navigate the applicable laws, regulations and industry codes that guide our business. And we are focused on continuously improving our compliance risk governance.

Now we anticipate that this will not be different for the new consumer health company, which will have focused and specific policies and compliance risk governance. And there will also be a dedicated compliance organization in the new consumer health company.

Jessica Moore

Wonderful. Thanks, Matt and Dirk. Maybe Paulette, you can add a comment specific to the environmental health standpoint, and then let’s hand it over to Carol to comment from a quality perspective.

Paulette Frank

Thank you, Jess. So this is Paulette, Chief Sustainability Officer. In terms of our current environmental goals, we continue to progress those as one company. We are evaluating the potential impact to our science-based targets for the new company based on our new carbon footprint of the new company.

Consumer Health, the new Consumer Health Company will assess what sustainability goals make sense for that business. What I can say also is that both businesses will have a very strong foundation of environmental progress to build upon. Thank you.

Carol Montandon

Yes. And this is Carol Montandon. I’m the Chief Quality Officer. And I think this represents an extraordinary opportunity to continue building on our quality commitments and actually enhancing our focus on the consumer experience. Creating 2 new companies allows us to better meet the needs of our customers and our consumers by increasing our focus, increasing our resources, our agility and our speed. ESG with a focus on high-quality products will continue to be a core element of the new Consumer Health Company moving forward.

Operator

Your next question comes from Louise Chen with Cantor Fitzgerald.

Louise Chen

So it’s obvious that J&J has made a strong commitment to ESG, but where do you still see room for improvement?

Jessica Moore

Maybe we can start with Paulette from an environmental standpoint and then we can have different aspects of the panel chime in with their specific area.

Paulette Frank

Sure. So this is Paulette. In terms of our carbon footprint reduction goals, we’ve made significant progress in our own operations, particularly with respect to our ability to procure renewable electricity. Where we still have work to do is around our Scope 3 goal and engaging our suppliers in reducing their own carbon footprint.

We’re particularly excited about the Energize platform that was launched last year and our ability to engage our suppliers in that platform to help accelerate their own procurement of renewable electricity.

Jessica Moore

And Wanda, maybe you would want to add from a DE&I perspective?

Wanda Hope

Sure, absolutely. Hi, everyone. I’m Wanda Hope, our Chief Diversity Equity and Inclusion Officer. From a diversity, equity and inclusion standpoint, we know that this is an evolving marketplace and an evolving space. So there’s always work to do and always things that we can improve upon in this space.

And while we are extremely proud of all that we have accomplished, and we have set some great goals in our Health for Humanity Report that I’m sure you all have seen where we’re targeting achieving 50% of women in management positions globally. In 2021, our data showed that 48% of management positions globally are held by women. And we’re even at gender parity for 2 of our regions.

We are making progress on our ethnic and racial diversity and management. We had a goal of 35%, and we’re currently on track with 33.9%. And we have a goal of achieving 50% of growth of our black and African-American employees and management positions. We made significant progress there with growth of 25% in our first year, and we recognize that there’s still so much work to be done.

So we are continuing to identify different ways to reimagine our talent strategies to recruit talent, to develop talent and really to ensure that we have equity across all of our talent processes across the organization.

Operator

Our next question comes from the line of Lei Huang with Wells Fargo.

Lei Huang

This is Lei calling in for Larry Biegelsen. Can you talk about how headwinds like inflation and labor shortage are affecting your programs such as Health for Humanity as well as other core functions like attracting and retaining talent, quality check, et cetera?

Jessica Moore

Maybe, Lauren, you would want to start from a global community impact?

Lauren Moore

Happy to thank you. This is Lauren from the Global Community Impact team. I will share that with our public commitments of the frontline health workers as well as Our Race to Health Equity, we don’t anticipate any changes in those areas as we’ve made the public commitments and basically intend to live into those. And we’re actually ahead on both of those targets as well.

Jessica Moore

Kristen, did you want to take?

Kristen Mulholland

Sure. Hi. I’m Kristen Mulholland. I lead Total Rewards for Johnson & Johnson. And from a compensation standpoint, we continuously evaluate our Total Rewards package.

Of course, salary is just one component of that to ensure that it’s competitive and meets the needs of our workforce. We understand the impact that inflation has had on our employees and their families. And like our peers, we’re closely monitoring our trends around the world. And we look at market data on a continuous basis and salaries to make sure they stay fair and competitive.

We have implemented some actions where needed to take care of our employees in response to the economic conditions. And we’ve done that as a result of inflation, but also not limited to inflation because of the tight labor market. So over the coming months, we’ll continue to monitor the situation, and we’ll take additional action where needed.

Jessica Moore

And then maybe, Carol, you want to add from a quality perspective?

Carol Montandon

Sure. This is Carol. While the post-pandemic economic reopening, excuse me, increased pent-up consumer demand, it also led to shortages in the global supply chain as we’re all aware. This, combined with the ongoing inflationary pressures, puts additional strains on any organization.

However, it’s our philosophy that quality and compliance is non-negotiable. Despite these external pressures, we are actually able to consistently deliver in full compliance with our quality standards and are actually increasing investments to automate transactional work, where possible, to free up our precious resources to focus on the most critical aspects of our business and to reduce risk.

Investing in automation and digital insights will help reduce variability in our quality process execution, improve product quality, reduce recalls and elevate the consumer experience.

Jessica Moore

And maybe one final comment from Paulette from a sustainability perspective.

Paulette Frank

Sure. Just to add, a key pillar in our climate strategy is energy efficiency and improving the energy efficiency of our operations. And that helps to mitigate increasing costs, particularly around energy.

Jessica Moore

Absolutely. Joe said it in the video, right? It doesn’t mean that just because we’re doing ESG that it’s an increase to the P&L. It can be both good for the environment as well as for the P&L.

Operator

The next question is from Rick Wise with Stifel.

Rick Wise

Does that reflect on the complicated geopolitical environment and the impact of Ukraine on the global supply of oil energy pricing? From 2 perspectives, I was curious to see how you think that’s going to impact your important programs.

One related to access is the global environment complicating your plans to put in place those global access plans for J&J products. And two, given these energy supply strains, do you feel better, worse, more anxious, more concerned at the margin about achieving your renewable electricity goals by 2025?

Kristen Mulholland

It’s Kristen. Let me just start with our employees before we — before I turn it over to other members of the panel. And just as a grounding, we took immediate action to care for our employees and hold our responsibility to our patients in the region.

We took measures to keep employees safe, including global security monitoring of employee safety. And we also maintain daily contact with employees to assess their safety. And we actually helped over 200 Ukrainian employees and family members evacuate. So I just wanted to start with that. But let me hand it over to Lauren to continue the dialogue.

Lauren Moore

Yes, and just to share a little more detail. To date, we’ve donated $10 million to support the work of the International Rescue Committee and the International Federation of Red Cross and Red Crescent to make sure humanitarian support for refugees in the border countries was underway.

We’ve also been providing product donations, including hygiene kits, health packets and medical supplies. We’ve launched a gift matching program for our global employees through global giving for the Ukraine Crisis Relief Fund.

And we’ve also continued to work with a number of long-standing partners in global health, including the International Health Partners, AMERICARES, Direct Relief, IFRC, Save the Children and UNICEF to make sure that we can support those in the region by providing them access to our supply chain network to strengthen their reach and capabilities.

In early March, we also did suspend all advertising and enrollment in clinical trials and additional investment in Russia. And so maybe I’ll turn it over to Paulette if you have any comments on his question around energy.

Paulette Frank

Sure. This is Paulette. So we have so far signed power purchase agreements that will take our renewable electricity to 100% in the U.S. and in Europe. And we also have tenders in the marketplace, active tenders in the marketplace that once those come in, we’ll evaluate what our future opportunities look like. Thank you.

Jessica Moore

And then maybe we hand over to Martin, specifically on the aspect of access.

Martin Fitchet

Yes. Thank you very much. This is Martin Fitchet, Head of Global Public Health. Basically said, our global access programs are unaffected by the situation in Ukraine.

We have very well-established supply chains, programmatic access programs as well as our R&D components all remain unimpacted, and we continue those. In fact, we continue to build on them.

But also relevant to Ukraine, we are in a unique position where we’re able to support our bedaquiline donation programs, particularly for refugee hosting countries such as Poland and other countries across Europe to support the population of Ukraine from that particular perspective. So we’re very pleased that our global access programs are unimpacted.

In fact, we’re in a unique position, I think, because of our strength in this area in public health and our decades-long contributions and support for global equity, we can actually support the populations, particularly in Poland and other countries in Europe with bedaquiline and other products, I think, as Lauren outlined. So thank you.

Operator

The next question is from the line of Terence Flynn with Morgan Stanley.

Terence Flynn

I had 2 questions. The first was with respect to your Health for Humanity 2025 goals. I noticed you list HIV, TB, schizophrenia. Just wondering how you decided which diseases to focus on is, obviously, J&J has a very broad portfolio of medicines.

The second question relates to your emissions reduction work there. Maybe you could just help frame for us that’s an area where, again, I guess, didn’t appreciate maybe the potential impact for the pharma industry. But how does the pharma industry compare to maybe some other industries in terms of emission levels just broadly? And then how are you guys measuring, quantifying those goals that you outlined?

Jessica Moore

Wonderful. Maybe we start with Martin specific to the disease states that we focus on.

Martin Fitchet

Yes. Thank you. Great question. I mean, how do we choose the diseases where we can have maximum impact, particularly in low, middle-income countries. Well, I think the key is to say we can’t do everything. We can’t focus on every condition, every disease, but we do take a very, very specific selective process in our portfolio selection for global public health.

Firstly, patient impact. So where can we significantly make an impact in a high burden disease that particularly affects low, middle-income communities around the world? So high-burden diseases where we can have an impact, meaning where our intervention can make a big difference.

And we combine that with where is our scientific strength? Where do we have R&D legacy and scientific institutional knowledge and strength in specific diseases that we can then apply to those high-burden diseases impacting low- and middle-income communities.

And that obviously, also where can we build really strong partnerships? So we bring — we have an innovation-based model in global public health. We call it lab-to-last mile, the lab being the R&D component, the last mile being the programmatic component that we partner with on the ground in Africa, in Asia, Latin America and other communities around the world.

And where that lab-to-last mile model can be applied with our areas of scientific strength, meaning where we innovate, applied against high-disease burdens and with the ability to partner with world-class partners, whether it be donor countries or government agencies or NGOs or foundations. That defines the disease — really the disease impact, the kinds of diseases we go after; as you said, TB, HIV, mental health, soil-transmitted helminth. These all fit those criteria. So I hope that helps clarify.

Lauren Moore

And Martin, this is Lauren. I’m just going to pick up on one comment with the disease states as well. When we announced our commitment to the Center for Health Worker Innovation in 2020, one of the reasons we’ve made a significant commitment to frontline health workers is that we understand that regardless of the disease state, if you’ve got access to primary care through a frontline health worker really will help any issue that you have. And so I think we’ve tried to sort of look at that broad commitment and understand that it’s an access issue to support frontline health care workers as well. And now I’ll turn it over to Paulette.

Martin Fitchet

That’s a super point, Lauren, also illustrates, I think, the partnership that we have with global community impact on global public health. Thank you for raising that.

Paulette Frank

This is Paulette. I have seen studies that indicate the health care industry as a whole globally account for about 4.5% of global emissions. In terms of how we measure our carbon emissions, we use the greenhouse gas protocol, which is universally accepted and used pretty broadly.

Operator

Our next question is from the line of Josh Jennings with Cowen.

Joshua Jennings

I wanted to focus on the impressive Our Race to Health Equity program. That 5-year, $100 million commitment is impressive. And just multitude question, but just in terms of the focus on increasing diverse representation in the health care workforce and boosting clinical trial participation in historically underserved groups, I guess, are there targets and any time lines? I know J&J can’t do this on their own. And so I think there’s some industry-wide initiatives in both pharma and medical devices industries. But are there targets? Are there time lines? And then how does this all translate to improved access? And are there any targets in terms of improving access, say, for atrial fibrillation, ablation — cardiac ablation procedures or knee replacement procedures for patients of color?

Lauren Moore

This is Lauren with Global Community Impact, and we did just announce our commitment to Our Race to Health Equity in 2020. The financial commitment was the first step, one of the interesting programs we’ve also supported because every part of our business has stepped in to understand how to improve business practices and programs as well.

We also have something called the business matching fund that we’re really proud of working with our sectors on specific initiatives. We do have a scorecard that we’re putting together. You can get more information on the Race to Health Equity sort of area of our website as we look at some specific 5-year commitments here.

Because of our commitment to the Center for Health Worker Innovation, we saw some unique opportunities with health worker representation and understood that we can leverage both of those platforms to focus in this area. So that is one area where we do have some specific unique programs with targets that I’d be happy to follow up.

But again, more specific information is on the website. And I will say that we do work with many community partners just because this is work that you can’t do alone and also the incredible commitment that we have to our internal employees as well. So it’s a developing commitment, but one that has significant support across the full organization. And we’re really proud of sort of how we’ve gotten things started. And Wanda, I don’t know if you want to make a comment about our commitment to employees as well.

Wanda Hope

Yes. This is Wanda. I would like to just share a little bit around our diversity in clinical trials and the impact that, that is having and, of course, how our employees are engaged in that. And when you think about diversity in clinical trials, it really is a story of our evolved commitment and our enterprise-wide commitment to DEI that really resonates with our teams around the world.

This is an initiative that was really started from a grassroots effort with our African Ancestry Leadership Council, ERG, and HOLA, our ERG supporting Hispanic and Latino employees. And they really took this grassroots campaign to elevate awareness on the importance of diversity in clinical trials, leading conversations at internal and external conferences and even to the point of handing out pamphlets to their colleagues, consumers and partners.

And a few years ago, I invited these leaders from our ERGs to have a frank conversation with our team in the Office of Diversity, Equity and Inclusion and was so impressed with the comprehensive slate of work that they had built and recognizing their passion and their opportunity to use are big for good.

My team connected these leaders with Dr. Paul Stoffels, who served as our Chief Scientific Officer at the time. Dr. Stoffels was equally impressed and compelled to integrate diversity in clinical trials in all of our clinical research.

So from these ERG insights and passionate work, an entire department dedicated to advancing diversity in clinical trials was born. And I think this is just a powerful case study illustrating the way our culture of inclusion encourages our diverse teams to share innovative ideas that really help us to create healthier communities for our patients, customers and consumers.

And it reflects how DE&I is embedded into the way we do business as well as the critical role that our ERGs and our employees play in elevating and empowering diverse perspectives throughout the enterprise. And of course, that led to direct impact with diversity in clinical trials and has — it really is shaping the way that we develop trials as we move forward.

Jessica Moore

Thank you. Rob, we have time for one last question.

Operator

The last question will be coming from the line of [Steve Jay] with Atlantic Equities.

Unidentified Analyst

Yes. Great. Just one question on access to medicines and LMIC that you outlined. Does the excess model for COVID-19 vaccine specifically provide a blueprint for durable access in other therapeutic categories that are not currently widely available in these markets? And then would any of these potential commitments include a shift towards local manufacturing in these markets?

Jessica Moore

Martin, will hand that one over to you.

Martin Fitchet

Yes. Thanks for the question. Global equity has been in the forefront of our COVID response, as you know, from the onset of the pandemic and has guided our actions throughout from developing first to truly fit-for-purpose global vaccine to implementing a clinical development plan that was globally diverse and allowed us to study the variants.

This is actually along the plans of how we do global public health at J&J. We — as I said to the answer to the earlier question, we have a fit-for-purpose R&D team that develops products specifically for the needs of low-, middle-income countries. And also, we provide access pricing that is targeted at providing the maximum possible access of patients to our medicines with our equity-based model.

So I think the way to put this is perhaps our global public health model, which was in place way before COVID and COVID emergency actually laid the groundwork for some of our equity-based approaches for vaccine equity worldwide.

So putting it that way around, we are in a position where we are actually accustomed as an organization to developing our fit-for-purpose medicines for low- and middle-income countries and making them as accessible as possible through equity-based tier pricing. And we applied obviously a similar model to developing the global COVID vaccine at a single global price, as you know.

So that, of course, is a model. The global access model for the vaccine was one, I think, that came quite naturally for us, given that we have always been committed as a company to global equity. And for many, many years, we’ve had the global public health model in place.

Jessica Moore

Great. Thank you, Martin and thank you to all our Q&A panelists as well as all of you for joining us today. If we didn’t get to your question on the webcast today, we will follow up via e-mail.

Additionally, you will be receiving a brief survey from IHS Markit, now part of S&P Global, to provide your feedback related to this event, which is very important to us. We value your input and ask that you participate so that we can continue to enhance our annual ESG Investor Update event. As always, thank you for your continued interest in Johnson & Johnson, and have a great day.

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