An ESG report should include detailed information on a company’s environmental, social and governance impacts. However, companies often forget to include aspects related to intellectual property rights. Let’s take a look at what IP specifically means in corporate governance.
Identifying and securing IP rights
An ESG report should be a source of reliable information on the company’s ESG strategy, objectives and progress towards them. However, it is often the case that a report’s authors do not include IP-related aspects, which also leads to a failure to assess the company’s IP assets and thus miss opportunities that exist in this area.
The place of IP in ESG reporting is ‘G’, or corporate governance. The definition and implementation of IP policies and the commercialisation of rights undoubtedly have a significant impact on the effective management of a company in the spirit of sustainable development.
What if a company has not yet analysed the IP aspect of its business?
In this case, the reporting process can also be used to identify IP rights and develop internal IP-related procedures in line with sustainability principles.
Why can IP reporting benefit a company?
Implementing appropriate IP procedures and policies certainly demonstrates adherence to the highest standards of corporate governance. This can also be a driver for a company’s position in the industry.
Reporting must not harm IP
When preparing a report, it is important to remember that the European Sustainability Reporting Standards (ESRS) do not require the reporting of confidential or sensitive information.
This applies to intellectual property rights, the disclosure of which could harm the company. Therefore, any know-how, patent applications or unpublished designs, the premature disclosure of which could prevent them from obtaining protection, may be omitted from the reports.
Major companies invest in IP
The importance of identifying and protecting intellectual property rights is clearly demonstrated by recent reports from the largest listed companies. This is particularly true in the IT, automotive and pharmaceutical industries.
CD Projekt, one of the largest gaming companies in the world, explicitly states that it is constantly securing its rights as part of its business, and that the protection and management of intellectual property is handled by a dedicated Business & IP team within the company’s legal department. Their report also highlights the importance of cybersecurity.
Toyota’s latest report also describes in great detail how important the protection and use of intellectual property rights is to the organisation as a whole. The report highlights the company’s focus on continuous research and development to raise the level of technological sophistication and competitiveness of Toyota-branded products. The company also describes the structure of the organisation dealing with IP issues and details the number of patent rights held, using the US and Japan as examples.
Pfizer, the global pharmaceutical giant, also explicitly mentions its IP policy on the use of generic medicines in the poorest countries and on sustainable development. A recent report by the company also mentions its sponsorship of the World Intellectual Property Organisation’s Inventor Assistance Programme.
It is therefore worth taking a leaf out of the book of the biggest companies and starting to position yourself as an organisation with a high level of governance and awareness of IP protection, implementation and commercialisation.
Are you interested in effectively securing your company’s IP rights in the spirit of sustainable development? Please do not hesitate to contact us.
