Independent Assurance Report on the 2021 Novartis in Society Integrated Report

To the Board of Directors of Novartis AG, Basel

We have been engaged by the Board of Directors of Novartis AG to perform assurance procedures to provide limited assurance on the ESG performance indicators included within the 2021 Novartis in Society Integrated Report of Novartis AG and its consolidated subsidiaries (Novartis Group) for the period ended December 31, 2021.

Scope and subject matter

Our limited assurance engagement focused on the following 2021 ESG performance indicators, data and information disclosed in the Novartis in Society Integrated Report 2021 of the Novartis Group for the year ended December 31, 2021:

The following ESG “People performance indicators” are not subject to this Assurance Report. Consequently, we do not express any conclusion on these ESG performance indicators.

  • The following indicators within the subheading “Health and safety”:
    • The “Fatalities”
  • The following indicators within the subheading “Gender indicators”:
    • The “Median tenure in years: female/male”
    • The following indicators within the subheading “Gender representation (% female / % male)”:
    • The “Overall headcount” The “Promotions”
    • The “Overall turnover” The “Entry-level positions (job levels 6,7,8)”
    • The “Revenue-producing roles” The “IT roles (IT job family)”
    • The “Engineering roles (R&D + TechOps job families)”
  • All indicators within the subheading “Gender representation by contract type (female/male)”
  • All indicators within the subheading “Number of employees by region, by contract type (permanent/temporary)”

Criteria

The ESG performance indicators disclosed within the Novartis in Society Integrated Report 2021 were prepared by the Board of Directors of Novartis AG (the ‘company’) based on the following criteria:

  • GRI Standards
  • Novartis Corporate Responsibility Guideline
  • Novartis Code of Ethics
  • Novartis procedures for gathering, collecting, and aggregating data for the ESG performance indicators
  • The terms and conditions as outlined within the “Final Listing Prospectus dated 21 September 2020” for the “Patients reached with strategic innovative therapies” and “Patients reached through flagship programs” ESG performance indicators

Board of directors’ responsibility

The Board of Directors of the company is responsible for preparing the Novartis in Society Integrated Report in accordance with the applicable criteria. This responsibility includes the design, implementation and maintenance of the internal control system related to the preparation of the Novartis in Society Integrated Report that are free from material misstatement, whether due to fraud or error. Furthermore, the Board of Directors is responsible for the selection and application of the criteria and adequate record keeping.

Independence and quality control

We have complied with the independence guidance and other ethical requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. PricewaterhouseCoopers AG applies Swiss Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Assurance practitioner’s responsibility

Our responsibility is to perform an assurance engagement and to express an opinion on the ESG performance indicators outlined within the “Scope and subject matter” section above. We conducted our engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (revised) ‘Assurance engagements other than audits or reviews of historical financial information’. This standard requires that we plan and perform procedures to obtain limited assurance about whether the ESG performance indicators outlined within the “Scope and subject matter” section above was prepared, in all material aspects, in accordance with the criteria as outline within the “Criteria” section above.

Based on risk and materiality considerations, we performed our procedures to obtain sufficient and appropriate assurance evidence. The procedures selected depend on the assurance practitioner’s judgement. The evidence gathering procedures were more limited than they would be on a reasonable assurance engagement and, therefore, less assurance was obtained than would be on a reasonable assurance engagement.

  • We performed the following procedures, among others:
  • Review of application of the Novartis Corporate Responsibility Guideline
  • Interviewing personnel responsible for internal reporting and data collection
  • Performing tests on a sample basis of evidence supporting selected ESG data concerning completeness, accuracy, adequacy, and consistency
  • Inspecting relevant documentation on a sample basis, including Novartis ESG policies, management reporting structures and documentation
  • Review of the management reporting processes for ESG reporting and assessing the consolidation process of data at Novartis Group level and the related controls
  • Inspecting the principles of the Novartis materiality assessment process providing the basis for the adherence to the GRI reporting requirements, addressing the soundness of the methodology, the identification process, the determination of the impacted stakeholders, as well as the prioritization based on the assessed impact of Novartis

We have not carried out any work on data other than outlined in the “Scope and subject matter” section as defined above. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.

Conclusion

Based on the work we performed, nothing has come to our attention that would cause us to believe that the ESG performance indicators outlined within the “Scope and subject matter” section above of Novartis AG for the period ended December 31, 2021 are not prepared, in all material respects, in accordance with the criteria as outline within the “Criteria” section above.

Inherent limitations

The accuracy and completeness of the ESG performance indicators outlined within the “Scope and subject matter” section above are subject to inherent limitations given their nature and methods for determining, calculating and estimating such data. Our Assurance Report should therefore be read in connection with the criteria as outline within the “Criteria” section above.

PricewaterhouseCoopers AG

PricewaterhouseCoopers AG (Graphic)
Signature Kris Muller (Graphic)

Kris Muller

Signature Kris Muller (Graphic)

Claudia Benz

Basel, February 1, 2022

The maintenance and integrity of Novartis AG’s website is the responsibility of the Board of Directors and Management; the work carried out by PricewaterhouseCoopers AG does not involve consideration of these matters and, accordingly, PricewaterhouseCoopers AG accepts no responsibility for any changes that may have occurred to the figures or criteria as published on Novartis AG’s website.