AstraZeneca's Pioneering Approach to Supplier Diversity and Sustainability

January 4, 2024 EcoVadis EN

Speaker:  Anna Hakobyan, Global Sustainability Supplier Diversity and Government Compliance Lead and President for Diversity Alliance for Science, hosted by Fergal Byrne, The Sustainability Agenda. 

The Sustainable Value Chains podcast series features senior sustainability experts and executives who explore a wide range of environmental, labor and human rights, ethics, and sustainable procurement issues and look at how companies can develop more sustainable value chains. 

Personal Journey and Professional Commitment

Growing up in Armenia as part of an entrepreneurial family, Ms. Hakobyan's personal and professional experiences shaped her understanding of the value of diversity. Her varied career across multiple sectors before joining AstraZeneca in 2010 enriched her perspective on the importance of a diverse supplier ecosystem, and now, she leverages her experiences to advocate for diversity, seeing it as essential for societal and economic equity. This commitment dovetails with the United Nations Sustainable Development Goals, particularly in fostering gender equality and economic development.

Supplier Diversity as a Catalyst for Societal, Economic and Health Equity

A key aspect of AstraZeneca's strategy is the role of supplier diversity. It’s more than a business practice – it's a catalyst for societal and economic equity. The company's commitment to diversity enriches its business with fresh ideas and perspectives, contributing to product enhancement and overall processes. This approach aligns with the United Nations Sustainable Development Goals, particularly those focusing on gender equality and economic development.

Ms. Hakobyan highlights the role of supplier diversity in promoting health equity. By engaging with underrepresented suppliers, AstraZeneca helps generate job opportunities and improve the quality of life in these communities, thus addressing health disparities. The company's procurement power is used as a tool for societal change, creating a healthier and more equitable world.

AstraZeneca's supplier diversity program is integrated into its overall business strategy, focusing on three pillars: access to healthcare, environmental protection, and ethics and transparency. The program is now a core focus area of its strategy, reflecting its ambition to create positive societal impact and promote ethical behavior.

The company's supplier diversity strategy is built on three pillars: embrace, engage and empower. It embraces diversity, equity and inclusion (DEI) across all aspects of its work, engages with small and diverse businesses, and runs development programs to empower these businesses. AstraZeneca has set an external goal to extend its program to 10 countries by 2025, focusing on maximizing spend with small and diverse businesses. It tailors the program to fit local realities, defining diverse-owned businesses based on country-specific underrepresented groups.

Implementation and Impact in Procurement

Key to AstraZeneca's strategy is the recognition that every procurement decision impacts society and people. The company focuses on leadership support, clear goals, key performance indicators (KPIs), and effective tools and processes to achieve these objectives. Supplier diversity is integrated into every stage of procurement, involving strategic planning and operational execution.

Ms. Hakobyan describes AstraZeneca's procurement as central-led, managed through categories to support business and market needs. The supplier diversity program, part of the global procurement strategy, collaborates closely with the entire procurement and business community within the company. This collaboration enables the embedding of supplier diversity in global, regional and local procurement processes.

Key measures include setting targets and action plans in each category strategy to maximize spend with small and diverse businesses and participation in mentorship and outreach events. In sourcing, AstraZeneca ensures that diverse suppliers are included in requests for proposals, providing them equal opportunities. Its contracts and business review processes include supplier diversity expectations, promoting diversity through larger business partners.

Each operational market of AstraZeneca has specific goals for including diverse suppliers. Its robust infrastructure records the diversity status of suppliers during vendor onboarding, enhancing their visibility and usage. They also offer shorter payment terms for small businesses in regions with established supplier diversity programs.

Anna underscores the importance of not limiting the drive for diversity within procurement alone; it must be part of the overall business strategy. AstraZeneca enhances business processes and engages broader business stakeholders to contribute to the program’s success. They aim to maximize spend with existing diverse suppliers and scout for new ones to develop their capabilities.

Global Reach and Scalability

Given the organization's size and complexity, AstraZeneca has engaged champions across various regions and categories. These champions are colleagues passionate about DEI, with strong influence skills and a broad understanding of business operations. Their role is to foster engagement with diverse businesses in various projects and sourcing opportunities, creating a chain reaction of commitment across global markets.

Hakobyan emphasizes that this collaborative approach is crucial for scaling and sustaining the supplier diversity program within a global organization. It ensures that a commitment to DEI is a fundamental part of AstraZeneca's organizational DNA. She proudly shares the significant increase in diverse spend over the past year, stressing that success is measured not just by spend but also by the impact on diverse businesses’ development and success.

Lastly, Hakobyan addresses scalability in supplier diversity at AstraZeneca. Scalability is achieved by engaging different business communities, regional representatives and champions within the company. This engagement embeds the importance of inclusion and diversity into the mindset of AstraZeneca colleagues and enables it to scale. She highlights the passion and contribution of AstraZeneca employees across different markets, many of whom serve as mentors to diverse suppliers, contributing to their development whether they are current suppliers or potential ones.

Mentorship and Development Initiatives

AstraZeneca's commitment to small and diverse businesses is evident in its mentorship program and other initiatives like the Lead in Sustainability Accelerator Program. The company supports small and diverse businesses through various initiatives. Their mentorship program is a year-long engagement where diverse suppliers are partnered with mentors to achieve specific improvement goals, enhanced by webinars aimed at uplifting their operational and strategic capabilities. Currently, AstraZeneca mentors 36 diverse businesses, with plans to increase this number.

The Lead in Sustainability Accelerator Program is an intensive, four-month program that enhances diverse suppliers' sustainability knowledge and capabilities. Initially piloted with 40 diverse-owned businesses, this program has now expanded to more than 80 suppliers. The program helps these businesses develop sustainability roadmaps and action plans, ensuring their business continuity and competitive advantage.

AstraZeneca also launched a five-week Climate Action Series, educating about 140 suppliers on proactive climate actions. EcoVadis supports this program, providing tools and processes to drive sustainability. Additionally, AstraZeneca pilots the Intentionally Inclusive Program, aimed at high-potential diverse-owned businesses, reflecting their proactive approach to creating opportunities for underrepresented groups. 

EcoVadis Partnership and International Expansion

Ms. Hakobyan highlights the role of EcoVadis in measuring DEI within AstraZeneca's supply chain. EcoVadis provides tools to assess the DEI policies of suppliers and how they are taking action on these values. AstraZeneca uses the EcoVadis platform to gain insights into their suppliers' DEI performance.

Regarding international efforts, AstraZeneca is a pioneer in promoting supplier diversity outside the US. It is a founding partner in initiatives such as the Minority Supplier Development UK and European Supplier Diversity Expansion Initiative, working to introduce minority certifications and set diverse businesses for success in various European countries.

Ms. Hakobyan, as the president of the Board for Diversity Alliance for Science, emphasizes the organization's role in creating a dynamic platform for diverse suppliers, life science companies, and healthcare organizations to collaborate effectively. They strive to ensure equitable opportunities for these businesses in the life sciences and healthcare industries.

Conclusion: A Model for Sustainable Procurement 

Finally, Ms. Hakobyan offers advice for organizations looking to develop supplier diversity programs. She emphasizes the importance of commitment and passion from individuals across various functions, not just procurement. Embedding supplier diversity within an organization's DNA is crucial, involving cross-functional and cross-regional teams. Looking ahead, AstraZeneca remains committed to refining its strategies and expanding partnerships to build a more inclusive and sustainable future.

About the Author

EcoVadis EN

EcoVadis is a purpose-driven company whose mission is to provide the world's most trusted business sustainability ratings. Businesses of all sizes rely on EcoVadis’ expert intelligence and evidence-based ratings to manage risk and compliance, drive decarbonization, and improve the sustainability performance of their business and value chain. Its AI-powered risk mapping, actionable scorecards, benchmarks, carbon action tools, and insights guide a resilience and improvement journey for environmental, social and ethical practices across 200 industry categories and 175 countries.

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