Driving ESG through 2023’s Economic Headwinds
A Q&A with AstraZeneca’s Country President for Belgium & Luxembourg, Keira Driansky
Michael Wong: While a recent Fortune survey pointed to how executive compensation at 73% of S&P 500 companies is now tied to environmental, social, and governance (ESG) performance,1 what should their C-suites be doing to keep their teams focused on these initiatives when there are many internal competing projects? After all, with several economists predicting a recession in 20232 and tech’s recent layoffs,3 many employees are rightfully concerned about their own jobs.
Keira Driansky: Sustainability is fundamental, not only to the health of the planet, but to the health of our society and people. At AstraZeneca, we are harnessing the power of science and partnership to accelerate the delivery of sustainable healthcare.
Integrating sustainability into everything that we do now in fact future-proofs our business. For AstraZeneca, that means taking action across our three interconnected sustainability priorities: Access to healthcare, Environmental protection, and Ethics and transparency. Each of these is in turn underpinned by three focus areas, which are the ESG issues that matter most to AstraZeneca and our stakeholders, but also where we can have the most positive impact. To ensure we are making a difference, leaders need to drive awareness and understanding of these realities and encourage their teams not to be too short term in their thinking, helping them understand how the actions they take today ladder up to the long-term sustainability strategy.
Keira Driansky
While our sustainability ambitions stem from our shared Values, including “We do the right thing” and “We follow the science,” which serve as a compass to guide us in all that we do, we should not forget that sustainability also offers a competitive advantage. Sustainability is increasingly important from a business and broader economic perspective, with a sustainable business model expected by our investors and our employees and partners. At the same time, sustainability is increasingly demanded by future employees, especially Generation Z and Millennials. Research suggests that a strong sustainability proposition can create value through (1) facilitating top-line growth, (2) reducing costs, (3) minimizing regulatory and legal interventions, (4) increasing employee productivity, and (5) optimizing investment and capital expenditures.4
Action on climate is becoming ever more important to our stakeholders, with the wider healthcare system beginning to look to deliver patient-centric, net-zero healthcare. AstraZeneca is part of the Scope 3 emissions of healthcare providers; we are part of their purchased goods and services footprint. Through our bold, science-based greenhouse gas emissions (GHG) reductions commitments and actions, we are well positioned to take advantage of the business opportunities presented by the increased demand for products and services with a lower GHG footprint. For example, the NHS5 has established targets to procure medicines only from suppliers with climate targets aligned with, or more ambitious than their own, and they have goals to reduce the footprint of respiratory products by 50% over the next seven years. AstraZeneca’s transition to next-generation propellants with a near-zero global warming potential within our Ambition Zero Carbon strategy is not only reducing our GHG footprint, it is also mitigating some of the transition risks we face in the market and will protect our revenue.
Our global scorecard plays an important role in rallying employees around our sustainability ambitions, goals, and purpose. This tool articulates strategic priorities for the upcoming year for the company as a whole and is designed to track our progress against these objectives. Sustainability and “being a great place to work” are built into our global scorecard and growth strategies. Executives are measured against specific elements of the strategy. The scorecard cascades down from the Senior Executive Team to markets and functions, where it is translated into local priorities. For example, in many countries, our front-line sales reps have moved to or are in the process of moving towards an entirely electric fleet. In the BeLux marketing company, during our recent national sales meeting, we made use of digital materials and tools only and dedicated a Townhall session to sustainability just a couple of months ago. The latter served to illustrate to employees how sustainability is part and parcel of their day-to-day activities, rather than an add-on.
To support our employees in delivering on our shared sustainability goals, we have also developed several internal communications tools. For example, in 2022 we launched a “Science Can” sustainability campaign,6,7 targeting both internal and external audiences. Through brainstorming sessions, the campaign aimed to spark conversations around what sustainability means for AstraZeneca, as well as increase understanding of how each of us can make a difference. The internal “We can” crowdsourcing activation enabled teams to identify actions they can take to help us deliver our sustainability agenda. Teams will subsequently implement these actions into plans and objectives for the coming year. We believe grassroots ideas, at an individual, team, site, or market level, have the power to change things— where even seemingly small actions can add up to make a real difference.
Our enterprise-wide “Pulse survey” is another tool that facilitates discussion on the topic of sustainability, and measures progress. A bi-annual employee survey, Pulse gauges employees’ understanding of their individual contributions to AstraZeneca’s sustainability priorities. The latest global results indicate that 87% of our employees have good insight into the role they can play in advancing our sustainability priorities.
With most S&P 500 C-suites and their direct reports representing a small percentage of the total employees employed, what three specific recommendations do you have to help convince the rank and file that ESG can be of value to their individual long-term career prospects?
Firstly, sustainability is a topic of increasing interest across stakeholder groups—from the patients, and customers we serve, to our employees, investors, payors, and policymakers. By adopting a strong sustainability mindset, employees are more likely to be successful in their roles and stakeholder engagements. With sustainability shifting from a ”nice to have” to a “must have,” an understanding of ESG is crucial for long-term career prospects.
Secondly, it is key to focus on inclusion and diversity (I&D), which in addition to creating a “sense of belonging” for employees, brings creativity, enables continuous learning, and supports the growth of both individuals and the company. An inclusive and diverse workforce, empowered to challenge conventional thinking, is key to unlocking breakthrough ideas and fostering innovation, which is so critical in the healthcare field. An analysis by McKinsey,8 for example, suggests that the most diverse companies are more likely to outperform less diverse peers on profitability. Similarly, a strong sustainability commitment contributes to a more engaged workforce.9The latter, in turn, is linked with better business performance and higher share prices.10
Finally, prioritizing sustainability requires a broad skillset. For example, it relies on foresight and long-term planning, as well as cross-functional collaboration within and outside an organization. Being part of a sustainability-driven organization can help employees develop a skillset that is highly valued in an increasingly interconnected world, where building a healthy future for society, people, and planet, is of the utmost importance.
References
1. Murray, Alan and Meyer, David, Executive compensation at 73% of S&P 500 companies is now tied to ESG performance, survey finds, Fortune, October 31, 2022
2. https://www.gzeromedia.com/gzero-world-clips/whats-the-chance-of-a-global-recession-in-2023
3. De Vynck, Gerrit, Technology Layoff spree in Silicon Valley spells end of an era for Big Tech, The Washington Post, November 12, 2022
5. https://www.england.nhs.uk/greenernhs/a-net-zero-nhs/
10. https://www.wtwco.com/en-BE/Insights/2021/05/why-is-employee-engagement-important
Keira Driansky is Country President, Belgium & Luxembourg, for AstraZeneca. She is a graduate from the Harvard Business School, Yale University, and the University of Cambridge where she was a Marshall Scholar.
Michael Wong is an emeritus board member of the Harvard Business School Healthcare Alumni Association
