The Enterprise Risk Management (ERM) program is a critical platform for our global organization and business as it provides a mechanism and a structure for prudently addressing risk responsibility and management in each organization. We pursue a comprehensive risk management program as an essential element of sound corporate governance and is committed to continuously embedding risk management in our daily culture.
We have identified six risk categories:
- strategic risks
- financial risks
- corporate governance and reputation risks
- political, legal and regulatory risks
- products and services risks
- operational and performance risks; operational risks include business interruption risks (e.g. natural catastrophes) and environmental risks
Through this process we have drawn up a Lonza-specific risk map. Risks were identified for each segment and for the corporate functions, and the risks are being tracked.
EHS risk assessments serve as valuable tools in our business and operating practices and in our planning processes. We review new ventures, capital investments in production equipment and systems and other major projects not only for the business opportunities they present, but also for their environmental, health and safety impact.
Suppliers to Lonza must adhere to the requirements of our Supplier Code of Conduct. This code defines standards of business ethics, as well as labor, health, environmental and safety practices. We routinely conduct audits of suppliers to monitor adherence to this code. Strict ethical requirements are most important when sourcing compliant materials for medicines and therapies.
Along with the businesses, our procurement team develops responsible sourcing strategies for spend categories, raw materials and services. Our risk analysis process enables us to identify high-risk materials and geographies and take adequate mitigation actions.
The Pharmaceutical Supply Chain Initiative (PSCI) is a non-profit business membership organization established in 2006, which Lonza joined in February 2019. The PSCI is a group of pharmaceutical and healthcare companies who share a vision of better, social, environmental and economic outcomes in the communities we serve. This includes:
- Fair and safe work conditions and practices
- Responsible business practices
- Environmental sustainability and efficient use of resources
The purpose of the initiative is to bring together the pharmaceutical industry to define, implement, and champion responsible supply chain practices. It has developed a set of principles that set the guidelines for a more sustainable supply chain. We have embedded these principles in our Lonza Supplier Code of Conduct and encourage our suppliers to follow them.