Responsible Sourcing

For Lonza, Responsible Sourcing means a commitment to upholding the highest social, environmental and governance standards when making sourcing decisions. 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.

Together with our suppliers, we are further shaping our collaborative approach and driving this process forward. Our suppliers and supply chain relationships are critical to the success of this commitment.

What we expect from our suppliers

To underline Our Commitment to Sustainability, we have developed a binding Supplier Code of Conduct. This Code sets forth key ethical, social, environmental and governance standards and principles that Lonza requires its suppliers, business partners and their contractors to adhere to, both globally and locally. Moreover, we expect our suppliers to ensure these standards and principles are upheld throughout their supply chain.

Our Responsible Sourcing program aims to help our suppliers evaluate their ESG performance and address their improvement areas, by identifying their sustainability risk and decarbonization maturity level. The suppliers’ respective risk and level comprise important criteria in selecting and evaluating our business relationships. Our Responsible Supplier Toolkit summarizes our Responsible Sourcing program, initiatives and targets, providing practical guidance and expected actions.

Initiatives for broader engagement in supply chain responsibility

In 2023, Lonza expanded its commitment to Responsible Sourcing practices by joining BioPhorum's Product Carbon Footprint (PCF) working group. Through this, we can actively support alignment across industries and collaborate on PCF challenges, with the aim to harmonize and simplify the requirements towards our suppliers.

Since 2022, we have been a member of Together for Sustainability (TfS), a joint initiative based on the principles of the United Nations Global Compact and the Responsible Care Initiative of the International Council of Chemical Associations (ICCA). The mission of the initiative is to drive sustainability (environmental, social, governance) improvements across the members’ supply base. As a member-driven organization and peer-to-peer network, TfS member companies aim to harmonize increasingly complex supply chain management processes and optimize dialog among worldwide business partners and suppliers.

We are also a member of Pharmaceutical Supply Chain Initiative - PSCI since 2019. The PSCI is a group of pharmaceutical and healthcare companies that share a vision of better social, environmental and economic outcomes in the communities we serve. Its purpose is to bring the industry together to define, implement, and champion responsible supply chain practices, which include:

Fair and safe work conditions and practices
Responsible business practices
Environmental sustainability and efficient use of resources

Supplier due diligence and sustainability engagement

To identify the potential ESG impacts of our suppliers, we have developed an in-house risk classification methodology, which assesses prevailing risks in the supplier’s country (country risk) and supplier’s sector (purchasing category risk). The methodology incorporates criteria for environment (including climate and energy), social standards (including child labor) and health and safety.

To measure the ESG impacts of our suppliers, we invite them to perform a tailor-made Supplier Sustainability assessment and/or audit, utilizing external providers and partners of industry initiatives. Associated risks are mitigated through Corrective Actions Plans (CAPs) and follow-up assessments and/or audits.

Responsible Minerals Sourcing

Lonza has established a Conflict Minerals Public Policy Statement governing our position and expectations towards our suppliers on managing the use of Conflict Minerals in our supply chain. Our due diligence process embodies the substantive components of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (CAHRAs), the Swiss conflict minerals regulation.

Reducing our supply chain’s carbon footprint

Greenhouse gas (GHG) emissions associated with our supply chain are a major contributor to our overall corporate carbon footprint. Scope 3 emissions include GHG emissions from purchased goods and services, capital goods, upstream and downstream transportation and distribution, waste generated in operations, employee commuting, business travel, and fuel- and energy-related activities.

A large proportion of Lonza’s Scope 3 GHG emissions can be attributed to purchased goods and services. In order to reduce such emissions across the supply chain, we have launched a Supplier Decarbonization initiative with the support of an external partner. Through this collaboration, our top emitting suppliers can submit their environmental data to Lonza and other customers, and access expert advice to reduce their carbon footprint.

As part of our emission reduction strategy, Lonza has submitted a letter of commitment to the Science-Based Targets initiative (SBTi). As part of this commitment, we expect our suppliers to set Scope 1 & 2 near-term climate targets aligned to the 1.5°C pathway following the SBTi guidelines, by 2028.