Case study: How Lonza creates economic value for its stakeholders
Lonza is one of the world’s leading and most trusted suppliers to the pharma, biotech and specialty ingredients markets, working together to develop medicines and products that improve and save lives. For over 120 years, Lonza has generated sustainable value for all its stakeholders Tweet This!, from its customers and suppliers to employees and their families, the communities in which it operates and its global shareholders.
This case study is based on the 2020 Sustainability Report by Lonza, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Lonza seeks to create value for its shareholders, customers, employees, suppliers and communities, and distributes its derived economic value to various stakeholders through a variety of streams. This includes governments through taxes, employees through compensation and benefits, shareholders through dividends and share price appreciation, suppliers and service providers through raw material and service prices, and society through taxes and local community projects. In order to create economic value for its stakeholders Lonza took action to:
- create economic value for employees
- create economic value for shareholders
- create economic value for public authorities
- create economic value for lenders
Subscribe for free and read the rest of this case study
Please subscribe to the SustainCase Newsletter to keep up to date with the latest sustainability news and gain access to over 2000 case studies. These case studies demonstrate how companies are dealing responsibly with their most important impacts, building trust with their stakeholders (Identify > Measure > Manage > Change).
With this case study you will see:
- Which are the most important impacts (material issues) Lonza has identified;
- How Lonza proceeded with stakeholder engagement, and
- What actions were taken by Lonza to create economic value for its stakeholders
Already Subscribed? Type your email below and click submit
What are the material issues the company has identified?
In its 2020 Sustainability Report Lonza identified a range of material issues, such as customer satisfaction, quality and reliability, socioeconomic compliance, anti-corruption, customer health and safety. Among these, creating economic value for its stakeholders stands out as a key material issue for Lonza.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Lonza engages with:
| Stakeholder Group |
| Suppliers |
| Customers |
| Group Management and Board of Directors |
| Employee Associations |
| Employees |
| Associations and Competitors |
| Consumers and Patients |
| Lenders |
| Shareholders and Investors |
| Rating Agencies and Analysts |
| Proxy Advisors |
| Regulators |
| Government / Authorities |
| Future Talent |
| Local Communities |
| Scientific Community |
| NGOs |
| Media / General Public |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Lonza conducted a materiality survey among its stakeholders, to capture their views on topics to be reported upon, actively managed or simply monitored. The survey’s participants included employees, customers, the scientific community, financial analysts, future talent, media and Lonza’s management and Board.
What actions were taken by Lonza to create economic value for its stakeholders?
In its 2020 Sustainability Report Lonza reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- As a purpose-led and responsible company, Lonza is an attractive employer for its 16,540 employees worldwide. In 2020, Lonza spent CHF 1,643 million for its employees.
- Creating economic value for shareholders
- In 2020, Lonza paid CHF 206 million to its shareholders.
- Creating economic value for public authorities
- In 2020, Lonza paid CHF 95 million to public authorities in taxes.
- Creating economic value for lenders
- In 2020, Lonza paid CHF 94 million to lenders.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
78% of the world’s 250 largest companies report in accordance with the GRI Standards
SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.
Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.
7 GRI sustainability disclosures get you started
Any size business can start taking sustainability action
GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom (venue: London School of Economics)
- Exclusive FBRH template to begin reporting from day one
- Identify your most important impacts on the Environment, Economy and People
- Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP.
- Benchmarking methodology to set you on a path of continuous improvement
See upcoming training dates.
References:
This case study is based on published information by Lonza, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://annualreport.lonza.com/2020/documents/Lonza_Sustainability_Report_2020.pdf
Note to Lonza: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.