ESG strategy
We foster a positive impact on the communities we serve by advancing access to care around the world
From expanding access to specialty medicines and clinical trials, to supporting our customers and partners in our collective mission to advance the health and well-being of patients, we aim to create healthier futures for all.
Our global ESG activities contribute to the United Nations Sustainable Development Goals (SDGs). The SDGs are a call for collaborative action to further the health and prosperity of the planet and all people.
As we pursue our environmental, social, and governance (ESG) initiatives from a foundation of ethics, integrity, and transparency, we are focused on three priorities that align with our services and beliefs.
Creating healthier futures is the foundation for everything we do, and our purpose directly inspires our global environmental, social, and governance (ESG) impact strategy. When we deliver on our purpose, we enhance access to healthcare and do our part to enable better patient outcomes in communities, which is why we embed our ESG strategy across our business. Our ESG team collaborates cross-functionally with leaders throughout the enterprise to elevate ESG priorities and implement meaningful initiatives.
In FY23, we incorporated an ESG metric covering 10% of the annual bonus opportunity into our executive compensation program. Our Board’s Compensation Committee selected three components for the ESG metric that were objectively measurable and aligned with Cencora’s ESG pillars of purpose-driven team members, resilient and sustainable operations, and healthy customers and communities.
In FY23, we incorporated an ESG metric covering 10% of the annual bonus opportunity into our executive compensation program. Our Board’s Compensation Committee selected three components for the ESG metric that were objectively measurable and aligned with Cencora’s ESG pillars of purpose-driven team members, resilient and sustainable operations, and healthy customers and communities.
In addition, Cencora has a fully verified science-based target to reduce absolute Scope 1 and 2 greenhouse gas emissions 54.6% by FY2032 from a FY2019 base year. Cencora also commits that 82% of its suppliers by spend, covering purchased goods and services, will have science-based targets by FY2027.
By aligning our business strategy with our purpose and ESG impact priorities, we deepen our value as a trusted partner for stakeholders across the industry, advance innovation across the pharmaceutical supply chain, and create an inclusive culture where our team members feel valued and can thrive. We plan to make further progress in FY24 as we continue to integrate our global business units, including Alliance Healthcare and PharmaLex, as one Cencora.
In FY23, we leveraged our experience, reach, and relationships to inform best practices and elevate our industry’s collective impact on ESG. We shared our ESG approach through our collaboration with the International Federation of Pharmaceutical Wholesalers (IFPW) to create a new framework to support IFPW members with alignment and advancement of their key ESG activities. Susan Lorenz-Fisher, Senior Vice President, Global Sustainability, ESG Integration & Real Estate, Cencora serves as the Chair of the IFPW ESG advisory committee, while Steve Collis, Chairman, President, and CEO, Cencora and Juan Guerra, President, International Business Group, Cencora sit on the IFPW Board of Directors.
Our approach to governance and oversight
The governance and ongoing execution of our global ESG impact is the responsibility of leaders and key internal partners across Cencora. The Global ESG impact team is led by the SVP, Global Sustainability, ESG Integration, and Real Estate, and falls under the purview of the Chief Communications & Administration Officer, who reports directly into the Chairman, President, and Chief Executive Officer of Cencora.
Our global ESG impact strategy, program, and goals have direct oversight and approval by the Executive Management Committee and our Board of Directors, particularly the Governance, Sustainability, and Corporate Responsibility Committee. Compliance and ethics are the cornerstone of our approach to ESG as a company, and we maintain a shared responsibility to operate at the highest levels of business ethics and integrity standards. All activities across our global ESG initiatives follow our global Code of Ethics and Business Conduct to ensure we execute our efforts aligned to these principles and uphold our standards.
We are committed to continually evolving our ESG strategy and governance approach. The exciting growth of our business and brand on a global scale in FY23 presented meaningful opportunities to ensure our approach to ESG impact aligns with the organization Cencora is today and the bright future we have ahead. A key focus area in FY23 was the evolution of our global ESG Impact Council, a cross-functional group of leaders who champion the integration and coordination of Cencora’s ESG strategy and practices with business strategy and policy. In addition to representing the various commercial and functional areas across our enterprise, we intentionally select leadership that reflects our expanded global footprint to ensure the way we positively impact people and the planet is shaped with an international viewpoint and broad industry perspective. Additional changes to our governance structure included the expansion of our subcommittees that align to our ESG priorities.
Our efforts to meaningfully enhance our ESG strategy also involved engaging a diverse set of internal and external stakeholders to understand the primary ESG issues where Cencora has the greatest impact. Engaging these stakeholders empowers our understanding of where our organization should prioritize our ESG areas of focus and resources. To ensure consistent alignment across our business, several layers of team members and leaders had the opportunity to influence the prioritization of the most important ESG issues for our business, including our Global ESG Impact Council, our Executive Management, and our Board of Directors. In FY24, we look forward to a continued focus on global integration that will enable better data sharing, particularly for our newly acquired companies, and improve process alignment.
Internal ESG governance model
Board of directors
This decision-making body provides oversight of our ESG strategy and practices, including risk management assessment and alignment to business ethics and the highest standards of integrity.
Key committees
The Governance, Sustainability, and Corporate Responsibility Committee of the Board of Directors oversees ESG strategy and practices and makes recommendations to the Board.
In addition, the Audit Committee, Compliance and Risk Committee, and the Compensation Committee oversee specific aspects of ESG.
Global ESG Impact Council
This council champions the integration and coordination of our ESG strategy and practices with business strategy and policy. It also provides guidance and input to determine ESG areas that should be the highest level of priority for the enterprise.
Management
Business segments and corporate functions support the integration of the company’s ESG priorities in line with our purpose.
How Cencora is making an impact on people and the planet
Purpose-driven team members
We put people first by collaborating openly across our organization to foster a diverse, inclusive work environment and uphold the highest ethical and compliance standards.
Areas
- Promote workforce diversity, equity, and inclusion
- Expand talent attraction, retention, and development opportunities
- Drive consistent human rights and labor practices
- Foster an environment for safety, health, wellness, and positive mental health
- Support business ethics and compliance commitments
Resilient and sustainable operations
We operate responsibly in our vital role at the center of the supply chain, ensuring people and animals have access to the medications they need while protecting the health of our planet.
Areas
- Advance efforts to create a resilient and responsible supply chain
- Increase product and packaging sustainability solutions
- Reduce GHG emissions and empower energy management
- Enhance product quality and safety
- Expand business continuity and climate impact practices
- Support cybersecurity, data protection, and privacy for our business
Healthy customers and communities
We broaden access to quality healthcare and accelerate positive health outcomes in communities and for our customers around the world.
Areas
- Improve access to affordable and quality healthcare
- Advance global public health outcomes
- Strengthen community impact and humanitarian work
- Support customer welfare and prescription drug safety
- Empower team member community engagement
