In pharmaceuticals, trust is not a marketing concept. It is operational. It is integral to business activity and service delivery. It sits in quality systems, regulatory filings, supplier audits and in the expectation that every product reaching a patient has been produced responsibly.
For STADA, sustainability follows the same logic. It is not positioned as a separate corporate initiative running alongside the business. It is being built directly into the mechanics of procurement, governance and executive oversight, so that transparency becomes structural rather than reactive.
From Philosophy to Operating Model
With more than 25,000 SKUs spanning generics, consumer healthcare and specialty pharmaceuticals, STADA operates one of the broadest portfolios in European healthcare. Approximately 50 percent of its products are manufactured externally through more than 400 contract manufacturing organisations and several hundred raw material and packaging suppliers. That scale creates reach and significant responsibility.
The guiding principle for how STADA handles that responsibility is simple: sustainability must live where decisions are made.
“We did not want to build an ivory tower,” says Martin Hess, Head of Global Sustainability. “We wanted to keep it in the responsibility of the related functions because, in the end, that is where you make the change.”
He has been instrumental in shaping the company’s direction over the past several years. Reporting directly to the CEO, he oversees the strategic integration of ESG across the business. Rather than centralising sustainability in a single team detached from operations, accountability sits within the global functions that already own the relevant topics. Compliance owns anti-corruption measures. Culture and People lead workforce engagement and development. Procurement owns ESG risk in the supply chain.
This structure took shape around 2021 during a broader transformation period for the company. A sustainability steering committee, composed of members of the extended executive board, was established to anchor ESG considerations at senior level. From the outset, sustainability was treated as a business discipline.
Embedding Responsible Procurement
As a three-segment company spanning Consumer Healthcare, Generics and Specialty products, STADA relies on a large and diverse supply network. Sustainable procurement has therefore become a powerful lever to shape and improve business practices across its value chain.
For Rashi Munshi, who leads Responsible Procurement, this has resulted in a significant operational shift. Having joined STADA seven years ago to drive procurement transformation, she now manages responsible procurement across an extensive and multifaceted supplier landscape.
Under her leadership, ESG topics are integrated and formalised in both supplier onboarding and ongoing partnerships.
“We make sure that the suppliers are formally acknowledging our code of conduct before we are putting them into the system,” she says. “Then we do regular risk assessments. It is very much embedded in the process now.”
ESG criteria are built into supplier qualification from the outset rather than retrofitted later. For every new supplier, the same expectations apply, from environmental performance and climate impact to labour conditions, human rights and business ethics.
Managing a portfolio of this scale requires a sophisticated supplier management approach. To support this, STADA implemented EcoVadis in 2021 as the backbone of its ESG assessment framework.
“We have thousands of suppliers,” Martin notes. “You need to have a partner who is managing this very professionally and where you can leverage their scaling effect.”
At the same time, operational ownership remains firmly with STADA. The model combines external standardised ratings with internal management and follow-up. It operates in layers. First, an abstract risk assessment screens the entire supplier base using factors such as country and industry exposure. On that basis, STADA then conducts more detailed ESG assessments through EcoVadis for prioritised suppliers.
Today, this covers more than 1,000 partners and represents approximately 90 percent of direct category spend, including suppliers of API raw materials, inactive ingredients, excipients, packaging suppliers, contract manufacturers and high-spend indirect suppliers.
This two-step approach focuses resources where exposure is most material while maintaining visibility across the broader network.
Crucially, the rating is not where the work ends.
“We are not just using the EcoVadis scorecards to categorise our suppliers,” Rashi explains. “We are actually doing very collaborative follow-ups with our suppliers, really talking to them about these findings to proactively manage risks.”
That engagement is where trust is built. Procurement managers do not simply log a score. They engage suppliers in discussion, identify gaps, agree corrective actions and support improvement plans. ESG performance becomes part of the relationship rather than a compliance checklist.
This is also why Responsible Procurement sits within Global Procurement. The teams negotiating contracts and managing supplier relationships are the same teams accountable for integrating ESG considerations.
Collaboration and Momentum in the Supply Chain
Industry collaboration reinforces this approach. Through initiatives such as the Pharmaceutical Supply Chain Initiative (PSCI), STADA participates in supplier webinars and forums focused on process safety, environmental standards, decarbonisation and digital transparency.
Rashi is personally involved in leadership discussions within PSCI India, contributing to wider efforts to raise standards across the sector.
Martin believes that simply initiating ESG ratings can become a catalyst for wider behavioural change.
“That is really inducing a lot of change in the whole supply chain,” he says. “Once you have started, even as an API supplier, you probably will not stop because other customers will ask you.”
Over time, suppliers formalise policies, document procedures and strengthen governance systems. Improvements made for one customer frequently extend to other relationships, gradually raising standards across the wider ecosystem.
Regulation, Reporting and Data Discipline
Transparency is driven not only by partnership but also by regulators and capital markets.
As a private equity-backed company, STADA operates under rigorous governance expectations. Financial institutions increasingly integrate ESG metrics into risk assessments, while disclosure requirements continue to expand.
Although STADA has historically published sustainability reports aligned with Global Reporting Initiative standards, its 2025 Sustainability Report is based on the European Corporate Sustainability Reporting Directive (CSRD), requiring significantly more detailed reporting around ESG performance throughout the supply chain.
As a German-headquartered organisation, STADA is also subject to the German Supply Chain Due Diligence Act. Even as reporting obligations continue to evolve, businesses must demonstrate documented risk assessments, mitigation measures and monitoring systems.
Preparation requires integrated data and close collaboration across functions.
Digital tools therefore play a critical role. Beyond EcoVadis, STADA uses platforms such as SpendHQ alongside internal dashboards to track supplier performance, spending patterns and ESG initiatives in real time.
The long-term ambition is even greater visibility, extending beyond tier-one suppliers and creating deeper insight into risks further upstream.
Resilience, Risk Mitigation and Sustainability Converge
Recent global disruptions have highlighted the importance of that visibility. The pandemic and geopolitical tensions exposed vulnerabilities throughout pharmaceutical supply chains worldwide.
STADA’s response has included strengthened dual-sourcing strategies and closer supplier partnerships.
“We need to be more adaptable, more resilient, more future proof,” Rashi reflects. “This is where we are making sure that we can reduce the dependency on single suppliers.”
The traditional assumption that ESG and cost efficiency are in conflict is increasingly outdated.
“That probably would have been a question five years ago, but I think not anymore,” she says. “Now we look at sustainability more as complementing the cost-efficiency side.”
In some Nordic markets, public tenders now place ESG criteria alongside price as a key evaluation factor. Suppliers demonstrating strong environmental and social performance can gain a direct competitive advantage. Sustainability increasingly influences both market access and commercial success.
Culture and Purpose
Culturally, sustainability aligns naturally with STADA’s purpose of caring for people’s health.
Producing affordable, high-quality medicines carries an inherent social responsibility.
“We are dealing with patients,” Martin emphasises. “We are producing medicines to help people’s lives and health.”
That sense of responsibility resonates internally. Employees are increasingly interested in how their organisation addresses environmental and social challenges. Not everyone will read a sustainability report from cover to cover, but the existence of a robust reporting framework, and the discipline behind it, helps build confidence.
Looking Ahead: Visibility, Carbon and Technology
Looking ahead, the direction of travel is clear. STADA plans to extend visibility deeper into lower-tier suppliers, strengthen long-term partnerships with key manufacturers and invest further in technology, including AI-driven analytics, to enhance transparency.
Carbon reduction throughout the supply chain will become increasingly important as expectations continue to rise across Europe. Understanding sourcing origins, transport emissions and energy usage will be essential to making credible progress.
What sets STADA’s approach apart is not a single initiative or metric. It is the fact that sustainability is treated as part of the company’s operating system. It is embedded in procurement, governance and executive leadership, measured, reviewed and reported with the same seriousness as cost and quality.
In pharmaceuticals, reliability is non-negotiable because patients depend on it. By building transparency directly into its supply chain architecture, STADA is reinforcing that reliability at every stage.
Trust, in this context, is not declared. It is engineered.