In pharmaceuticals, trust is not built through marketing campaigns or corporate messaging. It is built through consistency, accountability and the confidence that every medicine reaching a patient has been produced responsibly.
For STADA, that same philosophy now extends beyond product quality and regulatory compliance. It is increasingly shaping how the company approaches sustainability, procurement and supply chain transparency.
Rather than treating ESG as a standalone initiative, STADA has embedded sustainability directly into the operational framework of the business. The result is an approach that places accountability where decisions are made, transforming sustainability from a reporting exercise into a business discipline.
From Corporate Commitment to Operational Reality
With more than 25,000 SKUs spanning consumer healthcare, generics and specialty pharmaceuticals, STADA operates one of Europe’s most extensive healthcare portfolios. Approximately half of those products are manufactured externally through a network of more than 400 contract manufacturing organisations alongside hundreds of raw material and packaging suppliers.
Managing a supply chain of this scale creates enormous opportunity, but also considerable responsibility.
For Martin Hess, Head of Global Sustainability, the solution has always been clear.
“We did not want to build an ivory tower. We wanted sustainability to sit within the functions where real decisions are made.”
Reporting directly to the CEO, Hess has helped shape STADA’s ESG strategy around a simple principle: ownership should remain with the teams responsible for delivery.
Rather than creating a separate sustainability department detached from daily operations, responsibility is distributed across the business. Compliance oversees anti-corruption programmes, HR leads workforce development and engagement, while procurement owns ESG performance throughout the supply chain.
This structure emerged during a wider transformation period beginning in 2021, when STADA established a sustainability steering committee comprised of senior leadership and extended executive board members.
From the outset, sustainability was positioned not as a communications exercise, but as a strategic business priority.
Procurement Becomes a Driver of Change
For a pharmaceutical company operating across multiple product categories and international markets, procurement has become one of the most powerful mechanisms for driving sustainable business practices.
Leading that effort is Rashi Munshi, Head of Responsible Procurement, who has spent the past seven years helping transform procurement processes across STADA’s global supplier network.
Today, ESG considerations are integrated directly into supplier onboarding and relationship management.
“We make sure suppliers formally acknowledge our code of conduct before they enter our systems. ESG expectations are embedded from the very beginning.”
This means sustainability criteria are evaluated alongside traditional commercial considerations from day one.
Environmental performance, labour standards, human rights protections and ethical business practices all form part of supplier qualification processes.
The approach ensures that sustainability is not retrofitted later but built directly into supplier relationships from the outset.
Turning Data Into Accountability
Managing thousands of suppliers requires far more than manual oversight.
To support its ESG assessment programme, STADA introduced EcoVadis in 2021 as a key component of its supplier evaluation framework.
The system enables the company to assess suppliers against recognised environmental, social and governance benchmarks while maintaining visibility across an increasingly complex global network.
More than 1,000 suppliers are now assessed through the programme, representing approximately 90 percent of direct procurement spend.
But for STADA, the assessment itself is only the beginning.
“We are not simply using scorecards to categorise suppliers. We work collaboratively with them to address gaps and proactively manage risk.”
This collaborative approach differentiates STADA from organisations that view ESG purely as a compliance exercise.
Procurement teams engage directly with suppliers, reviewing findings, discussing opportunities for improvement and agreeing practical action plans.
The objective is not merely to identify risk but to reduce it through partnership.
As ESG expectations continue to rise across industries, this collaborative model is helping suppliers strengthen governance structures, formalise policies and improve operational standards.
Industry Collaboration and Collective Progress
Beyond its own supplier network, STADA is also contributing to wider industry efforts through participation in initiatives such as the Pharmaceutical Supply Chain Initiative (PSCI).
These forums bring together pharmaceutical companies and suppliers to share best practice across areas including environmental management, worker safety, decarbonisation and supply chain transparency.
For Hess, the impact extends well beyond individual supplier assessments.
“Once suppliers begin their ESG journey, they rarely stop. Improvements made for one customer often benefit many others.”
This creates a multiplier effect throughout the wider pharmaceutical ecosystem, gradually raising standards across the industry as a whole.
Transparency in an Era of Regulation
As ESG reporting requirements become increasingly sophisticated, transparency is moving from aspiration to obligation.
STADA’s sustainability reporting has historically aligned with Global Reporting Initiative standards, but the introduction of the European Corporate Sustainability Reporting Directive (CSRD) has raised expectations significantly.
The company’s 2025 Sustainability Report reflects this shift, requiring substantially more detailed disclosure around supply chain impacts, governance processes and ESG performance metrics.
As a German-headquartered organisation, STADA must also comply with the German Supply Chain Due Diligence Act, placing additional emphasis on documented risk assessments, mitigation measures and monitoring systems.
The result is a growing need for integrated data, cross-functional collaboration and advanced reporting capabilities.
Technology therefore plays an increasingly important role.
Alongside EcoVadis, STADA utilises platforms such as SpendHQ and internal dashboards to monitor supplier performance, spending patterns and sustainability initiatives in real time.
When Sustainability and Resilience Become the Same Thing
Recent global disruptions have demonstrated that sustainability and resilience are no longer separate conversations.
The pandemic, geopolitical instability and supply shortages exposed vulnerabilities throughout pharmaceutical supply chains worldwide.
In response, STADA has strengthened dual-sourcing strategies and invested in deeper supplier partnerships to reduce dependency on individual providers.
“We need to be more adaptable, more resilient and more future-proof. That means reducing reliance on single-source suppliers.”
Importantly, the long-standing perception that sustainability comes at the expense of efficiency is beginning to disappear.
Increasingly, organisations recognise that strong ESG performance can enhance operational resilience, improve supplier relationships and create long-term commercial value.
In several Nordic markets, sustainability criteria now sit alongside price during public procurement evaluations, creating tangible competitive advantages for businesses demonstrating strong ESG credentials.
Looking Ahead
For STADA, the next phase of the journey centres on deeper visibility, greater transparency and smarter use of technology.
The company intends to extend oversight further into lower-tier supplier networks, strengthen strategic manufacturing partnerships and leverage AI-powered analytics to improve risk management and ESG reporting.
Carbon reduction will also become an increasingly important focus as regulatory expectations and stakeholder demands continue to evolve across Europe.
Yet perhaps the most notable aspect of STADA’s approach is not any individual initiative or technology platform.
It is the fact that sustainability has become part of the company’s operating system.
“Trust is not declared. It is engineered through systems, accountability and consistent action.”
In an industry where reliability is non-negotiable and patient outcomes depend on operational excellence, STADA’s strategy demonstrates that sustainability is no longer a separate agenda.
It is becoming an essential component of how modern pharmaceutical businesses create value, manage risk and build trust.
And in healthcare, trust remains one of the most valuable assets a company can possess.