In this podcast, Heidrick & Struggles’ Dorothy Badie speaks to Jim Cleary, executive vice president and CFO of AmerisourceBergen, and Susan Lorenz-Fisher, the senior vice president of corporate responsibility and sustainability. One of the largest global pharmaceutical sourcing and distribution services companies, AmerisourceBergen is a #10 Global Fortune 500 and was recently named one of America’s most responsible companies by Newsweek. Cleary and Fisher discuss the importance of ESG, share some of the key ESG initiatives that AmerisourceBergen is currently focused on and how they collaborate on meeting their goals and communicate with their various stakeholders, and talk about the role the board plays in those initiatives. They also share how the company’s purpose of creating healthier futures drives their ESG efforts and offer advice to other companies starting out on their ESG journeys about how they can use their purpose to drive progress.

Some questions answered in this episode include:

• (5:35) Susan, can you share some of the key ESG initiatives that AmerisourceBergen is currently focused on and what you’re doing to address them?
• (9:28) Jim, I’m curious: as CFO, how do you view the importance of these ESG efforts with various stakeholders? How do you quantify the benefits?
• (12:22) The next topic I want to dive into with you is how you work together on these ESG efforts. Jim and Susan, how do you two collaborate on meeting AmerisourceBergen’s ESG goals?
• (15:09) Your company's purpose at AmerisourceBergen is “We are united in our responsibility to create healthier futures.” Susan, how does that purpose drive your ESG efforts? How can other companies starting out on their ESG journeys use their purpose to drive progress?
• (17:34) Jim, we continue to see ESG at the top of the agenda for board of directors, highlighting how seriously organizations are about driving this from the top. What role is AmerisourceBergen's board playing in ESG? What about the rest of the executive team?
• (20:15) Susan and Jim, as we bring this conversation to a close, I wanted to ask one final question. Looking ahead, which specific leadership skill sets and capabilities will be most important for your company to meet its strategic goals, including ESG?

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation.

Dorothy Badie: Hi, I’m Dorothy Badie, a client director in the Heidrick Consulting group. In today’s podcast, I’m talking to Jim Cleary and Susan Lorenz-Fisher. Jim is executive vice president and chief financial officer for AmerisourceBergen, responsible for managing the organization’s financial strategy and overseeing the company’s financial functions. Susan is senior vice president, corporate responsibility and sustainability for AmerisourceBergen. AmerisourceBergen was recently named one of America’s most responsible companies by Newsweek, and we will focus on sustainability and leadership in our conversation.

Jim, Susan, thank you for joining us today. To kick off this discussion, can you each share some background on your career journey, how you got to your current role, and, particularly, your interest in ESG?

Jim Cleary: Dorothy, this is Jim, I’ll go ahead and start out. First of all, thanks a lot for inviting us to be part of this podcast today. We really appreciate it.

ESG is something that’s always been important to me. In fact, I’d say that it was important to me long before it was even a term. My first job out of graduate school, after receiving an MBA, was to work as a cost engineer on the cleanup of a very large hazardous waste site. And, before graduate school, I worked for a company that recycled aluminum and scrap steel. So, at least the “E” part has always been important to me. And, before joining AmerisourceBergen, I was CEO of a smaller, publicly traded company, MWI Veterinary Supply, for 10 years, until we were acquired by AmerisourceBergen in 2015. During those 10 years, I actively worked with MWI’s board on governance. I started serving as chief financial officer of AmerisourceBergen three and a half years ago, and one of the areas in which I’ve have the opportunity to lead is our global ESG council—I am an executive sponsor. And I get to work very closely with Susan in this role. I promote ESG progress across AmerisourceBergen. I also promote communication and transparency with our stakeholders, including a number of our shareholders who are paying greater attention to how ESG aligns with their values. It’s probably not surprising that none—I repeat, none—of the traditional financial leadership roles of a CFO have gone away. But a CFO today and in the future also has an opportunity to have a leadership role in ESG initiatives.

At AmerisourceBergen, we’re a purpose-driven organization. We are “united in our responsibility to create healthier futures.” That's our purpose. ESG aligns with our purpose, and being a responsible company is one of the key elements to achieving long-term sustainable growth. At AmerisourceBergen, our long-term sustainable growth is supported by investments in our people, our culture, and our commitment to ESG. For example, diversity, equity, and inclusion is very important to us because we believe that meaningful value can be unlocked when individuals are empowered to bring their whole selves to work and embrace our collective differences. And so, with that comment, I’ll turn it over to Susan Lorenz-Fisher, who does a fantastic job leading our ESG efforts at AmerisourceBergen.

Susan Lorenz-Fisher: Thanks so much, Jim. And I love hearing your story and your background. Your continued support of ESG at AmerisourceBergen is just pivotal to our continued progress.

A bit of background on me: I’ve been a practitioner for about 15 years, and that really stemmed from my academic experience. When I was in college, I spent a lot of time in Asia and was an economics and biochemistry major, and just really got interested in international development and how the business world can support that in responsible ways. I ended up going to graduate school for a degree in what’s called sustainable systems. Then I became a consultant. I did that for a while, did a lot of corporate social responsibility reports for large companies, and spent a good amount of time doing overall CSR ESG strategy for large, publicly traded companies. Then I moved over to a food company and was there for about three years. I’ve now spent the past six-and-a-half years at AmerisourceBergen in a number of roles with increasing responsibility, starting with our commitment to climate and the environment, and really laying out some of our metrics and measurements for our carbon footprint.

That led to developing our first Corporate Citizenship Report, back in 2016. And then, about four years ago, I moved into an enterprise role under our communications and administration team, under the leadership of Gina Clark. And I’ve been in that organization for the past couple of years, really continuing to hone and build out our overall ESG commitment.

Dorothy Badie: Thank you both for telling us about your journeys and your passion for ESG. Susan, can you share some of the key ESG initiatives that AmerisourceBergen is currently focused on and what you’re doing to address them?

Susan Lorenz-Fisher: Yeah, absolutely. Thanks for that question, Dorothy. At the highest level, we really look at our company purpose, which is that we are “united in our responsibility to create healthier futures.” That’s the foundation for everything we do around ESG. So, when we say those words—environmental, social, and governance, corporate responsibility, sustainability—we really take a step back and think of it broadly, asking how we can foster a positive impact on the planet and its people. And we really embed that into how we improve access and equity in healthcare.

We have three priorities that we organize our ESG initiatives around. The first one is purpose-driven team members. We really see that as how we show up in terms of our culture. Fostering diversity and inclusion, really making team members feel like we’re investing in their long-term growth through training—things like that. And one of the pieces that we’re really proud of in terms of our progress in our purpose-driven team members pillar is the work we’ve done around gender pay equity. We just disclosed earlier this year that we have achieved 99.4% gender pay equity. So that’s something that we look at across our purpose-driven team members pillar, and we work very collaboratively across the organization to continue to hone and measure how we are showing up as an organization in terms of this first pillar of our ESG approach.

We call our second pillar resilient and sustainable operations. And that’s about how we look at the supply chain and our operations across AmerisourceBergen and how we’re accelerating the delivery of medications and healthcare services responsibly and with an eye on our environmental and social impacts. A couple of exciting things we’ve done in this focus area is committing to setting something called a science-based target. You'll hear that term more and more in the next few years as companies begin to base how they reduce their carbon footprint on scientific models of the changing climate. We’ve also had about 20% of our electricity globally come from renewable energy sources—we're continuing to build on as well.

The third pillar of our ESG strategy is what we call healthy communities for all. And that's where we see, across AmerisourceBergen, us inspiring equitable access to healthcare services within global communities and patient populations that we serve. We measure that in a number of different ways, commercially and philanthropically. In the last fiscal year, we donated about $5 million worth of products to charities around the globe. And we invested nearly $8 million through the AmerisourceBergen Foundation into more than one hundred charities that are doing the work in the health equity space. That’s really how we look at our three pillars of ESG as a company.

The one point I would emphasize is that our governance and collaboration and disclosure of all things ESG underpins those three core areas of our strategy. So, reporting out every year on our ESG initiatives on our global sustainability microsite, we align with the number of external standards. It's a little bit of an alphabet soup, so I won't go through all of them, but that is really foundational to us, making continued progress across all three of the pillars that I just talked through.

Dorothy Badie: Thanks for sharing these inspiring ESG achievements, Susan. Jim, I’m curious: as CFO, how do you view the importance of these ESG efforts with various stakeholders? How do you quantify the benefits?

Jim Cleary: That's a great question, Dorothy. We’re finding that ESG is increasingly important to a number of our internal and external stakeholders. It’s a growing list, including employees, customers, investors, rating agencies, regulators, and boards of directors. I say it’s a growing list and I’ll give you an example: yesterday, I was meeting with the lead insurance company on our directors and officers’ liability insurance, and they had a number of questions about our ESG efforts. So, we see an increasing number of stakeholders interested in this topic. And I’d say, regarding employees, they want to work for a company that’s aligned with their personal values, and ESG encompasses many of those values, especially the environment and DE&I. Regarding customers, they are managing their supply chains to ensure that their ESG goals are met, and a supplier like AmerisourceBergen can establish competitive advantage by helping our upstream and downstream customers with their ESG reporting. For example, around Scope 3 emissions, if the SEC moves forward with that, regarding investors, many of them incorporate ESG into their decision-making and analysis, and rating agencies are also starting to incorporate ESG into their analysis. Regarding regulators, there are different standards globally, which we’re watching and tracking, including from the SEC.

We're very proud of our progress on this front, which is ahead of regulatory requirements in the United States. For example, we’re on track to be able to measure Scope 1, 2, and 3 emissions, we’re aligned with the major international standards and frameworks for reporting, including SASB, that task force on climate-related financial disclosures, the World Economic Forum’s stakeholder capitalism metrics, and the United Nations’ sustainable development goals. Key metrics for our ESG reporting are externally assured. And this is the fourth year we’ve sought external insurance on our report.

In terms of quantifying the benefits that you asked about, we’re early in this. There will be revenue and operating income benefits from winning customer RFPs and include an ESG component. And savings will be measured from being a more efficient business, which can be used to reinvest and grow our business. And there'll be indirect benefits from becoming a stronger business—we will be a more resilient business by being able to adapt to extreme weather events, being an employer of choice, winning long-term shareholders, and lowering the cost of capital. So, thanks a lot of the question, Dorothy.

Dorothy Badie: Thank you, Jim. The next topic I want to dive into with you is how you work together on these ESG efforts. Jim and Susan, how do you two collaborate on meeting AmerisourceBergen’s ESG goals?

Jim Cleary: One example is our recent investor day, which was just last week at the New York Stock Exchange. Susan was a principal participant in our investor day, which was awesome. Along with business and financial presentations from our CEO, our group president, and me, Susan presented on our ESG strategy and initiatives to our investors and Wall Street analysts. This is indicative of how things like investor communications are evolving as ESG grows in importance and how the role of the CFO is expanding to include collaborating on ESG leadership and initiatives. Susan and I and our respective teams work closely together to drive change and to account for and track ESG progress and then report on it to stakeholders. Our teams also collaborate to submit data, for example, to ESG raters and rankers. And this level of collaboration will only increase in the coming years.

Susan Lorenz-Fisher: And, as a practitioner, I would say that what’s really been the fundamental movement in the past couple of years is that ESG and all its associated terminology has become mainstream. And that has meant that cross-functional collaboration is so critical to really integrating environmental, social, and governance considerations into how companies operate, how companies show up reputationally—the list goes on and on. And that’s why I think the piece around collaboration is so important: an organization’s ESG function can't be a bolt-on. It really has to be layered into the overall business strategy, ways of measurement, ways of collaborating, ways of governing. I think hearing Jim talk through how he sees collaboration and how his team and mind work so closely together—I think that’s a critical example of how companies need to be thinking about ESG. It’s everybody’s responsibility. And there have to be really clear policies for governance and, you know, identifying critical environmental and social topics, but ESG really has to be layered deeply, both horizontally and vertically across an organization.

Dorothy Badie: Thank you both. It does look like you found a very effective way to collaborate on ESG efforts, from identifying the opportunities to tracking down the efforts and communicating both in the organization and outside it.

Moving onto my next question. Your company's purpose at AmerisourceBergen is “We are united in our responsibility to create healthier futures.” Susan, how does that purpose drive your ESG efforts? How can other companies starting out on their ESG journeys use their purpose to drive progress?

Susan Lorenz-Fisher: Yeah, thank you, Dorothy, for that question. It’s a little bit cliché, but I would say that, for AmerisourceBergen, purpose really is the North Star for everything we do around our environmental and social impact and opportunity. We use that purpose as a way to make sure that every year, when our ESG report comes out, we’re making sure everything’s in line with our purpose—our overall strategy, how we’re measuring, how we’re managing, how we’re integrating. And so, I'd say, at the highest level, everything is grounded in that purpose. But I would say, too, that the concept of really making sure that companies understand what their material environmental and social impacts are and who their key stakeholders are is just a fundamental aspect of any good ESG program. And that’s something that we have layered really strongly into our overall approach to ESG.

And again, that really starts with our purpose. How do we show up as a company? What is our social purpose? And we have that very clearly delineated, as you just referenced Dorothy. So, it’s always the starting point for us, really making sure that we understand what that purpose means to our key stakeholders. I think that the customer piece is a good example, because our purpose, our guiding principles, how we layer and approach ESG are oftentimes a shared value and can be a really good point to start collaborations with external entities, with customers up and down the supply chain, with trade organizations and others like that. It’s our purpose that grounds all of that work and influences how we show up as a company in terms of our ESG impacts as well as opportunities.

Dorothy Badie: Thank you, Susan. And you’re definitely right. Many successful companies have a clear social progress. And I think, for you, it appears very clearly.

Jim, we continue to see ESG at the top of the agenda for board of directors, highlighting how seriously organizations are about driving this from the top. What role is AmerisourceBergen's board playing in ESG? What about the rest of the executive team?

Jim Cleary: Yeah, thanks a lot for the question, Dorothy. Our ESG strategy and efforts are overseen by our board and are fully supported across our board of directors and executive management team. Our board’s governance, sustainability, and corporate responsibility committee has oversight of ESG reporting and disclosure as well as overall ESG strategy alignment. And the committee’s name, the governance, sustainability, and corporate responsibility committee, indicates its commitment to ESG. The committee receives quarterly updates on all ESG programming across the organization, allowing them to give guidance and feedback on the company’s ESG strategy. Also, in conjunction with our compensation and succession planning committee, our board is evaluating ways to thoughtfully integrate an ESG performance metric, or modifier, in determining executive compensation. At a senior management level, we have an ESG global council, and it’s comprised of a cross-functional group of senior management leaders. The council’s overarching purpose is to ensure the integration and coordination of AmerisourceBergen’s ESG strategy and practices with our business strategy and tactics. The council, which is under Susan Lorenz-Fisher’s able management, leads AmerisourceBergen’s efforts to embrace a company-wide ESG approach, integrate ESG throughout our business, and ensure high standards of accountability for the management of ESG priorities and goals. And, as part of the work of this council, we are now a year into our three-year ESG integration plan that includes detailed tactics to advance our ESG vision and governance, enhance engagement with team members, customers, and other key stakeholders, and thoughtfully build measurements and accountability around our initiatives. And so, I think, like many large companies, you'll see that ESG is an increasingly talked-about topic and focus area for both our board of directors and our executive management team.

Dorothy Badie: Absolutely. And your board is clearly leading your organizations, ESG efforts and aligned on the importance of climate change and what to do about it. I really love how thoughtful you have been on setting a clear governance around your ESG efforts, too.

Susan and Jim, as we bring this conversation to a close, I wanted to ask one final question. Looking ahead, which specific leadership skill sets and capabilities will be most important for your company to meet its strategic goals, including ESG?

Susan Lorenz-Fisher: This is one of my favorite questions to answer in general, because I think the topic of ESG and how it’s been mainstreamed is so interesting. As a practitioner, I get a lot of questions from team members, from peers, from people in other organizations about what skills you need in order to be a strong ESG practitioner. And I think there are a lot of different ways of looking at it. I would say that, from that highest level, to lead ESG at a company, you really have to have a broad way of thinking—I often say that your skill set and your awareness of global issues has to be a mile wide and an inch deep. You know, there are a lot of practitioners internally and externally that you can lean on who are subject matter experts and who might support a very specific ESG metric, such as those around employee health and safety or a technical, energy-saving initiative that’s happening at a distribution center. Having that very broad way of looking at ESG and understanding what the critical issues are to your company is a really, really important one. I always say that’s a critical skill set.

But being able to facilitate cross-functional collaboration, in my opinion and experience, is absolutely the most critical skill to have to be a good ESG practitioner. You need to be able to make it a part of everybody’s job and integrate and infuse and influence ESG into every facet of a company and its decision-making processes. Often you’re collaborating, you’re coming up with ways to add ESG considerations into a project or a process, or you’re talking with a team about a new way of thinking about a business model or a customer partnerships. It’s truly that cross-functional collaboration, being able to leverage both horizontal and vertical relationships in an organization to get that infusion and integration. And, I think, leading it in line with a business strategy is one thing but equipping an entire culture to understand and embrace ESG matters as a part of their individual roles is another layer that’s really important. Jim, I’d love to kick it back over to you and hear your perspective on this one.

Jim Cleary: Susan, those were really great points and examples. I’ll add to that by giving a little bit more of a general answer about talent in general. At AmerisourceBergen, we know that our team members are definitely our most valuable asset. And we’re committed to cultivating and empowering them to drive our company’s long-term growth. And, underpinned by our purpose, we have leadership competencies. And at AmerisourceBergen, our leadership competencies are, first, people forward. Second, enterprise-powered. Third is action-biased. Fourth is creatively resourceful, and fifth is next-minded. And then, finally, sixth is purpose activist. These leadership competencies will drive our strategic business and financial results. And at the same time, they'll clearly drive forward our ESG initiatives. And I really am just so excited that our defined leadership competencies are so aligned with ESG. I’ll give a couple of examples. For instance, the people-forward leadership competency includes the ability to build diverse teams and actively cultivate an inclusive environment, which, of course, is highly aligned with ESG. The creatively resourceful leadership competency includes the ability to accomplish more with less through resourcefulness, creativity, and experimentation and, of course, that’s highly aligned with ESG. And I'll give one more example: the next-minded leadership competency includes the ability to envision and prepare for the future while delivering today’s goals. And again, that’s super aligned with ESG.

I'll just finish by saying that by developing the right leaders with the right skill sets, we can deliver everything from growth and financial results to purpose and ESG impact. And so, Dorothy, thank you so much for giving me and Susan Lorenz-Fisher, who leads our ESG efforts, the opportunity to join you guys today.

Susan Lorenz-Fisher: Dorothy, thank you so much to you and the team for the opportunity to talk today about our journey at AmerisourceBergen. It’s a subject we’re really excited about and we’re always happy to share our progress.

Dorothy Badie: Thank you both for your very insightful perspectives and thank you for making the time to speak with us today.

Thanks for listening to the Heidrick & Struggles Leadership Podcast. To make sure you don’t miss more future-shaping ideas and conversations, please subscribe to our channel on the podcast app. And if you’re listening via LinkedIn, Twitter, or YouTube, why not share this with your connections? Until next time.

About the interviewer

Dorothy Badie (dbadie@heidrick.com) is an engagement leader in Heidrick & Struggles’ New York office.