We believe that creating and maintaining a diverse workforce helps us drive innovation, exceed customer expectations and remain economically and socially sustainable. Diversity, Equity & Inclusion (DE&I) also supports our goals of attracting and retaining talent who enrich our culture and help us create new solutions to tomorrow’s challenges.
Our approach to creating a culture of inclusion and belonging
We are committed to promoting a strong sense of inclusion among our employees. Therefore, we approach Diversity, Equity & Inclusion (DE&I) with the same purpose as our other global business objectives and aspirations. While we have always been a diverse organization – we currently span 66 countries and have over 64,000 employees from 139 nationalities – we recognize that our success depends on our ability to foster an environment that champions equity and inclusion. In addition, our DE&I approach fuels our efforts to make positive impacts in the communities where we live and work. We expect our leaders and managers to be mindful and considerate in how they attract, hire, retain, and promote their people. We aim to help every employee maximize their potential, regardless of their gender identity, culture, ethnicity, race, religion or creed, sexual orientation, nationality, socioeconomic and family status, language, disability status, age, mindset, faiths, military service, or political conviction.
We strive to create equitable outcomes and identify and eliminate any barriers that may hinder our employees’ contributions or their access to opportunities or career advancement. Ultimately, we believe diversity inspires progress and strengthens our ability to innovate in all areas of our business.
The uniqueness of our people that brings science, curiosity and our High-Impact Culture to life. Therefore, we nurture an environment with a collective sense of belonging so that all team members feel valued and appreciated. This inclusive approach improves our overall performance and leads to more positive outcomes for our customers, patients and partners.
Roles and responsibilities
The Chief Diversity, Equity and Inclusion Officer is responsible for our global DE&I strategy and steering its related activities. In this role, she reports directly to the Chair of the Executive Board, whose Board responsibilities include Group Human Resources.
In addition, we have established a centralized Diversity Council consisting of high-ranking executives from all our business sectors and selected Group functions. The Diversity Council’s responsibilities include:
- Supporting equity and inclusion across our organization and its activities.
- Serving as ambassadors and advisors to the Executive Board and managing directors in country organizations.
- Proposing strategic goals, initiating measures and ensuring managers meet their responsibilities in their respective units.
- Exchanging information, sharing best practices and aligning on next steps.
- Working across businesses, functions and countries to integrate DE&I within our daily work to benefit our employees and customers.
Our commitment: International policies and principles
Our Social and Labor Standards Policy categorically states that our company does not tolerate any form of discrimination, physical or verbal harassment, or intolerance. To underscore our commitment to equality, fairness, inclusion, and tolerance in the workplace, we also participate in industry-wide initiatives:
- The Women’s Empowerment Principles, an initiative of UN Women and the UN Global Compact network, help to promote gender equality and women’s empowerment in the workplace. In addition, we also participated in the UN Target Gender Equality Programme in 2021/22, which supports companies in achieving gender balance in business.
- The Inclusion Action Plan of the German Mining, Chemical and Energy Industrial Union (IG BCE) defines concrete measures to create a more inclusive workforce for employees with disabilities. In endorsing this plan, we meet the standards of the United Nations Convention on the Rights of Persons with Disabilities.
- The Equal Opportunity Charter, through which we pledge to do everything in our power to achieve gender equality within our company.
- We are one of over 4,500 signatories of the German Diversity Charter, Charta der Vielfalt e. V., a corporate initiative that promotes diversity in companies and institutions.
In addition, we are a signatory to the Business Coalition for the Equality Act, an alliance of leading companies in the United States. We are also active in a number of external associations and public-private partnerships supporting equality, such as Healthy Women, Healthy Economies, ClosinGap (Spain), Women Empowerment Council (China), SEMI industry association (dedicated DE&I initiative), Embracing Carers™, and Disability:IN promoting the complete inclusion of people with disabilities.
Meeting statutory requirements
The German Law for the Equal Participation of Women and Men in Leadership Positions in the Public and Private Sector has been in effect in Germany since 2015. Due to our legal status as a KGaA (a corporation with general partners), this law also partly applies to us.
With a 37.5% share of women (6 out of 16 members), our Supervisory Board already meets the requirements of German gender quota legislation. As a KGaA, we are not required to set targets for our Executive Board, which currently has a 20% share of women (1 out of 5). Detailed information can be found in the Statement on Corporate Governance in our Annual Report.
Strategy rollout and new structure introduction
In 2022, we rolled out our DE&I strategy globally. We created a network comprising our 18 major countries, nominated dedicated representatives and developed tailored roadmaps for each country. We also streamlined the councils and working groups in the business sectors and major Group functions, renaming them Diversity, Inclusion, Community & Equity Councils.
Progress on our 2030 aspirations
In 2021, we pledged to our people, partners, patients, and industry to intensify our DE&I efforts and set robust aspirations to hold ourselves accountable. In 2022, we continued this strong focus and demonstrated that we are on track to advance toward our 2030 goals.
Gender equity: We developed measures to achieve a more balanced gender structure at various hierarchical levels of our business. We are steadily making progress and have increased the share of women in leadership (roles 4+) to 38% (2021: 36%) while maintaining a stable 43% proportion of women in our global workforce. Building on this effort, we are aiming for gender parity in leadership positions by 2030. Moreover, we are committed to fair and equitable pay for all employees.
Culture and ethnicity: With 24% of our employees based in the United States, it is crucial that we become an employer of choice among underrepresented racial and ethnic groups in this market. Therefore, we plan to increase the share of employees in U.S. leadership (roles 4+) who are members of underrepresented racial and ethnic groups from 21% to 30% by 2030.
Additionally, due to our current performance and future growth in Asia, Latin America and the Middle East and Africa (MEA), accounting for 40% of our Group sales, we aim to increase the global share of nationals from Asia, Latin America, and MEA in leadership positions (roles 4+) from 16% to 30% by 2030.
Inclusion: Beyond our aspiration to foster specific types of diversity and equity, we are accelerating our efforts to create a genuinely inclusive culture for all employees. To achieve this, we rolled out training courses to help leaders reflect on how they can lead more inclusively. All leaders will be encouraged to complete these courses over the coming years. At the end of 2022, 64% (2021: 37%) of our leaders had participated in this training program.
Diversity figures are part of our compensation-related corporate goals. We use a prediction algorithm developed in-house to support the modeling and tracking of our key performance indicators for DE&I.
Committed to fair and equitable pay
Our commitment to pay equity is a critical aspect of our DE&I strategy. To create transparency around unexplained pay gaps and identify their underlying root causes, we conducted a pay equity analysis in 2021 with a focus on gender-based discrepancies. In this first step, we analyzed ten of our largest countries, covering approximately 80% of our total employees. Based on this analysis, we continued to improve our transparency by releasing pay data publicly for the first time: The identified adjusted (unexplained) gender pay gap is less than 1.5% in favor of men. While this is a good starting point and below the existing benchmark, we will continue to monitor pay data and take measured actions as needed. These include enabling our leaders to ensure we continue making equitable and unbiased pay decisions.
Cultivating inclusion every day
We provide a framework for education in the areas of diversity, equity and inclusion, combined with empowerment to support inclusive leadership strategies. To maximize our leaders’ effectiveness in building diverse and inclusive teams, we rolled out the Inclusive Leadership Workshop as part of our global inclusion key performance indicators. It corresponds to the Leadership Program of 2021 and was renamed. The workshop combines global leadership interactions, peer coaching, continuous self-reflection, and leadership accountability. It is mandatory for all our leaders.
We also provide many learning opportunities with training and listening sessions on how to be a more inclusive colleague such as our unconscious bias training sessions. With the introduction of the psychological safety module, we help employees understand how important it is to create a safe environment in teams and ensure everyone’s voice is heard. In addition, we conducted a global inclusion assessment to better understand specific areas of opportunity and gain employee insights in order to create a more inclusive workplace. More information on how we approach employee engagement can be found under Corporate culture.
Since we work in an international environment, we support our employees with intercultural training and digital tools such as our Cultural Navigator. Furthermore, we offer language training and international networks to assist employees in international assignments and projects. For example, more than 1,000 expatriate employees are members of the International Community, which meets regularly at our global headquarters in Darmstadt.
Helping diverse talent flourish
To broaden diversity within our organization, we have continued to create a strong internal female talent pipeline, promote more women into leadership positions, and actively source external female talent. Additionally, we focus on internal development and external sourcing of international and underrepresented ethnic talent. We have also identified opportunities in each business sector to provide extra recruiting support and leverage existing and new talent to reach more diverse audiences. In addition, we have piloted software to evaluate the inclusivity of our job descriptions and provide recommendations to make them more inclusive. In 2022, we also conducted self-identification campaigns in specific regions in order to better understand our internal demographics. These campaigns encouraged employees to voluntarily provide information about their ethnicity, disability status, sexual orientation, gender identity, or veteran status.
To promote diversity in our hiring for internal roles, we continued our various mentoring, sponsorship and talent programs. We are also exploring new partnership opportunities to reach more diverse STEM candidates. These include HerHackathon (women in IT), GEM (underrepresented ethnical candidates in science, engineering and technology), and LOC M Scholars (underrepresented ethnic candidate tuition support for family members of existing employees). Furthermore, we have added information about our Employee Resource Group community to our new employee onboarding process, which raises awareness about our employee groups and networks worldwide to new employees in the early stages of their roles.
A sense of belonging: our employee networks
In our internal DE&I employee groups and networks there are over 7,500 members (since a person can be active in more than one group, the number of people may differ from the number of members). These members have created a strong base that fosters a sense of belonging for community members and their allies. Our more than 60 groups and networks include Women in Leadership, our Black Leaders Network, Rainbow, and I’M Able. We are also strongly represented at our local sites in a number of women-oriented organizations operating globally.
Supporting DE&I in the communities around us
In 2022, we announced a partnership with CNote, a women-led impact investment platform, to improve economic growth and opportunities in U.S. communities in which we operate. We will provide US$ 20 million, which can be used to fund BIPOC-owned small businesses in those communities via microfinance loans. CNote provides a diversified and scalable way to support job creation, small business growth, affordable housing development, and sustainable economic growth in underserved communities. This novel approach utilizes cash on hand that is held in our traditional bank accounts and instead deploys the cash to Community Development Financial Institutions.
In our Healthcare business sector in the United States, we have enacted a supplier diversity program to comply with local legislation. We are focusing our U.S. efforts on enhancing our current supplier locator tool by broadening the rollout among sourcing managers so as to improve our ability to connect with and potentially award business to a broad range of vendors. Additionally, we are continuing to expand the program to other business sectors in the United States that have pilot planning in place.
I’M IN is our external-facing DE&I initiative to amplify the voices of underrepresented populations and improve the healthcare ecosystem. Since 2019, we have partnered with healthcare practitioners through educational events, allowing them to explore untapped topics of health inequity in multiple sclerosis (MS) care and learn how inclusion positively impacts the patient experience. We are the first company to fund fellowships dedicated to reducing disparities in neurological care for MS patients.
Additionally, we have established a diversity in clinical trials project, as we understand the need for a diverse patient population in clinical trials and throughout the drug development life cycle. To maintain inclusivity, we focus on four key pillars that identify key tactical and targeted efforts. We have collated these and other examples in an internal DE&I in the business playbook, encouraging our teams to consider inclusive approaches in R&D, product development, procurement, marketing, sales, and partnerships.
Ensuring fair treatment for all
We do not tolerate any form of discrimination in our company, as stipulated with binding effect in our Code of Conduct and Social and Labor Standards Policy. In 2022, we published two new position papers on non-discrimination and non-harassment, complementing our position paper on DE&I. In addition, we have established various reporting channels to ensure employees have a clear point of contact should they experience harassment or discrimination in the workplace, or any other violations of our standards. Their first points of contact are their supervisors, HR or compliance teams. Alternatively, employees can also make anonymous calls to our compliance hotline. In 2022, 20 alleged cases of discrimination were reported via the compliance hotline and other channels, seven incidents were confirmed.
Solid ranking in diversity, equity and inclusion indices
We continue to make progress on integrating diversity, equity and inclusion within our business:
- We ranked ninth in the World’s Top Female Friendly Companies 22 list by Forbes, which identifies the companies leading the way in supporting women inside and outside their workforces.
- In the Financial Times ranking, we were selected as one of the leading 100 (out of over 15,000) companies on diversity.
- We scored eighth in the German Diversity Index published by BeyondGenderAgenda. The index reflects the transparency of the diversity commitments of the DAX 40 German blue-chip companies in their annual and sustainability reports for 2021.
- Our CEO Belén Garijo was presented with the BeyondGenderAgenda 2022 Honorary Award “Business” for her and the company’s outstanding commitment to diversity and inclusion.
- We were selected as one of the top 11 large companies in the LGBTIQ+ Diversity Performance Index by Uhlala Group
- We ranked seventeenth out of 100 in the 2022 BCG Gender Diversity Study by the Boston Consulting Group and the Technical University of Munich. This study rated management board and supervisory board gender diversity among Germany’s largest publicly listed companies.