Sustainability at AstraZeneca...Sustainability Update Strategy and governance 1 Strategy and governance AstraZeneca’s purpose is to push the boundaries of science to deliver life-changing

Sustainability Update | Strategy and governance 1

Strategy and governance

AstraZeneca’s purpose is to push the boundaries of science to deliver life-changing medicines. New medicines are needed more than ever due to growing populations, people living longer and certain lifestyle choices rapidly increasing the incidence of non-communicable diseases (NCDs).

As one of very few pure-play1 biopharmaceutical companies specialising in chronic diseases to span the entire value chain of a medicine, finding innovative ways of satisfying unmet health needs is at the core of AstraZeneca’s responsibility to our stakeholders and to society.

As an industry, we operate in a challenging environment with ever-changing circumstances regarding research and development productivity, pricing pressures, patent expiries and regulatory requirements. How we conduct ourselves as we navigate this environment is underpinned by our commitment to being a responsible company, working with integrity and being transparent about how we deliver our business activities in a way that brings value to our stakeholders, society and our company.

Our approach

Sustainability at AstraZeneca

We want to be valued as a source of great medicines and trusted as a company that delivers business success sustainably. Good governance is crucial to ensuring we are well managed, can deliver our strategic priorities and meet stakeholder expectations.

“Acting responsibly applies to all our activities. External recognition is particularly helpful in providing independent validation of our performance. I was therefore pleased that we were once again listed in the Dow Jones Sustainability World Index in 2014. We also retained our listing on the European Index for the seventh year running.

In the biennial Access to Medicine Index, we were disappointed to find ourselves in 15th position. We remain determined to find new ways to improve access to healthcare.

I am confident that our Healthy Heart Africa programme, which aims to improve the lives of hypertensive patients across Africa through increased education, screening, diagnosis and treatment, will make an important contribution.

Improved access matters because our innovative medicines can make a global contribution to better health. They help increase survival rates and improve quality of life for patients in important areas of medical need.”

Leif Johansson Chairman

1 A pure-play biopharmaceutical company is one that is not involved in consumer or animal healthcare, diagnostics or medical devices.



AstraZeneca’s approach to sustainabilityIn 2013, we announced a revised business strategy and our Senior Executive Team (SET) endorsed a focused approach to sustainability for the company, that is aligned to, and supports, the delivery of our business strategy.

Our prioritiesAreas of special focus

| Access to healthcare: increasing access to healthcare for underserved patient populations in a sustainable way. Our goal is always to improve health for patients and to add value for our stakeholders and our business.

| Environmental sustainability: promoting environmental stewardship across the product life cycle.

These two areas of special focus were identified as we believe we have both the capability and responsibility to implement activities that accelerate our business strategy while delivering wider benefits to society and the environment.

We have set long-term goals for our key programmes focused on improving access to healthcare and reducing our environmental impact. Both areas are included as priorities

on AstraZeneca’s performance scorecard, and activity is supported and overseen by dedicated members of the SET.

In addition, we continue to manage a range of sustainable business commitments, taking into account external stakeholder expectations and internal risk assessments.

Materiality We monitor risks and opportunities associated with our sustainability profile on an ongoing basis with the SET and the Board of Directors. This is part of a broader enterprise risk review cycle carried out periodically across the business. To support this process, an internal ‘Responsible Business’ Council comprised of senior leaders from across the business reviews priorities and activities on a regular basis.

The materiality landscape remains dynamic, however. We are therefore carrying out a materiality review with independent advice from an external advisory board and other external stakeholders to help inform our long-term approach to sustainable business. The review will involve key internal representatives from across the business to ensure integration with the core business strategy.

Our strategic priorities

Return to growth

Be a great place to work

Achieve scientific leadership

We push the boundaries of

science to deliver life-changing

medicines

Our ambition is to improve the lives

of 200 million patients by 2023

Our strategic approach

Our purpose Our ambition

We follow the science. We put patients first. We play to win. We do the right thing. We are entrepreneurial.

Our values

Ethical business practices

Responsible research

Responsible employer

Environmental sustainability

Access to healthcare

Our commitments to stakeholders and to sustainability



Governance

We are committed to operating with integrity and high ethical standards across all our activities. Our commitment to operating responsibly underpins everything we do and, to that end, our sustainability objectives are aligned to, and support the delivery of, our business strategy.

Our sustainability framework is the vehicle for managing commitments that are agreed across the Group, taking account of external stakeholder insights and internal reputational risk assessment.

Our SET manages our sustainability framework and Non-Executive Director Geneviève Berger oversees implementation and reporting to the Board. Members of the SET also sponsor key sustainability programmes.

All senior managers throughout the Group are accountable for operating responsibly within their areas, taking into account national, functional and site issues and priorities. Line managers are accountable for ensuring that their teams understand sustainability standards and that people are clear about what is expected of them. Individually, everyone has a responsibility to integrate sustainability considerations into their day-to-day decision-making, actions and behaviours.

Sustainability Council Our Sustainability Council is chaired by our Vice President of Corporate Affairs and members include senior leaders from across the business. The Council’s agenda is focused on driving long-term value creation by agreeing:

| Sustainability priorities for the Group

| Performance metrics and setting targets for cross-business activities

| Appropriate policy positions to support AstraZeneca’s business objectives and reputation management.

The Council is supported by a Sustainability Working Group of SET area representatives. Among other things, they continually review external issues with the potential to affect AstraZeneca and, as appropriate, prepare management and measurement proposals for the Council’s consideration.

Sustainability governance model

The Board

Senior Executive Team

Sustainability Council

Sustainability Working Group

“AstraZeneca has been a signatory to the United Nations Global Compact since 2010 and remains committed to the universal principles in the four core areas of human rights, labour, environment and anti-corruption. I am proud to confirm our continued support for this important initiative to underpin AstraZeneca’s corporate commitments to sustainability.”

Pascal Soriot, Chief Executive Officer



Stakeholder engagement

We can learn a great deal by listening to the people who have a stake in our business. We use their feedback to make sure that appropriate considerations are being included in our strategy development and risk management planning.

By acting on the feedback of our stakeholders, we can also build greater trust in our working relationships – a key ingredient for long-term business success.

Our regular engagement with stakeholders, which can take place through meetings, phone conversations or social media, provides the opportunity for sustainable business issues or concerns to be raised and discussed.

ShareholdersWe encourage feedback from shareholders both at face-to-face meetings and through formal assessments provided by surveys such as the Dow Jones Sustainability Indexes, which reflect areas of shareholder interest. We meet regularly and hold events specifically for socially responsible investors (SRIs), where the agenda reflects areas of interest expressed by the SRI community.

In 2014, key areas of interest for the SRI community were how AstraZeneca promotes access to healthcare and how it safeguards

patient safety. Taking responsibility for minimising environmental impacts along the value chain is an expectation of all corporations, including those in the pharmaceutical sector. There is also an ongoing focus on ethical business conduct, for example in the areas of sales and marketing and clinical trials, particularly as pharmaceutical companies move into emerging markets.

Besides looking for evidence of strong commitments and policies, the SRI community looks at the translation of these into practice – how a policy is monitored and enforced, and what performance looks like.

EmployeesFeedback opportunities are integrated into our internal communication programmes and employee survey. In addition, our Code of Conduct outlines the procedures for employees to raise integrity concerns, including a confidential telephone helpline and an externally accessible and hosted website. More information is available in the our people section.



CustomersOur day-to-day business activities include regular contact in our local markets with physicians and other healthcare professionals, and those who pay for healthcare, including governments. Our communications focus on providing information about our medicines, the diseases they treat and the benefits and risks associated with their use. More information is available in the compliance and access to healthcare sections.

Pricing and reimbursement continue to be highly challenging in many markets.

Most pharmaceutical sales are generated in highly regulated markets where governments, insurers and other private payers exert various controls on pricing and reimbursement. Austerity programmes are further constraining healthcare providers, while difficult economic conditions burden patients who pay out-of-pocket for medicines. As part of the pharmaceutical industry, we continue to work with policymakers and regulators to help ensure they strike a balance between containing costs, improving outcomes and promoting an environment that fosters medical innovation.

Governments and non-governmental organisations (NGOs)The pharmaceutical industry is one of the most highly regulated of all industries. Almost every aspect of our business is subject to regulation or ethical overview. It is therefore essential that we participate in public policy dialogue with governments and other public bodies to exchange views on issues that affect our business.

Our exchanges with governments are aimed at creating a constructive framework for the development and implementation of policies and regulations that affect our industry in a way that delivers good regulation and sound operational practices.

We also work with, and through, national and international trade associations to promote industry best practice and engage with key government and international agency stakeholders. For example, AstraZeneca has played a leading

role in driving the engagement of the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) in how to prevent, control and treat NCDs – such as diabetes, heart disease, chronic respiratory conditions and cancer – in developing countries.

Working in partnership with NGOs plays a vital role in our access to healthcare activities, such as Healthy Heart Africa and the Young Health Programme.

Stakeholder relations

AstraZeneca

Investors

Regulators/Governments/International organisations

Employees/Potential employees

Partners/SuppliersPatients/Healthcare

professionals/Healthcare payors

Local communities

Influencers

Key opinion leaders (medical)

Media analysts

Politicians Government officials

Non-governmental organisations

Academia Other companies Trade associations

General public

Indirect impact through influence on direct relationships



Patient groupsStaying in touch with changing needs is vital to our aim of making the most meaningful difference we can to patient health. We continually talk to patient groups, organisations and physicians to understand what they need and want.

Patient groups are independent non-profit organisations that provide advice and support to patients and their families and other caregivers. They

help to raise awareness of diseases, fund research and improve patient care, and some provide consultancy services, such as helping us develop educational material for patients.

Without funding from pharmaceutical companies, many of these groups would not be able to function as effectively or reach as many patients. We support patient groups that address diseases and therapeutic areas in which AstraZeneca is active,

but we never link financial support to the promotion of our medicines.

Our aim is to ensure that all of our relationships with patient groups and other healthcare organisations continue to be based on transparency, trust and a shared objective to improve the lives of patients. Our Code of Conduct and our Global Policy on Ethical Interactions underpin that commitment.

Which patient groups do you support? In line with the respective code requirements of the European Federation of Pharmaceutical Industries and Associations (EFPIA), the UK’s Association of the British Pharmaceutical Industry (ABPI) and the Swedish pharmaceutical industry association (LIF), we make public all our relationships with patient groups in Europe, the UK and Sweden.

In the US, we publish our contributions to non-profit organisations, including patient groups and other healthcare organisations, and our grants in support of independent medical education on our website.

Information is available on our biologics business website: www.medimmune.com.

Local communitiesOur site-based community liaison teams aim to ensure that we maintain open dialogue with our local communities, keeping them informed of our business activities and plans, and giving them the opportunity to raise any concerns.

See more information on community investment here.



Benchmarking and assurance

External benchmarking is an important means of evaluating our performance against our areas of special focus and sustainable business commitments. Our Sustainability Council has prioritised participation in two external indexes: the Dow Jones Sustainability Indexes and the Access to Medicine Index.

Dow Jones Sustainability IndexesWe met our target of maintaining our position in the Dow Jones Sustainability World Index, which comprises the top 10 percent of the largest 2,500 companies, with a score of 79 percent. We also retained, for the seventh year running, our listing on the DJSI STOXX – the European Index, which includes the top 20 percent of the 600 largest European companies. In 2014, we were one of four pharmaceutical companies to do so out of 14 assessed.

We achieved a total score of 79 percent, a drop of 6 percent from 2013. The best score for the sector for 2014 was 87 percent, a rise of 1 percent from 2013.

We increased individual scores for 7 out of 24 criteria for 2014 (compared with 8 out of 22 criteria in 2013), including customer relationship management, risk and crisis management, climate strategy, talent attraction and retention, corporate citizenship and philanthropy, stakeholder engagement and addressing cost burden.

While these scores are encouraging, we lost ground in some areas, such as corporate governance, marketing practices, innovation management, human capital development social reporting, occupational health and safety, environmental

reporting and bioethics. To better understand these lower scores, we have commissioned an in-depth external benchmark survey, and the analysis will be used to inform our improvement planning.

Access to Medicine IndexPublished every two years, the Access to Medicine Index independently ranks pharmaceutical companies’ efforts to improve access to medicine in developing countries. In making its assessment, it analyses a range of activities, including patient access programmes, R&D investment in diseases prevalent in developing countries, intellectual property, pricing, compliance and clinical trial transparency.

The latest Index was published in November 2014 and AstraZeneca was ranked 15 out of 20 companies assessed, up one place from in the previous Index in 2012.

We are currently reviewing our performance in this important Index to understand how we can improve through greater transparency and through specific initiatives to enhance affordability and access to AstraZeneca medicines.

The AstraZeneca company report card is available here.

“Our work to return AstraZeneca to growth and restore scientific leadership is underpinned by our continued commitment to driving business success responsibly.”

Geneviève Berger Non-Executive Director with responsibility for overseeing sustainability matters



Responsible partnering

We partner with others around the world to access the best science to stimulate innovation and to accelerate the delivery of new medicines to target unmet medical need.

We are always looking for strategically aligned, value-enhancing business development opportunities. Our current focus is on:

| Increasing early-stage research transactions and academic alliances

| Exploring value-creating peer collaborations

| Pursuing partnering, in-licensing and bolt-on acquisitions to strengthen our core therapy area portfolios.

To safeguard the reputation of AstraZeneca and also protect us from any unforeseen liabilities, we make sustainability considerations an integral part of our due diligence process when making acquisitions or doing deals with external partners.

The form our due diligence process takes depends entirely on the organisation that we are considering acquiring or partnering with. We assess all projects, whether internally or externally derived, against our ‘5Rs’ evaluation criteria: right target, right tissue or exposure, right safety, right patients, right commercial. This ensures we take forward the most attractive opportunities, regardless of source. These criteria also provide a framework for consistent and objective feedback to our partners, whether we decide to move forward with the opportunity or not.

Ethical conduct in sales and marketing is also considered, and safety, health and the environment (SHE) has a very high prominence throughout the process – both in terms of historical liabilities and the practices in place to safeguard employees and the environment.

Strategically aligned partnering In 2014, we reconfigured our business, giving our therapeutic areas (oncology, cardiovascular and metabolic disease (CVMD), and respiratory, inflammation and autoimmunity (RIA)) responsibility for finding and evaluating their own potential partners. This change means that instead of opportunities being sourced centrally, they are now strategically aligned and driven by the therapeutic agenda. Following the initial evaluation stage, our business development team steps in to conduct a detailed due diligence review and, if appropriate, negotiate the agreement.

This approach has already been a success. In 2014, although fewer evaluations were conducted, the ratio of evaluations-to-deal was much higher than in previous years.

More information on our partnering activity is available here.

Documents

Sustainability at AstraZeneca...Sustainability Update Strategy and governance 1 Strategy and governance AstraZeneca’s purpose is to push the boundaries of science to deliver life-changing