Novartis Third Party Code and Third-party risk Management (TPRM)

We are committed to working with third parties who operate in a manner that is consistent with our values and ethical principles. While interactions with third parties at Novartis are broadly defined by our Third-Party Code, we identify, assess, monitor and mitigate risk associated with suppliers through our Third-Party Risk Management (TPRM) framework.

Implemented globally across Novartis in 2019, our TPRM process promotes ethical behavior and fosters sustainability across our supply chain by addressing risk areas such as anti-bribery; animal welfare; health, safety and environment (HSE); labor rights; information security; and data privacy. We conduct risk assessments for all new eligible suppliers and new products, services or sites from existing suppliers. Not all suppliers trigger a detailed risk assessment.

Relevant links and disclosures

* v1.0 remains valid for contracts entered into up to October 31, 2020 & v2.0 is valid for contracts entered into as from November 1, 2020

Other information

  • Engagement with suppliers on environmental sustainability1

    Engagement with suppliers on environmental sustainability means starting and maintaining an active dialogue with our suppliers based on a phased approach. In March 2021 we launched Novartis Green Expectations from suppliers framework which invites our suppliers on the environmental sustainability journey while offering support along the way.  It outlines our environmental sustainability commitments (climate-, water- and waste-related) and underlines the necessity to work on the respective challenges with actors all across the value chain due to the interdependency of impact reduction actions and the associated decision-making.  We differentiated our subsequent engagement with the top 100 VFL(Value Forest Level)1 suppliers depending on their direct or indirect supply classification. We sent the Green Expectations to all the indirect suppliers and, in May, organized the Green Expectations Summit 2021 for them to address any questions, foster dialogue and help build the environmentally sustainable supply community. Environmental sustainability has also become a standing point in regular business reviews with all concerned direct suppliers were engaged through their account managers Novartis Green Expectations framework document was also published on the Novartis corporate website
     
    • As of 31 Dec 2021: 39% share of 2021 supplier-related emissions2
    • As of 31 May 2022: 58% share of 2021 supplier-related emissions2
  • Engagement with suppliers on ENERGIZE program

    The ENERGIZE program was launched at COP-26 in November 2021 as a joint initiative of 10 major pharmaceutical companies (AstraZeneca, Biogen, GSK, Johnson & Johnson, MSD, Novartis, Novo Nordisk, Pfizer, Sanofi, Takeda) in partnership with Schneider Electric. The aim of the program is to enable and accelerate decarbonization of the pharmaceutical value chain through capacity building and innovative renewable energy procurement mechanisms.  Engagement with suppliers for the ENERGIZE program means actively inviting suppliers to participate in the program as well as suppliers’ participation in the program based on indirect invitation via the public domain. ENERGIZE offers a series of educational webinars on renewable energy and respective procurement mechanisms covering financial, accounting, and risk and legal aspects thereof. In addition, it offers the opportunity to participate in joint procurement of renewable electricity. Suppliers may also choose to run their own procurement. ENERGIZE initially focuses on enabling green electricity procurement in Europe and North America but, in the near future, will expand globally where interest and renewable energy market opportunities align.
     
    • As of 31 Dec 2021: 14% share of 2021 supplier-related emissions2
    • As of 31 May 2022: 25% share of 2021 supplier-related emissions2
  1. Novartis suppliers are grouped for specific strategic and operational engagement purposes according to their affiliation to a parent company under a 'Vendor Forest Level' (VFL) framework. Considering the high number of Novartis suppliers (over 40,000 separate legal entities) this is key to prioritize engagement in accordance with the company strategy, and mid-term and long-term targets
  2. The indicator represents the share of suppliers engaged with in terms of Supplier-related emissions of Scope 3. Emissions are for supplier engagement prioritization. Supplier-related emissions cover the following Scope 3 categories: Cat1 (Purchased Goods and Services), Cat2 (Capital Goods), Cat3 (Fuel- and energy-related activities), Cat4 (Upstream transportation and distribution), Cat5 (Waste generated in operations), Cat6 (Business travel)