Responsible Procurement ensures that the Novartis commitment to good corporate responsibility is reflected in how we select and work with our suppliers.
We engage with an extensive network of suppliers worldwide and their contributions are crucial to our success. With such global reach, ensuring that our goods and services are ethically sourced is paramount.
Responsible Procurement involves more than ticking the compliance box. It's about taking responsibility to safeguard and improve ethical standards among our suppliers, and using our expertise to help them find lasting solutions to complex issues.
Responsible Procurement (RP) is the way we achieve that. It encourages companies that we do business with to meet the standards of ethics, business integrity and environmental practice we expect of them. Buying responsibly protects our patients, our people, our business and our reputation. It is built-in, not bolted-on, to the way we work and is fully integrated with our daily procurement activities. The program covers five areas of potential ethical risk: Labor Rights, HSE (Health, Safety and Environment), Animal Welfare, Anti-Bribery, and Data Privacy. We have in-house experts for all five areas and through this network, we engage pro-actively with suppliers to ensure ethical practices. Where necessary, we help suppliers find sustainable solutions to critical issues bringing about real changes.
Novartis is also a member of the Pharmaceutical Supply Chain Initiative (PSCI) and supports its principles for Responsible Supply Chain Management for ethics, labor, health and safety, environment, and related management systems. These principles are incorporated into the Novartis Supplier Code.
Managing supplier risk
Novartis engages thousands of new suppliers each year, across a supply chain which extends into almost every country in the world. Being able to quickly pinpoint areas of high risk is crucial.
Our RP practice is designed to provide that speed and accuracy and give us a clear view of where potential issues exist or standards may be compromised. It quickly filters out the approximate 95% of suppliers who present little or no ethical risk, allowing us to concentrate our efforts on the small number of suppliers where a significant risk exists or where we can influence change. Most importantly, it gives us this clear insight before we buy. We call it "buying with our eyes open".
Making a difference
Novartis recognizes that it's not enough to simply monitor suppliers' ability to comply with standards. We take the responsibility a step further, to promote real changes that benefit workers and the environment in the countries we source from, changes that make a difference.
We aim to foster a culture of openness, honesty and cooperation with our suppliers and encourage development in the pharmaceutical supply chain as a whole. Through the Working Well Project, we are collaborating with other Pharmaceutical companies employing the twin pillars of supplier development and performance metrics to make a compelling, evidence-based business case for improving labor standards in China.
Shanghai, China, is home to a Novartis world-class Research and Development campus that also houses all Novartis divisions. While this world-class campus was under construction, the health, safety and labor conditions of workers on the ground was a top priority for the company. Read here the case study which examines the journey of Novartis in developing a Responsible Procurement program specifically tailored to address the challenges inherent to construction projects in China. Download the case study (PDF 0.3 MB)
Another case study of interest includes our efforts to ensure that all promotional items sourced by Novartis are manufactured only at factories that meet a minimum recognized standard.