Published 13 November 2020
Economic success in a global economy depends on adhering to high standards of ethics and sustainable business practices. Companies like Roche can positively impact human rights and the environment through its supply chain.
At Roche, we believe that integrity is the basis not only of a sustainable and successful business, but a cleaner and more equitable future. Every employee has the responsibility to behave with integrity and act in compliance with our standards and guidelines. The same goes for all our business partners throughout the world: We require our distributors, suppliers and service providers to meet our integrity standards. We emphasise economic sustainability, and expect our business partners to help foster social and economic development in the communities where they operate.
“For us, sustainability runs the full gamut –economic, business, and the environment.” says Kelley Hinds, Head of Sustainability and Risk for Roche’s Global Procurement organization. Hinds’ team is responsible for assessing the 60,000 suppliers across the globe to look for violations in human rights, labor rights, environmental practices and health and safety. “We are using the power of business to change things and have a positive impact.”
Making sure that suppliers adhere to standards of sustainability has led Hinds and her team to be involved in some surprising challenges and issues. “I never thought I would spend so much time thinking about cows,” she says. As part of its commitment to environmental sustainability, Roche is determined to bring down greenhouse gas emissions with suppliers wherever they find them – which includes cattle. Roche buys a great deal of bovine plasma factor (cow blood) drawn from dairy cows. Cattle emit methane gas when they burp, which contributes to greenhouse gases. Faced with that challenge, Roche found research that adding a specific seaweed to cow feed reduces methane production by 60% – and increases milk production. “There’s the potential to create a very big, real world greenhouse gas reduction and an opportunity for Roche to collaborate with our suppliers and peers to deliver a solution” says Hinds.
Roche is expressly committed to the UN guidelines for business and human rights, which we enforce worldwide with our affiliates and suppliers. Roche was also a driving force behind the development of an industry-wide organisation to better identify and prevent violations of human rights or environmental standards among suppliers – the Pharmaceutical Supply Chain Initiative (PSCI).
We regard our suppliers and service providers as partners and go beyond the traditional concept of enforcing our sustainability principles through audit. Our goal is to collaborate with our suppliers to improve their capabilities.The aim is to create trust and added value – in contrast to conventional audits, which are often regarded as monitoring missions.
“We have a whole program, from vision to standards, companies have to hit to ensure sustainability,” says Hinds. “We want to make sure all humans are given full respect and rights, and actively address disparities in communities. We want to protect labor rights, and move diversity & inclusion forward in all countries in our supplier base. We also want to be good stewards of the environment.” All of these goals must be met in the local cultural context of 80 different countries –where the causes of problems such as corruption have different roots. “You have to know enough about a country’s history to understand the root cause of problems,” says Hinds.
We look for environmental impacts throughout the supply chain to see where they can be improved. An example of our impact on local sustainability is medical waste recycling in Shanghai. China has become the world’s second largest medical device market. Improper medical waste management can cause environmental pollution. Roche and a third party company developed and implemented an innovative process for the safe disposal of used diagnostic instruments.
Since then, the sustainable medical waste treatment process has also been adopted by competitors. Because of this successful collaboration with the vendor, Roche set the medical device industry benchmark for sustainable used medical instrument disposal.
Another example of environmental sustainability is in the United Kingdom, where we have a pilot project to offer all our suppliers renewable energy at Roche’s discounted rate, with the goal of having all our suppliers run on 100% renewable energy, achieving lower greenhouse gas data.
Human and labor rights
Roche routinely audits suppliers, looking for human rights violations, such as trafficked and abused people, or child labor. We also look at labor rights – how people are treated on the job. Part of the process is to do audits in other countries where we pull workers away from management and have conversations with a social auditor. This is a person who is trained in establishing trust and effective interviewing techniques, identifying signs of any maltreatment.
Trucking is an area that is often rife with labor violations, and difficult to audit, because of the number of subcontractors. Truckers may be forced to perform their jobs in unsafe conditions for employers who do not obey labor laws. One of our major logistics suppliers allowed us to perform an audit at one of their trucking companies, interviewing employees from the sub-supplier without management present. The result was positive, with no human rights violations found. With the successful pilot, we plan to perform more audits of truck drivers. The audit findings will be used to support a petition from different companies to governments in various countries to build safe rest stops for truckers in areas where they are vulnerable to hijacking and theft.
Another way we can help support labor rights – and build local economies – is to create shared service centers that we oversee. IT functions have typically outsourced a lot of jobs to far-flung parts of the world, which are hard to monitor. Roche is one of the few big companies that has not outsourced all of its IT to a big vendor in India.
Two of our biggest Roche IT workforce locations are still San Francisco and Basel. We created shared service centers within Roche in places like Kuala Lumpur, Budapest and San Jose. They are run by internal Roche employees or small key partnerships. This way, we are in a better position to protect human rights, and at the same time, develop talent locally in those countries.
Roche works with our suppliers to bring them into compliance with our standards. However, if we have attempted to bring a supplier into compliance and the supplier remains unable to meet Roche’s minimum requirements, we will reconsider the engagement with that supplier, up to and including termination of the business relationship.
“For the most part, suppliers want to collaborate with Roche to improve their sustainability. They want to partner with us to develop sustainable solutions for reducing greenhouse gas emissions in the goods and services we buy. Suppliers have to commit to our sustainability principles in order to work with us,” says Hinds. “Roche has the ability to change the world through the simple act of buying.”