Collaborating for a Lasting Future
Inclusion of sustainability target in supply chain strategy
We invite our suppliers to work jointly with us on improving supply chain sustainability. By engaging proactively, we aim to promote innovation, manage performance and risk, ensure business continuity and form emergency response plans. Our collaborations have led to significant improvements in our supply chain. Our supply chain strategy includes a sustainability target to assess existing business critical suppliers and service providers and abandon those below expectations who fail to improve. By 2020, minimum 90% of these suppliers are expected to meet our high standards for safety, health and environmental protection. End of 2018, the level was at approximately 85%.
Training and awareness
We educate our employees on ways to work with our suppliers on topics of economic, environmental, and social responsibility. In order to act as ambassadors of sustainability, all procurement staff must complete Procurement Policy and sustainability training. In 2017, we rolled out a new "Sustainability in Procurement" online training module. We provide tailored training to procurement teams to address category-specific sustainability topics.
We offer an e-learning program to help our suppliers increase their knowledge and understanding of the Roche Supplier Code of Conduct and of industry standards for sustainability. The program is available in English, Chinese, Spanish, Portuguese and German, with translations to other languages underway.
Our training of suppliers helps them to understand our expectations regarding their conduct with Roche. It also aims to improve a supplier’s operations in areas such as:
- conducting their business in an ethical manner and acting with integrity
- working against bribery and corruption
- upholding the human rights of workers and treating them with dignity and respect
- providing a safe and healthy working environment
- operating in an environmentally responsible and efficient manner
- using management systems to monitor continuous improvement and compliance with of sustainability principles
- jointly promoting innovation and driving cost reduction
More than 19,400 supplier employees have completed our sustainability e-learning program since its launch in mid-2012. This includes more than 5'000 each in Asia and in Latin America.
In 2017, we made our Supplier Code of Conduct e-learning available to the Pharmaceutical Supply Chain Initiative (PSCI) as basis to create and launch an online training on the PSCI Principles which are integral part of our Supplier Code of Conduct. This way we can reach many further suppliers to the industry and ultimately help to further increase supply chain standards of the whole pharma industry.
Anti-corruption compliance training specifically for procurement staff
Bribery and corruption are a risk that we are addressing via a special program designed for our procurement employees and also our suppliers. For business critical suppliers located in countries with high levels of corruption and bribery, procurement managers need to complete an anti-corruption compliance questionnaire to identify any risk of corruption.
We ask all business critical suppliers in countries with elevated corruption risk to sign an anti-corruption compliance confirmation.
We also invite our suppliers to use the anti-corruption compliance documents with their own suppliers. In China, in addition to this, we ask our key suppliers to sign an integrity declaration.
In case we identify signs of corruption, it triggers an in-depth investigation by Roche compliance staff. In 2018, we terminated the business relationship with 12 suppliers and service providers due to unethical behavior, thereof 2 based on critical audit findings that they were unwilling to improve.
Collaborating on human rights in the supply chain
We expect from our suppliers that they protect human rights, as well, and that they work with their own suppliers to protect the human rights.
In 2018, we implemented an updated scalable risk algorithm to identify suppliers with a high potential for human rights violations. We also enhanced our existing supplier labour and human rights risk assessment program. We worked with the Pharmaceutical Supply Chain Initiative (PSCI) to revise the PSCI audit program and create a more robust process for the identification of human rights violations.
Our human rights algorithm to assess human rights violation risks throughout the supply chain focuses on four risk factors: Country, Industry, Proximity (e.g. work on Roche premises) and known violations.
In 2018, we conducted 126 supplier sustainability assurance visits with the support of 3rd party auditors. We had 100 human rights and labour findings but none of them were critical. We found no evidence of child labour or modern slavery. The major findings included excessive overtime, improper pay of overtime, insufficient rest days per work week, and inadequate payment of social benefits. Corrective action plans were implemented with all suppliers. We verified closure via follow-up audits and the majority of suppliers made the necessary improvements quickly. We stopped business with 2 suppliers who failed to improve despite our support.
We continued to assess and mitigate the risk of human rights violations in our supply chain by collaborating with our critical suppliers. We used our enhanced human rights violation risk process to identify risks among our critical suppliers’ own critical suppliers (“critical tier 2 suppliers”). We did not receive any reports about critical findings among tier 2 suppliers.
At Roche, we are committed to nurturing the diverse workforce that is vital to our success. We approach diversity among our suppliers with the same commitment. The goal is to foster innovation, competition and agility in our supplier base.
Our efforts to encourage diversity among suppliers focus on increasing opportunities and building relationships with qualified businesses. These include small or minority-owned businesses, woman-owned, veteran-owned, lesbian, bisexual, gay and transgender businesses, and aboriginal/indigenous businesses. In 2018, our spend with diverse suppliers amounted to $808 million. We will continue to seek new collaborations with diverse suppliers that are highly innovative and agile.
We also actively engage with advocacy groups to promote capability development, mentoring and the use of diverse businesses globally. For example, the Diversity Alliance for Science focuses on developing diverse capabilities in the life sciences industry.
Safe & green logistics minimising environmental impacts
Green logistics is an area of increasing focus within our supply chain, as we seek to reduce air emissions, energy consumption and waste Roche-wide.
Our green logistics strategy aims to minimise environmental impacts by:
- moving more air freight to sea freight, thereby significantly reducing carbon footprint and cost
- developing and using smaller and better insulated cold chain packaging
- switching more freight from short-haul flights to specially refrigerated trucks
- reusing or recycling packaging materials
- preventing energy loss from refrigerated warehouses with inflatable door seals
- building new warehouses to the latest energy efficiency standards
- selecting transportation companies that train drivers to operate vehicles efficiently and use vehicles that meet low-emission standards
We apply the same high standards for our logistics service providers as we do for our own warehouses. To further promote green logistics, we optimise route planning with information technology and maximise use of cargo areas to a reduce traffic.
In 2018 we continued the air-to-sea program in collaboration with our logistics service providers, thereby reducing the environmental footprint by more than 95% on average and saving more than 3 million CHF. We will continue to broaden our environmental footprint reduction and reporting program.