With greater awareness and transparency in supply chains, companies are feeling pressured to become more responsible to meet their customers’ expectations. This could be through making large donations, hosting charity galas, and flying their staff to the other side of the country to plant trees. There are numerous ways to demonstrate corporate responsibility, yet the question comes down to how do consumers perceive these CSR stories, and does it translate into sales growth? For many customers, a company’s responsibility is simply providing reasonably priced, quality guaranteed products.
On March 23rd, we invited Roland Qin, Group Responsible Procurement Manager at Novartis, to share his insights on the topic of Responsible Sourcing at the School of Economics at Shanghai University. Roland has spent the past 10 years working with multinational companies in the areas of CSR, communications, and sustainability, and now at Novartis, he oversees the day-to-day, cross-divisional management of responsible procurement and labor rights. Roland focused his talk on how Novartis innovates its procurement procedures, how it helps the company to behave responsibly, and through these actions, demonstrates corporate leadership.
Here are our three key takeaways from the talk:
Set higher standards
Novartis is one of the few pharmaceutical companies to write its own set of Code of Conduct into contracts with all of its suppliers. Furthermore, instead of paying employees a rigid government-imposed minimum wage, Novartis uses a minimum living wage, integrating an additional portion for an employee to support the family as a whole.
Support supplier capacity-building
In addition to providing codes of conducts to suppliers, Novartis also supports them to build capacity in the longer run. For example, Novartis revolutionized the way they manage the manufacturing of promotional items which have a low value yet extremely high compliance risks, by choosing to work with only one supplier and helping them to develop new standards and monitoring systems.
Form industry alliances
Novartis started a global initiative to promote responsible sourcing together with 16 other leading pharmaceutical companies, including Johnson & Johnson, GSK, and Pfizer. By cooperating, and not competing against one other, Novartis helped push the industry benchmark much higher.
In the Q&A session that followed, Roland discussed with students and professors about the challenges of the pharmaceutical industry, the dilemmas Chinese companies face when promoting corporate responsibility, and the lesson learned from GSK’s local corruption scandal. Roland closed the session by sharing career advice and his insights on becoming a sustainability manager.
The talk is part of Collective Responsibility’s Beyond Business As Usual Speech Series. If you or your company is interested in taking part, please contact Chuli Duan at [email protected].