Case study: How Baxter promotes business integrity and compliance

What are the material issues the company has identified?

In its 2016 Corporate Responsibility Report Baxter identified a range of material issues, such as product innovation, employee health and safety, responsible procurement and logistics, serving communities. Among these, promoting business integrity and compliance stands out as a key material issue for Baxter.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The organization should identify its stakeholders, and explain how it has responded to their reasonable expectations.”

Stakeholders must be consulted in the process s of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Baxter engages with:

How stakeholder engagement was made to identify material issues

To identify and prioritize material issues based on stakeholder feedback, Baxter carried out interviews with both internal and external stakeholders.

What actions were taken by Baxter to promote business integrity and compliance?

In its 2016 Corporate Responsibility Report Baxter reports that it took the following actions for promoting business integrity and compliance:

• Providing legal and regulatory compliance training
• In November 2016, Baxter refreshed its Code of Conduct and all employees had to complete the corresponding training, in person or through an online training module. Baxter employees also complete over 20 e-learning courses every year, on various topics. These include adverse event reporting procedures, Baxter’s ethics and compliance standards, data privacy, Baxter’s Global Interactions Policy, trade compliance and workplace violence prevention.

• Enhancing third party compliance
• Baxter’s Third Party Program, policy and training summarize the standards and processes according to which new and existing third parties are reviewed, retained and monitored for compliance with the company’s anticorruption expectations. In addition, Baxter employees receive training on the company’s Third Party Program. The company also provides training to all new and existing third parties, as a part of its review and retention procedure.

• Carrying out compliance assessments
• Every year Baxter carries out risk audits and assessments covering, among others, corruption. Baxter’s Corporate Audit and Ethics and Compliance functions choose locations of operations to audit and assess based on a number of factors. These include size, Transparency International’s Corruption Perception Index, the nature of interactions with the medical community and third parties, industry trends and the results of local and regional compliance monitoring and investigations. In 2016, Baxter carried out three compliance assessments using Ethics and Compliance and Corporate Audit resources. The assessments showed constant progress in awareness, understanding and implementation of the company’s anticorruption programs. Additionally, Baxter conducted compliance self-monitoring in 49 countries.

• Promoting transparency
• Baxter strives to achieve transparent reporting regarding its relationships with the medical community and government officials. Thus, Baxter continually implements anticorruption programs, to ensure those relationships and related payments are for necessary and genuine services. In addition, in 2016 Baxter completed the worldwide launch of its Global Interactions Policy. This policy outlines when and how it is acceptable to provide members of the medical community or government officials with any payment of monetary value or other benefit.

Which GRI indicators/Standards have been addressed?

The GRI indicators/Standards addressed in this case are:

1) G4-56: Describe the organization’s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics – the updated GRI Standard is: Disclosure 102-16 Values, principles, standards, and norms of behavior

2) G4-57: Report the internal and external mechanisms for seeking advice on ethical and lawful behavior, and matters related to organizational integrity, such as helplines or advice lines – the updated GRI Standard is: Disclosure 102-17 Mechanisms for advice and concerns about ethics

3) G4-58: Report the internal and external mechanisms for reporting concerns about unethical or unlawful behavior, and matters related to organizational integrity, such as escalation through line management, whistleblowing mechanisms or hotlines – the updated GRI Standard is: Disclosure 102-17 Mechanisms for advice and concerns about ethics

4) G4-SO3: Total number and percentage of operations assessed for risks related to corruption and the significant risks identified – the updated GRI Standard is: Disclosure 205-1 Operations assessed for risks related to corruption

5) G4-SO4: Communication and training on anti-corruption policies and procedures – the updated GRI Standard is: Disclosure 205-2 Communication and training about anti-corruption policies and procedures

78% of the world’s 250 largest companies report in accordance with the GRI Standards

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References:

1) This case study is based on published information by Baxter, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) http://www.fbrh.co.uk/en/global-reporting-initiative-gri-g4-guidelines-download-page

3) https://g4.globalreporting.org/Pages/default.aspx

4) https://www.globalreporting.org/standards/gri-standards-download-center/

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