The case for CSR/ Sustainability Reporting Done Responsibly


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Case study: How Baxter promotes responsible procurement

Baxter operates in over 100 countries around the globe, providing a broad portfolio of essential renal and hospital products, and its global supply chain extends from the producers of raw materials it utilises in manufacturing, to the end users of its products. Baxter is, therefore, committed to building and driving a responsible supply chain.

This case study is based on the 2016 Corporate Responsibility Report by Baxter published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

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Collaboration is central to Baxter’s approach to promoting supply chain sustainability, and Baxter engages its suppliers on key corporate responsibility issues  Tweet This! including human rights, business ethics, labour practices, health and safety, and environmental performance. In order to promote responsible procurement Baxter took action to:

  • implement standards and policies
  • carry out supplier audits
  • conduct a Supplier Corporate Responsibility Survey
  • collaborate with other members of the healthcare industry

What are the material issues the company has identified?

In its 2016 Corporate Responsibility Report Baxter identified a range of material issues, such as innovation that expands access to care, ethics and compliance, employee health and safety, workplace culture. Among these, promoting responsible procurement 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 reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process 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:

Stakeholder Group
Patients/healthcare providers
Employees
Communities
Governments/payers
Shareholders

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics Baxter carried out interviews with both internal and external stakeholders, who included customers, suppliers and partners, governmental agencies, investors, sustainability experts and industry and patient organisations.

What actions were taken by Baxter to promote responsible procurement?

In its 2016 Corporate Responsibility Report Baxter reports that it took the following actions for promoting responsible procurement:

  • Implementing standards and policies
  • Baxter’s Supplier Quality Standards and Ethics and Compliance Standards for Suppliers outline its expectations and requirements for all suppliers in this area. Additionally, as outlined in Baxter’s Global Human Rights Policy, Baxter respects human rights, dignity and the diverse contributions of all individuals and works to make sure that its suppliers share its high standards. Moreover, Baxter’s Modern Slavery Statement declares Baxter’s commitments and approach to ensuring that its UK operations and supply chain are free from modern slavery such as child labour, forced and bonded labour, and human trafficking. To integrate these standards and policies into its business, Baxter considers social and environmental criteria in its purchasing decisions, and incorporates corporate responsibility criteria into its requests for proposal and supplier contract templates.
  • Carrying out supplier audits
  • Baxter launched its supplier audit pilot programme in 2016, and carried out one audit in Asia Pacific, two in North America and two in Europe. The audit format, aligned with the Pharmaceutical Supply Chain Initiative (PSCI) protocol, covers ethics, labour, environmental, health and safety, and related management systems. In 2016 Baxter also developed an overarching strategy and a risk-based approach to manage supply chain corporate responsibility risks, designed to help Baxter structure and prioritise its engagement in this area.
  • Conducting a Supplier Corporate Responsibility Survey
  • At the end of 2016, Baxter invited 211 global and regional top direct and indirect suppliers to participate in its Supplier Corporate Responsibility Survey, a key part of Baxter’s due diligence. The survey covers programme governance as well as environmental, social, and health and safety aspects. Eighty percent of the 211 suppliers surveyed responded, and Baxter provided them with a report card based on the data they provided.
  • Collaborating with other members of the healthcare industry
  • Baxter collaborates with other members of the healthcare industry to increase its influence, improve efficiency and advance responsible procurement. Baxter is, thus, a member of the Pharmaceutical Supply Chain Initiative (PSCI), a healthcare industry group focusing on responsible procurement, risk mitigation and supplier capability building. Baxter encourages its suppliers to participate in the PSCI supply chain audit programme and takes part in the PSCI Supplier Capability Building Committee, which creates resources and training to help suppliers improve their performance. In addition, as a corporate member of the Sustainable Purchasing Leadership Council (SPLC), Baxter works to advance the organisation’s mission of supporting and recognising purchasing leadership that accelerates the transition to a prosperous and sustainable future. In 2016, Baxter collaborated with other member organisations to pilot a small/medium enterprise (SME) Supplier Sustainability Maturity Model, to help SMEs establish sustainability within their companies. 

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken

2) Disclosure 408-1 Operations and suppliers at significant risk for incidents of child labor

3) Disclosure 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor

 

Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.

Disclosure 408-1 Operations and suppliers at significant risk for incidents of child labor corresponds to:

  • Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
  • Business theme: Abolition of child labor
  • Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  • Business theme: Abolition of child labor

Disclosure 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor corresponds to:

  • Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
  • Business theme: Elimination of forced or compulsory labor

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.



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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/

Note to Baxter: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.

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