The case for CSR/ Sustainability Reporting Done Responsibly


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Case study: How Johnson & Johnson is promoting product quality and safety

Employing, through its family of companies, approximately 126,500 employees in 60 countries, engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field, Johnson & Johnson is the largest and most diversified healthcare company in the world. Johnson & Johnson’s product portfolio spans pharmaceuticals, consumer and medical devices – 389,000 products and product variations that touch more than one billion people every day. Promoting product quality and safety is thus a top priority.

This case study is based on the 2014 Citizenship and Sustainability Report by Johnson & Johnson published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate that CSR/ sustainability reporting done responsibly is achieved by identifying a company’s most important impacts on the environment and stakeholders and by measuring, managing and changing.

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In keeping with its credo commitment that everything it does must be of high quality, Johnson & Johnson continues to take steps to ensure consistent and sustained high-quality, safe and effective products. After measuring and setting targets, Johnson & Johnson took action to promote the standardization and implementation of Johnson & Johnson’s Quality Policy across its family of companies, promote compliance through a closed-loop, independent audit approach, achieve an integrated and proactive approach to quality, safety and continuous improvement – for example, a Management Review Process requires each of Johnson & Johnson’s operating company’s executive management to continuously improve quality by reviewing its Quality System every six months – and, also, use its expertise to influence and shape regulations.

What are the material issues the company has identified?

In its 2014 Citizenship and Sustainability Report Johnson & Johnson identified a range of material issues, such as access to and affordability of health care, global health, ethical performance, compliance, product pipeline. Among these, given the expanse of its product portfolio, its global presence and the highly regulated environment in which it operates, [tweetthis]promoting product quality and safety stands out as Johnson & Johnson’s top material issue[/tweetthis].

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 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 Johnson & Johnson engages with:

Stakeholder Group                Method of engagement
Patients and others who use Johnson & Johnson’s products and services

 

·         Product packaging, labeling and package inserts

·         Customer call centers

·         Websites

·         Clinical trials

·         Email and conventional mail

·         Market research

·         Brochures

·         Product labeling and inserts

Doctors/nurses/hospitals/health care providers ·         Sales representatives

·         Continuing medical education liaisons

·         Education initiatives

·         Clinical researchers

·         Advisory boards

·         Support and education programs for caregivers

·         Email and conventional mail

Communities

 

·         Interactions with civic organizations, business groups, schools

·         Community action panels

·         Open houses

·         Facility transparency pages posted to Johnson & Johnson’s Responsibility website

·         Community liaison

·         Annual report

Employees

 

 

·         Credo survey

·         Intranet

·         Newsletters

·         Company webcasts

·         Town hall meetings

·         Company meetings

·         Government Affairs & Policy legislative update meetings

·         Quarterly business updates

·         Health Policy Excellence

·         Legislative position and external policy information via the Government Affairs & Policy website

·         Training sessions

·         Employee surveys

·         Work councils and union interactions

External manufacturers, contractors, suppliers

 

·         Supplier website

·         Workshops

·         Trainings

·         Contract negotiations

·         Performance reviews

·         Webinars

·         Dialogue

·         Auditing

Governments and regulators ·         Government Affairs liaisons

·         Annual report

·         Direct contact

·         Lobbying

·         Johnson & Johnson Legislative Day in Washington, D.C., and similar events at U.S. state and national capitols worldwide

·         Visits to Johnson & Johnson facilities by state and national policy makers

Industry organizations ·         Participation in work groups, meetings, research efforts
Shareholders and the investment community ·         Annual report

·         Annual shareholders meeting

·         Investor updates

·         Press releases

·         Quarterly results presentations

·         Road shows

·         Broker conferences

·         Site visits

·         Dialogue

·         Direct contact

NGOs and charitable organizations ·         Direct contact

·         Dialogue

·         Collaborative partnerships

·         Annual reports

Customers ·         Direct contact through sales, customer relationship managers and members of management as required and/or appropriate
Scientific Community ·         Medical and scientific meetings

·         Training programs and facilities

·         Collaborative research efforts

·         Position paper development

How stakeholder engagement was made to identify material issues

Stakeholder engagement at Johnson & Johnson is a constant, ongoing activity occurring at all levels of the organization. On any given day, Johnson & Johnson employees around the world engage with many different stakeholder groups that share Johnson & Johnson’s interests in advancing human health and well-being, stewarding a healthy environment and leading a dynamic and growing business responsibly.

Johnson & Johnson considers a variety of factors before engaging with stakeholders to ensure the most optimal outcome. Some of these factors include:

  • The possible alignments of Johnson & Johnson’s goals and values with that of the stakeholder group;
  • Johnson & Johnson’s ability to improve health conditions;
  • Johnson & Johnson’s ability to improve social, environmental or other conditions;
  • The opportunity that Johnson & Johnson and the stakeholder group have to learn from one another;
  • The identity, including the composition and values, of the stakeholder group. The potential for the stakeholder group to have a positive impact on other stakeholder groups, Johnson & Johnson’s customers, the public at large and Johnson & Johnson;
  • Johnson & Johnson’s ability to effectively participate in the engagement.

In 2013, Johnson & Johnson conducted a Citizenship & Sustainability materiality assessment to identify those topics of greatest interest to both Johnson & Johnson and its stakeholders; specifically, those reflecting Johnson & Johnson‘s significant economic, environmental and social impacts and those that could substantively influence the assessments and decisions of stakeholders. In 2014, the materiality assessment conducted in 2013 was expanded to include input from a larger group of external stakeholders. Over 200 geographically diverse customers/healthcare providers, universities, suppliers, NGOs and investors were invited to provide input to the process. Responses received were aggregated with the external stakeholder responses received in 2013 and a revised ranking of the material issues was generated.

What actions were taken by Johnson & Johnson to promote product quality and safety?

In its 2014 Citizenship and Sustainability Report Johnson & Johnson set the following targets for promoting product quality and safety, based on the company’s approach to materiality – on taking action on what matters, where it matters:

  • Promoting the standardization and implementation of Johnson & Johnson’s Quality Policy across the Johnson & Johnson family of companies

True to its decentralized business model, each member of the Johnson & Johnson Family of Companies maintains its autonomy to best serve its customers at the local level. However, Johnson & Johnson has integrated its total approach to Quality so that it can speak as one company to all its stakeholders, including health authorities, customers and healthcare professionals worldwide. Four years ago Johnson & Johnson formed the Johnson & Johnson Quality & Compliance (J&J Q&C) organization to ensure the standardization and consistent implementation of its Quality Policy and Quality Policy Standards across the Johnson & Johnson Family of Companies. The Johnson & Johnson Quality Policy governs Johnson & Johnson’s operating companies to help ensure they design, make and deliver Johnson & Johnson’s products in a consistent way. A three-phased approach to deploy a common set of Quality Policy Standards was two-thirds complete. Phase 1 deployment completed December 2013; phase 2 completed December 2014; phase 3 was on track for completion by December 2015.

  • Promoting compliance through a closed-loop, independent audit approach

A closed-loop, independent audit approach is in place to help ensure facilities and external manufacturing sites operate in compliance to Johnson & Johnson’s Quality Policy and Quality Policy Standards, as well as health authority requirements. Johnson & Johnson has a clear and systematic process in place to remediate compliance gaps and minimize their impact on the customer experience. Results, current status and progress are all reported to business leaders and Johnson & Johnson company governing bodies to help them support their sites’ efforts to achieve compliance in a timely manner. In the first three-year cycle, all of Johnson & Johnson’s facilities have been audited. As part of the closed-loop audit program, all findings are tracked to successful completion. In 2015 the audit program was expanded to include external manufacturing sites, using a phased approach.

  • Achieving an integrated and proactive approach to quality, safety and continuous improvement

Johnson & Johnson’s quality and continuous improvement approach includes a Management Review Process that requires each of Johnson & Johnson’s operating company’s executive management to continuously improve quality by reviewing its Quality System every six months to ensure its suitability, adequacy and effectiveness. Independent Quality Review Boards (Quality, Medical, Regulatory representation) within each business unit make decisions independent of commercial considerations to ensure they meet the high-quality standards expected of all Johnson & Johnson companies to do what’s right for Johnson & Johnson’s customers. As a result of these efforts, Johnson & Johnson has achieved an integrated and proactive approach to quality and continuous improvement. For the benefit of its customers, Johnson & Johnson continues to look at quality and safety throughout all phases of product life cycles. Health and safety impacts are assessed for all of Johnson & Johnson’s significant product categories in each business segment throughout the world. In addition, Chief Medical Officers are setting new benchmarks for medical safety and have implemented a consistent global approach for monitoring the use of in-market products.

  • Using Johnson & Johnson’s expertise to influence and shape regulations

Johnson & Johnson is exploring new ways to continue to foster its proactive quality culture and use its expertise to engage in leadership roles with external stakeholders to influence and shape regulations, ensuring the Company continues to deliver safe and effective products to improve the lives of its patients and customers. In one example, Johnson & Johnson’s Pharmaceutical segment is piloting segment-wide metrics related to new leading indicators that the U.S. Food and Drug Administration (FDA) is considering to make requirements.

Which GRI indicators/Standards have been addressed?

The GRI indicator addressed in this case is: G4-PR1: Percentage of significant product and service categories for which health and safety impacts are assessed for improvement and the updated GRI Standard is: Disclosure 416-1 Assessment of the health and safety impacts of product and service categories

 

References:

1) This case study is based on published information by Johnson & Johnson, 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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