Case study: How WBA promotes sustainability across its supply chain
Walgreens Boots Alliance (WBA) is an integrated healthcare, pharmacy and retail leader serving millions of customers and patients every day, with a 170-year heritage of caring for communities and approximately 13,000 locations across the U.S., Europe and Latin America. Through its increasingly proactive supplier sustainability engagement, WBA seeks to transform from an approach centred in risk assessment and management to a programme in which it leverages its influence to drive sustainability through its supply chain. Tweet This!
This case study is based on the 2021 Environmental, Social and Governance Report by WBA, prepared in accordance with the GRI Standards, 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.
Abstract
WBA implemented and progressed a number of tools and programmes during fiscal 2021 to further its commitments to increase the sustainability of its owned brand products and packaging, also continuing its rigorous ethical assessments programme to combat the risk of modern slavery and other such practices in its supply chain. In order to promote sustainability across its supply chain WBA took action to:
- implement a Supplier Sustainability Programme
- promote ethical business conduct
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With this case study you will see:
- Which are the most important impacts (material issues) WBA has identified;
- How WBA proceeded with stakeholder engagement, and
- What actions were taken by WBA to promote sustainability across its supply chain
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What are the material issues the company has identified?
In its 2021 Environmental, Social and Governance Report WBA identified a range of material issues, such as access to affordable and quality healthcare, product safety, diversity, equity and inclusion, data privacy and security, employee health, safety and well-being. Among these, promoting sustainability across its supply chain stands out as a key material issue for WBA.
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:
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 WBA engages with:
| Stakeholder Group | Method of engagement |
| Nongovernmental organisations (NGOs)
| · At a minimum, quarterly meetings with key charity partners · Formal yearly feedback with key charity partners and regular meetings with cancer charity partners · Regular and ad-hoc meetings, as well as conference participation with NGOs; frequency varies from business to business and from group to group |
| Stockholders, investors, lenders
| · Annual stockholders meeting · Quarterly earnings call with analysts · Frequent dialogue through WBA’s investor relations and corporate governance teams · Annual submission of CDP Climate Change questionnaire · Annual submission of S&P Global Corporate Sustainability Assessment (CSA) |
| Internal stakeholders
| · Twice annual employee feedback surveys · Annual employee performance reviews and appraisals · Annual pay analysis against key roles · Ethics, safety, compliance, development and other trainings and resources (frequency varies by business and role) · Employee benefits programmes and platforms · Daily company and business communications through email, intranet and bulletin boards · Quarterly town hall meetings with senior leaders · Brave Conversations — listening, learning, and building empathy from the lived experiences of others · Monthly meetings with field leaders who champion CSR in their areas · Employee charitable funds |
| Suppliers
| · WBA Global Supplier Sustainability Programme · Annual supplier conferences · Quarterly joint business plan meetings with select suppliers · Submission of surveys and questionnaires · Events and training with diverse suppliers · Regular engagement with waste management and energy suppliers through mechanisms including implementation of best practices and disaster response |
| Academics
| · Ongoing partnerships with world-class research facilities and organisations on health and wellbeing research · Regular guest speaker slots · Presentations at scientific meetings several times a year · Participation in roundtable sessions about climate change and health, including with academic groups · Research collaborations with industry groups, healthcare companies, pharmaceutical companies, commercial laboratories and universities |
| Communities
| · Proactive outreach to hundreds of community and grassroots organisations on vaccine equity issue · Daily, through WBA’s retail pharmacies and CSR initiatives · Annual campaigns with charity partners · Daily response to issues raised on social media · Employee charitable funds |
| Peers and industry groups | · Ad-hoc meetings and regular dialogue through membership organisations · Meetings and dialogue through trade and industry bodies · Collaborative work on specific projects |
| Government bodies and agencies | · Frequent engagement at all levels of government due to COVID-19 · Regular meetings with government agencies · Weekly or more frequent dialogue with membership associations · Consultative responses at national and international levels · Quarterly industry panels |
| Customers, including consumers, patients, pharmacists and pharmacy benefit managers (PBMs)
| · Always-on Walgreens and Boots UK customer satisfaction surveys · Most weekdays, through WBA’s corporate website and business websites · Daily, through social media · Daily, through WBA’s retail pharmacies and CSR initiatives · LinkedIn Live events with company leadership |
| Media | · Media releases, social media posts, announcements and corporate storytelling most weekdays · Quarterly streaming of earnings call with analysts · Media tours, outreach and interviews on an ad-hoc basis · Always on monitoring of media hotline · Submissions for CSR awards and recognition programmes · Health education and awareness campaigns on social media · Presence at industry events and conventions, such as British Beauty Week and Black Women’s Expo · LinkedIn Live events with company leaders |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics WBA conducted surveys with nearly 300 internal and external stakeholders, followed up by approximately 45 interviews. External stakeholder groups surveyed included non-governmental organisations, stockholders, academics, government agencies, community representatives and organisations, suppliers, media and industry groups. In addition, WBA surveyed some 6,000 customers in the U.S., UK, Chile, Mexico, Norway and Thailand.
What actions were taken by WBA to promote sustainability across its supply chain?
In its 2021 Environmental, Social and Governance Report WBA reports that it took the following actions for promoting sustainability across its supply chain:
- Implementing a Supplier Sustainability Programme
- WBA’s owned brand global Supplier Sustainability Programme was launched in April 2021, aiming to enhance its sustainability agenda and drive improvements across the entire supply chain through an online platform for data collection, analysis, reporting and scoring. The programme uses THESIS, developed by nonprofit organisation The Sustainability Consortium, a holistic sustainability assessment tool set to gauge supplier practices, performance and management on energy, water, ethics and more. For example, the system captures whether a supplier has a chemicals policy in place, or an emissions reduction target. One advantage of the tool is that it is also used by other large retailers, which minimises survey fatigue among vendors. The product category specific assessments in THESIS allow WBA’s teams to benchmark its suppliers’ sustainability performance and by proxy WBA owned brand sustainability performance. These quantifiable, comparative supplier sustainability results will provide WBA owned brand sourcing teams with the information necessary to select the best product suppliers with sustainability agendas and targets that complement WBA’s More than 100 of WBA’s highest spend owned-brand product suppliers have signed up to the programme and have completed their THESIS assessments identifying their environmental and social initiatives and opportunities. This includes suppliers based in Asia, Europe and the Americas, across many of WBA’s product categories, from health and wellness, to beauty and personal care, household and food.
- Promoting ethical business conduct
- Under the minimum requirements of its ethical trading standards programme, WBA expects suppliers to operate in accordance with the core principles outlined in its Supplier Code of Conduct and to be open and transparent to WBA’s assessment of their compliance with the code. Through its ethical sourcing programme, led by teams of ethical trading experts with the support of auditors and a small number of pre-approved third-parties, WBA makes sure owned brand suppliers are aware of and compliant with WBA ethical standards and expectations. This is achieved through a rigorous onboarding process for all owned brand suppliers that was enhanced during fiscal 2021 and is supported by a supplier training webinar designed to explain WBA’s ethical standards and assessment requirements, share opportunities for suppliers to improve social and environmental compliance, and provide a forum for suppliers to raise questions. 100 percent of owned brand suppliers, new and existing, along with GNFR (Goods Not For Resale) suppliers onboarded to WBA’s purchase order system via Global Risk Management Solutions (GRMS), are screened using social criteria. Supplier training webinars are held regularly in English, Mandarin and Spanish. During fiscal 2021, 23 supplier training webinars were held in English, with a total of 336 suppliers completing the training. Additionally, five webinars were held in Mandarin, with 142 suppliers completing the training. WBA monitors owned brand supplier compliance by assessing factory social and environmental performance using a detailed grading matrix based on internationally recognised standards, including the Ethical Trading Initiative Base Code and International Labor Organization Conventions and Recommendations. Factories with identified noncompliances are required to complete corrective action plans to resolve the issue and are re-assessed using a risk-based approach focused on improvement and compliance. As the COVID-19 pandemic limited WBA’s ability to conduct onsite assessments in areas heavily impacted by the pandemic, WBA developed additional approaches to monitor supplier compliance, including self-assessment questionnaires, reviews of third-party audit reports, remote confirmation of the resolution of identified noncompliances, and remote virtual audits.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 308-1 New suppliers that were screened using environmental criteria
2) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken
3) Disclosure 414-1 New suppliers that were screened using social criteria
4) Disclosure 414-2 Negative social impacts in the supply chain and actions taken
Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.
Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.
Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.2
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.8
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.1
Disclosure 414-2 Negative social impacts in the supply chain and actions taken corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.2
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.8
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.1
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References:
This case study is based on published information by WBA, 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 following link:
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