Johnson and Johnson faces up to supply chain challenge

Multinational medical and pharmaceutical company Johnson and Johnson has underlined the difficulty in ensuring responsible standards in supply chains in its latest sustainability report.

The company’s 2013 Citizenship & Sustainability report stated its aim to apply its new Standards for Responsible Suppliers across the supply chain. But, due to a highly complex supply chain, the report acknowledged the difficulty in ensuring the highest sustainability standards. (Scroll down for full report).

The report looked to the future challenge of making sure suppliers meet standards for environmental issues but confirmed that, on average, standards were not met for labour, human rights or fair business practice after evaluating 194 of its suppliers.

“We want to ensure all of our products are designed, developed, manufactured, and distributed to the right quality and compliance standards,” said Johnson & Johnson’s CEO Alex Gorsky.

“As a part of that effort and in connection with our complex supply chain system, we are working to strengthen our influence over the sourcing of materials, ensure adequate working conditions at our suppliers’ facilities, support diversity among our suppliers, and understand and take action to shape the ways in which our suppliers contribute to our environmental and social impacts.

“We recognize the continued interest in increased transparency by companies and honor our commitment to enhanced transparency.”

Johnson and Johnson’s annual report confirmed that the company had managed an absolute reduction in CO2 emissions of 5.7% against a 2010 baseline; aiming for a 20% reduction by 2020. One of the big energy successes was increasing on-site renewable and clean energy capacity to 47.6mW – close to the firm’s Healthy Future 2015 target of 50mW. Johnson and Johnson also increased its solar photovoltaic capacity to 17.43mW.

Water consumption

Furthermore, it oversaw a reduction in its transportation CO2 emissions of 15.8%, compared to the 2010 baseline, and the company is now on track to reach its 2015 target of a 20% improvement in vehicle fleet emissions. The report noted this was being driven by the growing widespread use of hybrid vehicles, with Johnson and Johnson’s hybrid fleet increasing to 34% of its vehicles.

But there was also further sustainability issues identified in the report. One of Johnson and Johnson’s main challenges recognised was the difficulty in reducing water consumption. In 2013, the company only saw a 2.5% absolute reduction in water use compared to the base line in 2010 – some way off the 2015 target of a 10% reduction. Water increases have been keenly felt in the consumer segment, where enhanced quality procedures for manufacturing and production have resulted in increased water usage.

Waste reduction has also proved a difficult issue with absolute reductions of 5.7% compared to 2010, with a target of a 10% absolute reduction by 2015. Hazardous waste generation also saw a large increase of just over 12% from 2012-13.

In individual products, however, it saw 55 products achieve Earthward recognition for achieving improvements in environmental and social sustainability. This comes close to the firm’s Healthy Future 2015 goal of having 60 such products.

View the full Johnson & Johnson 2013 Citizenship & Sustainability report below. 

Matt Field

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