Responsible sourcing 

Novo Nordisk’s Responsible Sourcing programme aims to ensure that our Triple Bottom Line principle is used throughout the supply chain.

The programme is based on our commitment to the UN Global Compact and the UN Guiding Principles on Business and Human Rights in our supply chain. 

With more than 40,000 suppliers across the globe, our expenses with suppliers accounts for more than a third of our total sales revenue. It is vital that we understand potential risks to responsible business conduct across our global supply chain and take necessary steps to mitigate risks.
 

Standards for business partners

We have been implementing Novo Nordisk’s Responsible Sourcing Standards for business partners globally. In the Standards we communicate our expectations to our suppliers on responsible business conduct within human rights, labour, environment and anti-corruption. The Standards build on international standards and are aligned with the Pharmaceutical Industry Principles for Responsible Supply Chain Management.

Novo Nordisk's Responsible Sourcing Standards for business partners are available in the following languages:

Danish (PDF) | English (PDF) | German (PDF) | French (PDF) | Spanish (PDF)| Chinese (PDF) | Japanese (PDF) | Portuguese (PDF) | Russian (PDF)

 

 

Policies and governance 

Our Procurement Policy requires employees to balance social and environmental issues with price and quality when they purchase goods and services.

The Corporate Procurement unit is responsible for coordinating and driving the Responsible Sourcing programme, which is governed by the cross-organisational Responsible Sourcing Strategic Forum, supported by our assurance systems such as Responsible Sourcing audits. 

Programme activities and performance measurement are specified in the Responsible Sourcing strategy, which can be found here.
 

Assessing risks

For new suppliers, we identify responsible business risks in the supplier selection phase, which include a self-assessment questionnaire, supplier visits or qualification audits for critical suppliers. Risks are either addressed in an action plan or used as basis for deselecting a supplier.

For existing suppliers, an annual risk assessment is conducted to categorise them into high, medium or low-risk-suppliers. Our Responsible Sourcing risk model is customised to fit the different sourcing areas, but is generally based on country of production, annual spend, supplier criticality and the types of activities which are known to present responsible business risks, such as low-skilled labour and handling of chemicals.  In 2017 we identified approximately 200 high risk suppliers - less than 2% of our total supplier base.  

We regularly review our Responsible Sourcing risk model including risk definitions to ensure that the scope and focus of the programme is up-to-date with emerging risks and business contexts.

 

Actions

Identification of high risk suppliers leads to audits and follow up on action plans.  Action plans are developed based on audit findings. For countries with the highest number of audits, specifically China, Russia and Brazil, a local Responsible Sourcing expert with a good understanding of local culture supports the supplier. 

All routine audits are rated by level of compliance. The frequency of audits is based on the compliance level to track overall improvements. Quality audits undertaken by Novo Nordisk’s Corporate Quality organisation also include a Responsible Sourcing check list that can lead to action plans or trigger a separate and dedicated Responsible Sourcing audit.

The Responsible Sourcing programme seeks to collaborate with suppliers to achieve sustainable improvements. This includes introduction of root cause analysis to suppliers.  

All new procurement employees are trained in the Responsible Sourcing programme through an e-Learning module, which includes actual cases and business dilemmas.

 

Performance

The Responsible Sourcing programme indicators and KPIs include: 

  • number of high-risk suppliers 
  • inclusion of Responsible Sourcing clause in contracts
  • number of audits per year
  • number of major and critical findings 
  • type of findings
  • timely closure of major and critical findings 

 

These are captured in a Responsible Sourcing dashboard and reported quarterly to the Responsible Sourcing Strategic Forum. 

In 2017, we conducted 28 audits against Novo Nordisk's Responsible Sourcing standards. There were no critical findings in 2017.

In 2018, we will continue to develop our capacity and engage with peers and partners in areas such as supplier capacity building. 

 

Stakeholder engagement

To ensure continuous learning and improvement, we are a member of the following external organisations:

  • Danish Ethical Trading Initiative (DEIH): a Danish based responsible sourcing network that focuses on knowledge sharing between companies, trade unions and NGOs
  • Pharmaceutical Supply Chain Initiative (PSCI): a global network of pharmaceutical and healthcare companies that shares knowledge and expertise, to promote responsible supply chain management

 

Internal stakeholder engagement is handled mainly through the cross-organisational Responsible Sourcing Strategic Forum. This ensures that area-specific issues are raised and that actions are aligned with business strategies. Furthermore the daily operation of the Responsible Sourcing programme is executed by Project Managers from each of the three Procurement areas in Novo Nordisk ensuring actions and development activities are anchored in the business areas. 

The Responsible Sourcing programme is also represented in the Human Rights Strategic Forum to ensure alignment and collaboration to respect human rights in the supply chain.

 

Reporting concerns

All employees, customers, suppliers, employees of suppliers and any other affected individuals can report concerns on responsible business conduct in our supply chain via our Compliance Hotline in over 40 languages. Employees can also report concerns, ask questions or request support via e-mail or a link on our intranet.