Our suppliers and other third parties – including agents, distributors and affiliate companies (where we have an equity stake) – help us develop and distribute the medicines, vaccines and products that patients and consumers need. Every year, we spend billions of pounds with tens of thousands of suppliers on a wide range of goods and services. It is essential that we strengthen the relationships with the suppliers and third parties that are critical to our business and work with those that share our values and operate in a responsible and ethical manner. To support this commitment, in 2015 we increased the use of preferred suppliers from 70% to 84%.
In addition to meeting GSK's anti-bribery and corruption and labour rights standards, where relevant, we expect third parties to comply with our standards on quality, health and safety, and the environment. These are clearly set out in our public statement on 'Working with third parties (PDF)'
We have introduced a comprehensive new programme to strengthen our management of risk in the supply chain. The focus of this programme is to ensure that all Third Parties will be risk assessed against the GSK Principles and contracts amended, as necessary, by the end of 2017.With a large supplier base, we need to focus our effort on working with those at highest risk of non-compliance with our standards on responsible business.
We also expect our suppliers and third parties to comply with GSK’s quality and safety standards. Our global manufacturing and supply team continue to manage and regularly assess the performance of the suppliers that support our manufacturing, specifically on quality and ethical, environmental, health and safety (EHS) management systems. On completion of all audits, we identify areas for improvement, work with suppliers to develop improvement plans and check this plan is implemented within an agreed time frame. If a significant concern is identified, we may suspend or terminate our work with an existing supplier, or decide not to work with a potential new supplier.
We have a responsibility to support our suppliers by paying on time. We have put in place an exception to our standard payment terms for small and medium sized companies in the UK, and small diverse suppliers in the USA. We have a number of initiatives underway to continuously improve the experience of suppliers who work with us. As part of our commitment to diversity and inclusion, we support suppliers run by groups that are under-represented in the supply chain such as those owned by women, minorities and disabled veterans. Through our supplier diversity programmes, we engage with and mentor small and diverse businesses in our supply chain, and help them identify potential areas for growth.
We are committed to upholding the UN Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises and the core labour standards set out by the International Labour Organization (ILO). We are also a signatory to the UN Global Compact, a voluntary global standard on human rights, labour, the environment and anti-corruption. We believe governments have a responsibility to define and enforce a legal framework for human rights in accordance with international laws and agreements. Businesses also have responsibilities. We have direct control over human rights in our own operations and aim to act responsibly across all our spheres of influence which includes our employees, suppliers, local communities and society more broadly.
We have undertaken an independent third-party assessment to help us understand the potential human rights impacts associated with our business. This identified seven priority areas: access to health care, air quality impact relating to propellants, clinical trial standards, employment practices, patient safety, product counterfeiting and use of third-party suppliers. Our efforts in each of these areas are outlined in the relevant sections of our Responsible Business Supplement.
Read our Human Rights Statement (PDF).