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Responsibility and our supply chain

Corporate Responsibility Report 2008

Responsibility and our supply chain

Our approach to ensuring high standards for our global suppliers includes:

Pre-assessments of potential suppliers to gather information and to help evaluation
Inclusion of human rights clauses in all supplier contracts and full environment, health and safety (EHS) requirements in contracts for critical suppliers
Review of EHS and human rights in routine supplier engagements (for example business performance meetings)
EHS audits of potential and existing suppliers
Regular progress monitoring and additional advice and technical support

Supplier contracts

Our supplier contracts contain EHS requirements based on our global EHS standards and human rights clauses based on the International Labour Organization conventions and the UN’s Universal Declaration of Human Rights. Companies must agree to our EHS and human rights requirements before they can be included in the selection.

Risk-based approach

Our supply chain is large and complex so we use a risk-based approach to target our efforts. We focus on ‘critical suppliers’ which are mostly based in Europe, North America and Asia and account for approximately 30 per cent of our supplier spend.

Critical suppliers include contract manufacturers and suppliers that present the greatest risk to GSK on one or more of the following issues:

Relevance to the supply of essential medicines
Threats to continuity of supply
The value of affected products to GSK
Regulatory requirements
Hazards associated with manufacturing processes and materials
Environmental impacts

We develop long-term relationships with critical suppliers and conduct regular monitoring to support the uninterrupted supply of high quality materials and services to GSK.

Training for GSK procurement teams

We train all new procurement employees in our standards and requirements for EHS and human rights . This emphasises their role in promoting compliance with the standards. Key procurement employees, including procurement managers, receive ongoing training on these topics.

In 2009, we will develop new sustainable procurement guidelines, with supporting training plans, which will focus on sourcing: