Sourcing Responsibly – putting ESG principles into practice: Connect to Frankfurt on-demand

In this Connect to Frankfurt session, Enric Bosch, Global Third Party manager, Chemicals at Boehringer Ingelheim (Barcelona, Spain), investigates the growing shift towards environmental, social, and governance (ESG) principles and how to put responsible sourcing for pharmaceutical companies into practice. 

Responsible procurement 

The goal of responsible procurement is to improve the ethical, environmental, and social performance of suppliers and ultimately mitigate any negative impacts found within the supply chain. Responsible procurement looks at not only where or what to source, but how to source according to ESG criteria, sustainability criteria, and more. Such focus on sustainability can not only minimise the risk of disruption in the supply chain, but also mitigate any reputational damage for a given company. 

While Bosch acknowledges the increased complexity for decision-makers when incorporating responsible procurement principles into their workflow, he emphasizes that better buying decisions affecting a company’s ESG performance is a key performance marker for investors and board members. Bosch highlighted the Pharmaceutical Supply Chain Initiative (PSCI), CPHI Frankfurt’s official partner in sustainability, and their work in providing common standards across the pharmaceutical supply chain via the Principles for Responsible Supply Chain Management. The key focus for the pharma supply chain, Bosch says, is in raw materials sourcing and active collaboration to embed and achieve responsible sourcing at scale throughout the pharmaceutical sector and supply chain. 

The Pharmaceutical Supply Chain Initiative 

The PSCI operates as a group of pharmaceutical and healthcare companies working towards a shared vision for better social, health, safety, and environmental outcomes. The three main modes of impact by which the PSCI functions, as highlighted by Bosch, include: 

1) Audit programs – these programs set up guidelines and standards across companies, as well as sharing the audit programs to establish consistency across the sector. 

2) Capacity building – suppliers are offered capacity building with tools and training offered by the PSCI in order to better understand the focus and importance on sustainability within the pharma supply chain. 

3) Special programs – depending on the situation, special programs may be implemented to a specific event or location for their particular issue. Bosch highlights the Musi river in the Hyderabad region of India as an example, a highly polluted river due to the cumulative concentrations of active pharmaceutical ingredients. 

With 32 full members including Bayer, Boehringer Ingelheim, and Bristol Meyers Squibb, as well as 36 associate members including Biogen, Charles River, and Amgen, the PSCI continues to grow as more companies become dedicated to responsible sourcing and sustainability within their work processes. 

Bosch also gives a brief overview of the PSCI Principles for Responsible Supply Chain Management, a set of five areas of responsible business practice to articulate industry expectations from the supply chain. The five principles are: ethics, human rights and labour, health and safety, environment, and management systems. With each area Bosch covers relevant business and operating practices to enact within the pharmaceutical supply chain. The PSCIs Implementation Guidance also provides further details for each Principle, giving companies a framework to improve and strive towards a responsible supply chain. 

Bosch concluded his presentation with a consideration for raw material sourcing. He highlighted the Responsible Sourcing Guidances available to the public for high-risk raw materials such as wax, talcum powder, and palm oil, areas of concern when considering the ethical and sustainable outcomes of each raw material source. 

Summary 

With a final emphasis on the responsibility companies must take in order to create a positive impact not only for supply chain stakeholders but also a more global social responsibility, Bosch takes care to encourage companies to join the PSCI’s initiative for a more ethical and sustainable pharmaceutical supply chain. 

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