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Supplier Engagement

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We encourage and invite suppliers to enroll in our Supplier Sustainability Program (SSP) which requires, among other things, suppliers to complete an assessment by EcoVadis, a recognized provider of business sustainability ratings for global supply chains.

Since the inception of the SSP in 2015, the number of suppliers enrolled in the program has increased from approximately 100 to over 1,100. Our spend with SSP suppliers has increased from 40% of our spend in 2016 to over 73% of our spend in 2020.

We aim to partner more extensively with our suppliers to help them deliver measurable improvements and significant impacts over the next five years and beyond. Our Sustainable Procurement Council, comprised of procurement category managers across all our procurement categories, manages the ongoing outreach to suppliers in the SSP. This intensive annual program includes monthly meetings to discuss our progress in enrolling suppliers in the SSP and engaging them to disclose to EcoVadis and CDP, with a more recent focus on going beyond disclosure to improve performance and impact. The program kicks off each year with a meeting with suppliers in partnership with EcoVadis and CDP, in which we provide context for our SSP, explain elements of the program and our goals, and define actions we request suppliers to undertake. In 2020, our virtual meetings were held in English and Mandarin.

Our analysis shows that, with each year of our engagement with EcoVadis, suppliers are progressively improving performance and moving from high-risk categorization to low-risk.
Johnson & Johnson was one of two recipients of the EcoVadis 2021 Sustainable Procurement Leadership Awards in the Best Value Chain Engagement category. The award acknowledges excellence in engaging trading partners in sustainability initiatives and honors best-in-class examples of driving internal engagement to roll out global supplier sustainability programs. The award was based on EcoVadis’ assessment of our performance in 2020.

As part of our own commitment to the CDP Supply Chain program, we encourage our suppliers to be transparent about their supply chain impacts and publicly disclose to CDP their environmental performance, including GHG emissions and water use.

CDP engagement in 2020
423 of our suppliers were invited to participate in the CDP Supply Chain Climate Program, an increase of 23% over 2019. Over 80% of these suppliers disclosed emissions data.

The strong participation of our suppliers earned recognition for Johnson & Johnson in 2020 as we were again named to the CDP Supplier Engagement leader board. We were the first healthcare company to achieve this recognition in 2017 and remain the only healthcare company on this list for four consecutive years. Furthermore—and of greater importance—this progress reflects our consistent focus on improving the sustainability of our supply chain for our communities and our planet, as well as the value-creating partnerships that benefit the resilience of our collective business.

Education and resources for suppliers: In partnership with EcoVadis and CDP, we delivered inaugural, year-end educational webinars to review the progress of our SSP and supplier performance and share our progress toward our Health for Humanity 2020 Goals. We also shared new tools, for example, the Johnson & Johnson CDP Climate and Water maturity ladder we created with CDP to guide suppliers on their CDP disclosure journey from beginner to leader.

Tessy saw the Supplier Sustainability Program from Johnson & Johnson as a great opportunity for our company to improve our sustainability practices. After years of collaborating with Johnson & Johnson and participating in the program, I am excited to see our achievements and Tessy’s efforts in leading our supply base into this space.
Roland Beck
Owner & President, Tessy Plastics, Johnson & Johnson supplier

Improving supply chain resilience: We rely on the resilience of our global supply chains to help ensure patients, providers and consumers have access to medical goods, including during major public health threats. During 2020, we worked closely across our supply base to engage, assist and support suppliers as they partnered with us to maintain their own operations and supply essential products during the COVID-19 pandemic. For more information, see the section COVID-19: Supply Chain Resilience.

Engaging suppliers to improve impacts: In 2020, we undertook to improve the environmental impacts generated through our external manufacturing supply chain by engaging widely across the Asia Pacific region with more than 150 external supply sites. We assessed several dimensions of Environmental Health and Safety (EH&S) performance, including process safety management, industrial hygiene, occupational health and workplace safety, and several risk assessment topics related to various environmental impacts, working within the Pharmaceutical Supply Chain Initiative (PSCI) framework. We offered specialist training for suppliers in several of these areas. Our initial assessment showed that most of the suppliers participating in the assessment program could demonstrate improvement in at least one area of EH&S EH&S Environmental Health and Safety View entire glossary performance, and were eager to continue to learn, apply best practice and improve their overall impacts.

Auditing supplier compliance: We verify and monitor supplier compliance with laws and regulations, and with our Responsibility Standards for Suppliers, through formal assessment and audits. Our EH&S audit program, which has been in place since 2006, is conducted using the audit protocol and checklist developed by the PSCI. Our social audits program is conducted in accordance with SMETA 4 guidelines and with a focus on human rights.

In 2020, we completed 104 EH&S audits, the majority in Asia, and five social audits. Our audit programs were affected by COVID-19, mostly due to travel restrictions, minimizing on-site workforces and limited resources at suppliers to support audits. Toward the middle of 2020, both programs began to complete virtual audits using video and other online tools. By year-end, more than half of our EH&S audits had been completed remotely and our social audits were rolled into our expanded Supplier Sustainability Program as part of our EcoVadis assessments.

Supplier Sustainability Program (SSP) 

Supplier Sustainability Program (SSP) 

2020 2019 2018
Spend with suppliers enrolled in SSP (billions)* $18.9 $17.1 $16.3
Percentage of total supplier spend attributable to suppliers enrolled in SSP 74% 71% 61%
Number of suppliers newly enrolled in SSP, annual 328 279 139
Number of suppliers enrolled in SSP, cumulative since the program launch (2015) 1,107 779 500
Suppliers invited to participate in CDP Supply Chain Climate program 423 344 305
Percentage participated 80% 84% 90%
Suppliers invited to participate the CDP Supply Chain Water program 153 112 108
Percentage participated 79% 84% 88%

Supplier EcoVadis Audits 

Supplier EcoVadis Audits 

2020 2019 2018
EcoVadis assessments completed 1,119 750 542
Supplier risk ranking based on EcoVadis assessments
Low-risk 729 462 323
Medium-risk 349 259 195
High-risk 41 29 24

Supplier Social Audits 

Supplier Social Audits 

2020 2019 2018
Supplier social audits completed, total 5 50 11
Completed using SMETA 4-pillar protocol 5 37 9
Completed using PSCI protocol 0 13 2
Social audits completed, by region
Asia Pacific 4 37 8
Europe, Middle East & Africa 0 5 1
Latin America 1 6 2
North America 0 2 0
Number of critical findings** identified as a result of supplier social audits 3 5 0

Supplier EH&S Audits  

Supplier EH&S Audits

2020 2019 2018
EH&S audits and technical visits completed, total 156 206 185
EH&S audits 104 134 101
Technical visits*** 52 72 84
Audits and technical visits, by region
Asia Pacific 133 174 155
Europe, Middle East & Africa 13 13 18
Latin America 2 7 5
North America 8 12 7
Number of suppliers identified as high-risk for non-conformance to Johnson & Johnson Responsibility Standards for Suppliers 24 32 23
Number of critical EH&S findings** identified as a result of EH&S audits 2 34 27
Safety-related findings 2 23 21
Environmental-related findings 0 11 6
* Represents spend we have control over/addressable spend defined as products and services that procurement teams can negotiate with from suppliers to meet business goals.
** We define a critical finding as evidence of very high risk to human life or potential catastrophic impact to facility, community or environment. We expect suppliers and potential suppliers to address critical findings immediately.
*** A technical visit is a follow-up visit to the initial audit.

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