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Teva's Corporate Governance Outlook

Corporate governance is an essential aspect of an organization's sustainability journey. At Teva, they have dedicated themselves to upholding quality, ethics, and transparency, which forms a significant pillar in their governance system. Their ESG progress report further suggest that their governance system is built around seven key material topics, which include Compliance and Ethics, Sustainable Procurement, Quality Manufacturing and Patient Safety, Data Privacy and Security, Corporate Governance, Intellectual Property, and Responsible Lobbying. However, one major challenge that companies face in managing and driving a holistic sustainability journey is their ability to bring their suppliers on board with their sustainability agenda. Today, we will delve deeper into Teva's sustainable procurement material topic as part of our corporate ESG discussion.

In Teva's journey towards sustainable procurement practices, a thorough assessment of suppliers' environmental and social performance is at the forefront. Through rigorous evaluations conducted by EcoVadis, Teva identifies suppliers with significant negative impacts in these areas, a vital step in ensuring accountability throughout its supply chain. Over the past three years, the ESG Progress report indicates that the company has flagged 19% of its critical tier 1 suppliers and 30% of non-critical tier 1 suppliers for significant environmental impacts. Similarly, 17% and 21% of these suppliers, respectively, have been singled out for significant social impacts. But Teva doesn't stop at identification; it's committed to action. Launching corrective action plans for 13% and 14% of its critical and non-critical tier 1 suppliers, respectively, Teva strives to improve ESG performance within a swift 12-month timeframe.

Communication is key, and Teva ensures that its supply chain partners are fully versed in its codes of conduct. According to the 2022 ESG disclosure report, Impressively, a staggering 99% of suppliers receive this crucial communication. Furthermore, contracts with targeted suppliers leave no room for ambiguity, incorporating clauses on environmental, labor, and human rights requirements, underscoring Teva's dedication to ethical and sustainable practices in every aspect of its operations.

Supplier engagement is another cornerstone of Teva's sustainable procurement strategy. By providing targeted training on supply chain codes of conduct to over 500 suppliers, Teva invests in building a network of responsible and ethically aligned partners. Moreover, the company's commitment to supporting renewable energies is evident in its involvement in programs like Energize, where 70 suppliers have registered to increase their knowledge and uptake of renewable energy solutions as depicted in the 2022 ESG report. But education is empowerment, and Teva doesn't just expect compliance; it actively fosters understanding and collaboration. With 100% of its workforce receiving training on sustainable procurement through the comprehensive GP Handbook, Teva empowers its employees to champion its ESG program and targets.

In the realm of supplier diversity, Teva stands out for its engagement with small and diverse businesses in the US. With over 800 small and diverse businesses engaged, representing a significant portion of its total US suppliers, Teva demonstrates its commitment to fostering inclusivity and economic empowerment. Looking ahead, the ESG progress report suggest that Teva have set ambitious goals for reducing its scope 3 emissions, aiming for a 25% reduction in absolute emissions from its supply chain. Joining programs like the CDP Supply Chain program and Energize, Teva seeks to leverage collective action and innovation to drive progress towards its sustainability targets.

In summary, Teva's approach to sustainable procurement encompasses assessment, communication, education, engagement, and action. Through these concerted efforts, Teva not only ensures compliance with ethical and environmental standards but also fosters a culture of responsibility and accountability throughout its supply chain.

For further insights into Teva’s ESG journey, we recommend exploring the full report here


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