Johnson & Johnson shows it continues to deserve high regard as a corporate citizen
In 1943, Robert Wood Johnson, chairman of Johnson & Johnson, wrote the company’s “Credo”. Written long before corporate social responsibility became the norm, the Credo remains unique in an era of increased focus on sustainability. Presenting an interesting contrast to the ethos of most companies, the Credo states that Johnson & Johnson’s first responsibility is to “the doctors, nurses and patients, to mothers and fathers and all others who use our products and services” rather than to the company’s shareholders.
Johnson & Johnson considers this approach to be a “recipe for business success”. It is therefore no surprise that the company was an early adopter of sustainability reporting, issuing its first report in 1993.
Today, Johnson & Johnson manufactures health care products, and provides related services to consumer, pharmaceutical, medical devices, and diagnostic markets. The company is organised into three business segments (Consumer, Pharmaceutical, and Medical Devices & Diagnostics) and employs 128,100 people in 60 countries. Johnson & Johnson has a portfolio of roughly 300,000 products that touch more than 1 billion people every day.
Johnson & Johnson’s most recent Citizenship & Responsibility Report, released in June, is organised around three principal sections: “Advancing Human Health & Well Being”, “Leading a Dynamic & Growing Business Responsibly”, and “Safeguarding the Planet”. These sections are bookended by thoughtful discussions and summaries of the company’s goals, progress and challenges. The report takes a unique approach to GRI by providing the relevant indicators throughout the text as well as a traditional GRI Index at the end of the report. Overall, Johnson & Johnson provides a meaningful and transparent discussion of the issues covered in its materiality assessment and the company’s progress on those issues.
“Advancing Human Health & Well Being” focuses on many of the issues that Johnson & Johnson deems to be most material, including Access to and Affordability of Health Care, Global Health, Product Pipeline, R&D and Clinical Trials, and Innovation. This section provides a wealth of information on these issues and the company’s progress against its Healthy Future 2015 Citizenship & Sustainability goals. However, the information is sometimes difficult to conceptualize due to the text-heavy presentation and limited visual aids.
Both the “Leading a Dynamic & Growing Business Responsibly” and “Safeguarding the Planet” sections incorporate more graphs and case studies, allowing the reader to distil performance on key metrics and gain insight into examples of this work. For instance, “Safeguarding the Planet” includes an infographic that Johnson & Johnson developed for its Care To Recycle campaign after internal research determined that “only one in five Americans consistently recycles in the bathroom, where many Johnson & Johnson personal care products are used”.
Although the report is candid about certain challenges that the company faced in 2013, it fails to mention the settlement it reached relating to the 2010 recall of DePuy Orthopaedics’ (a subsidiary of Johnson & Johnson) ASR XL Acetabular System and DePuy ASR Hip Resurfacing System used in hip replacement surgery. In 2013, the company reached a settlement worth an estimated $2.5bn that would compensate roughly 8,000 patients who were forced to have the device removed and replaced. The settlement is described in the company’s 10-K report, but the omission of this issue is of particular note since the Citizenship & Responsibility Report identifies “Product Quality and Safety” as the most material issue to both internal and external stakeholders.
Johnson & Johnson’s strong history of sustainability reporting and performance has earned the company recognition from groups including the FTSE4Good Index, the Dow Jones Sustainability Index, and Best Global Green Bands. Johnson & Johnson currently ranks second on both the Global Access to Medicines Index and CRO Magazine’s list of the 100 Best Corporate Citizens. The company’s report meets the expectations that are associated with these meaningful distinctions. Although the ASR recall is a glaring omission, and the style of the report lacks innovation, Johnson & Johnson’s commitment to those who use their products remains apparent.
- Follows GRI? Yes, G4 referenced
- Assured? Specific sections were externally assured
- Materiality analysis? Yes, and a matrix is included
- Goals? Yes
- Targets? Yes
- Stakeholder input? Yes
- Seeks feedback? Yes, an email address is provided and readers are invited to comment on both the report and the company’s sustainability activities
- Key strengths? Transparent and clear discussion of goals, progress, and challenges.
- Chief weakness? Limited use of case studies and info-graphics leads to a text-heavy report
- Pleasant surprise? Clear, and transparent discussion of challenges faced in 2013, relating to sustainability activities
CR report review CR Reporting Johnson & Johnson