In February 2020, Ethical Consumer viewed Johnson & Johnson's website for information on how the company managed workers' rights in its supply chain. Information on the company’s policies was obtained from its 2018 Health for Humanity Report and 2017 Responsibility Standards for Suppliers document.

Supply chain policy (rudimentary)

A strong policy would include the following commitments: no use of forced labour, permission of freedom of association, payment of a living wage, the restriction of working hours to 48 hours plus 12 overtime (without exception), no use of a child labour (under 15 or 14 if ILO exempt), no discrimination by race, sex or for any other reason.

Johnson & Johnson's Responsibility Standards for Suppliers included adequate clauses on child labour, forced labour, discrimination and freedom of association. The clause on wages was considered to be inadequate, as it only required the payment of minimum wages, not living wages. No clause was found covering working hours.
Overall, Johnson & Johnson was considered to have a rudimentary supply chain policy.

Stakeholder engagement (rudimentary)

Ethical Consumer deemed it necessary for companies to demonstrate stakeholder engagement, such as through membership of the Ethical Trade Initiative, Fair Labour Association or Social Accountability International. Companies were also expected to engage with Trade Unions, NGOs and/or not-for-profit organisations which could systematically verify the company's supply chain audits, and for workers to have access to an anonymous complaints system, free of charge and in their own language.

Johnson & Johnson was a member Pharmaceutical Supply Chain Initiative (PSCI), However, as an industry-only body (with no membership from NGOs or trade unions), this was not considered to be a multi-stakeholder initiative and therefore did not demonstrate adequate stakeholder engagement.
The company had a hotline, stating: “Our Credo Hotline is an integral component of the strong compliance culture at Johnson & Johnson. It is an anonymous whistle-blowing mechanism that provides a channel for all employees, contingent workers, customers, third-party agencies and other partners to report potential violations.”
Overall Johnson & Johnson was considered to have a rudimentary approach to stakeholder engagement.

Auditing and reporting (poor)

Ethical Consumer deemed it necessary for companies to have an auditing and reporting system. Results of audits should be publicly reported and quantitatively analysed. The company should have a scheduled and transparent audit plan that applies to their whole supply chain, including some second tier suppliers. The company should also have a staged policy for non-compliance. The costs of the audit should be borne by the company.

Johnson & Johnson’s Health for Humanity Report reported on several different types of supplier audits; compliance with its workers’ rights exceptions was said to monitored via ‘Social audits’.
It stated: “in 2018, we rolled out our social audit program, with 11 audits completed by year end. We plan to expand the program in the coming years.” However, this was not deemed to constitute a scheduled and transparent audit plan and no further details were found.
The company published some limited data on completed audits, but this was not considered to be sufficient, as it only stated the number of audits completed in each region and the number of ‘critical findings’ (0). It did not publish the numbers of findings categorised as ‘major’ or ‘minor’, nor did it explain these categories. No quantitative analysis of audit results was found.
The report included some examples of steps it would take towards “audit supplier improvement” in relation to its EHS audit program, but did not specify a policy for dealing with non-compliance with regards to its Social audits.
No mention of the costs of audits was found.
Overall, Johnson & Johnson was considered to have a poor approach to auditing and reporting.

Difficult issues (rudimentary)

Ethical Consumer also deemed it necessary for companies to address other difficult issues in their supply chains. This would include ongoing training for agents, or rewards for suppliers, or preference for long term suppliers. It would also include acknowledgement of audit fraud and unannounced audits, and measures taken to address the issue of living wages, particularly among outworkers, and illegal freedom of association.

Johnson & Johnson stated a preference for long-term suppliers in from its 2018 Health for Humanity Report: “We aim to maintain long-term relationships with suppliers, and prefer to work with them to resolve audit findings.” No information was found addressing other areas considered ‘difficult issues’ in this context.
The company was considered to have a rudimentary approach to difficult issues.

Overall Johnson and Johnson received a middle rating for supply chain management and lost half a mark in this category.

Reference:

2018 Health for Humanity Report (2018)

In March 2020, Ethical Consumer viewed an article in the Guardian, dated March 2019, which stated that another lawsuit had resulted in the company being ordered to pay compensation due to claims its talcum powder had contained cnacer-causing asbestos. It stated:

"A California jury has awarded $29m to a woman who said asbestos in Johnson & Johnson’s talcum-powder-based products caused her cancer."

Ethical Consumer noted that this was the latest of a series of cases brought against the company for similar claims about its talcum powder, several of which it had won and several of which had been lost by the company.

As a result of the story, the company lost half a mark under Irresponsible Marketing.

Reference:

https://www.theguardian.com/us-news/2019/mar/14/woman-awarded-29m-in-damages-in-johnson-johnson-canc

In March 2020, Ethical Consumer viewed an article in the New York Time, dated August 30, 2019, that reported on a court ruling against Johnson & Johnson for the irresponsible marketing of opioids. It stated:

"A judge in Oklahoma on Monday ruled that Johnson & Johnson had intentionally played down the dangers and oversold the benefits of opioids, and ordered it to pay the state $572 million in the first trial of a drug manufacturer for the destruction wrought by prescription painkillers."

The company therefore lost half a mark under the Irresponsible Marketing category.

Reference:

Johnson & Johnson Ordered to Pay $572 Million in Landmark Opioid Trial (30 August 2019)

In May 2019 Ethical Consumer viewed the pharmaceutical Transparency Index run by the campaigning organisation All Trials, started by Dr Ben Goldacre and Dr Sile Lane at Sense About Science. All Trials argued that transparency in clinical trials was not being sufficiently respected by pharmaceutical companies, with seriously detrimental effects on medicine.

The Index rated 46 pharmaceutical companies on their commitment to transparency.

Ethical Consumer marked down all companies who appeared below the top ten. This included ViiV Healthcare, which was in 36th place, Sanofi, in 25th place, Johnson & Johnson, in 15th place, and Bayer, in 11th place.

Reference:

Transparency Index (14 May 2019)

In February 2020, Ethical Consumer viewed Johnson & Johnson's list of subsidiaries in its 10-K filing with SEC (Exhibit 21). This stated that the company had operations in the following countries: China, Egypt, Israel, Mexico, Nigeria, Pakistan, Philippines, Russia, Saudi Arabia and Turkey

At the time of writing Ethical Consumer considered each country listed to be governed by an oppressive regime. The company therefore lost a whole mark in the Human Rights category.

Reference:

SEC 10-K Exhibit 21 (2019)

In February 2020, Ethical Consumer viewed Johnson & Johnson's website along with its form SD filing with SEC for details of its policy and reporting on conflict minerals.

1.The policy articulated the company's commitment to:

- Conflict-free sourcing: “[the company] will work toward the elimination, over time, of 3TG in our products that we discover originate in the DRC region and support armed groups”

- Continue to source from the DRC region: “[We] expect our suppliers to source materials from suppliers who also source responsibly, including from legitimate, conflict-free mines in the DRC region

- Ongoing due diligence: “Require all our 3TG suppliers to conduct the necessary due diligence and provide us with proper verification of the country of origin and source of the materials used in the products they supply to Johnson & Johnson companies”

2.The company was a member of the Responsible Mineral Initiative

3.Johnson & Johnson’s “Responsibility Standards for Suppliers” included a clause that suppliers must “Comply with requirements included in Johnson & Johnson’s Statement on Conflict Minerals”

4. The company’s SEC filing reported on the steps it had taken in line with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas

5. No commitment was found to only using 3TG minerals from smelters that have been audited and verified as conflict free by the Responsible Mineral Assurance Process

6. The company published a list of smelters or refiners believed to be in its supply chain, and included the name, location and certification status of each.

Overall, Johnson & Johnson received Ethical Consumer’s best rating for its conflict minerals policy and reporting.

Reference:

www.jnj.com (15 February 2002)

In February 2020, Ethical Consumer searched the Johnson and Johnson website and saw that it manufactured products using cotton. Ethical Consumer also searched for a company policy on sourcing cotton. No policy could be found.

According to Anti-Slavery international (ASI) website viewed by Ethical Consumer in August 2018, Uzbekistan and Turkmenistan were two of the world’s largest exporters of cotton, and every year their governments forcibly mobilised over one million citizens to grow and harvest cotton. Due to the high proportion of cotton likely to have come from Uzbekistan and Turkmenistan and the prevalence of forced labour in its production, the company lost half a mark in the Workers Rights category.

The Organic Trade Association website, www.ota.com, stated in July 2018 that cotton covered roughly 2.78% of global arable land, but accounted for 12.34% of all insecticide sales and 3.94% of herbicide sales. Due to the impacts of the widespread use of pesticides in cotton production worldwide the company also lost half a mark in the Pollution & Toxics category.

According to the International Service for the Acquisition of Agri-Biotech Applications (ISAAA), a non-profit pro biotech organisation, genetically modified cotton accounted for 80% of cotton grown in 2017. Due to the prevalence of GM cotton in cotton supply chains and the lack of any evidence that the company avoided it, it was assumed that some of the company's cotton products contained some GM material. As a result it lost half a mark under the Controversial Technology category.

Overall the company received Ethical Consumer's worst rating for its cotton sourcing policy.

Reference:

Website (30 April 2019)