McKesson Corporation (“McKesson”) publishes this Modern Slavery and Human Trafficking Statement (this “Statement”), pursuant to section 54 of the Modern Slavery Act 2015, on behalf of McKesson Global Sourcing Limited (“MGSUK”) for the fiscal year ended 31 March 2021 (“FY21”).
MGSUK is committed to good corporate citizenship and the highest ethical standards. To facilitate the fulfilment of these commitments, MGSUK has established and maintains appropriate measures to safeguard against the occurrence of human rights abuses, modern slavery and related human trafficking within its supply chain, as further detailed in this Statement.
BUSINESS AND ORGANISATION
MGSUK is a private limited company, incorporated in England and Wales, and is a wholly owned subsidiary of McKesson, a company incorporated in the State of Delaware, United States of America. The shares of McKesson are traded on the New York Stock Exchange. The McKesson group is a global leader in healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information technology.
MGSUK is the global sourcing organization for McKesson focusing on over-the-counter and medical-surgical products, and delivering value to its customers by working with global suppliers to drive efficiencies of scale in its supply chain. MGSUK itself does not physically manufacture products.
VALUES, POLICIES and TRAINING
MGSUK is committed to acting ethically and with integrity in all of its business relationships, aiming to ensure that modern slavery and human trafficking are not taking place anywhere in its business. MGSUK expects all organisations within its supply chain to adopt an equivalent approach in their operations. MGSUK is committed to sourcing quality products from suppliers who share its ethical values, which are reflected in the McKesson I2CARE principles, namely; Integrity, Inclusion, Customer-first, Accountability, Respect and Excellence. The I2CARE principles are central to McKesson’s Code of Conduct and serve as important guidelines for MGSUK’s interactions with its customers, suppliers, other business partners, and between its employees.
MGSUK has developed a new ‘Modern Slavery Prevention Policy’ which will be formally adopted during the fiscal year ending 31 March 2022, which will further enhance MGSUK’s commitment to tackling modern slavery and human trafficking.
All MGSUK employees are encouraged to raise concerns, including potential violations of McKesson’s Code of Conduct, company policies and applicable laws. MGSUK provides different mechanisms by which concerns can be raised. This includes the McKesson Integrity Line, operated by an independent third party, to which concerns can be raised anonymously and that is available either by phone or online to all employees 24 hours a day, 7 days a week, in multiple languages. MGSUK does not tolerate any form of retaliation for raising concerns in good faith, asking questions or participating in an investigation.
MGSUK conducts periodic web-based and/or face-to-face training for employees to emphasise the importance of acting with integrity and in line with its I2CARE principles and Code of Conduct.
In FY21MGSUK published a communication to its employees on the UK Modern Slavery Act and its implications, to help ensure a high level of awareness and understanding of the risks of modern slavery and human trafficking.
SUPPLY CHAIN DUE DILIGENCE & RESPONSIBLE SOURCING PROGRAM
Whilst MGSUK’s principal suppliers are heavily regulated manufacturers and distributors of medical-surgical products, MGSUK acknowledges that some of its suppliers are located in countries that may be more vulnerable to human rights abuses than others. MGSUK, therefore, makes several efforts to implement a zero-tolerance policy for such abuses, namely:
- Clearly communicating its expectations to suppliers to ensure adherence to its values and ethical standards:
McKesson has established the McKesson Supplier Sustainability Principles (“MSSP”), which include a requirement for its suppliers to provide freely chosen employment and forbids involuntary labour of any kind. The MSSP are incorporated into MGSUK’s supply agreements, so suppliers are legally bound to comply with the Principles. MGSUK provides regular training to its suppliers to enable them to understand the MSSP and identify what further actions may be taken to increase compliance with the Principles. MGSUK’s supplier agreements also include language that requires all suppliers to comply with national and regional statutory requirements in the country in which they are operating, including any applicable national laws regarding human trafficking, forced labour and other forms of modern slavery. - Establishing appropriate policies and processes within its businesses to make sure that the products it is selling meet the highest standards:
A dedicated Responsible Sourcing Team is responsible for leading the Responsible Sourcing Program for MGSUK which has four key elements: (i) the MSSP; (ii) supplier risk assessments; (iii) supplier audits; and (iv) remediation. The Responsible Sourcing Program has provided MGSUK with a clear framework to enable it to continually evaluate risks within its supply chain and make informed decisions about those risks, whilst ensuring that suppliers adhere to local legal requirements thereby improving their sustainability performance. These actions build a foundation for sustainable business development for both MGSUK and its suppliers. - Utilising both internal and external resources to evaluate the factories of its suppliers based in higher risk countries and audit them against recognised industry standards:
MGSUK carries out periodic supplier audits or uses the services of third-party providers or other resources for this purpose and, where issues are identified, it works with the supplier to ensure improvements are made. Audit findings of non-conformances are ranked based on risk. Audit results are summarised in a supplier scorecard which measures a supplier’s performance and is reviewed with the supplier on a quarterly basis. Should a critical issue be identified, MGSUK requires a timely response from the supplier and, if a supplier fails to adequately remediate the issue, the relationship is re-evaluated and, if necessary, terminated. In the event that an issue arises for which remediation is required, MGSUK works with the supplier to improve its standards with corrective action plans and on-going reviews to make sure McKesson’s standards are maintained. MGSUK aims to build relationships with its suppliers to ensure adherence to McKesson’s values and ethical standards.
In recent years MGSUK has updated its methodologies for checking potential supplier labour issues, updated its supplier scorecard process to include responsible sourcing metrics, updated its on-boarding processes for new suppliers to include responsible sourcing assessments, and enhanced its audit process to conclude joint supplier audits by its Responsible Sourcing Team and Quality Assurance Team.
MGSUK continues to be ready and willing to reject or terminate business relationships with new or existing suppliers in case adherence to McKesson’s standards cannot be evidenced or maintained.
MGSUK continuously monitors its responsible sourcing program and introduces improvements as appropriate.
COVID-19 PANDEMIC
MGSUK recognises the unprecedented challenges that were brought about by the Covid-19 pandemic in FY21 and that have persisted into the current fiscal year as they continue to lead to an increased chance of modern slavery in industry supply chains as businesses continue to adapt to the situation. MGSUK has continued to take steps to manage these risks as they have emerged in order to guard against the occurrence of modern slavery within its organisation and its supply chain.
To help prevent the spread of the virus and ensure continuation of its operations, MGSUK has continued to monitor the public health emergency and review its own existing measures in accordance with UK Government guidance. Pursuant to such guidance, MGSUK has continued to facilitate homeworking for its non-essential personnel during the fiscal year and all non-essential travel and face-to-face meetings were suspended. MGSUK has continued to pay sick pay in accordance with its internal policy throughout the pandemic and has implemented social distancing and other safety measures as it plans towards re-introducing employees into its business premises on a voluntary basis and in line with Government guidance.
MGSUK employees have received regular communication throughout the period to keep them informed about the impact of the Covid situation on MGSUK and which measures have been taken to protect the health and safety of the employees, including written updates from their business unit leaders, enterprise-wide communication, and regular group calls. All usual MGSUK recruitment checks have been carried out virtually and all employees have had continued access to their usual support and grievance procedures as they remained available online and escalation routes remained fully available.
MGSUK has supported its suppliers during the pandemic by continuing to pay for orders promptly and working closely with suppliers to source essential medical products and minimise interruptions in the supply of products to MGSUK’s customers.
MGSUK’s Board of Directors has been kept up to date throughout the pandemic of risks posed by the virus and has been actively involved in determining any necessary adjustments to existing measures to help to protect MGSUK employees.
EFFECTIVENESS
MGSUK believes its efforts to date as outlined in this Statement have been appropriate in helping prevent modern slavery and human trafficking in MGSUK’s supply chain.
GOING FORWARD
Following a review of the effectiveness of the steps MGSUK has taken in FY21 to help ensure its supply chain is free of modern slavery and human trafficking, MGSUK intends to take the following further steps to combat the occurrence of modern slavery and human trafficking:
- Continue to monitor the risk landscape within the context of MGSUK’s core operations and supply chain and adapt mitigation actions accordingly.
- Continue to monitor the legal landscape within the UK and implement any additional measures, as appropriate.
- In order to assess the risk of modern slavery in its supply chain, conduct a risk assessment considering the organisational structure of MGSUK, operational model, supplier countries of manufacture, and recruitment and employment practices.
- Continue to enhance its supplier due diligence and risk identification processes.
- Implement and raise awareness of a standalone modern slavery policy for the business, intended to enhance MGSUK’s capacity and underline its commitment to tackling modern slavery within its supply chain.
- Continue to work alongside its employees in developing responsible approaches to working environments in relation to Covid-19, and to help ensure their, their families’, and their community’s safety.
This Statement has been approved by the Board of Directors of MGSUK, and the Board has authorized G.B. Thomas, Director, to sign the Statement on behalf of MGSUK.