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Supply chain responsibility
1stin the IT industry to set a supply chain greenhouse gas (GHG) emissions reduction goal
In September 2013, HP announced a major step forward in carbon management leadership by becoming the first IT company to set a supply chain greenhouse gas (GHG) emissions reduction goal. HP’s goal is to drive a 20% decrease in our first tier manufacturing and product transportation-related GHG emissions intensity in our supply chain by 2020 compared with 2010.
The GHG emissions reduction goal will be driven through a variety of HP led activities, including:
- Business incentives for suppliers to set and achieve tangible GHG emissions reduction goals.
- Direct prevention of 2 million metric tons of GHG emissions, across our multi-tier supply chain, cumulatively by 2020 through specific supplier environmental improvement projects. (According to the U.S. Environmental Protection Agency’s Greenhouse Gas Emissions equivalency calculator, that’s equal to the yearly GHG emissions from electricity consumed in nearly 300,000 average U.S. homes.)
- Continued measurement and annual public reporting through our Global Citizenship Report to create awareness among our supply base and demonstrate progress.
HP is coordinating supplier training sessions and workshops to raise awareness and understanding of the new goal and associated expectations.
Read more about HP’s supply chain GHG emissions reduction goal in our press release.
HP has one of the industry's most extensive supply chains. Comprising more than 1,000 production suppliers and tens of thousands of nonproduction suppliers, HP's supply chain spans six continents, more than 45 countries and territories, and many cultures. The breadth and depth of our supply chain is a core part of HP's success, but it also brings challenges. We embrace the opportunity and our responsibility to address them.
HP has worked with suppliers for more than 12 years to improve social and environmental responsibility (SER) standards throughout the information technology (IT) supply chain. In a constantly evolving supplier landscape, our supply chain SER program seeks innovative ways to approach SER issues and to increase the positive impact of our efforts. We use our scale, purchasing power, and knowledge to achieve our objectives. Our program addresses the full range of SER issues—combining rigorous auditing with collaborative capability-building initiatives and targeting both production and nonproduction suppliers.
We have made strong progress in several areas. Our audit results over time show a decrease in the number of nonconformances to our code of conduct between initial and full re-audits of supplier facilities. We have also led the IT industry in efforts to eliminate conflict minerals from our supply chain, while targeting high-risk issues such as student labor. We have enhanced our auditing program to cover a larger number of supplier sites more efficiently, and to include our first independent management system assessments. We have also expanded our program beyond production suppliers to also cover nonproduction suppliers.
Read HP's approach to supply chain responsibility for detailed information about our program.
HP's vision is for a sustainable supply chain, with empowered partners that own and prioritize the well-being of the people, communities and environment around them. We have been working towards this vision for many years, evidenced by the 12-year history of our supply chain SER program.
In 2012, we introduced a series of fundamental changes to the way we manage supply chain SER. These are intended to deliver lasting value to our suppliers and the communities in which they operate.
These changes include a focus on:
- Increased supplier ownership of SER and management system discipline
- Tackling new and persistent issues like responsible use of student workers and working hours
- Addressing issues beyond our immediate suppliers
- Improving the link between suppliers' SER performance and our procurement processes
We discuss these changes in detail in our 2012 Global Citizenship Report.
HP's first supplier questionnaire distributed
HP surveyed its global suppliers for the elimination of ozone-depleting substances.
HP's first Global Citizenship Report published
HP's first Global Citizenship Report outlined our commitment to improving social and environmental performance over the next decade.
HP Supplier Code of Conduct rolled out
HP was the first electronics company to publish an SER Supplier Code of Conduct.
Procuring Environmentally Responsible Materials (PERM) program implemented
PERM preceded HP's supply chain SER program and included HP's first supplier environmental requirements.
HP's supplier self assessments began
Suppliers began self-assessments against our Supplier Code of Conduct requirements. Our target was to assess our top 40 suppliers by the end of the 2003 fiscal year. We achieved that goal.
HP's environmental procurement policy and General Specification for the Environment (GSE) released
We communicate materials restrictions to our design teams and to our manufacturing suppliers through our GSE.
Electronic Industry Citizenship Coalition (EICC) formed
Cross industry; global
The EICC fosters responsible management and operational practices in labor, human rights, ethics, the environment, and health and safety across the electronics industry's global supply chain. HP was one of the founding members of the EICC and codeveloped the EICC Code of Conduct. HP has supplemented the EICC Code with additional requirements specific to freedom of association. See HP's EICC Code of Conduct
HP's first supplier audit performed
HP; China, Mexico, Southeast Asia, and Eastern Europe
We completed 45 pilot audits in 2004, against a public goal to complete 30 during the year.
Supply chain SER program launched
We launched our supply chain SER program with a long-term vision to help improve supplier labor management standards, human rights, and environmental performance.
Monitoring sources of tantalum from capacitor suppliers began
HP obtained letters from capacitor suppliers stating that they were not using tantalum sourced from the Democratic Republic of Congo.
HP's first supplier SER forum held in China
HP held the first SER forum for regional Chinese suppliers to review and discuss HP's SER and Restriction of Hazardous Substances requirements. Around 330 representatives from various suppliers participated.
Capability building program launched
HP's capability building program commenced with the Focused Improvement Supplier Initiative, a program that provided 30 HP suppliers with the tools and resources to improve SER management within their facilities. Since then, our initiatives have covered multiple issues, including worker health, communication, environment and antidiscrimination. (See Capability building.)
Health and safety capability building efforts launched
HP joined the HERProject to raise awareness of the general and reproductive health needs of women working in manufacturing. (See Capability building.)
Kicked off capability building efforts focused on raising SER awareness through direct training of supplier
HP piloted a training program to directly train supplier employees in worker-management communications. The program helped workers better understand their labor rights and provided an independent workers' grievance hotline for communicating concerns about their working environment.
Comprehensive list of HP suppliers disclosed
We were the first electronics company to publish a list of our suppliers in our FY07 Global Citizenship Report.
Suppliers' greenhouse gas (GHG) emissions reported
HP became the first major IT company to publish its aggregated supply chain GHG emissions, representing 86% of our first-tier suppliers by spend. We increased that percentage to 95% for calendar year 2010.
Working hours key performance indicators (KPIs) program launched
HP piloted supplier use of KPIs to help reduce excessive working hours in the supply chain.
First capability building program to reach multiple tiers of HP's supply chain
HP's year-long program with hard disk drive suppliers in Thailand was the company's first effort to reach multiple tiers of our supply chain. The program raised awareness of HP's EICC Code of Conduct, facilitated best practice sharing among supplier management, and supported their implementation of SER-related management systems.
Supply chain SER program expanded to nonproduction suppliers
Originally focused only on production suppliers, HP's supply chain SER program expanded to also include nonproduction suppliers.
Conflict minerals program launched
HP's conflict minerals program was launched, broadening the scope of our work to focus on tantalum, tin, tungsten, and gold mined in the Democratic Republic of Congo.
First joint Validated Audit Process (VAP) audits performed
Cross industry; global
The VAP is designed to eliminate duplication and "audit fatigue" by providing a common auditing approach for companies in the electronics industry. This allows for audit results to be shared by multiple customers of one supplier.
Environmental sustainability capability building efforts kicked off
HP became the only information and communication technology company to join Energy Efficiency Partnership (EEP), a year-long pilot program designed to help major suppliers in China reduce energy use, GHG emissions, and costs. Through the EEP, HP expanded supplier capability building efforts to environmental improvement.
First HP nonproduction supplier audit performed
HP; China, Asia Pacific, North America
HP performed our first audits of nonproduction suppliers, auditing three facilities in China, India, and Mexico.
Supplier guidance on appropriate use of student and dispatch workers developed
In response to the growing focus on student labor management violations in the electronics industry supply chain, we developed “HP Student and Dispatch Worker Guidance Standard for Supplier Facilities in the People’s Republic of China (PRC)”, an industry-leading initiative.
First independent management system assessments of HP supplier facilities conducted
HP; China, Europe, Latin America
HP commissioned labor rights NGO Social Accountability International (SAI) to use its Social Fingerprint tool to independently assess the social management systems of three key production suppliers from China, Europe, and Latin America.
HP has a long history of transparency in our supply chain SER program. Examples include:
- In 2005, we believe we were the first electronics company to publish aggregated supplier audit results.
- In 2008, we were the first electronics company to publish a list of suppliers, and we were the first major IT company to disclose our supply chain GHG emissions.
- In 2013, we became the first IT company to publish our supply chain water footprint.
- In 2013, we became the first IT company to publish our supply chain smelter list.
- In 2013, we became the first IT company to set a supply chain GHG emissions reduction goal.
We maintain each of these disclosures in our annual Global Citizenship Report.
In addition, this year we are expanding the level of detail in our supplier list to include the locations and addresses of product assembly sites and the HP product types that are manufactured at each of these locations. See HP's list of suppliers.
We provide many other examples of our work to improve transparency, including our independent management system assessments with Social Accountability International, in our 2012 Global Citizenship Report.
In late 2012, the New York Times visited two supplier factories in China to investigate working conditions. The first factory, a new facility based in the emerging electronics manufacturing region of Chongqing, is owned by HP supplier Quanta and manufactures HP products. The second facility is based in Chengdu and employs up to 120,000 workers.
Pascale Legros, based in Montréal, Canada, has played a variety of roles since joining HP Global Procurement about five years ago. Beginning March 2012, she has served as HP’s Sustainable Procurement Program Manager, focusing on developing and implementing environmentally sustainable procurement strategies. As social and environmental responsibility (SER) issues are increasingly central in the global marketplace, companies including HP are using their buying power to improve the performance of their supply chains.
“We want our suppliers to clearly understand our goals and our strategies so that they can help us reach our targets and reduce our footprint,” says Pascale.
This past year, switching HP’s car rental service contract to hybrid and other fuel-efficient vehicles certified by the U.S. Environmental Protection Agency’s SmartWay program reduced fuel consumption and related GHG emissions by 15% per day driven, compared with 2011. This will save HP an estimated $1 million USD by the end of 2013. The team also worked with HP’s preferred office consumables supplier to devise a plan enabling HP data centers in the United States to purchase recertified mainframe data tapes at a reduced cost from the office supply store, reducing waste and saving energy.
“These actions taken as a whole can amount to a major impact. And I’m glad I can play a part. It’s great to know that what we do will have an impact on the world,” she says.
Pascale is also committed to supplier diversity and served as the Supplier Diversity Program Lead in Canada, earning distinction from Diversity Canada Magazine as one of the Most Influential Women in Diversity and Human Resources in 2013.
These efforts are just the start. Pascale is passionate about setting her sights on greater targets, and she is always looking ahead. “I know we can accomplish much more, and that motivates me.”
As an HP Supply Chain Social and Environmental Responsibility (SER) Program Manager, Sofia Kelly has a unique perspective on the evolving supply chain landscape, one in which environmental factors such as energy and water use are increasingly important alongside traditional labor and ethics issues.
Sofia relishes having an impact on these issues. “I’ve always had a passion for environmental conservation,” says Sofia, based in Palo Alto, California. “It’s just one of those things I was born with. I know that the idea of sustainability and creating a world that we can pass on is a necessity.”
Sofia began her career working at the factory level implementing environmental management systems (ISO14001) in the telecommunications industry, before moving on to a field that was rapidly growing in importance: supplier ethics and environmental requirements. HP is helping to pioneer this field which is why the past three years have been a great fit for Sofia.
HP is one of few IT companies reaching out to first- and second-tier suppliers to build capabilities that drive substantial environmental improvements. Through the Electronic Industry Citizenship Coalition (EICC), Sofia looks for new and better ways to help suppliers report and reduce greenhouse gas emissions. And through the Energy Efficiency Program and the Global Social Compliance Programme (GSCP), she and her team encourage suppliers to improve their environmental practices.
Motivating suppliers to participate in new efforts can be challenging. HP addresses this through close relationships with suppliers as well as by partnering with industry organizations such as the EICC. This helps the company align its message, reduce redundancy, and synchronize expectations. “Year-over-year, suppliers have been getting better at sharing metrics,” she says, “and we are now seeing high interest as well in our new GSCP initiative.”
Water is next on her list of focus areas. “We’ve been talking a lot about energy, but water is the next frontier and something that all companies need to quickly understand and manage,” says Sofia. This year, HP published water consumption data from its first-tier suppliers for the first time.
Sofia is proud of her contribution to these many efforts: “It’s great to see that in a relatively short period of time global companies such as HP have done so much to benefit the environment. It’s about conserving our resources, which ultimately benefits not only our industry, but the global economy as a whole. So, it’s incredibly rewarding for me.”
For more than a decade, the mining of minerals used to produce tantalum, tin, tungsten, and gold (3TG) in the Democratic Republic of Congo (DRC) has been linked to the funding of armed groups waging a civil war in the country. These metals are widely used in the components and assembly processes of electrical and electronic products and in many other industries. The possibility that HP products contain metals that fund armed conflict in the DRC is unacceptable to us, and we are taking a leading role to establish conflict-free sources in the DRC.
HP's campaign to eliminate conflict minerals while supporting the DRC has five dimensions:
- Conducting due diligence on HP's supply chain
- Supporting the development of an industry approach to due diligence
- Advancing the Electronic Industry Citizenship Coalition (EICC) and Global e-Sustainability Initiative (GeSI) Conflict-Free Smelter (CFS) program
- Supporting in-region mineral certification
- Advocating policy supporting conflict-free mineral sources from the DRC
Our recent efforts garnered recognition by two NGOs active in the DRC and the conflict minerals sphere. In its report "Taking Conflict Out of Consumer Gadgets: Company Rankings on Conflict Minerals 2012," the Enough Project named HP as one of four companies that have been "pioneers of progress." HP also ranked second out of 24 consumer electronics companies assessed by the organization. In addition, we received a letter from Free the Slaves, an NGO dedicated to ending all modern forms of slavery, recognizing our work engaging the U.S. State Department to help resolve issues in the DRC.
This year, for the first time, HP is publishing the identity of the 3TG smelters/refiners that we have confirmed to be in our supply chain. We believe there may be other smelters/refiners that are yet to be identified and we will update the list annually.
Diverse suppliers bring innovation to HP's supply chain, helping us gain a competitive advantage while supporting our global citizenship efforts. HP's Global Supplier Diversity program promotes an HP supply chain that is diverse, inclusive, and global and reflects the demographics of our customers and employees. HP has maintained a Global Supplier Diversity Office for more than 40 years. Its mission is to generate revenue by enabling HP to fulfill contracts requiring a globally inclusive supply base. We are members of over 20 supplier diversity organizations in Asia, Canada, Europe, and the United States. Our supplier diversity program gives diverse companies an equal opportunity to compete for HP business. These companies include:
- Aboriginal/indigenous businesses
- Lesbian, bisexual, gay, and transgender businesses
- Minority-owned businesses
- Small businesses
- Women-owned businesses
- Veteran-owned businesses
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