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Supply Chain Responsibility in the Technology Sector

By Melissa J. Anderson (New York City)

In 2004, the Electronic Industry Citizenship Coalition was founded by leading technology companies to “promote a common code of conduct for the electronics, and information and communications technology (ICT) industry.” The EICC’s main focus is corporate responsibility within the supply chain. According to the website, “together, EICC members are working to improve environmental and worker conditions.”

The EICC has more than 40 corporate members, including the biggest names in the tech industry. Here are how three EICC members are approaching corporate responsibility in their supply chains.

HP: Transparency and Advocacy

HP, ranked #1 this year on Corporate Responsibility Magazine’s 100 Best Corporate Citizens list, provides a transparent view of its efforts to address issues within its supply chain – providing numbers, goals, and strategy within its FY09 Global Citizenship Report.

Part of the company’s dedication to global responsibility is improving conditions for supply chain workers as well as education and development in the communities surrounding supplier facilities.

In a recent Huffington Post article, Gabi Zedlmayer, Vice President of HP’s Office of Global Social Innovation wrote, “Our expertise, size, and influence give HP a unique opportunity to drive the agenda on global corporate responsibility through influencing our own business ecosystem, as well as those of multiple industries.”

She continued:

“We also operate the IT industry’s largest global supply chain in size and reach, and last year the average number of major supplier non-conformances per facility decreased 40 percent from the first to the most recent audit. In 2009 we conducted 104 supplier site audits, bringing the total number of such audits the company has performed since 2005 to 590, and continue to hold our entire roster of suppliers to our own progressive standards.”

Besides dealing specifically with manufacturing facilities, the company notes its partnership with external labor organizations, such as Hong Kong–based Students and Scholars against Corporate Misbehaviour.

It also uses its report to call for an industry mechanism to avoid the use of conflict-mined resources. It says:

“At this time, there is no certification mechanism that can assure us that the metals used in our products are not sourced from mineral trade associated with the conflict in the [Democratic Republic of Congo]. HP is working alongside companies in other industries to drive the creation of such a mechanism.”

IBM: Environmental Accountability

With over 28,000 first tier suppliers in 90 countries, IBM recently announced a new initiative designed to improve the environmental practices of manufacturers in its supply chain. According to a press release, IBM’s suppliers are “now required to:

  • define, deploy, and sustain a management system that addresses corporate responsibility, including supplier conduct and environmental protection;
  • measure performance and establish voluntary, quantifiable environmental goals;
  • publicly disclose results associated with these voluntary environmental goals and other environmental aspects of their management systems.”

The key to IBM’s new program is accountability – the company believes that by setting goals and holding suppliers accountable for their environmental impact, it can help foster greater environmental responsibility around the world.

IBM Global Supply Chief Procurement Officer and Vice President John Paterson explained, “Clearly there are financial benefits for procurement organizations around the world to choose suppliers that effectively manage their corporate and environmental responsibilities. For IBM, this helps contribute to our business success and that of our suppliers. Moreover, it’s the right thing to do.”

AMD: Upholding Industry Standards

For the 15th year in a row, AMD has released its report on Corporate Responsibility [PDF]. AMD President and CEO Dirk Meyer says the company remains committed to corporate responsibility. He writes:

“From a business context, we look at problems faced by the world and ask ourselves how we can

apply our core competencies to help find solutions. In doing this, we can leverage our company

expertise and invest in programs that benefit both society and our business.”

According to AMD’s website, the company takes a broad view when it comes to supply-chain responsibility. “We communicate our expectations to these top-tier suppliers and require them to adhere to the Electronics Industry Citizenship Coalition’s (EICC) Code of Conduct and the Institute for Supply Management’s (ISM) Corporate Social Responsibility (CSR) Principles in the Supply Chain.”

The company also recognizes suppliers complying with its Supplier Social and Environmental Responsibility (SER) program.

Each of these companies takes a different approach to supply-chain responsibilities – both in how its programs are managed and how those programs are reported. HP’s program, for example, is highly visible – noted in detail on the company’s website and elsewhere – which not only helps build support for the company externally, but builds internal engagement and loyalty as well.

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