ELECTRONIC INDUSTRY CITIZENSHIP COALITION

Introduction to the Electronic Industry Citizenship

Coalition® Date: April 12, 2011 Presenter: Bob Leet, M.Sc. Company: Intel

Agenda

Setting the stage for action

EICC overview

Highlighted tools

Carbon Reporting Tool

Conflict-Free Smelter Program

High Expectations

In the globalized world society has high expectations of business to:

create jobs and wealth

address societal issues

collaborate with public sectors

use global span to accelerate change

The Electronic Industry

Citizenship Coalition®

(EICC®) is a coalition of

companies working together

to create a comprehensive

set of tools and methods

that support credible

implementation of the EICC

Code of Conduct throughout

the Information and

Communications

Technology (ICT) supply

chain.

Who is the EICC®?

EICC Members (As of 3 Feb 2011)

Objectives of the EICC

Develop and maintain a common Code of Conduct

Facilitate a credible process for evaluation and management of supply chains covering labor, environmental, and sourcing topics

Deliver shared training and education to improve social and environmental performance in the supply chain

Build external awareness and participation through meaningful stakeholder engagement

Labor

Health & Safety

Environmental

Ethics

Management Systems

Code of Conduct Elements

Evaluate & control exposure to hazards

Treat employees with dignity & respect

Uphold the highest standards

Protect the environment

A management systems approach drives sustainable solutions

HIGHLIGHTED TOOLS

Why? – Climate change is one of the top

global environmental issues companies face

– Increasing pressure to report emissions from investors, customers, and consumers

– Governments at all levels are involved in potential regulation and voluntary initiatives

– Multi-stakeholder groups are leading the development of standards

– Lack of transparency in supply chain is a business risk to all companies

Objectives – Increase transparency of carbon and

energy data in the ICT supply chain

– Increase data sharing efficiency

– Empower companies in the supply chain to measure their energy use.

– Create actionable information

– Increase awareness of the opportunities associated with improved carbon and energy management

– Expand data collection to include other environmental impacts, such as water use, waste generation, and recycling

EICC Carbon Reporting System

The program aims to provide a standardized approach for gathering emissions and water data from suppliers in the ICT supply chain.

Why? – Enable responsible

sourcing: companies that want to source responsibly will be able to use the results of the smelter assessment in their own purchasing practices

– Currently no system in the global electronics industry that allows a company to determine the source of their material

What? – Independent third party

assessment that evaluates a smelter’s procurement activities

– Assessment determines if the smelter demonstrated that all the materials they processed originated from conflict-free sources

– CFS is a voluntary program

Conflict-Free Smelter Program

The program aims to enable companies to source conflict-free minerals.

Questions?

EICC Headquarters

1155 15th Street, NW

Suite 500

Washington, DC 20005

(202) 962-0167 phone

Membership Contact: membership@eicc.info

ELECTRONIC INDUSTRY CITIZENSHIP COALITION

Thank You!

For more information on the EICC visit: http://www.eicc.info/

BACKUP, DELETE WHEN DONE REVIEWING

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Successes

Unprecedented industry adoption and collaboration

Beginning to level playing field for suppliers

Expanding portfolio of common tools and approaches

Communication with critical stakeholders

Carbon reporting system info

The EICC created the Carbon Reporting System to: – – Provide a low-cost system for measuring “Scope 3” supply chain emissions by gathering primary

data from suppliers (as opposed to using LCA models)

– – Build supplier capabilities in carbon footprinting and reporting

– – Establish dialogue with direct suppliers about carbon emissions, and build a foundation for working collaboratively to reduce emissions

– – Take a coordinated approach – reduce the likelihood of redundant and conflicting requests for supplier data

Questionnaire collects info on: – – GHG emissions (direct and indirect)

– – Electricity usage

– – Renewable energy generated and purchased

– – Carbon and energy management practices (e.g. reduction goals and activities)

– – Water usage

– – Water management practices

• Emissions calculator is consistent with the WRI GHG Protocol corporate accounting standard

More carbon reporting system info

How is this different from the CDP Supply Chain initiative? – • Simplified questionnaire – • Free for EICC members to participate; Low-cost for non-EICC

companies – • Suppliers have access to an emissions calculator that helps

them measure their footprint for the first time

How will Data Collected be Used? EICC members intend to use the data to: – – Better understand the current abilities of companies in the

electronics supply chain to measure and disclose carbon emissions, and to identify what additional capability-building is needed

– – Better understand individual companies’ and the collective supply chain footprint, as a prelude to working collaboratively to reduce emissions

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Challenges

• Resource commitments

• Give up speed - consensus takes time!

• Varying Levels Of Expertise in Sourcing &

CSR

• Cultural Differences

• Legal & Anti-Trust Issues

Vision - Through the application of high standards we can create better social, economic and environmental outcomes for all those involved in the Information and Communications Technology (ICT) supply chain. This includes: – increased efficiency and

productivity for customers and suppliers

– improved conditions for workers

– economic development – a cleaner environment for local

communities

Mission - To deliver these benefits through a shared approach for implementation of the Code. This approach will: – reduce duplication of effort

– focus efforts on positive social and environmental change and improvement

– build supply chain capability

– use a process that solicits feedback from stakeholders

EICC Vision and Mission

EICC History

Year Activity

Winter 2003 –

2004

NGOs publish reports targeting IBM, Dell, HP and five contract manufacturers: Flextronics,

Celestica, Sanmina, Solectron and Jabil.

October 2004 Targeted companies form the EICC and develop a common Code of Conduct.

November 2004 Intel, Microsoft, Sony and Cisco join the coalition and begin implementation of the Code.

2004-2005 More companies recognize the impact of code proliferation on common supplier base and

choose to join the EICC. The EICC establishes formal Memo of Understanding with Global E-

Sustainability Initiative (GeSI) for common tool development.

2005 - 2008 The EICC develops common risk assessment, common audit tools, joint audit approach and

auditor validation, web based data management tool, common reporting, capability building and

training tools and conducts stakeholder engagement.

2008 - 2009 The EICC increases focus on extractives and working hours. Pilots Carbon Reporting Tool.

EICC Organizational Structure

EICC

DEVELOPMENT ACTIVITY

OVERSIGHT

Governance

Finance

GeSI Alliance

CODE MGMT

Code Review

Membership Compliance

EXTERNAL RELATIONS

External Comms

Stakeholder Engagement

SPECIAL PROJECTS

Extractives

Environment

Working Hours

Academic Research

IMPLEMENTATION ACTIVITY

OUTREACH

Internal Comms

Membership Recruitment

Association Networking

CAPABILITY BUILDING

Learning & CB

E-Learning

Supplier Training

Audit Preparations

MEASURE-MENT

SAQ

Validated Audit

Corrective Action

E-TASC

REGIONAL ACTIVITY

ASIA PROGRAM

Asia Work Group

As of 30 Oct 2009

Labor

Health & Safety

Environmental

Ethics

Management Systems

Code of Conduct Elements

1. Occupational Safety

2. Emergency Preparedness

3. Occupational Injury & Illness

4. Industrial Hygiene

5. Physically Demanding Work

6. Machine Safeguarding

7. Dormitory & Canteen

Evaluate & control exposure to hazards

Treat employees with dignity & respect

1. Freely Chosen Employment

2. Child Labor Avoidance

3. Working Hours

4. Wages and Benefits

5. Humane Treatment

6. Non-Discrimination

7. Freedom of Association

Uphold the highest standards

Protect the environment

1. Permits & Reporting

2. Pollution Prevention

3. Hazardous Substances

4. Wastewater

5. Solid Waste

6. Air Emissions

7. Product Content

1. Business Integrity

2. No Improper Advantage

3. Disclosure of Information

4. Intellectual Property

5. Fair Competition

6. Protection of Identity

7. Community Engagement

A management systems approach drives sustainable solutions

1. Company Commitment 2. Management Accountability and

Responsibility 3. Legal and Customer Requirements 4. Risk Assessment and Risk

Management 5. Performance Objectives with

Implementation Plan and Measures

6. Training 7. Communication 8. Worker Feedback and

Participation 9. Audits and Assessments 10. Corrective Action Process 11. Documentation and Records

Progressive Approach….

….We have the means to improve

… Are you ready?

Drive Continuous

Improvement Activities

with Self & Suppliers Conduct

Validated Audits

Company Managed

EICC Managed

Risk Assess

Supply Chain

Self-Assessment

Questionnaire Adopt EICC Code of

Conduct Internally

Expand to Supply Chain Join the EICC

Active Involvement

Access Best Practices

EICC – Journey of Implementation

Corporate Social Responsibility Value Curve

Corporate responsibility enables a shift…

from cost to returns

Values-based

Self

Regulation

Incorporate the

company's

value system to

guide business

behavior

Growth

Platform

Access to new

markets, or

innovations that

generate

revenue

Legal and

Compliance

Adherence to

law in the

countries of

operation

Efficiency

Measurable cost

savings through

efficient or win-

win scenarios

Strategic

Philanthropy

Alignment of

charitable

activities with

social issues

EICC Membership Scope

60+ member companies across Asia, the Americas, and Europe Extended reach through partnership with Global e-Sustainability Initiative (GeSI) Supply Chain Workgroup

BRANDS PRODUCTION MATERIALS COMPONENT

LINKING FOUR TIERS OF THESUPPLY CHAIN

Why are companies undertaking a joint effort?

Rapid growth of initiatives to create better social and environmental outcomes in the supply chain. Suppliers may have different customers each with their own code of conduct and implementation. Multiple codes can lead to multiple assessments, questionnaires and audits that create wasted resources and generate duplicated results. By establishing a common approach we can: – reduce duplication – make implementation less burdensome – focus efforts on real improvement

Stakeholder Engagement Model

As part of our joint efforts, we seek input, in a structured and collaborative way, from credible/ knowledgeable stakeholders who can add value.

Engagement Principles: Collective,

Transparent, Credible

Customer

Media

Gov’t

Community Groups

Socially Responsible

Investors

Industry Groups

Regulators

NGOs

The Global e-Sustainability Initiative (GeSI) Partnership

Objective: Create a partnership to develop and deploy a consistent set of tools and processes to measure, monitor and enhance supply chain social responsibility performance across the Information and Communications Technology (ICT) sector.

WHO…

a coalition of companies in the Information and Communications Technology (ICT) supply chain from the EICC and the Global e-Sustainability Initiative (GeSI), two global industry organizations

WHAT… working together to create a comprehensive set of tools and methods that support a credible implementation of the Code of Conduct

WHY… to improve Social & Environmental practices and performance in the global electronics industry