creating shared value and measuring impact in the supply chain

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Title (46 pt. HP Simplified bold)

HP 2011 Supply Chain Social & Environmental Responsibility

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

1

HP supply chain SER firsts

2002 First IT company to develop and implement a supplier SER code2004 One of the first IT manufacturers to perform on-site supplier SER audits2004 Founding member of the Electronic Industry Citizenship Coalition (EICC)2007 First electronics company to publish a list of our suppliers2008 First major IT company to publish its aggregated supply chain greenhouse gas (GHG) emissionsPromoting responsible practices and helping our suppliers improve social and environmental performance

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

2

SC SER MilestonesHPs supply chain SER program launchedHPs first supplier audit performedHP's first supplier SER forum held in ChinaCapability building program launchedFirst capability building effort to directly train supplier employeesComprehensive list of HP suppliers disclosedConflict minerals program launchedFirst joint Validated Audit Process (VAP) audits performedFirst HP nonproduction supplier audit performed200720092008201020062000201120052004

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

3

Four-phase supplier management systemOur approach

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

4

Risk-based approach to supply chain SEROur approach

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

5

760 supplier site audits performed, 2005-2011Global audits

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

6

Nonconformances reduced by section of HPs EICC Code, 2005-2011Supplier audit performance

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

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Collaboration within our industry and across others

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

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HP works with suppliers to deliver substantial and lasting SER performanceimprovements on a broad range of issuesCapability buildingSince 2006, HP has:Carried out 19 programs in 9 countries on topics such as antidiscrimination, energy efficiency, labor rights, and womens healthEngaged about 60% of production suppliers (by spend)Impacted approximately 2,500 managers and 136,000 workersTrained about 150 second-tier suppliersConfirmed performance improvements by suppliers engaging in capability building programs, as verified by audits

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

9

Addresses the general and reproductive health needs of womenHealth Enables Return (HER) project

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

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Helps workers better understand their labor rights and how they can raise grievances about their working environmentWorker Management Communications

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

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We are proud of our progress to date, but our work is ongoingMoving forwardWe continually seek innovative ways to extend the impact of our effortsAuditing and capability building will remain central to our approach, but we will continue to innovate beyond traditional programs to effect lasting changeWe plan to extend our engagement with multi-stakeholder organizations to improve supplier management systems and worker-manager dialogueWe expect suppliers to provide increasing levels of transparency

We strive to make our program even more effective in pursuit of our values: to protect workers rights and dignity, to ensure strong health and safety standards, to reduce environmental impacts, and to uphold the highest standards of business ethics

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

12

Thank you

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.#

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Supply Chain EnvironmentalSustainability Scorecard

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Scorecard ObjectivesEnhance supply chain collaboration Improve key environmental indicatorsEncourage the sharing of ideas and capabilities to deliver more sustainable products and services to consumers

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Show same Filled In Scorecard page but with a couple NA Measures highlighted

Todd Stark, PresidentTechnology Enabled Supply Chain Transparency

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Global Mobile Penetration

Mobile phone ownership has doubled since 2006Now more than 6 billion mobile subscriptions globally

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Direct Communication with Workers

Spread of mobile technology means workers now have phones

Enables true two- way communication

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Step 2:

Responses are captured bya central server. Data isaggregated and analyzed. Step 1:

Workers place a free phone call. They answer questions using their keypad.Step 3:

Information is visualized on a web-based interface. Users access the data from a personal computer. IVR SMS AnalysisData Collection Analysis Visualization Labor Link makes communicating with workers: Reliable, Affordable, Scalable

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Using Labor LinkOur partners use Labor Link to engage workers and monitor their working conditions between audits

Supports (and can help catalyze) trends in the industry:Supplier ownership (BSR report)Shift from policing to improving workers lives (Levis MDGs)21

Business Partner Goals of Labor Link

This slide is targeted at suppliers

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Case Study: FactoryEileen Fisher is using Labor Link to deliver two surveys in India that measure

50% response rate on initial surveys Deployed in 4 languages

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Case Study: CommunityLevel Works is using Labor Link to deliver a community-based survey in India that measures Targeted 1,000 workers in Tirupur 80% response rate on initial survey Deployed in 2 languages

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Worker Turnover26

Takeaway: When asked why did you choose your job, #1 response was not wages/benefits, it was working conditions. This signals that there are many things employers (factories & farms) can do to retain workers, not only raising wages, and that surveying workers via Labor Link can surface this information and help lower the cost of turnover.26

Case Study: FarmFair Trade USA used Labor Link to measure the impact of a USAID-funded coffee sustainability program in Brazil on two topics 3,000 farmers targeted in 16 cooperatives Deployed in Portuguese

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10 Clear Steps to Engagement

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Implementation Process is CollaborativeLabor Link posters for the factory floor

Discussing worker needs and survey design

Workers receive a card with survey instructions

Then place a free call with their mobile phone

Posters explain survey period and incentives, eg 250 Rupees mobile top-up

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Data Reporting & Analysis is Tailored On Line

Posters explain survey period and incentives, eg 250 Rupees mobile top-up

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Sectors Using Labor Link Mobile Surveys

6. If you have a problem, is there someone other than your supervisor to whom you can speak? Agriculture

Apparel

Electronics

Artisan

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Additional Opportunities Underway

6. If you have a problem, is there someone other than your supervisor to whom you can speak?

Department Stores - HardlinesSporting GoodsBeveragesToys

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Where is Labor Link Operating?Currently operational in Brazil, China, India and Peru. Expanding to additional countries like Mexico, Sri Lanka, & Indonesia.

Vision is a global solutionMobile integration & tech adoption behaviors are different in every country33

Alternate cover slide for China34

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