creating shared value and measuring impact in the supply chain

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

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.2

HP supply chain SER firsts2002 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) emissions

Promoting responsible practices and helping our suppliers improve social and environmental performance


SC SER MilestonesHP’s supply chain SER program launchedHP’s 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 performed

2007

20092008

2010

2006

2000

2011

20052004


Four-phase supplier management systemOur approach


Risk-based approach to supply chain SEROur approach


760 supplier site audits performed, 2005-2011Global audits


Nonconformances reduced by section of HP’s EICC Code, 2005-2011Supplier audit performance


Collaboration within our industry and across others


HP works with suppliers to deliver substantial and lasting SER performanceimprovements on a broad range of issues

Capability building

Since 2006, HP has:• Carried out 19 programs in 9 countries on topics such as

antidiscrimination, energy efficiency, labor rights, and women’s health• Engaged about 60% of production suppliers (by spend)• Impacted approximately 2,500 managers and 136,000 workers• Trained about 150 second-tier suppliers• Confirmed performance improvements by suppliers engaging in capability

building programs, as verified by audits


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


Helps workers better understand their labor rights and how they can raise grievances about their working environment

Worker Management Communications


We are proud of our progress to date, but our work is ongoingMoving forward

• We continually seek innovative ways to extend the impact of our efforts• Auditing and capability building will remain central to our approach, but we will

continue to innovate beyond traditional programs to effect lasting change• We plan to extend our engagement with multi-stakeholder organizations to

improve supplier management systems and worker-manager dialogue• We 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.

Thank you

Supply Chain EnvironmentalSustainability Scorecard

Scorecard Objectives1. Enhance supply chain collaboration 2. Improve key environmental indicators3. Encourage the sharing of ideas and capabilities

to deliver more sustainable products and services to consumers

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

Todd Stark, President

Technology Enabled Supply Chain Transparency

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

Direct Communication with Workers

• Spread of mobile technology means workers now have phones

• Enables true two- way communication

Step 2: Responses are captured by

a 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

Analysis

Data

Collection Analysis Visualization

Labor Link makes communicating with workers:

Reliable, Affordable, Scalable

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

Business Partner Goals of Labor Link

• Surveying worker needs and job satisfaction

Increase Retention / Reduce Absenteeism

• Sending SMS alerts on worker incentive programs, holidays and benefitsBoost Productivity

• Sending SMS alerts on best practices and recognizing star performersIncrease Quality

• Automating and centralizing the collection of worker data Satisfy Customers

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

• Recruitment; worker-mngmt comms; labor standards awareness; training; job satisfaction

• Questions on community needs

Working Conditions

• Progress Out of Poverty Index developed by Grameen Foundation

• Comparison to 44 countriesLivelihoods

• 50% response rate on initial surveys• Deployed in 4 languages

Case Study: CommunityLevel Works is using Labor Link to deliver a community-based survey in India that measures…

• Heath & Social Security benefits• Awareness of minimum wage• Number of rupees earned per day

Wages & Benefits

• “How did you find your job?”• “Why did you choose this job?”• “Why did you leave your last job?”

Recruitment & Turnover

• Targeted 1,000 workers in Tirupur • 80% response rate on initial survey• Deployed in 2 languages

Worker 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…

• Use of pesticides, herbicides, and chemical fertilizers

• Compared practices in 2012 vs. 2009

Agrochemical Use

• Nitrogen fixing and soil analysis - trusted sources of agronomic information

Sustainability Practices

• 3,000 farmers targeted in 16 cooperatives• Deployed in Portuguese

10 Clear Steps to Engagement

1. Survey Purpose & Questions

2. Survey Sites & Number of Targeted Workers

3. Supplier Engagement

4. Languages Required

5. Timeframe for Survey

6. Incentives to Motivate Workers

7. Educational / Informational Content (Optional) 8. Reporting Format & Frequency

9. Conclusions from Data Analysis

10. How to Use Data to Inform Decision-Making

Implementation Process is Collaborative

Labor 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

Data Reporting & Analysis is Tailored On Line

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

ElectronicsArtisan

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

Department Stores - Hardlines

Sporting Goods

BeveragesToys

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