As Winston Churchill once said, “The farther backward you can look, the farther forward you can see.” During the holiday season, I spent some time reflecting on the work Intel’s Supply Chain Environmental, Social & Governance (ESG) Team did during 2012. I’ve been part of this effort for the past 3+ years of my 16 years at Intel and I think this was a year of genuinely meaningful progress in supplier sustainability that gets me energized for what it helps make possible in 2013. I’ll focus on just three of the key programs that are representative of our broader efforts: an expanded focus on supplier transparency, our audit progress; and, our first annual Supplier Sustainability Leadership Summit.
In 2012, we increased transparency expectations of our key suppliers by setting specific requirements and timelines for CSR Reporting for our Top 75 suppliers. To support this initiative, we provided training, in partnership with the Global Reporting Initiative, to help suppliers get started or make improvements to their reporting practices. This training was made available to all Intel suppliers, both live and on-demand, free of charge. Additionally, we partnered with Microsoft and Hewlett Packard to successfully propose the creation of a Supplier Transparency Work Group to the Electronics Industry Citizenship Coalition (EICC) Board of Directors and we are now part of the Work group, collaborating with other member companies to drive better industry standards.
We also expanded and improved our supplier ESG auditing in several ways in the past year: we increased the number of audits by 63%, to ensure we were gathering data from a robust cross section of our suppliers; we expanded and strengthened the ESG content of our Quality Assessment audits for closer integration and broader reach; and, we proactively commissioned a 3rd party audit of Intel’s own Chengdu, China factory. Collectively, these actions resulted in a significant increase in our organization’s competency to analyze, understand and improve upon the current state of ESG in our supply chain. The deep dive analysis of both our 2011 and 2012 audit data has helped us move from simply managing compliance to identifying broader system-level issues and opportunities for supplier education and capacity building around challenges such as working hours and rest days. And, we’ve been able to compare and contrast our own audit results to those of our suppliers and identify areas where we have internal strengths and can share best practices, very similar to what we have done with quality and engineering challenges for many years.
While we had previously incorporated ESG topics into our supplier training and events, for the first time we held a two-day conference in Shanghai (the 2012 Sustainability Leadership Summit) dedicated to supplier sustainability, to share some of our best practices and bring together a multi-stakeholder group to collaborate on key challenges. Because it was a first time event, we weren’t sure if our suppliers would be interested enough to invest the time and we were also uncertain how openly a diverse group of stakeholders would work together. We had hoped for 100-125 attendees and invited a mix of senior executives from suppliers with operations in China, government officials, leading NGOs, press, and fellow travelers from other industries. What transpired in the months leading up to the event in late September was both exciting and a bit daunting: we were overwhelmed by the positive responses and had an attendance of 185!
It was eye opening and encouraging to see the very diverse group of participants at the Summit openly engaging, some for the first time, on very real and pressing challenges like overtime, employee health and safety, environmental management and corporate social responsibility reporting. We heard many different perspectives and learned a tremendous amount from the various panel discussions, keynotes and conversations. The Summit also included interactive small group roundtable sessions which helped create a resource guide that contains a collective list of key challenges, best practices and recommended next steps. And, all of the learnings we’ve gained will be integrated into our work moving forward and based on the positive response to this year’s event, are already beginning planning the 2013 Sustainability Leadership Summit.
We know ESG challenges and issues remain in our supply chain and we continue to work diligently to ensure meaningful progress happens at as fast a pace as possible. Looking back on 2012 and on the progress we’ve made inspires me as we move ahead into 2013.