Lenovo is committed to being a responsible and active corporate citizen, consistently working to improve its business while contributing to the development of society. The company embraces the values of customer satisfaction, innovation, operational excellence and trustworthiness. Lenovo seeks to integrate these core values into every aspect of its business, and into policies and procedures in areas of quality and safety for products, employee welfare, global supply chain, ethical corporate behavior, social investments and environmental affairs. Lenovo has been a member of the Electronic Industry Citizenship Coalition (EICC) since June 2006. The EICC Code of Conduct is a code of best practices in supplier engagement that provide guidelines for performance and compliance in the following five key areas:
- • Labor
- • Health and safety
- • Environment
- • Management System
- • Ethics
As an EICC member, Lenovo has adopted the EICC Code of Conduct. We have implemented a Supplier Self-Assessment Questionnaire (SAQ) for Tier 1 production suppliers, and we require supplier plant sites to undergo audits from EICC certified auditors. We also conduct these activities for Lenovo and our facilities.
By working together, Lenovo and other member companies are creating a comprehensive strategy, including tools and processes to proactively pave the way for a standards-based approach for monitoring suppliers' performance across several areas of social responsibility. These areas include labor practices, health and safety, ethics, and protection of the environment. By establishing common approaches, Lenovo and member companies create the opportunity to reduce inefficiency and duplication of effort associated with social responsibility, while making it easier to audit standards compliance.
Lenovo leverages its membership in the EICC to collaborate on industry issues such as conflict minerals and environmental sustainability. We support an industry approach to address the conflict minerals issue. Conflict minerals are columbite-tantalite (coltan), cassiterite, wolframite, gold, or their derivatives. Conflict minerals may include any other mineral or its derivatives determined by the U.S. Secretary of State to be financing conflict in the DRC (Democratic Republic of the Congo) or an adjoining country. Lenovo has been a participating member in the EICC-GeSI (Global e-Sustainability Initiative) Extractives Working Group since its inception in 2007. Continual progress has been made including:
- • Published Statements on use of Minerals in Electronics Products
- • Formal policy posted on our corporate internet site
- • Commissioned studies and reports for education and awareness of issue
- • Created tantalum supply chain sub-team and hosted workshops
- • Provided financial and equipment support for ITRI Tin Supply Chain Initiative (iTSCi)
- • Hosted many stakeholder and multi-industry forums
- • Developed and piloted an auditing process for smelters to validate DRC conflict free (tantalum, tin)
In 2012, Lenovo will continue to support industry efforts in this area which include:
- • Further development of the Conflict-Free Smelter Validation Program
- • Development of a common industry approach to implementation of U.S. Securities & Exchange Commission (SEC) requirements on disclosure and due diligence
- • Support the implementation of a verifiable traceability scheme for the DRC and neighboring countries for conflict-free minerals
- • Communicate with stakeholders on our positions and initiatives related to metals derived from conflict minerals
Additional detail on industry efforts can be found at http://www.eicc.info/RESOURCES.htm. As a responsible corporate citizen, Lenovo is committed to providing leadership in environmental affairs in all of our business activities and supply chain. For the supply chain, Lenovo plans to continue its support and participation in the EICC Carbon Reporting System. The EICC Carbon Reporting System leverages the tools developed during the 2008-2009 pilot program and other standards such as CDP. The platform integrates a standardized questionnaire to gather quantitative carbon emissions and energy data with the help of an emissions calculator. Lenovo embraces the benefits of this industry tool, which include reduction of redundant customer requests, increased awareness within the supply chain of carbon foot printing and the ability to improve supply chain performance. Results from the 2009 EICC- Carbon Reporting System pilot Initiative can be found at: http://www.bsr.org/reports/BSR_EICC_A_Practical_Approach_to_Greening_the_Electronics_Supply_Chain.pdf Lenovo will continue supporting industry efforts and collaborating in these important areas. Currently suppliers accounting for 95% of Lenovo spending report their emissions and water usage.
Supplier compliance with the EICC code is a continuous improvement effort. As part of Lenovo's supplier engagement process, we continue to engage our Tier 1 suppliers, seeking to strengthen their commitment to EICC by signing formal contract amendments. We strongly encourage suppliers to complete self-assessment questionnaires online, and conduct compliance audits using third-party EICC auditors, while requiring similar requirements of their suppliers. Ninety-seven percent of Lenovo's Tier-1 production suppliers have agreed to comply with the EICC requirements, complete detailed Self-Assessment Questionnaires (SAQs) about their performance, and self-audit using approved EICC audit firms. Currently, approximately 80% of Lenovo component spend suppliers have completed self-assessments and/or third party audits.
Our supplier EICC audit results are continually improving with an 11% improvement in average scores from audit to audit. Lenovo audit findings still show that "working hours" is the most prevalent area of labor non-conformance to the EICC code. Lenovo will continue to work with its suppliers to put corrective actions in place to reduce excessive overtime. Also, we continue to support industry efforts by participating in EICC work group activities to better understand the root causes. Lenovo has supported development of tools to help mitigate and control excessive worker overtime, and we continue to work with suppliers on audits and corrective actions required to validate performance and drive sustainable improvements. Lenovo is committed to promoting and fostering suppliers' capability to drive innovation and leadership in this area.
Finally, Lenovo is expanding its supplier sustainability programs into its Logistics suppliers. Risk assessments continue to be performed to identify suppliers needing SAQ's and additional internal and third party audits.
Supplier Carbon Emissions and Reporting
Lenovo continues to participate with the Electronics Industry Citizenship Coalition's Environmental and Sustainability efforts for measuring and reporting the carbon emissions and water usage across our supply chain. We ask key Lenovo suppliers to submit GHG and water information to EICC/BSR through EICC or CDP reporting tools.
In FY 2012/2013, Lenovo will be conducting several initiatives to drive transparency in direct procurement spend, including the development of metrics to estimate Lenovo-related absolute and per-unit emissions to establish baselines, quantitative reduction goals, and measure improvements. In addition, Lenovo will request periodic reporting on goals and progress towards meeting these goals, while communicating with all suppliers to share best practices and reduction goals. These reduction activities will be tracked as part of Lenovo's Supplier Performance Report Cards, which also include EICC compliance efforts.
Lenovo conducts an annual supplier conference with its primary suppliers where we share sustainability and other business strategies and requirements. The conference includes direct participation by Lenovo's CEO, SVP of Product Group, SVP of Global Supply Chain, and other key executives. In past conferences, sustainability has been included in the executive presentations as well as in focused break-out sessions on specific topics including greenhouse gas emissions and conflict minerals.
Internal Global Supply Chain Operations
Lenovo applies the same demanding EICC standards to its own Global Supply Chain operations. We have completed third party EICC audits on its six manufacturing facilities in China, Mexico and India. Overall results were rated strong by the auditing organization along with prompt corrective action on identified improvement opportunities. Periodic EICC audits are on-going to monitor and validate successful performance in this area. In addition, Lenovo conducts rigorous internal audits of all global manufacturing locations to ensure regulatory and external management system compliance. All Lenovo global manufacturing locations are ISO 9001 (Quality), ISO 14001 (Environmental) and OHSAS 18001 (Health and Safety) certified.
Lenovo continues optimizing its global logistics program to expand product volumes to shipped using methods that are more environmentally friendly, such as ship and rail. The company also is working closely with its logistics partners to ship products responsibly. In North America, for example, Lenovo has joined the EPA SmartWay program and is requesting its North American carriers to comply these standards. The SmartWay Transport Partnership is an innovative collaboration between the freight industry and the U.S. Environmental Protection Agency that promotes fuel efficiency improvements while significantly reducing greenhouse gas emissions.