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Intel’s Environmental, Social & GovernanceExpectations for our Supply Chain
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Today’s presentation contains forward-looking statements. All statements made that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. Intel may make changes to or discontinue the program described in this presentation at any time, without notice. Please refer to our most recent Form 10-Q or 10-K filing for more information on the risk factors that could cause results to differ.
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Target Audience and Objectives
This presentation is intended for all suppliers within Intel’s supply chain.
1. Intel’s Commitment to Corporate Responsibility
2. Environmental, Social & Governance (ESG) and Electronics Industry Citizenship Coalition (EICC) Supplier responsibilities
3. Resources
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“Corporate responsibility is about doing the right things right. Throughout Intel’s history, we
have focused on building an ethical culture, reducing our environmental impact, investing in
our employees and engaging with our communities. Our approach has created value not only
for our stakeholders and society, but also for Intel. We have reduced costs through energy
conservation investments, minimized risk by proactively working with our communities and
supply chain, and enhanced our reputation as a leading corporate citizen by building trusted
relationships with the world.”
- Paul Otellini, President & CEOIntel’s Corporate Responsibility website
Innovation in everything we do.
Corporate Responsibility
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We incorporate environmental performance goals throughout our operations, seeking continuous improvement in energy efficiency, emissions reductions, resource conservation, and other areas.
Key Issues and Priorities:
Carbon: Climate Change and Energy Efficiency
Water Conservation
Waste: Reduce, Reuse, Recycle
Reducing Air Emissions
Product Ecology
*As of October 5, 2010
Intel and the Environment
Total Cost = Cost + Quality + Availability + Technology + Environmental Sustainability + Corporate Responsibility
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Intel’s 2009 Environmental Goals and Performance
Source: Intel 2009 Corporate Responsibility Report
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We strive to cultivate a safe and respectful work environment where
employees can thrive, create, and innovate. We also work to promote dignity and respect for people and our planet throughout the global electronics
supply chain. As a company whose success has been grounded in innovation,
we focus on improving the quality of education and finding ways to
strengthen communities around the world.
Key Priorities:
Invest in People and Innovation Culture
Environmental, Social, and Governance focus in our Supply Chain Management
Strengthen Communities
Improve Education and Promote Technology Access Globally
Intel’s Social Impact
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“Conduct business with uncompromising integrity and professionalism.” This statement, part of the formal Intel Values, expresses our commitment to upholding the highest standards of corporate governance and business ethics in our day-to-day activities at Intel and our engagement with external stakeholders.
Key Issues and Priorities:
Intel Governance, Ethics and Public Policy
Governance and Ethics
Corporate Governance
Intel Code of Conduct
EICC Commitment Letter
Ethics and Compliance Program
Conflict Minerals White Paper
Antitrust Compliance
Public Policy and Advocacy
Innovation and Competition
Technical Policy and Standards
Political Accountability
Trade Associations and Business Coalition Memberships
Intel Political Action Committee
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EICC is:
A coalition or collective of many large electronic industry companies working
to implement a Code of Conduct (“CofC” or “Code”) via the methodology
A methodology – not only the collection of thoughts on the CofC, but creation of the
methods and tools by which it is to be implemented
A Code of Conduct – a minimum standard of expectation for the electronics
industry and its supplier network
The Code is intended to apply to all companies in the electronics and
computer supply chain, including Intel
These are the minimum expectations that will be followed by all EICC member
companies and delivered to their supply chains
Electronic Industry Citizenship Coalition (EICC)
EICC URL: http://www.eicc.info
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Labor Environmental Health and Safety Ethics
• Permits & Reporting
• Pollution Prevention
& Resource
Reduction
• Hazardous
Substances
• Wastewater and
Solid Waste
• Air Emissions
• Product Content
Restrictions
Management Systems
• Freely Chosen
Employment
• Child Labor
Avoidance
• Working Hours
• Wages and Benefits
• Humane Treatment
• Non-Discrimination
• Freedom of
Association
• Occupational Safety
• Emergency
Preparedness
• Occupational Injury
& Illness
• Industrial Hygiene
• Physically
Demanding Work
• Machine
Safeguarding
• Sanitation, Food &
Housing
• Business Integrity
• No Improper
Advantage
• Disclosure of
Information
• Intellectual Property
• Fair Business,
Advertising &
Competition
• Protection of
Identity
EICC Code of Conduct Elements
A management systems approach drives sustainable solutions
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The Conversation: Congo
and Your Computer
ABC News with Diane Sawyer, June 29, 2010
Silicon Sweatshops20 November 2009 – goodelectronics.org
Jonathan Adams and Kathleen E. McLaughlin
“ … Hourly wages below a dollar. Firings with no notice. Indifferent bosses. Labor brokers that leech away months of a worker's hard-earned wages. A corporate shell game that leaves no one responsible. Such conditions are widespread at the contract factories cranking out some of the most popular gadgets on the holiday season’s gift lists, according to labor rights activists and workers interviewed by GlobalPost..
Why Demonstrate EICC (Code) Compliance?
Complete supply chain reputational risk mitigation is the new reality for our industry.
Recession boosts global human trafficking….The State Department's annual Trafficking in Persons Report also says trafficking has increased in Africa and slaps six African nations on a blacklist of countries not meeting the minimum standard of combating trafficking. ….The report cites the International Labor Organization, which estimates that at least 12.3 million adults and children are victims of forced labor, bonded labor and sex slavery each year.
CNN June 2009
Reputation is no longer a substitute for data
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We expect uncompromising integrity and professionalism in our business relationships
– Intel conducts business with uncompromising integrity and professionalism and seeks to maintain the highest ethical standards worldwide
– Intel’s Code of Conduct, EICC and ethical expectations for Intel suppliers may exceed the requirements of applicable laws or common practices of a region
– All Intel employees are expected to comply with the Intel Code of Conduct regardless of local business practices or social customs Any noncompliance should be reported to Intel
Helps to assure fairness in our supplier selection and management
processes
Protects our corporate reputation and enables expanded business with our
customers
Intel’s Ethical Principles
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All Intel suppliers and their employees are expected to comply with Intel’s ethical expectations regardless of local business practices or social customs
– Any noncompliance should be reported to Intel
– Suppliers are expected to report concerns regarding ethical issues or violations of Intel’s Code of Conduct (includes EICC Code)
Intel expects that suppliers ensure that their employees understand and comply with Intel business standards
– Train your current and new employees on Intel’s ethical expectations and issue reporting
– Ensure that your employees comply with Intel’s ethical expectations
Intel’s Ethical Expectations
For training materials and more information: https://supplier.intel.com/static/Ethics/
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No Bribes or kickbacks
– Intel does not permit bribes or kickbacks whether directly or through a third party
Please do not give gifts to our employees, not even for traditional festivals or celebrations
– Intel’s Code of Conduct forbids our employees from soliciting gifts, entertainment or favors and strictly limits our employees’ ability to accept gifts
– If a gift would create an obligation (or appear to create an obligation), it is likely to be viewed as a bribe
Avoid conflicts of interest
– Suppliers and Intel employees must avoid even the appearance of conflict of interest
– Disclose potential conflicts to Intel Management
Key Ethical Expectations
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Ethical violations are unacceptable to Intel
– Intel thoroughly and confidentially investigates any allegation
– If verified, Intel takes appropriate action with potential consequences to everyone involved
Suppliers should report any potential ethical issues or violations of Intel’s Code of Conduct to Intel Management
– By an Intel employee or supplier employees
– Concerns about ethical issues in the procurement process
– Any other ethical concerns
– No negative reflection on any person or company for reporting in good faith a potential ethics issue
Report Ethical Issues to Intel
Report issues so Intel can investigate and act
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Notify Intel Management any way you wish:
– Phone call, e-mail, fax, letter
– Signed or anonymous
Anonymous reports may limit Intel’s ability to follow up on an allegation
Sometimes we need clarification or more information in order to verify the allegation
– English or Local Language
– Select from multiple contact points for raising issues to Intel Management
Local Intel representatives
Intel Internal Audit
Intel Security
Purchasing Director
[email protected] (monitored by Internal Audit)
Reporting Responsibility
See the Ethics info on supplier.intel.com website for phone numbers,
email and contacts for reporting issues
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REDUCE TOOL/ EQUIPMENT LEAD TIME
Supply Chain Excellence: ESG Focus
Be an active player in supporting Intel’s ESG expectations
Initiate a Corporate Social Responsibility Position Statement
Set aggressive, hard to achieve ESG Goals
Engage and audit your supply chain for ESG
Report , share ideas and successes
Call To Action from Brian Krzanich (Supplier Day March 2010)
ESG has become no less important than
‘traditional’ supply chain focus areas
BACK TO BASICS NO EXCURSIONS
PARTNER TO ACHIEVE COST REDUCTION
ROADMAP REQUIRED ESG PLANS & TREND
ResponsivenessVelocity Efficiency ESG
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Sustainability within Intel’s Supply Chain
Beginning in 2010, TMG added Sustainability as a category within the Supplier Report Card (SRC) to measure supplier:
Financial Health
Ethics/Social Responsibility
Environmental Sustainability
The addition of this criteria into the SRC formalizes the importance of ESG at Intel and within our supply chain.
ESG is not optional, nor is it a passing trend
Intel’s Senior Management expectation is for increased ESG proficiency
ESG is pervasive across Cost, Quality, Technology and Availability
Intel will continue to “raise the bar” in these areas
We are not asking anything of our suppliers that we don’t do or expect of ourselves
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Understand and incorporate Intel’s Environmental Social Governance scope, objectives and applicability into the supplier’s program
Environmental Sustainability
Provide information about publicly published program Baseline usage/historical data of carbon, water and waste
Work with Intel to make changes to publicly published information, if requested
EICC Risk Assessment
Participate in all applicable EICC Risk Assessments
Drive Gap Closure Plans/Corrective Action Plans on high risk areas in a timely manner as needed
Roles and Responsibilities –Suppliers
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2011 SCQI Program Requirements
All SCQI, PQS, Achievement and Certified award nominees must meet the following minimum requirements (validated by EICC WG):
En
vir
on
me
nta
l
Su
sta
ina
bili
ty
Have publicly published program with objectives, metrics and forward-looking, multi-year goals to show overall flat-to-positive performance trends towards supplier stated goals
Ris
k
Ass
ess
me
nts
Have risk assessment process completed prior to Business Unit pre-screen process with appropriate gap closure/corrective action in placeas needed or no nomination
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EICC Risk Assessments are utilized to prove standards-based approach for evaluating supply chain compliance and performance with codes related to labor, health and safety, ethics and environmental activity.
As of January 2011, Intel is no longer using E-TASC as the tool of record for self assessment questionnaires (RA2). The EICC will be moving to a new tool, Enablon, which will be released in July 2011.
In the interim, an Excel spreadsheet tool is available to fill the SAQ/RA2 gap.
If a supplier is a subscriber to E-TASC currently, it is permissible to complete the SAQ / RA2 in E-TASC and then export the SAQ and scorecard for Intel until their subscription runs out. Then suppliers will be expected to convert.
EICC Risk Assessments (RA)
For more information, contact your Intel supplier owner
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Risk Assessment Process
NMonitor
Y
Gap Closure
Plan
Risk Assessment #1
Y
N
N
Y
RA2 completed in rolling 12
month window N
Y
Decision
CriteriaMonitor
Risk Assessment #2
Risk Assessment #3
Decision
Criteria
Monitor
Dec.
Criteria
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RA3/On-site Audit
The RA3 is an EICC validated audit(s) conducted at the supplier’s facility Key components: Covers all sections of the EICC Code, risk is based on %
compliance and/or critical areas
It is a single credible process where each facility is audited using a common
set of tools
Internal Stakeholders Notification
Supplier Notification
EICC Guidance Document
Facilities Demographics
Pre-audit Checklist
Audit Questions
Scoring
Audit Report
Pre-auditCommunication
AuditorSelection
AuditChecklist
Common
Audit
Auditor Capability
and Quality
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After the Audit
On-site audit/RA3 closure is handled like any other assessment (SSQA, QOS HA, etc).
Supplier provides Intel a Gap Closure Plan/ Corrective Action Plan based on audit findings, if applicable
Intel Commodity Manager/Supplier Owner sends GCP/CAP to EICC WG representative for review/feedback
Intel Commodity Manager/Supplier owner is responsible for holding supplier accountable for performance/closure to the GCP/CAP
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Corporate Responsibility websitehttp://www.intel.com/about/corporateresponsibility/index.htm?iid=gg_about+intel_gcr
Corporate report:http://www.intel.com/intel/cr/gcr/supply.htm?iid=crr_overview+body_supply
Intel Priorities & Goals: http://www.intel.com/about/corporateresponsibility/report/priorities-and-goals.htm
Governance:http://www.intel.com/about/corporateresponsibility/governance/index.htm
Environment website http://www.intel.com/intel/environment/
Eco-Technology Innovation websitehttp://www.intel.com/technology/ecotech/
Environmental, Health & Safety http://www.intel.com/intel/other/ehs/index.htm
Contact EHShttp://www.intel.com/intel/other/ehs/contact_us.htm
Materials Supplier Environmental, Health & Safety https://supplier.intel.com/static/EHS/materials.htm
Selected Resources for Intel’s Programs
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QUESTIONS?
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Copyright © 2011, Intel Corporation. All rights reserved
Intel, Intel logo, Intel Inside logo, and Intel Leap Ahead logo are trademarks or registered
trademarks of Intel Corporation or its subsidiaries in the United States and other countries
All products, platforms, dates, and figures specified are preliminary based on current
expectations, and are subject to change without notice