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May 8, 2019

Green Supply Chain News: Highlights from Apple's 2018 Supplier Responsibility Report

Lots of Good Information, as Apple Makes More Progress, but Document become Increasingly Promotional

By The Green Supply Chain Editorial Staff

Apple has once again released its Supplier Responsibility Progress Report for 2019, which as usual details the performance of the tech giant's supply chain against the tough standards it has set.

This is the 13th such report, Apple says, but it was really eight years ago, after Apple received a lot of criticism for how workers were being treated at some of its suppliers such as contract manufacturing giant Foxconn, that Apple really upped its compliance game and the depth of the report, which set a standard of sorts for how this reporting should be done at the time.

The Green Supply Chain Says:
The performance of Appleā€™s suppliers in terms of improving against that Code of Conduct has been impressive.

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As opposed to an overall Sustainability report, this document is focused specifically on performance by Apple suppliers against its Supplier Code of Conduct, an evolving standard that Apple says now involves more than 500 elements or expected behaviors.


“If we discover that standards aren’t being met, we work side by side with suppliers to help them improve,” says Apple CEO Tim Cook in an introduction. “If a supplier is unwilling or unable to meet our requirements, we end our business relationship with them.”


The report involves far more than environmental performance. In the highlights section of the 2019 report, for example, Apple cites the following achievements in 2018:

  • 96% compliance with Apple Working Hours Standards across all work weeks
  • 100% of final assembly sites for iPhone, iPad, Mac, Apple Watch, AirPods, and HomePod UL Zero Waste certified
  • 7.6 billion gallons of freshwater saved and 39% supplier water reuse rate achieved
  • 770 Apple-managed supplier assessments + 279 smelter and refinery third-party audits conducted in 45 countries
  • 76% high-performing supplier facilities, and just 1% low-performing, with a 30% increase in high-performing suppliers versus 2017

This year, Apple organized its summary and analysis in two main buckets: People and Planet.


On the people side, Apple notes for example its Factory Line Leader Program, which provides college students from vocational schools in four provinces across China with an opportunity to learn to become manufacturing line supervisors through a newly created work-study program. These positions are with Apple suppliers.


In full throated corporate social responsibility mode, Apple notes that “While suppliers will benefit from a well-prepared workforce, it’s the students themselves who stand to benefit most.”


Apple also offers free training for the employees in its extended supply chain on building apps for its smart phones and tablets using Apple’s Swift technology.


For a number of years, Apple has also provided what it calls the Supplier Employee Education and Development (SEED) Program, which provides college level and other educational offerings for its suppliers’ employees. Apple says that in 2018, over 1500 supplier employees earned a college degree through the SEED Program.


Apple also provides healthcare related education to supplier employees through what it calls the Health Program, launched in 2017.


Apple’s Supplier Code of Conduct also requires its suppliers to follow certain policies relative to areas such as overtime hours and pay, employee rights, and much more. Apple also provides education to supplier employees on those right and policies, and in 2018 it conducted more than 44,000 private interviews with workers in its supply chain to see if they have received training on their rights from their employers.


Moving on to issues related to the Planet, Apples says notes that considerable amount of Apple’s carbon footprint comes from the supply chain, mostly from the energy used in making Apple products.


In response, Apple’s Energy Efficiency Program works with high-energy use suppliers to assess and identify areas where energy waste and the carbon that comes with it can be reduced, such as by improvements in lighting, heating, and cooling.


In addition to the improvements in water usage noted above, Apple is also aggressively working to reduce use of toxic chemicals in it supply chain. It has developed as part of its Code of Conduct something it calls the Regulated Substances Specification (RSS).


To ensure compliance with those standards, Apple says it goes beyond review of Material safety data sheets to track compliance, requiring proof of a test report from a certified lab.


In 2018, Apple added n-Propyl Bromide (nPB) to the list of banned chemicals for cleaning and degreasing.


In terms of reducing waste, Apple says that to reach platinum certification in its zero waste to landfill program, a factory must divert 100% of its waste from landfill, with a maximum of 10% sent to a waste-to-energy facility.


Apple also notes that “As our program progresses, we will continue to work with suppliers deeper in our supply chain to implement zero waste practices and eliminate landfill waste.”


As an example, Apple also invested a lot on research to develop a new combination of adhesive and film for covering the glass screens on its phones and tablets that could be recycled together, whereas in the past no film could be recycled.


Of course, Apple is also pushing its suppliers to move to alternative energy sources. It says that it has set goals for itself and its suppliers to generate and procure more than 4 gigawatts of renewable energy worldwide by 2020 to reduce emissions associated with making Apple products.


As noted above, in 2018, Apple conducted a total of 770 assessments against its Code of Conduct at supplier manufacturing facilities, logistics and repair centers, and contact centers, 17% of which were first time assessments with that supplier.


The performance of Apple’s suppliers in terms of improving against that Code of Conduct has been impressive, as shown in the graphic below:

If Apple finds any “core violations’’ as part of the audit, which includes things such areas as underage or involuntary labor, document falsification, or immediate environmental and safety threats, those implicated suppliers are required to immediately remediate the violation area. Beyond immediately addressing the violation, suppliers must also make changes in their management system that address the root cause of the violation, and ensure sustained preventative measures to remain an Apple supplier.


The latest Apple report, as is the case of virtually all such corporate Sustainability reports, has morphed from a mostly factual analysis at its start to more of a promotional document, but that is simply where these efforts invariably go.


There is a lot more in this 66-page report. A copy of the report can be downloaded here: Apple 2019 Supplier Responsibility Report


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