Apple Supplier Responsibility 2017 Progress Report1
Supplier
Responsibility
2017 Progress Report
Educating & Empowering Supplier Employees15
Responsible Sourcing21
Supplier Improvement3
Manufacturing with the World in Mind 11
2016 Assessment Scores26
Apple Supplier Responsibility 2017 Progress Report2
Driven by responsibility to people
and the planet.
From responsible sourcing to recycling, every aspect of how we make our products
is deeply considered. This 11th annual Supplier Responsibility Progress Report
details the advancements we made in 2016 throughout our supply chain.
In 2016, we continued to increase our efforts with our suppliers. We performed 705
comprehensive site audits, our largest number to date. Our suppliers demonstrated
an improved ability to meet our stringent standards. In fact, the number of high-
performing supplier sites increased by 59 percent, while low-performing sites
decreased by 31 percent. We improved our working hours compliance to 98 percent,
achieved 100 percent UL Zero Waste to Landfill validation for all final assembly sites
in China for the first time, and achieved 100 percent compliance with our Regulated
Substances Specification for process chemicals at all final assembly sites. We also
tripled the number of supplier sites participating in our energy efficiency program,
resulting in the reduction of more than 150,000 metric tons of carbon emissions. A
number of large suppliers have already committed to power all Apple manufacturing
with renewable energy by the end of 2018. Ultimately, our goal is to equip our
suppliers with the capability to one day independently uphold all labor and human
rights protections, and maintain effective health, safety, and environmental practices
in their own operations.
At the center of our supply chain operations are the dedicated people who make our
products. We remain dedicated in seeking new ways to support our supply chain
talent and help improve their lives both during and beyond the workday. In 2016, we
partnered with our suppliers to train more than 2.4 million workers on their rights as
employees. Since 2008, over 2.1 million people have participated in Apple’s Supplier
Employee Education and Development (“SEED”) program. We also expanded
our educational programs to include worker-focused mobile platforms, providing
80,000 workers with English skills training, and nearly 260,000 workers completed
Environment, Health & Safety (“EHS”) courses.
In 2016, we expanded our responsible sourcing efforts beyond conflict minerals
to include cobalt. We’re proud to report that 100 percent of our conflict minerals
and cobalt smelter/refiner partners are now participating in independent third-
party audits to ensure their own business practices are conducted responsibly. Our
commitment to responsible sourcing will not waiver and we will continue to drive our
standards deep in our supply chain.
Although this is a report about our 2016 accomplishments, we know there’s always
work to be done. By holding our suppliers accountable to the highest standards
and partnering with them to make lasting change, we remain steadfast in our
commitment to improve lives and protect the environment.
A technician inspects
iPhone components.
Apple Supplier Responsibility 2017 Progress Report | Supplier Improvement3
Supplier Improvement
Realizing progress through partnership.
Our Supplier Code of Conduct outlines our standards for creating safer working conditions,
treating workers fairly, and using environmentally responsible practices in our supply chain.
We demand that all suppliers doing business with Apple affirmatively agree to adhere to our
Code of Conduct and supporting standards. Our Code goes beyond mere compliance with
the law. Every year, the requirements that our suppliers must meet increase and our efforts
to raise the bar continue.
Apple Supplier Responsibility 2017 Progress Report | Supplier Improvement4
During onsite facility audits, a supplier’s operations and management
systems are thoroughly evaluated on more than 500 data points
corresponding to our Code of Conduct. We continue to partner with
independent third-party auditors to review documents, interview
management and line operators, and perform onsite inspections. While
evaluating overall conditions, we also look for core violations. These include
underage workers or involuntary labor, document falsification, intimidation of
or retaliation against workers, and egregious environmental and safety risks.
We expect our suppliers to show steady improvement. If year-over-year
improvement is not demonstrated by a low-performing supplier, they
risk losing our business. In 2016, we enforced a stricter performance
policy, placing any supplier with a core violation or sustained poor supplier
responsibility performance on an immediate probation plan. As a result of
our policy on inadequate performance, we significantly reduced business
allocation to 13 suppliers and cut business ties altogether with three
suppliers in 2016.
Nearly
30
%
of our assessments involved
new suppliers in 2016
Leave no area for improvement unturned.
In 2016, nearly 30 percent of our assessments involved new suppliers.
Our discussions with these supplier partners begin with a new supplier
onboarding process, where we visit their facilities in person to review our
Code of Conduct, share best practices across our supplier base, and give
them a head start on developing successful management systems. We
help these new suppliers understand common missteps and we provide
them with proven solutions. We also teach them to perform their own risk
assessments, and develop corrective action plans, which we then verify
along with our third-party auditors. In 2016, suppliers who took part in
our new supplier onboarding process increased scores by 39 percent on
average, compared to their initial self-assessment scores.
When we uncover Code of Conduct violations at our supplier facilities, we
work with them to correct the violations and we teach our partners how
to proactively prevent future issues. Following supplier assessments, we
conduct onsite meetings to review gap analysis of low-score areas, identify
the root cause of all issues, and develop with our supplier partners a
customized corrective action plan. During this process, we draw upon a bank
of over 100 technical toolkits assembled from our extensive experience in
building supplier capability. Over a period of three to six months following an
assessment, Apple technical experts conduct detailed reviews with suppliers
to help them meet their targets. We then schedule a final visit to determine
if the improvements were sufficient for the supplier to return to the regular
engagement cycle, or if we should extend the partnership to support the
supplier’s efforts to improve performance.
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