With our suppliers, audits and assessments can be indicative of potential human rights risks. Zero-tolerance items are the most serious type of major nonconformance. Examples include child labor, forced labor, health and safety issues posing immediate danger to life or risk of serious injury, and perceived violation of environmental laws posing serious and immediate harm to the community. Our zero-tolerance policy requires auditors to escalate such items immediately.
Suppliers must rectify these items no later than 30 days after the original audit. HP then reexamines the zero-tolerance item between 30 and 90 days after the audit with an in-person visual verification to confirm resolution of the issue. Zero-tolerance items also result in suppliers being downgraded in our sustainability scorecards and either a reduction or elimination of business if both the zero-tolerance item and the underlying management system deficiencies are not addressed.
Therefore, we work with more than 95% of our high-risk profile suppliers, as well as other stakeholders on sustainability issues. This collaborative work with suppliers includes the following:
Risk assessments—Risk assessments help us prioritize how we engage with suppliers through our supply chain responsibility program. Suppliers also complete a self-assessment questionnaire to help us identify sustainability performance risks.
Capability building—Through programs and partnerships with non-governmental organizations (NGOs), training partners, governmental organizations, and suppliers, we help management and workers improve sustainability performance.
Performance monitoring—We measure supplier performance in order to understand issues at the supplier level and identify trends across our supplier base. We track supplier issues and trends through our assurance program, which includes both comprehensive audits using HP’s Supplier Code of Conduct, and focused assessments in specific high-risk areas, such as the use of foreign migrant workers. We also use supplier key performance indicator (KPI) monitoring, which collects data on key issues, such as working hours and use of student workers. Following monitoring, we improve performance by approving corrective action plans developed by suppliers.
Sustainability scorecard—The scorecard incentivizes suppliers by acting as a modifier to the general supplier management score. Suppliers with strong sustainability performance improve their opportunities for new or expanded business. Suppliers with poor sustainability performance risk a reduction in the business they are awarded.
Stakeholder engagement—HP engages with a broad range of stakeholders including workers (through interviews, surveys, capability building programs, and our ethics concerns reporting system), industry bodies, governments, socially responsible investors (SRIs), and non-governmental organizations (NGOs) to research and better understand issues of concern regarding sustainability in our supply chain.
We require all suppliers of HP goods and services to conform to the HP Supplier Code of Conduct and associated standards. Furthermore, our suppliers must pass on these requirements to their next tier suppliers and monitor compliance. The HP Supplier Code of Conduct and associated standards can be found on our Supplier sustainability requirements website: http://www8.hp.com/us/en/hp-information/global-citizenship/society/supplier-ser-requirements.html.