Our supply chain responsibility program primarily focuses on engagement with manufacturing suppliers with whom we have a direct contractual relationship. We typically have multi-year agreements in place with these suppliers. This allows us the opportunity to build supplier awareness and capability to meet our supply chain responsibility expectations, including the implementation of policies and processes to address the risks of modern slavery. These agreements require that our direct suppliers mirror our expectations with their suppliers. Where we do not have direct relationships, we believe that industry collaboration can be used to appropriately accelerate change. As part of our commitment to address modern slavery, we strive to collaborate in ways that drive positive change.
As a precursor to doing business with HP, suppliers are evaluated against our social and environmental standards, which engages suppliers from the get-go and creates an open channel for dialogue and alignment. We do this by having new suppliers fill out a supplier assessment questionnaire (SAQ) covering detailed questions about social and environmental management and practices. We may also compliment the SAQ with an onsite onboarding assessment if further inspection is needed. Once a supplier is selected for business, they sign our Supply Chain Social and Environmental Responsibility Policy, as well as agree to additional sustainability requirements as part of the main contract.
From our large pool of 700+ direct suppliers, we identify the suppliers that we consider high and medium risk for sustainability. The factors that guide which suppliers we will heavily engage with include:
- Spend – We have the most influence to promote change and improvements with suppliers that we have a lot of business with. Strong sustainability practices not only protect both of our brands but can also be used as a lever for allocating more/less business based on positive social and environmental performance.
- Geography – We subscribe to Maplecroft’s third party validated risk sensing database to flag countries and regions that are particularly at risk in relevant areas of concern to HP.
- Type of manufacturing – Some forms of production are more prone to health and safety risks, therefore require closer monitoring and engagement. We look at procurement categories when developing our yearly assurance list.
- External reports/data – We take into consideration external reports, press, reported incidents, or other public data sources as well. We never ignore a valid concern related to an HP supplier, external or otherwise. Any incident would bump them into our assurance program whether they meet the other thresholds or not.
We understand that auditing is not a means to sustained supplier performance, but it is an important measurement tool to receive continual feedback on the effectiveness of our programs. Every year, we audit suppliers making up 95% of HP’s supplier spend. Audits are conducted by third party certified auditors who perform an extensive three-day audit against our Supplier Code of Conduct. The audit is made up of an evaluation of the supplier’s management systems including document verification, inspections of the facility including dormitory and canteen, and worker interviews that must be done in the native language of the interviewee. Suppliers that require an audit must receive a full audit at least once every two years, however, if any nonconformances were found, they must be swiftly corrected and implemented within a 30-day window and verified by a follow up audit.