HP 2015 Sustainability Report

Introduction

Environment

Society

Integrity

About this report

Our deepened engagement with commodity suppliers and more fully embedded score- card in the procurement supplier performance management process has yielded positive results. On average, commodity supplier scores improved by 18% after a full year in the SER scorecard program, reflecting the company’s efforts to enhance labor conditions, support human rights, and improve environmental performance at production facilities. The table below shows improvement in supplier performance since 2014, with 84% of suppliers receiving exceptional or effective ratings on the SER scorecard in 2015, up from 56% the prior year.

Supplier performance, 2014–2015 percentage of suppliers*

84%

56%

44%

16%

0%

0%

2014

2015

2014

2015

2014

2015

Effective or exceptional

Concern or warning

Unacceptable

* Scorecard includes final assembly suppliers and suppliers of strategic commodities.

Strong SER performance benefits suppliers’ business by increasing worker productivity, engagement, and retention. Additionally, vendors with better management practices can deliver higher-quality products and reduce costs, which in turn creates savings for HP. SER performance also generates new revenue opportunities and supports relationships with existing and potential investors. Customers frequently ask for information about our Supply Chain Responsibility Program in tendering negotiations, and factor our re- sponses into appraisal of bids and significant new business contracts. In 2015, more than $2.5 billion of existing and potential business was linked to supply chain responsibility. Monthly performance tracking Launched in 2009, the KPI program fosters accountability and action in our business by maintaining focus on the important and recurring issues in supplier factories. It requires high-risk suppliers to report weekly KPI results which we share with company procurement managers monthly and senior executives quarterly. We track 46 indicators, and escalate detected issues to top management for quick problem solving. In 2015, the KPI program expanded to include more suppliers and incorporate foreign migrant worker metrics.

79 HP 2015 Sustainability Report

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