HP 2015 Sustainability Report

Introduction

Environment

Society

Integrity

About this report

In 2015, the company transitioned its audit results tracking system to the cloud-based EICC-ON platform. This will help us connect findings to trainings offered by the EICC Learning Academy and better align our capability-building efforts with the challenges facing IT industry suppliers. Hewlett-Packard Company participated in the EICC Validated Audit Program working group as well as in EICC efforts to improve supplier management system expectations and audit protocols for the entire industry—especially in high- risk areas such as forced labor. We are working to transfer audit responsibilities to our suppliers by increasing the share of EICC Validated Audit Process (VAP) audits. These use independent external auditors and include separate, third-party quality control for added credibility. In 2015, VAP audits made up 46% of all Hewlett-Packard Company supplier audits. Zero-tolerance audit findings Zero-tolerance items are the most serious type of nonconformance and include child labor, forced labor, severe forms of discrimination, health and safety issues posing immediate danger to life or risk of serious injury, and perceived violation of environmen- tal laws posing serious and immediate harm to the community. We take these findings very seriously and work with our suppliers to ensure that problems are swiftly corrected. When a zero-tolerance item is discovered, the supplier must cease all related practices and report corrective actions taken within 30 days of the original audit. We then work closely with the supplier to follow up, ensure that corrective actions are taken, and en- gage in on-site visits to confirm resolution. Zero-tolerance items result in suppliers being downgraded on our SER scorecard. Our SER policy requires all suppliers to disclose a fatality, debilitating injury, or any other HP Supplier Code of Conduct zero-tolerance item related to manufacturing an HP product. See our Supply Chain Social and Environmental Responsibility Policy for details. During audits in 2015, Hewlett-Packard Company identified five zero-tolerance findings related to health and safety issues at four commodities suppliers. There was also one zero-tolerance violation of labor rights at one commodity supplier. • Four findings related to emergency preparedness, including lack of adequate fire detection/suppression systems, lack of appropriate evacuation drills, and blocked/ locked emergency exits. • One finding related to industrial hygiene involving inadequate machine safeguarding. • One finding of withholding foreign migrant workers’ secondary school certificates and identification papers. We have worked with our suppliers to complete corrective actions addressing all zero-tolerance findings from 2015. We expect to see our engagement with these suppli- ers lead to long-term improvement in working conditions and overall SER performance.

84 HP 2015 Sustainability Report

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