Guide to Supplier Social Responsibility
The foundation of our supplier relationship program is our TE Connectivity Guide to Supplier Social Responsibility (SSR). This Guide outlines TE’s SSR objectives such as rejecting corruption and unfair business practices; promoting environmental sustainability and a healthy work environment; improving working conditions by prohibiting forced, harsh, or inhumane treatment and discrimination of supplier employees; and encouraging diversity through programs that enable socially and economically disadvantaged groups to become part of our supply chain.
TE’s Supplier Sustainability Journey
TE sustainability efforts continue to mature since we made considerable updates to our SSR guidelines in FY 2011. At that time, we significantly updated the SSR guidelines to better align with our corporate responsibility program and our commitment to the UN Global Compact. In particular, we shifted toward an SSR approach that requires suppliers to acknowledge alignment with TE principles. We also expanded our expectations for labor based on escalating global concerns, and we added new information on our efforts to address conflict minerals.
To support the rollout of the new guidelines, we reinvigorated our SSR program internally, including establishing metrics to measure our performance, updating our supplier validation processes, and selecting an external auditing firm to support our auditing objectives. We also provided a series of global communications on corporate responsibility, goals and objectives for SSR, and plans to reach our supply base, among other activities.
TE’s Supplier Code of Conduct: Alignment with our Customer’s Objectives
The TE Connectivity Guide to Supplier Social Responsibility was created to reinforce principles of ethics and sustainability important to both TE and our customers. Accordingly, our Guide is aligned with several industry based codes of conduct, including but not limited to the Electronics Industry Citizenship Coalition (EICC) Code of Conduct.
Supplier Alignment with TE's Social Responsibility Policies
Ensuring our suppliers have the same sustainability values as TE is a key goal. Our alignment efforts encompass suppliers new to TE, as well as, legacy suppliers who have provided TE with goods and services over time.
When a new supplier joins TE, we systematically provide them with TE’s Supplier Social Responsibility Guide, TEC-1015, in an effort to communicate our sustainability goals. Additionally, the suppliers demonstrate their awareness of our sustainability goals by acknowledging our goals during the supplier set-up process and affirming alignment with our guide.
For our legacy suppliers, we are systematically seeking their acknowledgement of alignment with our social responsibility policies. Every year, we reach out to a select group of legacy suppliers requesting that they acknowledge their alignment via an online assessment to ensure they understand TE’s position on sustainability.
In the upcoming years, we will continue to extend our sustainability policies and expectations further into our supply base for both direct and indirect goods and services.
We believe we can have a positive impact on the environment and local communities in which we do business by buying materials close to the facilities where they will be consumed. Localization shortens transportation distances, which in turn reduces fuel consumption and other transportation costs. It also bolsters the economic development in the local community.
To further our localization efforts, TE elevated awareness on the impact of localization internally by:
· Increasing communications to align efforts and develop comprehension of localization strategies
· Refining tracking metrics to monitor progress
· Establishing strategies to advance our goals
· Building selection of localized suppliers into our new product development process
One of the greater challenges we experience in driving localized spend is the readiness of the supply base in emerging countries to support our business. Enhancing our capability to drive efficient and effective supplier development is critical to our efforts.
TE’s FY13 goal seeks to achieve localized spending between 85 and 95 percent of our total direct material and to maintain that as we grow our production and expand into new regions.