2008/12/29 John Gabriel

2008 Acer CSR Forum

John M. Gabriel – Chairman of the Board

December 16, 2008

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In the globalized world society has high expectations of business

• To create jobs and wealth

• To collaborate with the public sectors

• To contribute to global governance

• To address societal issues

• To use global span to accelerate change

Expectations

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Companies are facing rising stakeholder demands

Investors

* Source: IBM CSR Study 2008, n = 250

1Harvard Business Review, “20 counter-culture breakthrough ideas,” K. Fraser, 2007; 22007 Manpower study of 37,000 employers in 27 countries; 3Interfaith Center for Corporate Responsibility www.iccr.org/ethvest.php

Green is the rising tide…

Investors

Consumers 25% of consumers would switch brands if given an ethical alternative.1

Workforce 41% of companies worldwide have difficulty finding suitable talent.2

Over 50% of shareholder proposals in 2006 were sustainability related.3

Half of businesses are being asked to adopt ethical labor or procurement standards by their customers *Suppliers

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Corporate Social Responsibility Value Curve: …..a shift from cost to returns

Values-based Self

Regulation

Incorporate the company's value system to guide business behavior

Growth Platform

Access to new markets, or innovations that generate revenue

Legal and Compliance

Adherence to law in the countries of operation

Efficiency

Measurable cost savings through efficient or win-win scenarios

Strategic Philanthropy

Alignment of charitable activities with social issues

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Electronic Industry Citizenship Coalition (EICC)

• Founded in 2004 to create a sector code of conduct andmeans for efficient / consistent implementation

• Goals: single code of conduct for the sector, tools for code implementation, shared supplier audits, and improved social conditions in the supply chain

• A vector of positive change for Technology firms to embrace and directly participate in….

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EICC Membership Scope

BrandsRetail Manufacturing MaterialsComponents

Linking 5 Tiers of the Electronic Sector

• 42 member companies

• Asia - Americas - Europe

• Extended reach through partnership with GeSI Supply Chain Work Group

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Members (September 2008)

www.eicc.info

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Objectives of the EICC

1. Creation of a credible process for companies to use in the evaluation and management of their supply chain.

2. Establish a long term governance structure to support the organization in attaining its goals.

3. Build external awareness, credibility, and participation / support.

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Objectives of the EICC

4. Develop a systems-based set of standards (EICC code), implementation applications, change control, and continuous improvement.

5. Shared training and education to improve and sustain social and environmental performance in the supply chain.

6. Frequent reporting of EICC progress against objectives, and sharing of results consistent with anti-trust boundaries.

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EICC Board of Directors• Current Board elected in Oct 2007; three-year positions

– Board acts as the Senior Operating Managers of the EICC

• Chair: John Gabriel (IBM)

• Vice-Chair: Sara Broadbent (Seagate)

• Finance: Open position (election underway)

• External Membership: Brian Glazebrook (Cisco)

• Internal Membership: Karen Duhart (ST Micro)

• WG Board Lead: Eric Austerman (Jabil)

• WG Board Lead: Danielle Harder (Microsoft)

• WG Board Lead: Sara Broadbent (Seagate)

• Chair Emeritus: Brad Bennett (Intel)

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Work Group Committee and Workgroups/Task Forces

Workgroup Committee

Communications / External Relations

(BOD Lead)

Special Topics(BOD Lead)

Environmental WG

Communications& Stakeholder WG

• Website / Print• Press / Media Relations• Annual Report• Stakeholder

Engagement • Workgroup Comms

Support

Extractives TF

Asia Network

Reporting WG

Code Management WG

Working Hours TF

Supplier Engagement Model and Tools

(BOD Lead)

Steady State Audit WG

•Auditor Certification•E-TASC•Audit Design

Tools Management WG

Learning and Capability Building WG

EICC - GeSI Alliance Team

Special Topics

Tools

Comm’s/Stkhldr

EICC Board of Directors

REACH TF

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2004 2005 2006 2007 & 2008

Future

Code published

EICC & GeSI partner on Strategic Plan

Self Assessment

Questionnaire

EICC website

Beta Risk & Audit Tools drafted / in test

E-TASC Rev 1.0 & 1.1 release

Joint Audit/ Validation WG’s start

Capability Building WG starts

Joint Audit Pilot 1 & 2

Training Materials

EICC Legal Entity

Validated Audit Process

Code Review

Code Review

Reporting Activities

EICC Delivery Timeline

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• Freely Chosen Employment• Child Labor Avoidance• Working Hours• Wages and Benefits• Humane Treatment• Non-Discrimination• Freedom of Association

• Freely Chosen Employment• Child Labor Avoidance• Working Hours• Wages and Benefits• Humane Treatment• Non-Discrimination• Freedom of Association

• Business Integrity• No Improper Advantage• Disclosure of Information• Intellectual Property• Fair Competition• Protection of Identity• Community Engagement

• Business Integrity• No Improper Advantage• Disclosure of Information• Intellectual Property• Fair Competition• Protection of Identity• Community Engagement

•Occupational Safety•Emergency Preparedness •Occupational Injury & Illness

•Industrial Hygiene•Physically Demanding Work•Machine Safeguarding•Dormitory & Canteen

•Occupational Safety•Emergency Preparedness •Occupational Injury & Illness

•Industrial Hygiene•Physically Demanding Work•Machine Safeguarding•Dormitory & Canteen

• Permits & Reporting• Pollution Prevention • Hazardous Substances• Wastewater • Solid Waste • Air Emissions• Product Content

• Permits & Reporting• Pollution Prevention • Hazardous Substances• Wastewater • Solid Waste • Air Emissions• Product ContentLabor

Health & Safety

Environmental

Ethics

ManagementSystems

EICC Code of Conduct

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Code Implementation Tools

• Supplier Introduction Packet

• Supplier Risk Assessment Application

• Self Assessment Questionnaire

• Audit Question Set (and scoring)

• Validated 3rd Party Audit Firms & Auditors

• E-TASC database

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Validated Audit Process

Member Notification Supplier Notification

EICC Guidance DocumentFacilities Demographics

Pre-audit Checklist

Member Notification Supplier Notification

EICC Guidance DocumentFacilities Demographics

Pre-audit Checklist

Audit QuestionsScoring

Audit Report

Audit QuestionsScoring

Audit Report

Pre-auditCommunication

AuditorSelection

AuditChecklist

CommonAudit

Auditor Capability & Quality

Auditor Capability & Quality

A facility is audited once (rather than multiple times), using common criteria, the audit report shared among multiple customers –

driving efficiency – saving resources for improvements

A facility is audited once (rather than multiple times), using common criteria, the audit report shared among multiple customers –

driving efficiency – saving resources for improvements

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E-TASC Database

E-TASC1.0 / 1.1

• Registration process

• Supplier Risk Assessment

• Supplier Invite Process

• Self Assessment Questionnaire

• Validated Audit Reports

• Best Practice Guidance

www.e-tasc.com

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Internal Communications

EICC Members-Only Website With:

Audit tools

Training Materials

Communications Materials

Presentations

Meeting minutes

Workgroup information

Member contact info

Rules of Governance…

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Stakeholder Engagement Model

Engagement Principles

Collective, Transparent, Credible

Non-Governmental Organizations

(NGO’s)

Governments Regulators

Socially Responsible Investment Entities

CommunityGroups

Industry Groups

CustomersMedia

Governments

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2008 Notable Activities / Deliverables• Defined Membership requirements and levels

• Validated supplier audits in China (pilot cycle 1 and 2)

• Stakeholder engagement sessions / Code review process

• Creating web-based education for buyers and supplier’s management

• Extractives study / consultation / stakeholder engagement

• Established Working Hours taskforce

• Assessing sys for GHG and Energy use in the supply chain

• Creating first annual report

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EICC – Journey of Implementation

Progressive Approach….Drive Continuous Improvement Activities with Self & SuppliersConduct

Supplier Audits

Company ManagedEICC Managed

Risk Assess Supply Chain

Deploy Self-Assessment QuestionairreAdopt EICC Code of

Conduct Internally

Expand to Supply ChainJoin the EICC

Membership Requirements

Active Contribution

…..Passion for Improvement

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References and Resources

• http://www.eicc.info

• Open membership period through January 2009; next period June 2009

• Initial membership contact: membership@eicc.info

• External membership: Brian Glazebrook: bglazebr@cisco.com

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Questions and Answers

Chairman: John Gabriel jmg548@us.ibm.com