Philips 2010 Annual Report Download - page 51

4 Our planet, our partners, our people 4.4 - 4.4
Annual Report 2010 51
Raising the audit bar
To enable our suppliers to continuously improve their
sustainability performance, we upgraded our auditing
process in 2010.
For the past few years we have audited our suppliers in
high-risk countries based on the Electronic Industry
Citizenship Coalition (EICC) code of conduct, which we
also supplemented with stricter requirements on freedom
of association and collective bargaining.
In 2010, in addition to auditing suppliers from acquisitions
and other newly introduced suppliers, we started auditing
suppliers that had already been audited in the past in order
to validate their continued conformance to the code.
Almost half the total number of audits conducted in 2010
were such follow-up audits.
The main areas of non-compliance – and therefore areas
for improvement – remain working hours, emergency
preparedness, and the management of hazardous
substances. However, thanks to our follow-up audit
initiative, these shortcomings are being addressed and
remedial action taken.
Repeat recognition
In recognition of our efforts in the area of responsible
supply chain management, the Dutch Association of
Investors for Sustainable Development (VBDO) ranked
us first among the forty largest publicly-listed Dutch
companies benchmarked for performance in this area.
Our scores have showed continual improvement over the
last four years, increasing from 62% in 2006 to 93% in
2010.
We were commended for thorough and transparent
reporting, dedication to supporting suppliers in improving
their sustainability performance, and embedding supplier
sustainability within the company strategy.
Mr Alexander Rinnooy Kan, President of the Netherlands’
Social and Economic Council (SER) and chairman of the
jury, commented: “Philips achieved the highest score in
the benchmark for the fourth consecutive year. That is an
unprecedented achievement. The sustainability strategy is
focused both on the reduction of risks as well as the
pursuit of market opportunities. Philips’ supplier
sustainability program goes beyond audits and truly
supports suppliers in improving their sustainability
performance. Philips is leading in many areas.”