Philips 2015 Annual Report Download - page 198

Sustainability statements 14.2.8
198 Annual Report 2015
Implementing corrective actions
On average we see 13 major NCs per supplier audit
(2014: 11) and work with each supplier to resolve these
NCs within 90 days where possible. The goal is to
improve conditions in the supplier factories. Therefore,
we focus on training, supplier development and
implementation of corrective action plans with those
suppliers.
If Philips notices that there is a delay in the realization
of the corrective action plan by the supplier, Philips uses
a stratied approach for consequence management.
Depending on the root-cause why the supplier is not
taking sucient corrective actions, Philips can decide
to: send a formal warning to the supplier; allocate no
new projects; allocate no new orders; or stop doing
business.
Collaboration Road with IPE in
Environment Protection
Since 2011, Philips’ Supplier Sustainability Oce
has partnered with the Institute of Public &
Environmental Aairs (IPE) to monitor and
improve China supplier environment performance
via pollution index from Water and Air pollution
Maps.
In 2015, Philips continued teaming up with IPE to
address Water and Air pollution in China. We
established a mechanism to screen suppliers’
environmental performance and oversee
corrective plans and monitor every
implementation at the suppliers. High
environmental impact suppliers were identied
and asked to extend environment performance
governance to their suppliers and even their
suppliers’ suppliers. In such way Philips
successfully helped suppliers with environment
issues in Guangdong and Zhejiang to make and
implement corrective plans in sewage treatment.
In 2016, Philips will continue its environmental
collaboration with the IPE by intensifying its
surveillance over our supplier environmental
performance, in order to build a sustainable green
supply chain in China.
Supplier training and capacity building
We provide classroom training sessions for suppliers,
Philips sustainability experts regularly visit suppliers to
provide on-site consultancy and training, and we invite
suppliers to participate in trainings provided by the
EICC. In 2015, we organized 11 training sessions on the
EICC Code of Conduct which were attended by more
than 500 suppliers globally.
To address emerging issues we also provide in-depth
capacity building programs for our suppliers on specic
topics.
IDH Electronics program
Philips is one of the initiators of the
IDH Electronics Program, an innovative multi-
stakeholder initiative sponsored by the Dutch
government and the Sustainable Trade Initiative (IDH)
together with Dell, HP, Philips and civil society
organizations.
In 2013, IDH was extended from the Pearl River Delta
Area to the Yangtze River Delta, and a total of 19 Philips
suppliers are now involved in the Program, which has
identied more than 200 major corrective actions with
suppliers and helped improve the working conditions
and the relationship between employees and
management for more than 70,000 employees. In 2015,
Philips introduced the IDH Fast Track Program, which is
a one-year program aimed at helping even more
suppliers to further improve their labor management,
environment, Health and Safety via professional on-
site assessment, analysis and correction plan. Seven
additional Chinese suppliers were involved through the
IDH Fast Track Program.
In 2015, the Sustainable Trade Initiative (IDH) capped its
Electronics Program by holding review and exchange
meetings in Shenzhen and Shanghai. The meetings also
marked the last phase of the 4-year IDH program.
Nearly 200 people participated in the meetings,
including representatives from Philips, and other
brands, as well as implementation parties, NGOs and
suppliers.
When the program is completed in 2016, Philips will
continue to support its suppliers by further enhancing
their management-employee communication, so that
the outcomes of the IDH program will be applied to
drive sustainability.
More information on the Supplier Sustainability Audit
Program can be found here:
Supplier Sustainability Goals and Progress.
Responsible Sourcing of Minerals: Addressing
issues deeper in the supply chain
Global supply chains in the electronics and health-tech
industry are long and complex; typically with more than
7 layers between the nished product and the very
source of the raw materials used in its manufacturing.
Addressing all issues deep in the supply chains is not
going to be easy, and it will not happen overnight.
However, Philips’ mission to improve people’s lives
does not stop with its customers or even its rst-tier
suppliers. Philips has already demonstrated this
commitment by becoming a frontrunner with its
advanced Conict Minerals program.