How Intel Encourages 9,000 Tier-1 Suppliers to Strive for Sustainability

(Credit: Intel)

Supply chain sustainability continues to be an evolving goal for corporations, and according to its 2020-21 Corporate Responsibility Report, Intel is one company that is focusing on improving its suppliers’ environmental management. For example, Intel says it has increased renewable energy from 71% to 82% throughout its own operations and across its supply chain, and conserved 7.1 billion gallons of water, according to the report.

How does the manufacturing giant handle sustainability across its 9,000+ tier 1 suppliers in 89 countries? Here are some of the steps it is taking to improve supply chain sustainability:

• Requiring its suppliers — and their suppliers — to comply with the company’s Intel Code of Conduct and with the Responsible Business Alliance (RBA) Code of Conduct, and to develop their own corporate responsibility strategies, policies and processes;
• Using commodity teams to develop, monitor and enforce sustainability efforts throughout its supply chain. The company communicates its expectations in supplier contracts and request-for-proposal documents, on its supplier website, at meetings and training events, and in annual letters to suppliers;
• Having a regular review and scoring process for to grade suppliers on sustainability, ethics, financial sustainability, supplier diversity,

  and environmental and human rights performance;

• Conducting supplier assessments and audits covering more than 300 environmental, safety, and human rights factors, helping to determine a supplier’s risk profile and identify where immediate action is needed and where longer term, corrective “targeted action plans” should be put in place;
• Following the RBA Validated Assessment Program to conduct audits of its finished goods factories;
• Working with suppliers to strengthen their capabilities as sustainability challenges grow, offering support such as online resources, interactive training sessions, and connection to external resources such as the RBA and other NGO training and conferences;
• Setting high safety training and performance expectations during the contracting process and orientation for new suppliers, and ensuring that suppliers have robust safety management systems and employee safety training programs in place;
• Working with supply chain sustainability consultants to offer suppliers training and programs focused on topics like work-hours management, occupational health and safety, environmental issues, and prevention of forced and bonded labor;
• When suppliers have issues, working with them to quickly develop and implement a strong corrective action plan to address the issues and concerns; supplier progress is reviewed quarterly until it is verified that all key issues have been closed.

Intel says it holds itself accountable to meet or exceed the same standards that it sets for suppliers, and audits itself to the same protocols. Every year, Intel completes the RBA Self-Assessment Questionnaire and publishes the results on its corporate website. In 2020, Intel was ranked in the top 7% of participating companies in CDP’s Supplier Engagement Rating, attaining a Leadership score for the fourth consecutive year, the company says.

Companies have good reason to be focusing on supply chain sustainability: globally, companies face up to $120 billion in costs from environmental risks in their supply chains by 2026, according to research released last February by CDP.