The IT industry has made considerable progress in implementing responsible practises along the supply chain. To date, HP has introduced its Social and Environmental Responsibility (SER) policy and Supplier Code of Conduct to 475 suppliers covering 98% of our purchasing expenditure for product materials, components and manufacturing, transport and other services. However, as we don't get direct access to the suppliers of our 1st tier suppliers, we have to rely on our 1st tier suppliers to ensure that HP's policies and codes are implemented further down the chain. We also realised that our suppliers often need more assistance from us in meeting the standards and processes required by us, particularly when it comes to extending these standards to their own suppliers.
In 2006 we launched the Central Europe Supplier Responsibility Project (CESR) in cooperation with The Copenhagen Center for Corporate Responsibility to equip small and medium-sized enterprises (SMEs) with the management tools needed to operate their businesses in a socially and environmentally sustainable manner. The project provides training for 20 HP suppliers in the Czech Republic, Hungary and Poland. Supported by a grant from the European Commission, the eighteen-month project aims to teach SME suppliers (less than 250 employees) how to run their businesses in a way that is both efficient and responsible. Among the participants are suppliers of packaging components, plastic and sheet metal parts who receive training and advice on management systems, labor, occupational health and safety topics, and sound environmental practices. The differentiating factor of CESR is the training of our direct suppliers about how to audit their own suppliers, i.e. our second tier suppliers.
The Copenhagen Centre facilitates the training sessions with support from HP. In addition, participants are invited to attend workshops to share experience and knowledge with the wider SME supplier community. For HP, the programme is an opportunity to build a focused effort on sustainability issues with suppliers in Central Europe. It allows us to reach second tier suppliers through the HP SER programme and provide contract manufacturers with the capability of undertaking sustainable supply chain management with their own suppliers. Following the conclusion of the project, HP will share its CSR engagement experience in other regions such as China and Latin America.
Many ‘smaller' companies don't have the resources, time or capabilities to develop or improve their sustainability standards. Economic growth has often outpaced management knowledge in Central Europe. As a company, HP has a responsibility to focus on educating our suppliers about socially responsible management practices. But this initiative provides us with an opportunity to directly help them improve standards quickly.
Within this initiative, a total of 16 second-tier suppliers were assessed for their current capabilities at the end of last year and at the beginning of this year. All (both 1st and 2nd tier suppliers) take part in tailored training workshops held in their local language and provided by an external training service provider. The first round of workshops took place in Prague, Budapest and Bydgoszcz during April. The second training workshop will take place in Pardubice and Szekesfehervar during October and the final project report including guidelines for other Multinational Companies how to work with SMEs is due for end of this year.