Ethical Performance
inside intelligence for responsible business


HP suppliers still failing to adopt proactive mindset

March 2008

Most of Hewlett Packard’s central European suppliers still have a ‘reactive’ approach to social and environmental responsibility despite the company’s best efforts, according to a European Commission-funded assessment of the IT multinational’s supply chain management.

The analysis found that while HP’s relationship with suppliers is ‘stakeholder-oriented, pro-active and collaborative’, most are content just to keep up with legal requirements or respond to customer demands as they arise.

The Danish Commerce and Companies Agency (DCCA), which carried out the analysis with the company’s co-operation, found standards  at suppliers were generally ‘acceptable’, but factory managers often failed to communicate HP’s requirements to the workforce or to second tier suppliers, particularly on health and safety.

This was partly a question of resources, and partly because managers had a poor understanding of the business case for social and environmental improvements – something HP is working to address.

The attitude of managers at supplier companies was more important than the quality of management systems, and there was ‘no clear evidence’ that those companies with certified management systems did any better on CSR issues.

The ‘exhaustive’ study reviewed HP’s working practices and the results of on-site assessments at 15 suppliers in the Czech Republic, Hungary and Poland between June 2006 and January 2008. The DCCA, which is an agency of the Danish government’s Ministry of Economic and Business Affairs, helped HP improve supplier performance by providing training and advice to first and second tier suppliers and developing a best practice forum.

HP, which had a turnover last year of $104billion (£52bn), has since drawn up guidelines for other multinationals on ways to raise supplier standards. However, much of the advice – such as using audits to back up codes of conduct and making sure any breaches are followed up – is pitched at a basic level.

In 2006 HP performed 45 audits to follow up 758 infractions by its suppliers.

Hewlett-Packard | Europe | Supply Chain Management

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