Lenovo 2013 Annual Report Download - page 92

CORPORATE SOCIAL RESPONSIBILITY REPORT
Lenovo Group Limited 2012/13 Annual Report
90
In FY 2012/13, Lenovo supply chain operations continued
to show improvement in supplier engagement and
commitment to the EICC code with a three-step program.
Over 95% of our procurement spend are committed to
the EICC and have signed formal agreements. All of them
are tracked to ensure they have completed annual self-
assessments to understand where improvements are
needed. Self-assessments are conducted with EICC on-line
reporting tools. More than 90% of our Tier one suppliers
have conducted the EICC audit in a timely manner and
corrective actions have been tracked. Overall compliance
between first round and second round audits has improved
over 10% and aggregate compliance is over 90%. Finally,
suppliers representing over 70% of our procurement
spend are EICC or GeSI (Global e-Sustainability Initiative)
members.
Lenovo participates with the EICC in the Greenhouse Gas
(GHG) reporting program. In FY 2012/13, over 95% of our
procurement spend reported their emissions. Through focus
on reduction goals, supplier Scope 1 and 2 total emissions
rates are flat even though Lenovo’s growth in shipments in
the same period is over 30%. We have validated that 80%
of these suppliers have formal published reduction goals.
Lenovo also participates in EICC Conflict Minerals activities.
We attend the Extractives and Due Diligence Workgroups,
the Conflict Mineral conferences and will be using EICC
due diligence tools to track the supply chain. We also have
posted our Conflict Minerals policy on our website.
Lenovo plans to continue optimizing our logistics programs
and working closely with our partners to ship products in
the most environmentally responsible manner.
Lenovo Global Logistics set up a GHG emission baseline
for international shipments in April 2012. The baseline was
verified by Bureau Veritas North America in June 2012.
Global Logistics will expand the baseline and measurement
to domestic transportation and distribution centers across
all Lenovo operations.
Global Logistics has been working on a Pallet Pooling
System project. This project involves the collection of
used pallets from carriers’ facilities in Hong Kong and
their reuse in Lenovo’s distribution center in Shenzhen. It
was estimated that this initiative will reduce approximately
640MT CO2e per year. The anticipated first launch is in
South China in June 2013. Lenovo also plans to expand
the project to East China and subsequently to the rest of
the world.
Global Logistics proactively drives ocean consolidation
opportunities to reduce the number of containers
shipped out of China manufacturing sites to reduce
carbon emissions. The Ocean Consolidation Project was
implemented in the third quarter of 2012. Implementing
container utilization from China to Western Europe is
estimated to deliver container utilization improvement of
18% and related CO2 emission reduction of an estimated
10%.
In North America, Lenovo Global Logistics joined the EPA
SmartWay program beginning in 2008 and will continue the
program with EPA SmartWay in 2013, requesting its North
American carriers comply with EPA SmartWay standards.
In Asia Pacific, Lenovo Global Logistics is committed to
support the incorporation of Green Freight Asia Network
(GFAN). GFAN is a network of private companies working
to increase the fuel/CO2 efficiency and to lower the air
pollution of freight transport in Asia Pacific region. Lenovo
Global Logistics is also working closely with GFAN to
identify opportunities to road test the GFAN standards and
methodologies with domestic transportation in China.