Lenovo 2015 Annual Report Download - page 118

116 Lenovo Group Limited 2014/15 Annual Report
CORPORATE SOCIAL RESPONSIBILITY REPORT
The contract stipulates that suppliers not just comply with the code, but that they:
• Conduct annual self-assessments with EICC questionnaires and reporting tools
• Receive comprehensive and detailed independent third-party audits at least every 24 months with EICC approved
auditors
• Provide Lenovo the audit reports and provide accompanying corrective action plans
• Require that their primary suppliers also comply with the Code and receive EICC audits as well
• Have active and continual improvement programs to quantify greenhouse gas emissions, water usage and waste
generation and drive reductions
• Have public policies and programs to reasonably assure that their products do not contain conflict minerals
In FY 2014/15, about 70 suppliers representing approximately 60 percent of our overall procurement spend received
EICC audits. Performance in the audits driven by Lenovo averaged better that 90 percent overall compliance. Due
to our efforts there have been very limited occurrences of negative public reporting. However, labor issues continue
to be the main problem area for supplier compliance and Lenovo intends to implement initiatives that will provide
greater transparency and drive continual improvement.
Lenovo also requires suppliers to report environmental data relating to greenhouse gas (GHG) emissions, water
usage and waste generation. In FY 2014/15, suppliers representing over 90 percent of our procurement spend
reported their emissions. Through focus on reduction goals, supplier total emissions were down 4.5 percent over
the past three years while Lenovo’s business volumes have grown over 50 percent. We also improved supplier third
party verification so that 93 percent of our procurement spend is covered. Finally, we established water and waste
baselines and 91 percent and 77 percent of our procurement spend suppliers, respectively, had public reduction
goals.
Lenovo made significant progress in FY 2014/15 with our conflict minerals program. To comply with the U.S. SEC
Dodd-Frank ruling in the first reporting year, Lenovo signed the Specialized Disclosure. We have publicly disclosed
our Conflict Minerals Report and included the list of smelters in our supply chain. We also improved our conflict
minerals policy to go beyond EICC Code of Conduct requirements and comply with key stakeholder concerns. While
Lenovo and many of its suppliers are not traded on a U.S. stock exchange and therefore not subject to the Dodd-
Frank ruling, we are nevertheless conducting and requiring due diligence activities system-wide. Please see the EICC
Conflict Free Sourcing Initiative for further information http://www.conflictfreesourcing.org/.