23 March 2010 | Allie Anderson
Electronics giant Philips ditched 12 suppliers last year for falling short of sustainability standards. All dozen vendors were struck off after failing to resolve or improve on compliance issues highlighted during supplier audits.
Philips revealed the terminations in its 2009 annual report, but did not name the vendors, state where they are based, or detail the specifics of the failings. General examples of problem areas, however, include improper waste disposal and staff working too many hours.
The cull followed a record total of 858 supplier audits conducted by the Dutch firm last year. The inspections were designed to identify and resolve areas in which its suppliers do not comply with a sustainability checklist. These standards are set out by the Electronic Industry Citizenship Coalition, of which Philips is a member.
Of the audits, 498 were “resolution audits” aimed at stamping out the severest “zero tolerance” non-compliance issues discovered in previous checks. These ranged from improper disposal of hazardous waste and lack of environmental permits, to blocked fire exits and staff continually working seven-day weeks.
In total, almost 100 “zero tolerance” non-compliances were identified. A further 103 “limited tolerance” concerns, such as failing to have adequate monitoring systems in place, were also uncovered.
Action plans to tackle all non-compliance issues were agreed with vendors within 30 days of an audit and “most” zero tolerance issues were solved within 90 days of being identified. The dozen who were dropped made no improvements during this time.
The record numbers of supplier audits were part of Philips’ ongoing sustainability programme, which is summarised in its yearly report. Other projects included cutting logistics carbon emissions by 17 per cent by reducing business travel spend, as well as investing more than €400 million (£360 million) in the research and development of green products and technologies.