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For a company to fully understand its economic, environmental and social impact, it needs to understand the impact of its supply chain.
We believe it is important to understand more about the social, economic and environmental performance of our suppliers, and we expect our suppliers to share our commitment to citizenship and sustainability (C&S).
We believe that, given its reach, the supply chain is an area where we and others have an extraordinary opportunity to streamline operations and reduce long-term costs, while simultaneously limiting our environmental impact and positively influencing social equality.
- Average score of top suppliers on the balanced C&S Scorecard in 2014: More than 70 percent
- Spend with minority, women and disabled veterans business enterprises: $16.5B
- Percent of total spend with minority, women and disabled veterans business enterprises: 27.45 percent
By the end of 2015, a majority of spend with strategic suppliers will be with those who track greenhouse gas (GHG) emissions and have specific greenhouse gas emissions goals.
By the end of 2017, achieve an average score of 80 percent or higher for top suppliers on the balanced C&S Scorecard, which covers four key categories including policy breadth, rigorous goals, reporting transparency and supply chain governance. We refer to this as “80 by 2017.”
At the end of 2014, suppliers representing more than 50 percent of spend reported that they were tracking greenhouse gas emissions and had greenhouse gas reduction goals.
At the end of 2014, the average score for top suppliers was more than 70 percent, up from 63 percent in 2013.
- The C&S Principles of Conduct for Suppliers outline fundamental expectations for working with AT&T.
- The sustainability scorecards are based on key weighted data from the annual supplier surveys, and they increase the accountability of our suppliers. The scorecards use data that we have been gathering since 2009 with our annual surveys. Results are incorporated into the overall quality scorecards used in performance reviews with strategic suppliers.
- Quarterly Officer-Level Supplier Sustainability Scorecards were introduced in 2014 that elevate visibility and motivate suppliers to improve sustainability performance toward our “80 by 2017” goal.
- We are working with our suppliers to assess their labor practices and human rights policies and performance.
- We proactively work with our top suppliers on tracking and setting goals on their greenhouse gas emissions.
- AT&T is a member of the U.S. EPA SmartWay Transport Program. This helps us in our continued efforts to reduce transport-related emissions.
- Our standard materials and services purchase agreement template contains a clause specifically addressing citizenship and sustainability.
- We train our contract managers, more than 200 sourcing professionals, about sustainability in the supply chain and are providing the tools necessary to engage our strategic suppliers on sustainable business practices.
- We are working with industry groups on developing a sustainability measurement model that provides a data-driven process to empower companies to share and apply best practices.
- We work with Alliance for Telecommunications Industry Solutions (ATIS) to set industry expectations for network equipment energy efficiency.
- Working with suppliers, we are innovating to reduce size and environmental impact of packaging.
- Annually, we recognize suppliers that are leading the way.
Engaging Our Supply Chain
C&S Principles of Conduct for Suppliers
We outline our C&S expectations in our Principles of Conduct for Suppliers, which cover topics including sustainable business practices, diversity, conflict minerals, ethics and labor rights. Every year suppliers are required to acknowledge these principles as part of the annual supplier sustainability survey. Additionally, every new contract agreement with suppliers requires that they acknowledge the principles.
AT&T uses a Supplier Sustainability Scorecard that measures the performance of our strategic suppliers on their adherence to sustainable business practices. Suppliers must accomplish at least the following to achieve acceptable sustainability scores:
1. Create policies for at least these areas:
- Energy efficiency
- Environmental protection
- Health and safety
- Labor practices and human rights
3. Establish and publicize performance goals
4. Extend policies to their suppliers and assess them
5. Track, report and have goals related to greenhouse gas emissions
The sustainability scorecard is based on key data from the annual supplier surveys that have been conducted since 2009. The annual survey and scorecard represent about 80 percent of annual spend, and cover about 500 suppliers.
We engage suppliers on sustainability at multiple levels including:
- Officers: We introduced quarterly officer-level supplier sustainability scorecards in 2014 that elevate visibility and motivate suppliers to improve sustainability performance. Scores of 80 or higher are considered good. We continue to work with suppliers to reach our “80 by 2017” goal.
- Global Supply Chain: Our team of professional contract managers also engages suppliers directly to improve their sustainability performance and build capacity. Our contract managers receive annual sustainability training.
- Business Units: Our business units (including real estate, fleet operations, technology operations and labs) engage our suppliers on a daily basis. Through these engagements, we encourage our suppliers to provide increasingly efficient and sustainable services and products.
With the annual survey, scorecards and our direct engagement with suppliers, our suppliers continue to improve and in many cases excel in their performance. This is reflected by the increased average sustainability score for suppliers of 70, up from 63 percent the previous year. We are on track toward our “80 x 2017” goal. We incorporate results into the overall quality scorecards used in performance reviews with strategic suppliers. Sustainability is part of strategic supplier assessments alongside other governance metrics including quality, financial viability, supplier diversity and business continuity.
Additionally, we gather data and sustainability information from the Carbon Disclosure Project (CDP) Supply Chain initiative and EcoDesk.
As reflected in our supplier sustainability principles, we take issues around human rights and labor practices in our supply chain seriously.
AT&T addresses human rights throughout our supplier engagement. AT&T supply chain has developed a Supplier Human Rights and Labor Practices Program. As part of that program, suppliers accounting for 80 percent of our spend receive the AT&T Supplier Sustainability Survey annually. Because we are a non-manufacturing service carrier, we look to our product manufacturers to demonstrate they have rigorous human rights programs and labor practices in their manufacturing operations. The annual AT&T Supplier Sustainability Survey discussed above is a key tool to obtain this important information. Specifically, our survey requests suppliers to attest that they have policies that
- prohibit child labor,
- prohibit involuntary labor,
- protect freedom of association,
- prohibit discrimination,
- prohibit physical coercion,
- limit the number of working hours, and
- address wages and compensation.
In 2015 the survey is also collecting the following important data from suppliers to ensure compliance:
- Global human rights and labor practice standards recognized by the supplier
- If the supplier has a formal audit process to enforce requirements in the facilities where they and their subcontractors manufacture products and equipment
- Whether the audits are performed by an independent third party
- The interval between audits
- The audit process documented corrective action and remediation process
- Whether corrective action plans include a process to ensure that violations do not reoccur
We also communicate our human rights policy directly to our suppliers, and expect them to recognize and abide by it. It is posted on AT&T’s Supplier Portal, along with other policies and materials that explain our supply chain sustainability approach.
We continue to proactively work with our suppliers to advance sustainable business practices throughout our supply chain. An important part of this effort is our work with our top suppliers on tracking and setting goals for their greenhouse gas emissions:
- By the end of 2015, a majority of spend with strategic suppliers will be with those who track greenhouse gas (GHG) emissions and have specific GHG reduction goals.
- By the end of 2017, achieve an average score of 80 percent or higher for top suppliers on the balanced Citizenship and Sustainability Scorecard.
AT&T, working with CDP Supply Chain, annually reaches out to about 500 of its suppliers – representing approximately 80 percent of its spend – to report on greenhouse gas emissions. Using industry-accepted methods, we gather and analyze data on these suppliers’ emissions, reduction goals and progress. As a result, in 2014 we were able to report for the first time an estimate of our supplier emissions in our greenhouse gas emissions reporting.
Additionally, we score three key greenhouse gas criteria in our overall AT&T Supplier Sustainability Survey and Scorecard — namely, whether the supplier: a) tracks its GHG emissions, b) sets GHG reduction goals, and c) reports to CDP. These scores roll directly into a supplier’s sustainability scorecard, which in turn is used with supplier evaluations. With the scorecards used as a measurement tool, suppliers are encouraged to improve performance in greenhouse gas emissions reductions as well as other key sustainability areas.
Use of minerals from the conflict zones of the Democratic Republic of Congo and surrounding areas is an important human rights issue that requires increased transparency in our supply chain. AT&T is a member of the Global Electronics Sustainability Initiative (GeSI) and participates in the Conflict Free Smelter Initiative (CFSI). AT&T also has signed on with the Private-Public Alliance (PPA) for Responsible Trade with the U.S. State Department. These organizations are developing standard processes to address issues relating to conflict minerals. Our Principles of Conduct for Suppliers address conflict minerals and confirm AT&T’s expectations that the products we sell will not contain conflict minerals that directly or indirectly finance or benefit armed groups. We reserve the right to suspend or terminate suppliers who fail to demonstrate commitment to this expectation. Read more about our efforts on conflict minerals.
AT&T strives to minimize the environmental impact of transportation by designing and optimizing its transportation and distribution network via route planning, consolidation and shipping full truckloads when possible. AT&T’s involvement in the SmartWay program requires us to benchmark and measure progress in our transport emissions management. This helps us further integrate energy efficiency, air quality and climate change initiatives into our transportation decision-making process. The program will also provide support to identify potential additional carbon reductions and cost savings opportunities in our distribution network.
This work has included better route planning and transport optimization, consolidation of network field technician deliveries, ensuring full loads and avoiding empty trips, and incorporating alternative-fuel vehicles. In 2014, more than 99.6 percent of the miles covered by AT&T Transportation Control Center were done by carriers that participate in the EPA SmartWay program. We use SmartWay participation as a factor when evaluating potential carriers, and in 2013 increased the number participating in the program. To learn more, read about our company fleet and transportation initiatives.
All of our model supply chain-managed material and services agreements contain a standard Citizenship and Sustainability clause that requires the suppliers to align with AT&T’s Principles of Conduct for Suppliers, and to respond to sustainability-related information requests from AT&T. The clause is standard in all new master agreements as of 2011; AT&T has executed thousands of agreements that contain the clause. We also have several clauses in our contract library that cover sustainability considerations such as energy efficiency.
We train our contract managers – more than 200 sourcing professionals – about sustainability in the supply chain and are providing the tools necessary to engage our strategic suppliers on sustainable business practices. We focus on how the contract managers can work with suppliers to ensure that the suppliers respond to our sustainability survey, with intention to help suppliers improve their performance and scores. As a result, we are seeing greater awareness and participation by our suppliers.
Standardizing Supply Chain Sustainability Measurements
We are working with QuEST Forum on developing a sustainability measurement model that is focused on sustainability-driven business improvement and profitability. The model provides a data-driven process that empowers companies to share and apply best practices. The goal is to provide the industry benchmarking methodology with holistic sustainability measures to drive business improvements and control costs.
We continue to work with our major network suppliers to establish goals to improve the efficiencies of next-generation network equipment and we work with the Alliance for Telecommunications Industry Solutions (ATIS) on using the Telecommunications Energy Efficiency Ratio (TEER) metric. We are already seeing results collaborating with strategic network suppliers with TEER baselines and goals in our agreements.
AT&T continues to address packaging opportunities in its supply chain. In 2014, we engaged suppliers even further for innovative solutions to both reduce packaging materials and environmental impact. For more on packaging reductions, please see the packaging section in our Product Life Cycle issue brief.
The AT&T Supplier Sustainability Awards honor suppliers that make outstanding contributions to our sustainability efforts. In 2015, we honored four suppliers that helped us advance our sustainability commitment in 2014 in the areas of energy efficiency, process improvement, the environment and packaging:
- FRG Waste Resources Inc. – Process Improvement
In the past 10 years, FRG Waste Resources has developed ways to improve waste and recycling processes to reduce costs and make business operations more efficient. FRG continues to pioneer methods to improve our waste and recycling management.
- Enlighted Inc. – Energy Efficiency
Since 2014, Enlighted has helped us use less energy by installing smart lighting solutions at AT&T facilities — from offices to garages to call centers. We’ve worked hand-in-hand to create a way to install smart lighting that helps our cost structure.
- Premier Surplus Inc. – Environmental
From 2013 to the end of 2014, Premier Surplus has worked with us to recycle more than 2.6 million pounds of electronics for our facilities in the southeastern region alone. The company supports our e-waste management in an environmentally responsible way.
- Superior Communications Inc. – Packaging
Superior Communications reintroduced sustainably packaged power accessory products to our stores. Made with recycled materials and packaged with no plastic, these products use less water and energy to produce, and reduces the carbon footprint.
Read more about previous AT&T Supplier Sustainability Awards winners:
- 2013 Supplier Sustainability Awards (click here)
- 2012 Supplier Sustainability Awards (click here)
- 2011 Supplier Sustainability Awards (click here)
Updated on: Sep 22, 2015