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Engaging Our Supply Chain

Materiality Assessment Topics: Environmentally responsible supply chain; Supply chain human rights practices; Energy efficiency of products

Issue Summary

For a company to fully understand its economic, environmental and social impact, it needs to understand its supply chain.

Collaboration with suppliers is crucial for both addressing major issues facing society and realizing opportunities for advancing a clean-energy economy, reducing greenhouse gas (GHG) emissions, reducing water usage and improving labor practices.

Our Position

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.

Given its reach, we believe our supply chain is an area where we have an extraordinary opportunity to streamline operations and reduce long-term costs, while simultaneously limiting our environmental impact and positively influencing social equality. AT&T has established several 2020 and 2025 goals to guide our efforts.

Data Highlights

2016 Key Performance Indicators
  • Average score of top suppliers on the balanced C&S Scorecard: 80.3%
  • Percent spend of suppliers who track greenhouse gas (GHG) emissions and have specific GHG goals: >50%
  • For supplier diversity Key Performance Indicators, view the Supplier Diversity issue brief.


2020/2025 Goals
  • 2020 Goal: We will lead our supply chain to improve its social and environmental impacts by integrating sustainability performance metrics into our sourcing decisions for 80% of our spend.i
  • 2025 Goal: We will work with our industry peers to develop and promote adoption of sustainability metrics that will transform the environmental and social impact of technology supply chains.

Click here to learn more about our 2020/2025 Goals.

iThis goal is focused on network, consumer equipment and corporate services spend, and does not include video content and entertainment companies.

Targets to our 2020/2025 Goals
In Progress
  • 2017 Target: By the end of 2017, achieve an average score of 80% or higher for top suppliers on the Supplier Sustainability Scorecard, which covers four key categories including policy breadth, rigorous goals, reporting transparency and supply chain governance.
    • PROGRESS: At the close of 2016, AT&T Global Supply Chain is pleased to report that it has achieved its 80 by 2017 goal with a score of 80.3.ii The goal was established in 2012 to measure the supplier base focused on our network, consumer equipment and corporate services. Going forward, we are working toward our new 2020 and 2025 goals that include shared industry approaches in measuring sustainability.
  • 2018 Target: By the end of 2018, incorporate sustainability-oriented standards or analyses into our sourcing decisions with strategic suppliers.
    • PROGRESS: Our Global Supply Chain organization held its 3rd supplier conference in June 2016, where we presented the importance of our sustainability program to 325 supplier representatives. This included a special emphasis on our goals, which require suppliers to adhere to our Principles for Conduct and participate in assessments and audits. AT&T continues to make progress with efforts including: incorporating sustainability clauses into agreements and RFPs, training our sourcing managers on the principles of sustainability, and providing updates to sourcing managers on supplier sustainability performance. AT&T will continue to expand incorporation of sustainability-oriented standards and analyses into sourcing decisions.
In Progress
  • 2025 Target: Establish clear, agreed-upon industry sustainability metrics.
    • PROGRESS: In 2016, working with our TL9000 industry group, QuEST Forum, we helped to develop and publish an industry sustainability measurement tool, the QuEST Sustainability Assessor. This tool provides actionable best practices for organizations that help accelerate their sustainability programs. In 2017 we plan to pivot from our AT&T supplier assessment to this third party industry tool. Visit www.questforum.org/sustainability for information and updates.
    • AT&T, working with CDP Supply Chain, annually reaches out to about 500 of our suppliers – representing approximately 80% of our spend – to report on GHG emissions. Using industry-accepted methods, we gather and analyze data on these suppliers’ emissions, reduction goals and progress. As a result, in 2016 we were able to report our 3rd annual estimate of our supplier emissions.
    • Also in 2016, AT&T joined the Joint Audit Cooperation (JAC), which facilitates collaboration among peer telecom companies and Information Communication Technology (ICT) suppliers to verify and audit supply chains on areas such as labor practices, human rights, health and safety, ethics and the environment. JAC Corporate Social Responsibility (CSR) Audits are conducted by recognized independent third party auditors at suppliers’ manufacturing facilities using a common audit framework.
  • 2025 Target: Promote the use of these metrics in industry sourcing.
    • PROGRESS: AT&T suppliers are currently using CDP Supply Chain metrics to measure and report their GHG emissions. This provides our company and the other participating companies the necessary means to benchmark supplier emissions and work with suppliers on making improvements.
    • In 2016, working with our TL9000 industry group, QuEST Forum, we helped to develop and publish an industry sustainability measurement tool, the QuEST Sustainability Assessor. This tool provides actionable best practices to organizations that help accelerate their sustainability programs. In 2017, we plan to pivot from our AT&T supplier assessment to this third party industry tool. See www.questforum.org/sustainability for information and updates.
  • 2025 Target: Develop and follow an industry roadmap toward truly sustainable performance.
    • PROGRESS: AT&T is moving its suppliers along an industry roadmap with CDP Supply Chain and QuEST Forum to continuously improve measurements, benchmarking and results in sustainable supplier performance.

iiThis does not include video content and entertainment companies. Looking ahead, we are focusing on an industry-wide measurement for assessing our suppliers.


Our Action

Overview
Engaging Our Supply Chain
Citizenship & Sustainability (C&S) Principles of Conduct for Suppliers
  • The C&S Principles of Conduct for Suppliers outlines fundamental expectations for working with AT&T.
Strategic Supplier Sustainability Scorecards
  • The sustainability scorecards are based on key weighted data from the annual supplier assessments, and they increase the accountability of our suppliers. The scorecards use data that we have been gathering since 2009 through our annual assessments. Results are incorporated into the overall quality scorecards used in performance reviews with strategic suppliers.
  • Officer-level supplier sustainability scorecards help us elevate visibility and motivate suppliers to improve sustainability performance.
Human Rights and Labor Practices Program
  • AT&T is working with suppliers to assess their labor practices and human rights policies and performance.
Corporate Social Responsibility (CSR) Audits
  • In 2016, AT&T began performing CSR audits of its supply chain through its membership in JAC.
GHGs and Environment
  • AT&T proactively works with strategic suppliers on tracking and setting goals on their GHGs.
U.S. EPA SmartWay Program
  • 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.
Embedding Sustainability in the Contract Process
Sustainability Clauses
  • AT&T’s standard materials and services purchase agreement template contains a clause specifically addressing citizenship and sustainability.
Sourcing Manager Training
  • AT&T trains sourcing managers – more than 200 sourcing professionals – about sustainability in the supply chain and is providing the tools necessary to engage our strategic suppliers on sustainable business practices.
Collaborating with Suppliers
Standardizing Supply Chain Sustainability Measurements
  • AT&T is 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.
Energy Efficiency
  • AT&T works with the Alliance for Telecommunications Industry Solutions (ATIS) to set industry expectations for network equipment energy efficiency.
Packaging
  • Working with suppliers, AT&T is using innovation to reduce size and environmental impact of packaging.
Supplier Sustainability Awards
  • The AT&T Supplier Sustainability Awards honor suppliers that make outstanding contributions to our sustainability efforts. Awards have been issued to suppliers for energy efficiency, alternative energy, process improvement, packaging and environment.   

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 covers topics including sustainable business practices, diversity, conflict minerals, ethics and labor rights. Suppliers are required to acknowledge these principles as part of the annual supplier sustainability assessment. Additionally, every new contract agreement with suppliers requires that they acknowledge the principles.

Strategic Supplier Sustainability Assessments and Scorecards

In 2016, AT&T used a Supplier Sustainability Scorecard to measure 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:
    1. Energy efficiency
    2. Environmental protection
    3. Health and safety
    4. Labor practices and human rights
  2. Establish and publicize performance goals
  3. Extend policies to their suppliers and assess them
  4. Track, report and have goals related to GHG emissions 4. 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 assessment and scorecard represent about 80% of annual spend, and cover about 500 suppliers.

AT&T engages suppliers on sustainability at multiple levels, including:

  • Officers: We introduced 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.
  • Global Supply Chain: Our team of professional sourcing managers also engages suppliers directly to improve their sustainability performance. Our sourcing 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.

Through use of the annual assessments, scorecards and our direct engagement with suppliers, our suppliers continue to improve and in many cases excel in their performance. In 2016, the average sustainability score for suppliers increased to 80.3, exceeding our “80 by 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.

Looking ahead, we are focusing on an industry-wide measurement for assessing all of our suppliers, guided by the QuEST Assessor sustainability tool. 

QuEST Assessor

In 2016, working with our TL9000 industry group, QuEST Forum, we helped to develop and publish an industry sustainability measurement tool, the QuEST Assessor. This tool provides actionable best practices to organizations that help accelerate their sustainability programs. In 2017, we plan to pivot from our AT&T supplier assessment to this third party industry tool. See www.questforum.org/sustainability for information and updates.

Human Rights and Labor Practices

As reflected in the AT&T Principles of Conduct for Suppliers, we take issues around human rights and labor practices in our supply chain seriously.

AT&T addresses human rights and labor practices through our supplier engagement. Suppliers accounting for 80% of our spend received the 2016 AT&T Supplier Sustainability Assessment. The assessment requested 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
  • Address wages and compensation

The assessment also collects the following important information from suppliers:

  • Global human rights and labor practice standards recognized by the supplier
  • Whether the supplier has a formal audit process to enforce requirements in the facilities where it and its 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

In 2017 we plan to pivot from our AT&T supplier assessment to the industry tool, QuEST Assessor, described in the previous section.

AT&T also communicates its human rights policy directly to suppliers, and expects 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.

Corporate Social Responsibility (CSR) Audits

In 2016, AT&T joined the Joint Audit Cooperation (JAC), which facilitates collaboration among peer telecom companies and ICT suppliers to verify and audit supply chains on areas such as labor practices, human rights, health and safety, ethics and the environment.

JAC CSR Audits are conducted by recognized independent third party auditors at suppliers’ manufacturing facilities using a common audit framework and include the following:

  1. Facility evaluation of production areas, office areas, storage facilities, distribution centers and dormitories.
  2. Management interviews of site manager(s), production, EH&S, quality, human resources and payroll managers.
  3. Confidential worker interviews of permanent, temporary and subcontract labor – including new workers, workers from various departments and shifts, and workers of both genders.
  4. Documentation review of relevant company documents necessary to understand whether the supplier is conforming to common CSR principles and standards. This may include personnel records, proof of age documentation, timesheets, payroll records, environmental permits, emergency response plans, Health & Safety training documentation and certifications.

The 10 main areas of focus during the audits are:

  • Child labor
  • Forced/bonded labor
  • Health & Safety
  • Freedom of association
  • Discrimination
  • Disciplinary practices
  • Working hours
  • Wages and compensation
  • Environment
  • Business ethics

In 2016, JAC members completed 69 facility audits covering 70,000 workers with 84% of audits focused on Tier 2 and 3 suppliers (i.e. suppliers upstream of JAC members’ direct Tier 1 suppliers).

Greenhouse Gas (GHG) Emissions and Environment

AT&T continues 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 GHGs.

AT&T, working with CDP’s Supply Chain program, annually reaches out to about 500 of its suppliers – representing approximately 80% of its spend – to report on GHG emissions. Using industry-accepted methods, we gather and analyze data on these suppliers’ emissions, reduction goals and progress. As a result, in 2016 we were able to report our third annual estimate of our supplier emissions in our greenhouse gas emissions reporting.

Additionally, we scored 3 key GHG criteria in our 2016 AT&T Supplier Sustainability Assessment 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 GHG emissions reductions, as well as other key sustainability areas.

Conflict Minerals

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 e-Sustainability Initiative (GeSI) and participates in the Conflict Free Smelter Initiative (CFSI). 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.

U.S. EPA Smartway Program

In 2016, more than 99.8% of the miles covered by AT&T Transportation Control Center, an organization managed by AT&T Global Supply Chain, were done by carriers that participate in the EPA SmartWay program. Additionally, with the incorporation of suppliers used by DIRECTV, AT&T will increase the number of SmartWay participating carriers that we will utilize going forward. To learn more, read about our company fleet and transportation initiatives.

Embedding Sustainability in the Contract Process

Sustainability Clauses

As of 2011, all of our template 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. Since that time, 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. 

Sourcing Manager Training

We train our 200+ sourcing managers 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 sourcing managers can help ensure that suppliers respond to our sustainability assessment, and how they can help suppliers improve their performance and scores. As a result, we are seeing greater awareness and participation by our suppliers with more than 350 suppliers responding to our 2016 sustainability assessments and more than 150 scoring 80% or better on our scorecard.

Collaborating with Suppliers

Standardizing Supply Chain Sustainability Measurements

With QuEST Forum, we are working on launching 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.

Energy Efficiency

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. TEER requirements are found in the requirements document, ATT-IP-76200.

Packaging

AT&T continues to address packaging opportunities in its supply chain 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.

Supplier Sustainability Awards

The AT&T Supplier Sustainability Awards honor suppliers that make outstanding contributions to our sustainability efforts. In 2016, we honored 4 suppliers that helped us advance our sustainability commitment in 2015 in the areas of process improvement, energy efficiency, the environment and packaging:

  • FujitsuProcess Improvement
    Fujitsu provided AT&T with significant network energy savings through the release of 2 new transponder modules using Green Chip DSPs. DSPs are Digital Signal Processors. These modules boost network capacity and lower power requirements, which saves costs.
  • Optelligent – Energy Efficiency
    We installed Optelligent’s Enterprise Building Management System solution. This improved energy efficiency and cut maintenance costs through the remote monitoring of equipment at critical sites.
  • FortuneEnvironmental
    In 2015, we chose Fortune Group to support transportation, recovery and recycling strategy. They helped process 54 million pounds of AT&T electronic waste.
  • Motivating GraphicsPackaging
    Motivating Graphics improved the environmental sustainability of our GoPhone packaging. They helped with plastic reduction, better transportation cubic efficiency, U.S. kitting and reducing overall carbon footprint.

Read about AT&T’s Supplier Sustainability Awards winners at the links below: 

  • 2015 Supplier Sustainability Awards (click here)
  • 2014 Supplier Sustainability Awards (click here)  
  • 2013 Supplier Sustainability Awards (click here)
  • 2012 Supplier Sustainability Awards (click here)
  • 2011 Supplier Sustainability Awards (click here

Supplier Diversity

Read more about AT&T’s long history of embracing diversity in our supply chain.

Updated on: Aug 17, 2017

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