AT&T is committed to conducting business with integrity and ethics, with an emphasis on corporate citizenship and sustainability. As part of our business, suppliers are held accountable to our same environmental, social and economic standards.
1 Supplier diversity and sustainability spend and performance excludes content and programing spend.
2 This goal is focused on network, consumer equipment and corporate services spend, and does not include video content and entertainment companies.
Suppliers are a key part of our business and therefore must be part of our approach to sustainability and diversity. The reach of our supply chain allows AT&T the opportunity to streamline operations, reduce long-term costs and limit our overall environmental impact.
We continue proactive work with our suppliers to advance sustainable business practices throughout our supply chain, focusing on energy use, climate impact, human rights, water use, waste and natural resource use. AT&T is committed to promoting healthy, safe and inclusive working conditions throughout our supply chain.
AT&T also works to increase the participation of minority-, woman-, service-disabled veteran- and LGBTQ+-owned business enterprises in our supply chain. We also encourage subcontracting opportunities for these businesses by requiring supplier diversity participation from prime suppliers.
- Managing Our Supply Chain
Top managerial responsibility for supply chain management lies with the Executive Vice President of Global Connections and Supply Chain, who also sits on the Corporate Social Responsibility Governance Council (Council). The Council is led by our Chief Sustainability Officer, with oversight from the Public Policy and Corporate Reputation Committee of the AT&T Board of Directors.
We have suppliers around the world (in non-embargoed countries) representing all types of trades, engaged across all our operating units. Changes to our AT&T Communications operations in 2018 include centralizing the management of high-risk suppliers representing certain high-risk factors and optimizing reverse logistics strategy and operations.
Our supply chain management strategy includes incorporating Citizenship and Sustainability and Supplier Diversity clauses into agreements and RFPs; training sourcing managers on the principles of sustainability and diversity; and providing updates to sourcing managers on supplier sustainability and diversity performance. We strive to ensure conformance with the AT&T Principles of Conduct For Suppliers (Supplier Principles) using the following approaches:
- The Supplier Principles is posted on the AT&T Supply Chain Portal, are publicly accessible to all AT&T suppliers and any potential future suppliers.
- The Citizenship and Sustainability and Diversity clauses are part of general agreements and purchase order terms.
- We conduct Strategic Supplier Sustainability Assessments and Corporate Social Responsibility (CSR) Audits and Assessments
- In 2019 we will be building a Preferred Supplier Program to recognize suppliers that demonstrate a commitment to all aspects of corporate social responsibility in the areas of diversity and sustainability.
Our Supplier Principles and management systems are also applicable to non-tier-one suppliers. And our CSR audit and assessment program conducted through our membership in the Joint Audit Cooperation (JAC) applies to tier 1, 2 and 3 suppliers.
- Supplier Engagement in Sustainability and Diversity
During our Global Supply Chain’s supplier conference in June 2018, we convened representatives from 119 companies. Among topics discussed, we emphasized the importance of our sustainability program with a special emphasis on our goals, which require suppliers to adhere to our Supplier Principles, and strategic suppliers to participate in sustainability assessments and audits.
We regularly engage employees of our suppliers through our membership in the Joint Audit Cooperation (JAC). If we learn a supplier may be at risk of non-compliance with social responsibility standards, we engage JAC to conduct on-site CSR audits by recognized, independent third-party auditors at suppliers’ manufacturing and assembly facilities using a common audit framework.
AT&T agreements also reference sustainable business practices within the Supplier Principles that set the expectation for suppliers to, among other things, reduce the environmental impact of their products and services. Our supplier agreements include a Citizenship and Sustainability clause, and execution of an agreement includes acknowledgement of these principles, and a requirement to respond to sustainability-related information requests from AT&T.
Supplier compliance with social standards is legally binding. We also have several clauses in our contract library that cover sustainability considerations, such as energy efficiency.
Supplier Sustainability Principles
We outline our expectations for suppliers on a variety of issues in our Supplier Principles, including environment, health and safety, diversity, ethics, freedom of association, conflict minerals, labor practices and human rights. In addition, suppliers are expected to hold their subcontractors to the Supplier Principles. We require our suppliers and their suppliers to comply with all applicable laws and regulations, both domestic and foreign. If a supplier has questions about our Supplier Principles, our process enables every senior sourcing manager to engage the AT&T Supply Chain Sustainability Office to consult with the supplier.
AT&T expects suppliers to demonstrate robust environmental, health and safety (EH&S) policies and practices. Suppliers should also provide a safe and healthy workplace that meets international and national standards, laws, rules and regulations. Suppliers should give appropriate health and safety information and training to their employees. We expect suppliers to minimize the impact of emergency events by proactively developing business continuity plans and response procedures.
We require suppliers to verify that they follow our Supplier Principles through a supplier self-attestation process. To ensure compliance with these Principles, we survey a subset of the suppliers based on their risk level, which we determine by reviewing responses to a supplier high-risk-activities questionnaire completed by our Supply Chain Sourcing Managers in cooperation with the AT&T business unit(s) that use the supplier. The supplier’s risk level also determines the frequency with which we survey.
Strategic Supplier Sustainability Assessments
Our strategic suppliers, representing 80% of supplier spend, are engaged with sustainability assessments on 1- to 3-year cycles. These assessments will be used with supplier evaluations to reach our 2020 goal of integrating sustainability performance metrics sourcing decisions.
We evaluate suppliers against scores in TIA Sustainability Assessor reports developed with the Telecommunications Industry Association (TIA), and encourage other companies to use it with suppliers. The TIA Sustainability Assessor and associated reports enable suppliers to continuously improve sustainable best practices with:
- A 10-factor model that provides structure for users;
- Several business segment options that refine appropriate questions;
- Individualized reports with a prioritized set of recommendations to optimize sustainability programs;
- Support for sustainability planning aligned with the organization’s strategy;
- Shifted emphasis from compliance to excellence; and
- Benchmark data against others in industry.
Suppliers completing the TIA Sustainability Assessor are requested to respond to questions regarding their policies and management practices:
- Environmental management
- Resource efficiency optimization
- Carbon footprint and ozone depletion
- Corporate social responsibility
- Supply chain management
- Stakeholder engagement
- Organizational engagement and capabilities
- Eco design
- End-to-end delivery
- Circular economy
Suppliers receive reports with overall performance bands of gold, silver, bronze or below bronze. Suppliers also receive a numerical score within each performance band that gives insight to their performance level, as well as their proximity to the next level performance band. AT&T has visibility to suppliers’ scoring progress. Even if a supplier stays in the same performance band, we work with them to review actionable items and discuss plans for improvement.
Corporate Social Responsibility (CSR) Audits and Assessments
AT&T is a member of JAC, an organization 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.
Through our JAC membership, CSR audits are conducted by recognized, independent third-party auditors at suppliers’ manufacturing facilities using a common audit framework. Member companies share audit results of suppliers thereby leveraging continuous improvement while reducing supplier audit fatigue. In 2018, audits for AT&T suppliers included human rights reviews for more than 14,000 individuals, and AT&T led 5 third-party audits of AT&T suppliers’ factory locations.
The JAC audit framework includes the following:
- Facility evaluation of production areas, office areas, storage facilities, distribution centers and dormitories.
- Management interviews of production, EH&S (environment, health and safety), quality, human resources and payroll manager(s).
- Confidential worker interviews of permanent, temporary and subcontracted labor — including workers of both genders, new workers and workers from various departments and shifts.
- 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 and safety training documentation and certifications.
The 10 main areas of focus, all of which are addressed during the audits are:
- Child labor
- Forced/bonded labor
- Health and safety
- Freedom of association
- Disciplinary practices
- Working hours
- Wages and compensation
- Business ethics
If we become aware of suppliers at risk of non-compliance with social standards, we engage though JAC with on-site CSR audits and corrective action plans. In 2018, JAC identified 768 corrective actions during the third-party audits. Throughout 2017 and 2018, 96% of the corrective actions identified were closed, including 100% of unacceptable, 93% of critical and 97% of non-compliance.
AT&T also measures supplier risk via the TIA Sustainability Assessor, through supplier narratives on policies and management practices that:
- Prohibit child labor
- Prohibit forced labor
- Protect freedom of association
- Prohibit discrimination
- Prohibit physical coercion and inhumane disciplinary practices
- Ensure health and safety
- Limit the number of working hours
- Address wages and compensation
- Prohibit corruption and bribery
Supply Chain Due Diligence
The AT&T due diligence process focuses on vetting suppliers prior to contract execution to ensure that AT&T isn’t conducting business with entities that pose risks to its operations, brand or reputation. This process is completed using a web-based due-diligence application to assist in monitoring our suppliers for indications of risk. The application analyzes data from multiple subscription and public data sources to identify, assess and monitor third-party risk.
Our maintenance and procurement process includes a high-risk activities questionnaire, which our procurement system uses to determine which clauses are required when contracting with potentially high-risk suppliers. During the initial engagement, suppliers complete an onboarding questionnaire. Based on those responses and any high-risk activities identified, a due diligence review may be triggered and if necessary, proper controls will be enacted to protect the company.
Our restricted parties screening process identifies potential sustainability risks in the supply chain. The program screens customers, suppliers and other trading partners against more than 600 restricted party lists from governments worldwide.
The AT&T risk management organization is responsible for preserving our assets and shareowner value by minimizing the financial effects of accidental losses, including activities related to the AT&T Supply Chain. Risk management is responsible for establishing insurance requirements for contractors/vendors and reviewing insurance clauses within contracts.
- Expectations of Suppliers
The Supplier Principles encompass all environmental, social and governance (ESG) considerations, including the following (Please refer to the Supplier Principles for the latest information on these expectations):
We expect suppliers to adhere to all laws pertaining to working hours and wages and respect the legal rights of their employees to associate freely and bargain collectively. AT&T communicates our Human Rights Policy directly to all suppliers and expects them to recognize and abide by it. Our JAC audits verify compliance with labor laws and standards, including child labor, forced labor or compulsory labor. Best practices and compliance with laws, which may include certification, are required for all suppliers as stated in the Supplier Principles and in our Human Rights in Communication Policy.
Health and Safety
We expect suppliers to apply robust health and safety policies and practices, and to have a safe and healthy workplace that complies with international and national standards, laws and regulations. We prohibit the use, possession, distribution or sale of illegal drugs or alcohol on our premises and in our vehicles while AT&T business is being conducted. We also expect suppliers to provide appropriate health and safety information and training to their employees, as well as proactively use business continuity plans and response procedures for emergencies.
Our Supplier Principles require that suppliers do not pay bribes or engage in corrupt practices to advance any interests with AT&T. This includes directly or indirectly offering anything of value to government officials, political parties or candidates for political office for the purpose of inducing acts or decisions. Without prior approval from AT&T, suppliers are prohibited from contacting legislators, federal or state regulatory officials or their staffs, and from making political contributions on behalf of AT&T. Our internal anti-corruption policy applies to all suppliers as well.
As a large device retailer, we’ve actively sought to address the human rights issue of conflict minerals from the Democratic Republic of the Congo (DRC) and surrounding areas, through increased transparency in our supply chain. Our Supplier Principles confirm our expectations that the products we sell will not contain conflict minerals that directly or indirectly finance or benefit armed groups. If corrective action is warranted regarding non-compliance around conflict minerals, as with our other expectations, AT&T would work with its suppliers to correct or remedy any identified non-compliance, including by suspending or terminating suppliers that fail to demonstrate a commitment to our Supplier Principles.
With respect to the products we sell, AT&T has put in place the following ongoing activities to identify potential reporting obligations:
- A comprehensive Conflict Minerals (CM) Program, which serves as the documented framework in which AT&T performs the steps required to determine the applicability of and compliance with Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the SEC’s rules implementing that Act (SEC Conflict Minerals Rules).
- A working team that addresses the day-to-day activities associated with complying with the SEC Conflict Minerals Rules.
- A governance committee that reviews and provides general guidance on conflict minerals compliance activities.
AT&T has taken the necessary steps to determine the extent to which we may have reporting obligations under the SEC Conflict Minerals Rules. The Executive Vice President — Global Connections and Supply Chain, AT&T Communications, has ultimate managerial responsibility for conflict minerals. To date, AT&T has not had a reporting obligation pursuant to the SEC Conflict Minerals Rules. AT&T will continue to execute the CM Program annually to identify any potential changes to our filing status.
We also support industry efforts to address conflict minerals. AT&T has engaged in hearings with the SEC on this topic. We remain involved in this issue through our membership in the Global e-Sustainability Initiative (GeSI) and our participation in the JAC program. Through continued collaboration with suppliers, we are committed to the responsible sourcing and use of these minerals.
- Supplier Diversity
For more than 50 years, the AT&T Global Supplier Diversity organization has connected certified diverse minority-, woman-, service-disabled veteran- and LGBTQ+-owned business enterprises with opportunities to provide products and services to AT&T around the world. We believe diverse suppliers bring value to our company through their unique skills and innovative ideas. Their efforts help us deliver world-class products and services to meet our customers’ diverse needs. Our goal for diversity performance is 21.5% of total procurement expenditures, of which 15% is targeted for utilization of minority-owned business enterprises, 5% is targeted for utilization of woman-owned business enterprises and 1.5% is targeted for utilization of service-disabled veteran-owned business enterprises.
AT&T has been a longstanding leader in supplier diversity by identifying and promoting diverse businesses for contract opportunities as both prime suppliers and subcontractors. We are proud to be one of the first corporations in the U.S. to have a supplier diversity program that was launched in 1968 as a response to the civil unrest and economic disparities many diverse businesses were encountering. The supplier diversity program has been instrumental in helping prime suppliers increase the use of minority-, woman-, service-disabled veteran- and LGBTQ+-owned businesses in their supply chain for subcontracting opportunities.
Supplier diversity program managers are dedicated to working with our sourcing teams and business units to identify specific areas of opportunity and include diverse businesses in competitive bids. In addition, our robust supplier program ensures diverse suppliers are identified, considered and mentored throughout the sourcing process. New and emerging technology has consistently been critical to AT&T business initiatives. We’ve made targeted efforts to ensure that diverse businesses are part of our transformation.
Participation in our supplier diversity program requires third-party certification issued by an approved organization or agency. A copy of the certification is required to do business with AT&T as a diverse supplier.
We are committed to enhancing diverse suppliers’ capabilities and opportunities by assisting them with business education and other business development initiatives. Our program is structured around internal and external initiatives and is guided by 4 areas of focus:
- Strategic Supplier Outreach: Our strategic outreach involves interviewing prospective suppliers at regional and national supplier diversity events and sharing important information and criteria about doing business with AT&T. We work with several diversity business organizations for targeted supplier identification. In 2018, AT&T executives and managers sponsored and/or participated in roughly 106 supplier diversity outreach events and meetings in 16 states and the District of Columbia.
- Diverse Supplier Advocacy: We advocate for current and prospective diverse suppliers in their quest to provide products and services to AT&T. In our advocacy, we work closely with our sourcing organization, business unit partners and prime suppliers to identify and influence opportunities for consideration and inclusion of diverse suppliers.
- Engaging Our Prime Suppliers: We focus on working with our prime suppliers to encourage and assist them to maximize their use of diverse suppliers as subcontractors. Key to this effort are our requirements that prime suppliers provide an annual plan outlining their proposed use of diverse suppliers and report their diversity subcontracting spend monthly.
- Business Development and Education: We provide opportunities for diverse suppliers to participate in executive education and training programs through the sponsorship of formal mentoring and business development programs. We also host and participate in workshops, seminars and 1-on-1 counseling sessions.
Over the past 50 years, our supplier diversity team has conducted comprehensive outreach to connect with hundreds of diverse businesses across the U.S. To achieve maximum effectiveness, we partner with Chambers of Commerce and business organizations to connect with diverse businesses.
Through the prime supplier program, our company is working to increase the use of minority-, woman-, service-disabled veteran- and LGBTQ+-owned businesses throughout our value chain in both overall spend and the number of contracts awarded to diverse subcontractors. Our team collaborates with prime suppliers to create meaningful goals and holds them accountable through action plans and monthly reviews.
AT&T is committed to employing suppliers that advance gender equity through their products and services. We do that by embedding our supplier diversity program in virtually every aspect of the business. For example, as a global enterprise we seek out and highlight our women business enterprise (WBE) suppliers who provide AT&T products such as IT services, construction and engineering, marketing and advertising, consultants, training services, etc. Our program seeks to drive accountability by rewarding suppliers who demonstrate strong diversity and inclusion values, thereby enabling AT&T to a make positive impact on the economic growth of diverse communities.
Additionally, AT&T Supplier Diversity sponsors a signature diverse supplier mentorship program called Business Growth Acceleration Program (BGAP), an initiative to help diverse-owned businesses thrive. We offer sponsorships to a select group of qualified business leaders who meet the criteria. The 5-month program is comprised of group sessions conducted by telepresence and in person. Classes provide strategies on how to improve business operations, enhance abilities to win corporate contracts and improve the growth of their businesses to handle larger projects. The practical, hands-on learning approach enables each participant to immediately apply concepts learned to their individual business challenges. At the conclusion of the program, CEOs have the opportunity to present a business pitch to AT&T leaders. In 2018, a total of 10 diverse businesses were selected to participate.
We offer executive/senior leader scholarships to diverse suppliers as part of our commitment to provide educational support to diverse owned businesses. In 2018, 3 scholarships were awarded. AT&T also provides financial support through our supplier financing programs, allowing small diverse businesses to utilize and leverage the credit power ranking/rating of AT&T. Our suppliers benefit by freeing up additional cashflow at a very low interest rate that many are not eligible to receive at their financial institutions. In 2018, participants in our supplier financing option included 56 female suppliers, 45 of which were certified WBEs and 11 of which were minority females.
Supplier Sustainability and Diversity Awards
The AT&T Supplier Sustainability and Diversity Awards honor suppliers that make outstanding contributions to our sustainability and diversity efforts. Read about our Supplier Sustainability and Diversity Awards winners:
- 2017 Supplier Sustainability and Diversity Awards
- 2016 Supplier Sustainability and Diversity Awards
- 2015 Supplier Sustainability Awards
- External Recognition
In 2018, our supplier diversity program received 14 national and 6 regional awards, including:
- Women's Business Enterprise National Council (WBENC), 2018 Top Corporation Award for WBEs
- Women’s Business Council Southwest (WBC-SW), Corporate Champion Award
- United States Hispanic Chamber of Commerce (USHCC), USHCC Million Dollar Club
- U.S. Veteran's Magazine, 2018 Best of the Best List for Veterans Businesses
- Technology Industry Group (TIG), National Corporation of the Year
- Omnikal, Top 50 Organizations for Multicultural Business Opportunities
- National Minority Supplier Development Council (NMSDC), Corporation of the Year
- National Business Inclusion Consortium, 2018 Best-of-the-Best Corporation for Inclusion
- Greater Women's Business Council (GWBC), Top Corporation Award for WBEs
- DiversityPlus Magazine, 2018 Top Champions of Diversity
- DiversityInc, Top Companies in Supplier Diversity (Ranked #6)
- Dallas Fort Worth Minority Supplier Diversity Council (DFWMSDC), Buy Those That Buy Us
- Black EOE Journal, Top Supplier Diversity Program
- Black Engineer, 2018 Black Engineer of the Year Award Advocacy
- Asia Society, Asia Society Corporate Survey
- Negocios Now, 2018 Who's Who in Hispanic Chicago
- Women’s Enterprise USA Magazine, 2018 Top 100 Leaders in Supplier Diversity
- Best of the Best Corporations for Inclusion, National Business Inclusion Consortium (National)
- Latin Business Association, Woman in Diversity Award (Regional)
- SF Times, Top 20 Bay Area Companies for Supplier Diversity (Ranked #8)
- Industry Collaboration
We focus on fostering education and training initiatives with diverse firms, and we have reaffirmed our commitment to working with historically underutilized groups and initiatives such as LGBTQ+ firms, veteran businesses, disabled businesses, and Historically Black Colleges and Universities.
We also collaborate with others in the industry and across our supply chain to develop more efficient products and practices. Examples of our engagement include:
- TIA-QuEST Forum: Working with our industry group, TIA-QuEST Forum, we helped to lead the sustainability working group advancing the evolution and use of the TIA Sustainability Assessor and the sharing of best practices. We hosted monthly working group conference calls that included presentations by member companies sharing best practices. For more information, visit the QuEST Forum Sustainability Initiative and TIA Sustainability websites.
- Joint Audit Cooperation (JAC): AT&T is a member of JAC, an organization which facilitates collaboration among peer telecom companies.
- Sustainable Purchasing Leadership Council (SPLC): AT&T continued a second year in 2018 as an active member of SPLC. SPLC evaluates sustainable purchasing standards and tools in the market and publishes sustainable purchasing guidance for conducting RFx evaluations. These guidance documents are then being increasingly used to inform our RFx initiatives.
- CDP: Working with CDP’s supply chain program, we reach out to more than 450 of our suppliers — representing approximately 80% of our spend — to report on GHG emissions annually. Using industry-accepted methods, we gather and analyze data on these suppliers’ emissions, reduction goals and progress. As a result, we are able to report our 5th annual estimate of our supplier emissions in our 2018 sustainability report. See more information at the CDP Supply Chain website and in our Greenhouse Gas Emissions issue brief.
- WarnerMedia Ethical Sourcing
The WarnerMedia Board of Directors has ethical sourcing guidelines, which apply to vendors from whom we purchase directly and to whom we license our images, brands and characters. The Guidelines establish expectations for the vendors' business operations as they relate to WarnerMedia and its businesses and reflect our commitment to conduct business in an ethical manner and in compliance with applicable laws and regulations. WarnerMedia's Internal Audit department reviews contracts with vendors during its division and departmental audits to confirm whether the Guidelines have been incorporated.
The WarnerMedia Supplier Diversity Website & Database serves as the primary resource tool for employees and diverse suppliers.
We believe in the value of collaborating and sharing information to improve responsible sourcing efforts across the globe. WarnerMedia and its divisions are members of various industry working groups, including the International Licensing Industry Merchandisers' Association (LIMA) and the Toy Industry Association (TIA).
For more information, visit WarnerMedia’s Ethical Sourcing and Supply Chain website.
Since the acquisition of WarnerMedia in June 2018 and the launch of Xandr in September 2018, we are continuing to integrate operationally and through our CSR reporting. For this reason, information for these 2 affiliates is not included in this brief, except where specifically referenced.
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