We believe that responsible sourcing is key to sustainable supply management

Supporting Congolese communities through conflict-free sourcing of mining produce

Although the Democratic Republic of the Congo (DRC) has a rich supply of minerals, its economy has collapsed due to decades of conflict. In an effort to prevent the purchase of minerals being used to finance war, many companies worldwide have stopped sourcing minerals from the DRC. Unfortunately, this has created a de facto embargo in a region where mining is often the principal source of income for local communities.

 

To overcome this issue and promote cooperation and economic growth in the region outside the control of the rebels, the Conflict-Free Tin Initiative was launched in 2012 in collaboration with the Dutch Government and other industry partners. This initiative introduced a tightly controlled end-to-end conflict-free supply chain from a tin mine in South Kivu, in the east of the DRC, all the way down to an end-product. The initiative has since been expanded to other mines in the DRC. In 2014 we decided to include this tin in the regular supply of solder, meaning it is now contained in many different Philips products sold globally.

Supporting sustainable tin mining practices in Indonesia

Indonesia produces roughly one-third of the world’s tin supply, with the vast majority coming from the islands of Bangka and Belitung. Philips was alerted by reports about environmental and social issues associated with this tin production. It was reported that the intensity of tin mining, the illegal small-scale miners and the irresponsible way the mining is carried out are causing environmental devastation and creating serious safety risks for the miners.


Philips does not directly source tin from Indonesia, and there are typically seven or more tiers in the supply chain between a mine and a Philips supplier. Nevertheless, in 2013 we decided to investigate how we can support the move towards more sustainable mining practices in Indonesia. We teamed up with other front-runner companies, the tin industry and civil society in the Indonesian Tin Working Group (TWG) coordinated by the Dutch Sustainable Trade Initiative. The Group’s goal is to contribute positively to addressing the sustainability challenges of tin mining and smelting in Bangka and Belitung while recognizing the economic benefits these activities offer in terms of development and poverty reduction.

 

By working together with local stakeholders, we aim to support the efforts of the Indonesian government, businesses and civil society to better formalize Indonesian tin production, make it economically beneficial for local communities, and reduce negative social and environmental impacts.

Managing and reducing CO2 emissions in our supply chain

In light of growing global concerns about the impact of climate change, there is a pressing need for industry and business to manage and reduce CO2 emissions across the entire value chain – including at supplier level. To this end, we have invited many of our largest suppliers – first-tier manufacturing and transportation-related suppliers – to report their carbon footprint as part of the Carbon Disclosure Project (CDP) Supply Chain program.

 

To fully understand and address the climate change impact of our supply chain, we have undertaken the following initiatives:

 

  • We have engaged with environmental data experts Trucost to quantify the carbon emissions in our supply chain.
  • We use the CDP (formerly Carbon Disclosure Project) to gain insights into our suppliers’ climate strategy and carbon footprint so that we can work together with them in reducing emissions in the supply chain.
  • We have become a founding member of the CDP Action Exchange program, connecting our suppliers to globally recognized solutions providers in the field of energy-efficient technology, helping them in their search for innovative solutions to reduce their future emissions.

Sustainability initiatives with our first tier suppliers

Supplier selection

  • Based on spend and estimated emissions
  • Manufacturing and transportation suppliers

CDP Supply Chain program

  • Climate change strategy and emissions reporting
  • Locate carbon hotspots

CDP Action Exchange program

  • Identify collaboration opportunities
  • Identify savings potential

Reducing the use of hazardous chemicals and preventing worker exposure

In 2014 we started an initiative aimed at eliminating the use of hazardous process chemicals in our supply chain, or – if no alternatives are available – minimizing the health risks for workers handling these chemicals. This initiative covers all Bill of Materials suppliers, regardless of their location. The new EICC taskforce on process chemicals in the supply chain initiated by Philips will initially focus on high-risk production processes, including component manufacturing, sub-assembly and finished goods assembly.


Its objectives are to:

  • ensure a safe working environment in supplier factories
  • develop and define one common industry approach to eliminate hazardous process chemicals
  • define and maintain one list of ‘process chemicals of concern’ that can be used across different industries, including a plan for substitution or elimination
  • maintain an active multi-stakeholder dialogue with NGOs and authorities, and share best practices and results.