Create commitment: what we expect from suppliers
As a baseline for building a sustainable business relationship with our supplier, we require all our suppliers to conform to the Philips Supplier Sustainability Declaration and Regulated Substances List. This requirement forms an integral part of any commercial agreement between Philips and the supplier.
The Supplier Sustainability Declaration is based on the Electronics Industry Citizenship Coalition (EICC) code of conduct, supplemented with stricter requirements on collective bargaining and freedom of association, in line with the Philips General Business Principles. The Supplier Sustainability Declaration includes standards in the areas of Labor and Human Rights, Health and Safety, Environmental Impact, Ethics and Management Systems. The chapter on Labor and Human Rights specifies everything from the prohibition of child labor, forced labor and bonded labor to maximum working hours per week and safe working conditions. The prohibition of child labor and the use of forced and bonded labor includes forms of labor using indentured labor, involuntary prison labor, slavery or trafficking of persons.
Suppliers must also comply with our regulated substances list, which contains, among other things, Philips’ global product content requirements. This includes restricting or prohibiting hazardous substances in products or manufacturing processes. For more information on regulated substances, click here.
Build understanding: training & capacity building
Supplier awareness and engagement are critical for building a sustainable industry. Our training sessions, supplier day events and briefings aim to build knowledge and commitment among our suppliers. We encourage our suppliers to analyze gaps and areas for improvement by completing the EICC Self Assessment Questionnaire for each site that manufactures products for Philips.
Monitor identified risk suppliers
Philips conducts onsite sustainability audits with identified risk suppliers. The goal of the audit is to verify that a supplier works in accordance with the provisions in the Philips Supplier Sustainability Declaration, and if needed identify areas and ways for improvement. The audits are conducted by an external audit firm, carried out using the Philips Supplier Sustainability Audit Tool and cover the entire site, not just the production lines set up exclusively for Philips products.
Philips has direct relations with approximately 10,000 product and component suppliers and 30,000 service providers. Given the size and complexity of our supply chain we need to focus our efforts and develop an approach based on the supplier’s sustainability risk profile, related to spending, country of production, business risk and type of supplier relationship. All risk suppliers are by definition part of our audit program.