Nokia sources components, materials, software and services for our products from hundreds of different suppliers around the world.

Most of these suppliers are component manufacturers, providing electronic components, displays, batteries and other parts that go into Nokia products. In addition, a portion of our mobile phone manufacturing is outsourced to contract manufacturers and we outsource the design and manufacture of a small number of products to original design manufacturers.

Supply chain issues are rising up the agenda for our stakeholders. In particular, network operators (our biggest customers) increasingly want to know how we manage our suppliers as part of their own supply chain. Several non-governmental organizations are also taking an interest in supply chain issues in the ICT sector.

See stakeholder engagement for more information.

In an increasingly competitive market, it is vital to have a competent and stable workforce in our supply chain with low attrition rates. This makes corporate responsibility an even more integral aspect of effective supply chain management.

To meet the expectations set by our company and stakeholders, all our suppliers must comply with the Nokia Supplier Requirements. These include clear guidelines on ethical, social, and environmental issues as well as quality, security and product development standards. Environmental targets and commitments we set for Nokia often have a direct impact on our suppliers. We assess compliance with the Nokia Supplier Requirements through regular supplier assessments.

Nokia deals directly with a relatively small number of suppliers. These "Tier One" suppliers also have their own supply chains. We work with our Tier One suppliers through our assessment processes and through joint industry initiatives to help build their capability to manage their own supply chains.

2007 highlights

• Rolled out the updated Nokia Supplier Requirements across the business
• Carried out 80 system assessments and 10 in-depth assessments of suppliers
• Initiated work with suppliers in four key commodity areas to set environmental targets beyond our current requirements
• Contacted all direct suppliers to raise awareness of EU REACH environmental legislation
• Nokia became a full member of the Global e-Sustainability Initiative (GeSI)
• Continued participation in the GeSI Supply Chain Working Group
• Through GeSI, actively participated in a multi-stakeholder project to improve labor, health and safety, and environmental conditions in the ICT supply chain in China.