Weak links? Not if we can help it.

supply_chain

They say a chain is only as strong as its weakest link. So we do everything we can to ensure there are no weak links in our supply chain. And if we identify one, we do our best to strengthen it.

As a major global company, we interact with thousands of suppliers every day. This gives us a great responsibility and we’re committed to ensuring that the highest standards of corporate responsibility are exercised.

Snapshot of our supply chain

  • As we operate our own global manufacturing network, most manufacturing is done in-house complying with our strict internal social and environmental requirements. The first tier of our supplier network starts after our own manufacturing network.
  • Our supply chain consists of around a hundred direct suppliers for hardware, components and parts, as well as hundreds of software suppliers. We also work with thousands of indirect suppliers who provide services and equipment needed for our daily operations.
  • Our global supply chain begins with raw material extraction and processing, and ends with the manufacturing of components and final product assembly and distribution.
  • There are typically four to eight supplier layers between mining activities and Nokia’s assembly factories.
  • Our supply chain is a network of companies in multiple tiers spread around the world. It delivers goods and services to our own production sites as well as to our offices worldwide.

The basic principles for business conduct that we expect from our suppliers

Our aim is to ensure that our suppliers provide a safe work environment, exercise good labor practices, use environmentally-responsible manufacturing processes, and reduce the environmental impact of their operations.

Nokia Supplier Code of Conduct establishes the basic principles for business conduct that we expect from our suppliers. It communicates in a clear and understandable way the fundamental principles of ethical and sustainable business practices set out in the general Nokia Supplier Requirements. All Nokia suppliers must comply with this code of conduct regardless of location or size.

The Nokia Supplier Requirements are based on international standards such as ISO 14001, SA 8000, OHSAS 18001, ILO and UN conventions, enforced through contractual agreements and verified by e.g. assessments.


Measuring the environmental and social performance through assessments

We use a range of assessment methods to first of all estimate suppliers’ compliance against our requirements but also to help them improve their performance level even further. Most assessments are conducted by trained Nokia assessors as we believe it’s important for us see the factories or facilities for ourselves, to understand the problems and work directly with suppliers to drive improvements. Occasionally, we work with third parties for specific expertise or investigations, or as part of joint industry assessments.

Supplier self-assessments

As part of the onboarding process, new suppliers are usually requested to conduct a self-assessment in regards to the Nokia Supplier Requirements. This provides us with an indication of the supplier’s own understanding of their compliance level before conducting an on-site assessment. In addition to these self-assessments, we use web-based risk assessment tools to get an indication of potential environmental, ethical, health and safety and labor risks in regards to the industry, countries and operations of the supplier.

On-site assessments of supplier sites

Our regular on-site assessments of supplier sites are one of the tools we use to monitor supplier compliance with the Nokia Supplier Requirements. The assessment provides us with a snapshot of a supplier's performance which we use as a basis for understanding the root causes of any non-compliance, and for driving corrective actions. We also conduct environmental and ethical in-depth assessments where we review a large amount of a supplier's policies, procedures and documents. We inspect the manufacturing facilities – including dormitories, health clinic and canteen, and interview senior management and facility workers.

Typical findings during the assessments can be found in our sustainability report >

Minimizing the environmental impact of our supply chain

Roughly 74 percent of the energy consumption and greenhouse gas emissions generated by an average Nokia product during its life occur in the supply chain, before the components reach our factories.

In order to reduce this impact and to produce environmentally sound products, a holistic approach to environmental management is of key importance. We have worked hard with our suppliers to establish environmental policies and to ensure monitoring, controlling and proper treatment of energy consumption, air emissions, waste, wastewater, hazardous substances, and chemicals generated from operations. This helps us ensure effective planning, operations, and control of environmental matters at the facilities where components and parts are made for us. Today, over 90 percent of our hardware and mechanics suppliers' sites are ISO 14001 certified, and majority of them have company-level reduction targets in place and monitored for energy, greenhouse gas emissions, water and waste. Our future goal is to drive impact reductions even further to enable a longer run positive impact.

Improving social conditions in our supply chain

Our aim is to ensure that all our suppliers demonstrate ethical labour practices, maintain high standards of health and safety, and treat their workforce with dignity and respect. Our suppliers must have in place policies, risk assessments, improvement programs, procedures and management reviews, to assure effective management of labor conditions and health and safety hazards.

98 percent of our direct hardware suppliers have code of conduct in place already and we're now focusing our efforts on ensuring that our suppliers are effectively implementing their codes and communicating about them with their workers.

It is important to us that our suppliers properly manage their labor practices and provide a safe workplace for their workers. In 2010, we introduced three new metrics related to health, safety and labor issues. These metrics measure occupational injuries and illnesses, employee attrition and overall employee satisfaction. We use them to help us get a deeper understanding of the social conditions at our suppliers' workplaces.

Read more about how we monitor social conditions in our supply chain in our Sustainability Report >

Nokia works with other electronics companies and non-governmental organizations in the IDH Sustainable Trade Initiative for improvements in working conditions and environmental performance of electronics factories in China.

Responsible sourcing of raw materials

We source components, materials and services from suppliers all over the world and we expect them to meet our own high standards of environmental and social responsibility. The Nokia Natural Resources Policy outlines our commitment to ensure that all materials used in our products come from socially and environmentally responsible sources.

Recognizing human rights responsibilities throughout the supply chain

According to our natural resources policy, we prohibit human rights abuses associated with the extraction, transport or trade of minerals, as well as any direct or indirect support to non-state armed groups or security forces that illegally control or tax mine sites, transport routes, trade points, or any upstream actors in the supply chain. Similarly, Nokia has a no tolerance policy with respect to corruption, money-laundering and bribery. We require the parties in our supply chain to agree to follow the same principles.

Nokia Natural Resources policy and conflict minerals

Mining of metals from the Democratic Republic of Congo

Nokia believes that any activities that fuel conflict, violate human rights or lead to serious environmental degradation are unacceptable. We want to ensure that all materials used in our products come from socially and environmentally responsible sources. The issue is currently especially acute with regards to so-called “conflict minerals” from the Democratic Republic of Congo.

Even though Nokia does not source or buy metals directly, we are very concerned about the potential link between mining and the conflict in the Democratic Republic of Congo. We are appalled by the reports from the conflict areas and strictly condemn all activities that fuel conflict or benefit militant groups. We require high ethical standards in our own operations and our supply chain and take continuous action to ensure that metals from the conflict areas do not enter our supply chain.

Nokia first became aware of the potential link between mining of coltan and financing of the conflict in the Democratic Republic of Congo (DRC) in 2001 and took action immediately to avoid tantalum derived from illegally mined coltan. In the following years we started working together with our suppliers on the topic. We required written assurances from tantalum capacitor suppliers that the tantalum (refined from coltan) does not originate from illegal mines in the DRC, started to map out the supply chains with our key suppliers, and eventually expanded these practices to cover other metals as well. However, for several years written assurances from 1st tier suppliers have not been enough for confirmation of conflict-free origin.

Nokia has actively worked independently and with suppliers, industry peers and other stakeholders to improve traceability and ensure responsible sourcing

Nokia’s conflict minerals due diligence activities include:

  • Active participation in EICC-GeSI Conflict-Free Sourcing Initiative
  • Incorporating requirements regarding conflict minerals policy and due diligence into Nokia Supplier Requirements and Nokia Substance List
  • Establishing long-term relationships with suppliers and working with them to drive improvements
  • Inquiry into our suppliers’ due diligence activities, and taking action accordingly
  • Identification of smelters in our supply chain with the EICC-GeSI reporting template
  • Contribution to and reliance on the Conflict Free Smelter program, once a sufficient amount of smelters have been validated
  • Publishing a Natural resources policy and its’ implementation regarding conflict minerals and communicating our policy to all our direct hardware suppliers. We require the parties in our supply chain to agree to follow the same principles.
  • Participating in the OECD pilot implementation phase of the OECD Due Diligence for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. The guidance outlines a five-step risk-based due diligence process as a basis for upstream and downstream companies to develop responsible supply chain management for tin, tantalum, or tungsten
  • Joining the Public-Private Alliance for Responsible Minerals Trade (PPA), a joint initiative between governments, companies, and civil society, to support supply chain solutions to conflict minerals challenges in the Democratic Republic of Congo (DRC) and the Great Lakes Region (GLR) of Central Africa. While we want to ensure that our products are free of conflict minerals, we wish to avoid an embargo on Central Africa and support legitimate trade
  • Joining the Solutions for Hope initiative to enable validated conflict-free tantalum from the Democratic Republic of the Congo (DRC) to be used in our products
  • Joining the Conflict Free Tin Initiative to enable validated conflict-free tin from the Democratic Republic of the Congo (DRC) to be used in our products

Reaching full traceability of minerals requires time and effort across the industries and collaboration from all actors in the supply chain. This is due to the complexity in the way metals are produced and sold, and to the fact that ores from many different sources can be combined. Once a mineral is smelted, any characteristics of the ore, or its origin, is gone and in the process the sources for metals used multiply quickly. That’s why industry wide cooperation is so important when ensuring ethical sourcing.

Looking at supply chain issues from an industry perspective

As well as working with our own suppliers, sharing our knowledge and experiences with other businesses and stakeholders in the Information and Communications Technology (ICT) sector can help us all improve our supply chain performance.

Global e-Sustainability Initiative (GeSI)

Nokia has been a full member of the Global e-Sustainability Initiative (GeSI) since 2007. The organization is working together with the Electronic Industry Citizenship Coalition (EICC) to promote good conduct and to develop and deploy a consistent set of tools and processes to measure, monitor and improve corporate responsibility (CR) performance across the ICT sector supply chain. These two industry associations have conducted extensive research into the key challenges surrounding the supply of metals, the ability to trace and track the sources of metal used in electronic products, and the industry’s ability to influence conditions.

Key achievements in this area include:

  • EICC and GeSI have initiated the Conflict Free Smelter assessment programme (CFS) to identify and validate smelters that process materials originated from conflict-free sources. Nokia has actively participated in the development of this programme and participated in some of the initial smelter visits.
  • EICC and GeSI have developed the Conflict Minerals Reporting Template tool to facilitate disclosure and communication of information regarding smelters that provide material to a company’s supply chain. Nokia has switched from our own template to this standardized tool in order to avoid our suppliers receiving a plethora of different reporting templates.

Organisation for Economic Cooperation and Development (OECD)

Nokia is participating in the pilot implementation of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. The guidance outlines a five-step risk-based due diligence process as a basis for upstream and downstream companies to develop responsible supply chain management for tin, tantalum, or tungsten.

OECD has launched the 12-month multi-stakeholder pilot to understand how companies are implementing the guidance, to assess challenges they may face, and to identify best practices. Nokia has volunteered to take part and we encourage our suppliers to participate as well.

Tin mining in Indonesia

Indonesia is a significant producer of tin used in the world. We are aware of concerns raised surrounding the environmental degradation on Bangka and Belitung islands in Indonesia, as well as the working conditions of miners there. We take these concerns very seriously and are working with our industry peers and relevant stakeholders to establish what part we can play in addressing them. We participate in the recently established EICC-IDH Tin Working Group, which brings together a range of stakeholders seeking to address the concerns about the impact of tin production in Indonesia.