Weak links? Not if we can help it.
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, our supply chain is long and complex. This gives us a great responsibility and we’re committed to ensuring that the highest standards of corporate responsibility are exercised.Nokia’s Supplier Code of Conduct outlines our approach and our commitment to ethical and sustainable business practices. It describes our commitment to respect and promote human rights, promote environmentally sustainable business activities, and exercise a zero-tolerance policy towards bribery and corruption. We expect all our suppliers to commit to the principles contained in the Supplier Code of Conduct as well as apply the same standards throughout their own supply chains.
We work hard to anticipate risk, uphold company values, enhance our governance practices, increase employee wellbeing and do right by the communities where we do business.
Nokia principles for sustainable sourcing
Integrating sustainable practices into our business
Our aim is to ensure that sustainable practices are not separate add-on features but embedded within all our sourcing practices – including supplier selection and relationship development. We expect our supplier network to do the same.
We believe that open communication, good relationships and transparency are key to success. We work closely with suppliers, customers, industry peers, non-governmental organisations and other stakeholders.
We continually strive to improve our ways of working and develop our requirements, tools, methods and processes over time to enhance sustainability.
Snapshot of our supply chain
Our supply chain consists of around a hundred direct suppliers for hardware, components and parts, and ---- hundreds of software suppliers. We also work with thousands of indirect suppliers providing services and equipment needed for our operations.
Our global supply chain begins with raw material extraction and processing, ending in the manufacturing of components and final product assembly.
There are typically four to eight supplier layers between Nokia and any mining activities. Our supply chain is spread around the world as it needs to deliver to our own production sites as well as to our offices worldwide.
As we operate our own global manufacturing network, most manufacturing is done in-house complying with our strict social and environmental requirements. This also means that our first tier supplier line starts only after production.
Sustainable 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.
To help ensure that our suppliers meet our standards, we have developed a comprehensive set of global Nokia Supplier Requirements (NSR), which include specified environmental and social requirements. Where applicable, our suppliers are required to comply with the NSRs, in addition to complying with Nokia’s Supplier Code of Conduct.
Substance management and the Nokia Substance List
Along with our suppliers' operations we also need to consider the materials they provide. Nokia is an industry leader in substance management and we make it our business to know all the materials in our products - not just those that raise concerns. All materials must be responsibly sourced using ethical labour practices, and be safe for people and the environment when used in the proper way.
Our sourcing organisation and suppliers play a key role in ensuring our components and parts are safe and compliant with the Nokia Substance List (NSL). You can find out more in the substance management area of the site.
Nokia Natural Resources Policy
The Nokia Natural Resources Policy outlines our commitment to ensure that all materials used in our products come from socially and environmentally responsible sources.
Implementation of the policy regarding fiber based printing and packaging
For fiber based printing and packaging materials our aim is to use 100% certified renewable or recycled materials by 2015. We accept certifications by Forest Stewardship Council (FSC) and / or The Programme for the Endorsement of Forest Certification (PEFC) with priority on the former. We also target to use at least 70% of recycled fibers on average across all packaging.
Implementation of the Policy regarding Conflict Minerals
We prohibit human rights abuses associated with the extraction, transport or trade of minerals. We also prohibit 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.
Supplier requirements and assessments
To be a Nokia supplier, companies must not only commit to the principles contained in the Nokia’s Supplier Code of Conduct. . In certain circumstances they must also accept our comperhensive set of more detailed Nokia Supplier Requirements and must agree to undergo a number of assessments designed to measure their environmental and social performance and set targets accordingly.
Our comprehensive set of Nokia Supplier Requirements provides clear guidance on what we expect from our suppliers. These requirements include environmental and social expectations, which are based on international standards such as ISO 14001, SA 8000, OHSAS18001, PCMM and ILO, and UN conventions.
Our aim with these requirements is to ensure that our suppliers provide safe working conditions, use environmentally friendly manufacturing processes and contribute to reducing the environmental impact of our own operations. We recognise that there are other standards and management systems in use and accept those which are equivalent to or exceed our own requirements.
We use a range of assessments to understand a supplier’s performance level and compliance to our requirements. Most are conducted by trained Nokia assessors, as we believe it’s important for them to see the factories or facilities for themselves, to understand the problems and to 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.
Types of Nokia assessment
Supplier self-assessments are used as part of a new supplier phase-in and as a complementary tool to our on-site supplier assessments. All new Nokia suppliers must conduct a self-assessment. Our primary tool for self-assessments is E-TASC.
On-site system assessment
The aim with our regular system assessments is to monitor compliance with the Nokia Supplier Requirements (NSR). All new suppliers must undergo a system assessment, as must suppliers who have undergone significant organisational changes and those considered to be at highest risk of non-compliance or with strong need of developments. Our key suppliers are generally assessed every two years.
On-site in-depth assessment
In-depth assessments are conducted to get even greater insight into how a supplier is managing and performing against our requirements for ethics, environment, labour, and health and safety. Suppliers undergo in-depth assessments for a variety of reasons, including identified risk or strategic importance.
Environmental performance data
In addition to driving performance improvements through our requirements and assessments, we are also working to drive improvements through environmental performance metrics and target setting. This provides a more continuous understanding of how suppliers are performing in this area and enables us to quantify the life cycle impacts and improvements.
If you consider the life cycle of a Nokia product, it is possible to identify environmental impacts associated with each stage from raw material extraction through to end-of-life disposal. In sourcing, our aim is to reduce the environmental impact of the supply chain part of the life cycle.
At the end of 2007 we started to work with our suppliers of components and contract manufacturers to increase visibility of environmental performance and target setting. Our initial focus is on four key environmental areas:
- energy consumption at supplier sites and improvement targets
- greenhouse gas emissions from supplier sites and improvement targets
- water consumption at supplier sites and improvement targets
- waste generation at supplier sites and improvement targets
Based on life cycle assessments and collaboration with suppliers, Nokia has been able to identify component types and processes that are more energy intensive than others. Suppliers of these components or processes are required to measure and monitor their energy consumption and greenhouse emissions. Nokia follows up on consumption figures and whether reduction targets have been set and met. In 2011, 66% of our hardware suppliers that account for the highest environmental impact or are strategically important to us, had company-level reduction targets for energy, greenhouse gas emissions, water and waste in place and monitored. We also encourage all of the rest of our direct suppliers to monitor and measure their energy and greenhouse gas emissions, and many are already voluntarily reporting to us.
Capacity building: helping suppliers do better
Our approach to working with suppliers is not just focused on assessments. We believe that remaining engaged with suppliers and providing support is equally important.
Some suppliers are more advanced than others in managing their operations sustainably, so our approach needs to meet different needs and build capacity over time. We therefore combine different approaches including face-to-face meetings, development programs, sharing examples of best practice training, performance metrics and targets and supplier-focused events. We also actively participate in the Global e-Sustainability Initiative (GeSI) working group, Learning & Capacity Building.
Driving improvements beyond requirements
In 2010 we introduced four new metrics related to health, safety and labour issues. With these metrics we want to get a deeper understanding of the labour conditions of our suppliers. The metrics concern occupational injuries, employee attrition, absence rate due to sick leave and overall employee satisfaction. During 2011, we began a more comprehensive implementation of the metrics.
Credit where credit’s due
Publicity and media attention tends to focus on the challenges of the supply chain. However, during the past few years we’ve seen a number of suppliers make significant progress in their environmental or social performance – and we think their achievements should be celebrated. That’s why we introduced our first supplier sustainability award in 2010.
After all, our role is not just to support those suppliers in need of improvement, it’s also to encourage those who have worked hard to meet our requirements.
As well as working with our own suppliers, it is important that we look at supply chain issues from an industry perspective. 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)
As many of the supply chain challenges we face are similar across the electronic industry, Nokia has been a full member of the Global e-Sustainability Initiative (GeSI) since 2007.
We are active in many of the GeSI working groups and have been a member of the GeSI Supply Chain Working Group (SCWG) since 2004.This Group works closely with the Electronics Industry Citizenship Coalition (EICC) and aims 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.
Find out more about GeSI
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.
Human rights and the supply chain
Nokia recognises that we have human rights responsibilities throughout 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.
For this reason we’ve conducted a human rights impact assessment to evaluate any potential human rights issues that may be associated with our activities, operations and relationships. As a result we have published the Nokia Human Rights Approach.
Mining of metals 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 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 ban tantalum derived from illegally mined coltan. Since then, together with the electronics industry we have been actively participating in the work to ensure full traceability of metals back to their original sources.
We take continuous action to ensure that metals from conflict areas do not enter our supply chain
We require our suppliers to confirm that our ban of conflict metals is respected and our requirements fulfilled. Specifically, we have taken the following actions:
Since 2001 we’ve required written assurance from all of our tantalum capacitor suppliers that the tantalum (from coltan) does not originate from the illegal mines in DRC, and we have also expanded this practice to certain other suppliers regarding tungsten (from wolframite) and tin solder suppliers (from cassiterite).
Our key suppliers are required to map their supply chains for the metals in their components back down to smelter and then to source where possible.
As of June 2011, we have included requirements regarding conflict minerals policy and due diligence into Nokia Supplier Requirements.
In June 2011 Nokia signed up to participate 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.
In November 2011, Nokia joined 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.
- In December 2011, we published a Natural resources policy and its’ implementation regarding conflict minerals to complement our strict supplier requirements and other guidelines. We require the parties in our supply chain to agree to follow the same principles. In the policy we publicly state that we prohibit human rights abuses associated with the extraction, transport or trade of minerals. We also prohibit 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. And finally, we have no tolerance with respect to corruption, money-laundering and bribery.
In Feb 2012 Nokia joined the Solutions for Hope initiative to enable validated conflict-free tantalum from the Democratic Republic of the Congo (DRC) to be used in its products.
We are actively working on other industry initiatives to improve traceability of minerals
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.
We are a member of the Global e-Sustainability Initiative, which is working together with the Electronic Industry Citizenship Coalition (EICC) to drive improvements in this area. 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.
Recent progress in this area includes:
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. More information including the current status of the Conflict Free Smelter validation programme can be found here: http://www.conflictfreesmelter.org/
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 is planning on taking this standardised tool into use in order to avoid our suppliers receiving a plethora of different reporting templates. More information can be found here: http://www.conflictfreesmelter.org/ConflictMineralsReportingTemplateDashboard.htm
EICC and GeSI are also supporting Internation Tin Research Institute’s (ITRI) Tin Supply Chain Initiative (iTSCi). This sourcing scheme is designed to be a constructive approach towards improved due diligence and traceability of tin minerals from the region. The aim with providing verifiable provenance information from individual mine sites in eastern DRC is to establish which sources are conflict mineral free and which are not.