In 2010, HP completed its third round of reuse and recycling vendor audits under its expanded program guidelines. Our third-party auditing firm, Environmental Resources Management (ERM), assessed 12 reuse and 25 recycling vendors in 17 countries.

Program focus:

In 2010, ERM supported HP for the third year of implementing its expanded Reuse and Recycling Vendor Audit Program (Program). The year was characterized by the beginning of a transition for the Program to using vendors certified to R2 or e-Stewards recycling standards, and a continued uncompromising focus on its two central tenets:

  1. Drive substantive performance improvements across the vendor network measured against the HP recycling and reuse standards; and
  2. Report outcomes and challenges of the Program with transparency.

The following three components continue to be the dominant vehicles for implementing the Program and where ERM's resources are deployed:

  • Performance audits: Vendor audits against HP standards continue to form the basis for deciding overall program direction and individual initiatives undertaken with specific vendors or vendor networks. The audits measure performance across a comprehensive portfolio of environmental, health, safety (EHS), and operations support topics.
  • Corrective actions follow-up: Corrective action follow-up is carried out to ensure the timely receipt of corrective action plans, to review their adequacy, and to prompt or remind vendors about their implementation commitments well ahead of formal, follow-up audits. This emphasis has yielded a significant increase in the number of vendors who are successfully addressing findings, and notably of those who are eliminating major findings. Furthermore, some vendors who operate facilities in multiple locations applied corrective actions across their network of facilities, rather than solely at the vendor location where a finding originated.
  • Knowledge transfer and capability building: Training to address EHS and operations gaps in vendors' processes for managing and auditing their own downstream vendors has been undertaken on a targeted basis. In addition, in a few cases where corrective action and follow-up efforts had not produced desired improvements in EHS performance, ERM resources were deployed to supplement the broader coaching focus of HP.

Transition to using vendors certified to R2 or e-Stewards

As a result of HP's transition to using vendors certified to industry-recognized standards that are independently audited, ERM resources are being focused on Program implementation in countries where certified vendors are not yet available, and, per HP's operational focus, on helping to develop one or two best-in-country vendors that the company can rely on with confidence. Work with these vendors constitutes a mix of capacity building through interactive audits, corrective action planning and follow-up, and/or direct coaching.

Ongoing challenge: Downstream material chain of custody

Performance audits include a downstream material-flow or chain-of-custody audit to check that material entering an HP tier-one vendor can be traced through the downstream vendor chain to final disposition. For the third year, our audits reveal that information from the first tier is well understood, but that ensuring that detailed information is forthcoming from second-tier and third-tier vendor audits persists as the primary challenge. Therefore, notwithstanding the intended transition of the HP Program away from auditing vendors that are certified to R2 or e-Stewards, ERM will continue to be deployed to conduct chain-of-custody audits and follow-up on behalf of HP for the immediate future.

Debora Bonner
Partner, Supply Chain and Sustainable Business Solutions
Environmental Resources Management