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In 2009, HP completed its second round of reuse and recycling vendor audits under its expanded program guidelines. Our third-party auditing firm, Environmental Resources Management (ERM), assessed 17 reuse and 34 recycling vendors in 24 countries.

The guiding principles for HP’s Reuse and Recycling Vendor Audit Program (Program) continue to be engaging with vendors to drive substantive improvements across the vendor base measured against the HP reuse and recycling standards, and to report outcomes and challenges of the Program with transparency.

As such, in 2009 ERM continued to support HP’s expectations for a rigorous program that reaches beyond auditing to identify and realize meaningful opportunities to improve operations in the vendor network. This translated into actions in three key focus areas: ongoing audits, driving corrective actions, and knowledge transfer and capability building to address structural and systemic improvement opportunities in vendor-operated programs.

Ongoing audits Vendor audits remain the basis for action by providing a measure of performance across full-spectrum environmental, health, safety and operations support topics. Audits include a “downstream material-flow” audit to check that material entering an HP tier-one vendor can be traced through the downstream vendor chain to final disposition.

Corrective action plans emphasized To help make sure the audits are effective vehicles for change and improvement, HP emphasizes the equal importance of the post-audit corrective action process. As such, a formal program is in place to help 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.

Knowledge transfer and capability building initiated In 2009, we initiated a series of capability-building programs as a means of implementing systemic change in areas identified as high-priority improvement opportunities. Specifically, these focus on helping vendor networks improve their self-auditing on select topics and corrective action processes, and improving the rigor of programs that tier-one vendors have in place to manage their own downstream vendors. These programs will continue in 2010.

Challenges As reported last year, information from the first-tier is well understood, but ensuring that detailed information is forthcoming from second-tier and third-tier vendor audits persists as the dominant challenge. Together with HP, ERM will continue to address the challenge by working directly with tier-one vendors on active management of their immediate downstream vendors, as described above.

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