NVIDIA’s efforts to reduce our environmental impact involve paying close attention to our supply chain. We work with the subcontractors who manufacture our products to improve their social and environmental performance and require them to comply with international guidelines for responsible practices and material safety.
NVIDIA is fabless, which means it relies on subcontractors to do its manufacturing, assembly and testing. Our products are developed in two distinct operational areas: Silicon Chip Operations, which works with a few key suppliers in the design and manufacture of NVIDIA’s GPUs, and Board Operations, which collaborates with several hundred various-sized global suppliers in the design and manufacture of the printed circuit boards (PCBs) that house electronic components in computers and other devices. Both organizations have implemented responsible supply chain practices through NVIDIA’s membership in the Electronics Industry Citizenship Coalition (EICC).
NVIDIA joined the Electronics Industry Citizenship Coalition (EICC) in 2007. Our membership has allowed us to raise awareness among our critical manufacturing suppliers and to improve factory conditions and operations in the areas of ethics, labor, environment, health and safety, and management systems. NVIDIA holds a seat on the EICC Board of Directors and participates in several work groups: Conflict Free Sourcing, Excessive Working Hours, Environmental Sustainability, Validated Audit Process and Transparency/Reporting.
Our Corporate Responsibility Directive and the EICC Code of Conduct guide us as we find solutions to challenges and opportunities in our global supply chain. Through our participation in collaborative industry initiatives such as the EICC, we believe that we can have a greater positive impact on the sustainability of our organization and its suppliers.
NVIDIA’s Commitment as a Supplier
Our customers include some of the largest electronics and consumer brand companies in the world. Consequently, we must conform to the standards outlined in the EICC Code of Conduct covering labor, environment, health and safety, ethics and management systems throughout our worldwide operations. Our progress related to implementing the code is found in this report as follows:
In 2013, NVIDIA will perform a self-assessment to ensure that the policies and systems we have established for implementing the EICC Code of Conduct are effective, and that we can achieve continual improvement in our performance in all these areas.
A full list of standards and initiatives to which our Silicon Chip Operations and Board Operations participate in or comply with can be found on the Environmental Key Metrics page. To learn more about efforts to remove hazardous chemicals and conflict minerals from our supply chain, visit the Compliance section.
Our ongoing organizational initiatives cover conflict minerals, management systems, excessive working hours and environmental responsibility.
NVIDIA recently adopted a conflict minerals statement that guides our actions in resource acquisition. (As defined by the Dodd-Frank Act, Section 1502, conflict minerals include tantalum, tin, tungsten and gold from the Democratic Republic of Congo, or adjoining countries.)
Additionally, the EICC and GeSI (Global e-Sustainability Initiative) is implementing a Conflict Free Smelter Program to help EICC members confirm the sources of the minerals used in their products to ensure they are using conflict-free minerals. NVIDIA has already taken action to request that all our direct suppliers report the name and location of smelters to confirm that they are not sourcing minerals from conflict regions in the Democratic Republic of Congo and adjoining countries. The identified smelters are being added to the EICC list of smelters to be audited.
In June 2013, NVIDIA was accepted as a member in the Public Private Alliance for Responsible Minerals Trade. Through this partnership, we will support supply chain solutions to conflict minerals challenges in the Democratic Republic of Congo (DRC) and the Great Lakes Region (GLR) of Central Africa.
NVIDIA tracks adherence to EICC standards in two ways:
Validated Audit Process (VAP): The VAP describes an EICC audit which examines management systems which includes sustainable solutions for labor, ethics, health, safety, and environmental conditions in the electronics industry supply chain. In NVIDIA’s Silicon Chip Operations, 90 percent of key suppliers undertook VAPs in 2010. In 2013, NVIDIA will request all Tier 1 Silicon Chip Operations suppliers to have new VAPs, except suppliers that have undergone a VAP within the last two years. To foster collaboration and reduce cost and duplication, suppliers that perform VAPs for one EICC member customer can authorize their other customers to have access to and review their VAP reports. Audit results do not disclose customer-specific information.
Issues uncovered during audits are identified as major or minor, and NVIDIA works with each supplier—either directly or through the EICC-managed corrective action process—to ensure they correct major issues as soon as possible. Additionally, NVIDIA engages with each supplier to discuss the audit findings, their progress in implementing corrective actions, and their overall efforts to advance their SER programs and performance. All new suppliers are reviewed under NVIDIA’s extensive Supplier Qualification process, which includes an evaluation to determine if and when a VAP will be required.
- Quarterly Business Reviews: We meet with our key suppliers for quarterly business reviews. These reviews give us an opportunity to measure their adherence to the EICC Code of Conduct. The reviews include feedback regarding each supplier’s performance during the previous quarter and priorities for the following quarter in the areas of technology, quality, responsiveness, delivery, cost and SER (social and environmental responsibility). Suppliers are evaluated on a scale of 100 QBR (quarterly business review) points, which includes a customary allocation of 5 QBR points to the supplier’s SER performance.
Excessive Working Hours
Suppliers are audited for labor issues during the VAP. We use our participation in the EICC Working Hours work group to help us understand the extent to which excessive working hours are an issue in our supply chain, and we work with other EICC members to determine what actions may be needed to improve performance in this area.
All Tier 1 suppliers in both product groups must be ISO14001 certified. Supplier environmental performance is evaluated as part of the VAP process; and environmental footprint data, including carbon emissions and water consumption, are collected as part of an annual survey of our suppliers through the EICC. Waste tracking capabilities will be added to the system in 2013.
We are continuing these efforts to determine which natural resources our suppliers are using and what environmental impacts are created in the materials sourcing, manufacturing, delivery and use of our products. We expect to continue over the next several years engaging with suppliers and customers to achieve a more accurate understanding of our overall impact and actions that can be taken to reduce it.