Apple’s supplier report is good as far as it goes, but the company still does not report on other aspects of non-financial performance

Apple’s culture of secrecy has no doubt helped it to become the world’s most profitable company. Internally, it keeps employees on their toes, focused and competitive. Externally, consumers will camp out for days in anticipation of the release of a new product.

A former manager at one of Apple’s suppliers, Foxconn, tells the New York Times: “Apple never cared about anything other than increasing product quality and decreasing production cost.” There have been petitions calling for next generation iPhones to be manufactured more responsibly, with the two most popular petitions having more than 250,000 signatures in total. The release of Adam Lashinsky’s book Inside Apple is adding pressure by revealing what it’s like to work at Apple – it is not always complimentary.

Apple has just released its sixth report on supplier responsibility. This year it has supplemented the report with a list naming 156 of its suppliers. Together these companies account for more than 97% of what Apple pays to suppliers to manufacture its products.

But where’s the rest of Apple’s corporate responsibility report? There is a section on its website dedicated to the environmental impact of its products (which has been criticised by Greenpeace, which says Apple lags behind others in the sector including HP and Nokia). But there is nothing on any of the other standard areas companies report on, and there is no sign of a vision, a strategy or any goals related to sustainability or responsibility.

Despite these gaps, the supplier responsibility report should be credited for its approach. It presents a complex subject in a way that is easy to understand. Supply chain sections in reports are often complicated, issue-laden and difficult to cram in to a few pages, so dedicating a whole report to it works well.

Apple-centric narrative

The report is grounded in a comprehensive audit process that measures suppliers against a code of conduct. This method is thorough and provides simplicity. But unfortunately it results in a report that often feels formulaic and isn’t a particularly engaging read. The narrative consistently comes from Apple HQ, whereas including the voices of people on the ground could make it more appealing.

Some of the numbers revealed in the audit process are startlingly bad, showing that careful reporting cannot mask poor performance. Just 38% of suppliers comply with Apple’s policy on working hours and 68% are compliant with the hazardous substance management. This is particularly worrying given that most audits are planned, so the supplier is able to prepare for the visit. Apple highlights that it has introduced unannounced auditing, but this only poses the question of why more auditing isn’t done this way.

The performance metrics are also limited by the audit-driven approach because they are all related to Apple’s actions rather than impacts or outcomes. This is most absurd in the health and safety section, where Apple reports on the percentage of suppliers that are complying with injury prevention standards but not the actual number of injuries recorded.

Sustainability commentators have welcomed the public list of Apple’s suppliers. Unfortunately the list does not indicate the significance of each company or how it is performing. It does, however, show us that some of Apple’s suppliers are huge companies supplying other electronic firms. Foxconn, which assembles an estimated 40% of the world’s consumer electronics, is also a supplier to Dell, HP, Nintendo, Nokia and Samsung. Its factories have a particularly grim history of suicides. Eighteen workers attempted suicide in 2010 and a further 150 threatened to take their lives in a dramatic protest recently.

Apple should show some ambition to build partnerships with peers in this area, especially when they acknowledge that the problem of excessive working hours is “not unique to Apple”.

It is not perfect, but the supplier responsibility report is much better than most organisations’ reporting on their supply chains. And many could learn from Apple’s web content on the environment, which is more user-friendly than most reports from consumer product manufacturers.

The trouble is that Apple’s “corporate responsibility” reporting lacks any sense of responsibility. The environment web section provides information but Apple does not set itself targets for improvement. Similarly, the supplier report takes the focus away from the company by putting the suppliers in the spotlight and by not setting any goals. In both cases the company appears to put the onus largely on consumers and suppliers rather than taking action itself.

Who knows what is going on behind closed doors, but publicly Apple is playing the role of the honest broker, and it would be nice to see the world’s most valuable company properly put a stake in the ground.

Emily Haynes is a consultant at sustainability strategy and communications consultancy Context.

Snapshot

Follows GRI?                        No

Assured?                                 No

Materiality analysis?               No

Goals?                                     No

Targets?                                   No

Stakeholder input?                  No

Seeks feedback?                     No

Key strengths?                        Simplifies the reporting of a complex issue.

Chief weakness?                     Lack of goals and targets and poor performance indicators.

Pleasant surprise?                    A list of Apple’s suppliers.