Customer requirements for corporate responsibility

We have extensive management systems in place to meet our customers' expectations in relation to quality, environmental, health and safety, and wider corporate responsibility issues. These systems are particularly robust in the case of quality (see 2005 quality results, including customer complaints, cycle time to process failure analysis, and customer returns) and environment, which includes the management and control of the material content of our products, and banned substances in accordance with and beyond the legislation in force (see the Product responsibility section). More recently, we have been focusing on strengthening our management systems across the company for responding to customer requirements and requests regarding corporate responsibility in general, including social and ethical aspects.

In 2005, we saw a significant increase in the number of requirements relating to wider corporate responsibility, including codes of conduct to be signed or accepted, self-assessment questionnaires, and quality audits that also covered some CR aspects. In particular, our customers are concerned about the management of social, ethical, and environmental risks in their supply chain and they increasingly expect us to monitor our suppliers' performance through self-assessment and audit.

In some cases we have found the demands of our customers to be excessive, notably regarding the responsibility they would like to attribute to us for controlling the CR performance of our suppliers, including ensuring them (our customers) access to our suppliers' facilities in order to check performance. As shown in our letter to customers demonstrating support for the Electronics Industry Code of Conduct, we are able to promote CR standards among our suppliers and support them in improving within our sphere of influence, but since we have many thousands of suppliers we cannot rely on extensive direct monitoring to achieve this.

STSC9: Customer CR requirements
	2005
Number of customer requirements for CR (including environment) received at company level*	165

In 2005, we became increasingly aware of the need to communicate internally to our sales regions so that they understand the importance of tracking CR requirements and providing visibility on these at corporate level. Some improvements were made in this direction in 2005, and in 2006 we will seek a more formalized solution.