Apple SR 2018 Progress Report

Supplier
Responsibility
2018 Progress Report
People 5
Planet 26
Progress 39
A commitment to people
and the planet.
Treating people with dignity and respect, providing advancement
opportunities, and conserving our planet’s resources are fundamental
to how an Apple product is made. That’s why we develop programs
throughout our supply chain that drive progress with suppliers, while
benefiting the people in our supply chain — and the planet.
We partner with our suppliers to offer global programs that provide

education and advancement opportunities to their employees. To date,
these partnerships have helped millions of people take advantage of
opportunities outside of the workplace. At the core of every employee’s
livelihood is a safe and healthy workplace where their rights are respected
each day. We’re committed to implementing responsible practices in our
supply chain to make a positive impact on employee well-being.
An environmentally responsible supply chain is a major part of Apple’s

mission to leave the world better than we found it. Along with our suppliers,
we continue to fight climate change, reduce water use, implement green
chemicals in manufacturing operations, and eliminate waste.
Apple’s Supplier Code of Conduct underscores a commitment to human

rights, environmental protections, and sound business practices. Every
year, we conduct assessments to ensure suppliers are meeting our high
standards. The number we conduct increases each year and the amount
of high-performing suppliers continues to grow. It’s all possible thanks to
strong partnerships between our suppliers and Apple.
A commitment to people, the planet, and the progress of our suppliers is

at the heart of our work. We will always seek to extend our efforts to make
positive impacts and drive lasting change.
Apple Supplier Responsibility 2018 Progress Report 2

We’re always looking for ways to advance
the lives of the People in our supply chain.
With our suppliers in 2017, we:
• T
rained more than 3 million supplier employees on their rights,
including local labor laws, and Apple’s Supplier Code of Conduct.
• L
aunched health programming that empowers female employees
to improve their health awareness with a goal of training 1 million
women by 2020.
• W
ere named the world’s top company for responsible sourcing of
conflict minerals by the Enough Project.
• R
eturned US$1.9M in excessive recruitment fees to 1558 people
affected by bonded labor, bringing the total to US$30M repaid
to over 35,000 employees since 2008.
We believe the best products are made

with respect for the Planet. With our
suppliers in 2017, we:
• W
ere awarded the number one spot in the Corporate Information
Transparency Index by the Institute of Public and Environmental Affairs.
• E
xpanded Zero Waste to Landfill efforts to India and attained 100
percent UL requirements for all iPhone final assembly facilities.
eplaced all GreenScreenⓇ Benchmark 1 and 2 cleaners with green
• R
alternatives in all final assembly facilities.
• A
cheived a 37 percent average wastewater reuse rate and freshwater
savings of 5.1 billion gallons.
We partner with new suppliers to help

them meet our strict standards, and
with existing suppliers to maintain their
Progress toward providing a safe and
healthy workplace. In 2017, we:
• C
onducted 756 assessments in 30 countries, covering 95 percent of
our total spend. In addition, 26 percent were first-time assessments.
• Increased the number of high-performing suppliers by 35
percent, while low-performers decreased by 71 percent.

2017 Results Highlights
People
3 M+
supplier employees trained
US$
1.9 M 12 K+
in recruitment fees returned enrolled in higher education
4 K+
participants received
on their rights worldwide to supplier employees in 2017 degree since 2008 preventative and women’s
health training
Planet
625K
metric tons of waste
100 %
of all iPhone final assembly
320K
annualized metric tons of
5.1B
gallons of water conserved
diverted from landfill since facilities worldwide carbon emissions reduced in 2017, enough to fill 7,722
2015 — that’s enough to diverted 100 percent of in 2017, enough to remove Olympic-size swimming pools
cover 2,545 soccer fields waste from landfills every private car off the road
about 1 meter deep in Hong Kong for 62 days
Progress
756
supplier facility assessments
30
countries in which
35%
increase in high-performing
conducted in 2017 assessments took place suppliers year over year

People
Carpenter, Apple Retail fixtures

United States
iPhone Production Line Manager
India
People are the strongest

link in our supply chain.
At the heart of Apple’s supply chain are the people who make our products.
Apple is dedicated to empowering those who work in our supply chain with
opportunities to receive an education and advance their careers. We also
work to ensure they are provided a safe and healthy workplace, where their
rights are respected and they are treated with dignity.

Empowering women through
health education.
We are setting a goal to At Apple, we are committed to helping our supplier employees gain access
bring health awareness to knowledge and opportunities that allow them to take charge of their own
programming to: health and well-being.
In 2017, efforts to empower women through health education began at

several of our supplier facilities in China and India. Our goal is to enable
women in factories to take charge of their personal health and well-being
1M people at Apple suppliers by becoming well-informed of risks specific to women. The program also
around the world by 2020, encourages them to take a leadership role by sharing their new health
who will extend health
awareness with their colleagues, friends, and community.
awareness through their
community interactions
Our curriculum provides vital information and access to services that
women need to maintain their health, including critical topics such as
self-examination for early cancer detection, nutrition, personal care, and
maternal health. Extended collaboration among Apple teams, factory
management, major medical institutions including the Department of
Community Health, St. John’s National Academy of Health Sciences in
Bangalore, welfare officers, trainers, and the women themselves is essential
to achieve the program’s goals. All training is conducted in the participants’
local language and tailored to the needs of factory employees.
Growing Health Knowledge
Early Cancer Detection Nutrition Personal Care Women’s Health
The program builds upon itself by leveraging a peer-to-peer model. Each

supplier site’s peer educators are trained on a specific health issue each
month. Through soft skills and leadership training, the employees develop
more self-confidence. As they continue to learn new topics, peer educators
host sessions to share their knowledge with program participants.
For our programs based in China, we’re working with Peking University
(PKU) to develop a rigorous independent evaluation process to measure
program impacts. This will allow us to better understand the resources
available to women and their current level of health awareness. With this
data, we will be able to continually shape the programming to best suit
employee needs into the future.

Feeling good about health.
“I have been sharing what I learn in the class about

preventative care and women’s health with my mom.
As a result, she visited her physician for an annual
checkup, something she had stopped doing prior
to my taking the class.“
Miao Minghui
Women’s health program participant
Women’s health program participants

China

Training people today to be
tomorrow’s leaders.
We’re committed to helping advance the skills of our supplier employees.
There is a growing need for qualified factory line leaders with the right mix
of technical and soft skills. Since they are a part of the production labor
force, but also act as a bridge between employees and management,
factory line leaders play a special role.
A comprehensive survey of key supplier sites, covering nearly half

of our supplier workforce in China, showed that most of our suppliers
face challenges recruiting qualified line leaders during peak season.
In 2017, we launched Apple’s Factory Line Leader Program to provide
vocational training students with the technical and soft skills necessary
to become qualified line leaders.
Factory Line Leader Program
Technical and A guaranteed internship Opportunity for full-time

soft skills training with an Apple supplier employment after graduation
In its first phase, the program brought together four suppliers and eight
schools with a curriculum team headed by one of China’s top Vocational
Education Training (VET) experts, Dr. Zhao Zhiqun of Beijing Normal University.
The factory teams include human resources and training professionals,
technical teams, and high-performing line leaders who serve as advisors.
After completing Factory Line Leader training, students are guaranteed an

internship with an Apple supplier and full-time employment opportunities.

A teacher dedicated to
student achievement.
Chen Changwei teaches business classes as part of the Apple Factory Line
Leader Program at a school in Kunshan, Jiangsu province. She discusses
her experience as a teacher for the program.
How is the Apple Factory Line Leader Program different from

“Apple can lead in other educational programs you have seen in China?
bridging the gap
I’ve led many enterprise corporation projects and have seen many
between schools and
similar projects at other schools. The biggest differences from this
companies to drive
program to other projects are: 1) The innovation. It’s the first time this
opportunities that
kind of program, which develops technical employees, has been initiated
benefit both.“
by a Supplier Responsibility department of a big company. 2) The wide
Chen Changwei scope and multiple partners. 3) Third-party monitoring systems. The
Factory Line Leader Program program will be evaluated by a leading university to test its validity.
instructor, China
4) Program diversity. Students come from different backgrounds and
a wide range of public and private schools.
Why do you feel it’s important to offer vocational

education opportunities?
I think regular college offers high-level academic talent development,
while vocational initiatives such as the Factory Line Leader Program can
offer more skills-based talent development that is necessary in China.
Factory Line Leader

Program Instructor
China

Enabling learning through smarter
educational content offerings.
In the last 10 years: In 2008, we set up classrooms for employees to access educational
content before and after work at our supplier sites across China. The
program was named the Supplier Employee Education and Development
(SEED) program. SEED gives employees the opportunity to study topics
such as language learning, software animation, and small business start-
2.5M+ supplier up training. We also partner with our suppliers to provide scholarships to
employees participated
employees who want to study for an associate’s or bachelor’s degree.
in SEED offerings
To date, more than 2.5 million people have participated in SEED and more
than 12,000 have enrolled for a degree.
In 2017, we focused on developing high-demand content to address

12K+ people enrolled in
students’ specific development goals. We also introduced a vocational
higher education degree
certification program for workers who aren’t interested in studying for a
degree, but would like to grow more job-based skills. Manufacturing skills
gained through SEED’s vocational certification can increase a supplier
employee’s opportunities for job advancement.
iPad Production Line Operators

China

Empowering employees
through environmental, health
and safety education.
In 2013, we identified a gap in skills needed to proactively address and
manage workplace health, safety, and environmental concerns at supplier
sites. In response, we partnered with the EHS Center at Nanjing University
to develop the Environmental Health and Safety (EHS) Academy, an intensive
curriculum that integrates international best practices with local policies.
To date, EHS Academy

participants have launched:
~ 3400
projects across 274 supplier facilities
While receiving training at the EHS Academy, local managers learn

about environmental protection, air pollution, water management,
chemical management, emergency preparedness, and safety equipment.
In addition to their coursework, managers must create and implement
projects to improve environment, health, and safety conditions at their
facilities. EHS Academy provides in-depth expertise that improves the
workplace environment and opens up opportunities for supply chain
employees to advance in their careers. Armed with more in-depth
environment, health, and safety skills, the people in our supply chain
are also able to find opportunities to advance.

iPhone Production Line Operator
China
A workplace that empowers

and protects people.
We hold ourselves and our suppliers to the highest standard when it
comes to human protections. Our dedication to treating the people in
Apple’s supply chain with dignity and respect is unwavering. We will
continue to go beyond what’s regulated to do what’s right for those
who work in Apple’s supply chain.

Training employees, starting on day one.
In 2008, our Supplier Employee Training Program was developed to
ensure that all people in our supply chain receive training on their rights
as employees during new hire orientation. In addition to local labor law
requirements, the training covers the protections outlined in our Supplier
Code of Conduct, such as permissible working hours, proper working and
living conditions, and fundamental health and safety information. Suppliers
are also required to provide grievance channels that enable their employees
to safely report any violation.
Supplier Employee Training Program
Training on local Training on Apple’s Supplier Notification of

employment laws Code of Conduct grievance mechanisms
Providing a voice for employees.

Interviews and grievance channels that encourage employee voice
and communication are fundamental to meeting our Supplier Code of
Conduct. After interviews, employees are given a phone number so
they can confidentially provide additional feedback to Apple, including
anything they consider to be unethical behavior.
Employees are encouraged to report any retaliation to Apple. We

investigate every claim to ensure suppliers appropriately remedy
each situation as necessary.
3 M+
people trained on
14.7M
people trained on
31K+
supplier employees
workplace protections workplace protections interviewed in 2017
in 2017 since 2007

A supplier employee takes worker
voice to new heights.
In 2013, Xu Yuexia joined CSMC, an Apple final assembly facility in Jiangsu,
China, as an operator. On her first day of work, Xu was trained on local
employment laws, as well as Apple’s Supplier Code of Conduct.
Through the years, Xu rose up the ranks from management trainee

to multifunction employee to supervisor. While developing her career,
Xu also worked to develop a team of employees dedicated to providing
worker rights advocacy to the over 40,000 employees at CSMC. In 2015,
Xu became a member of the Moral Support team. The team acts as a
support network for employees, providing a place where they can voice
their concerns, which are then brought to management. The Moral Support
team also arranges community service projects and team-building activities,
and promotes company culture.
Xu is very dedicated to the Moral Support team and has helped increase their
impact significantly. In 2017, she organized over 50 employee forums. As a
result of these forums, more than 100 cases were brought to management
and workplace improvements were made. Xu and team also work directly
with Apple to identify employees with grievances during assessment visits
and interviews. Xu finds that her role is always evolving, but she enjoys the
challenge of learning new things. She’s very proud of the Moral Support
team’s results and their ability to improve the lives of her fellow employees.
Workplace training leads to workplace advocacy.
2013: New Hire Training of Local 2015: Moral Support 2017: Support and
Employment Law and Apple's team founded advocacy provided to
Supplier Code of Conduct over 40,000 employees

Going further to fight bonded labor.
Bonded labor occurs when a person is forced to work in exchange for
the repayment of a debt or other obligation — sometimes levied as a
fee for receiving a job in the first place. In 2008, we made this a Core
Violation of the Apple Supplier Code of Conduct and limited permissible
2008: All forms of forced
labor prohibited in our fees to one month’s wages.
Supplier Code of Conduct
In 2015, Apple went even further — leading the way in mandating
2015: First company in that zero fees can be charged to supplier employees for recruitment
our industry to enact a
zero tolerance policy
opportunities, even if those fees fall within the legal limits of the supplier’s
for any fees uncovered, operating country. If bonded labor is discovered, the supplier is required to
even those within legal repay the recruitment fees in full to all impacted employees.
limits of the supplier’s
operating country
We ensure safe channels for employees and suppliers to communicate
concerns, and continue to be recognized as a leader among all industries
in efforts to eliminate this vicious practice.
Since 2008:
Zero tolerance policy
for suppression of
employee voice
US$
30M+
repaid from suppliers with
35K+
of offending suppliers’
identified Debt-Bonded employees received repayment
Labor Violations
In 2017:
US$
1.9M
in total payments as a result
1558
people received payment
of bonded labor violations

If debt-bonded labor is uncovered, immediate action is taken.
Probation notice Repayment deadline Repayment approval Payment confirmed

A Notice of Probation is sent The Notice of Probation The reimbursement for An independent auditor
to the violating supplier with tells the supplier they each impacted employee confirms that the individual
terms of reimbursement and must repay employees is then reviewed and received the repayment.
a non-retaliation clause to within 30 days or face approved by Apple.
protect employees. losing Apple’s business.
We have made consistent progress to eliminate involuntary labor in our

supply chain. Year-over-year annual assessments, combined with capability
building for suppliers, helped drive the violation recurrence rate to zero
in 2017. In addition, since 2013, the total number of debt-bonded labor
cases has steadily decreased.

Underage labor is unacceptable.
Apple strictly prohibits underage labor in our Supplier Code of Conduct.
In addition to a zero tolerance policy, we partner with suppliers to
continuously improve training, communication, and detection methods for
false identification to eliminate underage labor throughout the supply chain.
How We Identify Underage Labor
Factory inspections Employee interviews Process review Further assessments

A search for underage labor Official documentation is The facility’s recruitment Assessors are trained to
cases is conducted during compared, and employee and application screening look for instances where a
factory inspections. interviews take place in their processes are reviewed. supplier may provide false
own languages without supplier information or prevent access
management present. to documents — both Core
Violations of our Supplier
Code of Conduct.
In 2017, we assessed 756 facilities and nearly 1.3 million people and
uncovered two cases of underage labor. The two underage employees were
ages 14 and 15. In both cases, individuals used false identification to gain
employment. Once identified, both were immediately transported home and
enrolled in their school of choice, while continuing to receive wages from
the supplier. Upon reaching legal working age, they will be offered a
job at the supplier facility they departed, should they wish to return.
Identifying underage labor is not enough, the supplier must:
Finance employee’s Fund employee’s education Continue paying the full Guarantee an opportunity
safe return home wages the employee would to return to work upon
have earned at the factory reaching legal working age

Standards that encourage a more
inclusive workplace.
Apple’s Supplier Code of Conduct requires safe and respectful working
conditions. While we work with suppliers to ensure they are meeting
our standards of non-discriminatory practices, we sometimes find a
supplier who will go above and beyond to provide an equitable workplace.
Compal, a supplier in Nanjing, China, aims to build an inclusive setting
for all of their employees.
To give all employees a strong sense of belonging and a more inclusive

atmosphere, Compal has taken measures including giving employees the
choice to live in dorms with people who practice the same faith or religion.
Compal also provides specially prepared food options that adhere to the
religious customs and traditions of their employees.

China

Environmental Health
and Safety Manager
India
A respect for human rights,

at the deepest levels of our
supply chain.
Apple has an enduring commitment to the responsible sourcing
of materials for our products. We identify and map both regulated and
unregulated materials in our products to the farthest reaches of our
supply chain, and proudly lead our industry in establishing the strictest
standards for smelters and refiners.

From the Mine to the Factory Line
Material Sourcing Trading Smelting/Refining Manufacturing Final Assembly
Leading the way on materials

due diligence.
In 2010, we were the first company to map our supply chain from
manufacturing to the smelter level for tin, tantalum, tungsten, and
gold (3TG). In 2014, we started mapping our supply chain for cobalt and
completed that mapping in 2016. This work is done to ensure the minerals
in our products are responsibly sourced, based on our suppliers’ efforts
to identify and address risks in their own operations. Our programs are
informed and designed in accordance with The Organisation for Economic
Co-operation and Development (OECD) Due Diligence Guidance for
Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk
Areas, and other internationally recognized human rights instruments.
In 2017, for the second year in a row, 100 percent of our identified 3TG
and cobalt smelters participated in independent third-party audits.
Our efforts go beyond conflict to consider human rights and other risks,
and we go above and beyond what’s required by law to help smelters
report, assess, and mitigate risk in their business practices. In-person spot
audits of suppliers are conducted to verify the accuracy of reported data
and to ensure corrective actions are taken where gaps may exist.
In addition to offering new and current suppliers online trainings in English
and Mandarin, Apple provides tailored support to suppliers where
material gaps in management systems are identified. We are also the first
company to publish our smelter list.

Third-Party Assessment Participation
3TG and Cobalt
300
256 260
242 100% 100%
225 100%
225 211
186
175 88%
150
109
75 44%
14%
0
2% 6%
2009 2010 2011 2012 2013 2014 2015 2016 2017
3TG 3TG 3TG 3TG 3TG 3TG 3TG 3TG and 3TG and
Cobalt Cobalt
Identified Smelters Smelters Participating

in Third-Party Audits
We’re proudly recognized as a worldwide leader in the responsible sourcing

of minerals in our products.
“Apple proved to be the top industry leader in the

Enough Project’s 2017 conflict minerals rankings due
#1 Ranking
to the company’s leading work on supply chain risk
Enough Project assessment and mitigation, active participation in
multi-stakeholder working groups, and support for
programs in Congolese mining communities.“
John Prendergast
Founding Director, Enough Project

Sharing our work for others to follow.
In 2016, we developed the Risk Readiness Assessment (RRA), an
assessment tool for prospective and current suppliers to understand
their exposure and track key risks in their operations. 3TG smelters
and refiners in our supply chain that completed an RRA were provided
a summary benchmarking their risk readiness compared to their peers.
These results allow smelters and refiners to self-correct and collaborate
for better overall industry performance.
Expanding the RRA To encourage collective action across many industries, the RRA was open
to Other Industries sourced through the Responsible Business Alliance (RBA), formerly the
Electronic Industry Citizenship Coalition (EICC). The RRA online platform
provides a centralized database of participating smelter information,
supporting global comparability, easy access, and scalability that can
211 companies utilized be used across industries.
the RRA tool in 2017
In 2017, 151 smelting or refining companies utilized the RRA platform. In
addition, 60 companies (members of the RBA and Responsible Minerals
Initiative, or RMI) utilized the RRA online platform in 2017, representing
supply chain professionals from the electronics and electrical equipment
manufacturers, automotive, aviation, retail, and consumer goods industries.
3TG and Cobalt Smelters and Refiners Utilizing the RRA
100%
100% 100%
88.4% 87.5%
81% 82% 80%
75% 78%
73%
65%
50%
25%
0%
Tin Tantalum Tungsten Gold Cobalt
2016 2017

In addition to third-party audits and risk assessments, it’s also important
to empower and provide a channel for anyone to identify a challenge that
may be occurring in any industry scheme that audits and monitors mine
sites for conflict risks. The International Tin Association (ITRI)’s Tin Supply
Chain Initiative (iTSCi) program assists companies in responsible sourcing
of minerals from high-risk areas, and monitors the mine sites participating
in iTSCi’s traceability program in the DRC.
In 2017, we helped expand a whistle-blowing program implemented by

iTSCi into five new risk categories, so that supply chain misconduct and
incidents are surfaced and addressed. Through this program, people can
place anonymous calls to report allegations such as underage labor at mine
sites, mineral smuggling, or illegal mining in protected areas. We remain
committed to improving existing systems and driving for greater human
rights protections in the upstream portions of our supply chains.
Making an impact on the ground.

We believe driving for compliance is not enough. To make a lasting impact,
work must go deeper with on-the-ground organizations. We believe in
supporting vulnerable communities and giving a voice to individuals,
particularly in those regions where minerals that are in our products may
be mined. We also support efforts to help provide vocational education, so
people can find livelihoods other than mining and break the cycle of poverty.
While our long term aim is to end our reliance on mining, we know that today,
millions of people around the world depend on mining for their livelihoods.
In 2016, we helped fund research by Faber, Krause and Sanchez de la Sierra
(2017) at the Center for Effective Global Action (CEGA) at the University
of California, Berkeley, which indicated that approximately 90 percent of
cobalt miners in the Democratic Republic of Congo’s (DRC) former Katanga
province work in artisanal mining. In these communities, 60 percent of the
households rely on mining as a source of livelihood or have in the past.
Mining communities are especially vulnerable to human rights violations.
In 2016, work began with Pact, a nonprofit organization that works to

help mining communities in the DRC organize, and protect miners, mining
communities, and their children. In 2017, on Apple’s behalf, Pact launched
an extensive awareness campaign that outlines mining risks and brings them
to the attention of DRC communities. Neighborhood committees and local
leaders work with children and their families to explain the risks intrinsic to
child mining, both physical and psychological, and the benefits of health and
education. Pact also launched a vocational education program where at-risk
youth learn skills other than mining. The vocational training opportunity led
to some youths withdrawing directly from the mines.

“Private-sector involvement is one of the fastest
ways to achieve change at scale and is critical
for the systemic change necessary to tackle child
labor in mining. Apple’s support of vocational
education promotes more career opportunities
for future generations.“
Mark Viso
President and CEO, Pact
In addition to our on-the-ground efforts with Pact, Apple awarded a grant to

the Fund for Global Human Rights in 2017. Since 2003, the Fund has worked
to advance human rights by providing resources to activists and grassroots
organizations that have the potential to generate positive change in over 17
countries. Apple partnered with the Fund to support their work in the DRC.
Local organizations in the DRC receive grants from the Fund working on a
range of issues, including the rights of women and children; economic and
social rights of mining communities; inclusive economic growth; judicial
advocacy; and health, safety, and fair compensation for mining communities.

Planet
A floating solar project installed

by a component supplier
Japan
Solar panels used to
power an Apple supplier
China
Progress toward a greener

supply chain.
In 2017, we made significant progress with our suppliers in our ongoing
effort to protect the environment. We worked to divert waste from landfills,
reuse and recycle materials, and conserve our planet’s precious resources;
and we continued our efforts on fighting climate change.

Environment first. Transparency first.
And Apple first.
In 2017, Apple was awarded the top score in the Corporate Information
Transparency Index (CITI) for the fourth straight year. The CITI is run
by the Institute of Public and Environmental Affairs (IPE), a Chinese
#1 ranking awarded non-governmental organization with expertise in environmental protection.
to Apple by IPE’s
Corporate Information Through an ongoing partnership, Apple and IPE identify opportunities for
Transparency Index for our suppliers to improve their environmental performance, and we partner
the fourth straight year
with IPE personnel to conduct third-party validation on improvements to
correct identified gaps.
IPE also directly facilitates and supervises independent third-party

validations of enhancements made in our suppliers’ environmental
management systems. Of our suppliers involved in this process, 100 percent
also share annual environmental monitoring data through IPE’s platform to
demonstrate that they are sustaining improvements they have implemented.

China

When we waste nothing, that will
truly be something.
One of the ways we minimize our impact on the planet is to reduce the
amount of waste generated while manufacturing Apple products.
In 2015, we launched a Zero Waste Program that provides onsite support to

help suppliers learn how to recycle and reuse materials, and divert waste
from landfills. To achieve a Zero Waste to Landfill certification through
Underwriters Laboratories (UL), a factory must divert 100 percent of its waste
from landfills, with a maximum of 10 percent sent to a waste-to-energy facility.
When the program began, suppliers with the most significant waste impact
were selected: final assembly facilities in China. In just two years, 100
percent of our final assembly locations in China had attained Zero Waste
certifications, and our newest final assembly facility, which came online in
2017, will be certified in 2018.
In 2017, we also expanded efforts globally to include operations in India.

Worldwide, 100 percent of iPhone final assembly facilities have achieved
100% of iPhone final their Zero Waste to Landfill certification. In addition, we increased
assembly facilities
worldwide are zero
commodity facility participation by 136 percent year over year from 2016.
waste certified
100 %
final assembly
136%
increase in participating
625K
metric tons of waste
facilities participating commodity facilities diverted from landfill since
from 2016 2015 — that’s enough to
cover 2,545 soccer fields
about 1 meter deep
To help our suppliers achieve this objective, Apple provides necessary

tools and guidance, including the services of experts in sustainable
waste management solutions. Suppliers dedicate months identifying ways
to reuse or recycle materials. This can result in suppliers not only
improving their environmental management systems, but also benefiting
from sustained energy savings.

Zero waste from the factory to
the community.
In early 2017, we began work with Wistron at a new supplier facility in
“It’s exciting to see how India. During onboarding, we found ways to not only reach a Zero Waste to
the Zero Waste program Landfill certification in record time, but also benefit the local community.
is increasing recycling
and waste segregation A key part of the Zero Waste program is to provide waste management
awareness. I look forward training to all facility employees. This provides Wistron India employees
to seeing how Wistron with more recycling and waste segregation knowledge, inspiring them
employees will implement to implement their learnings at home. The community where Wistron
their learnings from their is located is doing their part as well. The local government is also
Zero Waste training to promoting waste segregation in the city to build a “Clean Bengaluru.”
positively impact the factory,
and beyond.“ From the beginning of the facility’s development, waste management
practices were incorporated into Wistron India’s operating plan to help
Shobha Savalgi
Environmental Health and
them avoid sending any waste to landfills. The partnership includes
Safety expert, Zero Waste assistance in selecting recyclable protective materials and finding service
instructor at Wistron
providers to reclaim materials at the end of life.
Wistron reached a 100 percent waste diversion rate in their first year of
operation and was certified by UL in late 2017, faster than any supplier yet.
Zero Waste Instructor

India

New life for landfill waste.
In the manufacturing of iPhone, Apple uses films to protect both the display
and enclosure. These films, their backing liner as well as trays that transport
the product down the assembly line, are made of polyethylene terephthalate
(PET). Partnering with Foxconn, we developed a new PET recycling process
that uses the waste film liner material to make trays. Reusing the liners
reduces transportation costs, carbon emissions, and eliminates 200 metric
tons or more of solid waste every year.
PET Liner Process

Before
Components exit assembly line Liners disposed in landfill

Protective film was removed from liner Liners were transported and disposed
and PET liners were sent to a landfill. in a landfill, creating roughly 200 metric
tons of solid waste per year.

PET Liner Process
After
A protective film and liner used

to protect iPhone screens
during manufacturing are no
longer needed.
The protective film and liner

are separated. One is recycled
and the other is used for
energy recovery.
The recycled piece is turned

into trays for use in production.
The trays are used to hold

iPhone devices in a later phase
of their production.
Exploring other waste diversion methods involves working with our

operations teams to find ways to optimize material use in manufacturing
processes. The work doesn’t stop there. The chemicals used during
the manufacturing process are also considered.

Partnering with suppliers to safely
manage chemicals.
In 2017, process chemicals at our final assembly facilities were verified at
100 percent compliant with Apple Regulated Substances Specification (RSS)
for the third year in a row. We also sought to expand our RSS compliance to
100% of process chemicals commodity and component manufacturers deeper in our supply chain.
used at final assembly
facilities were verified We launched our Chemical Management Program in 2014 to help suppliers
to comply with Apple’s develop a comprehensive approach to managing chemicals safely. The
Regulated Substances
Specification for the third program provides Apple subject matter experts to help suppliers implement
year in a row greener, less toxic alternative chemicals in their processes. We also
partner with factory leaders to assess critical elements of a comprehensive
chemical management program, and develop capabilities to independently
manage chemicals safely in factory settings. These elements include
chemical inventory, risk assessment, risk control, hazard communication
training for employees, management training, medical surveillance, chemical
handling, and emergency response.
80%
increase in number of program
113
supplier facilities participating
participants from 2016 in the program
Identifying greener alternatives.

In 2017, the Chemical Management Program focused efforts to identify
safer green alternatives. To better understand the opportunities for greener
alternatives, we mapped which chemicals are used in our final assembly
A rating from Report facilities and evaluated all control measures, such as ventilation, personal
Card on Retailer protective equipment, and worker training programs.
Actions to Eliminate
Toxic Chemicals, The results of mapping and assessment activities are the basis for an
Mind the Store
innovative partnership in 2017 to drive the adoption of greener cleaners.
Substitutions were identified and replacement feasibility studies were
conducted leading to the elimination of all Benchmark 1 and 2 cleaners from
our final assembly facilities. This involved the identification and replacement
of three Benchmark 1 and 26 Benchmark 2 cleaners and degreasers.

Both the GreenScreenⓇ framework and the Environmental Protection
Agency’s Safer Choice Program were used to evaluate the health and
environmental impacts of a chemical and identify better alternatives.
In 2017, this process was completed at 18 final assembly facilities worldwide.
We categorize chemicals according to GreenScreenⓇ Chemicals’ Benchmark categories:
Benchmark 4 Benchmark 3 Benchmark 2 Benchmark 1

Prefer, safer chemical Use, but still opportunity Use, but search for Avoid, chemical
for improvement safer substitutes of high concern
A clear plan for using less water.

In 2013, our Clean Water Program was launched at 13 facilities. We take
a risk-based approach by focusing on facilities with water-intensive
processes, located in water-scarce or water-stressed regions, and in
need of comprehensive water management programs.
The Clean Water Program is specifically designed to help suppliers develop

In 2017, our supplier long-term water management systems to improve their performance and
partners achieved increase efficiencies over time. This is achieved by assessing the type and
freshwater savings amount of water usage, current wastewater treatment, and ongoing water
of 5.1 billion gallons, management efforts at a supplier site.
marking 13.6 billion
gallons of water saved Suppliers are trained to reduce their water usage, promote water recycling,
since the program was ensure high-quality wastewater discharge, and prevent water pollution.
established in 2013. The process provides suppliers with tools for identifying long-term
environmental and financial benefits.
Participating factories
in China have achieved We host technical seminars for facilities to communicate and share best
an average reuse rate
practices. Education is a key component of the program. Depending on
of 37 percent.
the local environment and stringency of regional requirements, suppliers
are taught water permitting for specific processes to help minimize risks
in water-scarce areas. This program is about more than improving
assessment performance, it is about capacity building to enable suppliers
to maintain long-term high performance and become responsible neighbors
in their own communities.

Finding water solutions that make
community impacts.
In 2017, what began as an investigation into a drinking water supplier
turned into an effort to implement a more efficient drinking water dispensing
system in our retail locations. A planet-friendly water filtration solution was
just the beginning. Recognizing a unique opportunity to give back to the
communities where we operate, particularly in water-stressed Southern
California, we created a net positive impact for water consumption in our
Los Angeles area Retail operations.
We teamed up with Bonneville Environmental Foundation (BEF) to buy Water

Restoration Certifications (WRCs) to help restore rivers and wetlands that
supply water to Southern California. The BEF program incentivizes farmers,
ranchers, and other heavy water users to develop solutions that restore
water to water-scarce ecosystems. Each WRC Apple buys represents 1000
gallons of water restored to the Sacramento River Wetlands conservation
area. Our support will restore twice the amount of water consumed by our
26 Southern California retail stores last year.
Beyond driving a net positive water impact, our employees wanted to help
their community. We partnered with BEF and Heal the Bay to contribute to
the revitalization of the Los Angeles River through the LA WAYS Water Smart
Park. The improvements to this 9-acre stormwater retention and filtration
park in South Central Los Angeles began in late 2017 and will be finished
later this year. The self-sustaining park will reduce pollution, recharge
groundwater, and combat local climate change. As a living classroom, it
will also provide valuable environmental education opportunities to local
residents in a historically underserved community.
Render of LA WAYS Park

United States

The power of energy efficiency.
2017 Results: We work closely with suppliers to reduce their energy use and invest
in renewable energy projects. Each program sets ambitious goals and
supports Apple’s mission to leave the world better than we found it.
In 2015, Apple launched the supplier Energy Efficiency Program. This

program trains suppliers to uncover opportunities that reduce their
320K annualized metric energy usage and carbon emissions. In the program’s first year, efforts
tons of greenhouse gas were focused on manufacturing facilities with the highest energy use and
emissions reduced
potential for improvement, including aluminum casing, electrical, glass, and
optics suppliers. In 2018, requirements were added to our Supplier Code of
Conduct for suppliers to set annual carbon reduction goals.
77% increase in Apple conducts in-depth energy assessments to identify areas for
program participants improvement at supplier facilities. Suppliers are encouraged to invest in
energy-reducing infrastructure, such as lighting upgrades and motion
sensors, processed heating and cooling, and compressed air. The
assessments provide suppliers with a cost-benefit analysis of the potential
return on their investment for implementing energy efficiency improvements.
In 2017, the total number of program participants increased by 77

percent, and carbon emission reductions increased by 113 percent.
Suppliers participating in the program have implemented energy efficiency
improvements that reduced more than 320,000 annualized metric tons of
greenhouse gas emissions in 2017.
Supplier Clean Energy Program

Driving broader awareness of the need to manage carbon emissions
in every supplier facility is critical to our efforts to protect the planet.
Through our clean energy program, Apple and our suppliers will generate
and procure more than 4 gigawatts of clean energy worldwide by 2020 to
avoid emissions associated with Apple manufacturing.
We work with governments where our operations exist to align the program
with their priorities and encourage renewable energy policy. Suppliers are
given access to our SupplierCare platform that offers regional guidance
and tools to procure clean energy and is available in their native languages.
SupplierCare also provides our suppliers with global insights and updates
on global renewable energy markets and policies.
Since implementing the program, 16 suppliers have made commitments

to 100 percent clean energy for Apple production. Together with Apple
investments and other supplier commitments, we now have close to 3 gigawatts
of clean energy committed to addressing Apple’s manufacturing emissions.

Ultimately, the combined efforts of Apple and our suppliers’ will result in
improved energy efficiency, and new clean energy commitments of more
than 4 gigawatts dedicated to Apple production. With every program, the
4 gigawatts of clean overarching goal is to empower our suppliers to set goals for their own
energy by 2020 to address
manufacturing emissions
suppliers, extending each program’s overall impact.
Solar panels used to

power an Apple supplier
China

A supplier goes above and beyond for
the environment.
Avary Holding in Shenzhen, China, has been an Apple supplier for over
seven years. Avary strongly supports green initiatives and has worked with
Apple to develop programs that go above and beyond what’s required by
our Supplier Code of Conduct.
While Avary is working towards attaining a Zero Waste certification, they

are also extending their impact beyond eliminating landfill waste. Avary has
a number of green initiatives occurring in their factory, including investing
in systems to recover copper from process waste streams, and establishing
industry-leading chemical management practices that protect workers and
the environment. As the first graduate of the Clean Water Program in 2016,
Avary has achieved an impressive 58 percent wastewater reuse rate, by
installing a comprehensive water metering system, optimizing their water
consumption for component manufacturing and finding ways to reuse
process water for cooling systems, landscaping, and sanitation systems.
Avary’s commitment to the environment has not gone unnoticed. As a result

of their efforts, the national government, as part of an initiative to promote
green manufacturing in China, named Avary as a Green Manufacturing pilot
site. In addition, for their water conservation progress, in 2016 Avary was
named the first Clean Water Program graduated site in China.

2017 Code of Conduct Assessment Results
Progress
iPhone Production Line Managers

China

iPhone Production Line Manager
India
Leading in raising the bar.

We currently work with suppliers in 30 countries, whose operations range
in size from a dozen employees to hundreds of thousands. It’s a continuous
effort to drive our industry’s most stringent set of protections for people
and the planet. Through these supplier partnerships, we’re creating a more
responsible and greener supply chain.

Strong partnerships. Strong results.
Our supplier partnerships begin with a shared commitment to Apple’s
Supplier Code of Conduct. Our Supplier Code of Conduct and associated
Standards set Apple’s expectations for how our suppliers should conduct
business responsibly in labor and human rights, workplace health and
safety, environmental protections, and management systems. We add
new requirements to our Code every year, and are proud that it’s one of
the industry’s most stringent.
Our suppliers’ level of adherence to the Code is evaluated during annual

assessments. A standardized scoring methodology with more than 500 data
points is used to evaluate suppliers and categorize them as high, medium, or
low performers. Every year, we expand our efforts to reach more suppliers
through first-time assessments. Whether we are working with suppliers for
the first time or on repeat engagements, the goal is the same: to develop
their capabilities so that one day they can independently uphold our
Supplier Code of Conduct’s high standards in their own business operations.

China

2017 Data
In 2017, we conducted 756 assessments in 30 countries, covering
suppliers who represent 95 percent of our total annual spend. Of these
756 assessments, 197 were initial assessments where we visited facilities
for the first time. While we remain focused on a risk-based approach, it
is vital that our capability building efforts continue to reach a broader
set of suppliers year over year.
Our 2017 supplier progress results cover assessments at manufacturing

facilities, logistics and repair centers, and contact center facilities. Each
assessed facility is ranked on a 100-point scale based on its performance
relative to our Code of Conduct. A score of 90 to 100 is representative of a
high performer. A score less than or equal to 59 is representative of a low
performer. A score of 60 to 89 is representative of a medium performer.
In 2017, low-performing sites in our supply chain decreased by 71

percent, while the number of high-performing supplier sites increased
by 35 percent. Last year, 26 percent of our total number of assessments
were initial assessments.
In 2017:
35 %
increase in the number
71 %
decrease in the number of low
of high performers in our performers in our supply chain
supply chain
Our goal is to help suppliers run more ethical, responsible, and greener
businesses. We spend weeks, and sometimes months, with low- and
medium-performing suppliers to create facility-specific capability building
programs. Apple subject matter experts work with suppliers to complete
comprehensive root cause analyses and build customized development
plans. Through regular site visits, we continually drive supplier development
and conduct trainings to elevate capabilities. Over 150 Apple-developed
technical tools are drawn on to advise suppliers on capability building
and process improvement, enabling them to independently maintain and
improve performance over time.

Scaling Capability Building
14% 6% 3% 1%
58% 50% 40%
60%
59%
47%
36%
26%
0%
2014 2015 2016 2017

633 Sites 574 Sites 705 Sites 756 Sites
High Performing 90-100 Medium Performing 60-89 Low Performing 0-59

High (90-100) Medium (60-89) Low (0-59)
“Apple’s consultation broadened our mindset and

helped us develop a more complete management plan.
Through multiple onsite visits, problem identification
39 new tools and collaboration for a solution, we felt a true
developed for supplier
capability building partnership from Apple.“
Lin Shih-Ming
Administration Division General Manager, Mektec Taiwan

Average Year-Over-Year Percent Improvement in Participating
Suppliers’ Scores
33%
20%
16%
LHR H&S ENV

Labor and Health Environment
Human Rights and Safety
Percentage of High-Performing Suppliers
59%
47%
36%
2015 2016 2017

2017 Assessment Scores
We categorize our supplier assessment findings in three degrees of severity:
Administrative Non-Compliance
Denotes policy, procedure, training, or communication-related findings.
Examples include:
• Inadequate record keeping
• Inadequate documentation of policy or procedures
• Insufficient training on policy
Violations
Denote implementation-related findings.
Examples include:
• Insufficient provision of benefits
• N
o or inadequate pre-placement/on-job/post-employment
occupational health check
• No or inadequate environmental permits
Core Violations
Include what Apple considers the most serious breaches of compliance.
These are issues for which we have zero tolerance.
Examples include:
• Underage workers or involuntary labor
• Document falsification
• Intimidation of or retaliation against workers
• Environmental and safety threats

2017 Assessment Results
Labor and Human Rights

The average Labor and Human Rights score across our 756 supply
chain assessments in 2017 was 86 out of 100.
86
In 2017, the bar for Labor and Human Rights performance was
raised for wages and benefits, involuntary labor prevention, and
86 out of 100 Average
Labor and Human Rights student intern management.
Assessment Score
For wages and benefits, Apple suppliers are now required to pay a minimum
of 125 percent base wages for overtime worked in countries where there
are no legally established overtime rates. In addition, to prevent excessive
deductions of wages due to tardiness, a new requirement was added to
limit deductions for tardiness based on the exact hours and minutes a
supplier employee is tardy.
To emphasize our requirements to prevent involuntary labor, standards

were added for suppliers to establish due diligence processes to ensure
that employees hired through private employment agencies are provided
legally required benefits and pay on an accurate, timely basis. Suppliers
who work with private employment agencies are also required to have all
fees and expenses related to a foreign contract employee’s recruitment
clearly stated in the contracts between the employment agency and the
facility to ensure compliance with Apple’s zero fee policy.
Requirements were also raised in 2017 to limit the number of student interns
at a supplier facility to no more than 10 percent of their total workforce.
Raising the Bar in Labor and Human Rights Compliance
Universal overtime Limited deductions Safeguards for foreign Limit of no more than
wage requirements for tardiness contract workers 10% student workforce
hired through private at a supplier facility
employment agencies
In 2017, the majority of violations found were related to improper provision

of wages and benefits and working hours violations. An example of an
Improper Provision of Wages Violation is failure to pay for mandatory
pre-shift meetings, including one case where we required the supplier
to pay employees for a pre-shift meeting that lasted five minutes.

Examples of Benefits Violations include suppliers not providing legally
mandated benefits, or overtime not paid at premium rates as stipulated by
law and Apple’s requirement. In all cases, we work with suppliers to ensure
their employees are fully paid back.
Examples of Working Hours Violations include exceeding the 60 hour

workweek limit, and providing no day of rest after six consecutive days of work.
A lower percentage of assessment violations were found relating to

Anti-Discrimination and Anti-Harassment, Grievance Mechanisms, and
processes related to the protection of special classes, such as juvenile
and student employees.
Labor and Human Rights Non-Compliance Breakdown

Based on 756 assessments, on a 100-point scoring system.
Working Wages, Benefits, Prevention of Anti- Grievance Protected Anti-Harassment Freedom of Prevention
Hours and Contracts Involuntary Discrimination Mechanisms Class and Prevention Association of Underage
Labor of Abuse and Collective Labor
Bargaining
Administrative Non-Compliance Violations Core Violations

In 2017, 44 Core Violations were uncovered in Labor and Human
Rights; these included three Bonded-Labor Violations, 38 Working
Hours Falsification Violations, 1 Access Restriction Violation, and
2 Underage Labor Violations.
Debt-Bonded Labor
Since 2015, Apple has mandated that zero fees can be charged to foreign
contract workers for recruitment opportunities. In 2017, three suppliers
were identified with foreign contract workers who were charged recruitment
fees. In each case, the supplier was required to repay the recruitment
fees in full to all impacted workers. In one case, over 700 foreign contract
workers were recruited from the Philippines to work for a supplier through
a private employment agency. This resulted in excessive placement fees of
more than US$1M. We review the reimbursement amount for each impacted
employee, and confirm its repayment by onsite validation. We also require
our suppliers to terminate business relationships with private employment
agencies that charge employees up-front recruitment fees, unless the
agencies demonstrate a commitment to improve their practices and avoid
such violations in future business. Since 2008, more than US$30M has been
repaid to more than 35,000 foreign contract workers.
Debt-Bonded Labor Remediation Process
Violation Violation Signs terms Repayment plan Worker payment Payment

identification communication Supplier signs Supplier submits Supplier repays worker. verification
Apple assessor and Apple communicates probation terms and repayment plan for Third-party auditor
third-party auditor violation to supplier repayment terms. Apple approval. verifies repayment
identify debt-bonded senior management. at supplier site.
labor violation.

Working Hours Falsification
Our Working Hours policy is based on International Labour Organization
and Responsible Business Alliance (RBA) standards that limit working hours
to no more than 60 hours a week. Also, suppliers can offer overtime only on
a voluntary basis and factories must give employees one full day of rest for
every six days worked.
We launched a Working Hours Program in 2011 to better manage working

hours across our vast supply base. In 2012, the weekly working hours of
more than 1 million supplier employees were monitored. Since then, coverage
of employees monitored in the program has expanded year over year and, in
2017, the working hours of 1.3 million people were tracked on a weekly basis.
If falsification of employee working hours is discovered, the violation is

escalated to the supplier CEO and the supplier is placed on immediate
probation. The supplier’s ethics policy and management systems are then
1.3M employees thoroughly reviewed to identify the root causes and systemically correct
monitored on a
them. The supplier is required to undergo regular audits to ensure the
weekly basis
reviewed policy is implemented to prevent future violations. In addition,
the supplier must revise all records to reflect an accurate accounting
of hours worked by their employees. In 2017, we uncovered 38 cases of
falsification of working hours data. In all cases, suppliers were placed on
immediate probation. Our suppliers’ compliance for overall working hours
for the year was 94 percent.
Working Hours Falsification Remediation Process
Violation Violation Root cause Regular audits Revise all records

identification communication identification Supplier required to Supplier must revise
Apple assessor Apple communicates Apple and supplier review undergo regular audits all records to reflect
and third-party auditor violation to supplier supplier’s ethics policy to ensure the reviewed accurate accounting
identify records CEO and notifies and management system policy is implemented to of hours worked by
falsification violation. supplier of immediate to identify root cause. prevent future violations. their employees.
probation. Supplier
signs probation terms.

Access Restriction
When access is restricted at a supplier site during an assessment, the
supplier is required to provide complete records to Apple’s assessment
team, or a qualified third-party auditor approved by Apple.
In 2017, one supplier restricted site access and refused to provide

production records, a third-party audit, or documentation to justify wage
calculation, which resulted in the supplier receiving a Core Violation. If the
supplier refuses to provide the required documents for review during the
assessment, it is cited as a Core Violation. The supplier is then required to
hire an independent third party to do a comprehensive review of all relevant
records and demonstrate compliance. The supplier is also required to
conduct reviews of their ethics policies and management systems to identify
the root cause of the access restriction, and deliver a corrective action plan
to be implemented within 30 days of the discovery of the violation. Lastly,
the supplier is required to provide training to their management staff to
mitigate future obstruction during assessments.
Access Restriction Remediation Process
Supplier documentation Root cause identification Corrective action plan New policies
Supplier provides all Supplier conducts reviews Supplier must report back Supplier instructs their
documents to Apple or Apple- of their ethics policies and gap analysis and corrective management staff of new
approved third-party auditor. management systems to identify action plan within 30 days policies to prevent future
root cause of obstruction. of the violation discovery. access restriction.

Underage Labor
During an assessment, a supplier’s management system is thoroughly
analyzed for the ability to prevent underage labor. Assessors review
what steps the supplier takes to identify the job applicant’s age, if they
are proactively vetting for underage applicants during the interview
process, and how they continue to verify age during their onboarding
process. Auditors also review employee personnel files and have
face-to-face interviews with workers who appear underage.
When underage labor is identified, specialized third-party assessors are

brought in for an in-depth review of the case. The supplier is required to
stop the underage employee from continuing to work and to return them
safely home. Educational opportunities are presented to the underage
employee and their guardians.
While the underage employee is attending school, the supplier is required

to pay tuition and other associated fees, and continue to pay their wages.
Third-party assessors visit the underage employee regularly at school to
ensure they are progressing. Once the student reaches legal working age,
the supplier is also required to offer them reemployment.
In 2017, we uncovered two cases of underage labor. The two underage

employees were ages 14 and 15. In both cases, individuals used false
identification to gain employment. Once identified, both were immediately
transported home and enrolled in their choice of schools while continuing to
receive wages from the supplier. Upon reaching legal working age, they will be
offered a job at the supplier facility they departed, should they wish to return.
Underage Labor Process
Violation Return home Wages paid Education Employment

identification Supplier required to Supplier required to Supplier required to guarantee
Apple assessor and immediately provide continue to pay wages provide educational Supplier required to
third-party auditor safe passage home to worker until they opportunity for worker. provide employment
identify underage to underage worker. reach legal working age. opportunity upon worker
labor violation. reaching legal age.

Health and Safety

The average Health and Safety score across our 756 supply chain
assessments in 2017 was 90 out of 100.
90
In 2017, the majority of violations discovered were in the Health and
Safety Hazard Prevention and the Emergency Prevention, Preparedness,
90 out of 100 Average
Health and Safety Score and Response categories.
Examples of Health and Safety Hazard Prevention violations include

inadequate monitoring of chemical, biological, or physical hazards. If
inadequacies are found, the supplier is required to employ qualified testing
firms to conduct monitoring according to legal standards and Apple
requirements. Furthermore, Apple subject matter experts teach suppliers
to conduct comprehensive occupational health and safety risk assessments,
develop a full inventory of occupational health and safety hazards in the
facility, set up a regular monitoring plan, and provide coaching to their team
members to ensure their understanding of all requirements. A facility that
has an appointed health manager who inspects chemical, biological, and
physical hazards, but lacks a regular monitoring scheme occurring on a
weekly basis, would receive a violation.
One example of an Emergency Prevention, Preparedness, and Response

Violation is inadequate smoke detector installation. In 2017, we found
instances of facilities that installed fire equipment, but did not install
fire detectors in all rooms and public dormitory areas. Suppliers receive
a violation if proper equipment is not installed or if they fail to complete
regular fire detector inspections. A lower percentage of assessment
violations were related to health and safety permitting, incident
management, and working and living conditions.
In 2017, no Core Violations were discovered in the Health and Safety category.

Health and Safety Non-Compliance Breakdown
5.0
5
3.4
1.1
1
0.6
0.2
0
Occupational Emergency Health and Working and Incident

Health and Safety Prevention, Safety Permits Living Conditions Management
Hazard Prevention Preparedness,
and Response

Environment
The average Environment Assessment Score across our 756 supply
chain assessments in 2017 was 91 out of 100.
91
The bar for environmental performance standards was elevated in 2017. We
enhanced our requirements for wastewater discharge quality standards. In
91 out of 100
Average Environment situations where legal limits are not established for a receiving water body,
Assessment Score the enhanced standards set clearer guidance on how to monitor stormwater
discharge to prevent potential contamination. Managing stormwater is a
critical part of a comprehensive strategy to improve receiving water quality.
Apple has made stormwater management training a core part of our Clean
Water Program’s training curriculum as well.
The majority of Environmental Violations found in 2017 were related to

hazardous substance management and environmental permits.
Raising the Bar Hazardous Substance Management Violations include improper waste
in Environmental storage or inadequate segregation of waste types. When Hazardous
Compliance Substance Management Violations are discovered, an Apple subject matter
expert engages onsite with supplier leadership to define clear roles and
responsibilities on hazardous waste management and provides practical
tools. The supplier is required to renovate or even rebuild their hazardous
substance storage area to ensure storage conditions minimize or prevent
Higher wastewater
and stormwater safety hazards and environmental impacts. For example, one facility’s
monitoring requirements waste storage area had a standard warning sign indicating the presence
of hazardous materials, but no signs indicating the specific types of waste
stored. This resulted in the facility receiving a violation.
Improper segregation of waste can pose a potential risk of creating

secondary hazards. When this is uncovered, Apple subject matter experts
go onsite to work with the supplier’s environmental health and safety staff to
review gaps and root causes, and provide tools and guidance to the supplier
on how to segregate their waste properly to mitigate risks.
Apple subject matter experts also work with suppliers to set up a complete
inventory of hazardous substances, develop a matrix based on substance
characteristics and compatibility, and teach them how to conduct regular
checks and maintenance to ensure all risks are mitigated.

Examples of Environmental Permit Violations include expired permits or
insufficient operating licenses. Environmental permitting is a basic legal
requirement for an operation. When expired permits or insufficient licenses
are uncovered, the supplier is required to follow applicable laws and
administrative processes to renew their permit or apply for a new license.
For example, a facility that had a Pollution Discharge Permit, but failed to
update it after a construction project, was issued a violation. Support was
provided as necessary during this time to assist suppliers by providing
consultation in circumstances where improvements of environmental
facilities may be necessary to meet requirements.
A lower percentage of assessment violations were identified in air

emissions management, non-hazardous waste management, boundary
noise management, and pollution prevention.
Environment Non-Compliance Breakdown

2.5
2.2
1.7
1.6
1.5
1.1
1 0.9
0.5
0.5 0.4
0.1
0
Hazardous Stormwater Environmental Wastewater Air Emissions Boundary Non-Hazardous Pollution

Substance Management Permits Management Management Noise Waste Prevention
Management Management Management and Resource
Reduction

In 2017, four environmental-related Core Violations were identified, and
suppliers were placed on immediate probation. Three Core Violations were
related to improper wastewater management, for which we elevated the
focus in 2017. One Core Violation was related to air emissions.
Wastewater and Air Emission

With every Wastewater and Air Emission Core Violation, the supplier is
required to immediately stop the wastewater discharge or air emission,
including the suspension of production if necessary. The supplier must then
conduct a comprehensive root cause analysis, and implement remediation
actions to prevent future incidents of wastewater or air emission pollution.
An example of a Wastewater Core Violation is a facility that discharged
process wastewater into public drainage with pollutant concentrations
higher than the legal limit. This facility was required to immediately stop
discharging the wastewater, store the wastewater in temporary containers,
and fix their wastewater treatment plant to ensure they met the legal limits.
An example of an Air Emission Core Violation is the waste air generated
from manufacturing processes that release volatile organic compounds into
the atmosphere directly without any treatment. This facility was required
to immediately stop the air emission, and install proper air treatment
equipment to ensure the air meets legal limits.
Wastewater/Air Emission Violation Remediation Process
Stop discharge Root cause analysis Remediation actions

Supplier must immediately Supplier must conduct Supplier must implement
stop wastewater discharge/ root cause analysis. remediation actions to
air emission. prevent future incidents.

Carpenter, Apple Retail fixtures
United States
Driving higher standards

with all suppliers, big
and small.
The Apple Supplier Code of Conduct drives performance with suppliers both
big and small. From large final assembly facilities, to small suppliers with a
dozen employees, we work every year to expand our partnerships to help
suppliers provide responsible and environmentally conscious workplaces.

Apple Services and Logistics Suppliers
In 2012, a partnership began with Apple’s Services and Logistics suppliers
to extend our Supplier Code of Conduct further into the service domain.
These efforts help our suppliers avoid Working Hours Violations, provide
proper health and safety training, and maintain a fair workplace. In 2017,
we visited 30 AppleCare Centers and 10 logistics centers in 16 countries
to conduct assessments.
Retail Suppliers
In 2016, our Supplier Code of Conduct engagement was extended to include
employees working for retail store suppliers. Assessments were conducted
on suppliers supporting 20 of our stores, identifying opportunities to improve
400% year-over- and strengthen both their management systems and employee training.
year increase in
retail manufacturing In 2017, we expanded the program, assessing suppliers conducting
assessments services for 100 of our stores. We strengthened suppliers’ management
systems, working hours compliance, employment contracts, and
grievance channels. Employees were provided extensive training on
worker protections, health, and safety.

China
Where we’re headed.

Every day, we’re working toward our vision for the future. A future where
people feel empowered and respected at work. Where our supply chain
is always working to protect our planet. And where our suppliers have the
capability to provide an industry-leading workplace.
Our work is never done. By partnering with our suppliers to drive the highest
standards in the industry, we remain committed to making a positive impact
on the people in our supply chain and the planet.

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Supplier

We partner with our suppliers to offer global programs that provide

An environmentally responsible supply chain is a major part of Apple’s

Apple’s Supplier Code of Conduct underscores a commitment to human

A commitment to people, the planet, and the progress of our suppliers is

Apple Supplier Responsibility 2018 Progress Report 2

We believe the best products are made

We partner with new suppliers to help

Apple Supplier Responsibility 2018 Progress Report 3

Apple Supplier Responsibility 2018 Progress Report 4

Carpenter, Apple Retail fixtures

People are the strongest

Apple Supplier Responsibility 2018 Progress Report 6

In 2017, efforts to empower women through health education began at

Growing Health Knowledge

Early Cancer Detection Nutrition Personal Care Women’s Health

The program builds upon itself by leveraging a peer-to-peer model. Each

Apple Supplier Responsibility 2018 Progress Report 7

“I have been sharing what I learn in the class about

Women’s health program participants

Apple Supplier Responsibility 2018 Progress Report 8

A comprehensive survey of key supplier sites, covering nearly half

Factory Line Leader Program

Technical and A guaranteed internship Opportunity for full-time

After completing Factory Line Leader training, students are guaranteed an

Apple Supplier Responsibility 2018 Progress Report 9

How is the Apple Factory Line Leader Program different from

Why do you feel it’s important to offer vocational

Factory Line Leader

Apple Supplier Responsibility 2018 Progress Report 10

In 2017, we focused on developing high-demand content to address

iPad Production Line Operators

Apple Supplier Responsibility 2018 Progress Report 11

To date, EHS Academy

While receiving training at the EHS Academy, local managers learn

Apple Supplier Responsibility 2018 Progress Report 12

A workplace that empowers

Apple Supplier Responsibility 2018 Progress Report 13

Supplier Employee Training Program

Training on local Training on Apple’s Supplier Notification of

Providing a voice for employees.

Employees are encouraged to report any retaliation to Apple. We

Apple Supplier Responsibility 2018 Progress Report 14

Through the years, Xu rose up the ranks from management trainee

Workplace training leads to workplace advocacy.

Apple Supplier Responsibility 2018 Progress Report 15

Apple Supplier Responsibility 2018 Progress Report 16

Probation notice Repayment deadline Repayment approval Payment confirmed

We have made consistent progress to eliminate involuntary labor in our

Apple Supplier Responsibility 2018 Progress Report 17

How We Identify Underage Labor

Factory inspections Employee interviews Process review Further assessments

Identifying underage labor is not enough, the supplier must:

Apple Supplier Responsibility 2018 Progress Report 18

To give all employees a strong sense of belonging and a more inclusive

iPad Production Line Operators

Apple Supplier Responsibility 2018 Progress Report 19

A respect for human rights,

Apple Supplier Responsibility 2018 Progress Report 20

“I have been sharing what I learn in the class about

“Apple’s consultation broadened our mindset and