Texas Instruments

2012 Corporate Citizenship Report


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Supply chain transparency

Metals | Chemicals | Paper | Labor

TI believes that public reporting on sustainability increases transparency, and leads to improved sustainability and social responsibility practices. We encourage our suppliers to publish reports disclosing their own sustainability and social responsibility efforts using an internationally recognized reporting framework, such as Global Reporting Initiative (GRI) guidelines.

GRI guidelines include quantitative metrics on workplace safety and human and worker rights, as well as environmental compliance. Over time, we will encourage all of our strategic suppliers to publish independently verifiable sustainability reports.

Additionally, our company goes to great lengths to provide the kind of information and transparency we expect from our suppliers. For example:

  • Our external Eco-Info and Lead (Pb)-Free website and product content database allow customers to view information on the materials contained within our products.
  • We engage suppliers continuously to discuss their contracts and delivery strategies, solicit their feedback, and address management issues.
  • We detail our supply-chain management and monitoring programs, and disclose our annual performance in this citizenship report.
  • We share findings of the Electronic Industry Citizenship Coalition/Global E-Sustainability Initiative's Conflict Minerals Reporting Template with customers as required. This template facilitates the disclosure of information regarding smelters that provide material to a company's supply chain.
  • We regularly meet with customers and suppliers to respond to questions about our environmental and social responsibility activities.

Responsible sourcing

TI's strategic procurement plan enables us to purchase intelligently and coordinate buying power globally. Our worldwide procurement teams oversee various categories of goods and services, set specific procurement strategies, and identify qualified suppliers and the best fulfillment methods.

We source the majority of our services and products locally to drive economic development and employment to communities where we operate. Currently, more than half of our procurement occurs outside the United States.

We also consciously consider sustainability in our purchasing decisions, and have guidelines in place for purchasing and using specific resources.

Metals

Tin, tantalum, tungsten and gold are integral to the manufacture of TI's products. Additionally, we use a very small amount of cerium. These metals are not sourced directly by our company, but are included in other materials that we purchase.

Conflict minerals
The U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act seeks public disclosure of companies' sourcing of tin, tantalum, tungsten and gold from mines that contribute to conflict in the Democratic Republic of Congo or adjoining countries. In 2012, the U.S. Securities and Exchange Commission enacted regulations to implement a law that requires publicly traded U.S. companies to disclose the extent to which their products contain conflict minerals sourced from Congo-area mines.

TI does not purchase these metals directly from any smelter or mine, and thus must rely on source information that its suppliers provide. We collect this information using the Electronic Industry Citizenship Coalition/Global E-Sustainability Initiative's Conflict Minerals Reporting Template, which helps companies trace metals back through their supply chain.

We also support industry initiatives, such as the Conflict-Free Smelter program, to validate responsible and sustainable sources of these minerals. When the program's list of validated smelters becomes available, we will require suppliers to implement program policies and source from approved smelters. Data collected through these initiatives indicates that substantially all of our products that contain tantalum are conflict-free. Industry efforts focused on tin, tungsten and gold are ongoing.

In addition, we have a conflict minerals policy that addresses the procurement and use of specific materials and related supplier requirements. It states that if we become aware of a supplier whose supply chain includes metals from a conflict source, we will take the appropriate actions to remedy the situation promptly, including reassessing supplier relationships. We also expect suppliers to take similar measures with their suppliers to ensure alignment throughout the supply chain.

Rare earth metals
A small amount of cerium, which is a light rare earth metal, is critical for the fabrication of some of our semiconductor devices. In 2010, China constrained the mining and export of rare earth metals like cerium. Other regions initiated production of these materials, and existing mines increased output when prices rose dramatically.

These events led to an oversupply of light rare earth metals, including cerium, and a relaxation of Chinese export quotas that relieved the imbalances. By 2012, pricing pressures had subsided and the availability and cost of cerium no longer posed a concern for TI. This helped us continue meeting our customers' product expectations.

Chemicals

We comply with chemical standards and regulations and use benign chemicals where possible in our manufacturing processes. We screen all chemicals to ensure compliance with customer requirements and regulatory standards. We also ensure that any necessary environmental, safety and health controls are in place.

Paper

In the past decade, our procurement of eco-friendly paper has evolved from excluding old-growth forest products to purchasing more print and paper goods from Forest Stewardship Council- and Sustainable Forestry Initiative-certified distributors. Today, paper used at TI contains at least 30 percent postconsumer waste.

We continue to use eco-friendly paper products in our printers. We also are continuing the use of eco-products globally, such as file folders, boxes and other items with significant paper content, to further support our environmentally sustainable procurement practices.

Labor

TI is committed to protecting both our own employees and those employed by our suppliers. Our labor policies and guidelines are designed to ensure their humane and ethical treatment.

We require suppliers to certify compliance with applicable labor laws and support our supplier code of conduct. Suppliers must affirm that their products will not be manufactured with the use of forced labor (including prison and indentured labor) or child labor.

When initiating relationships with suppliers, we educate them about our standards and expectations for safe, humane and ethical labor practices. These guidelines are communicated in meetings; on our supplier website; and in purchase orders, supplier contracts and other related documentation.

If suppliers have questions or concerns about doing business with TI, we make our buyers or procurement representatives available to meet with them. Our Supply-Chain Management team can also assist with identifying and addressing issues that are inconsistent with our ethics and values. If suppliers prefer, they can contact our Ethics Office to anonymously ask questions or discuss issues.

Human trafficking
The California Transparency in Supply Chains Act requires companies doing business in that state to report their efforts to eradicate human trafficking. Our disclosures summary provides quick access to all relevant information about our efforts on this point and the humane treatment of workers globally.

We continuously assess global labor risks and monitor supplier performance to ensure ongoing compliance. We do not currently conduct third-party audits to evaluate risks of human trafficking and slavery. However, if a supplier operates in a high-risk region or insufficiently demonstrates its adherence to viable labor, ethics and compliance practices, we conduct announced, on-site inspections. If we find deficiencies, suppliers have 90 days to make corrective actions.