In Focus: Intel and Responsible Mineral Sourcing

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Intel is recognized for its achievements on supply chain sustainability. The company has manufactured microprocessors that are conflict-free since 2013 and has been a leader in eradicating forced labor practices. Aiste Brackley spoke to Dr. Adam Schafer, who leads supply chain sustainability initiatives at Intel and is also on the Steering Committee of the ERM Group’s first Mining and Technology Forum, to take place in 2020.

Aiste Brackley: What is unique about Intel’s supply chain? 

Adam Schafer: Unlike many electronics companies, we have two significant supply chains. We’re a manufacturing company with factories in the US, Europe and Asia. There is significant effort involved in managing supply chain sustainability at those factories – materials, equipment, emissions, recycling and other environmental issues.

We also have a significant supply chain of outsourced manufactured components. We work with original device and component manufacturers – everything from cast metal components for a hard drive to more complicated integrated electronic parts.

We must work across both of these communities to bring the total picture of sustainability together.

Intel has a strong record on supply chain sustainability. What are some of your achievements that you are most proud of?

The most fundamental achievement is not something that we have been able to achieve alone. The Responsible Business Alliance was started in mid-2000s by less than a dozen of companies, and Intel was one of them. It is now the world’s largest industry coalition dedicated to corporate social responsibility in global supply chains, representing trillions of dollars of revenue from many industries.

Another major achievement has been our leadership around eliminating conflict minerals. We were among the founders of the Responsible Minerals Initiative. We have always taken the view that the most effective way to address issues around conflict minerals is not to run away from them but drive robust due diligence in the regions and improve sourcing.

The collective work of companies had big impact on the regulatory landscape, paving the way for regulatory measures such as the Dodd-Frank Act, which requires companies to report publicly on their due diligence to eliminate conflict minerals in supply chain, and the EU Conflict Minerals Regulation, set to come into force in 2021.

We’re not by any means done or perfect. But we have taken a very consistent view on who we are and how various issues fit into our Code of Conduct. Leading from the front is the appropriate way to drive our and other industries to be more sustainable.

Remember that there are a lot of wheels that have already been invented – make sure to look and learn from the work that has already been done.

What are the lessons that you have learned and that your peers could learn from?

If a company is only starting on their sustainability journey, it is important to take the time to understand and define the value that it brings. A circular economy story for a consumer products company with a lot of plastic bottles will bring up very different materiality aspects to circular economy issues for a company like ours, where we focus on effectively managing and reusing chemical waste.

Secondly, remember that there are a lot of wheels that have already been invented – make sure to look and learn from the work that has already been done.

Finally, companies should aim to lead from the front.

There’s a responsibility on less developed programs to catch up, not a responsibility for the more developed programs to slow down.

There’s a responsibility on less developed programs to catch up, not a responsibility for the more developed programs to slow down.

What role does collaboration play in individual and collective success of the industry?

There are no companies that have perfect leverage to drive change in their suppliers. But together companies can be multiplicative and not only affect their individual suppliers but drive change in the entire market. Conflict minerals is a good example of where that has been successful. By no means is it a solved problem but it is a completely different market than it was ten years ago. There is no way we could have achieved this progress without cooperation from our supply chain and customers, the two key partners.

Intel has manufactured microprocessors that are free of conflict minerals since 2013. How did you manage to achieve this milestone and what are some of the biggest challenges that still lie ahead?

It took us some time to realize that we should focus on smelters because that’s where we could be most effective and where we could affect the market the most. Focusing on smelters, with lots of energy put into due diligence efforts, audits and collecting data over the years is what took us to where we are, being able to manufacture our products free of conflict minerals.

The world’s attention in the last few years has been mostly focused on cobalt above traditional tin, tungsten, tantalum, gold and other minerals. In part thanks to this attention, the road from zero to certifiable due diligence of cobalt took less than two years. This pace of change is good news for electronics companies, given the significance of cobalt for the industry.

When it comes to remaining challenges and the next frontier in responsible mineral sourcing, my catchphrase is the rest of the periodic table and the rest of the world.

We use most of the periodic table elements in the manufacturing of our products that come from all over the world. We have a lot to work on and learn about in order to responsibly source all these materials. We don’t expect it to happen instantly, but we can drive that commitment.

You are on the Steering Committee of the Mining and Technology Forum, to be organized by the ERM Group in 2020. What opportunities could result from closer collaboration of the two sectors?

The most important outcome that technology sector companies can get out of closer collaboration with the mining industry is learning about the materials. Every time I have worked with a mining company – whether it is a giant global leader or a small regional company – I have learnt a lot about the industry. Whether it’s the pressure that a Chilean miner is facing on water availability in the high desert or the sourcing of certain minerals as by-products of other minerals – we need to know more about each other’s business and sustainability challenges.

The most important outcome that technology sector companies can get out of closer collaboration with the mining industry is learning about the materials.

What do you see as the most promising emerging solutions in supply chain sustainability?

Emerging technologies offer many opportunities, and their thoughtful application can bring about effective solutions to many problems. However, I am a strong believer that there isn’t one miracle technology that will provide all the answers.

The real opportunity with many technologies is adding fidelity to the programs that we already have. For instance, blockchain alone can’t drive traceability from the mine to the mobile phone. However, it has the potential to greatly improve the fidelity of the systems that we have, to trace materials from the mine through the refiner to the smelter to the product.

Better supply chain sustainability ratings are another solution that I would like to see at a greater scale.

Better supply chain sustainability ratings are another solution that I would like to see at a greater scale. We need both more specialized ratings on supply chain sustainability specifically but also greater transparency on their methodology in order to drive better performance of companies and industries.

About the author

Aiste Brackley
Aiste Brackley

Aiste is Director and head of thought leadership and research at SustainAbility. Passionate about data, climate change, women’s leadership and jazz. Ultimate believer in human creativity and potential.

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