Apple's Supply Chain Sustainability: 2019 Progress Report, Study notes of Human Rights

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2019 Progress Report

Supplier Responsibility

“ We believe that

business, at its best,

serves the public good,

empowers people

around the world, and

binds us together as

never before.”

Tim Cook

CEO

Content

People Building new skills for the future Creating paths to advancement Health education Supplier workplace rights training

Planet Greener supply chains reach beyond factory walls Water stewardship Safer process chemicals Eliminating waste Combating climate change

Progress Apple-managed assessments 2018 Assessment results Progress in our mineral supply chain A deeper look at our Apple-managed assessment results Labor and Human Rights assessment results Health and Safety assessment results Environment assessment results Leading by example and sharing our work

$ 30.9M

7.6B

76

% 1049

96

% 17.3M+

100

% 30

%

compliance with Apple Working Hours Standards across all work weeks

supplier employees trained on their rights since 2007

In 2018, Apple was awarded an A+ rating and ranked first out of 40 retailers by Mind the Store for our actions to eliminate toxic chemicals

ranking, Corporate Information Transparency Index (CITI), 5th year in a row

participation in third-party audits across identified tin, tantalum, tungsten, gold, and cobalt smelters and refiners

increase in high-performing suppliers year over year

supplier recruitment fees repaid since 2008, $616k repaid to 287 supplier employees in 2018

gallons of freshwater saved and 39% supplier water reuse rate

high-performing supplier facilities, 1% low-performing

2018 Stop Slavery Award — issued by Thomson Reuters Foundation

final assembly sites for iPhone, iPad, Mac, Apple Watch, AirPods, and HomePod UL Zero Waste certified

770 Apple-managed supplier assessments + 279 smelter and refiner third-party audits conducted in 45 countries

1

100

% A+^

1

Mind the Store

People

2018 Highlights

Planet

Progress

Fusion Machine Operator, Device Glass Technology, United States

Over 3.6 million supplier employees have

participated in education and skill-building

programs to date.

People

Empowering people through

education, skill building and

a safe and respectful workplace

Building new skills for the future

Creating paths to advancement: New skills, degrees, and pathways

Health education: Elevating knowledge

Supplier workplace rights training: Respect for human rights throughout our supply chain

Building new skills

for the future

Our education programs are designed to provide a path to advancement for the people in our supply chain, from life skills to vocational certifications and college degrees. Here are the stories of a few of those employees who participated in Apple education programs in 2018.

For the millions of employees who work for Apple’s suppliers, advancement often begins with education. That means education of all kinds — vocational education, education in the soft skills that help employees become better managers, and health education that gives them tools to manage their well- being. Apple’s education programs are designed to function like a staircase, allowing participants to climb, one step at a time, toward their goals.

Robotics instructor with students, Robotics classroom, China

You can see that in action at the facilities of Catcher Technology in Suqian, a Chinese city of 5 million, 300 miles northwest of Shanghai. There, Liu Jingbo is leading his students into the future of manufacturing. The students, though, aren’t merely students — they are full-time employees at Catcher who are taking advantage of a program created by Apple that provides on-the-job training in the kind of automation technology that is changing the way manufacturing is done. On each side of the students are six industrial robotic arms at rest, the same kind used throughout Catcher’s facility, which manufactures precisely molded machine metal casings that form the foundations of iPhone, iPad, and MacBook. “You need to know the basic coding of how to program your robotic arm,” Liu tells his students, who sit before operating systems that control the model robot arms. “But you also need critical thinking skills, so you know how to troubleshoot.”

At the facilities of the electronics manufacturer Jabil in the central Chinese city of Chengdu, employees were given the opportunity to dedicate time this past fall to learning to code in the Swift language used to create iPhone apps. And that’s exactly what they did, building their own original apps over the course of their time in training.

“It really changed my life,” says Tao Jiang, a technician who joined Jabil in 2018 and co-created an app that helps employees share technical tips through a workplace social media system. “Now if I face a problem, I can turn it around to look at it in a different way. It’s totally changed my mindset at work. Before I was just an operator, but now I want to be a professional in the IT department.”

Another education program, the Factory Line Leader Program, provides college students from vocational schools in four provinces across China with an opportunity to learn to become what are known as line leaders — manufacturing line supervisors, essentially — through a newly created work-study program.

“Now if I face a problem, I can turn it around

to look at it in a different way. It’s totally changed my mindset at work.”

Empowerment and life skills Vocational skills Education and career advancement

Mobile learning

Bachelor’s degree

Factory Line Leader

Health awareness Environmental Health and Safety certification

Electrician services

Life-skills courses

Vocational certification

Robotics

Personal enrichment courses

Associate’s degree

Swift coding

3.6M+ Over 3.6 million participants to date

Creating paths to advancement

New skills, degrees,

and pathways

Since 2008, we’ve provided the people in our supply chain with opportunities to take part in education and skill-building programs. We began with classrooms that offered supplier employees access to online learning that spanned life skills to enrichment to college degrees. As our education program grew, we reached more people, in more parts of our supply chain, with more diverse offerings. Today, employees in our manufacturing supply chain, and people deeper in our supply chain have access to skill-building that can help them advance in their jobs, and gain further education.

A path to advance — at every skill level

68

%

42

of participants had minimal or no coding experience before the program; today, they can develop an app

apps developed by participants spanning workplace improvements, gaming, and social networking

Coding a new career path

In 2017, a program was created to share Apple’s Swift coding technology with supply chain employees. Swift was developed by Apple as an intuitive tool that makes learning to code fun and interactive.

Our coding program initially focused on bringing training to supplier employees in several major sites around China, and started with the basics. Once familiar with operating systems and interfaces, students began learning to code. The program offers interactive lessons to teach key coding concepts, and additional challenges and templates encourage students to explore code in engaging new ways.

In 2018, the next phase of Swift content rolled out to participating supplier facilities, an intensive App Development with Swift training program. At the end of the program, many students had the skills to successfully create their own app. The apps cover a wide range of topics, from real-time machine maintenance to employee engagement and community building.

Since graduating from the program, many participants have gained more advanced positions at work in IT-related roles. Whether it’s a more advanced job at the factory or an opportunity with Apple, providing opportunities for personal and job advancement after completing the program is a priority.

13.5K+

6 K+

enrolled in degree program since 2008

enrolled in vocational certification since 2017

Environmental Health and Safety

iPhone repair Electrician services

Vocational certification — a path to advancement

More options, more opportunity

Since 2008, our Supplier Employee Education and Development (SEED) Program has empowered supplier employees through education. In addition to college courses, participants can take courses that range from art to learning a new language to financial planning.

In 2018, over 1500 supplier employees earned a college degree through the SEED Program. Since SEED began, over 13,500 supplier employees have enrolled in a degree program.

In 2017, vocational certifications were added to the SEED curriculum. Today, supply chain employees can obtain certifications in skills such as iPhone repair, Environmental Health and Safety, and electrician services. The certifications give supplier employees an opportunity for immediate job advancement upon completion of training.

In 2018, more than 3000 supplier employees participated in vocational certification training.

744

203

supplier employees earned a certificate in assembly line robotics in 2018

participants in the SEED Program now hold advanced robotics positions at supplier facilities

New skills for the workforce

of tomorrow

Skill building for smart manufacturing

As a part of SEED’s expansion into vocational certification, a program was launched to provide robotics training to employees in our supply chain. The program offers on-the-job training to equip supplier employees with skills to work in the new landscape of smart manufacturing while receiving opportunities for job growth and advancement.

Skill building for tomorrow’s leaders

In addition to robotics certifications, Apple’s Factory Line Leader Program was developed in 2017. Line leaders provide management to an assembly line, a job that requires managerial and soft skills. The Factory Line Leader Program provides vocational training students with the technical and soft skills necessary to become qualified line leaders.

The program partners with leading academics in diverse regions of China to create custom vocational training programs to best prepare the workforce of tomorrow. After completing Factory Line Leader training, students are guaranteed an internship with an Apple supplier and full-time employment opportunities.

Following completion of their internships in 2019, program participants will be eligible for line leader positions at Apple suppliers.

Gaining the skills for a new profession

Christelle learned of the Apple-funded vocational education program offered by Pact in 2017. She told her friends who worked with her at a local mine about the program but, ultimately, she was the first of her friends to sign up.

Of the options available, Christelle was most interested in hairstyling, and began her vocational training in October 2017. She spent months taking courses at a hair salon, and spent her free time practicing her new skills on friends and neighbors.

Today, Christelle works in a salon. Her friends have seen Christelle excel in her new work, and four have chosen to follow her lead and are seeking to learn hairstyling through Pact’s vocational education program.

Christelle Banza Mujinga, Beauty and Hairstyling, Democratic Republic of the Congo

“Thanks to the project, I was able to train in beauty and hairstyling. With the money I earn, I can purchase everything that I need. Now, I can support myself and sometimes, when food is scarce at home, I provide my contribution. I am very proud to be able to help my parents.”

17

% 16

%

increase in overall knowledge of women’s health issues

increase in utilization of women’s health care

Health education

Elevating knowledge

In 2017, our education efforts expanded to health. The Health Program was launched using a peer-to-peer training model at several supplier facilities in China in an effort to empower women in our supply chain with information to maintain their health.

Beyond basic health knowledge, the program provides vital information and training on critical topics such as self-examination for early breast cancer detection, nutrition, personal care, and maternal health.

We set an ambitious goal — to bring health awareness to over one million people in our supply chain by 2020.

“After giving birth to my baby, I was having symptoms

I didn’t understand. After attending Apple’s health training, I understood the symptoms and proactively went to the hospital for treatment.”

Zhang Yanling Apple Health Program participant

Women’s empowerment through health awareness