Global Citizenship

 

 


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Global Citizenship.

 

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Supply Chain

Responsibility

At Lexmark, we work closely with our suppliers to ensure our products and services have a positive impact on people, communities, and the environment. We choose suppliers who share our vision of corporate citizenship and agree to conform to Lexmark’s expectations and standards. We monitor the performance and compliance of our suppliers by analyzing on a regular basis their social, environmental and economic data.

Our membership and participation since 2009 in the Electronic Industry Citizenship Coalition (EICC) has further strengthened our organizational efforts in support of human rights, labor standards, and other corporate social responsibility values. Lexmark has adopted and actively pursues conformance to the EICC Code of Conduct supplemented by the Lexmark Supplier Code of Conduct.

Fundamental areas of the Lexmark Supplier Code of Conduct

Compliance with the EICC and Lexmark Supplier Code of Conduct

Lexmark works with a multitude of direct and indirect suppliers. All Lexmark suppliers are expected to comply with the EICC and Lexmark Supplier Code of Conduct. In accordance with EICC guidelines, Lexmark conducts third-party audits for several of our Tier 1 suppliers to monitor compliance in these areas.

Supply chain responsibility program at Lexmark

The Lexmark Vice President of Global Supply Chain and Planning is the senior person responsible for delivering on our environmental, social and governance (ESG) objectives. At the operational level, the management of Global Sourcing and Supplies Operations has responsibility for implementing the ESG objectives.

Lexmark procurement staff have received training in ESG issues related to our procurement processes. Lexmark procurement personnel also have access to a database of supplier information that includes the suppliers' ESG commitments, as well as their performance metrics. All Lexmark staff that engage with suppliers are expected to consider the ESG impacts of engaging with a supplier prior to entering into a relationship with the supplier.

Sustainability is integrated with the Lexmark supplier selection and retention processes. Lexmark provides incentives for suppliers to adhere to EICC guidelines by offering long-term contracts, collaborating on production volumes, consolidating suppliers and partnering on development projects.

 

 

The EICC Code of Conduct
The EICC Code of Conduct sets forth performance, compliance, auditing and reporting guidelines across five areas of social responsibility:

Locations

Lexmark sourcing teams are encouraged to select suppliers that are near the location where their products will be used—such as near a manufacturing location—when possible. The use of locally based suppliers is both environmentally and financially preferable, resulting in positive local impacts.

Lexmark supplies are strategically produced in local economies near our customers. We produce supplies in Poland to meet the needs of our customers in Europe. Lexmark sources supplies for Asia Pacific from China, and our manufacturing plant in Mexico produces supplies for Latin America and North America. Manufacturing products regionally near our distribution centers not only allows our customers to receive needed supplies faster, it provides an opportunity for our customers to recycle their supplies closer to home.

Key and strategic suppliers
Key and strategic suppliers account for a significant percentage of Lexmark total procurement spending. Based on 2016 spending, the 141 key and strategic suppliers make up about 40 percent of our purchases.1

 

Our goal is to regionally source 80% of our supplies by 2017

We regionally sourced 78% of our supplies in 2016.

Accountability

To better understand corporate social responsibility (CSR) risks in the supply chain, Lexmark analyzes the spending behavior of that chain, evaluating basic information (total number of suppliers, geographic spread, and so on), as well as social and environmental aspects such as supplier diversity and environmental factors. These spending analyses are conducted with specially developed data-collection tools and are conducted in collaboration with consultants specializing in supply chain analyses.

  • Our spending-analysis process
    Over the last four years, 100 percent of Lexmark procurement spending was subject to our spending-analysis process. Through this process, we have identified critical suppliers–our high-volume, high-spending suppliers, suppliers of critical components and unique or sole source suppliers. Lexmark has over 9,000 suppliers, 1.5 percent of which have been identified as key and strategic 1.
  • Risk management
    Less than 1 percent of our suppliers are determined to be high risk. Based on how critical the risk is, Lexmark conducts a deeper analysis of economic (cash management), environmental (weather-related), and social (war and political instability) risk factors.

    These risks are managed in part through the EICC Code of Conduct. This code prescribes best practices related to environmental performance in operations, human rights (forced or child labor, freedom of association, International Labour Organization conventions), working conditions (working hours, layoff practices, remuneration), occupational health and safety and business ethics (corruption, anti-competitive practices). To improve business practices and assist companies in identifying risks and driving improvements, self-audits and site audits are conducted in conformance with the EICC Code of Conduct, laws, and regulations.
  • Demonstrating improvement
    Lexmark requests information from its suppliers to determine their policies and principles that protect the environment and promote social responsibility. We encourage suppliers to demonstrate continual improvement through the completion of the EICC Self-Assessment Questionnaire (SAQ) or Lexmark Supplier Sustainability Questionnaire.

    The Lexmark Supplier Sustainability Questionnaire provides us greater understanding and transparency of the CSR initiatives of the key suppliers of goods and services that support our operations. The questionnaire input creates ongoing discussions between Lexmark and its suppliers so that we can document our progress on environmental and social initiatives, and helps us explore how we can improve as responsible corporate citizens.

    Lexmark collaborates with the EICC and CDP to encourage our suppliers to disclose their environmental information. Our goal is to disclose the energy consumption and emissions of our suppliers to improve the management of environmental risk, prevent climate change and protect our natural resources. Lexmark measures and discloses our environmental information and we request our key and strategic suppliers to collect and report their environmental data to drive action toward a more sustainable world.
  • Conflict minerals
    On August 22, 2012, the U.S. Securities and Exchange Commission (SEC) released its final rules for the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requiring SEC filing companies to report on the use of conflict minerals (tin, tantalum, tungsten and gold) in companies’ products. Lexmark has filed such reports each year since the rules were established. Lexmark maintains a policy of responsible global sourcing including work toward a conflict-free supply chain.

    In November of 2016, Lexmark was sold to a consortium of three investors. When that transaction closed Lexmark was no longer a publicly traded company, removing its reporting obligations to the SEC, including the obligation to prepare a Conflict Minerals Report. However, Lexmark remains committed to a conflict-free supply chain, and will continue its efforts around conflict minerals.

    In support of that effort, Lexmark conducts a country of origin inquiry to determine whether a conflict mineral originated in the Democratic Republic of the Congo (DRC) or an adjoining country. Lexmark, as well its subcontractors and suppliers, discloses its reasonable country of origin inquiry of tin, tungsten, tantalum and gold used in the manufacture of Lexmark products. Lexmark also requires a due diligence declaration identifying the list of smelters used within a supplier’s supply chain. This information must be submitted along with the supplier’s due diligence process. Suppliers must report the results using the EICC template, or Lexmark-approved similar template. Lexmark has filed with the SEC a Conflict Minerals Report in 2016.
  • Human trafficking and slavery
    Lexmark has implemented the following practices to prevent human trafficking and slavery. Our practices and procedures uphold the human rights and labor policies and principles in our supply chain.
    • Standards—Lexmark upholds and respects international human rights standards that promote workers’ rights, fair-employment opportunities and open channels of communication.

    • Verification—Lexmark inspects for compliance through supplier assessments, operation reviews, risk management and third-party audit systems.

    • Audit—Lexmark monitors and audits its facilities and select partners’ facilities by questioning about labor and human rights policies and procedures to ensure that forced, bonded, trafficked, slave or involuntary prison labor is not being used.

    • Training—Lexmark provides training on the EICC Code of Conduct to employees in procurement who have direct responsibility for supply chain management.

    • Accountability—Lexmark suppliers are required by contract to operate in full compliance with laws and regulations, including those regarding human trafficking and slavery in countries of operation or where products are distributed.

    For more details read our Human Trafficking and Slavery Statement.

Diversity

Lexmark strives to encourage and afford opportunities to minority suppliers. The Lexmark Supplier Diversity Program is founded on Lexmark values of mutual respect, corporate citizenship and integrity. Diverse businesses make up a vital segment of the economy, and, therefore, supporting diverse businesses are advantageous to our financial performance and our community.

Our global sourcing efforts with veteran-owned small businesses helped Lexmark earn the distinction of a Military Friendly Employer. This recognition resulted from a leading survey by Victory Media that recognizes companies with the strongest job opportunities and best-in-class hiring and retention programs for transitioning service members and spouses seeking civilian employment.

  • How the supplier diversity program works
    Lexmark sets goals annually to increase contracting opportunities for eligible minority suppliers. These goals are reviewed to determine if they are attainable and represent a meaningful contribution to the Lexmark supplier diversity program. Lexmark employees are encouraged to take an active role in supporting the supplier diversity program by ensuring that diverse-owned vendors are encouraged and given an opportunity to do business with Lexmark.
  • What we buy
    • Construction: New work, additions, alterations or maintenance and repairs services
    • Manufacturing: Packaging, molded plastics, chemicals
    • Printing: Labels, business cards
    • Office Supplies: Furniture, office supplies
    • Consulting/Professional Services: Photography, translation, environmental consulting services
    • Professional Equipment: MRO/Lab supplies
    • Administrative Services: Facilities support services, temporary staff services
    • Educational Services: Instruction and training services
  • Who is eligible
    • All Small Business (including ANCs and Indian Tribes)
    • Small Disadvantaged Business
    • Women-Owned Small Business
    • Veteran-Owned Small Business
    • HUBZone Small Business
    • Service-disabled Veteran-Owned Small Business
  • Program requirements
    • Certification by a third-party agency
    • The company must be at least 51 percent owned and operated by a United States citizen who is a member of one of mentioned groups
  • Business trade organizations
    Lexmark is member of DiversityInc and sponsor of the Lexington, Kentucky, Chamber of Commerce and Minority Business Expo.
  • Diverse supplier registration
    Click here for the Supplier Registration Form. Email the completed form to supplierdiv@lexmark.com. This data will be used to provide a list of diverse suppliers to the appropriate Lexmark decision maker.

 

1 Key and strategic suppliers are those with spend over $1 million and goods and/or services critical to Lexmark operations.

 

Letter from Lexmark's global sourcing vice president
Our vision is to create strategic partnerships with qualified diverse suppliers. We believe this provides us the greatest opportunity to develop innovative and cost-effective business solutions and at the same time, strengthen our company, customers, and community. Supplier diversity brings different strengths and values and a competitive advantage for our company.

Michelle Rawlings Vice President, Global Sourcing and Planning, Lexmark