Apple Inc.

Mission

Apple designs Macs, the best personal computers in the world, along with OS X,
iLife, iWork and professional software. Apple leads the digital music revolution
with its iPods and iTunes online store. Apple has reinvented the mobile phone
with its revolutionary iPhone and App store, and is defining the future of mobile
media and computing devices with iPad.

Vision / Values (from Tim Cook, CEO of Apple Inc.)

We believe that we are on the face of the earth to make great products and that’s
not changing. We are constantly focusing on innovating. We believe in the simple
not the complex. We believe that we need to own and control the primary
technologies behind the products that we make, and participate only in markets
where we can make a significant contribution. We believe in saying no to
thousands of projects, so that we can really focus on the few that are truly
important and meaningful to us. We believe in deep collaboration and cross-
pollination of our groups, which allow us to innovate in a way that others cannot.
And frankly, we don’t settle for anything less than excellence in every group in
the company, and we have the self-honesty to admit when we’re wrong and the
courage to change. And I think regardless of who is in what job those values are
so embedded in this company that Apple will do extremely well.

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Apple Inc. Supplier Code of Conduct (Version 4.5 | Effective Date: January
1, 2019)

Apple is committed to the highest standards of social and environmental

responsibility and ethical conduct. Apple’s suppliers are required to provide safe
working conditions, treat workers with dignity and respect, act fairly and ethically,
and use environmentally responsible practices wherever they make products or
perform services for Apple. Apple requires its suppliers to operate in accordance
with the principles in this Apple Supplier Code of Conduct (“Code”) and in full
compliance with all applicable laws and regulations. This Code goes beyond
compliance with applicable laws by drawing upon internationally recognized
standards to advance social and environmental responsibility. When differences
arise between standards and legal requirements, the stricter standard shall
apply, in compliance with applicable law. This Code outlines Apple’s expectations
for Supplier conduct regarding labor and human rights, health and safety,
environmental protection, ethics, and management practices.

Apple will assess its suppliers’ compliance with this Code, and any violations of
this Code may jeopardize the supplier’s business relationship with Apple, up to
and including termination. This Code applies to Apple suppliers and their
subsidiaries, affiliates, and subcontractors (each a “Supplier”) providing goods or
services to Apple, or for use in or with Apple products.

Additionally, Apple maintains detailed standards (“Standards”) that explicitly

define our expectations for compliance with this Code.

Labor and Human Rights

Apple believes all workers in our supply chain deserve a fair and ethical
workplace. Workers must be treated with the utmost dignity and respect, and
Apple suppliers shall uphold the highest standards of human rights.

Anti-Discrimination
Supplier shall not discriminate against any worker based on age, disability,
ethnicity, gender, marital status, national origin, political affiliation, race, religion,
sexual orientation, gender identity, union membership, or any other status
protected by applicable national or local law, in hiring and other employment
practices. Supplier shall not require pregnancy or medical tests, except where
required by applicable laws or regulations or prudent for workplace safety, and
shall not improperly discriminate based on test results.

Anti-Harassment and Abuse

Supplier shall commit to a workplace free of harassment and abuse. Supplier
shall not threaten workers with, or subject them to, harsh or inhumane treatment,
including but not limited to verbal abuse and harassment, psychological
harassment, mental and physical coercion, and sexual harassment.

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Prevention of Involuntary Labor and Human Trafficking
Supplier shall ensure that all work is voluntary. Supplier shall not traffic persons
or use any form of slave, forced, bonded, indentured, or prison labor. Involuntary
labor includes the transportation, harboring, recruitment, transfer, receipt, or
employment of persons by means of threat, force, coercion, abduction, fraud, or
payments to any person having control over another person for the purpose of
exploitation.

Supplier shall not withhold workers’ original government-issued identification and

travel documents. Supplier shall ensure that workers’ contracts clearly convey
the conditions of employment in a language understood by the workers. Supplier
shall not impose unreasonable restrictions on movement within the workplace or
upon entering or exiting company-provided facilities.

Workers shall not be required to pay employers’ or their agents’ recruitment fees
or other similar fees to obtain their employment. If such fees are found to have
been paid by workers, such fees shall be repaid to the worker.

Third Party Employment Agencies

Supplier shall ensure that the third-party recruitment agencies it uses are
compliant with the provisions of this Code and the law.

Prevention of Underage Labor

Supplier shall employ only workers who are at least 15 years of age, the
applicable minimum legal age for employment, or the applicable age for
completion of compulsory education, whichever is highest. Supplier may provide
legitimate workplace apprenticeship programs for educational benefit that are
consistent with Article 6 of ILO Minimum Age Convention No. 138 or light work
consistent with Article 7 of ILO Minimum Age Convention No. 138.

Juvenile Worker Protections

Supplier may employ juveniles who are older than the applicable legal minimum
age but are younger than 18 years of age, provided they do not perform work
that might jeopardize their health, safety, or morals, consistent with ILO Minimum
Age Convention No. 138. Supplier shall not require juvenile workers to work
overtime or perform nighttime work.

Student Worker Protections

Supplier shall ensure proper management of student workers through proper
maintenance of student records, rigorous due diligence of educational partners,
and protection of students’ rights in accordance with applicable law and
regulations. Supplier shall provide appropriate support and training to all student
workers.

Working Hours
A workweek shall be restricted to 60 hours, including overtime, and workers shall

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have at least one day off every seven days except in emergencies or unusual
situations. Regular workweeks shall not exceed 48 hours. Supplier shall follow all
applicable laws and regulations with respect to working hours and days of rest,
and all overtime must be voluntary.

Wages and Benefits

Supplier shall pay at least the minimum wage and provide any benefits required
by law and/or contract. Supplier shall compensate workers for overtime hours at
the legal premium rate. Supplier shall communicate pay structure and pay
periods to all workers. Supplier shall meet all legal requirements relating to
wages and benefits, pay accurate wages in a timely manner, and wage
deductions shall not be used as a disciplinary measure. All use of temporary and
outsourced labor shall be within the limits of the local law.

Freedom of Association and Collective Bargaining

Supplier shall freely allow workers’ lawful rights to associate with others, form,
and join (or refrain from joining) organizations of their choice, and bargain
collectively, without interference, discrimination, retaliation, or harassment.

Grievance Systems
Supplier shall ensure that workers have an effective mechanism to report
grievances and that facilitates open communication between management and
workers.

Health and Safety

Worker health, safety, and well-being is important to Apple. Supplier shall provide
and maintain a safe work environment and integrate sound health and safety
management practices into its business. Workers shall have the right to refuse
unsafe work and to report unhealthy working conditions.

Health and Safety Permits

Supplier shall obtain, keep current, and comply with all required health and safety
permits.

Occupational Health and Safety Management

Supplier shall identify, evaluate, and manage occupational health and safety
hazards through a prioritized process of hazard elimination, substitution,
engineering controls, administrative controls, and/or personal protective
equipment.

Emergency Preparedness and Response

Supplier shall identify and assess potential emergency situations. For each
situation, Supplier shall develop and implement emergency plans and response
procedures that will minimize harm to life, environment, and property.

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Incident Management
Supplier shall have a system for workers to report health and safety incidents
and near-misses, as well as a system to investigate, track, and manage such
reports. Supplier shall implement corrective action plans to mitigate risks, provide
necessary medical treatment, and facilitate workers’ return to work.

Working and Living Conditions

Supplier shall provide workers with reasonably accessible and clean toilet
facilities and potable water. Supplier-provided dining, food preparation, and
storage facilities shall be sanitary. Worker dormitories provided by Supplier or a
third-party shall be clean and safe and provide reasonable living space.

Health and Safety Communication

Supplier shall provide workers with appropriate workplace health and safety
training in their primary language. Health and safety related information shall be
clearly posted in the facility.

Environment
Apple is committed to protecting the environment, and environmental
responsibility is at the core of how we operate. Supplier shall develop,
implement, and maintain environmentally responsible business practices.

Environmental Permits and Reporting

Supplier shall obtain, keep current, and comply with all required environmental
permits. Supplier shall comply with the reporting requirements of applicable
permits and regulations.

Regulated Substances
Supplier shall comply with Apple’s Regulated Substances Specifications for all
goods it manufactures for, and provides to, Apple.

Hazardous Waste Management

Supplier shall implement a systematic approach to identify, manage, reduce, and
responsibly dispose of or recycle hazardous waste.

Non-Hazardous Waste Management

Supplier shall implement a systematic approach to identify, manage, reduce, and
responsibly dispose of or recycle nonhazardous waste.

Wastewater Management
Supplier shall implement a systematic approach to identify, control, and reduce
wastewater produced by its operations. Supplier shall conduct routine monitoring
of the performance of its wastewater treatment systems.

Stormwater Management
Supplier shall implement a systematic approach to prevent contamination of

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stormwater runoff. Supplier shall prevent illegal discharges and spills from
entering storm drains, the public water supply, or public bodies of water.

Air Emissions Management

Supplier shall identify, manage, reduce, and responsibly control air emissions
emanating from its operations that pose a hazard to the environment. Supplier
shall conduct routine monitoring of the performance of its air emission control
systems.

Supplier shall regularly quantify, set targets, monitor progress, and reduce its
emissions of greenhouse gasses through conservation, use of clean energy, or
other measures.

Boundary Noise Management

Supplier shall identify, control, monitor, and reduce noise generated by the facility
that affects boundary noise levels.

Resource Consumption Management

Supplier shall regularly quantify, set targets, monitor progress, and reduce
consumption of fossil fuel, water, hazardous substances, and natural resources
through conservation, re-use, recycling, substitution, or other measures.

Ethics
Apple expects the highest standards of ethical conduct in all of our endeavors.
Supplier shall always be ethical in every aspect of its business, including
relationships, practices, sourcing, and operations.

Responsible Sourcing of Materials

Suppliers shall exercise due diligence on relevant materials in their supply
chains. Suppliers shall develop particular due diligence policies and management
systems in order to identify applicable risks and take appropriate steps to
mitigate them. Due diligence shall be conducted to the material processing level
in order to determine whether relevant materials originate from regions with high
risks, which include areas associated with conflict, worst forms of child labor,
forced labor and human trafficking, gross human rights violations such as
widespread sexual violence, or other reasonably objective high risk activities,
including severe health and safety risks and negative environmental impacts.

Business Integrity
Supplier shall not engage in corruption, extortion, embezzlement, or bribery to
obtain an unfair or improper advantage. Supplier shall abide by all applicable
anti-corruption laws and regulations of the countries in which it operates,
including the Foreign Corrupt Practices Act (FCPA) and applicable international
anti-corruption conventions.

Suppliers shall have a policy relating to business with Apple that prohibits the

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giving and acceptance of gifts. Gifts include items such as cash, or cash
equivalents including entertainment, gift cards, product discounts, and
nonbusiness activities. Suppliers shall have a process to investigate and report
any violations to the policy.

Disclosure of Information
Supplier shall accurately record information regarding its business activities,
labor, health and safety, and environmental practices and shall disclose such
information, without falsification or misrepresentation, to all appropriate parties
and as required by law.

Protection of Intellectual Property

Supplier shall respect intellectual property rights and safeguard customer
information. Supplier shall manage technology and know-how in a manner that
protects intellectual property rights.

Whistleblower Protection and Anonymous Complaints

Supplier shall provide an anonymous complaint mechanism for managers and
workers to report workplace grievances. Supplier shall protect whistleblower
confidentiality and prohibit retaliation.

Community Engagement
Supplier is encouraged to help foster social and economic development and
contribute to the sustainability of the
communities in which it operates.

C-TPAT
To the extent that Supplier transports goods for Apple into the United States,
Supplier shall comply with the C-TPAT (Customs-Trade Partnership Against
Terrorism) security procedures on the U.S. Customs website at www.cbp.gov (or
other website established for such purpose by the U.S. government).

Management Systems
Apple believes that sound management systems and commitment are key to
enriching the social and environmental well-being of our supply chain. Apple
holds its suppliers accountable to this Code and all of its Standards. Supplier
shall implement or maintain, as applicable, management systems that facilitate
compliance with this Code and the law, identify and mitigate related operational
risks, and facilitate continuous improvement.

Company Statement
Supplier shall develop a company statement affirming its commitment to high
standards of social and environmental responsibility, ethical conduct, and
continuous improvement. Supplier shall post this statement in the primary local
language at all of its facilities.

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Management Accountability and Responsibility
Supplier shall identify company representatives responsible for ensuring
implementation and periodic review of its management systems. Supplier shall
have a Corporate Social Responsibility (CSR) or Sustainability representative
that reports directly to executive management and has the responsibility and
authority to manage social and environmental compliance requirements for the
business.

Risk Assessment and Management

Supplier shall develop and maintain a process to identify labor and human rights,
health and safety, environmental, business ethics, and legal compliance risks
associated with its operations; determine the relative significance of each risk;
and implement appropriate procedures and controls to minimize the identified
risks.

Performance Objectives with Implementation Plans and Measures

Supplier shall have written standards, performance objectives, targets, and
implementation plans, including periodic assessments of the performance
against those objectives.

Audits and Assessments

Supplier shall perform periodic evaluations of its facilities and operations, and the
facilities and operations of its subcontractors and next-tier suppliers that provide
goods or services to Apple to ensure compliance with this Code and the law.

Supplier will permit Apple and a third party designated by Apple to periodically
evaluate Supplier’s facilities and
operations, and those of its subcontractors and next-tier suppliers, to the extent
they are providing goods or services to Apple, for Apple’s benefit, or for use in
Apple products.

Documentation and Records

Suppliers shall maintain appropriate documents and records to ensure regulatory
compliance.

Training and Communication

Supplier shall develop and maintain management and worker training programs
to facilitate proper implementation of its policies and procedures and to fulfill
Supplier’s continuous improvement objectives.

Supplier shall have a process for communicating clear and accurate information
about its performance, practices, policies, and expectations to its workers, next-
tier supplier(s), and customers.

Supplier shall have an ongoing process to obtain feedback on its practices

related to this Code and to foster continuous improvement.

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Corrective Action Process
Supplier shall have a process for timely correction of any deficiencies or
violations identified by an internal or external audit, assessment, inspection,
investigation, or review.

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Supply Chain Map of Apple Inc.

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Apple Inc. Case Study

Apple Suppliers & Labor Practices

February 13, 2017
Written by Lucy Atkinson, Ph.D.
Stan Richards School of Advertising & Public Relations
Moody College of Communication
The University of Texas at Austin

With its highly coveted line of consumer electronics, Apple has a cult following
among loyal consumers. During the 2014 holiday season, 74.5 million iPhones
were sold. Demand like this meant that Apple was in line to make over $52 billion
in profits in 2015, the largest annual profit ever generated from a company’s
operations. Despite its consistent financial performance year over year, Apple’s
robust profit margin hides a more complicated set of business ethics. Similar to
many products sold in the U.S., Apple does not manufacture most its goods
domestically. Most of the component sourcing and factory production is done
overseas in conditions that critics have argued are dangerous to workers and
harmful to the environment.

For example, tin is a major component in Apple’s products and much of it is

sourced in Indonesia. Although there are mines that source tin ethically, there are
also many that do not. One study found workers—many of them children—
working in unsafe conditions, digging tin out by hand in mines prone to landslides
that could bury workers alive. About 70% of the tin used in electronic devices
such as smartphones and tablets comes from these more dangerous, small-

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scale mines. An investigation by the BBC revealed how perilous these working
conditions can be. In interviews with miners, a 12-year-old working at the bottom
of a 70-foot cliff of sand said: “I worry about landslides. The earth slipping from
up there to the bottom. It could happen.”

Apple defends its practices by saying it only has so much control over monitoring
and regulating its component sources. The company justifies its sourcing
practices by saying that it is a complex process, with tens of thousands of miners
selling tin, many of them through middle-men. In a statement to the BBC, Apple
said “the simplest course of action would be for Apple to unilaterally refuse any
tin from Indonesian mines. That would be easy for us to do and would certainly
shield us from criticism. But that would also be the lazy and cowardly path, since
it would do nothing to improve the situation. We have chosen to stay engaged
and attempt to drive changes on the ground.”

In an effort for greater transparency, Apple has released annual reports detailing
their work with suppliers and labor practices. While more recent investigations
have shown some improvements to suppliers’ working conditions, Apple
continues to face criticism as consumer demand for iPhones and other products
continues to grow.

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Apple Inc. Supplier Responsibility 2019 Progress Report

Note: Below are excerpts from the full report

“ 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

People come first.

In everything we do.

We care deeply about the people who build our products, and the planet we all
share. So we hold ourselves and our suppliers to the highest standards to ensure
everyone is treated with dignity and respect. And we share our work openly so
others can follow our lead.

We continuously challenge ourselves to expand our education programs and

provide skill-building opportunities that meet the needs of those in our supply
chain. Since 2008, over 3.6 million supply chain employees have participated in
education programming. We’ve implemented programs that help supplier
employees learn new skills, earn degrees, and expand their career options. We
also provide health and wellness education to give people the tools to take
charge of their well-being.

Every year, we find new ways to partner with our suppliers to protect the planet.
In 2018, our suppliers achieved UL Zero Waste certification for all final assembly
test and packaging facilities across iPhone, iPad, Mac, Apple Watch, AirPods,
and HomePod. Our suppliers conserved 7.6 billion gallons of freshwater, and 100
percent of our final assembly sites adopted safer, greener cleaners in their
manufacturing processes.

Driving the highest standards in the world means continuously raising them, and
helping our suppliers meet them. In 2018, we completed 770 Apple-managed
supplier assessments covering manufacturing facilities, logistics and repair
centers, and contact center facilities. In addition, 279 third-party mineral smelter
and refiner audits were conducted.

We believe that if we’re not finding areas to improve, we’re not looking hard
enough. If we discover that standards aren’t being met, we work side by side with
suppliers to help them improve. If a supplier is unwilling or unable to meet our
requirements, we end our business relationship with them. Through capability
building and partnership, we not only improve our suppliers’ performance in our
supply chain, but beyond it as well.

Our 2019 Annual Progress Report outlines the results of our efforts in 2018.

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2018 Highlights

People

- #1 2018 Stop Slavery Award – issued by Thomson Reuters Foundation

- $30.9M supplier recruitment fees repaid since 2008, $616K repaid to 287
supplier employees in 2018

- 96% compliance with Apple Working Hours Standards across all work
weeks

- 17.3M+ supplier employees trained on their rights since 2007

Planet

- 100% final assembly sites for iPhone, iPad, Mac, Apple Watch, AirPods,
and HomePod UL Zero Waste certified

- 7.6B gallons of freshwater saved and 29% supplier water reuse rate

- A+ Mind the Store - 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

- #1 ranking Corporate Information Transparency Index (CITI), 5TH year in a

row

Progress

- 1049: 770 Apple – managed supplier assessments + 279 smelter and

refined third-party audits conducted in 45 countries

- 76% high – performing suppler facilities, 1% low – performing

- 100% participation in third – party audits across identified tin, tantalum,

tungsten, gold, and cobalt smelters and refiners

- 30% increase in high – performing suppliers year over year

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Our supply chain is global.
So is our responsibility.
Apple products are made all over the world. We work with suppliers, from mining
to recycling, to verify that our requirements are being met for the people and
communities in our supply chain. In 2018, a total of 1049 supplier assessments
were conducted in 45 countries.

We enforce our policies by assessing and closely partnering with our suppliers at
every point in our supply chain.

PEOPLE
Empowering people through education, skill building and a safe and respectful
workplace

Over 3.6 million supplier employees have participated in education and skill-
building programs to date.

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.

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 wellbeing.
Apple’s education programs are designed to function like a staircase, allowing
participants to climb, one step at a time, toward their goals.

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

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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.

Supplier workplace rights training

Respect for human rights throughout our supply chain

Suppliers are required to ensure that their employees are educated on their
workplace rights and that those rights are respected. Supplier employees attend
a new hire orientation to receive training on local labor law requirements and the
human rights protections outlined in the Supplier Code of Conduct. Topics
covered include permissible working hours and overtime policies, proper working
and living conditions, and health and safety information.

Going further in our supply chain for rights awareness

We are committed to help raise awareness of a person’s rights at work at every
step of our supply chain. This includes communities where minerals in our
products may be sourced. In addition to our work to provide vocational education,
we have also partnered with Pact to support community leaders, and
communities living around mine sites. The program uses an internationally
recognized training curriculum developed by the United Nations Children’s Fund
(UNICEF). Since 2016, rights awareness training has been provided to over 7000
people living in mining areas.

Every employee has a voice

The Code of Conduct requires our suppliers to provide channels that encourage
employees to voice concerns. Channels include advertised hotlines for
anonymous phone calls and the ability to directly contact Apple’s Supplier
Responsibility team.

In order to verify the effectiveness of channels, we interview numerous supplier

employees during annual assessments in their local language without their
managers present.

These interviews seek to ensure that supplier employees have received training
and are aware of proper channels to voice concerns.

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Going further to give a voice to mining communities
In 2018, we again supported the Fund for Global Human Rights, an organization
that works with local human rights defenders in the DRC. With this support, the
Fund is able to partner with grassroots organizations that advance the rights of
women and children, advocate for miner health and safety, and defend the
economic and social rights of mining communities.

We also help enable people in mining communities to raise issues through

whistleblowing mechanisms. In 2018, Apple continued supporting the
whistleblowing mechanism of the International Tin Association’s International Tin
Supply Chain Initiative (ITSCI). The whistleblowing initiative allows people to
voice concerns related to extraction, trade, handling, and the export of minerals
in their local language, so allegations of misconduct can be surfaced and
addressed.

Working to end modern slavery in our supply chain, and beyond

In 2018, Apple was awarded the Thomson Reuters Foundation’s Stop Slavery
Award.

The Stop Slavery Award recognizes companies that have taken concrete steps
to eradicate forced labor from their supply chains. The aim is to demonstrate that
business plays a critical role in putting an end to modern-day slavery worldwide.

A path to employment
In 2018, we went further in our commitment and partnered with the International
Organization for Migration (IOM) to create a path for trafficking survivors to obtain
full-time employment with Apple.

Participants receive counseling, vocational support services, and regular medical

exams for two years as they adjust to their new employment in an Apple retail
store.

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PLANET

Greener factories, greener communities

In 2018, 100% of final assembly sites for iPhone, iPad,

Mac, Apple Watch, AirPods, and HomePod achieved UL Zero Waste
certification.

Greener supply chains reach beyond factory walls

Our supply chain environmental programs encourage suppliers to consider the
impact their operations can make outside their factory walls, to the communities
that support the making of an Apple product.

Kunshan has evolved from an agricultural hub to becoming the home of dozens
of electronics manufacturers, including numerous Apple suppliers. That
prosperity wouldn’t be possible without the water that flows through neighboring
canals, rivers and lakes. But it will only be sustainable if that water is conserved
and protected.

True water stewardship requires industrial users to go beyond their own facilities,
and work with partners in government and civil society to protect water supplies
on a basin-wide basis.

Apple and its suppliers have partnered with the Alliance for Water Stewardship
(AWS), a collaboration between businesses and nongovernmental organizations
(NGOs), in a program to support water management beyond the factory and into
the community. “Through participation in this program, Apple’s suppliers will
become role models and leaders for others to follow,” says Michael Spencer, the
Chair of the International Board at AWS.

In addition to water stewardship, Apple has also moved in recent years to reduce
waste generated by product manufacturing, advising suppliers on how to cut all
levels of industrial waste from their operations. That’s a win-win for the
environment and the economy — less waste in the environment means lower
costs overall. In 2018, the final assembly facilities for iPhone, iPad, Mac, Apple
Watch, AirPods and HomePod became UL Zero Waste certified.

We also consider our supply chain’s impact on climate change. A considerable

amount of Apple’s carbon footprint comes from the supply chain, mostly from the
energy used while making Apple products. Apple’s Energy Efficiency Program
works with high-energy use suppliers to assess and identify areas where energy
waste — and the carbon that comes with it — can be reduced, such as lighting,
heating, and cooling.

Altogether in 2018 the Energy Efficiency Program has led to the reduction of
466,000 annualized metric tons of greenhouse gas emissions, equivalent to

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taking 100,000 cars off the road for one year. And while the greenest energy is
the energy you never use, Apple has also committed to working with its suppliers
to generate and procure more than 4 gigawatts of renewable energy by 2020,
around one-third of the energy needed to make Apple products.

#1, for the fifth year in a row

For the fifth straight year, we were awarded the #1 ranking in the Corporate
Information Transparency Index. The index is a product of the Institute of Public
& Environmental Affairs (IPE), a civil society organization with expertise in
environmental protection. The Index ranks hundreds of brands on environmental
supply chain performance in China.

For more than five years, Apple and IPE have partnered to create meaningful
environmental impacts that extend far beyond our own supply chain. This
collaboration has proven to provide positive impacts that we hope to continue in
the years to come.

Water stewardship
Leading the way
Since 2013, Apple’s Clean Water Program has provided support and education
that enables suppliers to conserve water, find ways to reuse or recycle water in
manufacturing operations, and ensure that the water discharged from our
supplier facilities is as clean as possible.

In the last five years the number of participating suppliers has grown from 13 to
116. In 2018, participating suppliers saved 7.6B gallons of freshwater, bringing
the total cumulative savings to 21B gallons. As the program has scaled, we’ve
worked with participating suppliers to expand efforts from conservation to water
stewardship. Using a standard created by AWS, suppliers have begun to extend
their efforts outside of their factories, to the communities they operate in.

In 2018, efforts to expand beyond conservation to stewardship began with

suppliers in the Kunshan region of China. Participating suppliers committed to
stricter water stewardship efforts, extended water programming beyond their
factories, and engaged their surrounding communities. In 2018, two Apple
suppliers received AWS certification, including the first gold certification ever to
be awarded in the electronics industry.

As the program continues, suppliers committing to extend efforts beyond their

factory walls will establish a comprehensive water management plan, have a
deeper understanding of internal and external water risks associated with their
operations, promote better water management practices and awareness
throughout their own supply chains, and ultimately help improve the water
resources in their region.

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Safer process chemicals
Industry-leading standards
Since 2014, we’ve partnered with suppliers to implement an industry leading
Chemical Management Program to protect the people who help make Apple
products, and the environment. The program provides support and education that
enables participating suppliers to implement a rigorous chemical management
system that includes driving transparency about chemical use, volumes
consumed, and strengthening safe-use practices.

We continually strengthen and evaluate our Supplier Code of Conduct, and the
Apple Regulated Substances Specification (RSS). We also partner with suppliers
to provide support and training to help them meet our high standards. In 2018,
500 suppliers participated in training on the RSS.

Material safety data sheets are commonly used to quickly screen chemicals for
compliance with restrictions. We go deeper and require suppliers to provide proof
of a test report from a certified lab. We also assess new chemicals when they are
introduced, and provide support to ensure safe use.

Progress toward safer, greener chemicals

We strengthen our chemical management efforts every year to keep our
factories, and the people who work in them, safe. In 2018, process chemicals at
our final assembly facilities were verified as 100 percent compliant with Apple’s
RSS for the fourth year in a row. We continue to enhance the RSS; in 2018, we
added n-Propyl Bromide (nPB) to the list of banned chemicals for cleaning and
degreasing.

We also encourage safer and greener cleaners and degreasers in our suppliers’
operations. Apple provides both training and assessment tools for suppliers to
conduct their evaluations of safer alternatives based on the GreenScreenⓇ
framework and the U.S. Environmental Protection Agency’s Safer Choice
Program. In 2018, 36 suppliers achieved the elimination of all GreenScreen
Benchmark 1 and Benchmark 2 cleaners and degreasers.

Eliminating waste
Products that add up to zero waste
To minimize our impact on the planet, we provide support and education that
enables our suppliers to reduce the amount of waste sent to landfill while
manufacturing Apple products.

In 2015, the Zero Waste Program was created. Through this program, suppliers
must identify waste elimination opportunities. To help our suppliers achieve this
objective, we provide tools and guidance, including the services of experts in
sustainable waste management solutions. Suppliers dedicate months to

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identifying ways to reuse or recycle materials and divert waste from landfills. This
can result in suppliers not only improving their environmental management
systems, but also benefiting from sustained conservation of resources.

Suppliers must demonstrate through a third-party assessment that they meet

Zero Waste to Landfill certification through UL (UL 2799 Standard). The UL
Standard is a rigorous and comprehensive standard for waste streams from
manufacturing environments.

To reach platinum certification, a factory must divert 100 percent of its waste
from landfill, with a maximum of 10 percent sent to a waste-to-energy facility. To
reach gold certification, a factory must divert 95 percent from landfill. In two
cases, Apple suppliers have achieved gold certification because the carbon
impacts of shipping recyclable materials long distances outweighed the
environmental benefits of landfill diversion.

When the Zero Waste Program began, suppliers with the most significant waste
impact were selected: final assembly facilities where components from all over
the world come together to be assembled into Apple products. In 2018, our
efforts to achieve a zero waste supply chain reached a significant goal. All final
assembly facilities for iPhone, iPad, Mac, Apple Watch, AirPods, and HomePod
in our supply chain are UL Zero Waste certified.

As our program progresses, we will continue to work with suppliers deeper in our
supply chain to implement zero waste practices and eliminate landfill waste.

Environmental innovation in the smallest details

It takes multiple pieces of protective film to cover an Apple product during its
journey on the assembly line. Film is placed and removed to help keep products
pristine as they come to life. Each piece is small, but it adds up to being a
significant portion of the non-recyclable waste generated during assembly.

We set our sights on a solution — finding a new protective film that could be
diverted from incineration and, instead, recycled. After conducting research, it
became clear that no recyclable protective film was available on the market. This
introduced an opportunity for Apple engineering teams to partner closely with a
protective film supplier.

The turning point for the project was identifying a combination of adhesive and
film that could be recycled together. The result? A cost neutral, recyclable
protective film that in its first year of adoption, diverted 895 metric tons of waste
from incineration and avoided 1880 metric tons in carbon emissions from Apple
manufacturing. Better yet, the film has also been made available by the supplier
for other companies to adopt in their manufacturing processes.

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Green Factories
In 2018, 12 Apple supplier facilities received the Chinese Government’s Green
Factory designation, bringing the total number of Apple supplier facilities
awarded this designation to 16. Awarded by the Ministry of Information and
Industry Technology, the Green Factory designation is part of China’s “Green by
2025” manufacturing plan. Launched in 2016, this government initiative has set
out to identify 1000 factories that represent best practices in green
manufacturing. In addition, we are supporting the China Electronic
Standardization Institute as part of the drafting committee for the development of
green standards for electronics manufacturing in China.

Combating climate change

Doing more with less
Since 2015, we have partnered with suppliers to help improve energy
conservation through our Energy Efficiency Program.

The program focuses on facilities with the highest energy use and potential for
improvement. In-depth energy assessments are conducted to identify areas for
improvement at supplier facilities. Suppliers are encouraged to invest in energy-
saving technologies and 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 2015, 13 facilities participated in the program. Today, we’ve also increased

participation to 85 facilities. Participating suppliers implemented energy efficiency
improvements resulting in the reduction of 466,000 annualized metric tons of
greenhouse gas emissions in 2018.

Clean, renewable energy

We’re also working with our suppliers to transition to using clean, renewable
energy in their operations.

Through our Clean Energy Program, Apple and our suppliers are working to
generate and procure more than 4 gigawatts of renewable energy worldwide by
2020 to reduce emissions associated with making Apple products.

Since implementing the program in 2015, 30 suppliers have made commitments

to 100 percent renewable energy for Apple production. Together with Apple
investments and other supplier commitments, we have secured 3.9 gigawatts in
clean energy commitments.

Ultimately, our combined efforts will help to reduce product-related carbon

emissions, create a more resilient supply chain, and contribute to healthier
communities —while also paving the way for others to follow.

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PROGRESS
Partnering with suppliers to drive accountability and continuous
improvement

30% increase in high-performing supplier facilities year over year.

Apple-managed assessments
In 2018, a total of 770 assessments were completed at facilities including
manufacturing facilities, logistics and repair centers, and contact centers that
support AppleCare. Apple-managed assessments in 2018 covered 93 percent of
Apple’s supplier spend. Of these 770 assessments, 17 percent were initial
assessments where we visited facilities for the first time.

We assess supplier performance against the standards outlined in our Supplier

Code of Conduct. In our efforts for responsible procurement, we also onboard
and assess new suppliers before they enter our supply chain.

An assessment typically takes multiple days. Over 500 criteria are evaluated to
ensure compliance and identify improvement areas against our Supplier Code of
Conduct.

Following an assessment, we partner with a supplier to develop a corrective

action plan to make improvements where needed. Ongoing engagements with
our suppliers can include months on the ground working with suppliers, providing
training, tools, and support to help them meet our standards.

To support capability building, Apple’s SupplierCare platform provides

information to increase understanding of the Supplier Code of Conduct and
educate suppliers on best practices. Tutorials range in topics from safe storage
of chemicals to responsibly sourcing minerals. In 2018, SupplierCare expanded
to provide online trainings to 219 active supplier facilities.

2018 Assessment results

Our 2018 supplier progress results cover assessments at manufacturing
facilities, logistics and repair centers, retail, and contact center facilities. Each
assessed facility is ranked on a 100-point scale based on its performance relative
to our Supplier Code of Conduct.

Through our assessments, we measure the performance of suppliers’ operations

against our Code and drive improvements in the areas of Labor and Human
Rights, Health and Safety, and Environment.

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Progress in our mineral supply chain
We’re proud to be recognized as a worldwide leader in the responsible sourcing
of minerals in our products.

Few companies map the path of materials in their products. Apple maps many
materials, including tin, tantalum, tungsten and gold — back to the smelter or
refiner and goes even further — tracking some, like cobalt and certain other
minerals, all the way back to the source.

Leading by example and sharing our work

When the tools and technology needed to build capability in our supply chain do
not exist, we create them. If we find these tools would be helpful for others
outside of our own supply chain, we share them openly. We work across
industries and in the collective to share our progress and promote best practices.

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Sharing Environmental Health and Safety knowledge
In 2014, the Environmental Health and Safety (EHS) Academy was established
in partnership with the EHS Center at Nanjing University to develop an intensive
curriculum in environmental protection, air pollution, water management,
chemical management, emergency preparedness, and safety equipment. The
EHS Academy developed the professional skills of hundreds of EHS managers
at our suppliers, and developed the suppliers’ capability to manage and maintain
EHS systems onsite.

We are working with the Responsible Business Alliance to open-source this

curriculum and make it available online to participating companies and, by
extension, EHS managers in supply chains around the world.

Working in the collective

Apple also works to make industry-wide progress on responsible minerals
sourcing, beyond its own supply chain. In addition to serving on the executive
steering committee of the Responsible Minerals Initiative, Apple engages with a
broad range of civil society, industry, and government experts. In 2018, we
partnered with the Enough Project, an international human rights organization, to
convene a series of expert group panels to discuss opportunities to work
collectively on innovative approaches to the responsible sourcing of minerals.

We also worked with the International Organization for Migration (IOM) to create
a clear roadmap for companies and their suppliers to address human rights
allegations related to mineral sourcing in their supply chain. The guidelines were
informed by the UN Guiding Principles on Business and Human Rights and
clearly outline step-by-step approaches to be taken by companies, assessors,
and smelters or refiners to mitigate issues in their sourcing supply chain. They
also give a step-by-step process to remedy the issue. The guidelines are publicly
available.

In 2018, we transitioned Apple’s Risk Readiness Assessment (RRA) tool to an

industry-wide platform. In total, 265 companies that were seeking a tool to
assess human rights risks in their sourcing supply chains utilized the tool from a
diverse set of industries.

Through the Clean Electronics Production Network (CEPN), Apple shares best
practices, including our rigorous approach to chemical management, driving
transparency in the supply chain, and safer, cleaner substitution. An example of
this leadership is funding training videos for CEPN to share with its members and
the entire electronics industry.

Additionally, we participate in cross industry collaborations and serve in

leadership roles with organizations including the Responsible Business Alliance,
its Responsible Labor Initiative, and the Public-Private Alliance for Responsible

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Minerals Trade.

Creating a ripple effect that drives change.

Our commitment to people and the planet doesn’t end at our supply chain. We
seek to be an example for others to follow, openly sharing our progress to
accelerate industry-wide change. And we’re proud of the global recognition we’ve
received for our efforts. But we know our work will never be done, because we
believe that if we aren’t finding ways to improve, we aren’t looking hard enough.

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Apple Environmental Responsibility Report 2019

Note: Below are excerpts from the full report

Letter From Lisa Jackson

Vice President, Environment, Policy & Social Initiatives
Apple Inc.

Creating powerful solutions to push humanity forward takes relentless innovation.

Resolving to do this without taking precious resources from the planet means
holding ourselves and our suppliers to ever higher standards. We know that
accomplishing this work will require all of our best efforts. At Apple, we are
committed to building groundbreaking products and services with the mission to
leave our world better than we found it.

It was just a year ago that we reached our goal of covering 100 percent of our
operations with 100 percent renewable electricity. That work continues as we
source the clean energy needed to maintain that standard — even as our
company grows. And our learnings have paid off in significant ways as we help
the manufacturers in our supply chain make the same energy transition we have.
To date, more than 40 suppliers have made commitments to join us, putting us
well on track to exceed our goal of putting 4 gigawatts of clean energy online by
2020.

At the same time, we are launching the next phase of our industry-leading work
to better use and reuse materials with a state-of-the-art lab to support our
research and innovation with material recovery. This initiative, along with Daisy -
our fearless disassembly robot, means we’re doing even more with the materials
from old devices our customers return for recycling. And we’ve found new ways
to make it easier for devices that still have value to go on to another user. Our
launch of the new MacBook Air and Mac Mini with enclosures made from 100%
recycled aluminum was just the beginning: Together, we’re pioneering a future
where we no longer need to mine precious materials from the Earth to make our
products.

At Apple, it’s simple. We apply the same level of innovation that goes into
everything we create, design, power and manufacture to making things better for
people and the planet. And we make it simple for customers and partners who
share our passion to join us in this work. In a time where the threats facing our
planet are too great to ignore, we are demonstrating that businesses must play a
vital role. We are proud to do the hard work, to make the breakthroughs, and
tirelessly search for ways to ensure the better future for our planet that we all
deserve.

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Our Environmental Strategy

Our ambition: to make products without taking from the Earth.

We’ve embarked on a bold mission to make products without taking from the
Earth. Getting there requires focus and innovation in three key areas:

Climate change: We take responsibility for the emissions associated with our
own operations, as well as the entire lifecycle of all our products and
accessories.

Resources: We believe in conserving Earth’s resources when operating our

facilities and making our products.

Smarter chemistry: We believe that our products should be safe for anyone who
assembles, uses, or recycles them.

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