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Strategic CSR - How HP integrates CSR into its business

Ken Larson Director, Corporate Social Responsibility

Agenda
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Current landscape Organizational review CSER goals and actions Global Citizenship Reporting Supply Chain Management Questions or comments

Strategic CSR at HP

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Did you know«
‡ 51 of the 100 biggest economies in the world are now corporations, only 49 are nation states ‡ The 100 largest MNCs now control about 20% of global foreign assets ‡ 300 MNCs now account for 25% of the world¶s total assets ‡ As much as 40% of world trade now occurs within MNCs ‡ The annual sales revenues of each of the 6 largest multinational corporations are now exceeded by the GDPs of only 21 nation states in the world
Corporations like HP have a major role to play
Strategic CSR at HP page 3

Trends driving increased importance of global citizenship to business success ‡ ‡ ‡ ‡ ‡ Global instability ± link between prosperity and security Impact of the internet on transparency Eroding trust in corporations & corporate leaders Increased regulatory pressure Scale. scope and impact of MNCs Strategic CSR at HP page 4 .

Rising interest in global citizenship across all core stakeholder groups Customers ‡ ‡ Requiring performance data with bids Growing interest in global citizenship partnerships Growth in social screening of investments Rising shareowner activism Response to ³Global Citizenship in Action´ newsletter Graduation pledge Shareowners ‡ ‡ Employees ‡ ‡ Strategic CSR at HP page 5 .

HP Today $21. consulting. CA US$72B (µ03) over 140. support & outsourcing HP at a glance: Founded Headquarters Revenues Employees Countries Strategic CSR at HP 1939 Palo Alto.4B IT infrastructure business.2B access devices business $22.000 178 page 6 .6B imaging and printing franchise $15. storage & software $14. encompassing servers.2B services business.

Business value for HP Brand value Innovative new solutions Access to new markets Unmatched opportunity for development of our leaders ‡ ‡ ‡ ‡ Strategic CSR at HP page 7 .

HP is committed to making a positive contribution to the global community Self management of global standardization Global Citizenship Shareowners and customers want to invest in companies that do the right thing Enlightened self-interest Strategic CSR at HP page 8 .

Leadership framework strategy ‡ ‡ ‡ HP corporate objectives HP corporate strategy HP operating model culture and behavior structure and processes metrics and rewards Strategic CSR at HP page 9 .

Good citizenship is good business. Strategic CSR at HP page 10 . intellectual and social asset to each country and community in which we do business.Corporate objectives ‡ ‡ ‡ ‡ ‡ ‡ ‡ Customer loyalty Profit Market leadership Growth Employee commitment Leadership capability Global citizenship . We live up to our responsibility to society by being an economic.

Leadership & Commitment "We believe that the winning companies of this century will be those that not only increase shareholder value but increase social and environmental value. HP is contributing to a more sustainable future while also making HP a stronger company and the preferred IT solutions provider." Carly Fiorina NYSE Magazine Jan/Feb 2003 Strategic CSR at HP page 11 . by holding our company to the highest standards of business conduct. and by giving back to the communities in which we operate. by bringing the benefits of information technology to emerging markets. « By developing products and solutions that are environmentally sound.

that a company exists simply to make money.David Packard 1947 Strategic CSR at HP page 12 ...Profit is not the proper end and aim of management ± it is what makes all of the proper ends and aims possible«´ ..to advance the frontiers of science.Leadership Legacy ³Many assume.to improve the welfare of humanity.the real reason HP exists is to make a contribution. wrongly..

Global Citizenship ³Global citizenship at the simplest level is about conducting your business in a way that contributes positively to the communities that you're part of.´ .Debra Dunn Senior Vice President Corporate Affairs environment e-inclusion Strategic CSR at HP page 13 . That to me is what citizenship is.

Corporate Affairs Purpose: Build the brand and grow the business through recognized leadership in global citizenship. Debra Dunn SVP Corporate Affairs Maureen Conway e-Inclusion & Emerging Market Solutions Gary Fazzino Government & Public Affairs Walt Rosenberg Corporate.Social & Environmental Responsibility Bess Stephens Philanthropy & Education Strategic CSR at HP page 14 .

Global Citizenship Framework privacy ethics & governance community engagement environment e-inclusion Strategic CSR at HP page 15 .

CSR Goals maximize hp¶s recognition and brand image as the industry leader in CSR ‡ define leadership strategy. goals and measures ‡ integrate and enable CSR activities across the company ‡ partner with the businesses to facilitate company CSR initiatives ‡ develop and implement solutions that aid horizontal business processes ‡ engage stakeholders to define and anticipate expectations in CSR Strategic CSR at HP page 16 .

CSER Engagement Model global HR finance & information marketing. & administration technology brand workforce & development comms corporate technology & strategy legal IPG PSG ESG HPS Integrate CSR practices and effective horizontal management processes sales and go-to-market supply chain and customer operations Strategic CSR at HP page 17 .

legislative. and market trends ‡ Strengthening brand and fueling revenue growth Strategic CSR at HP page 18 .How CSR Goals Support the Businesses ‡ Integrating key practices and metrics through an effective horizontal management process ‡ Creating and delivering knowledge tools ‡ Driving continuous improvement through global governance processes ‡ Leveraging business opportunities through engagement of stakeholders ‡ Identifying regulatory.

Supplier Requirements Supply Chain Management Data Protection CRM Bid Package Requirements Customer Inquiries Business Practices Market research/trending Customer Data Protection Positioning page 19 Strategic CSR at HP .CSER Network Global Brand & Communications CSER Reporting Public Relations/Positioning Stakeholder Response Finance and Administration Metrics/Reporting Governance Internal Audit Investor Relations Information Technology Privacy Architecture D-base Tracking Systems Supplier data base Legal Business Practices Privacy Regulatory Requirements Governance Corporate Affairs Services Service contracts End of Life Management Office of CTO & HP Labs Balanced Scorecard Technology Roadmaps DFE Corporate. Social & Environmental Responsibility Sales & Marketing Human Resources Employee Training Communications Alignment of Practices Employee networks Balanced Scorecard Product Groups Regulatory Tracking Market trends ESS Process Implementation Worldwide Ops.

measuring and managing performance standards to ensure socially responsible behavior Strategic CSR at HP page 20 .Governance & Ethics Ensure that our business Practices reflect our values by establishing.

social and/or environmental impact Strategic CSR at HP page 21 .Community Engagement Create and implement innovative programs that align the commitment and accelerate the deployment of HP people in targeted communities for the purpose of sustained economic.

Privacy Enable trusted relationships with our customers and employees by ensuring HP¶s global privacy policies are compliant. create a business advantage and support company values Strategic CSR at HP page 22 .

endof life solutions and sound operations Strategic CSR at HP page 23 . energy efficiency. products and services that minimize not only our environmental footprint.Environmental Sustainability Deliver technologies. but also those of our customers through product and material innovation.

e-inclusion approach ‡ Applying the power of technology to unlock the potential of individuals and communities while growing the business ‡ Engaging in global multisector initiatives ‡ Piloting new models of public-private partnerships Strategic CSR at HP page 24 .

sustainably applying ICT solutions to address them Replicable model with sustainability focus ± different components emphasized based on local relevance Projects facilitate entrepreneurship. assessing issues. through new methodologies & technology Entrepreneurship leads to community sustainability Strategic CSR at HP page 25 .e-inclusion framework Deep Engagement East Baltimore DV East Palo Alto DV Kuppam i-c Community Access Inventor Centers Micro-enterprise Development Digital Garage Digital Community Centers WW Development Projects Global Giving Microfinance Initiative (Uganda) Digital Freedom Initiative (Senegal) Enablis Mogalakwena i-c Tribal DV Deep partnership with a community.

is enlightened self-interest. ³We call it philanthropy. to be effective.´ Carly Fiorina Chairman and CEO Hewlett-Packard Strategic CSR at HP page 26 .Philanthropy To make strategic investments of corporate resources to address critical societal issues. but I really do view it as a business investment«´ ³Philanthropy. and enhance business opportunities to increase shareholder value. has to be sustainable« the most sustainable motivation there is. engage employees.

Strategic CSR at HP page 27 .Public Policy Shape public policies and community programs worldwide to position HP as the preeminent internet leader and advance HP¶s business and branding objectives.

Communications ± Visibility is Critical Effective communications and transparency enable our global citizenship framework to take effect: ‡ Extensive internal communication ‡ Interactive communication with external audiences ‡ Global Citizenship report Strategic CSR at HP page 28 .

employees. also to GRI ± Part of our competitive environment ‡ Leadership reports driven by goal setting. at a global level ‡ Citizenship reporting is a component of transparency Strategic CSR at HP page 29 .Global Citizenship Reporting ‡ Brand and Reputation ‡ Accountability and Credibility ‡ Customers. measurement and clear accountability. investors and NGOs ‡ Global reporting trend: ± Increasing numbers of firms reporting.

Challenges of a Global Supply Chain ‡ Increasing demands for transparency of operations of global companies ‡ A need to know what are the labor/human rights/ environment practices in our supplier¶s operations .To control possible negative press .To ensure that our values are reflected in the work of our suppliers ‡ Implemented Supplier Code of Conduct ‡ Became a participant in the UN Global Compact Strategic CSR at HP page 30 .

Labor Practice ) 2003 focu ed on the top 50 upplier that ma e up ~70% of the direct procurement pend. Safet . capacit building Strategic CSR at HP page 31 ‡ How i it being implemented in Direct Procurement? ± ± ± ‡ Current challenge . En ironment. and Management tem ) that upplier mu t meet in order to do bu ine with HP A ociated elf a e ment que tionnaire for compliance (HP SCoC. 50 audit Data. nearl 300 a e ment . 2004 rolled out further.Supplier Code of Conduct ‡ What i it? ± ± Supplier agreement with HP that define the minimum requirement (En ironment. Labor Practice . Occupational Safet . Health. follow up. impro ement plan .

Each organization/company/NGO may define global citizenship differently ‡ We are committed to leadership by example.Summary ‡ HP recognizes the importance of emerging global citizenship issues. . and will reach our goals through: ± ± ± ± ± Commitment of highest levels of the organization Engagement and action of employees Willingness to experiment & learn Innovation of our products and solutions Partnerships with key alliances and stakeholders ‡ End result will be a sustainable business enterprise. Strategic CSR at HP page 32 .