Case study: How Micron promotes sustainability across its supply chain

What are the material issues the company has identified?

In its 2020 Sustainability Report Micron identified a range of material issues, such as employee development & engagement, operations & facility management, workplace health & safety, ethical conduct, human rights, diversity & inclusion. Among these, promoting sustainability across its supply chain stands out as a key material issue for Micron.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Micron engages with:

To identify and prioritise material topics Micron engaged with its stakeholders through the following channels:

What actions were taken by Micron to promote sustainability across its supply chain?

In its 2020 Sustainability Report Micron reports that it took the following actions for promoting sustainability across its supply chain:

• Promoting compliance
• Micron performs a supplier risk assessment that aligns with its own Code of Business Conduct and Ethics and the RBA (Responsible Business Alliance) code of conduct. In addition, Micron expects all suppliers to be able to provide evidence of compliance with the following:
  • An annual RBA self-assessment questionnaire (SAQ) for a company’s headquarters and all facilities or Micron’s sourcing compliance assessment (SCA)
  • An RBA audit or equivalent for any facility identified as high-risk
  • S. Foreign Corrupt Practices Act
  • K. Bribery Act
  • California Transparency in Supply Chains Act of 2010
  • K. Modern Slavery Act of 2015
  • An updated conflict minerals reporting template (CMRT) in case of addition of any new smelter or change of status of existing smelters
  • Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), updated and provided every six months or as any product change requires
  • Restriction of Hazardous Substances (RoHS), updated and provided every 12 months or as any product change requires
  • CDP (formerly the Carbon Disclosure Project)
  • A sustainability/corporate social responsibility or equivalent report
• Micron also requests that suppliers provide transparency through supply visibility mapping and supplier assessments, including the following information:
  • Data points such as manufacturing locations, emergency contacts, manufacturing recovery time and locations of critical subtier suppliers
  • Business continuity processes and programmes at manufacturing locations
  • Event impact notification responses associated with Micron’s supply chain
  • Programmes and policies related to ethics, environment, forced labour and safety 

• Screening, assessing and auditing suppliers
• Micron’s sourcing risk and compliance group oversees supply chain risk management, which includes environmental, human rights and geopolitical risks. This team continues to mature its mission of enabling a resilient, compliant and sustainable global supply chain, including new and incumbent supplier screening, assessments, investigations, risk profiling, development and auditing. Each year, members of the sourcing risk and compliance group do the following:
  • Screen and assess: Micron initially assesses suppliers using inputs from business continuity processes, geographic location, type of commodity or service, Micron’s history with the supplier and third-party reviews. Micron conducts additional screening for new suppliers.
  • Score: Micron maps suppliers at the manufacturing level, focusing on business continuity planning processes, ethics, location, forced labour, environment and safety. Micron assigns an operational risk score that indicates risk associated with manufacturing or business disruption, as well as a score that indicates risk associated with responsibility and compliance. Each score may be high, medium or low.
  • Audit: Suppliers identified as high risk may be audited in person to make sure they comply with Micron’s code of conduct.
  • Improve and develop: Micron may develop a mitigation plan and request improvement actions of any suppliers found to be out of compliance or the suppliers may be removed from the supply base. Micron may establish corrective action plans, carry out in-person training or develop scorecard reviews or other plans to improve suppliers’ risk profiles.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 308-1 New suppliers that were screened using environmental criteria

2) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken

3) Disclosure 414-1 New suppliers that were screened using social criteria

4) Disclosure 414-2 Negative social impacts in the supply chain and actions taken

Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.

Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.

Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:

• Sustainable Development Goal (SDG) 5: Gender Equality
• Targets: 5.2
• Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
• Targets: 8.8
• Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
• Targets: 16.1

Disclosure 414-2 Negative social impacts in the supply chain and actions taken corresponds to:

• Sustainable Development Goal (SDG) 5: Gender Equality
• Targets: 5.2
• Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
• Targets: 8.8
• Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
• Targets: 16.1

78% of the world’s 250 largest companies report in accordance with the GRI Standards

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References:

1) This case study is based on published information by Micron, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

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