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Supply Chain

Supply Chain Environmental Impact

As a multinational company, our supply chain has a global environmental impact – an impact that is felt by the local communities in which our suppliers operate. While we do not have direct control over our suppliers’ operations, we are committed to working with them to continually improve and to mitigate negative environmental impacts. We currently monitor and require reporting from our suppliers on environmental issues, score them according to their performance, and provide one-on-one coaching. We will be expanding training and incentives in this area in 2012.

Monitoring

We work closely with our suppliers to address environmental issues. Suppliers are asked to meet standards set in our Supplier Code of Conduct for environmental reporting, pollution prevention and resource reduction, wastewater and solid waste, air emissions, and product content. We also ask suppliers to obtain environmental permits as required by applicable law. Supplier audits cover these elements, and EMC tracks and monitors findings, providing individual coaching as needed, until the supplier completes corrective actions.

In 2011, we cross-referenced our Chinese supplier list against the database of companies with pollution violations maintained by the Institute of Public & Environmental Affairs (IPE), a non-governmental organization based in China. Any suppliers found with violations are expected to submit plans with corrective actions and to take the necessary steps to be removed from IPE’s list. They will also be prioritized for audits and environmental training.

Reporting

We ask our direct Tier 1 suppliers representing 97 percent of spend, as well as strategic Tier 2 suppliers, to report on their carbon emissions and water management. We do this as part of the EICC’s Carbon and Water Reporting Initiative, and accept reporting using either the EICC or the Carbon Disclosure Project questionnaire.

EMC has collected greenhouse gas emissions data from key Tier 1 direct suppliers since 2009. In previous years, we encountered challenges in obtaining complete and accurate emissions data from our suppliers who are at varying stages of maturity in their reporting. In 2011, we saw improvement in the data reported by many suppliers, and we also offered more education and guidance for those suppliers who needed support to complete their reporting.

As a result, we were able to collect emissions data from suppliers representing 95 percent of our direct spend, surpassing our 2011 goal of 85 percent. The Scope 3 Purchased Goods and Services emissions from these direct materials suppliers – determined using financial allocation methods consistent with the guidelines from the World Resources Institute’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard – are part of our Scope 3 emissions.

To learn more, visit Energy & Climate Change Strategy.

EMC suppliers are expected to have goals for reducing emissions and to demonstrate progress to those goals. These factors are integrated into our supplier performance scorecard which guides our purchasing decisions. In 2011, 60 percent of suppliers on our scorecard reported all three of the required elements – i.e. Scope 1 and 2 emissions, goals, and performance. We continue to work with the others to bring resource reduction goals and performance tracking systematically into their operations.

Water was also included in our data collection for the first time in 2011. Management systems and reporting are generally less mature in this area than for carbon emissions. We plan to use this information to guide decisions on where to focus data collection and training in 2012 and beyond.

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