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Background

 

          Apple Inc. is an American multinational corporation, founded in April 1, 1976 by Steve Jobs, Ronald Wayne, and Steve Wozniak, and headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software, online services, and personal computers. In 2014, Apple:

  • Had approximately 4,400 full-time equivalent temporary employees and contractors, in addition to it’s 92,600 full-time equivalent employees [1]

  • Had a gross income of $70.38 billion [2]

  • Sold a total of 254.59 million products [3]

          Apple’s former Chief Executive Officer Steve Jobs resigned on August 24, 2011; Apple’s Board elected Tim Cook, previously Apple’s Chief Operating Officer, to replace Jobs as CEO.

            Since Apple is a very complex corporation, there is a lot to consider when thinking about Apple’s corporate social responsibility. This page is an outline of what there is to know about Apple’s CSR, but is still lengthy. Here are a few guiding ideas for reading:

  • Apple treats its direct employees well, but has serious issues with labor further down its supply chain that it’s working to fix.

  • Apple has paid more attention to its philanthropic efforts since Tim Cook became CEO.

  • Apple prioritizes environmental policy and practices, in part because it knows its audience will be impressed by stellar environmental performance. It still has environmental issues further down its supply chain with mining and hazardous chemicals that it’s trying to fix.

 

 

            In contrast, Tim Cook has been working to shift Apple’s culture to be more employee-oriented and collaborative. Within months of taking his position, Cook implemented a “Double the Donation” matching program, through which employees can solicit Apple to match the donations they make to charitable organizations, sending the message to employees that Apple cares about what its workforce cares about.[7] Additionally, this past October, Apple’s Human Resources department updated their employee benefits to include extended parental leave and reimbursements for all educational classes.[8] In 2013, Apple opened an elaborate employee wellness center at its Cupertino headquarters, and is currently attempting to build “the best office building in the world” in the form of Cupertino’s Apple Campus 2.[9] While Apple’s increased attention to its employees may be a reflection of a shift in values, it is more likely an acknowledgment of the increasingly competitive technological job market.

 

 

Mission Statement

 

Apple’s 2014 Supplier Responsibility Progress Report begins with the following:

 

At Apple, we believe in making complex things simple. We strive to design products that are intuitive and enrich people’s lives. [4]

 

In general, Apple promotes itself as a team of out-of-the box thinkers, brought together to provide its customers with the most innovative technology possible.

 

            This pressure did yield results. Apple soon joined the Fair Labor Association, becoming the first technology company to join the Association as a Participating Company.[11] Apple, the FLA, and other third-party associations continued to audit a broader base of Apple suppliers than had been audited in the past. In its 2014 Supplier Responsibility Report, Apple claims to have audited 451 out of over 700 suppliers, “tracking real time work hours for over 1 million workers in [its] supply chain, publishing the data every month.”[12] Although probably overstated, Apple’s reported 95% compliance rate (meaning 95% of audited suppliers complied with Apple’s work limit of 60 hours/week) is a drastic improvement from the 46% compliance rate reported in Apple’s 2010 Supplier Responsibility Progress Report.[13] 

            Apple refrains from firing manufacturers that don’t comply with its Supplier Responsibility Standards. However, Apple has made a substantial push towards transparency and accountability, and this push seems to be yielding results.

A complete list of Apple suppliers can be found here: http://images.apple.com/supplier-responsibility/pdf/Apple_Supplier_List_2014.pdf

Apple’s Supplier Responsibility Standards can be found here:

http://www.apple.com/supplier-responsibility/pdf/Apple_Supplier_Responsibility_Standards.pdf

 

Additionally, the New York Times article can be found here: http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?pagewanted=all&_r=0

 

Manufacturing

            In January of 2012, the New York Times published an article by Charles Duhigg and David Barboza entitled “In China, Human Costs Are Built Into an iPad.”[10] The article highlighted the working conditions for workers at Foxconn, one of Apple’s primary product suppliers. It described workers’ “crowded” living conditions, harsh working hours, and hazardous working conditions, drawing attention specifically to explosions at Foxconn and Chengdu (another Apple supplier) iPad facilities that led to the deaths of a total of 8 workers and the injury of over 90. Although Foxconn and other Apple suppliers are not exclusively contracted by Apple, the New York Times article and resulting media attention put pressure on Apple to take responsibility for the workers throughout its supply chain.

Apple's Responsibility to Workers Further Down its Supply Chain

           

           Apple’s products come from a longer chain of production that extends beyond manufacturers. The tin, tungsten, tantalum, gold and other materials necessary for production travel though a supply chain that looks something like this:

 

Outline of Apple’s Supply Chain

 

Mining

 

        -> Smelting/Refining

 

                             -> Solder Manufacturing

 

                                               -> Component Manufacturing

 

                                                                                    -> Manufacturing

 

                                                                                                        -> Distribution

 

 

Mining

          The New York Times article compelled Apple to take a closer look at its supply chain as far as manufacturing and its direct suppliers. Similarly, in 2013, the association Friends of the Earth pushed Apple to look even further. Previously, rumors had been circulating in the Media that products from Apple and other tech companies contained tin from the island of Bangka, part of the Belitung Islands in Indonesia. After investigations by Friends of the Earth and other Organizations, mining in Bangka was shown to be hazardous for a number of reasons: [14]

 

  • Some Bangka on-shore mining was done with no more than pick-axes

  • On average 1 miner a week died in an accident

  • Mining lead to significant illegal deforestation

  •  

 

Friends of the Earth prompted Apple customers to put additional pressure on Apple. But even after 24,000 Apple customers asked Apple if its products contained Bangka tin,[15] Apple refused to admit that it did until the release of its 2014 Supplier Responsibility Progress Report. By that time, Apple had already “worked with the EICC and IDH Sustainable Trade Initiative to develop the Indonesian Tin Working Group, whose goal is to explore how its members can help resolve the environmental and social challenges of tin mining on Bangka and the Belitung Islands while also supporting the economic benefits of a robust mining trade.”[16]

 

Smelting         

          Apple began to investigate the smelting and refining of the metals in its products by 2009, to find out, in part, how much it was supporting the dangerous labor practices found in Bangka mines. In 2010, Apple became one of the first companies to begin mapping its supply chain to the smelter or refiner level.[17] At this level, Apple conducts “conflict mineral audits,” evaluating smelters and refiners on their compliance with Apple’s “Conflict Free Sourcing Program” (CFSP), and holding them accountable by publishing their names, countries, and status with Apple’s CFSP. If smelters or refiners were found to be incompliant, they would be removed from Apple’s supply chain.[18] Apple’s goal became to establish as many conflict-free smelters and refiners as possible to really put the pressure on incompliant smelters/refiners to become compliant (but also to keep as many as possible without facing criticism).

 

A list of Apple’s verified smelters as of November 1st, 2014, can be found here: http://www.apple.com/supplier-responsibility/pdf/Apple_Smelter_List.pdf

 

 

            Apple has also pledged $100 million to President Obama’s ConnectED initiative to bring new technologies to economically disadvantaged schools, in turn to equip and support students that are underrepresented in the industry of technology.[25] Apple is also a sponsor of the country’s largest LGBT rights organization, the Human Rights Campaign, and the National Center for Women & Information Technology.[26]

            Curiously enough, 7 days after the release of the New York Times article on Foxconn, Apple donated a total of $50 million to Stanford University's hospitals: $25 million for a new main building and $25 million for a new children's hospital.[27]

 

 

 

Apple’s Responsibility to the Environment

           

Renewable energy

          Apple proudly advertises its one-of-a-kind data center, powered by 100% renewable energy. In their 2014 report, Greenpeace reported that Apple “is the most improved company since [their] last full report, and has shown itself to be the most innovative and most aggressive in pursuing its commitment to be 100% renewably powered.”[29]

 

 

 

Recycling

           Apple also accepts old, unwanted, or worn out products and will recycle them, claiming some responsibility for the full life cycle of their product. Apple goes one step further with this policy than other rival companies by offering gifts cards in exchange for defunct computers, iPods and iPhones.[30]

 

Chemical Use

         Apple has worked with manufacturers to eliminate certain harmful chemicals (mercury, lead, arsenic, phthalates, brominated flame retardants and polyvinyl chloride) from all materials in their products.[31] Most recently, in response to the New York Times article (discussed above) that highlighted iPad factory explosions caused by the use of the chemical n-hexane, Apple removed n-hexane and benzene from their list of approved substances and from all of their products. Apple demonstrates its commitment to these standards by testing materials from suppliers in its Environmental Testing Lab in Cupertino for substances not on its approved list.

          But Apple defines and creates its own regulated substances specifications, and therefore has the ultimate say in what industrial substances are acceptable. Benzene and N-Hexane for example were on Apple’s list of approved substances* until 2014, despite their known health risks: n-hexane causes nerve damage, and benzene is a known carcinogen.

*Full list not available to the public

 

Environment, Health, and Safety Academy

           EHS Academy launched last year to train factory workers and managers in safe work practices relating to materials used in manufacturing. Apple partnered with Universities in China and an international sustainability organization to develop the curriculum, and covers half of the Academy’s cost for suppliers who send workers to be trained.[19] 

 

Apple’s Responsibility to Outside Communities

 

            Under Steve Jobs, Apple didn’t have much of a founded commitment to outside communities. Jobs seemed to think that his legacy was Apple's phenomenal products and consequent success, and once that was achieved, those who were in the position to donate or contribute to charities and non-profits could do so. Jobs attempted to establish the “Steven P. Jobs Foundation” to promote social entrepreneurship, but it lacked attention, and dissolved after 15 months. In 2010, Jobs declined to join Bill Gates’ and Warren Buffet’s “Giving Pledge,” which would have committed half of his annual salary to charity.[20] 

          He did, however, establish Apple’s [Product]RED as part of the international advocacy group [Product]RED. iPads, iPods, iPhones and their cases all have [Product]RED variations, and a percentage of profits from the sale of those products goes to the Global Fund to help fund AIDS programs in Africa. Since its introduction, [Product]RED as a whole (Apple is only a participant), has generated more than $250 million, with more than $70 million from Apple alone.[21]

          Tim Cook sought to foster a more externally responsible Apple Inc. Soon after taking his position as CEO, Tim Cook implemented Apple’s “Double the Donation” program, as mentioned above, and, later, Apple’s “Dollars for Doers” program. Through Double the Donation, an employee, spouse, or board member can 1) donate a given amount to an organization and 2) submit an application to Apple. If approved, Apple will match the donation (up to $10,000 annually per individual).[22] “Dollars for Doers” is a volunteer grant program through which Apple employees (only employees) can 1) volunteer at least an hour of their time and 2) submit an application to Apple. If approved, Apple will donate $25 for every hour the employee volunteered to the non-profit at which the employee volunteered.[23] 

Corporate donation-matching programs and volunteer-grant programs are very common and certainly aren’t new. The first corporate donation-matching program was implemented in 1956 by General Electric.[24] A list of over 350 companies with matching-donation programs, including Sony, HP, and IBM, can be found here: http://nnedv.org/downloads/Other/Matching_gifts_companies.pdf

And a list of companies with volunteer-grant programs can be found here:

http://www.sayograys.org/Volunteer%20Incentive%20Plans.pdf

Tim Cook also paticipated in the ALS ice-bucket challenge to promote awareness of the disease amyotrophic lateral sclerosis (ALS) and encourage donations to research on the disease. [28]

Conclusion

 

          At the end of the day, Apple can only rely on innovation and advertisements to grow its revenue so much. At some point, coming out with another iPhone won't bring in enough sales to continue at the rate of growth that Apple has experienced since its beginnings. By improving its responsibility to its workers, the environment, and outside communities, Apple may be able to create products that are both appealing in their quality as well as in their ethics.

Citations 

1. United States Securities and Exchange Commision, Apple Inc. Form 10-K, (D.C. 2014). Accessed December 6, 2014. http://www.sec.gov/Archives/edgar/data/320193/000119312514383437/d783162d10k.htm.

2. "Apple Inc.," Market Watch, accessed December 6, 2014, http://www.marketwatch.com/investing/stock/aapl/financials.

3. Statista-The Statistics Portal, "Apple Product Sales Comparison 2009-2014, by Quarter," chart, Statista, accessed December 4, 2014, http://www.statista.com/statistics/253725/iphone-ipad-and-ipod-sales-comparison/.

4. Supplier Responsibility; 2014 Progress Report, 2014, accessed December 4, 2014, https://www.apple.com/supplier-responsibility/pdf/Apple_SR_2014_Progress_Report.pdf.

5. Mark Reschke, "Tim Cook, Changing the Culture at Apple," TGaap-Three Guys and a Podcast (blog), entry posted August 18, 2014, http://www.t-gaap.com/2014/8/18/tim-cook-changing-the-culture-at-apple.

6. Ibid

7. "Apple Inc.," chart, Double the Donation-Matching Gifts Made Easy, accessed December 6, 2014, https://doublethedonation.com/matching-gifts/apple-inc.

8. Michal Lev-ram, "Apple unveils new perks to attract talent," Fortune, October 2, 2014, accessed December 4, 2014, http://fortune.com/2014/10/02/apple-employee-perks/.

9. "Apple Campus 2-Official Video," video file, 3:37, YouTube, posted by Talon Fast, October 12, 2013, accessed December 6, 2014, https://www.youtube.com/watch?v=eB6_XkUFpAc.

10. Charles Duhigg and David Barboza, "In China, Human Costs Are Built into an Ipad," New York Times (New York, NY/USA), January 25, 2012, Business Day-The iEconomy, accessed December 6, 2014, http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?pagewanted=all&_r=0.

11. "Apple Joins FLA," Fair Labor Association, accessed December 4, 2014, http://www.fairlabor.org/blog/entry/apple-joins-fla.

12. Supplier Responsibility; 2014 Progress Report, 2014, accessed December 4, 2014, https://www.apple.com/supplier-responsibility/pdf/Apple_SR_2014_Progress_Report.pdf.

13. Supplier Responsibility-2010 Progress Report, -, accessed December 6, 2014, https://www.apple.com/supplier-responsibility/pdf/Apple_SR_2010_Progress_Report.pdf.

14. "Archived Press Release 'Rotten' Apple Told: Come Clean on Bangka Tin," Friends of the Earth-See Things Differently, last modified July 6, 2013, accessed December 6, 2014, http://www.foe.co.uk/resource/press_releases/apple_bangka_06072013;

Natalie Starkey, "Apple to Establish if Tin from Bangka Island Is Used In iPhones," The Guardian, July 12, 2013, Environment, accessed December 6, 2014, http://www.theguardian.com/environment/2013/jul/12/apple-tin-mining-bangka-island-iphone.

15. "Archived Press Release 'Rotten,'" Friends of the Earth-See Things Differently.

16. Supplier Responsibility; 2014 Progress.

17. Conflict Minerals Report (n.p.: Apple, 2013)

18. Ibid

19. Supplier Responsibility; 2014 Progress

20. Jessica Prois, "The Steve Jobs Philanthropy Debate," Huffington Post, October 7, 2011, -, accessed December 4, 2014, http://www.huffingtonpost.com/2011/10/07/the-history-of-steve-jobs_n_998325.html.

21. Andrew Ross Sorkin, "Bono Praises Steve Jobs as Generous and ‘Poetic’," New York Times (New York, NY), September 1, 2011, -, http://www.nytimes.com/2011/09/02/opinion/bono-praises-steve-jobs-as-generous-and-poetic.html?_r=0; https://www.apple.com/product-red/.

22. "Apple Inc.," chart.

23. Ibid

24. "Top Matching Gift Companies List of Companies with Strong Donation Matching Programs," Double the Donation, accessed December 4, 2014, https://doublethedonation.com/matching-grant-resources/list-matching-gifts-companies/.

25. "Inclusion Inspires Innovation," www.apple.com, accessed December 6, 2014, https://www.apple.com/diversity/.

26. Ibid

27. Nilay Patel, "Tim Cook boasts about Apple's charitable contributions during internal all-hands meeting," The Verge, February 2, 2012, -, accessed December 1, 2014, http://www.theverge.com/2012/2/2/2766403/tim-cook-apple-charity-project-red-stanford.

28. Reschke, "Tim Cook, Changing the Culture," TGaap-Three Guys and a Podcast (blog).

29. "Clicking Clean: How Companies Are Creating the Green Internet," Greenpeace, last modified April 2014, accessed December 8, 2014, http://www.greenpeace.org/usa/global/usa/planet3/pdfs/clickingclean.pdf.

30. Apple, accessed December 4, 2014, http://www.apple.com.

31. Ibid

Apple’s Responsibility to its Employees

 

Apple’s Responsibility to its Direct Employees

            Employees working under Steve Jobs tended to describe their job at Apple as a challenge that yielded excellent products.[5] Jobs was generally uninterested in the well-being of his employees; he sought to recruit the talented, and to keep them only with the size of their paychecks and the allure of Apple products, an attitude reflected in his supposed tendency to fire seemingly incompetent employees in the elevator.[6] 

Apple’s Responsibility to its Workers (throughout its supply chain)

 

  • Mining increased levels of acidity in Bangka soil, making farming in the area nearly impossible

  • Silt and runoff from mining was destroying coral reefs and driving away fish

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