Apple corporate social responsibility

Marie Glueck

“Apple is committed to the highest standards of social responsibility across our worldwide supply chain. We insist that all of our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes. Our actions — from thorough site audits to industry-leading training programs — demonstrate this commitment.”

This is what Apple states on its website. This commitment might be true or not, but there is evidence that there is still a huge gap between this statement and the execution. The most famous example is the investigation at Foxconn, a big supplier of Apple, where the Fair Labor Association “found excessive overtime and problems with overtime compensation; several health and safety risks; and crucial communication gaps that have led to a widespread sense of unsafe working conditions among workers.” Additionally Apple claims that they go beyond the industry standard in their manufacturing process – this might seem to be great, but if one knows how the standards are now with low wages and plenty of working hours this is not enough.

Looking on the environmental side, Apple seems to be very transparent about its commitment to reduce the environmental impact of its products. This ranges from the non-use of hazardous materials to the calculation of the carbon footprint and less packaging. Additionally it aims to design its products to be as energy efficient and recyclable as possible. This has benefits for the environment and for the company and Apple should be acknowledged for this effort. These actions towards a greener company are well recognized amongst the customers, as stated in a survey by TDG in 2008, where 1512 internet users rate Apple as the most environmentally friendly technology brand. In contrast Greenpeace rated Apple 11th out of 17 rated companies in its Guide to Greener Electronics 2009. This created a gap between the perceptions of the customers and the reality. This gap is quite dangerous, because in case the perception of the customers is revealed to be untrue this would cause a huge damage on Apples reputation. The company already works hard to close the gap and went up five places in the Guide to Greener Electronics of Greenpeace from the ninth to the fourth place in 2011.

The story behind Apple’s environmental footprint

Still, after some research, Apples CSR activities seem to be more reactive than proactive and especially in the environmental sector due to pressure of environmental groups. According to some resources Apple lacks behind the CSR activities of its competitors, this is most probably because of the former CEO Steve Jobs, who valued the best technology for people more than random donations to charities (Chun 2011). Random donations to charities which Jobs did not like are not CSR for me neither, CSR is not how much money a company gives to the community, CSR is HOW a company makes business. And here is room for improvement.

The current situation of Apple is the chance of CEO Tim Cook to develop and introduce a proper CSR strategy. The strategy needs an innovative and inspiring vision which is aligned with the core values of the company and serves the cool image the company worked hard on. It needs to promote trust and openness internally and implement a continuous stakeholder dialogue to ensure the survival of the brand. Nobody wants to own products which are related with inhuman working conditions. Apple is highly innovative and should use its skills for social innovation. They have the potential to come up with innovative solutions for global challenges. Apple should not miss the possibility to become an innovator in CSR activities and to set a new standard in the technology sector with a cool sustainability vision. It’s time for a green Apple!

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Apple and Its Suppliers: Corporate Social Responsibility – Case Solution

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In 2014, a documentary came out implicating Apple due to the alleged human rights violations by its suppliers which assemble its iPhones. This was after the 2009 scandal of another violation by another one of its suppliers. This case study looks into how Apple should respond to this new issue.

​Sun Hye Lee, Michael Mol, Kamel Mellahi
Harvard Business Review (W16147-PDF-ENG)
March 22, 2016

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Apple and Its Suppliers: Corporate Social Responsibility Case Answers

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1. Identify the multiple levels of analysis at play for Apple as it addresses the Corporate Social Responsibility challenges in its supply chain.

Nowadays, Corporate Social Responsibility is the main topic everywhere. If any firm (including Apple, Inc.) wants to create the right image in the society, they should contribute some of their profit and earnings to CSR (Lee & et al., 2016).

Many companies are donating some percentage of their revenue for the welfare of society and the environment. Moreover, Apple’s brand image was degraded when they violated the worker’s rights at one of Apple’s suppliers, Foxconn.

But after they started contributing to CSR and applying some rules and regulations to preserve the labor rights. And this happened at on more distribution location that was China (Lee & et al., 2016).

Instead of having a great brand image who invest in CSR, it still has so many problems due to violation of laws in its supply chain. The main four reasons for CSR’s breach are lack of stakeholder engagement, lack of triple-bottom-line thinking, lack of transparency, and lack of CSR leader (Godelnik, 2012).

After analyzing in detail, the company got to know that this problem is not at one level. The first level of challenges arises because Apple operates worldwide because they have different cultures, values, and rights. The second level of issues is due to the distinct goals of every company. The third level of challenges grows due to the relation between supplier and buyer.

It’s then the responsibility and opinion of how much they want to give importance to Corporate Social Responsibility. Therefore, this depends on the stakeholders that are customers, investors, employees, and supplier’s employees (Thompson, 2017).

Apple can address the challenges of CSR by satisfying their stakeholders:

1. Customers : The main stakeholders of apple are their customers. For CSR, Apple has designed their strategy to address the issue by giving preference to their customers and their desires. Every customer or consumer always buys the right quality products and is available at reasonable prices in any company. In contrast, Apple is a prestigious brand and offers its products at high prices. Also, almost all individuals want to buy Apple products. They do not care about the prices because apple is satisfying their needs by providing products of high quality and also environment friendly (Thompson, 2017).
2. Employees : The Second most crucial stakeholder who helps Apple attain its corporate social responsibility goals is its employees. These are those individuals who work there and the company for achieving its goals and objectives. If they are not satisfied with the management, they would do something wrong and do not do their jobs properly, and also they might sometimes violate human rights. Therefore, to satisfy them, the main reward is compensation and benefits. Apple tries to compensate its employees after some time to help them fulfill their CSR goals (Thompson, 2017).
3. Investors: Investors of any organization are their primary stakeholders, which is the same case in Apple. Therefore, in Apple, this stakeholder’s only want and objective is to get an excellent financial return on their investments. If they would satisfy them, then they would able to contribute more to their CSR efforts. Moreover, Apple is an excellent profitable company that has a superior profit margin. Therefore, this effort for the CSR helps them to satisfy their investors (Thompson, 2017).
4. Supplier’s employees: Along with their employees, the employees working with their suppliers are also their stakeholders. But they are indirect stakeholders. Their want is ethical employment, compensation, and job security. Therefore, to successfully present the Apple company as a company with a good reputation in CSR, they have to take care of their suppliers’ employees. Moreover, Apple follows its code of conduct according to which they can leave their suppliers if they do some evil things. Therefore, by addressing CSR goals, Apple can satisfy its stakeholders also (Thompson, 2017).

Therefore, at last, if they want to remove the allegations of violation of CSR policies, then they have to satisfy their stakeholders first. Because if they follow the ethical code of conduct, they will automatically not face CSR challenges.

2. Is Apple responsible for the alleged human rights violations that occurred?

Apple’s supply chain is global in nature. Around 90% of Apple’s exclusive products, i.e., the iPhone, are manufactured in countries other than the USA. Semiconductors are manufactured in Germany and Taiwan, display panels in Korea, and chipsets in Europe. All these parts are ultimately assembled in China (Render, 2020).

Foxconn and Pegatron are Apple’s two key suppliers operating out of China, where, as per various media reports, many human rights violations occurred. These human rights violations included long working hours, low wage rates, poor labor practices and working conditions, use of the juvenile workforce, environment pollution and violation of women’s rights, etc. (Lee, Mol, & Mellahi, 2016).

In my opinion, Apple is responsible for the alleged human rights violations as well due to the following reasons:

• These suppliers are manufacturing on a contractual basis for Apple, so Apple can also be considered a principal employer (Moorhead, 2019). Hence, it is Apple’s duty to ensure that fair labor practices are followed by their suppliers also.
• Apple is a key buyer for these suppliers, i.e., 40% of Foxconn’s revenue comes from Apple (Oliver, 2013). Hence, Apple holds substantial power over its suppliers and can get better labor practices implemented by their suppliers.
• Apple is known for forcing its suppliers to supply parts at a shallow margin, whereas its profit margin is very high, e.g., it pays a 0.8% margin to some of its suppliers, whereas its margin is more than 35%. To cut costs and increase their margins, the suppliers resort to these unfair trade practices. To counter this, apple should ensure that while making their internal estimates for various purchases, they should ensure that enough margin is left for the suppliers so that they do not have to resort to unfair labor practices (Lu, 2020).
• As part of their Corporate Social Responsibility, they should ensure that the supplier should declare that they will follow fair labor practices as part of their contract.
• Apple believes in making processes simple; however, this principle has its limitations in the case of Supply Chain Management (Lu, 2020). They will have to maintain close coordination with all their suppliers to ensure that its suppliers’ labor practices are fair.
• Apple is the world’s leading company in terms of valuation, cannot neglect is corporate social responsibility, and it has to keep an eye on what labor practices are followed by its suppliers as Apple itself is indirectly responsible for that also.

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Apple Corporate Social Responsibility (CSR) and Sustainability

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As the world’s leading innovator in technology, Apple Inc. is known for its personal computers, smartphones, tablets, software, digital media, and music platform. Headquartered in Cupertino, California, Apple holds the mantle for being the most valuable brand in the world today and the first publicly traded company to be valued at over $2 trillion. [1]

Founded in 1976 in a garage in Los Altos, California, Apple has one of the most fabled origin stories in business. What started out as a mission to change how people view computers has helped power the digital revolution. In 2020, Apple reported an annual global revenue of $274.5. With 511 retail stores spanning 25 countries and employing 147,000 people worldwide, Apple continues to exert immense influence over how technology is used and integrated into everyday life across the globe.

Apple’s Corporate Social Responsibility Policy

Given Apple’s notorious penchant for secrecy – both in the launching of new products and internal operations – how the company measures and assesses the impact of its Corporate Social Responsibility and Sustainability initiatives is not always apparent. However, despite Apple’s reputation for confidentiality, its CSR programs have expanded considerably over the last decade, with particular emphasis being placed on greener and more equitable business practices. [2]

I. Apple’s Green Business Practices

As one of the first global companies to achieve a net-zero carbon impact for corporate emissions, Apple announced plans in 2020 to extend this initiative across its entire supply chain by 2030. In line with this goal, all products sold will likewise be carbon neutral by the end of the decade. [3]

Apple’s environmental sustainability efforts also include improving the durability and longevity of its products, with a number of programs (launched in 2020) to refurbish and reuse Apple products. These initiatives include ensuring that 40% of all materials used in the production of its MacBook Air line are made from recycled sources.

Last year, Apple partnered with The Conservation Fund to protect 36,000 acres of sustainable forest in North Carolina and Maine and in 2021, announced a $200 million first-of-its-kind carbon removal initiative called Restore Fund. In collaboration with Conservation International and Goldman Sachs, this program will invest in forestry projects to remove at least 1 million metric tons of carbon dioxide from the atmosphere every year.

Apple’s environmental sustainability efforts also include reducing toxic materials such as mercury, PVC, and Beryllium in their product lines. These safer and stricter guidelines have earned the company an A+ rating from Mind the Store, a North American campaign that evaluates retailers on chemical safety. Apple was also the first consumer electronics company to receive the EPA Safer Choice Partner Award in 2020 for its work on using safer cleaning solvents.

Additionally, Apple focuses on reducing the overall environmental impact of its supply chain, particularly in its approach to sourcing raw minerals. In line with this priority, all Apple suppliers, smelters, and refiners of tin, tantalum, tungsten, gold, and cobalt are required to undergo third-party audits.

II. Apple’s Equality & Fairness Programs

In 2021, Apple announced a series of new CSR programs under its $100 million Racial Equity and Justice Initiative (REJI). These efforts focus on addressing systemic racism faced by communities of color by promoting educational support, including:

• A developer academy to support tech education in Detroit, Michigan.
• A $25 million learning and innovation center to support historically black colleges and universities
• Venture capital funding for minority entrepreneurs. [4]

In addition to these initiatives, Apple’s social responsibility programs continue to support diversity and professional growth throughout its workforce. Over the last 6 years, the number of employees from underrepresented communities (URCs) increased by 64%. The number of female employees worldwide also increased by 70% with an 85% increase in female employee leadership positions.

COVID-19 Relief

In 2020, Apple donated over $15 million to help mitigate the impact COVID-19 has had on its workforce. It introduced a range of protective measures throughout its supply chain, including health screenings, social distancing protocols, increased cleaning procedures, as well as providing masks and sanitizers to employees. Apple also launched a number of apps to help keep people up-to-date about the pandemic and CDC guidelines for COVID-19 quarantining, testing, and tracing procedures. [5]

Apple’s Corporate Social Responsibility Issues

Despite Apple’s investment in CSR, the company continues to face a number of labor and human rights allegations regarding its Chinese subcontractors. According to recent reports, Apple has been accused of being too slow in cutting ties with Chinese supplies known for violating the company’s CSR labor policies, particularly if doing so would negatively impact profits. [6]

Apple has also been accused of lobbying the US Congress to alter legislation designed to limit goods made with forced labor from Muslim minority groups in Xinjiang, China. [7] In a March 2020 report issued by the Australian Strategic Policy Institute, [8] Apple was cited for unfair labor practices in the Xijiang region of China. After an internal investigation with their Xijiang suppliers, Apple announced that no evidence of human rights violations had occurred, but that it will continue to monitor the situation.

In addition to these labor allegations, Apple faces a number of European lawsuits over its alleged obsolescence design for its Series 6 iPhone product line. [9] According to these claims, consumers were forced into buying new or updated phones earlier than necessary due to the company’s alleged manipulation of the batteries in its devices.

Apple’s Corporate Social Responsibility Report

Access the Apple Inc. Corporate Social Responsibility 2019-20 Environmental Progress Report here. [10]

Conclusion

Answering calls to become “A Greener Apple,” the tech giant has taken positive steps over the last decade toward improving its social and environmental impact. As one of the most profitable and innovative companies today, Apple is uniquely positioned to lead the way toward creating a more sustainable, more equitable, and healthier planet. How well the company responds to issues pertaining to responsible corporate citizenship and sustainability will continue, no doubt, to be closely monitored by various consumer groups, environmental organizations, and governmental agencies around the globe.

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