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Independent verificationin TCO CertifiedIndependent verification is a cornerstone of TCO Certified. Assessment of product,factory, and brand owner compliance takes place both pre and post certification.Confirming compliance with TCO Certified is vital for ensuring trust among the purchasers andbrand owners that use it. The process also provides direct access to industry conditions andinsights, allowing us to measure progress and identify hot spots that demand our continuedattention.All testing and verification in TCO Certified is carried out by independent test and verificationpartner organizations, typically world-renown test houses that specialize in electronics, socialresponsibility or sustainability issues.1. PrecertificationFACTORY / BRANDCOMPLIANCEVerification of compliance withcriteria before we certify a licationBrand owner applies for TCO CertifiedFOLLOW UPFACTORY AUDITBRAND SOCIALENGAGEMENTFOLLOW UPPRODUCT TESTING2. PostcertificationAnnual follow up verificationafter certification of productINDEPENDENTVERIFICATIONCopyright 2017 TCO Development. All Rights Reserved8Accuracy andreassurancethroughindependentverificationAll organizations verifying for TCOCertified are independently accredited inaccordance with ISO/IEC 17025.All detected nonconformities in TCOCertified products must be correctedthough a corrective action plan withina reasonable time frame, which isdetermined based on severity andcomplexity of the problem. This is onethe most important aspects when drivingimprovements in the IT industry.

Verification rounds, 2016In 2016 we carried out a number of follow up verification and quality assuranceactivities, including:1. Post certification verification- products, factories and brandowner responsibility3. Review of brand ownerproactive workA detailed review with a brand owner representative,who is designated as responsible for socially responsiblemanufacturing. The review focuses on the company’s proactivework in socially responsible manufacturing and actions takento prevent future nonconformities. The review is designed toshow where strengths and weaknesses exist and is aimed atcontinuous improvement at each review. In 2016 we carried outthe review with 19 brand owners.As part of our annual product follow up program, we haveretested a selection of certified product models. Testingincludes analysis of chemical content and ergonomic aspectssuch as display luminance and color performance, along withother factors. Products are typically selected based on variousrisk factors, for example products with an extended certificatelife or where several variations of a display panel have beenused. Products are also selected to represent a wide range ofbrands.4. Review of verification partnersWith multiple accredited test and verification partners, each sitemust deliver accurate, repeatable results, regardless of location.During 2016 we carried out our regular ‘round robin’ producttesting, where a single product sample is tested at all testsites. The purpose is to ensure consistency of test methods,equipment calibration and criteria interpretation.As the number of manufacturing sites entering the TCOCertified program grows, so does our compliance monitoringof factories manufacturing certified products. During 2016 wecarried out a number of follow up factory audits.2. Review of TCO Certified systemEvery test and verification site is also subject to annualaccreditation in accordance with the International LaboratoryAccreditation Cooperation (ILAC), the international organizationfor accreditation of conformity assessment bodies includingcalibration laboratories (using ISO/IEC 17025)We have conducted an internal review of all processes androutines in TCO Certified, to ensure consistency and accuracyin accordance with the requirements for ISO 14024 Type 1Ecolabels. TCO Certified has also met the requirements forthe Global Ecolabelling Network’s GENICES peer reviewaccreditation, in accordance with ISO 14024.5. Brand claims monitoringMore information We have continued our ongoing efforts to ensure continuedaccuracy in any product claims related to TCO Certified.Brand owner websites and promotional materials are regularlyreviewed and corrected for this purpose.9

A new generation TCO CertifiedA new generation TCO Certified is launched every three years, with the latestgeneration in November 2015. This rapid development cycle allows us to designprogressive criteria that are in line with current technologies and that can drivefaster progress in targeted areas.Throughout the process, we invite input from an international group of stakeholders andinterested parties, representing brand owners, manufacturers, purchasers, technical andscientific experts, NGOs and interest groups.TCO Certified criteria development cycleStakeholder DialogContinuous throughout the three year cycleYear threeYear oneDraft and launchof new versionAnalysis anddirectionYear twoResearch andcriteria developmentCopyright 2017 TCO Development. All Rights ReservedFocus criteria in the new generationSocially responsible manufacturing Reduction of hazardous chemicalsExpanded brand owner responsibility for supply chainworking conditions and implementation of correctiveactions.Brand owners bear the ultimate responsibility for socialresponsibility in the supply chain and new criteria expand thisresponsibility to focus on improved closure of corrective actionsand further implementation of the code of conduct in the supplychain. The goal is to drive improvements in the brand owner’sstructured work, close nonconformities and minimize the risk offuture violations.Brand owner commitment to conflict mineralsinitiativesA new paradigm for identifying safer flame retardantsWhile toxic halogens are largely phased out of certifiedproducts, too little is known about the non-halogenatedchemical flame retardants used to replace them. TCO Certifiedhas added criteria aimed at increasing transparency aroundthese chemicals; eliminating the most hazardous, identifyingsafer alternatives and making this information public. Thisassessment is carried out using the GreenScreen for SaferChemicals hazard assessment tool. The chemicals approvedfor use in TCO Certified products are published in theTCO Certified Accepted Substance List, available at www.tcodevelopment.com. The list represents a shift from thetraditional approach of listing banned substances only.Brand owners must prove their involvement in programs aimedat establishing a conflict-free supply chain of Tantalum, Tin,Tungsten and Gold (3T G). This includes supporting in-regionresponsible sourcing programs or implementing an OECD duediligence process. This helps suppliers meet due diligencerequirements, and develop a legitimate mining industry thatdirectly benefits the people whose livelihoods depend on it.10

COMMUNITY.11

Building a communityof best practiceProgress is best made when there’s open and constructive stakeholder dialog,aimed at more transparency and achieving common objectives. IT purchasersare increasingly aware of the social and environmental risks associated withelectronics. Using TCO Certified helps support responsible purchasing decisionsand verification of product compliance.Brand owners turn to TCO Certified for independent validation of their product attributesand sustainability progress, making it easier to secure buyer trust. As an independentorganization, we are uniquely positioned to offer buyers, brand owners and experts a platformfor exchanging knowledge and best practice. This progressive dialog is vital for developingmutually beneficial solutions.Communityengagementhighlights, 2016Sustainable IT SummitInaugural TCO Development Sustainable ITSummit. Held to mark the launch of the latestgeneration TCO Certified, the Summit broughttogether leading voices from industry andpurchasing communities to share best practicesand discuss strategic approaches for higherimpact.Webinar series2016 Sustainable IT Webinar Series – a learningplatform for sharing the latest research andinitiatives from brand owners, research expertsand purchasing leaders. Continuing in 2017.Dialog with brand ownersAnnual review with brand owners. As anextension of the certification process, wecarry out an annual dialog with each brandowner about their proactive work to furthertheir commitment to environmental and socialresponsibility.

Stakeholders have direct impactPurchasersBrand ownersReducing risk, impacting industryCertified product models from 27brand ownersPurchaser use of TCO Certified is critical to driving positivechange, including at the factory level. Through their continueduse of TCO Certified as part of a sustainable purchasingprogram, organizations around the world have been able toreduce their environmental and social risks when buying ITproducts and send a clear message to industry. Easier to make more responsible IT product choicesCertifying product models makes it easier for brand ownersto meet buyer demand, gain access to volume contractsand show compliance with current, relevant sustainabilitycriteria. They also benefit from from the structured platform forcontinuous improvement that TCO Certified offers. Progressivecriteria and independent verification help brand owners reducesustainability risk and provide validation of progress andproduct claims. Independent verification is included - no need to do ityourselfBrand owners offering TCO Certifiedproducts, 2016 Easier to reduce the social and environmental risks of ITproductsAcer, AOC, ASUS, BenQ, Casio, Casper, Dell, EIZO, Founder,Fujicom, Fujitsu, Genuine, Hanns.G, HP, iiyama, Jabra, Lenovo,LG, MEDION, MSI, NEC, Philips, Plantronics, Samsung, TERRA,VERSUS, ViewSonicBenefits to IT buyers include:Your purchasing choices drive change - by using TCO Certifiedyou have a direct impact on sustainability in the IT industry,including socially responsible manufacturing.Using TCOCertified is part ofa comprehensivesustainable IT strategyStrategic partnersCollaborating for greater impactContinual progress demands constant innovation. Working withour network of strategic partners is key to our ability to drivemeaningful change and provide decision support for purchasersand industry alike. This means being at the forefront of technicalinnovation and setting relevant criteria aimed at solving themost pressing social and environmental challenges.Among our collaborations in 2016: Continued partnership with accredited test and verificationorganizations TUV Rheinland, Nemko, Intertek, Goodpoint andSwerea IVF Integration of the Clean Production Action’s GreenScreen for Safer Chemicals hazard assessment tool in TCO Certified Sustainable Purchasing Leadership Council - IT HardwareTechnical Advisory Group ModUpp2020 - Sweden-based sustainable purchasingeducation initaitive Multi-stakeholder collaboration in sustainability, purchasing,legislative and voluntary initiatives, NGOs and interestorganizations13

IMPACTS.14

IMPACTS, ASociallyResponsibleManufacturingImpacts, 2016 Improved code of conductcompliance and implementation ofcorrective actions, especially whenbrand owners present collectivedemands to shared manufacturingsites Persistent challenges inadherence to labor laws, despitesome progress Greater brand owner engagementin conflict-minerals initiatives15

IMPACTS, A - Socially Responsible ManufacturingImpacts, A.1Brand owner improvements infactory working conditionsIn the new generation TCO Certified we have increased brand owner responsibilityfor code of conduct compliance and implementation, as well as follow up ofcorrective actions in factories where certified products are made.As shown in our 2016 case study of 16 brand owners, code of conduct compliance hasimproved, along with closure of corrective actions, despite some persistent challenges.A shift to greater brand ownerresponsibility for the supply chainBeginning in 2009, TCO Certified has included criteria forsocially responsible manufacturing. What started with branddeclarations of social responsibility initiatives, the criteriahas evolved into a structure for greater transparency andcontinuous improvement in supply chain working conditions.Prior to the 2012 generation, brand owners typically placedresponsibility for working conditions and corrective actionsonto manufacturing partners. The new generation shifts thisresponsibility to the brand owners. There are several reasonsfor this change: Manufacturer improvements are most often at the demand ofthe customer, in this case the brand owner. For a manufacturingsupplier, social responsibility is not always a priority and maybe outweighed by lead time, cost and other factors Brand owners have the most influence and opportunity toaffect working conditions in the supply chain Purchasing organizations generally consider brand ownersas having ultimate responsibility for supply chain workingconditionsTCO Certified criteria summary- socially responsiblemanufacturingBrand owner must implement a code of conduct,complying with: Eight ILO Core conventions UN Convention on the Rights of the Child, article 32 Health & Safety and labor laws in the country ofmanufactureTo prove compliance, brand owners must: While brand owner responsibility has been a key aspectin TCO Certified since 2012, we have observed that a singlebrand acting alone may not have enough leverage to driveeffective change at the factory level. in 2016 we have testeda new approach, based on collective demand-setting fromseveral brand owners at shared manufacturing sites. This newmethod has resulted in faster, more effective implementation ofcorrective actions Sign a legally binding license agreement with TCODevelopment Have a serious code of conduct and ensure it iscommunicated and implemented in the supply chain Regularly conduct audits of all factories manufacturingcertified products and send samples of these reports toTCO Development for reviewThere are however remaining challenges where nonconformitiesare still common, particularly in adherence to local labor laws.While there has been some measurable improvement, theseissues are continuing hot spots moving forward.An observation is that brand owners and their manufacturingpartners have a greater awareness of their social responsibilitycompared with our 2013 analysis, and while there are persistenthot spots, the level of overall engagement and preparednesshas improved.16 Handle nonconformities in the whole supply chain ina responsible way, in accordance with corrective actionplans Appoint a person responsible for implementation of thecode of conduct and for reporting to TCO Developmentannually Report proactive work annually, aimed at minimizingrisk of nonconformities against the code of conductCriteria in TCO Certified for conflict minerals; Brandowners shall: Publish a conflict minerals policy Commit to in-region initiatives or establish a duediligence process for conflict minerals

IMPACTS, A - Socially Responsible ManufacturingCase study; tracking brand ownerfactory progress, 2013-2016Improved working conditions, but challenges with labor lawsIn 2016 we studied progress in socially responsiblemanufacturing at tier one sites manufacturing TCO Certifiedproducts for 16 brand owners. This case study is based onfollow up verification with the same facilities assessed in 2013and included in our report “The State of Socially ResponsibleManufacturing in the IT Industry “(2014).The comparison is based on collected data from both 2013and 2016, tracking progress of the same brand owners andfactories, including results from third party audits. Verifiedaudit reports show major improvement in code of conductcompliance and closure in all but two areas of corrective actionby the end of 2016.One brand owner could not be included in this study as theyare no longer using the same manufacturing facility as in 2013,and therefore could not provide comparative data. That brandowner’s new facility is however subject to the same complianceand follow up requirements.Of note is that factory audits do also show some challenges ineffective assessment of freedom of association.However, adherence to labor laws is a continuing challenge, asviolations continue, despite some measurable improvement.Number of brands with nonconformities in factoriesmanufacturing TCO Certified products, 2013-2016.2013Number of brands11Forced laborDiscriminationFreedom of associationNonconformities - all levels32Rigths of the child11Health & safety16Labor laws162016Number of brandsForced labor 0Discrimination 0Freedom of association 0Levels of labor law violationsRigths of the child 0Health & safetyPriority nonconformities2Labor laws14Copyright 2017 TCO Development. All Rights Reserved17Major nonconformitiesMinor nonconformities

IMPACTS, A - Socially Responsible ManufacturingLabor laws - a measurable shift, but challenges persistDespite some progress, labor law nonconformitiespersist. These violations are most commonlyconnected with payment of wages as well asexcessive factory working hours.In our 2016 study, 14 of 16 brand owners showed somelevel of nonconformity with labor law provisions, in factoriesmanufacturing certified products.However, our observations reveal some improvement. Where11 brand owners in our 2013 analysis showed labor lawviolations at the highest “priority” level. The number of priorityviolations was reduced to zero in 2016.While the majority of brand owners still show some kind oflabor law nonconformity in the factories, the severity of thoseviolations has been reduced to either the “major” or “minor”levels.Important to note are the different characteristics of laborlaw compliance when compared with other code of conductaspects such as compliance with ILO and UN conventions. It isclear that progress in this area is more difficult and longer termas it involves legislative and public policy issues at the locallevel.Labor law is a complex issue, involving challenges not only withworking hours, but also with migrant workers, the employmentof students and temporary workers, among other issues.Labor law and non conformities16The most commonly observed labor lawconformities in our follow up verification are:Working hours-Excessive overtime-Child labor - juvenile workers doing night shifts-High percentage of tempworkers1 brand with minornonconformity143 brands with majornonconf

TCO Certified. For the purposes of this report, the term "brand owner" refers to the companies owning the brand names under which TCO Certified products are sold. TCO Certified is a product certification. Compliance applies to specific product models and the manufacturing facilities where they are made. While