Stakeholder Engagement

We maintain open dialogue with stakeholders throughout engagement process

 

Flex values feedback and input from our internal and external stakeholders. We respond to all concerns identified during the engagement process. Every year, the materiality assessment is updated based on the requests of information from stakeholders, including but not limited to customers, external sustainability rankings and industry information. In 2017, the EICC (now known as the Responsible Business Alliance or RBA) 2016 Sensing Assessment served as a point of reference for relevant topics within the industry [102-46].

We recognize our employees, customers, shareholders, potential investors, suppliers, subcontractors, governments/regulatory agencies, unions, Non-Governmental Organizations (NGOs) and industry associations as key stakeholders [102-40]. The engagement and interaction between Flex and its stakeholders is defined by the nature of company business, the scale of the organization, and the social, economic and environmental impacts of our operations [102-42].

As referenced in our Annual Report, our facilities include an extensive network of design, engineering, manufacturing, and logistics in 30 countries, across more than 100 locations. In our worldwide facilities, we also provide Global Services and product introduction centers [102-45]. This report includes all Flex entities [102-45]. However, the scope of the material topics and/or indicators included may be smaller depending on our materiality analysis (see Significant Topics and Boundaries). Each executive and their teams are informed of the GRI reporting principles, and the data collected was constantly evaluated against GRI standards [102-46].

 

Assessing sustainability topics to meet our stakeholder’s expectations and requirements [102-46]

Flex Assessing sustainability topics to meet our stakeholder’s expectations and requirements Assess
Flex Assessing sustainability topics to meet our stakeholder’s expectations and requirements Determine
Flex cAssessing sustainability topics to meet our stakeholder’s expectations and requirements Analize
 
Flex Assessing sustainability topics to meet our stakeholder’s expectations and requirements Narrow down
Flex Assessing sustainability topics to meet our stakeholder’s expectations and requirements Identify
Flex Assessing sustainability topics to meet our stakeholder’s expectations and requirements Validate
Flex Assessing sustainability topics to meet our stakeholder’s expectations and requirements Materiality

Flex materiality matrix 2017

People

Community

Environment

Integrity

Supply Chain

Economic Performance

Flex Materiality Assessment Matrix High Low
Flex Materiality Assessment Matrix High Medium
Flex Materiality Assessment Matrix High High
Flex Materiality Assessment Matrix Medium Low
Flex Materiality Assessment Matrix Medium Medium
Flex Materiality Assessment Matrix Medium High
Flex Materiality Assessment Matrix Low Low
Flex Materiality Assessment Matrix Low Medium
Flex Materiality Assessment Matrix Low High

 

Notes: 1) Materiality is used herein as defined by the Global Reporting Initiative's GRI Standards; 2) Chart shows relevance to our stakeholders, does not indicate performance.

Water discharge data for 2014 has been restated in the present report as a result of improvements in measurement methods. We’ve updated the number in the KPI environment section [102-48]. Furthermore, we’ve also updated some of the topics. As a result of a 2017 materiality assessment, we now cover 15 topics, 13 of which are covered within the organization and two outside of it. You can learn more about these topics in the following table [102-49].

Social Topics
People
Material Topic [102-47] GRI Indicators Scope [103-1]
Occupational health and safety 403-2 All manufacturing and logistics sites*
Training and education 404-1, 404-3 All entities
Management system Flex metric All manufacturing and logistics sites*
Working hours Flex metric All manufacturing and logistics sites*
Forced or compulsory labor Flex metric All manufacturing and logistics sites*
Community
Material Topic [102-47] GRI Indicators Scope [103-1]
Local communities 413-1 All manufacturing and logistic sites*
Environmental Topics
Environment
Material Topic [102-47] GRI Indicators Scope [103-1]
Energy 302-1, Flex metric All manufacturing and logistics sites*
Water 303-1, 303-3 All manufacturing and logistics sites*
Emissions 305-1, 305-2, 305-3, 102-47 All manufacturing and logistics sites*
Effluents and waste 306-1, 306-2 All manufacturing and logistics sites*
Management system Flex metric All manufacturing and logistics sites*
Economical Topics
Integrity
Material Topic [102-47] GRI Indicators Scope [103-1]
Anti-corruption 205-2 All entities
Management system Flex metric All manufacturing and logistic sites*
Supply Chain
Material Topic [102-47] GRI Indicators Scope [103-1]
Procurement practices – local suppliers 204-1 Significant operations in the Americas, Europe, and Asia ***
Supplier environmental assessment 308-1 Preferred supplier list (PSL)**
Supplier social assessment 414-1 Preferred supplier list (PSL)**
Responsible materials sourcing Flex metric ****
Economic performance
Material Topic [102-47] GRI Indicators Scope [103-1]
Economic performance 201-1,201-2 All entities
Market presence – fair wages and benefits 202-1 All manufacturing and logistic sites*

* Operations in the Americas, Europe, the Middle East, Africa (EMEA) and Asia: Austria, Brazil, Canada, China, Czech Republic, Denmark, Germany, Hungary, India, Indonesia, Ireland, Israel, Italy, Japan, Malaysia, Mexico, Netherlands, Poland, Romania, Singapore, Sweden, Turkey, United Kingdom, Ukraine and the United States [103-1].
** Preferred Supplier List (PSL): Geographical location varies, but more attention is on suppliers located in China [103-1].
*** Operations in the Americas, Europe, and Asia: Brazil, China, Malaysia, Mexico, Poland, Romania, and the United States [103-1].
**** The Smelter(s) or Refiner(s) (SORs) identified by our suppliers in their declarations, as well as the countries of origin for their Conflict Minerals can be found on the Appendix of our Form SD and Conflict Mineral Report

Flex uses multiple communication channels to inform stakeholders, including written communication, meetings, regular and specialized reports, contracts, surveys, and other methods. The frequency of communication varies depending on the topic and business process. Engagement may be daily, monthly, quarterly, annually or as needed to keep an open dialog with all stakeholders [102-43]. Taking advantage of the regular communication and business process, Flex continually identifies key sustainability topics and concerns of our stakeholders. Then we strive to incorporate these priorities into our business and corporate sustainability strategies (see table). Key topics include environmental performance, working hours, working conditions, social and environmental supply chain management, integrity/ethics, company performance, regulatory compliance and adherence to Responsible Business Alliance (RBA) standards, among others. [102-44].

Key topics and concerns raised through stakeholder engagement 1

Key topics and concerns include: a) social and environmental related topics and concerns were raised by customers, shareholders, potential investors, suppliers, subcontractors, governments/regulatory agencies, unions, Non-Governmental Organizations (NGOs), social and environmental industry associations, and our employees; b) economic related topics and concerns were raised by shareholders, potential investors, suppliers and our employees [102-44].

Social Topics
Occupational health and safety
Key topics/concerns [102-44] Flex response [102-44]

Occupational health and safety performance

Safe use of hazardous substances and chemicals

Flex social and environmental management system integrates OHSAS 18000. All Flex sites are requested to have a Health and Safety management system in place. This is verified through Flex Pledge physical audits performed by corporate team. 

Our management system requires all sites to convene committees to address safety issues and concerns. 

Flex offers employees access to telemedicine via a new application called Health Tap Compass, which provides access anytime and from anywhere to over 75,000 well-qualified physicians. Employees can connect by video, voice or text on any electronic device and obtain a consultation at no cost.
Training and education
Key topics/concerns [102-44] Flex response [102-44]
Recognition for performance

Opportunities to learn and grow
We have special projects and programs to address employee concerns and improve employee engagement, including site/segment/function coffee talks/town halls, lunch and learn, mutual respect training, management workshop (culture intervention), values workshop, leadership skills training and recognition programs.

We conduct an annual survey of all employees to evaluate the performance of the organization’s management system.
Working hours, forced/compulsory labor and other human rights issues 
Key topics/concerns [102-44] Flex response [102-44]
Excessive working hours per week

Weekly day of rest

Freedom of association

Incorporation of U.N. Guiding Principles and/or International Labor Standards

Non-discrimination

Harassment and abuse

Child labor and young workers

We participate in RBA Task Forces on the U.N. Guiding Principles, Trafficking and Forced Labor, Transparency and Environmental Compliance.

Flex undertakes targeted Respect and Dignity audits* of high risk sites, as well as prioritizing sites for the broader Flex Pledge protocol based on the risk profile of the site.

We’ve advocated for a solution to issues around working hours that are generated by interested parties, including the RBA, Original Equipment Manufacturers (OEMs), Electronics Manufacturing Services (EMS) companies, NGOs, academia, and governments. We recognize that there are many factors that contribute to this situation, and only through a broad consortium of stakeholders will we find common ground.

The RBA regularly hosts NGO participants at its meetings and we’ve engaged actively in these dialogues.

In some parts of the world, we engage directly with individual NGOs. Our aim is to improve the substance of the RBA Code of Conduct and its implementation.

Flex participates in the Global Business Initiative on Human Rights, including regional meetings, and attends the United Nations Annual Forum on Business and Human Rights.

In 2016, we made notable changes to the Flex Human Rights policy. To better align with the U.N. Guiding Principles on Business and Human Rights, the following revisions were made:
1) The Policy now explicitly applies to the Flex value chain
2) A reference to “gender identity and expression” was added in the section prohibiting discrimination
3) New sections on Implementation, Reporting and Escalation Processes were added to clarify the Policy’s day-to-day execution.

* The Respect and Dignity audits focus on the social aspects of working conditions. 

Local communities
Key topics/concerns [102-44] Flex response [102-44]
Identify suitable community partners

In 2016, the Flex Foundation continued its longtime partnership with the Silicon Valley Education Foundation (SVEF), by sponsoring its Elevate Teacher Workforce Training Initiative.

The Flex Foundation supported several non-profit organizations on the implementation of projects aligned to Flex community focus areas: decent work, quality education, affordable clean energy, and responsible production and consumption (SDGs 4, 7, 8 and 12). Examples of grants we provided include:

  •  Guangdong Education Development Foundation (GETCH) to help improve employment opportunities for youth with disabilities in China.
  • Midlands Technical College in Columbia, S.C. to support tuition assistance for 20 need based students who wish to enroll in the college’s Advanced Manufacturing two-year degree, certificate and diploma programs.
  • During 2016, 21 Flex volunteers from nine sites spent 10 days in Nepal helping build a community hall that will house a clinic, a lecture hall and an emergency shelter.
  • In cooperation with the University of Technology in Gdansk, Flex Poland created the first accredited post-graduate course in Quality Assurance and Production Engineering of Electronic Devices.


Our sites organize several donation events, volunteer activities and engage with local organizations regularly to support communities where we operate.


 
Environmental Topics
Energy, water, emissions, effluents and waste
Key topics/concerns [102-44] Flex response [102-44]

CO2 emissions

Waste management

Water consumption

We continue to make the sustainability data collection and reporting process more robust, which allows us to respond to the increasing number of customer requests to better understand the environmental impact and footprint of their own companies. We rely on the broadly accepted reporting standards of CDP (Climate Change and Water Disclosure Project) and Global Reporting Initiative (GRI).

In line with our Flex scrap policy, a new process was developed to systematically control measure and capture scrap and waste inventory, shipping and financial transactions. Four locations across Malaysia, Mexico and the U.S. have already deployed this new process.

Over the last four years, Flex replaced and installed more than 85,000 LED light fixtures manufactured by Flex Lighting Solutions in 12 countries.

Flex has wastewater treatment plants operating in different sites around the globe and new water recycling projects are being evaluated in Asia and the Americas.

In 2016, Greenhouse Gas (GHG) emissions tracking process was enhanced by adding steam, refrigerants and jet fuel related emissions, and by updating electricity factors according to the latest Environmental Protection Agency (EPA) and International Energy Agency (IEA) reports. WSP has conducted a review of Flex's 2016 greenhouse gas inventory to evaluate alignment with the GHG Protocol, see review letter here.

Social and Environmental Topics
Management systems
Key topics/concerns [102-44] Flex response [102-44]
External certification of management systems achieved by Sites

Existent components of the management system and corresponding processes
The Flex integrated social and environmental management system, Flex Pledge, consolidates several management processes into one system and incorporates current environmental, health and safety requirements, including the latest changes from the RBA, and align them to the ISO/OHSAS format. Flex Pledge corporate audits are performed at Flex sites to verify that they’re in compliance with our social and environmental management system requirements. Effective closure of all gaps found during the audit results in Flex Pledge site certification.

Further, our sites have the option to be certified in ISO14001 and OHSAS18000. While Flex Pledge implementation covers all manufacturing and logistics operations, the external certifications are conducted according to the site business needs.
Supplier social and environmental assessment
Key topics/concerns [102-44] Flex response [102-44]
Social and environmental supply chain management

Our standard of ethics and compliance is adhered throughout the supply chain

How they are applying the Flex social and environmental initiatives

The Supplier quality team incorporates social and environmental criteria into its supplier management processes, including auditing.

Social and environmental requirements are included in the supplier qualification process and in the Global Business Agreement (GBA) signed by our suppliers. A dedicated team performs physical audits of risk suppliers and monitors closure of corrective action plans.

Flex has a supplier code of conduct which clearly communicates our collective commitment to act with integrity and expectation that our suppliers do the same.

As new suppliers are qualified they’re trained on Flex social and environmental requirements. Similar training is provided to members of the procurement organization.

In 2016, we provided on-site supplier training at our Flex Suzhou campus. During the training, we explained Flex social and environmental expectations for suppliers and our requirements, as well as the Flex Supply Chain social and environmental management program and the updated RBA requirements.

To promote ethics and integrity across our supply chain, we assess material suppliers and labor agents. We have audited our major labor agents in China since 2015.

Economic Topics
Economic performance, market presence and procurement practices 
Key topics/concerns [102-44] Flex response [102-44]
Company performance

Direct labor salary

Local suppliers spend

Flex meets regularly with major shareholders and analysts.

Q&A session with CFO about Flex financial results during the period.

Compensation ranges are closely monitored and evaluated on an annual basis to ensure Flex is competitive with our peer group companies.

Local suppliers support Flex businesses by providing low volumes of high inventory rotation, saving freight costs, and enabling prompt response for business needs. These companies also create local job opportunities, which impact the local economy.

Anti-corruption
Key topics/concerns [102-44] Flex response [102-44]
The importance of our culture, integrity and ethics The Flex Ethics Hotline provides an avenue for employees and others to raise ethical concerns of all kinds and they may do so anonymously if they choose.

Corporate Ethics and Compliance at Flex links compliance activities and teams through a common management system designed to identify risks and prevent violations of company policy, regulatory requirements and laws.

We’ve built a culture of ethics and compliance at Flex. We continuously monitor controls to detect and mitigate risks. Our CEO and senior management regularly distribute messages on business ethics and compliance to employees. In 2016, we provided Tone-at-the-Top Training at our highest risk sites.
Responsible materials sourcing
Key topics/concerns [102-44] Flex response [102-44]
Country of sourcing

Smelters or refiners

Due diligence report
We’re a founding member and active participant in the Responsible Minerals Initiative(RMI) formerly the Conflict Free Sourcing Initiative (CFSI).

Flex collects Conflict Minerals Reporting Templates from both customer-controlled and Flex-controlled suppliers. The collection of customer supplier data is solely for complying with due diligence and reporting obligations. We also collect and provide aggregated declarations, specific to the customer’s supply base.

1 Key topics and Flex response information is based on stakeholder engagement activities performed in 2016. Last update: August, 2017

Responsible Business Alliance (RBA)
Founding and Regular Member

Working and environmental conditions improvement through leading standards and practices

Business for Social Responsibility
(BSR) Corporate Member

Collaboration among companies and their stakeholders for systemic progress toward a just and sustainable world

Environmental Leadership Council
(ELC) Member

Addressing the most critical energy and environmental issues

 

Global Business Initiative
(GBI) Human Rights Member

Advancing human rights in a business context

Silicon Valley Leadership Group
Member

Sustainability and Energy Committees

 

CHWMEG
Member

Responsible Waste Stewardship

Sedex
Member

Responsible sourcing data on supply chains sharing

IPC
Member

Environment, Health and Safety Committee

 

Sustainable Apparel Coalition - Social & Labor Convergence Project
Member

Social progress in the apparel and footwear sector