Citizenship

Mindfully Made

Mattel products are manufactured and packaged across the globe, in countries including Canada, China, Indonesia, Malaysia, Mexico, Thailand and the United States. These manufacturing operations occur in facilities owned and operated by Mattel as well as in our network of approximately 50 vendors worldwide.

Mattel believes how we achieve success is just as important as the success itself. We strive to manufacture our toys responsibly, adhering to strong standards and oversight processes, known as our Responsible Supply Chain Commitment, which reflect our commitment to safe working conditions for our employees, ethical labor practices and environmental stewardship.

The safety of our employees who make our products is particularly important to us. Manufacturing facilities pose risks from equipment, processes, and unsafe behaviors. Since 2013, we have strengthened our focus on employee health, safety and well-being. Our renewed emphasis on safety has refocused our culture from the worker on our factory floor, who must wear their personal protective equipment, to the leadership of our global development and product supply organization, who get personally involved in the investigative process if an incident occurs.

Information graphic describing the percentage of products made in factories owned and operated by Mattel
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    Responsible Supply Chain Commitment

    As one of the first brands to create and implement a formal code of conduct, Mattel believes that providing a safe and ethical working environment in the factories that make our products is an investment in our workforce, productivity and sustainability, and something we will not compromise. Since 1997, Mattel has had standards that guide our efforts to manufacture responsibly. These standards, originally known as the Global Manufacturing Principles (GMP), establish ethical and environmental requirements that all our manufacturing facilities must achieve. In 2015, we strengthened our GMP and renamed it the Responsible Supply Chain Commitment (RSCC). These new and improved standards are our guide to doing what’s right.

    The RSCC is a comprehensive set of standards and oversight processes that communicate our expectations for responsible factory working conditions, environmental protection and appropriate oversight to ensure progress is made on these fronts, including ensuring that non-compliances are identified and corrective actions taken. These standards include important issues from stakeholders and reflect the most recent industry practices and changes to regulatory statutes. The RSCC are also more robust than the GMP, including improved worker safety and training standards and clear expectations for Mattel suppliers to ensure that they also provide proper protection to employees. The RSCC apply to suppliers and subcontractors throughout our supply chain, including those involved in the manufacture of toys, apparel, packaging and other goods. Mattel is committed to safety excellence and continues to take steps toward attaining the highest workplace safety standards in any industry. While in the past we have relied mainly on audits, as part of our new Responsible Supply Chain efforts, we are also focusing on developing stronger partnerships with our suppliers of finished goods to build capability and secure their commitment to enhance health and safety performance.

    While the GMP has been transformed and renamed the RSCC, Mattel’s commitment to fair labor practices, safety, health, and environmental stewardship has remained a constant. We will continue to ensure that the people who make our products are treated fairly and with respect, including creating an environment that embraces the cultural, ethnic and philosophical differences that make us unique.

    2016 Labor Spotlight: The Voice of the Worker

    Improving working conditions has been a long-standing priority for Mattel. In 2015 we launched a collaboration with the Walt Disney Company and the social enterprise Good World Solutions to further understand our operations through the eyes of the workers on the floor. Using a tool called Labor Link developed by Good World Solutions, Mattel gathered anonymous feedback from workers in our owned and operated manufacturing sites on job satisfaction and worker-management communications. Labor Link leverages mobile technology to enable two-way interaction with our workforce. Workers participate by calling a local number and answering questions via their telephone keypad or submitting input directly through messaging applications (such as WeChat).

    Using the Labor Link survey platform, 8,683 workers across 4 Mattel owned and operated factories in China were polled. 53% of surveyed workers chose to participate in the anonymous survey, putting Mattel above the average Labor Link response rate of 30-40%.

    “Working with Labor Link provides a new dimension of insight into job satisfaction amongst our workforce. Along with our existing audit and engagement practices, Labor Link helps us understand what is most important to our workers, and enables us to better engage with them.”

    Huey Wilson, Senior Vice President of Mattel Human Resources

    As we examine the data provided by the Labor Link platform, we are encouraged by the high levels of participation, and it will provide the ability to implement programs that support our workforce, increase overall satisfaction, and improve retention rates across our facilities. Based on the result evaluations so far, Mattel has designed a Core Worker program to improve the worker experience by focusing on key success factors such as a positive work environment, growth opportunities, communications, and trust. We are on track to roll-out the core worker programs at our O&O plants beginning in 2017.

    “Workers know best how to improve their workplace. Companies like Mattel are discovering that Labor Link’s anonymous worker feedback drives measurable improvement on key worker well-being and business indicators. This kind of scalable worker engagement will be central to the workplace of the future.”

    Heather Franzese, Executive Director and Co-founder of Good World Solutions

    We believe that making changes to how we engage our workforce and introducing new programs focused on supporting the worker will lead to less stress in the factory environment, improve worker retention rates and help to make working at Mattel more rewarding for each individual, and ultimately improve productivity. We are committed to sharing our progress as we continue this journey.

    These standards specifically address topics such as payment of regular wages and overtime, working hours and living conditions. A core element of the standards is ensuring employees meet minimum legal age requirements and that they are seeking employment of their own free will. Mattel has a zero-tolerance policy for the employment of underage workers and forced labor of any kind, including the use of prison labor, indentured servitude/trafficking or for the restriction of free movement. We also have standards for environmental stewardship such as waste, water and energy management.

    Mattel is committed to implementing the RSCC throughout its supply chain system, as well as regularly assessing and publicly disclosing its progress. We regularly report on our global citizenship efforts through our dedicated citizenship website. This process is headed up by our citizenship team. Mattel has shifted towards providing this information on our citizenship website as a cost effective way to enable greater transparency on a more timely basis and in a format that is both user and environmentally friendly.

    Information graphic describing Global Citizenship Playbook Core Tenets
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    Site Improvement Plans

    In addition to adhering to strong supply chain standards, every Mattel manufacturing plant strives for continuous improvement. Our plants develop a Site Improvement Plan to better their citizenship performance year after year. These plans list specific actions they will take throughout the year to create a safer workplace and reduce their impact on the environment.

    While every plant identifies individual areas for improvement, we also establish certain focus topics for all plants to address. In 2015, we established 9 key focus areas which include Machinery Safety, Work at Height and Contractor Management.

    Once a month, each plant’s leadership team holds a meeting to review the plant’s progress, identify opportunities for new safety and environmental improvements, and provide an opportunity to share challenges and best practices.

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    Health and Safety

    Mattel’s Pursuit of Health and Safety excellence, an integral component of the Responsible Supply Chain Commitment, stresses the importance of practicing safety first, last and always. We believe that a strong safety culture is the bedrock of a successful supply chain.

    We strive for an injury-free workplace and we have seen major reductions in total recordable injuries since 2013 in our manufacturing plants. This reduction reflects our efforts to reduce hazards while encouraging positive safety behaviors.

    Information graphic describing Mattel plants completion of their 2014 site improvement plans

    2016 Health and Safety Spotlight

    The goal is ZERO! Having come into Mattel in early 2016, I am very happy to be in such an outstanding company with a clear vision that keeping our employees safe is the most important priority. In daily talks with the shop floor, it is clear to me that leadership has well communicated that the safety and wellbeing of our employees is the top priority. At MONTOI, we continue to have some recordable injuries and first aid cases. These incidents have highlighted unsafe behavior or risk taking that shows we still have some work to do to ensure our employees understand the level of acceptable risk tolerance required to attain our goal of ZERO.

    To drive clear expectations for safe behavior at work we launched a shopfloor-based safety committee empowered to help us reduce and/or eliminate the risk taking. The earlier launch of the near miss and the safety walk programs raise awareness and help us take corrective actions, but we still need greater engagement from the shop floor. This employee committee will enable us to change our culture to one where everyone is involved in helping each other see the risks and keeping their co-workers safe. It is a journey and it will take time but as I see the transition happen with our teams on the floor, I know we will get there.

    Jonathan Waite, General Manager Mattel Montoi Manufacturing Plant

    In order to further raise awareness about environmental, health and safety (EHS) and create a simple and unified message for EHS practices and expectations across Mattel, we launched the “Play with Care” campaign in June 2015. As part of the initiative, Mattel employees, no matter their position, made a personal “I WILL” commitment statement, in one of the eight high risk Play with Care focus areas, to take responsibility for their safety and the safety of their co-workers. Our areas of focus include:

    • Safety Basics
    • Machinery and Equipment
    • Electricity
    • Housekeeping
    • Material Handling and Ergonomics
    • Chemical Management
    • Vehicle Safety
    • Environmental Protection

    In 2016 our Play with Care program was expanded to include near miss reporting which has shown tremendous results as a leading indicator for safety engagement. By the end of the first quarter of 2016, we had already more than tripled our annual target for near miss reporting. Our workforce is continuously encouraged through the Play with Care program to take ownership of their own safety, and bring any thoughts or concerns to management.

    Safety Focus Area: Machine Safety

    Ensuring the safety and well-being of our people who work with and around machines is a critical component of our health and safety program. Since 2015, we have updated our machine safety standard and integrated technical machinery risk assessment into our projects. We have conducted full plant risk assessments in partnership with independent machinery safety experts and invested in multiple training programs with our teams around the world. Our goal is to qualify internal Certified Machinery Safety Experts in all of our major facilities. We are well on our way to achieving this goal.

    By building our capability, setting world class standards, engaging with independent third parties and partnering with our suppliers, we ensure that all of our equipment is risk assessed and where necessary upgraded before it goes into operation. Our commitment is clear—machinery safety is one of global safety focus areas and we collaborate widely to ensure that safety comes first, last and always.

    Safety Walks

    Since 2013 our General Managers and leadership teams of owned and operated factories conduct &‘safety walks’ every day where they spend time evaluating different areas of the factory for potential hazards. In 2016, we built upon the success of this program and expanded safety walks to all management staff, regardless of function, in our owned and operated factories and distribution centers. This increased engagement of management staff with the shop floor employees improved safety performance, and expanded the capability of our own teams in identifying risks. Safety walks are structured around the Play with Care program to enhance overall employee engagement and create a forum for interacting with leadership in a way that allows our employees to make suggestions on how to improve the workplace. These open and informal discussions reinforce leadership’s commitment to eliminating dangers and supporting the health and wellbeing of employees.

    Information graphic describing Mattel plants safety walks

    Mattel’s Environment, Health and Safety Commitment

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    Ethical Sourcing

    Promoting ethical sourcing throughout our supply chain is fundamental to how we do business. The Responsible Supply Chain Commitment (RSCC) establish ethical and environmental requirements that we expect to be met by all supplier and subcontractor facilities manufacturing our products worldwide. We apply these four steps when working with our vendors who manufacture finished product.

    Information graphic describing Mattel's ethical sourcing

    Pre-Screening & Supplier On-Boarding

    Before we begin production with a supplier who is contracted to manufacture finished products, we certify them as a qualified supplier. We review their practices in areas such as product quality, worker treatment, health and safety and environmental stewardship to identify if they meet our requirements. In addition, Mattel’s supplier pre-screening and on-boarding procedures include assessing compliance with Mattel’s RSCC prohibiting non-consensual labor including forced labor, human trafficking and slavery. Mattel is developing key performance indicators around nonconsensual labor that foster accountability and action in our supply to maintain focus on this important issue.

    Mattel assesses and evaluates the risks in our supply chain through various means, including (i) reviewing supplier profile information, (ii) conducting certain internal quality assessments and (iii) conducting external compliance assessments through, among other things, inspections and visits to our current and potential suppliers.

    The RSCC apply to our suppliers and subcontractors. We communicate our expectations for ethical sourcing performance by including the RSCC requirements in supplier contracts, clearly establishing the supplier’s obligation to implement them, beyond compliance with local laws, addressing safe and just working conditions in the country or countries where the vendor does business. Our master services agreement requires suppliers to comply with the RSCC, and ensure its subcontractors comply with the RSCC as well. In addition, in order to maintain an adequate line of sight into our supply chain, Mattel requires suppliers to disclose all subcontractors. Subcontractors of our suppliers are not permitted to further outsource any activity.

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    Capability Building and Training

    We believe that providing ongoing training and support to our key product manufacturing suppliers is crucial to strengthening their performance over time. One of our top priorities with these suppliers is building safety awareness and skills, since we encourage the same approach to safety in our supplier factories as we do in our owned and operated facilities.

    In addition to regular factory visits to review current practices and identify opportunities to improve, we hold quarterly review meetings with suppliers to discuss current initiatives. To help our vendors be best in class, we have developed a self-assessment tool in 11 different Environmental, Health and Safety categories. This self-assessment facilitates dialogue to identify areas for improvement and encourages vendors to move to a higher level of performance in all areas, thus driving continuous improvement.

    2015 Spotlight: Health and Safety

    Everyone who makes our toys deserves a safe working environment so they can go home safe and sound. We hold our toy manufacturing suppliers to the same safety standards we apply in Mattel owned factories. As we embarked on our safety journey two years back, it became very apparent to me that our suppliers’ leadership teams did not place a high enough priority on safety. To change this, we initiated two fundamental programs: the first, we established a Quarterly Safety Review with the suppliers’ owners & their safety representatives and second, we developed a safety assessment to show our vendors where they are in their safety journey and what better looks like.

    Mike Burrows, Vice President Contract Manufacturing

    In addition to safety, employees responsible for oversight and implementation of ethical sourcing practices also receive training. Mattel Human Resource professionals and management with direct responsibility for supply chain management are also provided specific training to identify any signs of forced labor, including human trafficking and slavery.

    Mattel also requires suppliers to establish and maintain management systems that are related in scope to the content of our RSCC, which are designed to ensure compliance with applicable laws, regulations and Mattel’s business partner requirements. When designed properly, these systems should identify and mitigate all related operational risks and facilitate corrective actions, establish preventative measures and ensure continuous improvement.

    Audits

    Audits provide an opportunity to evaluate performance against citizenship and ethical sourcing standards. Factories that produce toys for Mattel generally have at a minimum of two audits per year. Mattel’s internal audit team conducts periodic unannounced audits of both our owned and operated factories and our toy manufacturing suppliers, to verify and document performance to our RSCC, including adherence to environmental, health and safety standards, prohibitions against forced and child labor, human trafficking, and local wage and hour laws. For factories with critical findings, our audit team will return within 6 months to evaluate whether the issues have been properly corrected.

    Mattel requires suppliers to closely monitor subcontractors’ compliance with the RSCC and the manufacturing tasks they perform. Suppliers are also contractually obligated to provide sufficient oversight of outsourced activities in order to ensure that subcontractors comply with the RSCC. Our master services agreement grants Mattel the right to inspect and audit the facilities, books and records of our suppliers, as well as their subcontractors. To monitor compliance with the RSCC, Mattel conducts unannounced audits of its suppliers and of its suppliers’ subcontractors.

    In addition to our internal audit, our factories in Asia participate in third-party audits. As an active participant of the global toy industry’s initiative to continuously improve factory working conditions, commonly referred to as the ICTI CARE Process (ICP), Mattel’s and our supplier’s toy factories that are registered with ICTI CARE are audited at least annually, for compliance to the ICP Code of Conduct. Audits are conducted by an independent professional audit company that has been approved and trained by the ICTI CARE Foundation. Factories that complete an audit and meet the requirements of the ICP are then issued the ICP Seal of Compliance. The ICP is based on a code of ethical operating practices comparable to Mattel’s own RSCC. Designed to promote safe and just working conditions in toy factories, the ICP provides the industry with a unified approach to responsible manufacturing. ICTI CARE’s primary focus has historically been in China and as part of Mattel’s commitment to advance ethical sourcing, we have pledged that our toy manufacturing facilities based in China and South East Asia will participate in the ICP. Additionally, Mattel now subscribes to ICTI CARE’s Committed Brands Plus Platform. This online database allows our customers direct access to the results of these annual audits and corrective action plans.

    Information graphic describing ICP Seal of Compliance

    Performance Review and Corrective Actions

    Mattel’s citizenship team engages with our manufacturing and product sourcing teams to raise awareness of our RSCC requirements and help develop tools to track performance of our own factories, as well as the progress of our toy manufacturing suppliers. As part of Mattel’s ethical sourcing verification efforts, compliance status reports that summarize the results of our RSCC and ICP audits are considered when placing new orders.

    Mattel maintains accountability standards and procedures for our factories and vendors that do not meet our RSCC or ICTI CARE standards, including the monthly tracking of corrective actions and restrictions on the placement of new business, until satisfactory corrective actions are implemented. A factory with a zero-tolerance finding must address the issue immediately and correct findings, according to an agreed timeline and corrective action plan. Additionally, our master services agreement states that any material violation of the RSCC by a supplier or its subcontractor will be deemed a material breach of the agreement by the supplier. Mattel’s expectation is that any issues are remedied through the implementation of corrective action plans by the supplier, including any issues with its subcontractors. The supplier must commit to a corrective action plan, which is tracked by Mattel to ensure that corrective actions are completed by the supplier or its subcontractor, as applicable, within the prescribed time frame. If satisfactory corrective actions are not implemented by the supplier or its subcontractor within the specified time frame, Mattel may stop or restrict the placement of new business with the non-compliant supplier, prohibit the supplier from continuing to use its non-compliant subcontractor, or, if all other efforts have failed, terminate its relationship with the non-compliant supplier. Mattel views termination as a last resort because it prefers to first work with its suppliers to identify and remedy the root cause of non-compliance to improve the workplace environment.

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    Environmental Stewardship

    We work to minimize our environmental footprint, in every step of the toy-making process. To ensure we are making improvements, we established metrics known as Sustainable Performance Indicators or SPIs, allowing us to track our progress against our resource reduction goals. We currently collect data from over 50 facilities worldwide and report our metrics on owned or operated facilities larger than 20,000 square feet. To account for fluctuations in our business, we index the data to changes in sales against our 2008 baseline. We refer to this as “normalizing.”

    As part of these efforts in 2016 we began requesting the same SPIs from our largest toy manufacturing suppliers. This data collection will allow Mattel to better understand the full environmental impact of our production and help us to support our suppliers as they advance their own environmental stewardship programs.

    2016 Sustainability Spotlight

    In partnership with the West Basin Municipal Water District and Metropolitan Water District of Southern California, our Mattel corporate headquarters completed a project to bring reclaimed water to our irrigation systems. This project, supported through a partnership with local and state agencies is estimated to save approximately 2 million gallons of potable water a year. Reclaimed water at our corporate headquarters now joins other initiatives across the company as we seek to reuse or reduce overall consumption of water.

    Energy Leadership

    Energy consumption and the associated carbon emissions are one of the greatest sources of environmental impact in manufacturing. In our plants, teams of employees conduct expeditions to find resource saving opportunities, allowing us to make energy efficiency improvements.

    Mattel’s Chang An (MCA) manufacturing facility in China was recognized in 2014 by the local government for sustainability, receiving the Outstanding Energy Saving Enterprise award. Not only did MCA focus on equipment upgrades, but it also worked with machine operators, who helped identify ways to save energy through behavioral change. MCA has also developed an energy management system that is serving as a model for our other plants.

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    Responsible Fashion

    It’s no secret that children of all ages love fashion. Dressing up dolls in different outfits is part of the fun, and kids like styling their American Girl and Barbie dolls.

    Dyeing fabric can require a lot of water and cause pollution. We estimate 100 grams of fabric consumes one liter of water for dyeing.

    We are always looking for ways to reduce water consumption. In 2014, we saved over half a million liters of water by purchasing printed instead of dyed fabric.

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    Good Housekeeping

    We want as much recyclable material as possible to make it to the recycling bin. A few years ago, our housekeeping department in our American Girl Distribution Center in Wilmot, Wisconsin redesigned their recycling program by making it more user-friendly.

    The housekeeping team revamped the recycling signage and bins, trained all employees in their facility, and led new employees on a recycling tour. They also worked closely with their waste management company, to identify opportunities to recycle items generally considered not recyclable.

    From 2009 to 2014, their efforts reduced the amount of trash their distribution center sent to a landfill by 63%. We are working to share these best practices across our other facilities.

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    Collaboration and Learning

    We believe there is great value in sharing our best practices and learning what has worked for other leaders across different industries and sectors. By collaborating and discussing issues, we can work together towards solving challenges that one company on its own cannot address. That is why, Mattel contributes its time, knowledge and financial support to various local, national and global organizations in order to share ideas and learn how other industry leaders address issues in such categories as human rights, health, safety, and the environment. Mattel is a member of many groups including, but not limited to:

    • Business for Social Responsibility (BSR)
    • Global Social Compliance Programme (GSCP)
    • International Council of Toy Industries (ICTI CARE)
    • Sustainable Brands
    • Toy Industry Association (TIA) & TIA’s Environmental Sustainability Committee
    • Toy Industries of Europe (TIE)

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