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 32 vendors worldwide.

Approximately 50% of our products are made in factories owned or operated by Mattel.

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.

    Mattel Participates in the Digital Worker Voice Pilot for Employee Engagement to Enable our Manufacturing Workforce to Utilize Mobile Technology for Providing Feedback

    Mattel is excited to announce our participation in the Ethical Toy Program’s pilot project to use a smartphone application as a platform to improve communication, receive real-time feedback and offer an anonymous channel for workers to voice concerns.

    Well-functioning and easy-to-use grievance channels for frontline workers are key to capture early warnings of non-conformance with Mattel’s Responsible Supply Chain Commitment. Traditionally, factories have relied on tools such as hotline numbers, in-person counselling and suggestion boxes as grievance channels. With the help of smartphone technology, Mattel now aims to provide workers with a safe, trusted channel that enables anonymity and a two-way dialogue in one solution.

    The anonymous survey tool will make audit processes more accurate and transparent by scaling the number of workers interviewed. Real-time feedback on performance will provide management valuable insights on areas of improvement.

    The pilot will run for one year beginning in June 2018 with future plans to expand the program. Microbenefits is the technology partner of the project and the pilot is generously sponsored by the Walt Disney Company.

    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

    Chang An Family Summer Program

    For the seventh consecutive year, in 2017 the Mattel Chang An plant (MCA) organized a summer program for Mattel employees' children who live separated from their parents to come to Chang An to attend a four weeks long daycare program.

    Since 2011, Mattel has brought families together to allow children and parents to spend more time with each other during the summer school break. The program is led by professional teachers and the curriculum focuses on learning and development through play. It’s free of charge for Mattel employees and provides a safe location for children when parents are at work.

    The children are divided in groups according to age and take part in activities such as singing and dancing, painting, sports, language studies and free play.

    'Many children are a little shy when they arrive. But after a couple of days and with the help of symbolic play, games and other activities, children start to relax and express their thoughts and feelings. They slowly make new friends and pick up new skills. It’s wonderful to see them develop as individuals and knowing that they are close to their parents in a safe environment', said Lily Zhang, Program Manager of the Summer Program at MCA.

    'Most of the time we are separated, and I miss my son very much. This program allows me to take him with me during the summer. Now I can see him every day, which makes me really happy', said Ms Li Jun, Mattel employee and parent participating in the program.

    It's estimated that 61 million children in China live separated from their mothers and fathers as parents leave home towns to look for better work opportunities. Mattel is looking forward to continuing the summer program to help our employees bridge the distance and strengthen family relationships.

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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

    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. In 2017, 24 Mattel engineers and scientists from across our manufacturing locations achieved the Certified Safety Machinery Expert designation. This international designation is given to those with extensive years of machinery safety experience and success completion of an independent qualifying exam.

    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.

    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.

    In 2017, 265 audits were conducted across company-owned and vendor manufacturing plants.

    Mattel has an internal audit team responsible for verifying our manufacturing plants’ compliance with Mattel’s Responsible Supply Chain Commitment and other manufacturing guidelines.

    Mattel also uses independent third-party programs such as ICTI CARE or other equivalent well-recognized audit programs to assess performance in health and safety, labor practices.

    In addition, the majority of Mattel’s manufacturing plants are certified to one or more of the following:

    • ISO 9001 – Quality Management System for manufacturing sites
    • ISO 17025 – Requirements for Laboratories
    • ISO 14001 – Environmental Management
    • OHSAS 18000 – Occupational Health and Safety
    • C-TPAT –Supply Chain Security Program
    Audits 2017

    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.

    2017 Sustainability Spotlight

    After implementing our Smart Tooling strategy (smaller parts, smaller tools, and smaller machines), we reduced the steel required to make our tools by 4.1 million kg annually, a 40% reduction.

    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.

    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.

    Mattel Foshan China Is Doing Its Part to Raise Environmental Awareness

    For Earth Day 2018, our Mattel Foshan China (MFC) team coordinated environmental efforts to teach employees and their families about their impact on the environment. The facility shared videos depicting the Earth’s current situation and provided best practices for securing the future of our planet. Children of the MFC employees and nearby communities participated in the Children Environmental Protection DIY Contest to help our next generation discover how important sustainability is and the children produced artwork from recyclable materials. The facility also held an hour without lights in the dorms and canteen, encouraging employees to do the same at home.

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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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