March 15, 2017

SDI International Corp. is committed to supporting the goals set forth by the United Nations Global Compact. While we currently employ all of these values, we will continue to incorporate these principles into our day-to-day global business operations. These goals will be shared with our employees, customers and suppliers through this annual Communication of Progress.

Our company ethics policies are communicated to our employees during the new hire process via our electronic onboarding portal. The policy is provided to them for their review along with other new hire paperwork. In addition, the ethics policy and its importance is discussed during employee orientations, which typically occur between one and 14 days after an employee’s commencement of employment.

SDI manages hundreds of suppliers that impact our customers’ productivity. SDI is responsible not only for ensuring these suppliers’ compliance with performance SLAs and contractual compliance, but also for maintaining effective, ethical relationships. Part of this effort has included the execution of a customized code of conduct applicable to and signed by each of these suppliers, ensuring that they subscribe to this joint commitment to ethics. This level of partnership with our suppliers:

• goes beyond industry standards;
• has helped us earn industry awards;
• fosters a reputation for fairness and ethics among our suppliers; and
• allows us to quickly align suppliers for our programs.

Key differentiators reflecting our commitment to these policies include our:

• ISO 9001:2008-certified quality program
• Proactive Human Resources Department
• Commitment to Diversity
• Early Adoption of the OFCCP Internet Applicant Recordkeeping Rule
• Commitment to and documentation of sustainable practices
• Brand exploration
• Deployment of a supplier ethics policy.

Sincerely,

SDI INTERNATIONAL CORP.

Carmen Castillo
President & CEO

Who We Are

SDI is a business and workforce solutions provider primarily to Fortune 500 companies. Leveraging our international network of offices/operations centers, our outsourcing initiatives and managed services programs have been delivering value to our customers for 25 years.

Since 1992, there have been many value-added factors that have drawn corporations to align with SDI International Corp. These range from our leading-edge outsourcing capabilities to our quality program, and from our (Minority- and Woman-Owned Business Enterprise status (WMBE) to our core business philosophy. ISO 9001:2008 and SSAE 16 certified, SDI’s quality policy governs all of our initiatives, and our corporate-wide quality agenda pledges that our programs and outsourcing activities meet and exceed our customers’ service expectations.

For most of SDI’s Fortune 500 customers, the prevailing draw is our underlying business philosophy: we are committed to providing world-class services while producing both hard and soft cost savings. These savings are generated through program-wide initiatives such as process consolidation and refinement, and adherence to aggressive pricing models. From these cornerstones, we have built and implemented programs for our customers that adapt to fluxing market conditions, grow with the needs of the client, and produce real value.

SDI excels in the delivery of leading-edge programs such as:

• Procurement, HR, and Strategic Sourcing Support through Global Service Centers
• Consolidator/Integrator Services (Supplier Screening/Remittance)
• Automated Managed Services Programs (MSPs)
• Small Supplier Managed Services Programs (SSMSPs) with Inclusive Procurement Platform (IPP) Plugins
• Independent Contractor Compliance Programs (ICCPs)
• Talent Acquisition
• Payrolling Services.

SDI has built global operational support units called service centers in Argentina, Belgium, Canada, China, India, Mexico, Poland, Slovakia, South Africa, the United Kingdom, and the United States. These centers provide procurement, human resources, and strategic sourcing support based on industry and regional best practices. SDI International Corp. has affiliates based in the following countries:

• Argentina: Superior SDI SRL
• Belgium: Superior-SDI BVBA
• Canada: Superior Design International, Inc.
• China: SDI Information Technology (Beijing) Co. Limited
• India: SDI Business Services India Private Limited
• Mexico: SDI Procurement Services (Solutions), S. de R.L. de C.V.
• Slovakia: Superior SDI Slovakia s.r.o.
• United Kingdom: Superior SDI Limited

Finally, SDI’s commitment to diversity/inclusive utilization is strong, as we have begun including KPIs specific to this utilization within our governing SOWs. We measure both the percentage of Buy Desk requirements where diverse suppliers were included in the final list submitted to requestors, and the percentage of diverse suppliers that were submitted or referred to requestors that are awarded the business. SDI has even reached a MOU with the International Trade Centre (ITC) for global inclusive supplier utilization and Tier II sustainability models.

Human Rights

Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and

Principle 2: make sure that they are not complicit in human rights abuses.

SDI’s Assessment:

SDI supports and respects this provision. We do not participate in or carry out business where human rights violations may occur, and we mandate that employees follow all human rights codes. This is evidenced in all of our business operations and enforced companywide.

SDI’s Implementation:

SDI has a formal policy to which employees and suppliers must adhere, protecting human rights. For suppliers, this is included in our supplier code of conduct. For employees, this is a policy distributed during onboarding that must be signed.

Human rights provisions include:

• to promote equal opportunities for and treatment of its employees irrespective of skin color, race, nationality, social background, disabilities, sexual orientation, political or religious conviction, sex or age;
• to respect the personal dignity, privacy and rights of each individual;
• to refuse to employ or make anyone work against his will;
• to refuse to tolerate any unacceptable treatment of employees, such as mental cruelty, sexual harassment or discrimination;
• to prohibit behavior including gestures, language and physical contact, that is sexual, coercive, threatening, abusive or exploitative;
• to provide fair remuneration and to guarantee the applicable national statutory minimum wage;
• to recognize, as far as legally possible, the right of free association of employees; and
• to neither favor nor discriminate against members of employee organizations or trade unions.

Further, SDI encourages any supplier or employee that obtains any knowledge of any violations in human rights to immediately report this to our Human Resources department, where appropriate action will be taken.

SDI’s Measurement of Outcomes:

Since instituting these formal policies, SDI has not been subject to any human rights investigations and has been compliant with all national and international laws regarding human rights.

Labour

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labour;

Principle 5: the effective abolition of child labour; and

Principle 6: the elimination of discrimination in respect of employment and occupation.

SDI’s Assessment:

SDI supports and respects this provision. We do not participate or carry out business where child labour violations may occur or in which the right to collective bargaining may be undermined. We do not employ workers under the age of 16, nor do we partner with organizations where known violations have occurred.

SDI’s Implementation:

Within SDI’s employee handbook and supplier code of conduct, we have clearly defined anti-child labour provisions. Further, SDI complies with all state and provincial child labour laws, regulations regarding forced/compulsory labour, and discrimination legislation.

SDI administers its personnel policies and conducts its employment practices in a manner that treats each employee and applicant for employment on the basis of merit and experience, without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, age, disability, or veteran status.

The company’s Equal Opportunity Policy is based upon the philosophy that people should be treated fairly, with dignity; and upon the belief that citizens in a free society have the right to self-determination without fear of discrimination as to personal preference or characteristics beyond their control. Experience continues to confirm our belief that it is good business to have and support personnel policies and practices with a strong commitment to equal opportunity.

In the application of our Equal Opportunity Policy, managers are responsible to ensure that:

• Recruitment and placement for every level and job classification are conducted without regard to an individual’s race, color, religion, sex, sexual orientation, gender identity, national origin, age, disability or veteran status.

• Decisions on promotions and transfers are in keeping with equal opportunity principles and are based on qualifications as they relate to the requirements of the job for which the person is being considered.

• Personnel policies, practices and actions are applied fairly to all employees.

• Affirmative Action Plans will be implemented within our organizational units.

• Non-segregated facilities are maintained, and appropriate physical facilities are provided for both male and female employees.

• Employees will be provided information concerning the company’s Equal Opportunity Policy, Affirmative Action Program and Fair Treatment Process.

• The Equal Opportunity Policy of the company will be monitored by conducting annual, regular reviews to determine performance to the Affirmative Action Plan.

• The quality of the equal opportunity environment and performance to the Affirmative Action Plan obligations are significant elements of each Manager’s performance.

• In addition, managers and non-management employees are held accountable for any conduct toward their subordinates or co-workers that may be defined as sexual harassment, including sexual advances, requests for sexual favors, or physical or verbal conduct of a harassing nature which is intimidating or demeaning.

• Any such proven misconduct may be cause for immediate termination from employment.

SDI’s Measurement of Outcomes:

SDI has not employed any forced or compulsory labour, nor have we employed child labour. Our EEO policy is also strictly enforced throughout all practices and monitored via our applicant tracking systems, ensuring compliance.

Environment

Principle 7: Businesses should support a precautionary approach to environmental challenges;

Principle 8: undertake initiatives to promote greater environmental responsibility; and

Principle 9: encourage the development and diffusion of environmentally friendly technologies.

SDI’s Assessment:

SDI has supported sustainability initiatives since inception.

SDI’s Implementation:

SDI was one of the first procurement and workforce solutions providers to begin actively documenting and tracking greenhouse gas emissions. We also capture all of these elements and others related to sustainability within an annual report, which exceeds industry norms for a non-manufacturing company.

SDI has developed a sustainability policy that is shared with all suppliers, customers and employees. This policy serves twofold:

• to act in accordance with the applicable statutory and international standards regarding environmental protection;
• to minimize environmental pollution and make improvements in environmental protection

In order to sustain our future, we need to perform well in the three key areas that are the principles of sustainable development:

• Social and Ethical Performance
• Environmental Performance
• Economic Performance

The areas to which we are committed include:

• Daily consumption of energy, natural gas, and water
• The purchase of paper products, and our daily usage and disposal of these products
• Waste of any kind, including hazardous materials
• Reducing employee and third-party travel.

SDI’s Measurement of Outcomes:

We have implemented an environmentally responsible delivery approach to help ensure minimal carbon emissions and pollution in our community. Purchases from multiple divisions are consolidated and we have developed a best practice of an order size standard for all locations.  This reduces the frequency of small, inefficient orders, thereby decreasing delivery trips and paper waste from boxes and other packaging materials.  All orders are completed online, eliminating the need for paper catalogs.
 
We have implemented an ink and toner recycling program, to be picked up at the same time as the office supply deliveries, reducing the environmental costs of carbon emissions.
 
Office supplies and other consumables can make up a large amount of a company’s waste. We look first to products that are of a recycled material, responsibly sourced, fully recyclable, and/or certified as EPA compliant. We have fully restricted the purchase of Styrofoam and other harmful products across all offices and continually access needs and the availability of smart alternatives.

Our paper products are from FSC certified sources, including our approved paper brand, which is made of 100% post-consumer waste.  We have also recently expanded our sustainable purchasing initiatives to include janitorial, facilities, and break room products.

In addition, all promotional items are sourced through a WBENC certified vendor.  Sustainable options are always included when new products are requested.

In 2016, we made many improvements to our offices. We’ve engaged a Leed-certified third party facilities management company that has implemented extensive updates in our heating, electrical, and water systems. Our cleaning towers have also been upgraded with a new alarm system, valves, pipes, and flotation device. These updates will help to lower all of our utilities and previously unavoidable waste.

Note also that SDI has deployed a sustainability questionnaire that is employed during supplier onboarding within our customer-facing programs. This allows us to validate that our supply chain is taking sustainability seriously, and helps us document their efforts.

Anti-Corruption

Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

SDI’s Assessment:

SDI has supported anti-corruption within all its business lines.

SDI’s Implementation:

Within our employee handbook and supplier code of conduct, we have the following clause:

Prohibition of Corruption and Bribery

• to tolerate no form of and not to engage in any form of corruption or bribery, including any payment or other form of benefit conferred on any government official, customer representative or SDI employee for the purpose of influencing decision making in violation of law.

SDI’s Measurement of Outcomes:

SDI has never been involved with any corruption or bribery, and will not undertake in business with any suppliers known to violate this provision. We encourage our employees to report any violations immediately to Human Resources, where appropriate action will be taken.