Supply chain IBM spent $22.2 billion in 2021 with 13,000 suppliers, as we continued to promote a commitment to social responsibility among our global supply chain and throughout our industry. IBM is a founding member of the Responsible Business Alliance (RBA), a nonprofit industry group that helps its members support continuous improvement in the social, environmental, and ethical responsibility of their supply chains. We require our first-tier suppliers of hardware, software, and services (and IBM’s own operations) to adhere to the RBA Code of Conduct, which contains provisions on labor, health and safety, environmental requirements, ethics, and management systems. New suppliers must demonstrate having management systems for social and environmental responsibilities within a year of starting to do business with IBM. Suppliers must establish goals, disclose results, cascade IBM’s requirements to their next-tier suppliers, and more. In 2022, IBM committed to engaging 100% of our suppliers on sound practices including social and environmental responsibility, ethics, and risk planning. See the IBM Supply Chain Responsibility website for more detail. To help suppliers meet our requirements, IBM provides and facilitates education that includes online access to the RBA learning academy for many suppliers, as well as materials IBM developed to augment the RBA courses. IBM continuously updates these programs to address areas where assessments reveal improvement in the supply chain is needed. We also encourage suppliers to publish reports on their responsibility programs and results—63 of our top 100 suppliers did so in 2021, and 52% of those followed Global Reporting Initiative guidelines (as does IBM). Going forward, IBM will place renewed focus on having its top suppliers publish their ESG reports as part of driving greater supply chain transparency and best practice sharing. IBM’s top suppliers are listed on page 51 , with links to their ESG reports if available. IBM collaborates with a range of external organizations to promote social responsibility, and encourages our suppliers to participate as well. We contribute to advancing RBA’s code of conduct, which in 2021 began requiring expanded public reporting on environmental impact and minerals sourcing. We also collaborate with organizations such as the Mexican NGO Centro de Reflexión y Acción Laboral, which works to address mutual concerns regarding working conditions in the supply chain in Mexico. 2019 2020 2021 Supplier spending by category ($B) Services and general procurement 20.8 20.3 18.8 Production procurement 3.7 3.3 2.9 Logistics procurement 0.6 0.6 0.5 Total ($B) 25.1 24.2 22.2 Supplier spending by region ($B) North America 11.3 10.9 10.2 Asia Pacific 7.0 5.1 5.0 Europe, Middle East, Africa 5.6 5.5 4.9 Latin America 1.2 2.7 2.1 Total ($B) 25.1 24.2 22.2 First-tier supplier spending Total US ($B) 10.1 9.5 8.5 Diverse US ($B) 1.4 1.5 1.4 Diverse non-US ($M) 621 570 584.3 2021 diverse spending (US and non-US) results include Red Hat. 34 IBM 2021 ESG Report