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Echelon Statement on California Transparency in Supply Chains Act

On January 1, 2012, the California Transparency in Supply Chain Act of 2010 (SB 657) officially went into effect in the state of California. This law requires retail sellers and manufacturers doing business in the state to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains. Echelon is committed to ensuring the highest standard of social responsibility wherever our products are made. We encourage our suppliers to share our commitment in treating workers fairly and with dignity, providing safe working conditions and use environmentally responsible manufacturing processes.

Verification and Certification

Our major suppliers are either members of Electronic Industry Citizenship Coalition (EICC), UN Global Compact or their programs and practices are consistent with the EICC principles. Echelon requires our major suppliers to adhere to the principles espoused in the EICC Code and to comply with all applicable foreign, federal, state and local statutes and regulations.

We intend to require all our major suppliers to certify that they do comply with applicable laws and regulations regarding slavery and human trafficking. Verification will be conducted by Echelon rather than an independent third party.

Auditing

We are in the process of integrating topics of forced labor and human trafficking into our normal on-site auditing of our major suppliers to ensure compliance with Echelon’s policies and standards prohibiting the use of forced labor and human trafficking. Echelon conducts its own supplier audits according to an audit plan; therefore, the audits are not independent and not unannounced.

Internal accountability

Echelon does not intend to do business with suppliers that are engaged in slavery and human trafficking. We are in the process of establishing a program designed to create and maintain internal accountability standards and procedures for employees and contractors regarding slavery and human trafficking.

All Echelon employees are required to acknowledge and adhere to our Code of Business Ethics and Conduct. Any employees or contractors who failed to meet our expectations maybe subject to corrective action, including termination of employment.

Training

We conduct an on-going training for our employees on Echelon’s Code of Business Ethics and Conduct to ensure that business is conducted with the highest degree of ethical behavior and in compliance with the law. In addition, we plan to conduct training for all employees who have direct responsibility with supply chain management to emphasize the importance of ensuring that Echelon’s suppliers abide by the EICC Code of Conduct, including its prohibitions on slavery and human trafficking.

We will continue to impleme