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Supply Chain Management and Green Procurement
To promote sustainable management among suppliers, SKFH actively establishes regulations and goals for supplier management while implementing green procurement and local procurement.
- since 2014, SKFH and its subsidiaries have required suppliers to comply with the Company’s "Supplier Management Regulations," and "Integrity Policy and Code of Conduct" in their contracts. Suppliers are expected to take responsibility for their employees, society, and the environment, and commit to not engaging in any unethical behavior.
- When signing the contract, suppliers are also required to sign a Confidentiality Agreement for Company Use and a Confidentiality Agreement for Personal Use to ensure that confidential information of SKFH and its customers is used properly and to reduce the risk of personal data leakage that may infringe on customer rights.
- To ensure the safety of contractor operations, we have formulated the "Safety and Health Management Guidelines for Contractor Work and Change" to require contractors to comply with relevant occupational safety and health regulations and provide necessary personal protection, as well as education and training to their employees.
- We also invite our suppliers to sign the Supplier ESG Commitment Letter to commit to corporate ethics, protecting the environment, and respecting the rights and human rights of their employees; Suppliers must not engage in forced labor or employ child labor, and
they should provide a healthy and safe workplace with humane treatment and free from discrimination and harassment. - In 2022, SKB adopted ISO 20400 Sustainable Procurement Guidelines. and obtained third-party SGS certification to implement sustainable procurement by examining and integrating sustainable key factors into procurement practices.
- In 2023, SKL completed the ISO 45001 and TOSHMS (Taiwan Occupational Safety and Health Management System), revised the "Supplier Management Regulations," and the Supplier ESG Commitment Letter. The Company expects suppliers to adhere to the commitment: "All operational personnel engaged in contracted business by the supplier, have completed occupational safety and health-related education and training, and additional accident insurance will be procured if necessary.
Supplier ESG Commitment Letter
- In order to strengthen suppliers' awareness of occupational health and safety, all suppliers participating in our assessment and signing of contracts are required to sign the " Supplier ESG Commitment Letter", which stipulates that suppliers should "comply with local labor safety and health-related laws and regulations" and "provide occupational health and safety training for employees", Suppliers shall safeguard the health and safety of workers, and respect the rights and human rights of their employees; not to commit forced labor or engage with child labor and should provide a healthy and safe workplace with humane treatment and humane workplace with without discrimination and harassment.
- In 2023, 100% of new suppliers of SKFH and its subsidiaries signed the ESG pledge to join us in promoting environmental sustainability, safeguarding basic human rights and fulfilling corporate social responsibility.
100%
Supplier Risk Assesment
- To assess the potential sustainable risks of suppliers, SKFH and its subsidiaries carried out self-assessment and risk assessment in 2019 to assess their ESG implementation situation, and investigate whether suppliers had violation of any economic, social or environmental laws and regulations by means of questionnaire, and performed risk evaluation on the basis of questionnaire self-assessment results and external investigation results to classify the suppliers as high risk, medium risk and low risk according to the results.
- For high risk suppliers, we conduct field audits to examine their performance in various aspects of ESG, and discuss or disseminate with suppliers of the illegal incidents.In case of major defects or violations of the company's management standards, we not only require the suppliers to make corrections, but also continue to pay attention to how they cope with the subsequent situation, and may dissolve or terminate the contract if necessary.
- In 2023, SKFH and its subsidiaries completed 100% of the main supplier risk assessments and implement the mitigation and remediation plans.
Note 1:The potential risks of environmental issues are mainly due to the lack of complete environmental protection measures in the production process and operating environment, such as failure to promote green procurement and failure to save energy and resources.
Note 2:The potential risks of human rights issues are mainly related to workplace safety and health (such as labor safety violations) and customer privacy protection-related issues (such as failure to provide personal data protection or information security training for employees).
Note 3:Risk incurred means that penalty has been imposed due to violation of environmental laws and regulations and violation of labor laws and regulations, and the penalty contents are mainly related to air pollution and noise pollution.
Note 4:Risk ratio = number of suppliers that have incurred risks / new major suppliers that have undergone risk assessment.
Supplier Conference
In order to mitigate future risks, we also strengthen our cooperation with suppliers and implement their responsibility for sustainable management. We use the opportunity of regular supplier conferences and on-site audits to conduct sustainable education and training for suppliers. We hold supplier conference every 3 years in principle.In 2022, Shin Kong held a supplier conference attended by hundreds of supplier representatives. The next supplier conference is scheduled for 2025
Exerting Procurement Influence
SKFH and its subsidiaries give priority to local suppliers when making purchases. We also select products that have environmental protection and energy-saving labels for office supplies or equipment, and prioritizes green building materials for new construction or decoration units. These decisions can improve energy efficiency and reduce the negative impact of the supply chain on the environment. From 2016 to 2023, SKL has been awarded the "Green Procurement Performance Unit for Private Enterprises and Organizations" by the Environmental Protection Administration for eight consecutive years.