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Supply Chain Management and Green Procurement
To promote sustainability management among suppliers, 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. Moreover, 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. As suppliers also include contractors, 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.
In order to strengthen suppliers' awareness of occupational health and safety, all suppliers participating in our evaluation are required to sign a " 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.
Supplier ESG Commitment Letter
In order to strengthen suppliers' occupational health and safety awareness, 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 2022, 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.
Supplier Conference
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 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. During the conference, appreciation certificates were presented to attending representatives, and academic and industry experts were invited to share their sustainable low-carbon strategies and actions under the theme of “Light of Sustainable Finance, Creating Zero Emissions Together”. The aim was to work together with suppliers to seize sustainable low-carbon business opportunities.
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 2021, SKL has been awarded the "Green Procurement Performance Unit for Private Enterprises and Organizations" by the Environmental Protection Administration for six consecutive years.In the future, we will continue to promote the supplier management mechanism to fulfill the responsibility of suppliers for sustainable management.