Risk Management»Corporate Governance Aspect»Supply Chain Management Risks

Supply Chain Management Risks

• Supplier Sustainability Management Risk: Suppliers failing to comply with ESG standards, violating labor ethics, occupational safety, environmental protection, and responsible procurement practices may lead to operational interruptions due to non-compliance, indirectly resulting in supply chain disruptions for the company.
• A summary of the operations and results for 2023 is as follows:
• Organizational Adjustment and Policy Establishment
• - Restructure the organization by expanding the scope of the "Green Product Committee" to the "Green Product and Supplier Sustainability Management Committee," responsible for promoting and implementing supplier management matters.
• - Establish sustainability behavior guidelines for suppliers and a supplier sustainability commitment agreement.
• Supplier Due Diligence System Establishment
• - Strictly adhere to the "OECD Due Diligence Guidance for Responsible Mineral Supply Chains," RMI framework, and customer requirements to conduct responsible mineral procurement due diligence.
• - Require suppliers to sign a responsible mineral procurement declaration. Submit proof and reports through the responsible procurement reporting system to ensure the non-use of conflict minerals.
• - Promote human rights due diligence, establish self-assessment forms for suppliers to fill out, to prevent supply chain violations of human rights regulations and potential customer accountability.
• Supplier Communication and Training
• - Maintain good communication with suppliers through education and training, strictly prohibiting the use of conflict minerals, and informing them of the consequences if compliance is not met.
• - Hold supplier conferences to explain the content of the RBA and encourage suppliers to join RBA to establish a connection with the company.
• Supplier Audit and Management
• - Regularly communicate with suppliers, coordinate compliance requirements, and request them to manage their suppliers in accordance with these rules.
• - Encourage suppliers to undergo RBA VAP audits and conduct on-site audits to ensure compliance with RBA's code of conduct.