Supplier Sustainability Code of Conduct

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Supplier Sustainability Code of Conduct

  • Quanta firmly believes that technology is the driving force for the progress of human society, and is committed to innovating in science and technology with the vision of benefiting people and benefiting life. In addition to giving back the results of our efforts to society, shareholders, and employees, we also actively communicate and interact with all stakeholders to jointly create a better society, fulfill our corporate citizenship responsibilities, and implement sustainable development.
  • In addition to Quanta, we firmly believe that the supply chain is also one of the important factors in achieving sustainability goals. Quanta takes the supervision of suppliers as its responsibility and refuses to cooperate with suppliers that violate sustainability-related laws and regulations. We are committed to promoting good working conditions, respect for human rights, and environmental responsibility throughout the supply chain, and hope to contribute to sustainable development with our partners.
  • The company refers to "Quanta ESG Commitments and Policies", "SASB Sustainable Disclosure Standards", "Responsible Business Alliance Code of Conduct (RBA)", "United Nations Guiding Principles on Business and Human Rights (UNGPs)", and "Ten Points of the United Nations Global Covenant" Principles (UNGC)", as well as international norms such as the United Nations Universal Declaration of Human Rights (UDHR), have formulated Quanta's supplier code of conduct. We also conduct risk assessments on direct suppliers regularly and, if necessary, Risk assessments are also conducted on indirect suppliers.
  • This code of conduct is divided into two parts: A. Requirements for Suppliers of the Quanta, and B. Implementation of the Supplier Code of Conduct. Among them, the requirement for suppliers is divided into 1. Responsible Business Practices, 2. Environmental Responsibility, 3. Social Responsibility, and 4. Use of Critical Raw Materials. The Implementation of the Supplier Code of Conduct is divided into 1. Auditing and Management, 2. Non-compliance mechanism, and 3. Communication Channel and Whistleblowing.
  • A. Requirements for Suppliers of the Quanta
    • Responsible Business Practices
      • Integrity and Business Ethics
        Integrity and business ethics are part of Quanta's core values. Quanta's suppliers should comply with all legal and regulatory requirements applicable to their operating activities, including but not limited to fair trading laws and antitrust laws, prevention of corruption and money laundering, personal Data use and protection, intellectual property protection, information disclosure, and so on.
        Our Suppliers should comply with international codes of conduct (such as the implementation of the "Responsible Business Alliance (RBA) Code of Conduct" ), as well as the “Ethical Corporate Management Best Practice Principles”, “Corporate Governance Best Practice Principles”, “The Codes of Ethical Conducts”, "Procedures for Insider Trading Prevention”, "Management of Intellectual Property" and other measures that formulated by Quanta. For more information, please visit https://www.quantatw.com/Quanta/english/corporategovernance/ruleandinfo.aspx .
      • Cybersecurity and Privacy
        Our company values the use and protection of customer and personal data, complying with relevant privacy regulations, and avoiding unauthorized data use and sharing. We require hardware and service suppliers to fill out self-assessment forms annually and conduct online or on-site audits to ensure their information security management requirements and service capabilities meet cybersecurity requirements. Suppliers should have a cybersecurity management system, regularly report relevant risks, issues, and management effectiveness, and actively seek relevant certifications (such as ISO 27001), aiming to expand the scope of certification. Through the implementation of cybersecurity management systems, we aim to protect both the company and customers, continuously enhance our ability to respond to cybersecurity incidents and meet the increasing demands for information security.
      • Export Controls and Economic Sanctions
        Suppliers should regularly conduct compliance reviews on export controls and economic sanctions to ensure that their business activities do not violate relevant trade regulations and laws, such as the "Uyghur Forced Labor Prevention Act," the Denied Person List, and the Entity List in the Export Control Reform Act (ECRA), as well as all export control laws and regulations of the United Nations, the United States, the European Union, its member states, the United Kingdom, and other jurisdictions. Our company emphasizes reducing legal risks and ensuring the transparency and legality of business operations. Suppliers should cooperate with the company to ensure that the entire supply chain complies and stays away from any actions that may cause legal issues.
      • Counterfeit Parts
        Our company emphasizes product management and counterfeit control, not using unauthorized counterfeit, forged, substituted, or modified components, or falsely claiming to be genuine parts manufactured by the original factory or authorized. Suppliers should also establish counterfeit prevention controls to ensure that suppliers will not deliver counterfeit products to our company and downstream supply chains.
    • Environmental Responsibility
      • Environmental Management Systems
        Suppliers should establish and regularly review environmental management systems and strive to obtain certification for their environmental management systems (e.g. ISO 14001). As a minimum, this management system should include the establishment and continuous development and the external validation of the Supplier's own production processes and production sites to ensure that environmental impacts (for example, due to energy and water consumption, wastewater, air/noise/sound emissions, waste, and hazardous substances) can be identified and analyzed systematically. Also, Suppliers should regularly publish relevant environmental reports.
      • Energy Management Systems
        Suppliers should establish and regularly review the energy management system to minimize energy waste and improve energy usage efficiency. Also, strive to obtain environmental management system certification (e.g. ISO 50001) and plan to use renewable energy.
      • Environmental Due Diligence
        Suppliers should confirm that their business activities comply with environmental regulations and standards, and regularly perform climate and natural risk assessments to understand the dependence, impact, risks, and opportunities of their operations and supply chains on nature. Then, take appropriate measures based on the precautionary principle to prevent environmental threats that may cause environmental damage.
        Suppliers should report publicly on their targets and approaches for reducing and preventing environmental threats and damage and publish information on the corresponding commitments, challenges, and progress made.
      • Greenhouse Gas Emission and Decarbonization Plan
        To reduce greenhouse gases, Quanta has pledged to implement the science-based carbon target method (SBT), and committed to reducing a 42% carbon reduction target in Scope 1 and Scope 2, and a 25% carbon reduction in Scope 3 by 2032, with 2022 serving as the baseline year. Our objective is to achieve 50 percent renewable energy by 2030 and carbon neutrality by 2050.
        Suppliers should also formulate their carbon reduction plans by the SBT, and control their scope 1, scope 2, and scope 3 greenhouse gas emissions to comply with the company's carbon reduction strategy mentioned in the preceding paragraph and together achieve the goal of carbon neutrality by 2050. We also expect suppliers to transparently and accurately publicly disclose their carbon data and regularly report to us, such as product life cycle (LCA), carbon disclosure questionnaire (CDP), or Quanta's carbon questionnaire.
        In addition, suppliers should choose to use green and recycled materials while maintaining quality and providing relevant information to Quanta. Once using new materials, risks must be identified in the context of environmental due diligence. Moreover, suppliers shall continue to employ innovative procedures and explore the possibility of replacing existing materials with green and recycled materials more effectively to make a positive contribution to the circulatory economy.
      • Water Resource and Soil Quality
        Suppliers should evaluate the impact of production emissions on water resources and soil, as well as confirm their impact on the overall natural ecosystem to prevent water resources and soil from being polluted. If there is a risk of pollution, suppliers must adopt appropriate enforcement practices to ensure that their product sourcing and manufacturing processes do not endanger water resources.
        In regions affected by water scarcity, the suppliers should take precautions to avoid increasing the existing level of water stress and jeopardizing the population's access to adequate clean water.
      • Biodiversity and Deforestation
        Suppliers must ensure that their business activities will not cause deforestation or affect biodiversity, contribute to the transformation of natural ecosystems, and at the same time conduct corresponding due diligence on their supply chains.
        If the supply chain of its products involves destructive risks of deforestation, biodiversity, and other natural ecosystem conversions, suppliers should continue to perform due diligence and take effective and verifiable measures to protect these natural ecosystems in the long term. Furthermore, suppliers should contribute to eliminating legal deforestation and ecosystem modification from supply chains.
      • Animal Welfare
        Quanta continues to pay attention to the issue of animal welfare. We expect our suppliers to comply with animal welfare standards during their operations. We also expect our suppliers to give preference to alternative methods that do not involve animal testing, except where required by law. In any case, the supplier shall follow the national and international rules regarding animal protection and animal testing, such as the 3R principle regarding animal testing (reduction, refinement, replacement), the five freedoms of the Animal Welfare Committee (AWC), and the standards for the improvement of animal health and welfare of the World Organization for Animal Health.
      • Hazardous Substances and Waste
        Suppliers should be able to effectively identify and manage chemicals and wastes that pose a hazard to humans or the environment and to ensure that these substances can be safely handled, transported, stored, used, recycled, and disposed of. Besides, Suppliers should provide employees with appropriate training to prevent these substances from causing air pollution, soil pollution, water pollution, and other harmful effects.
        Suppliers should Prohibit or restrict the inclusion of specific substances by laws, regulations, and customer requirements. They should minimize the use of chemicals and other hazardous substances and replace them with less hazardous alternatives, to reduce the generation of hazardous waste. Meanwhile, they must also have corresponding requirements for their suppliers.
      • Conservation of Resources
        Suppliers should avoid waste, and ensure resources such as water, energy, and raw materials are being handled responsibly. During product procurement and manufacturing progress, the usage of energy, water, and other resources should be highly efficient.
      • Noise Emissions
        Suppliers should manage noise emissions. If there are high-noise equipment or systems in the workplace, noise control measures should be implemented, and regular measurements and reporting to relevant authorities should be carried out by the law. Within the company, noise-exposed groups should be identified, and have special health checks which is conducted by the law. Management control measures should be implemented to reduce the exposure time of workers to noise. Regarding the external environment of the company, appropriate management procedures should be established to ensure that surrounding noise complies with relevant regulations.
    • Social Responsibility
      • Human Rights Due Diligence
        Suppliers should establish effective processes for the active protection of human rights. When delivering products or providing services to Quanta, they are obliged to develop procedures within a reasonable time to take systematic and adequate Human rights due diligence measures. The purpose is to identify, prevent, minimize, and eliminate potential and actual adverse impacts on human rights throughout the value chain, to avoid human rights-related risk impacts in the supply chain.
      • Freely Chosen Employment
        We prohibit any forms of forced labor, including but not limited to forced labor, fraud, withholding of wages and identity documents, as well as human trafficking. Suppliers should establish clear policies setting out the implementation procedures for hiring, promotion, and termination to ensure that all employees are free to choose their jobs. Also, inform employees honestly of their rights, obligations, and responsibilities in a language they can understand before starting work. The above content should also be consistent after taking up the job. Employees are also free to resign or terminate their employment relationship with reasonable notice by the law. Meanwhile, suppliers should further explain how to communicate the above policies with intermediary companies and conduct regular audits to ensure the effective implementation of the policies.
      • Child Labors
        Suppliers should comply with relevant minimum legal age work practices of the International Labor Organization (ILO), and prohibit the use of child labor in their business activities and supply chains. Companies must not hinder children's development and education or cause adverse effects on children's health and safety. Suppliers should convey the relevant requirements to the deeper suppliers. If a supplier discovers child labor in its workforce, it should not only terminate employment but also take care to develop appropriate measures to correct the situation.
      • Working Hours, Wages and Benefits
        Suppliers should ensure that working hours, wages, and benefits meet at least minimum standards by local laws and international regulations. Wages must be paid on time in full for services rendered and may not be unlawfully withheld.
        Overtime should only be provided voluntarily, and they must earn the fees. Suppliers should also conduct regular audits of wages and social benefits to ensure they maintain appropriate local living standards.
      • Diversity, Equality, Inclusion and Humane Treatment
        Quanta firmly believes in the value of multiculturalism and is committed to creating a diverse, equal, and inclusive work environment. Suppliers should also promote diversity and inclusion in the workplace and ensure that all employees are treated with respect and equally.
        We prohibit all forms of discrimination, including gender, pregnancy, race, color, disability, union membership, political affiliation, origin, religion, age, sexual orientation, and so on.
        For the above matters, suppliers shall formulate corresponding regulations, and clearly convey these regulations to all employees. Regularly raise awareness of discrimination and harassment issues to all employees and include training on steps to report violations. For reported cases of discrimination, suppliers should establish a management process system and carry out the investigations effectively, meanwhile, holding protection to the affected parties.
      • Freedom of Association
        The company expects suppliers to respect employees' rights to freedom of association and collective bargaining, allowing employees to have freedom of association by local laws and international regulations without interference, discrimination, retaliation, or harassment. Employees have the right of employees to participate or not and seek representation in trade unions, and so on.
      • Local Communities and Indigenous Peoples
        Suppliers should consider the impact of operation activities on the local community and indigenous people, and pay attention to their right of living conditions, education, employment, and social and economic activities.
        The suppliers must uphold the principles of free, prior, and informed consent of indigenous people in their operation activities and take appropriate preventive measures to avoid potential adverse impacts on the health, safety, and living conditions of local communities and indigenous peoples. Unlawfully contributing to the forced relocation of local communities and indigenous peoples is also prohibited.
        If necessary, the suppliers should work with local authorities and relevant stakeholders to avoid the impact of the business activities.
      • use of private or public security forces
        Our company is committed to reducing all forms of violence and related fatalities. We do not enter into contracts with private security personnel or public law enforcement agencies that do not respect human rights, and we pledge that our operations will not directly or indirectly support non-state armed groups. Suppliers are also expected to contribute to reducing violence and promoting peace. Security personnel contracted by us should have already undergone organizational norms for human rights policies or specific procedures and received formal training to avoid any improper forms of harm or punitive measures by corporate security personnel.
      • Health and Safety Working Environment
        Quanta is committed to maintaining a safe and healthy working environment and helping employees maintain good health. Suppliers should have policies and guidelines on occupational health and safety in place and foster a preventive approach according to which occupational accidents and illness can be prevented.
        Suppliers are required to establish work health and safety baselines and establish an occupational health and safety management system (e.g., in compliance with ISO 45001 standards) to ensure a safe workplace, necessary working tools and materials, and adequate protective equipment. Furthermore, provides all employees with regular access to relevant training to protect its employees against work-related hazards in the form of accidents, hazardous substances, and excessive physical and mental stress. The Partner must ensure a safe workplace, the necessary working tools and materials, and adequate protective equipment.
    • Use of Critical Raw Materials
      • Quanta recognizes a significantly negative impact in the mining, trading, processing, and export of 3TG (tungsten, tantalum, tin, gold), cobalt, mica, and other minerals in conflict zones and high-risk areas will cause the risk of significant negative impacts. Therefore, companies must respect human rights and not contribute to conflicts. Suppliers should adopt and widely promote a policy of responsible sourcing of minerals from conflict zones and high-risk areas and are committed to not engaging in any activity that would result in the financing of social, environmental, or human rights degradation, and provide Conflict Minerals Reporting Template (CMRT) and Extended Minerals Reporting Template (EMRT). At the same time, we monitor suppliers whose products use the above raw materials, perform due diligence on them, formulate policies and procedures, and provide relative reports (CMRT and EMRT) to reduce the risk of actual and potential negative impacts in the supply chain.
      • Quanta requires smelters/refiners upstream of the supply chain to actively participate in third party verification agency (RMI/LBMA) certification and requires suppliers to make responsible purchases from RMI/LBMA-certified compliant smelters/refiners while supporting the continued use of existing Conflict minerals from the Democratic Republic of the Congo and surrounding countries and/or other high-risk areas certified by third parties so as not to impact or curtail responsible mining operations in the region.
      • Suppliers should use RMI's strategies and practices for responsible mineral due diligence, adopt the due diligence report template and supporting management tools released by RMI, designate responsible units, and establish effective management procedures. At the same time, it must also continuously communicate its responsible procurement policy to its suppliers, provide training to suppliers on responsible mineral procurement, and investigate the implementation status of the above policy by the Company's suppliers. Where necessary, the Company will take relevant measures to reduce and/or eliminate risks accordingly.
      • For other critical raw materials such as steel, aluminum, rubber, and so on, we encourage the use of materials provided by certified suppliers. For example, steel suppliers should be certified by ResponsibleSteel™, and aluminum suppliers should be certified by ASI. If not certified, alternative options (such as due diligence results) need to be provided to ensure responsible sourcing of raw materials.
    • Supplier Management Responsibility
      • To ensure the sustainability of our supply chain in alignment with consistent values and standards, Quanta requires its Tier-1 suppliers to actively propagate the principles and standards of the "Supplier Code of Conduct" to their downstream suppliers. This includes but is not limited to, standards in quality, environmental practices, social responsibility, and sustainable development.
      • Tier-1 suppliers are expected to establish effective mechanisms to ensure that their sub-tier suppliers understand, adhere to, and implement our standards. This may involve providing training, sharing best practices, and conducting regular audits and assessments of the compliance of their sub-tier suppliers. Additionally, Tier-1 suppliers are also expected to take responsibility for promoting sustainable development within the supply chain by incorporating supplier management responsibilities into their contracts with sub-tier suppliers and requiring reporting of any discovered non-compliance.
      • We believe that this integrated cooperation and management will contribute to building a sustainable and responsible supply chain ecosystem. Quanta reserves the right to audit Tier-1 suppliers and their sub-tier suppliers to ensure that the same standards are followed throughout the supply chain.
  • B. Implementation of the Supplier Code of Conduct
    • Auditing and Management
      Quanta regularly conducts risk assessments on direct suppliers and provides relevant results to procurement as cooperation suggestions. Under additional circumstances, suppliers are required to conduct risk assessments on sub-suppliers and provide relative reports to Quanta to achieve traceability and maximum transparency in supply chain management, which can be traced back to the source when necessary. Upon request, the suppliers of Quanta shall respond fully and accurately, designate a point of contact for Quanta to contact, and provide relevant documentation upon request.
      To review the compliance of Suppliers with the standards set out in this Code, Quanta uses a standardized self-assessment questionnaire, third-party audits by the audit program of the Responsible Business Alliance (RBA) and the Responsible Supply Chain Initiative (RSCI), as well as on-site inspections by the audit team of Quanta. The supplier shall cooperate to the best of its abilities in responding to the self-assessment questionnaire and with the audits, and provide appropriate and reliable evidence for verification. In the event of violations or critical matters, we reserve the right to conduct risk analyses along the supplier’s entire supply chain.
    • Non-compliance mechanism
      After becoming a supplier of our company through the evaluation process, if there is an event of noncompliance with the mandatory requirements described in this Supplier Code of Conduct, we will provide counseling based on the actual situation and require them to improve within a time limit. If there is no improvement for a long time or critical violations are discovered, the company will reserve the right to terminate business relationships immediately.
    • Communication Channel and Whistleblowing
      Quanta has established communication channels and complaint mechanisms with suppliers. Complainants can obtain relevant channels in each site of Quanta through the official website information ( https://www.quantatw.com/Quanta/english/service/serviceinfo.aspx ) to report any Violations of these standards of conduct. If a violation falls within the sphere of influence of the Supplier, the associated risks must be remediated immediately.
      Suppliers are also obliged to make their supply chain aware of the available complaint reporting channels, ensure that vital information is delivered to the deeper levels of the supply chain, and establish an equivalent complaints format for their supply chain. At the same time, efforts must also be made to ensure that equal reporting obligations are stipulated in contracts signed with subcontractors, and subcontractors are required to submit corresponding reports to the company's suppliers.
  • C. Reference