Supply Chain Sustainability Management

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Supply Chain Sustainability Management

Supply Chain Sustainability Management

Supply Chain Sustainability Management


In the ESG process of Wistron's supply chain management, the basic requirements for existing suppliers and new suppliers include compliance with Wistron's supplier code of conduct, green product procurement, CMRT surveys, and supplier selfassessment questionnaires, supplier performance management, sustainability audit and coaching improvement, etc. There are qualification training of supply chain personnel and training and management of suppliers. Through the management of Wistron Sustainable Supply Chain, our suppliers have basic sustainable capabilities and continue to become Wistron's cooperative partners.
The basic (to which not limited) training of procurement and related personnel of the sustainable general education course includes the Responsible Business Alliance (RBA) general education courses. Based on this, it is necessary to understand Code of Ethical Conduct, ethical management and corporate governance, basic training of sustainable general education courses, conflict minerals, green management, green partners, legal course training, negotiation skills courses, etc. Supplier audit personnel must accept and pass the supplier audit course training with the subject score (written test) of 80 points (inclusive) in order to obtain the identification of auditors and perform supplier audits.
Meanwhile, our employees within the supply chain participate in supply chain-related training courses. 260 people participated in the training on ethical management, corporate governance and other related issues with a total of 260 hours of training. A total of 883 people participated in training courses related to sustainable management with a total of 609 hours of training. 28 people also participated in the training of auditors with a total of 97 hours of training.

Sustainable Supply Chain Strategy  


Wistron focuses on cooperation and growth with our suppliers, and our strategy is based on sustainable procurement. We have responded to customer demands and established the Sustainable Supply Chain Strategy, which includes, quality performance and implementation, technical manufacturing capabilities, cost/operation management, local supply chain prioritization, and sustainability. We hope to strengthen our partnerships to create new opportunities.

Wistron has established a global procurement unit and supplier quality management unit to conduct supplier management. The units manage the standards and the procedures for the supplier selection based on partnerships with suppliers. They conduct risk evaluations, performance evaluations, audit guidance, education and training, and organize supplier conferences, in order to implement the sustainability requirements in the daily management of supply chains.

Supplier Screening Mechanism

Wistron refers to the Supplier Selection Criterion for supplier screening in order to understand and identify potential risks in the supply chain. Sustainability factors or business operation perspectives are also considered during the process of screening, and then supplier investigation and evaluation are carried out. Screening includes but is not limited to dimension of environment, social, governance, business relevance, country-specific, sector-specific, and commodity-specific.

Aspects Evaluation Item
Environmental • Prioritize local suppliers to reduce transportation energy consumption and emissions.
Social  •Review public litigation records or media information to assess the potential negative impact risks associated with social topics, including but not limited to human rights and labor rights.
Governance • Publicly disclose information or corporate governance assessment records (such as annual reports or sustainability reports).
• Financial statement review and analysis.
Business relevance • The diversity of the products or services it manufactures and provides.
• The substitutability of the products or services it manufactures and provides.
• Whether the products it manufactures and provides belong to technological pioneers or exist in niche markets.
• Industry research and business analysis: Investigation of its target customer base and brand perception, as well as the industry reputation regarding its technology and quality. 

• Prohibition on the use of conflict minerals and materials on the U.S. prohibited list.
• Take note of international sanctions regulations to avoid inadvertent violations of sanction norms, such as the U.S. sanctions list (SDN List).
• Pay attention to the prohibition of importing or exporting specific countries or items from sanctioned countries (such as the Taiwan SHTC list regulations).
Sector-specific • The manufacturing process involves risks related to resource intensity and energy consumption (such as the stability of power supply for production and contingency measures).
• Take into account the regional regulatory trends concerning industries with potential pollution issues (such as environmental regulations for the painting or electroplating industry, or the presence of trends towards migration bans).
Commodityspecific • The resource intensity in the region where the goods are manufactured, such as the expandability of land use, labor force structure, integrity of the upstream and downstream supply chain, and delivery lead time.
• Suppliers that meet specific product certification requirements, such as choosing factories certified by UL to manufacture specific goods.

Supplier code of conduct


Wistron is is fully aware that in the pursuit of the company's continuous growth, our operating strategy must take into account the impacts of society and the environment. Therefore, Wistron invites all our suppliers to work together on sustainability and has established the supplier code of conduct, as a basis for supplier compliance. The content covers the 5 major aspects of labor, health and safety, the environment, code of ethics, and management systems. It also includes biodiversity, prevents any deforestation activities, or land conservation. Meanwhile, the supplier's compliance with this code is taken as one of the main evaluation items for our procurement decisions. We have revised our Supplier Code of Conduct in 2022 to continuously improve the sustainability of the supply chain. Our suppliers are also required to re-sign the code of conduct, and they were given relevant education and training. The signing rate and training rate of the Code of Conduct are 95.90% and 100%, respectively.

Signing of the Supplier Code of Conduct
2023 Targets
Existing suppliers
  • The number of suppliers that should sign is 1,293
New suppliers
  • The number of suppliers that should sign is 150
New critical suppliers
  • The number of suppliers that should sign is 7
Existing suppliers
New suppliers
New critical suppliers

Existing supplier signed Code of Conduct


Training rate for the Supplier Code of Conduct


SAQ response rate among tier 1 suppliers


Wistron supplier code of conduct

Sustainability Risk Assessment for Supply Chains


In In order to understand the risk related to sustainability in the supply chain, Wistron distributed the Self-Assessment Questionnaire (SAQ) to all our tier 1 suppliers and non-tier 1 suppliers. The suppliers must describe their implementation of the 5 major sustainability aspects (sustainability and operational risk management, supply chain and operation continuation, environmental protection, human rights and labor security, and occupational safety and health) in the questionnaire, and provide related evidence, such as management system certification or related documents. The supplier self-assessment result will be used as reference for future sustainability risk management. The response rate for the SAQ among tier 1 suppliers was 100% in 2022. The response rate among significant non-tier 1 suppliers was also 100%.

2022 Self-Assessment Questionnaire
Year 2021 Performance 2022 Targets 2022 Performance 2023 Targets
Tier 1 suppliers Number of surveyed suppliers 1,084 suppliers - 1,427 suppliers -
Response rate (%) 100% 100% 100% 100%
Significant tier 1 suppliers Number of surveyed suppliers 430 suppliers - 639 suppliers -
Response rate (%) 100% 100% 100% 100%
Significant non-tier 1 suppliers Number of surveyed suppliers 256 suppliers - 241 suppliers -
Response rate (%) 100% 100% 100% 100%
Through the analysis of the SAQ results, the main sustainability risk factors for suppliers in 2022 are unimplemented energy conservation and carbon reduction mechanisms for energy management, non-certified Greenhouse Gas Inventory certified management, and no use of green electricity or renewable energy. In the aspect of environmental protection. In the aspect of sustainability and operational risk management, the most important risk factors are unimplemented response plan management for continued operations and non-participation in responding to carbon disclosure plans. We defined suppliers which scored less than 80 points as high risk suppliers, and identified the potential risks within the supply chain. In 2022, we identified 92 high risk suppliers (including 16 critical suppliers). We later conducted sustainable audits of the high risk suppliers, in order to confirm and understand the risks of the suppliers.
2022 Sustainability Risk Factors for Suppliers
Dimension Risk
Environmental protection Energy conservation and carbon reduction mechanisms for energy management have not been implemented.
Uncertified Greenhouse Gas Inventory Certification Management
Non-use of green electricity or renewable energy
Sustainability and operational risk management Response plan management for continued operations has not been implemented.
Non-participation in responses to the Carbon Disclosure Project

2022 Results of Self-Assessment Questionnaire
Tier 1 suppliers Critical tier 1 suppliers Critical non-tier 1 suppliers
Number of high risk suppliers 92 16 0
Number of high risk suppliers 6.45% 2.84% 0%

Supplier audit


Wistron has established supplier sustainability audit procedures to conduct audits on significant suppliers in order to implement supplier sustainability risk management. Sustainability audit types* include desk assessment (on-site assessment)/2nd party (supplier audit/consultant)/3rd party (third-party assessment) and industry standards (obtain relevant industry certification). If the supplier has a score of lower than 80 points in the audit results, the Company will ask the supplier to propose improvement measures for discrepancies found in the audit. The supplier is required to complete the improvements for the discrepancies, report back, and file a re-audit application within two months. If the supplier still can't pass the re-audit, it may not file another application within six months. Where the issues discovered affect the quality of materials supplied, the materials/supplier will be replaced with an alternative.
According to the supplier performance management method, if the elimination mechanism cannot be implemented immediately because of the shipment involved, it can be implemented after the introduction of the alternative plan is completed. Suppliers who are still unable to cooperate with improvement within two years will have their purchase amount reduced or stop purchasing from them, or their supplier qualifications will be disqualified.

* :Sustainability audit types include:
(1) Desk assessment: After suppliers complete self-assessment, due to subjective and objective factors preventing Wistron from conducting on-site assessment, video or remote audit/review are carried out based on the supplier's self-assessment report.
(2) On-site assessment: After the supplier's self-assessment is completed, Wistron's audit personnel conduct on-site assessment/reviews based on the supplier's selfassessment report.
(3) Supplier audit/consultant (2nd party assessment): Non-tier 1 suppliers are audited by the tier 1 suppliers or consultant using Wistron's audit criteria, and the audit results and improvement reports of non-tier 1 suppliers are obtained.
(4) 3rd party assessment: Conducting on-site assessment through the third-party verification agency, we obtain audit results and improvement reports. The scope of 
the third-party audit includes:
(4.1) Social Accountability 8000 Standard; 
(4.2) Non-VAP report for third-party Review + improvement and prevention report;
(4.3) CMA (Customer Managed Audit), AMA (Auditee Managed Audit) + improvement and prevention report.
(5) Industry standards: For example, the electronics industry undergoes the VAP based on the RBA Code of Conduct. In 2022, the focus of the certification was primarily on material categories such as IC/LCD/TouchPad/SSD.

Item 2021 Performance 2022 Targets 2022 Performance 2023 Targets
Number of audited significant suppliers  686 suppliers - 880 suppliers -
Number of audited high risk suppliers  50 suppliers - 92 suppliers -
Percentage of audited high risk suppliers (%) 100% 100% 100% 100%
Number of audited high risk significant suppliers 14 suppliers - 16 suppliers -
Percentage of audited high risk significant suppliers (%) 100% 100% 100% 100%
Deficiency improvement rate (%) 100% 100% 100% 100%


Audit Method 2021 2022 Goal
Number of audited suppliers Desk 367 719 100%
(Percentage of audited 
significant suppliers)
2nd party 0 10
3rd party 0 59
Industry Standard 0 92
Total 367 880
Percentage of audited high risk significant suppliers 53.50% 100%
Number of audited high risk suppliers 50 92 -
Ratio of completion in CAP 100% 100% 100%
Number of suppliers eliminated 0 0 -

Item 2022 Goal
Number of suppliers counseled 267 suppliers 267 suppliers
Percentage of significant suppliers be counseled 100% 100%

Improvement Actions for Deficienc From Supplier Audits
Aspects Topics Improvement Actions
Sustainability and operational 
risk management
Business continuity management
  • Promotion of corporate social responsibility, including employee care, corporate governance, environmental protection. and social welfare
  • Focus on compliance with government regulations, protection of work rights, and promotion of occupational health and safety
  • Development of green products, reduction of environmental impact, social and environmental responsibilities, etc.
  • We prevent the interruption of business activities, and minimize the disruption of business operations caused by disasters and management failures with combination of preventive and recovery controls and programs.
Supply chain sustainability 
Supplier selection / 
  • Establish a comprehensive supply chain risk management plan
  • Identify all risks at every point of the supply chain
  • Improve the accuracy of demand prediction and establish a secure inventory
Environmental protection Energy management / 
emission reduction plan
  • We formulate energy policies and emission reduction plans and targets with combination of relevant emission reduction actions.
  • We carry out energy monitoring, such as the establishment of identification of relevant regulations and the clear quantification of indicators, the formulation of energy resource control programs, and the implementation of carbon reduction in accordance with the programs.
Human rights and labor 
Control time-out of overtime working hours / 
  • Electronic overtime application control systems were established, overtime needs be applied in advance, and the system automatically generate early warning signals when the number of overtime hours is exceeded.
  • Regarding anti-discrimination issues, anti-discrimination education and training programs are regularly organized and included in the annual training plan. Staff training is conducted and record keeping management is implemented.
Occupational safety and 
Emergency preparation/ 
lack of knowledge about chemicals management
  • Enhance employee operation safety awareness
  • Marking escape routes clearly
  • Evacuation education and training
  • Post warning signs and regulations on related facilities and in areas
  • Add safety improvement facilities where appropriate, Conduct inspection of chemical safety information

Supplier selection mechanism


In order to implement sustainability and performance management for our suppliers, Wistron has implemented the supplier performance evaluation system. The scores, from high to low, go from A to E (A is over 85 points and E is lower than 46 points). The performance evaluation mechanisms are the basis for supplier selection and the evaluation mechanisms are as follows. In 2022, no supplier was rated as E in the supplier performance evaluation and no suppliers were eliminated.

  1. Suppliers who scored lower than an E in the quarterly evaluation are required to propose improvement measures. Wistron will discuss adjustments to the supplier's strategy and the cancellation of the supplier's current projects and qualifications for new projects according to the improvements implemented by the supplier.
  2. If a supplier is given an E rating for 3 consecutive quarters, the suspension of the supplier’s qualifications to join new projects will be discussed in the quarterly meetings.

Schedule Award Mechanism and Elimination Mechanism

Through quarterly Spend Performance Management (SPM) meetings, relevant departments conduct evaluations and rate suppliers based on a graded system, following appropriate management procedures. The implementation of measures and mechanisms is as follows:
• Award: Suppliers consistently rated as "A" grade for three consecutive quarters within a fiscal year will be honored with the Excellent Supplier award during the annual supplier conference. They will receive a larger share of business cooperation opportunities, along with the chance to participate in new projects.
• Penalty: Suppliers consistently rated as "D" grade for three consecutive quarters will be placed on an observation list. Their senior management will be required to attend review sessions at our company, where they must present improvement strategies.
• Disuse: Suppliers consistently rated as "E" grade for three consecutive quarters will have new project eligibility temporarily suspended. Order quantities will be reduced and shifted to secondary suppliers. Implementation of the elimination mechanism depends on the feasibility of alternative solutions post-completion of ongoing shipments. Suppliers failing to meet improvement requirements within two years will experience reduced procurement or complete 
cessation, leading to supplier qualification termination.

Improvement of Supplier Sustainability

In order to strengthen the connection and interaction between Wistron and the suppliers, information transparency, and real-time transmission of information and knowledge on sustainable issues, we have developed a digital learning platform for our suppliers. The problem of insufficient training caused by frequent personnel turnover is improved to improve the 
supplier's sustainable service quality and skills. Therefore, the supplier can continue to improve and create a win-win situation. The platform has been officially launched on 2022/9/15. The course has 30 lessons, including general education (7), policies and regulations (5), supply chain management (8), quality management (7), environmental occupational safety and health (1), and cross-domain management (2). The number of registered suppliers is 1,071 suppliers, and the reading rate of completed compulsory courses is 100%.

Supplier Benchmarking for Learning

Excellent suppliers are used as benchmarks to be learned: 2022/08 Sustainability Report and DJSI excellent Nanya Technology was specially invited to share the sustainable organization and effectiveness of Nanya Technology.

Development of Suppliers' Sustainable Ability

Wistron continues to improve the sustainability of suppliers in the form of projects every year. It includes Y2022 supplier sustainability project promotion plan, and carbon reduction plan of suppliers with high energy usage (supplier carbon reduction target 2.5%). 27 suppliers participated in PCB, LCD, and ME. After more than 8 months of internal and external guidance and requirements, 17 suppliers obtained ISO14064-1 (62.96%); 16 suppliers obtained ISO50001(59.26%); emission reduction data inventory: 100% , and substantial carbon reduction results have been achieved.
Item 2022 Goal
Number of suppliers with capacity building 27 suppliers 27 suppliers
Proportion of significant suppliers (%) 3.07% -

Supplier sustainability evaluation


Wistron has stipulated ESG standards for suppliers (including new and existing suppliers).  In order to become a Wistron supplier, who must sign the Code of Conduct and are required to pass ISO 9001, ISO 14001, IECQ QC 080000, and ISO 45001 certification.

Furthermore, the supplier’s ESG performance is included in the selection criteria. Regarding the evaluation of new suppliers, the supplier quality system evaluation form will be  used for evaluation.  The Non-ESG considerations factor accounmted for 86.67%. The ESG factors account for 13.33% of the score, and include:

  1. Established appropriate and effective documents and procedures related to the RBA Code of Conduct (2.22%)
  2. Complies with labor standards (2.22%)
  3. Complies with health and safety standards (2.22%)
  4. Complies with environmental standards (2.22%)
  5. Complies with ethical business standards (2.22%)
  6. Complies with management systems (2.22%)

The ESG performance of existing suppliers is regulated by the supplier performance evaluation. The regulated items include quality, reliability, compliance, supply capabilities, price, ESG and sustainability. Among these factors, sustainability accounts for 20% and includes:

  1. Quarterly review of ESG sustainability activities (10%)
  2. ISO-14064-1 Certification Annual Review (1%)
  3. ISO-50001 Certification Annual Review (1%)
  4. Annual ESG sustainability audit score (3%)
  5. Major Missing Events of ESG Sustainability On-site Assessment (5%)
ESG risk management and avoidance plan (Description: Human rights issue: whether the supplier conducts human rights risk assessment, and whether the supplier is reported due to related issue of violating human rights. Operational risk: whether the suppliers provide financial statements or financial indicators, and whether there is an explantation or plan for the risks revealed by the indicator.  Disaster preparedness: including fire, and natural disasters).

Supplier Partnership Projects

Through communication and cooperation with the suppliers, Wistron continues to identify their needs while they improve on sustainability. We maximize the impacts of the investments and improve the sustainability awareness and capabilities of suppliers, in order to face the ever-changing sustainability standards and trends.
Supplier Partnership Projects Cooperation Description Qualitative Benefits Quantitative Benefits
Supplier Sustainability Carbon 
Reduction Project (Critical suppliers 
with high energy usage)
We and our suppliers cooperate with each other
to reduce carbon from the upstream and downstream, 
and the concept of bringing the big to the small is 
also established. We cooperate with partners of
critical supplier with high energy usage to carry
out annual carbon reduction plans. Starting from
the improvement of software and hardware
equipment, the compliance of the inventory
data is confirmed, and assistance and suggestions
are given according to various types of suppliers. An annual carbon reduction target of 2.5% was also defined. In the end, the annual 3% carbon reduction benefit was achieved, and the audit and certification of ISO14064-1 was completed.
• The goal of energy efficiency and carbon reduction is 
achieved to realize the digital management of energy 
efficiency and carbon reduction, manpower saving, 
optimization of process, and improvement of efficiency through the optimization of the hardware and software supporting facilities of suppliers' equipment. 
• The carbon reduction project plan that is regularly coordinated with our suppliers every year has established a solid foundation for the sustainable 
supply chain. Meanwhile, the risk of out-of-stock caused by the replacement of suppliers due to noncompliance with Wistron's regulations is reduced.
There were averagely 45% of Carbon emissions and 65% of water 
saved in compliance with project suppliers, and Wistron's Scope 3
carbon emissions was reduced synchronously.
• 50.3% of Carbon emissions was saved. (total carbon emissions of 
3,240,028 tCO2e in 2021 v.s. carbon emissions of 2,466,439 tCO2e 
until September in 2022)
• Annual carbon emission of transactions with Wistron 2021
total carbon emission 113,001tCO2e v.s. 2022 carbon emission 
54,047tCO2e as of December
The packing suppliers and our 
upstream value chain suppliers use 
the pulp certified by the Forest 
Stewardship Council
We support the concept of global environmental 
protection and sustainable and responsible forest 
management, and our actions also substantively support 
biodiversity, deforestation or land protection. Wistron 
encourages our critical suppliers of packing and the 
non-tier 1 value chain suppliers to only use the pulp 
and the recycled paper produced by the wood from the 
responsible forest management. Our critical suppliers of 
packing and the non-first-tier value chain suppliers have 
all obtained the certification of the FSCTM-CoC forest 
management system.
• The balance of humans and ecology has obtained many benefits. The point is the protection of natural life and forests by reducing deforestation through proper management. Tree-based production with minimal damage can be ensured, and the commitments to biodiversity and no deforestation are met. • 83.33% of Wistron's critical suppliers of packing and the nontier 1 value chain suppliers use responsible forest management to manage the wood and the pulp raw materials. They have also obtained the certification FSCTM CoC forest management 
• Wistron continue to persuade the upstream supply chain to achieve the goal of using the wood and the pulp raw materials 100% from responsible forest management.

Supplier Conference


Every year, the Wistron team invites with suppliers to achieve friendly, mutually beneficial, and common growth for sustainability. In the 2022 Supplier Conference, the main focus will remain on global climate change. The Wistron Group Partner Conference is hosted to honor the suppliers with outstanding performance in sustainability and greenhouse gas inventory reports. During the 2022 sustainability/GHG Supplier Conference, consultant companies were invited to provide education and training to suppliers. In addition, we also explained Wistron's management policies for sustainability to suppliers, with the aim of promoting Scope 3 of the GHG inventory and the importance of water resource management.

Key Performance Indicators for Sustainable Supply Chains
Year 2019 2020 2021 2022 2023 2025 2030
Item Achievement rate Goals Achievement rate Goals Achievement rate Goals Achievement rate Goals Goals Goals Goals
Signing rate of the code of conduct for 
tier 1 suppliers
80.00% 80% 90.50% 82% 86.5% 90% 95.9% 100% 99.5% 100% 100%
Risk assessment completed for 
tier 1 suppliers
89.6% 90% 90.00% 100% 100% 100% 100% 100% 100% 100% 100%
Audit rate for high risk suppliers
67.10% 70% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Suppliers signing rate of "Declaration of 
non use of conflict minerals"
90.00% 85% 89.80% 92% 86.26% 90% 95.82% 100% 99.5% 100% 100%
Number of attendees at the supplier 
conference - groups/departments
- - 176 persons/
290 persons
- 354 persons/
366 persons
- 330 suppliers/
213 suppliers
300 suppliers/
210 suppliers
- - -
Suppliers with high energy usage obtaining GHG external 
verification (ISO 14064-1)
- - - - - - 62.96% 35% 55% 70% 100%

Deficiencies in the Audit and the Percentage of Related ESG Items

A total of 880 suppliers were audited according to the audit procedures above. 833 non-compliant reports were found, and the number of suppliers who have implemented correction, counseling and improvement measures was 267, including 162 cases of sustainability and operational risk management, 36 case of supply chain sustainability management, 279 cases of environmental protection, 119 cases of human rights and labor security, and 237 cases of occupational health and safety.