Supply Chain Sustainability Management
Wistron has established a comprehensive supply chain sustainability management process, which consists of five major steps: adherence to sustainability norms, sustainability risk assessment, sustainability audits assessment, support for improvement and capacity building, and preference and exclusion mechanism. These steps ensure that suppliers comply with our supplier code of conduct and avoid potential conflicts with ESG requirements. We verify the implementation with suppliers, item by item, through risk assessments and sustainability audits assessments , and help suppliers establish improvement plans for items that need to be improved. Additionally, we proactively initiate supplier sustainability resilience capacity building plans. Through long-term and in-depth cooperation, we continue to improve thesustainability performance of suppliers, thereby exerting Wistron's influence in the industry chain.
- Supplier sustainability management structure
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Sustainability norms are followed
Supplier code of conduct
Wistron understands the importance of balancing the impacts and effects on society and the environment while pursuing continued growth. Therefore, Wistron has established the supplier code of conduct as a basis for supplier compliance. The code covers five major aspects: labor, health and safety, the environment, code of ethics, and management systems. It also includes commitments to biodiversity, preventing deforestation, and land conservation. Suppliers’ compliance with the code is a critical evaluation criterion for our procurement decisions. In 2023, all suppliers signed the supplier code of conduct, representing their commitment to Wistron's sustainability standards. In addition, we also require different categories of suppliers to sign a letter of agreement, the declaration of controlled hazardous substances confirmation and compliance, the declaration of non-use of conflict minerals, etc. The signing rates of these documents are 100%, 100%, and 100% respectively. We remain steadfast in enforcing Wistron's sustainability expectations and requirements.
- Signing of the Supplier Code of Conduct
| Year | 2023 Performance | 2023 Targets |
|---|
| Existing suppliers | Number of suppliers required to sign | 1,250 | - |
| Percentage of signed suppliers（%） | 100 | 100 |
| New suppliers | Number of suppliers required to sign | 52 | - |
| Percentage of signed suppliers（%） | 100 | 100 |
Existing supplier signed Code of Conduct
100%
New supplier signed Code of Conduct
100%
SAQ response rate among tier 1 suppliers
100%
Wistron supplier code of conduct
Sustainability Risk Assessment
In order to assess the sustainability risks within our supply chain, Wistron conducts a two-phase risk investigation on suppliers. We aim to evaluate the level of supplier compliance with required standards at different stages. This allows us to identify any potential risks and pinpoint high-risk suppliers. Following this, audits assessments, coaching, and assistance in improvement measures are undertaken to effectively control and mitigate the identified supply chain risks.
Active Assessment
Target: All suppliers
To assess potential risks in our supply chain, Wistron conducts preliminary investigations and screenings of suppliers based on the following factors: environmental, social, governance, business relevance, country/region of location, sector, and product. This allows us to preliminarily identify suppliers with potential risks and manage them to mitigate the impact brought by potential risks.
Risk Assessment
Target: Tier 1 and Non-tier 1 Suppliers
In order to understand the sustainability risks of existing suppliers, Wistron issued a self-assessment questionnaire for tier 1 and non-tier 1 suppliers, which was based on five sustainability aspects: sustainability and operational risk management, supply chain and business continuity, environmental protection, human rights and labor security, and occupational safety and health, etc., and required suppliers to provide supporting information to gain further insight into our suppliers’ sustainability risks.
Suppliers with a score of less than 80 on our sustainability risk assessment questionnaire are defined as high-risk suppliers. We identified a total of 67 high-risk suppliers in 2023. Based on the results, in 2023, the main sustainability risk factors are concentrated in environmental protection and sustainable operation & risk management. In order to effectively mitigate the impact of these risk factors, Wistron will prioritize greenhouse gas inventory and certifications (ISO 50001 and ISO 14064-1) for critical and high energy consuming material suppliers in addition to encouraging suppliers to purchase renewable energy certificates. Other identified risk factors will be listed as items requiring guidance for remediation.
Sustainability Assessment
In order to understand our suppliers’ sustainability efforts, Wistron requires suppliers to undergo different types of assessments, including desk assessments and on-site assessments (including 2nd party, 3rd party and industry standard assessments). Results from sustainability assessment in 2023 as below tables and set long-term goals for the current year and 2030 to establish a clear direction for the short-term and long-term goals and lead the supply chain towards sustainability.
Corrective action/improvement plans
To enhance the sustainability performance of suppliers, Wistron helps suppliers develop improvement plans through on-site or remote counseling for deficiencies identified in assessments. If the deficiencies cannot be addressed within two months, the supplier may submit another audit assessments application for a second assessment to confirm the implementation of the improvement plan. If the second assessment also fails, the supplier cannot reapply for six months and may be replaced by alternative materials or other suppliers. If immediate termination of the supplier is not possible due to shipment commitments, alternative solutions may be implemented first before execution. Suppliers still unable to comply with improvement measures within two years may face reduced purchase orders, suspension of procurement, or cancellation of supplier qualification. In 2023, all audited suppliers assessments completed deficiency improvements within the specified timeframe, and no supplier were terminated due to non-compliance.
- Proportion of deficiencies
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- Supplier assessment corrective/improvement actions
Preference and Exclusion Mechanism
To encourage suppliers to implement sustainable practices and enhance their sustainability performance, Wistron conducts sustainability performance evaluations of suppliers and implements a reward and exclusion mechanism in accordance with relevant management procedures.
- Preference : Suppliers with outstanding sustainability performance ratings are prioritized as primary suppliers, receive higher order allocations, and are granted opportunities to participate in new projects. They are also recognized and honored as Outstanding Suppliers during the annual Partner Conference. In 2023, a total of 5 suppliers received increased orders due to the reward mechanism.
- Exclusion : Suppliers with poor sustainability performance ratings have their eligibility for new project introductions suspended and their procurement amounts reduced. If a supplier fails to improve their performance within a two-year period, their procurement is halted, and their supplier status is revoked. In 2023, no suppliers met the criteria for exclusion.
Capacity Building
Buyer Education Training
To ensure that procurement colleagues worldwide (including buyers, logistics personnel, quality assurance teams, and other supply chain-related departments) understand supplier sustainability management processes and their roles, Wistron conducts training through an online platform. Senior executives share insights into the implications of sustainable supply chain development strategies, followed by training sessions focusing on the specific sustainability professional capabilities required for key business functions. This equips procurement colleagues with the ability to promote and implement supply chain sustainability strategies in their daily operations and interactions with suppliers. In 2023, a total of 1,776 individuals completed 636 hours of training.
Supplier Education Training
To strengthen the sustainability of our supply chain and enhance the sustainability capabilities of our suppliers, Wistron has allocated resources to develop a supplier education and training platform. This platform provides free courses and shares information related to sustainability, empowering suppliers to access and learn about sustainability independently online. By integrating ESG concepts and perspectives, we aim to foster a resilient and sustainable mindset throughout the supply chain. Currently, the platform offers courses covering various topics including general subjects, policy and regulations, supply chain management, quality management, and environmental occupational health.
Partner Conference and Sustainability Sharing Forum
In 2023, we centered our efforts around Resilience - Challenges & Opportunities. At the Wistron Group Partner Conference, the company shared its accomplishments in sustainable resilience and its goals for achieving net-zero carbon emissions. Leveraging the "big leads small" effect, Wistron led its supplier partners towards the net-zero target. Furthermore, Wistron recognized and commended suppliers who demonstrated outstanding commitment to sustainability and integrity. Through these initiatives, Wistron aims to foster a culture of friendly cooperation, mutual benefit, and sustainable growth in its business operations.
In 2023, Wistron organized two Supplier Sustainability Sharing Forums to facilitate supplier communication and education. The first forum featured presentations by consulting firms on corporate carbon management, greenhouse gas inventory, energy management systems, and international trends in circular economy and recycled materials. Wistron also briefed suppliers on their sustainable management policies and requirements regarding anti-corruption, greenhouse gas inventory, and water resources risk management. A total of 663 participants from 413 suppliers attended, with post-event surveys indicating a positive reception, scoring an average of 4.6 out of 5 in terms of helpfulness. The second forum focused on inviting suppliers with exemplary ESG performance to share their ESG policy implementations and measures for energy conservation and carbon reduction. A total of 140 suppliers participated, gaining insights into the industry's current sustainability landscape and fostering a greater commitment to sustainable development.
Capacity Building Project: Promoting Net Zero Carbon in the Sustainable Supply Chain
- Establishing a segmented supplier carbon management promotion strategy
Based on the standards and methods of the "Science-Based Carbon Reduction Target Initiative," Wistron has established Scope 3 carbon reduction targets aiming for an absolute reduction of 25% by 2030. Starting from 2021, annual greenhouse gas inventory results from suppliers are collected. Upon analysis, it was found that suppliers exhibit varying degrees of capability in carbon inventory and reduction. Consequently, a classification management system has been implemented, categorizing suppliers based on their level of significance (determined by factors such as revenue and material substitutability) and carbon inventory capabilities. Tailored project plans are provided to suppliers in different categories, along with necessary assistance resources, experience-sharing courses, and consulting resources, to ensure their progressive advancement towards carbon neutrality.
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- Building supplier carbon management sustainability capabilities
Wistron conducted a comprehensive inventory of scope 3 greenhouse gas emissions (15 categories). The inventory results revealed that the highest proportion of carbon emissions stems from upstream raw material procurement. Consequently, tailored capability-building plans are being initiated for suppliers across different categories. Through initiatives such as carbon inventory capacity building, verification plan promotion, and deep collaboration with SBTi and carbon reduction projects, Wistron launched four carbon management projects in 2023. These projects involve ongoing cooperation with 99 suppliers for more than 6 months, aiming to continually enhance supplier capabilities.
- Supplier capability building KPI
Supplier Circular Economy Project Cooperation
Amidst the global push for a circular economy, Wistron remains committed to safeguarding natural life and forests by fostering communication and collaboration with suppliers. This focus enables the fulfillment of biodiversity and non-deforestation pledges, while simultaneously reducing the Earth's environmental burden. Furthermore, it enhances suppliers' sustainability awareness and capabilities to adapt to evolving sustainability trends.
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