Sustainable Supply Chain Management
Supplier Sustainability Management Approach
ASEH is committed to partnering with our suppliers to ensure that working conditions in ASEH’s supply chain are safe, their workers are treated with respect and dignity, and that business operations are environmentally responsible and conducted ethically.
Supplier Sustainability Management Approach
As part of the ASEH Procurement and Supply Chain Development Policy and Commitment, we established a four-stage sustainability supply management process that is run repeatedly to ensure supplier compliance and enhance their sustainability performance. In order to effectively improve the overall sustainability performance in the supply chain, we implement a series of supplier counseling and capacity building programs, and also established incentive and removal mechanism which related to supplier ESG performance. By incorporating ESG performance/regular evaluation system, we expect to create a positive sustainable supply chain management.
Supplier Sustainability Agreement and Evaluation
ASEH Supplier Code of Conduct and ASEH Sustainability Assessment Questionnaire (SAQ) establish standards based on the “Responsible Business Alliance. RBA” and refer to international principal including” OECD Guidelines for Multinational Enterprises, “UN Guiding Principles on Business and Human Rights”,” UN Universal Declaration of Human Right”, “ILO Declaration of Fundamental Principles and Rights at Work”, “ILO Fundamental Conventions”, and” Social Accountability SA8000”.
Supplier ESG Risk Screening
To better manage supplier risks, we established a 2-phase screening process that evaluates any underlying ESG risks at our suppliers. For suppliers that exhibit high levels of ESG risks, ASEH will closely monitor and supervise them through periodic audits and guidance to mitigate and control the risks effectively.
Phase I: Active Assessment – All suppliers
Base on type of business relation between ASEH and supplier, and the procurement value, we then assess the procurement category (eg. raw material, facility, equipment, contract services) and potential ESG risks.
Phase II: Sustainability Self-Assessment Questionnaire (SAQ) – Tier 1 suppliers
To cater for a diverse and complex supplier base, we have customized our SAQs according to the type of industry, and ESG risk assessments for different categories of suppliers.
Supplier Category and Sustainability Assessment Aspects
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Raw material supplier: Labor, Health and safety, Environmental protection, Sustainable governance, Risk management and Supply chain management
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Facility, Equipment and Waste management suppliers: Labor, Health and safety, Environmental protection, Ethics and Sustainable management system
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Service contractor: Labor, Health and safety, Ethics, Sustainable management system and Irregular audit
Supplier Assessment and Evaluation
Phase I: Desk Assessment – Tier 1 supplier
We’ve conducted sustainability assessment questionnaire to all tier-1 material suppliers. Suppliers are required to self-assess risk and provide corresponding supporting document in accordance with the requirements of the question.
Phase II: Physical Assessment – Significant supplier
We define significant suppliers by high-risk supplier that identified by SAQ survey result and its business closeness with ASEH. Then we conduct physical assessment and provide counselling to ensure supplier’s risk circumstance and continually reduce risk level.
Sustainability Assessment
For our key raw material and critical suppliers, we include ESG metrics on top of other indices such as quality, costs, delivery, service and technology, as performancemeasurements at quarterly business reviews (QBR). Suppliers with the best ESG performance are recognized at our annual supplier day, and invited to share theirexpertise in sustainability development with other suppliers at the annual supplier forum. Outstanding suppliers also receive priority in our procurement selectionprocess.
Supplier Performance Improvement Program
ASEH has implemented on- site or remote support to help suppliers develop actionable plans on completion of correction and improvements within a specified timeframe. We will follow up with a second audit to track the progress of corrective actions and to determine all identified deficiencies have been effectively addressed and resolved. For suppliers who continue to fall short of compliance despite counselling, we will still offer guidance in the first year and potentially reduce our procurement volume with them. To maintain the company’s standard of service and quality, suppliers will be removed from our qualified supplier list if they fail to meet expectations in the second year, and all dealings with them will be suspended.
Sustainable Supply Chain Development Program
ASEH recognizes active participation in supplier development and capability improvement is crucial to ensure sustainable supply chain development. Through the Annual Sustainability Forum, we hold sustainability capacity building projects, workshops, and educational training to strengthen the collaboration between suppliers and ASEH, and enhance suppliers’ capability in addressing sustainability issues to respond the fast-changing trends in sustainability.
In 2022, ASE Kaohsiung and USI both hosted the Annual Sustainability Forum, bringing in a total number of 750 participants from suppliers.
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ASE- ASE Kaohsiung: communicate requirements for sustainability risk management in the supply chain, the corresponding strategies, and objectives, in addition, share corporate risk management trends and successful implementation cases in the industry
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USI: communicate USI Corporation’s requirements for supplier sustainability risk management and future objectives, promote USI Corporation’s green products, conflict minerals policy and management requirements, and explain its main focuses in the annual audits of green products and conflict minerals, also share experiences in implementing USI Corporation’s Environmental Footprint/Impact Assessment
Greenhouse Gas Inventory Guidance Program
To align with ASEH’s Net Zero Emissions pathway, we have conducted carbon inventories for the Scope 3 emissions sources (the largest emission contributors)within our supply chain. We have allocated resources to provide guidance and support to our suppliers in establishing greenhouse gas and product carbon footprint management systems that comply with regulatory requirements. Starting from 2022, we began collaborating with external consulting units to initiate a medium- to long-term supply chain carbon inventory guidance project.
Renewable Energy Development Project
To address the challenges posed by climate change, SPIL joined forces with clients to develop a two-year Sustainability Cooperation Project, promoting renewable energy development in the supply chain. SPIL initiated multiple objectives such as renewable energy installation and circular benefits in collaboration with 10 suppliers, including materials and logistics suppliers. By providing technology, assistance, and guidance through the project, we actively assist suppliers in overcoming barriers encountered in developing renewable energy, working together to develop renewable energy and deploy advanced initiatives to facilitate carbon reduction and energy transition across the supply chain.
Carbon Reduction and Water Conservation Guidance Project
To reduce resource waste and increase green sustainability awareness, starting from 2021, ASE Kaohsiung has provided guidance to 22 suppliers to establish their own reduction goals and assist them in implementing reduction plans with a target of reducing greenhouse gas emissions and water consumption by 1%. As a result, the greenhouse gas emissions in the supply chain were reduced by 7,260 tons of CO₂e, achieving an annual reduction rate of 1.35%. Water consumption was reduced by 148,075 tons, achieving an annual reduction rate of 2.02%. The achievements in reduction exceeded the set target of 1%.
ESG Workshop - Specific Sustainability Issues
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SPIL
Target: Raw material supplier
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Share international trends in climate issues and future regulatory requirements
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Share experiences of suppliers with excellent greenhouse gas management
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Require suppliers to obtain ISO-14064-1 certification for greenhouse gases
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Regular Educational Training
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ASE – Kaohsiung, Chunli, ASE Shanghai (Material), Wuxi and Korea site
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USI
Target: Raw material supplier, Facility and Waste management contractor, Recruitment agency and Service contractor
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Promote health and safety, food safety, and environmental health and safety policies
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Disseminate knowledge on fire management, fire rescue, and emergency evacuation procedures
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Conduct annual evacuation drills and emergency response exercises for vehicle accidents
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Other topics
Other topics
