Supply Chain Sustainability Management
ASEH has suppliers around the world, all of which are important partners. Beyond value creation, we also hope to be able to address labor rights and environmental protection issues by joining the Responsible Business Alliance (RBA) and actively participating in its annual conference.
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.
Supplier Sustainability Requirement
ASEH's raw material suppliers are required to sign the "ASEH Supplier Code of Conduct Commitment Letter". The suppliers are also required to complete a sustainability risk assessment questionnaire that covers regulatory compliance, sustainable management, supplier management, conflict mineral management, environmental protection, health and safety, labor rights, human rights, etc. The purpose of the questionnaire is to assess each supplier's sustainability risk and conduct an on-site audit where necessary to ensure conformity to ASEH's supplier sustainability standards.
Supplier Sustainability Risk Assessment
To assess the current status of supply chain sustainability development and risk management status, ASEH conducts an annual three-step supplier sustainability risk evaluation and analysis. This allows ASEH to identify the suppliers that exhibit potentially high social, economic, and environmental risks. Deficient suppliers will have to undergo audits and follow ASEH's corrective guidelines to ensure effective mitigation and control of risk.
Supplier Sustainability Risk Assessment Targets and Procedures
Targets: All suppliers
- We conduct an initial risk assessment of suppliers based on the manufacturing location, manufacturing processes, and procurement amount.
Targets: All tier-1 suppliers
- Critical suppliers: ASEH SAQ/RBA SAQ
- Non-critical suppliers: ASEH SAQ
Target: High-risk suppliers
- High-risk critical suppliers: On-site audit/ RBA VAP
- High-risk non-critical suppliers: RBA SAQ
Sustainability Risk Assessment Factors
- Flexibility, Quality, Cost, Service and Technology
- Sustainability Management Policies and Organization
- Risk Management
- Business Ethics
- Information Security
- Conflict Minerals Management
- Supply Chain Management
- Environmental Management System
- Carbon Management
- Water Management/li>
- Waste Management
- Occupational Health and Safety Management System
- Emergency Preparedness
- Labor Rights
- Labor Management System
- Human Rights
- Social Involvement
Supplier Sustainability Audit Mechanism
ASEH established a supplier sustainability audit system to carry out routine and ad hoc audits on-site, through document submissions, and through appointing third-party agencies or the RBA VAP. Deficient suppliers are required to draw up corrective action plans and rectify them within a given time frame. We will then review the results of their corrective action plans, followed by another assessment on the status the following year.
In 2019, we conducted on-site audits/RBA VAP on 115 raw material suppliers, including high-risk critical suppliers. All audited suppliers completed the corrective actions within the given time frame; and after evaluation, no supplier was terminated for non-compliance.
Sustainable Supply Chain Development Program
ASEH continues to support its suppliers by providing education and training, organizing seminars, forums and counseling sessions. These efforts help ASEH stay responsive to an ever changing business landscape and to foster sustainability values throughout the supply chain.
Supply Chain Greenhouse Gas Inventory Guidance Program
To counter impacts and risks arising from climate change, ASEH has invested significant resources to assist suppliers in establishing greenhouse gas management systems that are compliant with regulatory requirements. We commissioned a consulting company in Taiwan to launch a two-year (2018-2019) Supplier Guidance Project for the Implementation of ISO 14064-1 Greenhouse Gas Inventory Social Return on Investment (SROI). As of the end of 2019, we have provided on-site support for over 20 suppliers in ensuring ISO 14064- 1 compliance for their greenhouse gas management systems. The project has allowed them to control their greenhouse gas emissions, acquire external verification for ISO 14064-1 compliance, develop capacity for supply chain carbon disclosure, and increase their level of competitiveness.
Risk of Foreign Forced/Bonded Labor in Supply Chain Corrective Action Project
ASEH is committed to the protection of the dignity and the rights of workers. In 2018, we collaborated with suppliers to review and conduct due diligence on the hiring process of foreign workers, and explore ways to improve the process. The aim is to eliminate any practice of forced or indentured labor, and to make up for the inadequacy in local labor law protection and/or complex hiring procedures within our supply chain.
Supplier Sustainability Education and Training
ASEH continues to invest resources enhance the sustainability performance of its supply chain risks. We have organized various sustainability education and training, and conducted guidance outreach at multiple facilities to communicate our supply chain management requirements. In 2019, we conducted 7 seminars/consulting globally, with 575 people attendees from more than 350 suppliers attended.