TWM started to implement "Self-Evaluation form for ESG Performance for New Suppliers" since October 2017, focusing on the environmental protection, labor conditions, compliance in ethical operation, energy/resource management, waste and pollution management, and human management protection policy. All suppliers that are for sure going to collaborate with TWM and TWM can effectively track and review their ESG performance are required to fill in the initial ESG self-evaluation form. In 2019, 154 suppliers meet the standard with 100% of recovery rate. All suppliers passed the evaluation.
The suppliers have to comply with "Taiwan Mobile Guidelines on Corporate Social Responsibility for Suppliers," new suppliers are required to sign the "Declaration of Integrity in Business Conduct," and contractors are required to sign the "Safety and Health Protection Declaration for Contractors" after reading the "Environmental and Occupational Health and Safety Policy for Contractors" when taking on tenders. The signing rate of the guarantee was 100% in 2019.
TWM included 12 categories of sustainability topics in the CSR Self-Assessment Questionnaire, covering the economic, environmental, and social aspects. Circular economy topics also made their debut in the questionnaire to clarify the suppliers' perception and actions. Before the questionnaire is handed out, education and training will be provided to the procurement staff and suppliers to clarify the management focus, questionnaire content and key points of the year.
Suppliers must give answers about their management situations as well as providing supporting documentations, before a third-party agency entrusted by TWM conducts a desk review and gives an objective score. A total of 384 questionnaires were given desk review this year. We also regularly evaluate non-tier-1 suppliers to enlarge the scale of sustainable supply chain cooperation. A total of 6 suppliers were audited in 2019.
Number of Supplier's CSR Self-assessment Questionnaire Received
We selected 40 critical suppliers for on-site visits to gain an in-depth understanding of the supplier ’s sustainable management practices, as well as understanding their difficulties in implementing ESG in order to propose precise suggestions for improvement. We have reached the target of 80% critical tier-1 supplier visits in advance in 2019. We will continue to select important suppliers for on-site visits in the future, further our relationship with suppliers to promote sustainability. 40 critical suppliers will be selected for on-site visits in 2020.
In addition to evaluating the CSR implementation of existing suppliers, we hope to identify and track changes in the supply chain sustainability risks (such as the probability of threat, potential impact, warnings in advance, etc.) through the sustainability management of the suppliers, in order to assess the threat and impact of these risks on TWM in advance.
In 2018, we incorporated regulatory data in the supply chain risk assessment model and identified 19 with high environmental risks. We designated them into the priority list for visits. A coaching program was formulated and the suppliers were given a deadline for improvement. We have completed 11 follow-up visits in 2019 with 100% of improvement. A 100% of follow-up visit rate is scheduled in 2020. Therefore, no supplier contract was terminated due to potential environmental or social impact in 2019. In 2019, we identified 5 high-risk suppliers among 315 tier-1 suppliers, with one of them deemed to have high economic and social risks.