Supply Chain Management Framework and Supplier ESG Program

Completed carbon desk assessment for 128 suppliers and on-site carbon assessment for 10 suppliers
Compared to the base year of 2022, the goal is to achieve a 23% reduction in supply chain carbon emissions by 2035

Taiwan Mobile remains committed to its corporate social responsibility and continues to strengthen partnerships with suppliers in pursuit of sustainable net-zero goals. Since revising its Supplier Code of Conduct in 2023, Taiwan Mobile has further reinforced its expectations on human rights, labor rights, environmental protection, and business ethics — clearly outlining its commitment to responsible supply chain practices.

In 2024, building on this foundation, Taiwan Mobile continues to implement the ISO 20400 Sustainable Procurement Framework, expanding the scope of on-site assessments and enhancing supplier training to improve ESG performance across its supply chain. At the same time, Taiwan Mobile has strengthened its risk identification and management mechanisms to ensure suppliers actively align with its sustainability strategies, working together to build a more resilient and sustainable supply chain.

In line with this commitment, Taiwan Mobile also applies the principle that suppliers with better ESG performance are preferred in supplier selection and contract awarding. In 2024, three multi-year procurement contracts included clauses specifying that if suppliers achieve carbon reduction targets, Taiwan Mobile will prioritize contract renewal. This approach further encourages suppliers to continuously enhance their ESG performance and move forward together on the path to sustainability.

Sustainable Supply Chain Management System

Taiwan Mobile established the Sustainable Development Department in 2019 to plan and carry out ESG strategies and projects. The Supplier ESG Program is integrated into the company's overall ESG policy planning and oversight of the program is conducted by the board of directors. The Company continues to build a sustainable supply chain management system through innovative initiatives. In 2023, it introduced the ISO 20400 framework for sustainable procurement and supplier management into its existing Procurement Management Regulations, which was approved by the General Manager. Therefore, the procurement policies, systems and all management processes cover sustainability factors including environmental, social, governance and business relevance. We conducted the suppliers screening through the above four sustainability factors. The supply chain management system is applicable for new suppliers, existing suppliers, and major tenders. It also ensures compliance with the Supplier Code of Conduct through risk assessment. The regulations includes seven key management focuses as follows:

Quality management: Confirm that products and equipment meet the sustainable demand through the technical appraisal mechanism, and grasp the actual implementation status of each supplier through the supplier's performance, and make optimization and improvement.
Service management: Suppliers are required to commit to completing a service and providing a delivery date. Suppliers that delay will be disqualified from consideration.
Risk management: Suppliers must sign the "Declaration of Integrity in Business Conduct" and cannot violate fair competition, environmental protection, copyrights, and labor laws and regulations. We will use the annual ESG review to confirm the implementation status of business conduct integrity and conduct risk assessments. The results will serve as the foundation for supplier selection.
Opportunities identification: Find the suppliers who have consistently performed well in the industry according to ESG issues, identify the possible opportunities of each supplier for future cooperation, and conduct effective management and cooperation.
Sustainability implementation: Improve the information security capability and transparency system of the supply chain, and strengthen the responsibility for the supply chain by effectively managing the supplier management practices. Organize regular education and training for employees and suppliers, so as to enhance both sides' awareness of sustainability.
Low-carbon transportation: Incorporate transportation costs and carbon emissions from logistics traffic into the planning of supply transportation routes and green the current logistics flow.
Continuation of green procurement implementation: Taiwan Mobile plans to adopt the ISO 20400 Sustainable Procurement Guidelines for procurement management in 2023 and set corresponding environmental standards for different procurement items to reduce the environmental and social impacts generated by procuremen tactivities.

Implementation through five major processes

Supply Chain Carbon Management

Since 2018, Taiwan Mobile has been conducting greenhouse gas (GHG) inventories with its suppliers and continuously enhancing data quality each year. Using 2020 as the base year, Taiwan Mobile completed the 2023 GHG inventory for 128 Tier-1 suppliers in 2024, along with on-site GHG assessments for 10 suppliers.

The Company continues to identify key engagement suppliers based on the top 90% of emissions and procurement value. The 2024 inventory results highlighted engineering contractors, IT service providers, and equipment suppliers as the main emission hotspots in the supply chain.

Internal Training (for company’s buyers and/or internal stakeholders)

Taiwan Mobile offers many internal ESG-related courses, such as TCFD, CDP, SBTi Carbon Reduction Pathways, Circular Economy, ESG Disclosure, etc., and requires relevant buyers and internal stakeholders to participate, with a requirement of 50 hours of courses annually. Additionally, to effectively advance ESG initiatives, Taiwan Mobile’s Board of Directors incorporated ESG performance into its self-assessment framework starting in 2017. Furthermore, 30% of the variable compensation for senior management is linked to ESG performance and related goals. Irregular education and training workshops are held to explain key ESG strategies including the Supplier ESG Program to TWM employees ranging from senior executives to entry level employees, encouraging all employees to practice and implement the company's sustainability vision.

In 2024, TWM continued to host Supplier Conferences and Carbon Reduction Workshop for suppliers. In addition to inviting suppliers to participate, responsible buyers were also required to attend, providing guidance, and exchanging views with suppliers.