Supply Chain Management Framework and Supplier ESG Program

• 15 suppliers jointly commit to following the SBTi method to develop carbon reduction plans
• Completed carbon inventories for 129 suppliers and conducted on-site carbon emission audits of 10 suppliers
• Achieve a 23% reduction in suppliers' carbon emissions by 2035
• Taiwan Mobile and its suppliers share the responsibility of fulfilling corporate social responsibility. To this end, we integrate environmental, social, and governance (ESG) topics into our supply chain management framework, requiring suppliers to respond to sustainability strategies and proactively identify and manage potential sustainability risks in the supply chain.

Promotion and Supervision of Supplier ESG Plan:

Taiwan Mobile has a sustainable operation system. In 2015, the Code of Practice for Corporate Social Responsibility was formulated, promoting long-term sustainable actions based on the Code.

In 2019, the Sustainable Development Department was established to carry out planning and sustainability-related projects. In order to internalize ESG in all departments of the organization, the board of directors, the highest accountable decision-making, vertically managed and synchronized supervision by various committees, linked to the senior managers of each department. Through irregular internal education and training, require senior executives and relevant colleagues to communicate key ESG strategies and implementation methods. In 2017, the board of directors has included ESG performance self-assessment and entrust an external association to conduct an effectiveness evaluation every three years.

Through vertical management from the board of directors to each department, carry out the sustainable management of enterprises into the organization. The procurement department is responsible for the promotion of the supplier's ESG plan, And regularly report the management performance according to the progress.

Sustainable supply chain management measures

Taiwan Mobile has built a sustainable supply chain management system through innovative activities, integrated three aspects of environment, society, and governance (ESG) to manage suppliers systematically, and established seven management priorities:

1. 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.
2. Service management: Suppliers are required to commit to completing a service and providing a delivery date. Suppliers that delay will be disqualified from consideration.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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

Taiwan Mobile has started to train suppliers on taking comprehensive inventories of greenhouse gas emission sources and improving the inventory data quality while deepening their sustainable awareness of the impact of carbon emissions.

In 2022, Taiwan Mobile completed 2021 carbon emissions inventories for 129 Tier-1 key suppliers and on-site audits of 10 suppliers.

In 2022, Taiwan Mobile held the first Supplier Carbon Reduction Forum, inviting key carbon-emitting suppliers to share international carbon reduction trends and industry case studies and exchange expectations for carbon reduction actions with supplier partners. Through two-way communication and deepened engagements with suppliers, 15 have responded to join Taiwan Mobile to work towards the plan of 23% carbon reduction of the supply chain by 2035.

The inventory results in 2020 established the base year for Taiwan Mobile's target of the greenhouse gas reduction plan. The major supply chain emissions of TWM are transportation logistics and information service suppliers. The main engagement suppliers were identified according to their emissions, and reduction targets and strategies will be designed for each supplier's industrial category to promote suppliers' carbon reduction jointly.

Internal and external education and training

For the continuous strengthening of ESG Supplier agreement, Taiwan Mobile has ESG-related courses both internally and externally, and internally provides sustainable courses for all employees such as TCFD、CDP、SBTi Carbon reduction pathway, sustainable practical lecture, ESG disclosure, etc., Relevant personnel are required to participate, and 50 hours of courses are required every year.

Externally, circular economy forums, supplier conferences and other activities are held, in addition to inviting suppliers to participate, responsible purchasers are also required to participate, synchronously coach and communicate with suppliers.

Supplier Conference to be held in 2022 to commend suppliers with outstanding performance in sustainable management, in addition, TWM began to implement the supply chain carbon management plan in 2018, and guides suppliers to conduct greenhouse gas inventory every year, TWM completed 129 supplier carbon inventory and 10 supplier carbon on-site audit in 2022. During the inspection period, relevant education and training are carried out simultaneously to improve the quality of the inspection data, and at the same time let suppliers understand the purpose of the inspection and deepen their understanding of carbon emissions.

In addition, TWM held the first “TWM Carbon Reduction Forum”, join hands with 15 suppliers to respond to SBTi's carbon reduction commitment, invite suppliers to jointly understand the importance of carbon reduction.