Responsible Procurement

A Promoter of Shared Value

Suppliers have always been Nanya's most important business partners. We aim to enhance cooperation to create greater value and share the value and benefits of cooperation and create a sustainable future.

Statistics

  • 100 %

    Nanya requires 100% of key suppliers to complete the self-assessment to control sustainability risks in the supply chain

  • 24.6 million kWh

    Electricity saved through cooperating with suppliers on energy-saving projects was estimated to exceed 24.6 million kWh

  • 1st

    Held Nanya Sustainable Supply Chain Seminar for the first time in 2020, and invited 20 key suppliers to discuss topics on energy conservation and carbon reduction

Strategies and Performance

2020

Sustainable Supply Chain Management

  • Use of non-conflict minerals: 100% (goal: 100%)
  • Key suppliers' completion of the self-evaluation questionnaire: 100% (goal: 100%)
  • Completion rate of deficiency improvements by suppliers with high sustainability risk in audits 100% (goal: 100%)
  • 100% of suppliers signing Supplier Code of Conduct (goal: 100%)

2021

Sustainable Supply Chain Management

  • Use of non-conflict minerals: 100%
  • Key suppliers' completion of the self-evaluation questionnaire: 100%
  • Completion rate of deficiency improvements by suppliers with high sustainability risk in audits 100%
  • 100% of suppliers signing Supplier Code of Conduct

2025

Sustainable Supply Chain Management

  • Use of non-conflict minerals for wafer product lines: 100%
  • Key suppliers' completion of the RBA self-evaluation questionnaire: 100%
  • Completion rate of deficiency improvements by suppliers with high sustainability risk in audits: 100%
  • Percentage of suppliers signing Supplier Code of Conduct: 100%
  • Accumulative percentage of auditing and counseling key suppliers for three years: 100%
  • Create at least two supplier sustainability counseling projects a year

Strategies

Sustainable Supply Chain Management

  • Management of conflict minerals: No conflict minerals have been used in any of Nanya's products
  • Supply chain risk management: Implement regular "quality, delivery, service, cost, technology, and sustainable management" evaluations for suppliers

Sustainable Supply Chain Development Strategies

Nanya firmly believes that the sustainable growth of supply chains has certain impacts on corporate sustainable development. Therefore, we are committed to developing sustainable supply chains. We actively invest in related resources and cooperate with suppliers to drive sustainable supply chains and achieve shared value.

Nanya's commitment

  • No conflict minerals have been used in any of our products and we have conducted procurement based on the green product regulations.

  • We adhere to the principle of fair trade and conform with related laws and regulations to protect human rights, pay attention to labor's physical and mental health and safety, protect environment, and fulfill corporate social responsibility.

  • In adherence with the principle of integrity, we are dedicated to implementing corporate social responsibility in our purchasing activities so as to pursue sustainable operations.

Sustainable Supply Chain Management

Nanya established a supply chain management framework. We use sustainability regulations, sustainability risk surveys, on-site sustainability audits/improvement measures, and supplier capability development to manage and control supply chain risks and strengthen suppliers' sustainability performance. We hope to drive suppliers to grow with us and exert more shared value and influence through a series of sustainability management processes.

  • Sustainability regulations

    Sustainability regulations

    • Formosa Plastics Group Supplier/ Contractor Code of Conduct
    • Responsible Business Alliance (RBA) Code of Conduct
    • Regulations and requirements related to conflict-free minerals
  • Active risk assessment and surveys

    Active risk assessment and surveys

    • Establish management system for verification and investigations based on the RBA standards
    • Inspection items include labor, health and safety, environment, code of ethics, and management system
  • Sustainability risk assessment questionnaire

    Sustainability risk assessment questionnaire

    • Issue self-assessment questionnaires to major suppliers
    • Determine high-risk suppliers
  • On-site sustainability audits/improvement measures

    On-site sustainability audits/improvement measures

    • On-site audit
    • Document review
    • Employee interviews
    • Issue CAR for discrepancies found in audits
    • Follow up on improvement for defects
  • Develop supplier capability

    Develop supplier capability

    • Organize supplier award ceremonies

Sign the Letter of Compliance with Corporate Social Responsibility Requirements for Suppliers and Subcontractors of Formosa Plastics Group

For our suppliers to understand and implement corporate sustainability step by step, we formulated the Letter of Compliance with Corporate Social Responsibility Requirements for Suppliers and Subcontractors of Formosa Plastics Group (Letter of Compliance), and provided suppliers with comprehensive training and education. The training coverage rate was 100%. The Letter of Compliance includes the Supplier Code of Conduct stipulated by Formosa Plastics Group, the RBA Code of Conduct, and regulations and requirements related to conflict-free minerals. Suppliers have to undertake to abide by the corporate social responsibility regulations in the Letter of Compliance before signing contracts with the Company

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Supplier Sustainability Assessment

In terms of supplier selection, when suppliers that directly produce materials are introduced into Nanya's supply chain, they have to receive rigorous evaluations and reviews in addition to related third-party verification of ISO 9001 and ISO 14001. We use digital supplier assessment and management system to conduct reviews on six major indicators, including "quality, delivery, services, costs, technology, and sustainable operations". The score for sustainable management indicators accounts for 10% to ensure compliance with the Company's requirements for a sustainable supply chain.

  • Note1: The top five important indicators for supplier assessment are "quality, delivery, services, technology, and sustainable operations"
  • Note2: Sustainable operations - Green environment evaluation items include the ISO 14001 certification, energy and resource conservation, reduction in greenhouse gas emissions, and waste recycling rate.
  • Note3: Sustainable operations - Corporate social responsibility evaluation items include compliance with local labor laws and regulations.
  • Quality

    Stable yield
    Decrease in variates

  • Delivery

    On-time delivery
    Multiple backup sources

  • Services

    Quick response
    Pro-activeness

  • Costs

    Reduction in waste
    Increase in benefits

  • Technology

    Front-end development
    Risk forecasts

  • Sustainable operations

    Green environment
    Social responsibility

Sustainability Risk Surveys and Assessment

To ensure the supply chain's implementation of sustainability, Nanya distributes Technology Corporation Supply Chain Code of Conduct Questionnaire to major suppliers each year. All major suppliers have to conduct self-assessment, fill in the questionnaire, and hand it back. Suppliers are required to reply the implementation status of various sustainability issues on the questionnaire and provide certification documents issued by related management systems. The results of the suppliers' self-assessment questionnaires shall be adopted as the basis of sustainability risk management and as reference for Nanya's assistance to achieve supply chain sustainability. The content of questionnaire mainly focuses on potential impacts that suppliers might make on the three aspects of economic, social, and environmental. We analyze the results of the suppliers' self-assessment questionnaires, screen 5% of high-risk suppliers for onsite audits, and provide assistance for improvements.

  • Environmental Aspect

    Companies fail to formulate identification procedures for environmental protection laws and regulations, obtain permits to discharge pollutants related to their operational activities, and establish procedures for identifying impacts/risks caused by climate change.

  • Social Aspect

    Companies do not set bans on forced labor and abide by regulations on work hours and wages. They are punished for violating labor or ethical regulations, failing to establish whistle-blowing systems and identity protection. They do not set bans on discrimination, provide the right to form associations freely, and formulate procedures for covering suppliers under the ethical elements of BRA Code of Conduct.

  • Economic Aspect

    Companies fail to establish conflict-free minerals policies.

Supplier Sustainability Audit

Each year Nanya screening high-risk suppliers for audits based on the results of the self-assessed Nanya Supply Chain Code of Conduct Questionnaire. In addition, to strengthen sustainability risk management of supply chains, we conducting onsite audits for key suppliers at least once every three years is phased in. In 2020, we audited 26 key suppliers (including high-risk suppliers). We plan to have 100% of key suppliers receive audits on sustainability risk by third-party institutions entrusted by Nanya starting in 2021, estimating that 30 key suppliers (including high-risk suppliers) would complete the audits in 2021. Thus, we are able to ensure the supply chain's implementation of sustainability.

The audit coverage rate of high-risk suppliers was 100% in 2020. We audited 20 high-risk suppliers (including 16 high-risk major suppliers and 4 high-risk second-tier key suppliers) on their sustainability performance. The audit results showed that high-risk suppliers had 64 non-compliance items, but high-risk second-tier suppliers had zero. In regard to non-compliance items, the Company issued Corrective Action Requests (CAR) for follow-up and improvement.

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