Sustainable Supply Chain
Sustainable Supply Chain
Supply Chain Management
● Strategy: Focus on supplier sustainability and risk management by setting key targets and implementing action plans to advance value chain sustainability.
● 2030 Goals:
◆ Implement ESG risk assessment and management, obtaining valid carbon data from > 70% of key suppliers
◆ Supply chain sources are diversified, with no single supplier exceeding 50% of total supply
◆ Local procurement >75%
◆ Local procurement volume surpassed industry average
◆ Organize Sustainable Ecosystem Summit and supplier EHS training, and expand of overseas supply chain audits
◆ Strengthen green talent development across the supply chain and establish a collaborative smart talent pool
◆ 100% completion of on-site supplier audits
Responsible Supply Chain: Co-creation of Sustainable Value
Suppliers are vital partners in CLC's operational growth and competitiveness. Through responsible supply chain management, the company not only effectively mitigates operational risks, stabilizes product quality, and enhances customer service but also creates added value to solidify the foundation for long-term collaboration. CLC has systematically assessed the current state of its supply chain. Guided by a comprehensive management policy and evaluation mechanisms, we focus on 4 resilience-driven actions: “Low-carbon, Digitalization, Incentives, and Empowerment.” We are committed to engaging and assisting 300 key suppliers in their transition and upgrading, strengthening the sustainability resilience of local vendors while helping them unlock international orders and green financing opportunities.
CLC inaugurated the paper industry's 1st Sustainable Supply Chain Conference in 2020. Since then, we have continuously deepened industry dialogue to enhance the overall competitiveness of our supply chain. In 2025, the event was upgraded to the “Global Sustainable Ecosystem Summit,” incorporating suppliers from Vietnam and Mainland China. Concurrently, CLC united 20 partners to establish the paper industry's 1st Carbon Neutral Alliance. This initiative completed Taiwan's 1st industrial paper carbon footprint inventory and established an industry-wide carbon database. Furthermore, CLC pioneered the “Supply Chain Climate Survey,” targeting critical suppliers to collect greenhouse gas and carbon footprint data, thereby expanding our Scope 3 inventory boundaries and fortifying our overall low-carbon management capabilities. In addition, we launched the “CLC iPAS Industrial Control Cybersecurity and Smart Manufacturing Supply Chain Program” to upgrade digital capabilities and risk management resilience, laying an intelligent foundation for a sustainable supply chain.
CLC received an A rating in the 2025 CDP Supplier Engagement Assessment (SEA), ranking among the TOP 6.22% of companies globally (one of only 1,394 companies).
Procurement Policy and Supplier Risk Management
Complying with regulations, CLC adheres to fair and transparent trading principles to actively develop premium suppliers, contractors, and secondary sources. Through its online procurement platform, CLC connects global partners to build a stable, efficient supply chain. The company evaluates suppliers and implements a tiered management system to ensure quality, delivery, price, and service, immediately triggers reassessments during major changes to mitigate risk. Furthermore, all current active suppliers must sign the Supplier Code of Conduct and Integrity Provisions , covering occupational health and safety, labor rights, environmental protection, carbon reduction, energy management, and restricted substances to strengthen supply chain compliance and sustainability.
In 2025, CLC maintained partnerships with 221 major suppliers with annual transactions exceeding NTD 10 million in Taiwan area, covering raw materials, processes, energy, chemicals, and equipment engineering.
*Note: More details about “2025 CLC Global Sustainable Ecosystem Summit”, please refer to the practice- Net Zero Supply Chain in 2025 Sustainability report, and official website.
CLC Supply Chain Assessment Mechanism
Supplier Development and Assessment
CLC implemented the Supplier Evaluation Procedures to ensure timely raw material supply and maintain supply chain competitiveness. In 2025, 100% of new suppliers completed environmental and social responsibility assessments, fulfilling sustainable procurement requirements.
CLC conducts annual supplier evaluations under ISO procurement procedures. Cross-department teams assess suppliers and classify results into 4 grades: Excellent, A, B, and C. Management strategies are implemented according to these results.
100% Key On-site Supplier Audit Target: 100% by 2030
Since 2020, to strengthen supply chain engagement and management—ensuring stable quality and supply capacity—CLC has built upon its regular supplier evaluations by pioneering an “on-site audit” system. This system targets “Key Suppliers” whose operations are highly linked to the company’s product responsibility and manufacturing processes, with a target to achieve 100% coverage by 2030.
As of 2025, CLC completed on-site audits for 271 suppliers, achieving 87% of the 2030 target, with 20 new suppliers evaluated in 2025. The audit result shows that 15 suppliers were rated Excellent and 5 rated A; no suppliers were rated B or C, reflecting overall stable performance. CLC conducts annual on-site audits, rollingly refines assessment criteria, and assigns staff or experts to support lower-rated suppliers in improving sustainability management.
To ensure supply chain stability and deepen local integration, CLC prioritizes Taiwanese suppliers and has set a goal for local procurement to exceed 75% of total expenditure by 2030. In response to operational requirements, CLC conducts an annual rolling review of its local procurement strategy. In 2025 local suppliers accounted for 86.4% (+0.7% YoY); local procurement value was 71.7% (+3.7 percentage points YoY). However, due to increased overseas purchases of high-end equipment under the upgrade and transformation strategy, the 73% annual target was not met. Moving forward, CLC will continuously strengthen local supply chain resilience to steadily pursue its procurement targets.
Supply Chain Engagement: CLC Empowers Carbon Management
Enhancing Carbon Data to Steadily Reduce Scope 3 Emissions
Building on previous survey insights, CLC advanced the“Supply Chain Carbon Management Empowerment Program”in 2025. Integrating onsite assessment results with the Tayuan Mill's “Industrial Upgrade and Innovation Platform Counseling Program” (backed by IDA, MOEA), we re-identified 36 key Tier-1 suppliers across international (wood pulp, fuel) and domestic (recovered paper, chemicals, equipment) categories. To ensure precision counseling, CLC delivers systematic transition resources targeting supplierscommitted to biennial organizational GHG inventoriesandthose needing climate score improvements, helping partners establish a solid carbon management foundation.
CLC Supply Chain Human Rights Management and Due Diligence
CLC integrates human rights into its sustainable governance and risk framework. Aligning with UN and ILO conventions, we embed our "Human Rights Policy" into the “Supplier Code of Conduct and Integrity Provisions” and supply chain guidelines, strictly requiring partners to comply with labor conditions, child labor prohibitions, and occupational health and safety standards. To ensure execution, CLC utilizes a robust management mechanism covering supplier development, assessment, counseling, and onsite audits. Additionally, during the October 2025 “Global Sustainable Ecosystem Summit,” CLC’s Legal Affairs Department conducted human rights and integrity training for nearly 500 value chain partners, fortifying value-chain resilience.
To deepen Human Rights Due Diligence (HRDD), we have established a 5-step investigation process aligned with the EU Corporate Sustainability Due Diligence Directive (CSDDD) and the Ministry of Economic Affairs' HRDD Operational Manual. For the detailed process, please refer to Ch5.1 CLC Human Right's Risk Management and HRDD in 2025 sustainability report (p.111).
At the end of 2025, CLC surveyed suppliers with annual transactions exceeding NTD 10 million across Taiwan, Mainland China, and Vietnam. The survey assessed 7 core issues: “Labor Condition Safeguards, Workplace Respect and Equality, Forced Labor and Prohibition of Child Labor, Supplier and Subcontractor Management, Occupational Health and Safety, Personal Data Protection and Cybersecurity Control, and Communication Channels and Freedom of Association.” Utilizing a 5-point Likert scale to evaluate the likelihood and impact of each issue, we mapped out the “Supplier Human Rights Risk Matrix” to prioritize human rights management.
Low-risk Assessment Results and Continuous Mitigation Management
Results show that critical suppliers' risk levels across all issues fall within the "Low Risk" category, demonstrating steady human rights management. CLC adopts a "preventive management" strategy, prioritizing relatively higher-ranked issues—Labor Condition Safeguards, Occupational Health and Safety, and Personal Data Protection and Cybersecurity Control—into annual on-site audits for dynamic tracking and guidance. To build a sustainable ecosystem, CLC aims for “100% on-site audits of key suppliers” by 2030, applying differentiated management based on ratings.
Moving forward, we will promote routine human rights training to enhance supplier resilience, and establish remediation and communication channels to effectively mitigate impacts, fulfilling our long-term commitment to human rights governance.
Enhancing Supply Chain Sustainability through Supplier Training
In 2025, CLC held 8 training sessions for 137 suppliers, strengthening their low-carbon transition and environmental management capabilities. To drive mutual industry chain learning, following a 2024 exchange with Da Fon Environmental Technology, CLC invited its Vice General Manager, Mr. Chang-Hsin Juan, to speak at the 2025 “CLC Global Sustainable Ecosystem Summit” on “AI Sorting Technology and Low-carbon Circular Applications.” This bidirectional exchange—evolving from experience sharing to technological feedback—co-creates a paradigm for supply chain transformation, bolstering value-chain resilience.
