● Strategy: Enforce sustainable supply chain management and ensure competitive material sources and service quality.
● Goals of 2030: Disperse supply chain sources, and the proportion of single suppliers does not exceed 50% / Local procurement ratio up to 75%.
Building Sustainable Ecosystem, Pursuing Common Good of Industry
Suppliers are the important partners to CLC's growth and burgeoning. Through management approaches, the evaluation mechanism, and guidance, we guide the up- and down-stream industrial chain to make continual improvement. Through the CLC e-procurement platform, we establish a stable supply chain ecosystem and team up with Taiwanese and global suppliers to create job opportunities and promote economic growth. To ensure the supply chain's ESG capability, we also hold supplier conference to facilitate conversation.
We organized ESG Conference for three consecutive years and shared the trend and development of ESG online. Focusing on climate adaption and sustainable strategies, we promise to build up the sustainable ecosystem through circulation economy, employee development, and social inclusion.
Leading the Whole Industry to Hold the ESG Supplier Conference ahead of the Competitors
Expanding Sustainability Competitiveness with Key Suppliers
Emphasizing Scale for Good! Driving common good with the industry's capacity. As a leading paper company, we actively guide supply chain partners to engage with ESG through the continual improvement of low-carbon products, application innovation, responsible production, employee development, and social inclusion. Additionally, through practical supply chain management, including establishing standard operating procedures (SOPs), evaluation mechanisms, and guidance, we aim at building a supply chain ecosystem for sustainable operations.
Taking a head start in the industry, we held the Supplier ESG Conference since 2020 to commend 32 suppliers with outstanding ESG performance (accumulated) and share industry trends, strategy of emission reduction and ESG regulations with them, and thereby build a sustainable ecosystem for co-existence and co-prosperity with over 300 key suppliers. We held the Supplier ESG Conference online to offline with the digital resource to let the industry sustainable transformation never stop due to the Covid-19. At the 3rd 2022 CLC Supplier ESG Conference, we focused on three sustainability issues: "climate change", "low-carbon products", and "information security". Apart from inviting suppliers to share their experience, we also planned the third-party "information security risk assessment service" to help suppliers quickly understand the information security risks, hoping to achieve information security joint defense in the supply chain.
Establishing Taiwan's First Carbon Neutrality Alliance in Industry, in Collaboration with Supply Chain Partners to Implement the Carbon Reduction
To support IDB's "getting seniors to help juniors" policy, CLC established Taiwan's first Carbon Neutrality Alliance in industry in 2022. We will lead the whole industry and exert the leading influence, in collaboration with upstream and downstream industry partners to implement the carbon reduction transformation together.
Procurement Policy and Risk Management
We uphold a rigid, fair, and open transaction principle; abide by the laws and social norms; actively cultivate excellent suppliers, contractors, and alternative sources; conduct investigations and evaluations according to the related evaluation regulations, and establish the supplier graded management system to ensure the quality, delivery time, price, and after-sales service of supply sources. However, investigation will be conducted when suppliers have made significant changes. All CLC suppliers are requested to sign and constantly publicize the "Integrity and Non-Disclosure Agreement". To follow the global trend and industry development, CLC renamed the agreement to "Supplier Code of Conduct" in 2021, reinforcing the health & safety, recruitment conditions, environment and energy conservation, energy efficiency, banned substances to enhance supply risk management into the agreement and asked all the major suppliers to sign it. Major suppliers signed the agreement and all new suppliers in 2022 are also required to sign the agreement.
In 2022, we maintained cooperation with 424 major suppliers (annual purchase amount over NT$10 million), with purchases mainly including raw materials, manufacturing, energy, chemicals, equipment, construction projects, and so on.
Supply Chain Management Policy
●Creation of a friendly workplace
●Enhancement of ESH management
●Emphasize sorting and recycling
●Grasp ecofriendly business opportunities
●Reduce impact on the environment
●Fulfill the responsibility as a citizen of the Earth
●Implement supply chain management
●Take more flexible procurement strategies
2. Exchange information on a regular basis, adapt to the global deployment of the Group, and share and understand the market development of important material sources.
3. Investigate all potential material sources transparently and openly and strive for stable sources of reasonably priced raw materials.
4. Perform joint procurement of important domestic and overseas raw materials for the Group to upgrade its competitiveness.
Building the Supplier Evaluation Mechanism
New Suppliers Development
CLC developed "Supplier evaluation regulations" to ensure the equipment, service and product quality, delivery time, flexibility and price could meet the procurement and price policy of company. 100% of new suppliers in 2022 completed the environment and social evaluation.
Since 2022, as the society keeps thinking highly of climate change and ESG sustainable development, CLC enhanced the suppliers evaluation sheet and added the "Climate Action" item. The evaluation expanded to 9 dimensions. We encouraged to develop the ESG sustainable strategies and goals to boost the sustainable energy.
Annual Suppliers Evaluation in 9 dimensions (including Climate Action)
To realize the sustainable supply chain ecosystem with partners together, we evaluate suppliers periodically according to the ISO procurement SOPs. Each year the procurement, technology, and requisition units will form a task force to comprehensively evaluate all suppliers having business with CLC to rate suppliers in four grades: Excellent, A, B, and C in terms of materials quality, service and coordination, environmental safety performance, delivery time cooperation, price, green supply, and ESG information disclosure. We also draw up management strategies for each grade to ensure the basic quality and supply capacity of suppliers.
The coverage rate of major supplier On-site Evaluation will reach 100% in 2030
In 2020, we began to perform "on-site evaluation" on suppliers of important materials highly connected to our products and processes ahead of the industry to optimize their risk management in the following four major aspects: R&D and process, environmental safety, procurement, and quality assurance, hoping to keep up with the industrial trends and meet our specifications. We also include 10% more suppliers for evaluation coverage ratio each year to achieve evaluation on all important suppliers by 2030.
In 2022, we completed on-site evaluation of 68 suppliers to a total of 156 suppliers (50%) over the past three years. Although physical evaluation was reduced on suppliers because of the pandemic, the 50% target by 2030 was achieved. The outcomes of the 2022 evaluation included 59 excellent suppliers, 9 grade A suppliers, and no grade B & C suppliers. To expand the sustainable capacity of the supply chain, we will continue to plan and implement on-site audit each year and keep optimizing the evaluation indicators with reference to the industry's status and actual supplier performance. We will also provide guidance for suppliers with lower grades to promote sustainable operations and management, and human rights and labor practical experience.
Start the Evaluation and Commendation of Outstanding Suppliers, Common Good with 32 Supply Chain Partners in Recent 2 Years
In 2021 we organized the 1st Outstanding Supplier Selection. After selecting suppliers with outstanding performance based on the annual evaluation, the list of outstanding suppliers of the year was determined through the preliminary, semi-final, and final evaluations. We selected the supply chain partners which performed well in "Responsible Production", "Energy Conservation and Carbon Reduction", "Green Procurement", "Employee Caring" indicators. 32 Winners were commended at the annual supplier ESG conference in recent 2 years (2021-2022). In the future, we will constantly adjust the evaluation mechanism through rolling reviews to encourage the supply chain partners to aim at a better future.
To promote green procurement and reach the HSE consensus in supply chain partners, we actively arrange related education and training for suppliers. In 2022, we organized 8 sessions with the participation of 125 suppliers.
Support for Local Procurement (Local Supplier Ratio was 83.3%)
To pursue the stability and localization of the supply chain, we prioritize the use of Taiwan local suppliers and set the ratio of local procurement at 75% as mid- and long-term goal. Besides shortening the delivery time and reducing transportation risk, we can also benefit local enterprises and thrive domestic economic development. We take rolling adjustment for managing the local suppliers and the amount of procurement. The local supplier ratio was 83.3% and the amount of procurement decreased by 2.7% vs LY. , for upgrading the equipment, and suppliers of advanced overseas eco-friendly equipment joined. However, impacted by COVID-19 and shortage of sea shipping container, the price of raw materials rose dramatically, driving the amount of overseas procurement increased significantly recent 2 years. As a result, CLC take rolling adjustment for the goals, the local procurement ratio was 66.4% and increased by 4.9% vs LY to reach the ratio of local procurement at 75% in 2030.