CHENG LOONG

Promoting Green Procurement, the Amount of Green Procurement and Reached NT$9.17B

To support national policies, connect with international trends, and practice SDGs12: "Promote the green economy, ensure sustainable consumption and production patterns", we actively implement green procurement according to the CLC's green procurement related SOPs to actively prioritize the purchase of raw materials, plant facilities, and office supplies certified by the Green Mark, Energy Label, and FSC^TM to reduce environmental impact.

In 2022, due to the bad economic condition and the breakdown of the Automated Storage and Retrieval System (ASRS), causing the production, we used 1.572 million MT of recovered paper, with the utilization rate up to 92.5% (in terms of industrial paper was up to 97.6%), which both reached the target. FSC^TM annual procurement ratio reached 92.6% but didn't reach the 98% target, due to the impact of the strike, conflagration and Russia-Ukraine War, causing the reduction of the supply. To actively connect to SDGs 15 and show the ambition of pursuing biodiversity, we have set the target FSC^TM pulp ratio at 100% in 2030.

To achieve the circulation and waste reduction, CLC set the target ratio of green procurement at 50% in 2030 and continuously to increase the amount of green procurement and reached NT$9.17B in 2022 (47.1% of total procurement, +6% YoY). We maintained leading green procurement performance among local cooperation and 10 factories were awarded Excellence in Green Procurement by the EPA and outstanding green procurement certification by local governments (Hsinchu mill).

Responsible Sustainability Procurement Policy

❙  No Conflict Minerals

To avoid using conflict minerals acquired from illegal means is what the CLC does to realize the ESG in human rights protection and environment protection for a sustainable supply chain. We hereby guarantee that all CLC industrial paper and corrugated boxes do not use conflict minerals including tin, tantalum, tungsten, and gold from the Congo Republic and nearby countries and regions in the production process. Additionally, CLC let the suppliers understand the serious social and environmental issues such as human rights violations, armed conflicts, and international disputes caused by the mining and trade of metal minerals, and the duty they need to fulfill in the supply chain. We commit to non-conflict procurement, and continue to pay attention to the mineral management requirements of international organizations, and communicate with the supply chain in real time.

❙  Substance Restriction

To ensure sustainable procurement of the supply chain and conformity to the international restrictions on hazardous substances of products, besides establishing the Hazardous Substances Inspection Instructions, we began to implement the full material disclosure (FMD) in 2021 to periodically request suppliers to provide the inspection reports and declarations of hazardous substances and strictly request business units to comply with the substance restrictions for materials, finished products, and new materials.

Fostering the upgrading and transformation of recovered paper supply chain, checking the source of recycled materials from the source, and optimizing the recycling effect in one continuous line

❙  Prospecting the Social Source Classification Problem, Implementing Corporate Recycling Capacity to Expand the Positive Influence

CLC recycled domestic recovered paper with the largest scale in Taiwan, we put the circular economy as an important corporate development target. However, recovered paper in Taiwan usually mixes with 10-13% of household waste (e.g. plastics, hemp ropes, and waste food paper containers) to deal with people not implementing the correct recycling classification. It influenced the recycling effects and increased the energy consumption problem. Since 2018, CLC has guided 167 recycling companies, we enhance the local recovered paper quality in line with the international standard and the competitiveness of supply chain from the sound source recycling system. In addition, the amount of waste food paper container suppliers which increase to a total of 51 form the local purchase and recovery supply chain ecosystem.
 

❙  Upgrading and Transformation of Recovered Paper Supply Chain Plan: Reducing Paper Sludge by 50%, Decreasing the Energy Consumption by 10%

Since 2018, CLC has targeted to support over 2 supplies to upgrade to reduce impurities and waste from the source, and made the revision of procurement guidance for recovered paper, introduced the first "Recycled Paper Moisture Analyzer" in Taiwan and e-platform assistant. We planned three stages of "counseling period", "observation period" and "replacement period" for 167 recovered paper suppliers in Taiwan to implement source identification.

In 2022, we successfully guided 10 focused recovered paper suppliers to implement transformation to reduce paper sludge by 50% with innovative process technology. Meanwhile, it improved the recycling efficiency, and the energy saving during the process reached 10%. More importantly, it enhanced the profit and competitiveness of recovered paper suppliers.