Supplier Management

In addition to establishing a green corporate culture, creating a green-friendly workplace, and making efforts to reduce negative impacts on the environment in its own operations, Yuanta Financial Holding Company (FHC) also recognizes that as one of the corporate consumer groups, the issue of corporate sustainability has expanded from the Company itself to the supply chain. Companies should play an influential role in encouraging and practicing green consumption from the procurement side, helping to increase the market share of green products, and working together with suppliers to implement sustainable practices and make a contribution to environmental sustainability.

The Company has established the “Sustainable Procurement Declaration,” “Integrity Management Guidelines,” “Procedures for Integrity Management and Guidelines for Conduct,” “Yuanta Group Supplier Sustainable Procurement Guidance,” and “Guidelines of Supplier Management,” and continues to regulate suppliers with the “Integrity Commitment Statement” and “Supplier’s Terms and Conditions for Sustainable Procurement” in supplier contracts. Furthermore, each subsidiary has “Green Procurement Terms and Conditions” in its procurement regulations.

The Company continues to work on sustainability issues from our entrepreneurial nature and actively exert our influence to cooperate with suppliers, including requiring suppliers to sign Integrity Commitment Statement and Supplier’s Terms and Conditions for Sustainable Procurement, holding annual supplier conferences for sustainability-related education and training, and conducting annual supplier evaluations and human rights due diligence surveys, etc. The Yuanta Group has obtained the “ISO 20400 Sustainable Procurement Guidance” certification in 2020 to optimize the sustainable procurement process.

By strengthening the management of suppliers’ environmental and human rights issues, Yuanta Group’s philosophy of emphasizing corporate social responsibility (CSR) is implemented in the supply chain management, so as to reduce the risks posed by suppliers to the Company itself and to achieve the purpose of constructing the Yuanta Group's green supply chain in a concrete and effective manner.

Sustainable Procurement Declaration

Supplier Selection Process of the Group

In addition to pursuing our own sustainable management, we also hope to work together with our suppliers to fulfill our CSR and abide by the principle of integrity management. Starting from June 2013, suppliers who wish to enter into contracts are required to understand our integrity management principles, CSR strategies and practices in accordance with the Company’s “Procedures for Integrity Management and Guidelines for Conduct” (hereinafter, “Conduct Guidelines”), and are required to comply with the relevant integrity management terms and conditions and the regulations of the Conduct Guidelines.


Develop supplier selection criteria	Assess supplier	Follow-up supervision
Supplier scale Professional qualities and experience Passed ISO or other QA certification	Refer to past performance in the industry Pass internal proof-of-concept Has the supplier had a positive working relationship with the company	Proof of outstanding capabilities or services Offer recommendations or request documents as necessary to clarify outsourcing requirements or specifications

To ensure product and service quality and effectively control operating costs, Yuanta requires its suppliers adhere to the Group’s integrity management policies Integrity Management Guidelines Procedures for Integrity Management and Guidelines for Conduct

Sustainable Procurement Guidance

In order to establish a better sustainable procurement process, Yuanta FHC and its subsidiaries are actively implementing the “ISO 20400 Sustainable Procurement Guidance” to establish a better and more effective sustainable procurement process through systematic management, and have obtained the “ISO 20400 Sustainable Procurement Guidance" certification in 2020. Led by Yuanta FHC, we look forward to the further implementation of the concept of sustainability in the procurement process of all our subsidiaries.

Since November 2015, the Yuanta Group has required its major suppliers (including new suppliers) to sign the “Supplier’s Terms and Conditions for Sustainable Procurement” as set out in their procurement contracts, clearly laying out the working conditions, occupational health and safety, environmental protection, and labor rights protections expected of suppliers under the law. In the contracts, terms are laid out for the contract to be terminated in the event of a violation by the supplier, serving as a demonstration of the Yuanta Group’s determination to pursue CSR among its suppliers.

Yuanta Group Supplier Sustainable Procurement Guidance

Supplier Management

(1) Supplier Assessment

The supplier assessment not only examines the major suppliers’ compliance with the regulations on integrity management, confidentiality, personal data protection, and CSR, but also includes five major items: price, quality, service, reputation, and sustainable development, with the sustainable development assessment based on the seven core themes and 37 sustainable issues of the ISO 20400 Sustainable Procurement Guidance. Supplier assessment criteria are scored out of 100 points. If the assessment result is less than 60 points, the Company will communicate with the supplier, and if there is no improvement after the communication, the procurement contract with the supplier will be terminated.

Supplier Risk Assessment

Sustainability Standards	Risk Assessment	Communication and Improvement
Supplier Integrity Commitment Statement Supplier Sustainable Procurement Guidance Guidelines of Supplier Management	Guidelines of Supplier Management Supplier Assessment Supplier Human Rights Due Diligence	Assessment results tracking counseling and improvement Supplier education and training Supplier conference

(2) Supplier Human Rights Management

In order to improve the implementation of human rights system by suppliers, the Company conducts annual supplier human rights due diligence and defines human rights high-risk suppliers as those that have had violations of laws, labor disputes, and labor health and safety incidents in the past three years (2017 to present). Procurement personnel will conduct on-site visits and communication with high-risk suppliers to understand their management practices on labor and health and safety issues and improvement situation in the face of incidents, in order to reduce the risk of suppliers’ human rights and to enhance the suppliers’ attention to human rights issues. If there is no improvement after communication, we will exclude the supplier from the procurement contract.

Supplier Human Rights Risk Assessment Management Table

(3) Supplier Education and Training

The Company is committed to promoting sustainable corporate development, and in addition to fulfilling our own CSR, we also ask our supplier partners to do the same. Along with the annual awareness-raising and training on human rights and environmental issues at the bargaining meetings for procurement cases over NT$1 million, the Company has continued to hold annual “supplier conference” from 2019 onwards. Through continuous and deepening communication, we are working with our supplier partners to fulfill the commitment and vision of sustainability issues, and build a bridge between communication and the practice of sustainable management. Three supplier conferences were held in 2020, with 118 major suppliers participating.

綠色採購绿色采购 Green Procurement

Through green procurement and supplier management, the Yuanta Group supports companies with low-carbon, sustainable commodities and expands the impact of sustainable practices, while reducing procurement risks to effectively control and reduce operating costs.

To implement green procurement, the Yuanta Group prioritizes purchasing of products and consumables certified as environmentally friendly, energy efficient, or fuel efficient by the government. Office renovation projects are conducted primarily with green building materials.

In staff training, the Yuanta Group continues to promote green procurement and related concepts among our employees and the procurement departments of our subsidiaries, explaining green procurement and how to prioritize legally compliant green products, and listing out government-approved green products, including those that have received Green Mark approval from the Environmental Protection Administration (EPA) of the Executive Yuan, R.O.C. (Taiwan); those that are in line with our requirements for use of renewable materials, low pollution, recyclability, and resource efficiency; and other products with the same or similar functionality than others, but with greater potential to benefit society or reduce social costs. In addition, we also implement training programs for procurement staff and share with them relevant information. In this way, we are able to maximize the benefits of green procurement decisions with regard to our products/services.

Furthermore, in our procurement and business coordination, we continue to encourage the use of environmentally labeled materials among our suppliers and promote concepts of environmental sustainability and green consumptions, getting them to work together with us on these and help create a larger market for green consumption.

In recent years, the Company has participated in the Taipei City Government’s Green Procurement for Private Enterprises and Groups project. By actively promoting green procurement, we have seen year-on-year increases in the totals of our green procurement. We were recognized by the Taipei City Government as an excellent green procurement benchmark enterprise for ten consecutive years (2011- 2020) and by the EPA of Taiwan’s Executive Yuan for our outstanding performance in green procurement for nine consecutive years (2012-2020). In the future, Yuanta FHC will continue building on these efforts, educating our workforce about the environment, and further doing our part to work toward a greener world.

Yuanta Group Green Procurement Amount

Year	2018	2019	2020	2020 Category	Amount (NT$1000)	Percentage (%)
Green Procurement Amount (NT$1000)	66,820	12,556	83,849	Energy Saving Certified	38,890.98	46%
				Environmental Protection Certified	37,597.03	45%
				Category 3 Products	-	-
				Other Certifications	7,361.04	9%