Supplier Management

While the Company focuses on the growth of the Group’s business, we also strictly implement procurement risk control and responsible procurement. We have invited suppliers to join sustainable action to create a resilient and sustainable future by promoting sustainable supply chain management. This year, 100% of suppliers with contractual relationships met our sustainability standards. In addition, we continue to screen and evaluate new and existing suppliers according to the “Key Points for Procurement Operations” and ESG (environmental, social, and governance) three dimensions that was established internally. At the same time, we consider the conditions of bribery-related Judicial Yuan record, the size, professionalism and experience of the suppliers, and acquisition of international standards, etc., and also conduct terrorism financing checks on major suppliers of procurement amount of NT$25 million or more. Only those who pass the checks become qualified suppliers of the Company.

Sustainable Procurement Declaration

Supplier Selection Process of the Group

Suppliers who sign contracts with us, in accordance with the company’s “Procedures for Integrity Management and Guidelines for Conduct”(hereinafter referred to as “Conduct Guidelines”), are required to comply with the terms and conditions of the “Integrity Management Guidelines” and “Conduct Guidelines”. In addition, to facilitate the evaluation of procurement contracts with suppliers, the Company conducts supplier management checks when suppliers provide their quotation.

Sustainable Supply Chain

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

Supplier Feedback and Complaints

The Company has established a comprehensive supplier feedback and complaints process to provide affected stakeholders with avenues for redress and to assist the Company in continuing to improve sustainable procurement practices. The cases will be handled with a high degree of confidentiality; the privacy of the parties involved will be protected; and, impartiality and fairness will be maintained during the investigation of the case.

Types of cases received by the Feedback and Complaints Channels: cases related to integrity management, labor rights, environmental protection, procurement processes, and procurement transactions.
Feedback and Complaints Channels: Stakeholder communication channels are available (link below)
https://www.yuanta.com/EN/ESG/Stakeholder-Engagement/Contacts
The Company will encourage stakeholders to use these channels to provide feedback or concerns by engagement.

Supplier Sustainable Procurement Guidance

In order to establish a better “sustainable procurement process”, the Group's subsidiaries continued to introduce the ISO 20400 Sustainable Procurement Guidance in 2022 and obtained the certification. Through systematic management of the sustainable procurement process, we have implemented the concept of sustainability in the procurement process of all subsidiaries. In terms of management system, the Group has required subsidiaries to incorporate the "Supplier’s Terms and Conditions for Sustainable Procurement "and "Integrity Management Terms and Conditions” into the procurement contract with major suppliers. The terms and conditions specify that suppliers are to fulfill and comply with various laws and regulations of labor conditions, occupational safety and health, environmental protection, and labor human rights, etc. The contract also contains a clause which stipulates the contract may be terminated or canceled if suppliers violate the relevant laws and regulations.

Yuanta Group Supplier Sustainable Procurement Guidance

Supplier Management

(1)Supplier Annual Self-Assessment

The Company implements sustainable supplier management by continuing to optimize the supplier self-assessment mechanism and questionnaires. The self-assessment targets all suppliers, and the assessment is divided into six major categories: human rights, labor practices, consumers (including personal data and privacy protection), integrity management, environment, and health and safety. Using information collected through the self-assessment questionnaires, we analyze the current risk level of suppliers, including supplier sustainability awareness and the presence of major deficiencies or violations, and classify them into three levels: high, medium, and low risks, so that we can effectively monitor the deficiencies of suppliers with respect to specific indicators to make sure the risk is under control.

In order to enhance suppliers’ sustainability awareness and self-awareness, the Company advocates the supplier self-assessment mechanism through three supplier conferences held in each year, individual communications, training, and promotions. Furthermore, to increase the response rate and the suppliers’ awareness of sustainability, we will communicate and follow up on the individual suppliers that do not turn in the self-assessment form. The Company posted a self-assessment questionnaire response rate of 100% this year, an increase of 9.33% compared with 2022, achieving this year’s target.
Supplier Human Rights Due Diligence Investigation Table

(2) Supplier Evaluation

The Company hopes to encourage and guide our suppliers to continuously enhance product and service quality through implementing the self-assessment mechanism, as well as developing sustainable actions. In accordance with the “Guidelines of Supplier Management”, the Procurement Department conducts an annual evaluation of major suppliers. “Sustainable Development” is one of the assessment items. It is based on the seven core themes of ISO 20400 Sustainable Procurement Guidance and other relevant international standards. Based on the assessment results, major suppliers are classified into A, B, and C three grade levels (Note). Grade A suppliers are commended publicly at supplier conferences and selected over their competitors if they offer similar conditions during price comparison, negotiation, or supplier selection processes. Grade C suppliers will receive enhanced coaching and will be re-evaluated the next year for tracking purposes. The Company may refuse to do business with suppliers rated as Grade C for three consecutive years.
Note: A-Excellent; B-Qualified; C-Engaging and coaching.

Supplier Risk Control Procedures

(3) Supplier Education and Training

We are committed to promoting sustainable corporate development. In addition to our own efforts, we also ask our supplier partners to fulfill corporate social responsibility and join the ranks of sustainable actions. This year, we held three supplier conferences. A total of 72 major suppliers participated. Through this event, we share the concepts and practices of supply chain management and sustainable procurement, explain how to make the most of corporate social influence, and actively embrace a new future of sustainability. We give recognition to Grade A suppliers with excellent sustainable performance; each year, the theme is changed to facilitate suppliers to get on board with the new trends in sustainability and the invitations are adjusted according to different themes and major suppliers. This year, the theme of the Supplier Conference was “Net-Zero Emissions and Global Carbon Reduction Trends”, which gather suppliers and partners to jointly implement carbon reduction actions, seeking solutions to climate change, and continue to deepen sustainable influence.

綠色採購绿色采购 Procurement

The suppliers can be separated into eight categories: information (software and hardware), building construction and renovation, office equipment, consulting (labor), stationery and printing, media and advertising, gifts, and miscellaneous. The bulk of procurement spending is for products in the information category. To lessen environmental impact and promote green procurement to drive a green production chain, the Group has formulated “Green Procurement Terms and Conditions” in accordance with the procurement regulations, giving priority to products with eco-friendly, energy-saving, Energy Star, water-conservation, green-building materials, FSC sustainable forestry, and carbon-reduction labels. Through green procurement and supplier management, we exert a green influence and give priority to local suppliers in our purchases, with 97.00% of purchases made from local suppliers in Taiwan this year. We support local companies that provide low-carbon and sustainable goods or services, while reducing procurement risks.

The amount of green procurement in 2023 is NT$273,170,000, accounting for 4.76% of the total procurement amount. For the sake of the large purchase of green electricity and the replacement of information hardware equipment for green label products this year, the green procurement amount increased by 28.66% compared with 2022. In addition, the Company continued to participate in the “Green Procurement Program for Private Enterprises and Organizations” promoted by the Taipei City Government, and actively responded to green procurement activities. The Company has been awarded by the Taipei City Government in recognition of its “outstanding performance in green procurement” for thirteen consecutive years (2011-2023) and has been awarded by Taiwan’s Ministry of Environment of the Executive Yuan in recognition of our outstanding performance in implementing green procurement for twelve consecutive years (2012-2023).

Promoting Sustainable Procurement Internally

This year, four quarterly procurement meetings were held to share the key points of improvement for procurement-related audits of the Group and promote the integration of ESG and supplier management practices. Procurement personnel training is also organized during the quarterly procurement meetings in order to advocate sustainable procurement. A total of 84 persons were trained with the cumulative number of training hours reaching 126 and 100% training completion rate. Various sustainable procurement tasks have been implemented, including amending the procurement operating guidelines, adopting and advocating consistent and green procurement reporting boundaries by the Group, initiating sustainable procurement consultancy, optimizing the Group’s supplier database, and organizing supplier engagements. Through these actions, we continue to carry out supplier management and review procedures, strengthen management effectiveness, and integrate the ESG aspects with supplier management in practice. Moreover, we held eight "Procurement Seminars" for the Procurement Department this year, which not only enhanced the ability for joint negotiation, but also strengthened the awareness of green purchasing and promoted related auditing and improvement issues to put into practice the Group’s green purchasing spirit.

Group Green Procurement Amount

Year	2021	2022	2023
Amount (NT$1000)	68,446	212,316	273,170