Sustainability

Supplier Management

 

We value our relationship with suppliers for offering quality products and services to consumers. Chunghwa Telecom’s suppliers can be divided into three categories: property, labor and engineering. We make enormous purchases from an extensive number of suppliers, from networking equipment, data equipment, cables, marketing design, to waste disposal services.

This means that we possess great influence to convince suppliers into supporting our social responsibilities. Chunghwa Telecom utilizes four approaches, namely: contractual terms, questionnaire surveys, Supplier CSR Interchange Meeting, and on-site audits, to raise suppliers’ awareness and understanding towards CSR, as well as the commitments we have made in supply chain management. For suppliers that have just begun to familiarize with the CSR concept, we choose to encourage their participation while at the same time provide them with the proper education and assistance; over time, we hope to engage all suppliers in a win-win relationship.

“Code of Corporate Social Responsibility for Suppliers of Chunghwa Telecom Co., Ltd.” clearly outlines the Company’s expectations in terms of “ business, ethics, labor, environment, safety and health.”

The guidelines apply to all suppliers that provide products or services to Chunghwa Telecom or its subsidiaries or joint ventures, and extends to other participants of the supply chain that the supplier is directly or indirectly related to. We hope that suppliers may commit to our values and take more proactive steps toward maintaining a sustainable business relationship.

 

Creating Win-Win Cooperative Relationships

Over the years, we have continued to jointly growth with our suppliers. We provide incentives for them to work in research and development. Rights to our patented technologies are transferred fairly. In terms of hardware and software, we continue to support telecommunications facilities and testing environments. We provide expansion and open cooperative platforms to achieve profit sharing.

We provide financing through an open platform and assist suppliers to develop.

1. Digital Cloud Rainforest: By our comprehensive cloud service creation environment, a high- capacity cloud platform, we encourage software developers to participate with incentives to establish their results in the applications market. Hence, software developers can focus on the research and development of innovative services and enter market quickly.

2. The Firefly Project: Partnered with the Small and Medium Enterprise Credit Guarantee Fund of Taiwan to establish the “Chunghwa Telecom Firefly (counter guarantee) Project Credit Guarantee.” All first-rate corporations recommended by us can apply for credit guarantee. In the end of 2015, a total of 20 companies had been recommended, and the project was instrumental in obtaining NT$ 278 million.

 

Building Ability

We share resources with suppliers to enhance their R & D capabilities. To mastering future technologies, we also committed to the advance of a friendly environment.

1.  Develop intelligent tourism and travel services, and realize the digital rainforest collaborative network: We will continue to develop and deepen the functions of the HiNet Travel Cloud platform to provide a full-range of integrated travel services. The multilingual version (Simplified Chinese, English, and Traditional Chinese) will include convenient services such as restaurant reservations, trip planning, transportation tickets, accommodation bookings, travel coupons, travel information, promotions, souvenirs, and social sharing to help travel agents to provide quality service through complete service interface, so as to realize the ‘digital rainforfest’ network and promote the upgrade of the overall industry in Taiwan.

2. Provide independent verification and validation (IV&V) of products and services to ensure the security and performance of the IT system and services: The testing center of the Chunghwa Telecom Laboratories centralizes and builds testing manpower, platform and equipment, and establishes objective third-party and IV&V procedures. Apart from providing comprehensive IV&V services for major services, the center conducts tests on products from cloud partners, including the TDP (Cloud Modular Green Energy Data Center Development Project) and ACP Cloud Appliance in collaboration with Inventec, Wcloud of Wiwynn, and the Cloud OS (RC5 and SP2) of the Industrial Technology Research Institute.

3. Develop 4G wireless communication standards for LTE technology to promote domestic industrial development: We will continue to develop LTE technology and standards, analyze system performance through the experimental network, complete the LTE Physical cell id/Cell id planning and research, LTE ICIC/eICIC technology research, MIMO/Tx-Div parameter switch verification test, and TD/FDD test assessment to capture the functions and performance supported by the equipment of partners. Apart from the reference for LTE network planning and design of this company, the assessment outcomes and planning suggestions can help the domestic industry and academic/research units such as mobile service providers, III, ITRI, and NCTU to run the interlinking test to promote domestic industrial development, business interlinking, and technical exchange.

4. Assist TTIA with completing industry standards and demonstration plans for intelligent buses: having observed that formulation of vehicular platform standards is an important factor for the sustainable development of the vehicular platform industry and vehicular communication industry, Chunghwa Telecom joined the TTIA Intelligent Bus Computing Systems (IBCS) Task Force, formed by domestic upstream, midstream, and downstream vehicular equipment manufacturers, large passenger bus operators, and peripheral application contractors who were invited by the Ministry of Economic Affairs. 8 corporations worked together to formulate a complete standard regulation for industry products related to vehicular platform-related products. (TTIA, or Taiwan Telematics Industry Association’s URL: http://www.ttia-tw.org/en/)

5. Driving green energy industries with iEN services: iEN can provide solutions for the electrical, lighting, air conditioning, mercury heating and boiler, environmental monitoring, solar power, water flow, and water conservation sectors, as well as address demands for intelligent architecture, energy efficiency for mechanical rooms, etc. Responding to Chunghwa Telecom’s pledge to create digital rainforests, iEN is diligently utilizing the influence of industry supply chains and committed to green procurements, research cooperation, and technological promotion with equipment suppliers, integration contractors, and service contractors. We hope to create overall industry capabilities and advantageous brands through mutual resource augmentation and joint development of internationally competitive products.

 

Supplier CSR Status Survey and Audit

Engineering suppliers and suppliers with high sustainable risk would be the top priority for us to audit. In 2015 audits were conducted on 77 route-engineering suppliers, total 207 times, and 10 companies were conducted “third-party audit for suppliers”. Management and employees were interviewed to monitor production quality through onsite audits (announced and unannounced). From 2012, suppliers with procurement of NT$ 5 million or more must agree to abide by the “Chunghwa Telecom Supplier CSR Guidelines” and “Operating Guidelines for Promoting Supplier Implementation of CSR,” and implement supplier CSR surveys to facilitate our supervision of the sustainability risks of suppliers, 213 survey received in 2015. Our definition of high sustainability risk is as follows:

● Economic: Occurrence of business ethics violations due to supplier not having formulated a code of conduct

● Environmental: Supplier has yet to formulate a written environmental policy and has not formally requested that suppliers comply with environmental regulations.

● Social: Company has yet to formulate a written labor policy or health safety policy.

According to our preliminary supplier sustainability assessment plan, suppliers in the equipment and labor category will also be gradually included in the scope of audits to further integrate ESG (environment, social, governance) factors and supplier selection criteria.

We value our relationship with suppliers for offering quality products and services to consumers. Chunghwa Telecom’s suppliers can be divided into three categories: property, labor and engineering. We make enormous purchases from an extensive number of suppliers, from networking equipment, data equipment, cables, marketing design, to waste disposal services.

This means that we possess great influence to convince suppliers into supporting our social responsibilities. Chunghwa Telecom utilizes four approaches, namely: contractual terms, questionnaire surveys, Supplier CSR Interchange Meeting, and on-site audits, to raise suppliers’ awareness and understanding towards CSR, as well as the commitments we have made in supply chain management. For suppliers that have just begun to familiarize with the CSR concept, we choose to encourage their participation while at the same time provide them with the proper education and assistance; over time, we hope to engage all suppliers in a win-win relationship.

“Code of Corporate Social Responsibility for Suppliers of Chunghwa Telecom Co., Ltd.” clearly outlines the Company’s expectations in terms of “ business, ethics, labor, environment, safety and health.”

The guidelines apply to all suppliers that provide products or services to Chunghwa Telecom or its subsidiaries or joint ventures, and extends to other participants of the supply chain that the supplier is directly or indirectly related to. We hope that suppliers may commit to our values and take more proactive steps toward maintaining a sustainable business relationship.

 

Creating Win-Win Cooperative Relationships

Over the years, we have continued to jointly growth with our suppliers. We provide incentives for them to work in research and development. Rights to our patented technologies are transferred fairly. In terms of hardware and software, we continue to support telecommunications facilities and testing environments. We provide expansion and open cooperative platforms to achieve profit sharing.

We provide financing through an open platform and assist suppliers to develop.

1. Digital Cloud Rainforest: By our comprehensive cloud service creation environment, a high- capacity cloud platform, we encourage software developers to participate with incentives to establish their results in the applications market. Hence, software developers can focus on the research and development of innovative services and enter market quickly.

2. The Firefly Project: Partnered with the Small and Medium Enterprise Credit Guarantee Fund of Taiwan to establish the “Chunghwa Telecom Firefly (counter guarantee) Project Credit Guarantee.” All first-rate corporations recommended by us can apply for credit guarantee. In the end of 2015, a total of 20 companies had been recommended, and the project was instrumental in obtaining NT$ 278 million.

 

Building Ability

We share resources with suppliers to enhance their R & D capabilities. To mastering future technologies, we also committed to the advance of a friendly environment.

1.  Develop intelligent tourism and travel services, and realize the digital rainforest collaborative network: We will continue to develop and deepen the functions of the HiNet Travel Cloud platform to provide a full-range of integrated travel services. The multilingual version (Simplified Chinese, English, and Traditional Chinese) will include convenient services such as restaurant reservations, trip planning, transportation tickets, accommodation bookings, travel coupons, travel information, promotions, souvenirs, and social sharing to help travel agents to provide quality service through complete service interface, so as to realize the ‘digital rainforfest’ network and promote the upgrade of the overall industry in Taiwan.

2. Provide independent verification and validation (IV&V) of products and services to ensure the security and performance of the IT system and services: The testing center of the Chunghwa Telecom Laboratories centralizes and builds testing manpower, platform and equipment, and establishes objective third-party and IV&V procedures. Apart from providing comprehensive IV&V services for major services, the center conducts tests on products from cloud partners, including the TDP (Cloud Modular Green Energy Data Center Development Project) and ACP Cloud Appliance in collaboration with Inventec, Wcloud of Wiwynn, and the Cloud OS (RC5 and SP2) of the Industrial Technology Research Institute.

3. Develop 4G wireless communication standards for LTE technology to promote domestic industrial development: We will continue to develop LTE technology and standards, analyze system performance through the experimental network, complete the LTE Physical cell id/Cell id planning and research, LTE ICIC/eICIC technology research, MIMO/Tx-Div parameter switch verification test, and TD/FDD test assessment to capture the functions and performance supported by the equipment of partners. Apart from the reference for LTE network planning and design of this company, the assessment outcomes and planning suggestions can help the domestic industry and academic/research units such as mobile service providers, III, ITRI, and NCTU to run the interlinking test to promote domestic industrial development, business interlinking, and technical exchange.

4. Assist TTIA with completing industry standards and demonstration plans for intelligent buses: having observed that formulation of vehicular platform standards is an important factor for the sustainable development of the vehicular platform industry and vehicular communication industry, Chunghwa Telecom joined the TTIA Intelligent Bus Computing Systems (IBCS) Task Force, formed by domestic upstream, midstream, and downstream vehicular equipment manufacturers, large passenger bus operators, and peripheral application contractors who were invited by the Ministry of Economic Affairs. 8 corporations worked together to formulate a complete standard regulation for industry products related to vehicular platform-related products. (TTIA, or Taiwan Telematics Industry Association’s URL: http://www.ttia-tw.org/en/)

5. Driving green energy industries with iEN services: iEN can provide solutions for the electrical, lighting, air conditioning, mercury heating and boiler, environmental monitoring, solar power, water flow, and water conservation sectors, as well as address demands for intelligent architecture, energy efficiency for mechanical rooms, etc. Responding to Chunghwa Telecom’s pledge to create digital rainforests, iEN is diligently utilizing the influence of industry supply chains and committed to green procurements, research cooperation, and technological promotion with equipment suppliers, integration contractors, and service contractors. We hope to create overall industry capabilities and advantageous brands through mutual resource augmentation and joint development of internationally competitive products.

 

Supplier CSR Status Survey and Audit

Engineering suppliers and suppliers with high sustainable risk would be the top priority for us to audit. In 2015 audits were conducted on 77 route-engineering suppliers, total 207 times, and 10 companies were conducted “third-party audit for suppliers”. Management and employees were interviewed to monitor production quality through onsite audits (announced and unannounced). From 2012, suppliers with procurement of NT$ 5 million or more must agree to abide by the “Chunghwa Telecom Supplier CSR Guidelines” and “Operating Guidelines for Promoting Supplier Implementation of CSR,” and implement supplier CSR surveys to facilitate our supervision of the sustainability risks of suppliers, 213 survey received in 2015. Our definition of high sustainability risk is as follows:

● Economic: Occurrence of business ethics violations due to supplier not having formulated a code of conduct

● Environmental: Supplier has yet to formulate a written environmental policy and has not formally requested that suppliers comply with environmental regulations.

● Social: Company has yet to formulate a written labor policy or health safety policy.

According to our preliminary supplier sustainability assessment plan, suppliers in the equipment and labor category will also be gradually included in the scope of audits to further integrate ESG (environment, social, governance) factors and supplier selection criteria.