Supplier Development program

The well-rounded supplier assessment and development mechanism is established at Chunghwa Telecom to ensure that an effective management of ESG risks of the vast army of suppliers. Also, a well-rounded supportive development system is built to assist suppliers in improving and developing their ESG competencies for them to march towards sustainable low-carbon industry transformation with Chunghwa Telecom.

Supplier Assessment Process

Chunghwa Telecom conducts a comprehensive supplier sustainability/ESG risk assessment. Through the supplier ESG questionnaire, on-site visit by employees (second-party assessment), and on-site audit to suppliers (executed by SGS-Taiwan under commission), we ensure that our partnership with suppliers achieve the best practices for the environment, society, and corporate governance, meeting the requirements of the sustainable supply chain management objectives.

Assessment Approach	Description
Desk Assessment	Fill-out of ESG self-assessment questionnaire required for 100% of all suppliers. Fill-out of the ESG questionnaire for suppliers with a procurement amount of NT$5 million or more, with relevant supporting materials provided, including relevant ESG policies, management system certificates, management documents, etc. Review of the supporting documents of suppliers by employees and external consultants to assess the commitment, implementation status, and potential risks of suppliers on relevant ESG issues
On-site Assessment by Company Employees (Second-party Assessment)	On-site visit and assessment of suppliers are conducted by CHT employees on a regular basis. Assess the ESG performance and risks of suppliers via on-site checks, interviews, and verification of relevant information
Assessment by Independent Third-party Entity (Third-party Assessment)	On-site audits to the sites of at least 40 significant suppliers selected each year by the commissioned independent third-party entity (SGS-Taiwan) to verify the implementation status and risks in accordance with the “Chunghwa Telecom Supplier Code of Conduct” and the ESG Compliance Checklist

Supplier Assessment	2023	Target for 2023
Total number of suppliers assessed via desk assessments/on-site assessments	177
% of unique significant suppliers assessed	88.94%	% of significant suppliers: 90
Number of suppliers assessed with substantial actual/potential negative impacts	2
% of suppliers with substantial actual/potential negative impacts with agreed corrective action/improvement plan	100
Number of suppliers with substantial actual/potential negative impacts that were terminated	0

Corrective Action Plan for Suppliers

Corrective Action Plan Support	2023	Target for 2023
Total number of suppliers supported in corrective action plan implementation	2	% of significant suppliers: 80
％ of suppliers assessed with substantial actual/potential negative impacts supported in corrective action plan implementation	100