Supply Chain Management Strategy-FETnet

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Supply Chain Management Strategy

FET has implemented its " Supply Chain Management Policy" as the foundation for supplier management. Additionally, the "Supplier Code of Conduct" , " Supply Chain Biodiversity Commitment " and "GHG Management Guidance " are encompassed in supplier ESG specifications. Suppliers are obligated to sign the " FET Supply Chain ESG Sustainable Operation Self Declaration " and the " Integrity Management Agreement " which include punitive penalties. Furthermore, starting from 2023, FET has incorporated suppliers' ESG performance into the supplier selection criteria. All active suppliers are required to annually complete the online signing of the " Integrity Management Agreement " in order to enhance management. Failure to sign will result in the inability to utilize system functions for order reception and payment requests. Active suppliers must renew their contracts every 360 days to ensure their ongoing commitment to integrity management. New suppliers must complete the " ESG Quantitative Evaluation Form, " and the FET Credit Management Office will assess their third-party credit reports. Since 2021, we have implemented a nine-level credit evaluation system. Suppliers with a credit evaluation between levels 8 and 9 will not be eligible to become FET suppliers. Please refer to 「FET Sustainability Report」and 「Supply Chain ESG Summary」

Supply Chain Management Policy

FET has established four major policy directions, each with its own set of objectives, continuously expanding the scope of influence to encompass critical suppliers and other tier-one suppliers. For three consecutive years in 2023, it has been recognized by CDP Supplier Climate Assessment with a "Leadership Level A" rating, placing its management performance in the top 8% globally. In order to enhance the role of procurement personnel in supply chain management, the Procurement Department sets annual assessment goals for various indicator completion rates in its ongoing yearly performance evaluations. These goals are then linked to the overall assessment results through different weightings and an end-of-year reward system.

Four Policies for Sustainable Supply Chain Management

Supply Chain Management Strategy

Supply Chain Management Strength and Performance

All FET procurement contracts explicitly state that vendors must adhere to relevant regional, environmental, and labor safety and health laws and regulations.Construction suppliers must sign the "Contractors Occupational Safety and Health and Environment Commitment," the "Declaration on Announcement of Contractors Worksite Environmental Hazards," and carefully review the "Occupational Safety and Health Management Implementation Points for Contractors." Additionally, suppliers must fulfill relevant management and hazard prevention responsibilities in accordance with the "Regulations for Occupational Safety and Health Organization Management and Self-Check" to ensure the safety and health of workers and prevent occupational hazards.In addition to regularly assessing suppliers to ensure their compliance with the aforementioned regulations, FET also suspends the accounts of suppliers who have not conducted any transactions with the company for three years or more. This is done to ensure that the information regarding suppliers' creditworthiness and corporate social responsibility remains current.

Whistleblowing of integrity violation

We establishing the process of whistleblowing of integrity violation, anyone can appealing by internal contact e-mail or external window：
1. internal：Whistle_blower@fareastone.com.tw
2. external：Ombudsman@fareastone.com.tw
3. Far Eastern Group Procurement appealing e-mail：cp_complaint@feg.com.tw

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