The Fubon Financial Holdings e-Procurement System currently comprises about 887 an increase of 177 over 2017, and growth of 25% includes suppliers which render various services ranging from building and remodeling, shared office facilities and equipment, printed items, and IT-related software and hardware solutions. Sort out the Company’s purchasing amount from 2016 and 2017, set a price threshold for different industries, select 37 key suppliers, and classify them as follows:
Since 2016, the Company has promoted sustainable management for suppliers. New suppliers are required to provide proof of establishment, credit certification, and tax return information, and can only become qualified suppliers after being reviewed and deemed to have normal operations with no indications of breaching contract. In addition, to help supply partners understand and comply with our safety and ethical standards, Fubon Financial Holdings has posted its "Supplier Corporate Social Responsibility Code of Conduct" in the "Purchasing" section of its website, clearly upholding worker interests and human rights, occupational health and safety, environmental protection, and prohibiting commissions and kickbacks. Partnered suppliers are also asked to sign the "Letter of Commitment on Supplier Corporate Social Responsibility Code of Conduct", which 100% of e-Procurement system suppliers have signed.
Fubon also evaluates and records supplier performance and uses that as a reference when selecting suppliers for future jobs to maintain a high quality of service. Suppliers may be disciplined for poor performance by having their ratings lowered or being disqualified, while suppliers that perform at a consistently high quality level and are good corporate citizens have their ratings increased, leading to a closer relationship. CSR measures such as environmental and health and safety mechanisms are included as performance indicators in supplier evaluations as a way to get suppliers to share our CSR values and engage in sound environmental practices.
Open, Transparent Purchasing Mechanism
Suppliers are assessed and selected based on standard procedures, and an e-Procurement system has been established. Through the system, procurement information, including public notices of upcoming tenders, is openly posted on the Company’s official website, and qualified suppliers can use it to download documents, submit bids and quote prices. The result is an open, transparent process that allows each supplier’s bid to compete on an even playing field.
Supplier Training and Education
Before suppliers of the Company receive tenders, they must sign the "Supplier Tender Reception Commitment" to ensure that it will follow the Company’s ethical regulations for suppliers. In 2018, the Company organized the "Supplier Education Training" event to share the principles and methodology of "carbon management" with suppliers, raise awareness about the impact climate change has on earth, and the connection of establishing a "green supply chain" in order to encourage suppliers to gradually establish environmental management measures outside the ones mandated by law. Roughly 140 representatives from suppliers attended this education training. The Company will work to increase the number of participants in 2019. In addition, the company expects to set up an education and training section in the e-procurement system in 2019 to so that suppliers can obtain CSR-related information with more ease.
Sustainability Management Evaluation
In order to complete sustainable supply chain management mechanisms, Fubon Financial Holdings launched the supplier sustainability questionnaire in 2018, inviting 151 suppliers that reaching a specific amount of transaction with the Company in two years to fill out a CSR self-assessment questionnaire. Contents of the questionnaire were drawn from international sustainable purchasing standards such as PAS 7000, CERES, GRI Standards, and ISO 20400, and divided into 13 question blocks from three major aspects.
|Supplier Evaluation Question Blocks|
|Economic Aspect||Social Aspect||Environmental Aspect|
|Q1||Internal and external channels of communication||Q7||Labor and human rights management||Q9||Environment management|
|Q3||Legal compliance||Q10||Carbon management|
|Q4||Quality management||Q8||Health and safety||Q11||Pollution and toxic emissions management|
|Q5||Supplier management||Q12||Waste management|
|Q6||Protection of business secrets||Q13||Product management|
For the 2018 evaluation, 118 suppliers filled out the self-assessment questionnaire for the paper inspection. In order to conduct a fair assessment of suppliers’ CSR performance, the paper inspection examines the answers and supporting documents of the manufacturer on a case-by-case basis to promote and confirm the implementation of the supplier's corporate social responsibility. The evaluation showed that most supplies are mature in the economic aspect, scoring higher on legal compliance and feedback channels. By contrast, the environment aspect could use a little more attention.
A total of 28 key suppliers of the company's 37 key suppliers responded to the questionnaire, putting the review rate of key suppliers at 76%. That percentage is expected to further increase in 2019; aside from written reviews, the Company also selected 10 key suppliers for on-site visits, clarifying the difference between written reviews and actual operation. Each year the Company arranges to visit 10 key suppliers. The current coverage is 27%, and it is expected to reach to 50% in 2019.
In order to improve suppliers’ sustainable management skills through evaluations, the Company organized the "Supplier CSR Conference", where suppliers’ sustainability management evaluation results are announced, specific constructive suggestions are given according to how suppliers answered the questionnaire, and the President of Fubon Financial Holdings awarded those that performed well in the evaluation. Well-performing suppliers are also invited to share their sustainability management experiences during the conference. After the conference, suppliers will be provided with individual evaluation reports with suggestions for improvement, prompting suppliers to implement sustainable management approaches. In the future, the Company plans to list the supplier's CSR performance as a key prerequisite for receiving tender, or evaluation criteria for tender bidding in order to exert financial influence and implement sustainable practices.