VALUE CREATION

Value Creation

Supplier Sustainability Management

FET periodically conducts supplier evaluation and ESG on-site audits annually based on the contents of the self-declaration statement. The results of FET´s annual supplier evaluation are announced on the procurement system's external website and at the annual Supplier Conference. Moreover, outstanding suppliers are recognized and invited to share their experiences at regular procurement meetings.
In order to further improve the supplier auditing mechanism, FET introduced third-party ESG audits for 10 first-tier critical suppliers and conducted a survey based on the “Supplier Sustainability Management Evaluation Framework". The result of this year found that some of the audited companies need to improve their management on "Energy Utilization" and "Waste Management" and promote their "Supplier's communication and performance management" capabilities. Third-party auditors also propose substantial improvement proposals in light of the current situation. FET will regularly track and observe suppliers' improvement situation. All third-party audits of critical suppliers are expected to be completed in 2020 and positive improvement and counseling will be determined according to the results, and supply chain ESG management will be carried out.
Supplier's Sustainability Management Evaluation Framework
Supplier Sustainability Risk Assessment
FET launched a sustainable risk assessment operation on the supply chain for the first time in 2017 to identify economic, environmental, and social-oriented risk projects. Threats, impact, and vulnerabilities of sustainable risk are measured separately to further define the supplier's risk rating. The evaluation covered 42 suppliers and identified two high-risk suppliers. The supplier management mechanism may affect FET's services. FET established targeted improvement plans for high-risk suppliers and continued to track improvement results. Furthermore, follow-up are also arranged for high-risk suppliers to conduct on-site inspection to confirm improvement. The risk assessment operations will continue in 2018 and expand the scope of assessment to jointly improve the sustainability of the telecommunications industry chain.
The Result of Sustainability Risk Assessment on Suppliers‭ (‬Number of Suppliers‭)‬