Supplier Audit and Sustainability Capability
Supplier Audit
Compal has long-term promotion plan for sustainable supply chain development through the implementation of a Business Continuity Plan (BCP). This ensures that suppliers comply with ESG and environmental standards, thus strengthening their sustainable management. Meanwhile, we have established a systematic and data-driven audit mechanism. This mechanism uses risk identification, graded management, and impact analysis for comprehensive evaluation, to ensure that suppliers meet RBA standards. For high-risk and high-impact suppliers, we implement in-depth evaluations and risk control to continuously enhance supply chain stability and competitiveness.
Compal conducts supplier audits based on RBA standards and encourages suppliers to obtain international certifications and undergo independent third-party audits (such as RBA VAP). A total of 252 suppliers have passed RBA VAP and RBA non-VAP audits. 24 suppliers completed both document and on-site audits. Compal requires suppliers to formulate and implement corrective action plans for all non-conformances. Beyond requesting timely corrective actions and submission of non-conformance reports, we provide coaching and supervision, conduct annual spot checks for such high-risk suppliers. For priority non-conformances such as excessive working hours, we continuously enhance tracking and supervision. If a high-risk supplier fails to provide concrete corrective action in response to three consecutive non-conformance notifications, Compal will take steps like reducing procurement volume or terminating our partnership. This helps ensure our supply chain remains stable and compliant.
Compal will expand its audit scope starting in 2025, to increase the proportion of audited suppliers to over 10% of the total. We will also adopt AI and data analytics to predict supply chain risks. This allows us to formulate response strategies early. Concurrently, we will continuously monitor supplier improvement progress to ensure compliance with environmental and social responsibility standards.
Each year, the Procurement Center and Safety Regulation and Environmental Protection Affairs Department organizes the Supplier Conference jointly. Meeting format switched to online communication and conferencing between 2020 ~ 2021 due to COVID-19. In 2022,third party consulting company was also invited to participate in the Supplier Conference, and contents related to global green product regulatory updates and implementation guidelines, RBA VAP v7.0 updates, conflict minerals, introduction to Compal’s supplier management system and environmental education in the supply chain were explained to 205 suppliers attending the Supplier Conference. In 2023,to accelerate supply chain’s participation in net zero emissions and carbon reduction, Compal invited 34 key suppliers to join Compal’s ONE+N electronic industry supply chain net zero acceleration program, and a physical Supplier Conference was also held on September 13, 2023. Compal continues to communicate the latest trend of sustainable supply chain to suppliers through the Supplier Conference and also works with suppliers to improve the ESG performance continuously.
Building Supply Chain Sustainability Capabilities
Supplier conference
Compal actively promotes sustainable supply chain development by inviting third-party consulting firms to co-host supplier conferences. These events, held both in-person and online, deepen suppliers' understanding and implementation of green sustainability practices. In 2024, two supplier conferences were held, with a total of 458 suppliers participating. The focus was on updates of global green product regulations and key implementation points, with an emphasis on supply chain responsibility, including conflict minerals policy management and system optimization. During the conferences, Compal also shared its short-, medium-, and long-term carbon reduction targets, analyzed international initiatives and changes in European and U.S. hazardous substance regulations, and discussed application strategies for the circular economy, to help suppliers stay up to date on market trends and enhance their environmental competitiveness.
Compal will consistently convey the latest regulations and requirements, increase supply chain transparency, promote sustainable product design, and collectively build a low-carbon, highly efficient, and resilient global supply chain.
Smart Sustainable Supply Chain
Since 2015, Compal has established a Supplier Opinion communication channel within its
CPS (Compal Procurement System) platform, creating an efficient and smooth communication pipeline. To further enhance supply chain management effectiveness, we officially launched VIP 1.0 (Vendor Integration Portal 1.0) in 2024, with plans to upgrade it further by launching VIP 2.0 in 2025 and include it in an AI smart supplier management system. This new system is expected to integrate machine learning and automation technology, enabling suppliers to interact more closely with Compal, thus improving communication efficiency. Through AI-driven management, we aim to continuously optimize the implementation of our ESG sustainable supply chain management policies, driving the supply chain towards smart, digitized, and sustainable development.
Supplier Capability Building Plan
Since its launch in 2023, the “ ESG GO Training platform” has been dedicated to strengthening the partnership between Compal and its suppliers through information and knowledge sharing. It offers online courses, covering topics, such as environmental sustainability, social responsibility, corporate governance, and green manufacturing technology. Through the courses and sharing on this platform, we aim to promote Compal's sustainability goals and actions for carbon reduction and net-zero emissions. Simultaneously, it assists suppliers in enhancing their professional knowledge and capabilities, fostering their consensus and practical implementation of carbon reduction and net-zero goals.
In 2024, we continued to enhance the " ESG GO Training platform " and expanded the number of courses to 39. The content is more focused on practical applications and professional depth, thus enhancing suppliers' competitiveness in sustainable management and innovative manufacturing. We have strengthened two-way communication with suppliers and expanded learning resources, to enable more stakeholders to participate and collectively enhance sustainability actions.
In the future, we will further expand the course scope, enhance training on industry standards and regulations, and continuously optimize the learning experience through data analysis, while collaborating with suppliers to jointly build a development model that integrates economic growth and sustainability.
Learning Platform - ESG GO Training platform: https: //www.compal.com/esg/go/
Mentor-Based Approach to Carbon Reduction
To actively address global climate change challenges and move toward the 2050 net-zero emissions goal, Compal adopts a “Lead-supplier strategy” model to motivate supply chain partners in taking carbon reduction actions, thus demonstrating its commitment to leading the industry toward low-carbon transition. In the ONE+N Electronic Supply Chain Net-Zero Project, we have partnered with 34 suppliers, including 6 significant suppliers identified as critical or high-risk who have committed to achieving net-zero goals. Notably, Compal collaborated with 9 key suppliers with higher carbon emissions (covering industries like panels, motherboards, and bearings). While the original target was to achieve a carbon reduction of 10,000 tCO2e within two years, the final results exceeded expectations as they successfully achieved a carbon reduction of 12,879 tCO2e in 2024, demonstrating significant effectiveness. To ensure supply chain partners can effectively execute carbon reduction strategies, Compal has integrated internal and external expert resources to form a low-carbon coaching team. Through sharing benchmark cases, carbon footprint monitoring, and technology adoption coaching, this team assists suppliers in optimizing system performance and reducing energy consumption and carbon emissions. At the same time, Compal actively promotes a value chain carbon inventory by assisting suppliers with data management through a carbon data management platform, to ensure that all data is third-party verified to enhance data transparency and accuracy. Furthermore, Compal organizes ESG and circular economy themed lectures, to enhance suppliers' understanding of international sustainability trends and strengthen their low-carbon transition mindset and actions.
Inviting Suppliers to Join the CDP
Compal actively encourages suppliers to participate in the CDP to help the suppliers to implement scientific
carbon management. In 2024, Compal formally invited 450 Tier-1 and key suppliers to join the CDP. Through proactive engagement and professional coaching, Compal successfully assisted 246 suppliers in submitting and disclosing environmental data. This demonstrates our strong commitment to promoting sustainable development with supply chain partners.
Looking ahead to 2025, Compal plans to strengthen management and coaching for high-emission suppliers, expand CDP participation, and provide stronger support in carbon reduction strategies, data management optimization, technical assistance, and carbon inventory training. By systematically enhancing suppliers’ environmental management and carbon reduction capabilities, Compal aims to build a resilient and sustainable green supply chain with its suppliers.