Supplier Sustainability Management

SYSTEX is committed to fulfilling social responsibility and protecting basic human rights, and expects all suppliers to adopt the same standards and jointly fulfill their responsibilities. Therefore, SYSTEX has developed the “Supplier CSR Code of Conduct”, requiring suppliers of SYSTEX and its affiliates to abide by the laws and regulations of the places where they operate.

SYSTEX has 4 types of suppliers including Upstream Software Original, Affiliates, Distributors and Outsourcers. By 2022, a total of 2,147 suppliers have signed “Vendor Integrity Pledge and Declaration” (>99% signed), and more than 500 suppliers have joined the “SYSTEX Partner APP”. Meanwhile, “Supplier CSR Code of Conduct” was officially adopted in April 2021, and a total of 1,244 suppliers signed documents, including 79 key suppliers (100% signed).

Every year, SYSTEX has conducted on-site audits on high-risk suppliers. Continuously affected by the epidemic, SYSTEX replaced on-site and online audits, and a total of 74 suppliers were assessed, of which 21 were key suppliers. In the future, 20-25 key suppliers will be audited every year to implement sustainable management policy. SYSTEX joins hands with suppliers to create sustainable operation and integrity responsibility, and positively enhance IT ecological innovation and partnership.

Signed “Vendor Integrity Pledge and Declaration”
Signed “Supplier CSR Code of Conduct”
Signed “Vendor Integrity Pledge and Declaration” and “Supplier CSR Code of Conduct” by Key Suppliers
Supplier Sustainability Management Process

Vendor Integrity Pledge and Declaration

Before conducting transactions, SYSTEX evaluates the legitimacy of the counterparty and checks it for a record of dishonest behavior. Adhering to the business philosophy of integrity, SYSTEX has formulated corporate governance and risk management mechanisms, and then implements them internally and externally. In order to implement ethical corporate governance and supply chain management, SYSTEX has required new suppliers to sign the “Vendor Integrity Pledge and Declaration” since 2019 to perform and maintain the development of business activities.

10 Terms of Vendor Declarations
  • Probity
  • Honesty
  • Trading contract compliance
  • Information security policy
  • Personal data protection
  • Confidentiality
  • Labor rights and benefits
  • Occupational safety and health
  • Acts related to cyber security management and money laundering control
  • Regulatory compliance

Supplier CSR Code of Conduct

SYSTEX is committed to implementing social responsibility and protecting basic human rights, expecting all suppliers can adopt the same standards and fulfill CSR together. Therefore, SYSTEX has developed “Supplier CSR Code of Conduct” in line with its “Ethical Corporate Management Best Practice Principles”, which requires suppliers of SYSTEX and its affiliates to comply with the laws and regulations of the places where they conduct business activities.

Supplier Screening
GRI 308-1, 414-1

SYSTEX positively impacts suppliers through practical procurement actions. When screening new suppliers, they are required to sign the “Supplier CSR Code of Conduct” and “Vendor Integrity Pledge and Declaration”, and then SYSTEX checks whether they are legal enterprises paying taxes normally through the government website and arranges assessment audits according to SYSTEX’s needs. In addition to meeting customer needs, SYSTEX not only considers suppliers’ service quality, sustainable development and integrity management, but also conducts annual assessments based on the existing list of excellent suppliers or adds recommended suppliers to the list.

For suppliers who fail the assessment or are on the “Rejection List” published by the Public Construction Commission, SYSTEX classifies them as unqualified suppliers and terminates deals. If the supplier has a significant negative impact on the society, SYSTEX will take the initiative to include it on unqualified list after verification. Unqualified suppliers must go through the above process to resume transaction.

Assessment of Excellent Suppliers and on-Site Audit

Excellent Suppliers Assessment

SYSTEX conducts annual assessments of excellent suppliers and then ranks them according to their score. In 2022, the total number of excellent suppliers were 20.

On-Site Audits on Outsourced Suppliers

In order to maintain quality of whole supply chain, SYSTEX conducts on-site audits on outsourced suppliers irregularly. The audit members are composed of procurement related departments. They evaluate suppliers’ project performance, and weekly report suppliers’ poor-quality records. In addition, SYSTEX also conducts “Assessment of Outsourced Service Project” and then ranks them according to their quality of service and degree of collaboration. In 2022, a total of 56 supplies were rated as Class-A suppliers.

Key Supplier ESG Assessment

Every year, SYSTEX defines key suppliers from Distributors and Outsourcers of suppliers based on criteria such as transaction volume or uniqueness, and then conducts ESG audit plans. The assessment questionnaire covers 16 topics and 35 questions. SYSTEX requires suppliers to answer each question and provide supporting materials to ensure that they have practical actions. Then the SYSTEX audit team conducts on-site audits irregularly to check the status of suppliers.

Continuously affected by the epidemic, SYSTEX replaced on-site and online audits in 2022, and a total of 21 key suppliers were assessed by the audit. According to the analysis of assessment results, suppliers have low scores in “Sustainable Governance, Supplier Management, Sustainable Disclosure”, so that SYSTEX will assist suppliers to improve and reduce the potential risks.

Topics and Questions of ESG Assessment

  • Sustainable Governance
  • Sustainable Disclosure
  • Quality Management
  • Supplier Management
  • Business Secret Protection

  • Human Rights
  • Community Engagement
  • Health and Safety

  • Management System
  • GHG
  • Air Pollution
  • Water Stewardship
  • Waste management
  • Circular Economy
  • Product Packaging
  • Green Product
Supplier ESG Promotion Plan

SYSTEX is expected to implement the “Supplier ESG Promotion Plan” in 2023, using digital technology to create a “supplier interactive platform”. Through the platform, SYSTEX can push information, confirm orders, reply to delivery, and organize online training of regulatory compliance and ESG promotion. SYSTEX is also expected to hold a “supplier exchange meeting” to invite excellent suppliers to share their practical experience.

In addition, SYSTEX formulated the “Supplier IS and Personal Data Protection Questionnaire” at the end of 2021, requiring suppliers to reply since 2022, and a total of 843 questionnaires were answered, with an average score of 84.79 points, hoping to raise suppliers’ awareness of IS protection and enhance the IS management.

Supplier IS and Personal Data Protection Questionnaire

The questionnaire is divided into 2 categories. In terms of information security, suppliers are required to self-assess whether they have passed IS verification and built IS-related mechanisms. In terms of personal information protection, suppliers are required to check whether they have set up personal information-related mechanisms. In view of this, SYSTEX will continue to monitor the behavior of suppliers to implement information security.

Categories and Questions
Information Security
  • Obtain IS-related verifications
  • Plan IS training courses
  • Build anti-virus mechanism and update virus pattern regularly
  • Build program security testing mechanism
  • Regularly back up significant data and software
  • Take protective measures such as confidential data encryption
  • Keep records of handling IS events and improvement measures
Personal Information Protection
  • Formulate personal data protection policies and norms
  • Build proper preservation mechanisms for personal data
  • Implement training of personal data protection
  • Build an audit mechanism of personal data protection
  • Implement the improvements of personal data protection

“SYSTEX Partner APP” is a partnership platform that shares procurement-related announcements, purchase order notices, receipt notices, payment notices and other information with suppliers, allowing suppliers to keep abreast of the latest information. SYSTEX has developed the following functional services of “SYSTEX Partner APP”, so that suppliers can understand SYSTEX’s sustainable management policy, receive the latest ESG trends, and reply to the ESG self-assessment results, allowing SYSTEX to achieve digital sustainable management through digital technology.

Local Procurement
GRI 204-1

SYSTEX has 4 types of suppliers including Upstream Software Original, Affiliates, Distributors and Outsourcers. In 2022, a total number of suppliers exceeded 1,800 with a total expenditure of more than NT$18.4 billion, so that SYSTEX can combine suppliers’ products and services with its technical skills to develop solutions to help create greater benefits for customers.

Green Procurement
2022 Green Procurement: NT$ 295 M (61.38%)

SYSTEX supports the sustainable concept with practical actions. Through the green procurement mechanism, SYSTEX purchases energy-efficient products that do not contain substances controlled by the Montreal Protocol, and prioritizes the use of office items with environmentally friendly labels, including personal computers, laptops, LCD monitors, printers and toner cartridges, hoping to drive the development of green industries through actual procurement actions.

Proportion of 5 Office Items

Awarded the “Green Procurement Enterprises”

In response to the competent authority’s promotion of green procurement actions, SYSTEX and SYSTEX Solution were awarded the “Green Procurement Enterprises” by the Environmental Protection Administration in 2022. In addition, SYSTEX and its affiliated companies “SYSTEX Software & Service, SYSPOWER, SYSTEX Solution, Taifon Computer, Palsys Digital Technology” were also awarded the “2022 Taipei City Private Enterprises and Organizations’ Green Purchasing Performance” by the Taipei City Government.

Conflict-Free Minerals Statement

Based on corporate ESG responsibility and concern for human rights, SYSTEX commits to “Conflict-free Mineral Statement: Do not support, accept or use mining from the Democratic Republic of the Congo and surrounding countries with armed conflicts, as well as from illegal mining or harsh working conditions”; comprehensive understanding and tracing the cobalt (Co), gold (Au), tantalum (Ta), tin (Sn), and tungsten (W) contained in all electronic products to ensure that supply chain products do not come from conflict mineral areas, and encourage suppliers to achieve the goal of “conflict-free minerals”.