The case for CSR/ Sustainability Reporting Done Responsibly


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Case study: How ASE promotes sustainability among its suppliers

ASE is a global leader in semiconductor manufacturing services with sales and manufacturing facilities strategically located around the globe, including in Taiwan, China, South Korea, Japan, Singapore, Malaysia, Mexico, America and Europe. ASE is committed to partnering with suppliers to make sure working conditions in ASE’s supply chain are safe  Tweet This!, workers are treated with dignity and respect, and business operations are environmentally responsible and conducted ethically.

This case study is based on the 2016 Corporate Sustainability Report by ASE published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

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ASE considers suppliers as important partners and expects them to offer fair terms and safe working conditions to their employees, not tolerating the employment of child labour or forced labour by any supplier. In order to promote sustainability among its suppliers ASE took action to:

  • implement a Supplier Code of Conduct
  • carry out supplier risk assessments and audits
  • strengthen suppliers’ capabilities to face sustainability challenges

What are the material issues the company has identified?

In its 2016 Corporate Sustainability Report ASE identified a range of material issues, such as regulatory compliance, employee health and safety, waste management, water resource management, training and talent development, labour/management relations. Among these, promoting sustainability among its suppliers stands out as a key material issue for ASE.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups ASE engages with:

Stakeholder Group                Method of engagement
Customers ·      Customer quarterly business review meeting

·      Customer audits

·      Technical forums

·      Customer service platform

Employees

 

·      GM mailbox

·      Intranet website

·      Satisfaction survey on employees

·      Dedicated employee helpline

Shareholders

 

·      Annual financial reports

·      Quarterly earnings release

·      Annual shareholder meeting

·      Institutional investors’ conference

Suppliers ·      Supplier questionnaire survey

·      Supplier on-site audits

·      Annual supplier forum

·      Supplier capacity-building activities

Government ·      Communication meetings, conferences, forums or seminars held by government authorities

·      Proactive dialogue with government authorities

·      Reporting through government portal

Community ·      ASE Charity Foundation

·      ASE Cultural and Educational Foundation

·      Employee volunteer activities

·      Community perception surveys and needs assessments

Industry Unions and Associations ·      Organisational member conference

·      Technology forums held by industry unions/associations

Media ·      Press releases

·      Spokesperson interviews

·      Company’s website

NGOs ·      Communication meetings, forums, seminars or workshops held by NGOs

·      Company’s website

·      Volunteer activity cooperation with NGOs

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics based on stakeholders’ concerns ASE conducted a stakeholder survey, with a total of 866 questionnaires completed by stakeholders.

What actions were taken by ASE to promote sustainability among its suppliers?

In its 2016 Corporate Sustainability Report ASE reports that it took the following actions for promoting sustainability among its suppliers:

  • Implementing a Supplier Code of Conduct
  • Committed to establishing a sustainable supply chain, ASE requires new suppliers to comply with the “ASE Group Supplier Code of Conduct”. ASE also incorporates sustainability in the management and assessment of suppliers and encourages all suppliers to obtain international certification standards, such as ISO 90001 / TS 16949, ISO 14001, OHSAS 18001, etc. There are two aspects of ASE’s requirements for new suppliers: “Supplier Code of Conduct Commitment Letter” and “Supplier Sustainability Risk Assessment”:
    • Supplier Code of Conduct Commitment Letter: ASE requests its manufacturing and service suppliers, including new suppliers, to sign the “ASE Group Supplier Code of Conduct Commitment Letter” to guarantee their compliance with the “ASE Group Supplier Code of Conduct” which covers labour, health and safety, environment, business ethics and management system.
    • Supplier Sustainability Risk Assessment Questionnaire: New suppliers must complete ASE’s sustainability assessment covering regulatory compliance, sustainable management, conflict minerals management, environmental protection, health and safety, labour rights, human rights, etc., to assess sustainability risks associated with new suppliers.
  • Carrying out supplier risk assessments and audits
  • ASE carries out, annually, a supplier sustainability risk assessment through a three-stage approach. First, it conducts an initial potential risk analysis on suppliers according to the manufacturing location, procurement amount, and manufacturing processes. Next, ASE conducts a sustainability risk assessment, through questionnaires, on critical and tier 1 non-critical suppliers. Finally, after the questionnaire assessment is completed, high-risk suppliers are subjected to further risk assessment. Additionally, to ensure the effective management of its suppliers’ sustainability performance, ASE regularly conducts on-site / off-site audits and appoints third-party agencies to conduct audits on some critical suppliers. In 2016, ASE completed sustainability audits on 107 of its raw material suppliers and 67 of Human Resource and Service Contractors.
  • Strengthening suppliers’ capabilities to face sustainability challenges
  • ASE provides trainings, workshops and seminars to strengthen suppliers’ capabilities to face the ever-changing sustainability trends and to help build up suppliers’ awareness and capabilities for improving their sustainable practices. Accordingly, ASE collaborated with universities and industry alliances to implement a three-year Green Supply Chain Programme, to improve the sustainability performance of its suppliers and create sustainable value. In addition, to strengthen suppliers’ ability to respond to global sustainability trends and risks, ASE organises education and training on various sustainability issues and at multiple facilities, to convey its requirements for supply chain management.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 308-1 New suppliers that were screened using environmental criteria

2) Disclosure 408-1 Operations and suppliers at significant risk for incidents of child labor

3) Disclosure 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor

4) Disclosure 414-1 New suppliers that were screened using social criteria

5) Disclosure 414-2 Negative social impacts in the supply chain and actions taken

 

Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.

Disclosure 408-1 Operations and suppliers at significant risk for incidents of child labor corresponds to:

  • Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
  • Business theme: Abolition of child labor
  • Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  • Business theme: Abolition of child labor

Disclosure 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor corresponds to:

  • Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
  • Business theme: Elimination of forced or compulsory labor

Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:

  • Sustainable Development Goal (SDG) 5: Achieve gender equality and empower all women and girls
  • Business theme: Workplace violence and harassment
  • Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
  • Business theme: Labor practices in the supply chain
  • Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  • Business theme: Workplace violence and harassment

Disclosure 414-2 Negative social impacts in the supply chain and actions taken corresponds to:

  • Sustainable Development Goal (SDG) 5: Achieve gender equality and empower all women and girls
  • Business theme: Workplace violence and harassment
  • Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
  • Business theme: Labor practices in the supply chain
  • Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  • Business theme: Workplace violence and harassment

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.



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References:

1) This case study is based on published information by ASE, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) http://www.fbrh.co.uk/en/global-reporting-initiative-gri-g4-guidelines-download-page

3) https://g4.globalreporting.org/Pages/default.aspx

4) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to ASE: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.

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