Case study: How Compeq promotes sustainability among its suppliers
Headquartered in Luzhu Plant, Taoyuan, Taiwan, Compeq engages in the manufacture of printed circuit boards (PCBs), the key component for containing all electronic components and interconnecting the signals of electronics. Compeq is committed to developing a long-term cooperation with its suppliers, urging suppliers to meet CSR standards Tweet This!, improve health and safety, protect the environment, and value human rights, so as to build a steadily growing sustainable supply chain.
This case study is based on the 2020 Sustainability Report by Compeq, prepared in accordance with the GRI Standards, 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.
Abstract
Compeq adds labour, industrial safety, environmental and ethical considerations to its supplier evaluation and encourages suppliers to comply with CSR-related regulations through self-assessments, so as to effectively promote sustainability principles across its supply chain. In order to promote sustainability among its suppliers Compeq took action to:
- evaluate suppliers
- audit suppliers
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With this case study you will see:
- Which are the most important impacts (material issues) Compeq has identified;
- How Compeq proceeded with stakeholder engagement, and
- What actions were taken by Compeq to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2020 Sustainability Report Compeq identified a range of material issues, such as economic performance, environmental compliance, labour relations, customer privacy. Among these, promoting sustainability among its suppliers stands out as a key material issue for Compeq.
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:
Stakeholders must be consulted in the process s 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 Compeq engages with:
| Stakeholder Group | Method of engagement |
| Employees
| · Town Hall Meeting · Communication hotline, suggestion box, and email · Internal/External Website · MEMO and weekly assembly · Corporate Social Responsibility Questionnaire |
| Union
| · Union Directors and Supervisors · General Meeting of Labour Representatives · Labour-Management Meeting · Corporate Social Responsibility Questionnaire |
| Customers
| · Email · Corporate Website · Customer Satisfaction Survey · Customer Audit · Corporate Social Responsibility Questionnaire |
| Suppliers/ Contractors
| · Email · Monthly supplier/contractor review meeting · Annual self-assessment questionnaire, audit, and rating of suppliers/contractors · Corporate Social Responsibility Questionnaire |
| Investors (Shareholders)
| General shareholders: · Shareholders Meeting · Annual Report · Information Publication · Website · Corporate Social Responsibility Questionnaire Institutional investors: · Company Visit · Seminar · Corporate Social Responsibility Questionnaire |
| Government authorities | · Correspondence of official documents · On-site interviews and inspections by competent authorities · Corporate Social Responsibility Questionnaire |
| NGOs | · Email · Corporate Social Responsibility Questionnaire |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Compeq engaged with its stakeholders through online surveys or paper questionnaires, collecting a total of 422 valid responses (a response rate of about 54%).
What actions were taken by Compeq to promote sustainability among its suppliers?
In its 2020 Sustainability Report Compeq reports that it took the following actions for promoting sustainability among its suppliers:
- Evaluating suppliers
- Compeq has established a comprehensive assessment mechanism for both new and current suppliers. First, it requests all suppliers to sign the “Compeq CSR Undertaking” and other relevant documents. Second, it uses different methods to evaluate different types of suppliers, issuing an audit notice to inform the supplier of the scope of audit. The audit scope covers social and environmental aspects, and the audit team will conduct the audit. At the end of each year, Compeq classifies current suppliers by CSR risk level (social and environmental aspects) into three levels: high, medium, and low. Low-risk suppliers will be checked if they have signed the Compeq CSR Undertaking. Medium-risk suppliers will be requested to fill in the Compeq CSR Self-Assessment Form. in addition to signing the Compeq CSR Undertaking, only suppliers with a score of over 80 points in the self-assessment will become qualified suppliers. High-risk suppliers will need to receive an onsite evaluation performed by Compeq’s CSR team in addition to signing the Compeq CSR Undertaking and receiving a score over 80 points in the self-assessment.
- Auditing suppliers
- In 2020, Compeq conducted onsite audits covering labour practices, health and safety, environment, ethics, and management system on 119 grade A suppliers, including materials suppliers, waste disposal contractors, and dispatched labour/foreign worker agencies in the high-risk group. Nonconformities found in the 2020 supply chain audit include the following:
- In terms of labour practices, “recruitment discrimination”, “absence of grievance procedures”, and “violation of working hours” were the major nonconformities found in 2020.
- In health and safety, ineffective implementation, absence of translation of hazard signs for foreign workers, and absence of periodic risk assessment in some plants were the nonconformities found in 2020.
- Apart from requesting suppliers to propose corrective actions, Compeq will conduct a second audit where necessary to make sure all audited nonconformities are improved.
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 308-2 Negative environmental impacts in the supply chain and actions taken
3) Disclosure 414-1 New suppliers that were screened using social criteria
4) 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 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.
Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.2
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.8
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.1
Disclosure 414-2 Negative social impacts in the supply chain and actions taken corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.2
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.8
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.1
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References:
This case study is based on published information by Compeq, 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 following link:
http://www.compeq.com.tw/doc/ent_csr/2fb2f6dc-ddf6-11eb-89fb-005056a9caf8/20220106_083002_cn.pdf
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