Case study: How Quanta promotes sustainability among its suppliers
Founded in 1988, Quanta Computer has grown to become a Fortune 500 company and the global leader in NB (notebook) research, development, design and manufacturing. Quanta seeks to make sure suppliers meet its standards when conducting business Tweet This!, performing their tasks in compliance with the law and environmental protection requirements.
This case study is based on the 2019 Corporate Social Responsibility Annual Report by Quanta 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.
Abstract
When suppliers supply products or services to Quanta or its affiliates, Quanta requests that they support and comply with its CSR policy, as well as the RBA (Responsible Business Alliance) code of conduct. In order to promote sustainability among its suppliers Quanta took action to:
- promote supplier compliance
- audit suppliers
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With this case study you will see:
- Which are the most important impacts (material issues) Quanta has identified;
- How Quanta proceeded with stakeholder engagement, and
- What actions were taken by Quanta to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2019 Corporate Social Responsibility Annual Report Quanta identified a range of material issues, such as economic performance, anti-corruption, customer privacy, socioeconomic compliance, customer health and safety. Among these, promoting sustainability among its suppliers stands out as a key material issue for Quanta.
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 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 Quanta engages with:
| Stakeholder Group | Method of engagement |
| Shareholders and investors
| · Annual general shareholders’ Meetings · Conduct conference calls and press conferences for institutional investors to announce quarterly financial reports and operational information every quarter · Important news will be updated and synchronised on Public Information of the Market Observation Post System and the Company’s official website. In addition, the press release and the press conference will be issued and held irregularly depending on the actual needs and situations · Set up e-mail and telephone number as ways of contact on the official website of the Company · A dedicated corporate IR (Investors Relations) department has been created to hold face-to-face meetings or telephone conferences with domestic and overseas institutional investors on a regular basis |
| Customers
| · QBR (Quarterly Business Review) · Conduct customer satisfaction survey every year · Technology forum and seminar · Meet customers’ requirements and inspections on product quality, environment, and responsibility; cooperate with customers on prevention and improvement · PIS (Proprietary Information Security) – Advocacy and training of the rules governing employees in situations when confronted by press |
Suppliers
| · Request to Sign the Letter of Commitment to Environmental Protection · Request the products must be tested by the accredited public laboratories · Incoming inspection must be sampled and tested by the GP laboratory at Quanta · Quanta Green Website (green.quantacn.com) · Green supply chain annual convention · Annual audit of suppliers and contractors |
| Employees
| · Bridge communications between supervisor and employees through face-to face meetings · Provide “70885 – please helpme” staff service hotline and message bulletin · “Quanta Wechat Account” – online consultation for employees’ queries · Provide “70695 – please try to understand me” Complaint of sexual harassment hotline and mailbox · “70345” – complaint hotline for production line workers · Equipped with on-site medical care staff to provide employees with medical consultation services · Free annual health examination and consultation for employees · Quanta Elite School provides five major ELITE programmes based on different job functions to provide occupational training, development and feedback · Employee satisfaction survey · Release quarterly magazine and manage regularly the information sharing platform each month · “Employee Assistance Program” personnel available at all production sites to provide instant support and feedback · Conduct Labour-management Conference · Conduct Welfare Committee Conference |
| Community
| · Quanta Culture & Education Foundation · Quanta Arts Foundation · Charity clubs at various manufacturing sites · Environmental Quality Monitor Committee of Taiwan HwaYa Technology Park · Participate in forums and activities organised by competent authorities · Participation in external association activities |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Quanta engaged with its stakeholders through questionnaires.
What actions were taken by Quanta to promote sustainability among its suppliers?
In its 2019 Corporate Social Responsibility Annual Report Quanta reports that it took the following actions for promoting sustainability among its suppliers:
- Promoting supplier compliance
- Suppliers are important business partners of Quanta, and their compliance with regulations pertaining to the environment, labour practices, human rights, and social impact aspects directly and indirectly affects Quanta’s business stability, product quality, on-time delivery capability, and business reputation. This is why Quanta has put in place stringent supplier management standards so as to select, audit, and manage suppliers. For business transactions, Quanta checks records to see if suppliers have violated any environmental or social regulations. Contractual terms allow for Quanta to terminate the contract if it is found that the supplier has violated policies that resulted in a significant negative impact on the environment or social community. Quanta has a composite supply chain in place whereby it can conduct unannounced on-site audits, or promptly initiate an audit of a supplier if major work-related or environmental incidents occur in certain areas or industries.
- Auditing suppliers
- Quanta performs onsite audits on general new suppliers with environmental, labour, human rights, ethics, and social impact indicators and surveys them with a two-way participatory survey as used on other suppliers. By the end of 2019, Quanta completed the onsite audit and two-way participatory survey on all new suppliers. In addition, all suppliers audited onsite in 2019 complied with the “Supplier Management Standard”, with a compliance rate of 100%. Once a SCAR (Supplier Corrective Action Request) is issued after the audit report, the supplier must respond with relevant improvement plans and achievements before the deadline. If a longer time frame is required due to amendments in regulations or equipment purchase, the case can be discussed separately. If the supplier fails to take action within the stipulated time, actions such as rejection or termination of contract will be taken. Quanta’s procurement system prevents it from placing orders with suppliers who fail to qualify for the recognised standards reviews. Suppliers found violating labour practices, human rights and ethics in the audit and failing to make corrections by a time limit will be rejected and disqualified for being a quality vendor of Quanta.
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 414-1 New suppliers that were screened using social criteria
Disclosure 308-1 New suppliers that were screened using environmental criteria 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
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References:
1) This case study is based on published information by Quanta, 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) https://www.globalreporting.org/standards/gri-standards-download-center/
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