Case study: How Walsin Lihwa promotes sustainability across its supply chain
Founded in 1966 with a capital of NT$30 million as a manufacturer of wire and cable, Walsin Lihwa is currently the leader of the wire and cable and speciality steel industry in Greater China, and an international enterprise that successfully entered the real estate business and made investments in the technology industry. To implement and strengthen sustainable supplier management and grow together with its partners, besides assessing suppliers’ quality, timeliness of completion/delivery, prices, services/communication and coordination, Walsin Lihwa added CSR to supplier assessment items in 2018.
This case study is based on the 2018 Corporate Social Responsibility Report by Walsin Lihwa 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
Walsin Lihwa works closely together with its suppliers in the pursuit of corporate sustainability and growth. Tweet This! Accordingly, in 2018, Walsin Lihwa’s Business Units incorporated CSR aspects into the Regulations for Supplier Management. In order to promote sustainability across its supply chain Walsin Lihwa took action to:
- promote local and green procurement
- implement a supplier assessment mechanism
- organise supplier CSR meetings
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With this case study you will see:
- Which are the most important impacts (material issues) Walsin Lihwa has identified;
- How Walsin Lihwa proceeded with stakeholder engagement, and
- What actions were taken by Walsin Lihwa to promote sustainability across its supply chain
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What are the material issues the company has identified?
In its 2018 Corporate Social Responsibility Report Walsin Lihwa identified a range of material issues, such as financial performance, legal compliance, health and safety, risk management, product quality and safety, pollution control. Among these, promoting sustainability across its supply chain stands out as a key material issue for Walsin Lihwa.
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 Walsin Lihwa engages with:
| Stakeholder Group | Method of engagement |
| Employees | · Questionnaire survey for material issue identification · Environment, Health and Safety Committee Meeting · Labor-management meeting Please refer to section 5.4 Care, Communication and Employee Benefits · Employee intranet and e-newsletter · Complaints and suggestions mailbox and hotline · Mechanism for the involvement of all employees |
| Government organisations
| · Questionnaire survey for material issue identification · Official notification · Participation in briefing and conciliation meetings, questionnaires, and training courses on various policies and laws · Phone, email and electronic communications platforms · Public Information Observance Station |
| Customers
| · Questionnaire survey for material issue identification · Customer satisfaction survey · Visits to customers · Phone, email and feedback sent through mail |
| Shareholders
| · General shareholders’ meeting · Publication of annual report · Investor conferences · Questionnaire survey for material issue identification · Company website · Public Information Observance Station · Company spokesperson system · Shareholder service centre · Complaints and suggestions mailbox and hotline |
| Suppliers Contractors Outsourcer
| · Questionnaire survey for material issue identification · Visits, on-site assessments and audits · Phone, email and letters · Suppliers’ Meetings |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Walsin Lihwa engaged with its stakeholders through questionnaire surveys.
What actions were taken by Walsin Lihwa to promote sustainability across its supply chain?
In its 2018 Corporate Social Responsibility Report Walsin Lihwa reports that it took the following actions for promoting sustainability across its supply chain:
- Promoting local and green procurement
- In recent years, Walsin Lihwa continued to engage in local procurement, with 15.6% of procurements made by its key suppliers in Taiwan, 99.7% of procurements made by key suppliers in mainland China and 16.9% of procurements made by key suppliers in Malaysia sourced from local suppliers. Overall, in 2018, approximately 52.3% of Walsin Lihwa’s key suppliers were local suppliers, up 6.3% compared with 2017. Walsin Lihwa is also dedicated to green procurement, and recycles old wood iron shaft and seal plate for reuse, reducing the amount of new wood iron shaft and seal plate procured, along with the consumption of environmental resources. Green procurements in Taiwan are for recycled packaging materials, such as old wood iron shaft and seal plate, and recycled raw materials. In 2018, Green procurements amounted to NT$9.4 billion or 11.75% of all procurements, up NT$1.8 billion compared with 2017.
- Implementing a supplier assessment mechanism
- In accordance with policies revised by its CSR Committee in recent years and in order to comply with corporate policies, Walsin Lihwa’s Customer and Supplier committee revised Walsin Lihwa’s Supplier Management Commitment to Social Responsibility at the end of 2018. Contents that were revised include occupational safety and health, emergency response mechanisms and procedures, ethical conduct and environmental protection. Starting from 2019, procurement personnel of each OU (operating unit) sent the new version of the Commitment Letter to suppliers to fill out. To make sure its supply chain fulfills its commitment to CSR, 85% or 377 of Walsin Lihwa’s new 443 suppliers in 2018, signed the Supplier Management Commitment to Social Responsibility, up 5% compared with 2017. Moreover, to implement the principles for supplier CSR performance appraisal, in addition to signing the Supplier Management Commitment to Social Responsibility, in 2018 Walsin Lihwa also asked key suppliers to fill out a Supplier CSR Performance Self-Assessment Form. Walsin Lihwa requires suppliers to comply with both domestic and overseas CSR related laws, regulations, and standards for corporate governance, trade secret protection, supplier management, labour relationships management, health and safety management and environmental protection. Of Walsin Lihwa’s 111 key suppliers, 96 returned the Supplier CSR Performance Self-Assessment Form in 2018 and about 86% of suppliers completed questionnaires for sustainability self-assessment. To comprehensively implement the principles for supplier CSR performance appraisal, Walsin Lihwa planned to increase the number of key suppliers assessed in 2019 and to include new suppliers among those that conducted CSR performance self-assessments, so that suppliers collaborating with Walsin Lihwa would jointly promote sustainable development.
- Organising supplier CSR meetings
- Walsin Lihwa began making an effort to comply with international CSR standards in 2014. To properly implement related measures and achieve corporate sustainability, Walsin Lihwa began to request its suppliers to sign the Supplier Management Commitment to Social Responsibility and carried out supplier assessments in recent years. This allows suppliers to clearly understand Walsin Lihwa’s CSR policy and expectations, engage in direct communication and obtain feedback. Walsin Lihwa’s Changshu Walsin plant in Mainland China and its Hsinchuang Plant organised supplier CSR meetings and plan to continue organising supplier meetings, to further discuss CSR-related contents. Walsin Lihwa planned to help suppliers understand how to establish sustainable supply chain-related management mechanisms in 2019, and included results of sustainability questionnaires as an indicator in supplier assessments, hoping its suppliers jointly comply with the principles, and use their social influence to achieve a balance between economic, social, and environmental aspects that will enable sustainable development.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 204-1 Proportion of spending on local suppliers
Disclosure 204-1 Proportion of spending on local suppliers corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.3
78% of the world’s 250 largest companies report in accordance with the GRI Standards
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References:
1) This case study is based on published information by Walsin Lihwa, 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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