Supply chain sustainable management

Sustainable
Supply
Chain
Management

Management and Planning
|
Risk Management
|
Evaluation and Results

Supply chain management

In addition to consistently requiring suppliers to provide high-quality raw materials and efficient services, CGPC also actively establishes diverse communication channels with its suppliers to strengthen two-way exchange and collaboration, aiming to jointly achieve sustainable development goals such as environmental protection, occupational safety, and human rights. Furthermore, the company has formulated a "Supplier Corporate Social Responsibility Commitment" as a foundation for promoting a sustainable supply chain. The implementation status and future plans are as follows:

Supplier management development track

Foundation

Establish a procurement unit, and consolidate the information that each subsidiary of the Group needs to purchase,purchase in bulks to achieve the goal of reducing costs.

System

Compliance with regulations

Establish procurement guidelines

Now

Establish supplier sustainability management culture

Increase risk assessment

Incorporate sustainability indicators into supplier evaluation

Promote signing of supplier/contract letter of commitment to social responsibility and onsite audit

Promote green procurement

Disclose sustainable supply management results and future plans

Introduce the Supplier Sustainability Self-Assessment Form, Code of Conduct, and Quality

Requirements Self-Assessment Form

Future Plan

Increase the number of supplier factory audits and reinforce work injury investigations

Suppliers jointly participate in social activities

Supply chain sustainable development

As one of the domestic benchmark companies, CGPC works together with suppliers to jointly undertake corporate social responsibility and formulate a letter of commitment for supplier CSR, the implementation status, and future planning:

Policy Commitment

Improve the safety environment for workers and strive to protect the environment.

Fulfill social responsibility and improve competitiveness.

Enhance partnership and share sustainable business opportunities.

Establish a supplier management mechanism to improve risk control and management capabilities.

Strategy

Enhance procurement performance, establish strong partnerships.

Foster a culture of safety awareness, creating a collaborative work environment.

Sharing the corporate social responsibility.

Short-term

Short-term: 2025-2026

•

in 2025, all supplier signing of the “Supplier Social Responsibility Commitment” to achieve 100%

•

Collaborate with R & D on three annual projects, subject to market conditions:
1. Development of recycled plastics, 2. Biodegradable, 3. Low-carbon and recyclable raw materials.

•

The “Supplier Code of Conduct and Quality Requirements Self-Assessment Form” is used to systematically assess the potential environmental and social risks of negative impacts caused by suppliers.
Medium term

Medium term: 2027-2028

•

On-site audits will be conducted on 12 suppliers annually, and the development of incorporating sustainability self-assessment forms for field audits will be undertaken.

•

Encourage suppliers to jointly participate in social activities at least once/year.

•

Suppliers who have conducted carbon footprints disclosures and established carbon reduction targets represent 30% or more of our total annual purchasing value.
Long-term

Long-term: 2029-2033

•

Based on the results of factory audits, establish a communication platform with suppliers, for the deficiencies, we assign the relevant professionals to provide suggestions and assist in planning.

•

Suppliers who have conducted carbon footprint disclosures and established carbon reduction targets represent 50% or more of our total annual purchasing value.

Supplier and contractor managment

To strengthen a sustainable supply chain system, CGPC promotes the following management strategies from multiple perspectives, working with its supply partners to achieve environmental protection, occupational health and safety, and social responsibility goals：

Deepening Partnership Cooperation - Growing Together

We promote an on-site supplier assessment system, conduct joint cross-departmental factory audits, and improve supply quality and service efficiency through document review and defect feedback.

Institutionalized management and evaluation mechanism

Establish a review and evaluation system for new suppliers and contractors to ensure that raw materials and engineering services comply with the company's environmental protection and safety standards.

Prioritize local procurement

We give priority to local suppliers in Taiwan, taking into account communication efficiency, delivery stability and local economic support.

Promote green procurement programs

In 2025, green procurement expenditures reached NT$26.07 million, demonstrating a concrete track record in green purchasing.

Supplier Social Responsibility Commitment

We has reached an agreement with all suppliers/contractors to sign and comply with social responsibility commitments, promote on-site audits, and encourage suppliers to participate in social activities.

Promotion of Supplier Code of Conduct (Supplier Social Responsibility Commitment)

As a leading domestic enterprise, CGPC has a responsibility to encourage its suppliers to shoulder their social responsibilities. Therefore, we have drafted a Supplier Corporate Social Responsibility Commitment (hereinafter referred to as the Commitment), requiring suppliers to make commitments regarding human rights, workplace safety, health, environmental protection, and conflict minerals. The implementation status is as follows:

※ Request items

Labor and human rights

This includes no forced labor, prohibiting child labor, providing proper wages and benefits, guaranteeing workers' working hours and rest time, eliminating workplace sexual harassment, bullying and workplace discrimination, and not using conflict minerals.

Health and safety

Including the provision of necessary measures such as occupational safety, emergency response, industrial hygiene, machine protection, public health, food and accommodation, and health and safety information.

Environment

Includes environmental operating permits, pollution prevention and resource conservation, hazardous substances, sewage, non-hazardous solid waste, noise, exhaust emissions, product and service restrictions, energy/resource consumption and greenhouse gas emissions.

Ethics

This includes operating with integrity, respecting intellectual property rights, complying with relevant confidentiality agreements, protecting privacy, and avoiding conflicts of interest.

Supplier potential risk prevention and impact response measures

Proactive measures：

Procurement personnel receive training on supply chain sustainability and environmental, safety, and hygiene for contractors. To ensure worker safety, the company proactively inspects equipment and parts regularly or irregularly, based on their importance and safety. Through a maintenance management database, effective inventory, inspection, and replacement are conducted. The Group Procurement Department identifies qualified suppliers based on procurement requests from various units, the project value, contract value, or project importance. To align with international standards, we prioritizes sustainable procurement management, promotes green procurement, reduces environmental impact, and implements factory audits, integrating the results into a risk assessment mechanism.

Passive measures：

For broad-scale suppliers, the Transparent Footprint website is checked regularly to understand whether the suppliers have major violations and to assess whether their influence will cause potential impact on CGPC. The supply ratio, replacement and deployment of suppliers are adjusted. For engineering projects, the industrial safety unit will immediately conduct investigations on personnel safety, equipment damage and environmental impact, and the results will be handed over to relevant departments for improvement.

Supplier Human Rights Due Diligence (HRDD) Process:

Steps		Description
1	Human Rights Issue Identification and Risk Assessment	Identify human rights topics by referencing relevant international human rights standards and the focal areas of industry benchmarks, both domestically and internationally. Conduct risk evaluation through questionnaires distributed to suppliers and contractors.
2	Preventive and Mitigation Measures	Focus on preventive and mitigation measures, while implementing effective remedies to address any impacts that have already occurred.
3	Grievance Mechanisms	Provide accessible grievance and support channels.
4	Information Disclosure	Disclose relevant information periodically in the ESG report.

CGPC identifies supplier human rights issues by referencing relevant international human rights standards and the focal areas of domestic and global industry benchmarks. For Tier 1 suppliers, the Corporation has identified the following three primary human rights issues:

Occupational Health & Safety (OHS)

Working Hours & Leave Management

Unlawful Infringement Prevention

Based on the human rights issues identified above, CGPC will issue risk assessment questionnaires to Tier 1 suppliers in 2026 to conduct risk identification and evaluation. Corresponding mitigation measures are outlined as follows:

Issues	Risk Mitigation
Occupational Health & Safety (OHS)	Require suppliers and contractors to establish occupational health and safety (OHS) management systems or relevant policies. Require suppliers and contractors to periodically conduct hazard identification, safety training, and safety audits. Periodically review whether suppliers and contractors have been penalized by regulatory authorities for labor law violations related to working hours or overtime management.
Working Hours & Leave Management	Require suppliers and contractors to manage normal working hours, overtime, and leave in accordance with local labor laws. Require suppliers and contractors to establish working hours and overtime management systems, and periodically review their execution status. Periodically review whether suppliers and contractors have experienced major occupational accidents or received administrative penalties from regulatory authorities.
Unlawful Infringement Prevention	Require suppliers and contractors to establish policies or management systems for preventing unlawful workplace infringement (including workplace bullying and violence). Require suppliers and contractors to provide employee grievance, investigation, and protection measures, and conduct regular awareness training. Periodically review whether suppliers and contractors have experienced major workplace unlawful infringement incidents.

Regarding the tracking of due diligence implementation, China General Plastics Corporation (CGPC) regularly evaluates the effectiveness of mitigation and remedial measures, reporting the outcomes to the Sustainability Committee. Furthermore, the Corporation has established comprehensive grievance mechanisms and accessible reporting channels for suppliers and contractors to report illegal or human rights-violating behavior.

Supplier & Contractor Dedicated Telephone Line：(886-2) 8751-6888 EXT.3771
Supplier Grievance Email：troychen@usig.com

Supply chain risk assessment

CGPC has established an electronic procurement process platform. Based on the basic principles of fairness, impartiality, and openness, any behaviors of fraud and favoritism have been eliminated. We have established smooth communication channels with suppliers to avoid risks, and evaluate, prevent, and respond to sustainable supply chain risks. The execution plan for growth with suppliers is as follows：

Risk assessment and prevention

In addition to the supply chain security requirements, the special conditions for chemical suppliers are identified as follows:

Chemical process leakage and pollution risks.

The risks of occupational safety and environmental pollution in workplaces with high dust, high temperature, high noise, or high humidity.

Risk of working at heights.

Industrial safety risks such as cutting or welding (S)

VOC (volatile organic compounds) escape risk.

Labor-intensive industries.

Supply chain and engineering disruption/delayed delivery and completion risk.

Raw material and process quality risk.

Preventive approach

Implement supplier sustainable self-assessment questionnaire for initial risk identification information.

Establish long-term collaborative relationships with suppliers, develop new suppliers, and coordinate long- term material preparation systems.

Establish an internal safety stock system and reference point for requisition according to the delivery schedule to prevent the risk of materials outage.

Procurement personnel undergo education and training on supply chain sustainability.

Environmental safety and health education and training for contractors.

Response to impact

Adjust the supply proportion of suppliers and take alternative suppliers or have them complement one another.

In terms of the engineering part, the environmental safety and health unit immediately starts an investigation on personnel safety, equipment damage and environmental impact, summarizes the results and submits such to the relevant units to take response measures, as well as understand the status.

Future plan

Chemical suppliers are listed as key points, and aspects such as the procurement amount, tender amount for construction and the importance are included in the factory audit of the abovementioned SDGs, and establish risk assessment measures according to the results.

Place it under restriction, and provide consultation according to the risk assessment measures and the risk levels after assessment.

The Company has established a grievance mechanism which can accept complaints through writing, communication channels with stakeholders, or through the mailbox of the Audit Committee. After receiving a grievance case and depending on the severity of the case, the Company will designate relevant personnel to investigate and notify the parties concerned and relevant personnel to attend on-site explanation, handling the case in a fair and reasonable manner.

Supply chain ESG risk management

Risk items and attributes	Suppliers (Chemicals)	Construction contractor
Risk items and attributes	Environmental (E)、Social (S)、Governance (G)
Potential risk	a.Chemical manufacturing process(E) b. High-dust, high-temperature, high-noise or high-humidity workplace(E) c.VOC (volatile organic compounds) escape risk (E) d.Labor-intensive industries (S) e.Supply chain disruption/delay risk(G) f.Quality risk(G)	a. High-dust, high-temperature, high-noise or high-humidity workplace (E) b.Risk of working at heights. (E、S) c.Labor-intensive(S) d.Industrial safety risks such as cutting or welding(S) e.Construction disruption/delay risk(G) f.Construction quality risk (G)
Number of audits and homevisits	4 companies (Audit)	To be conducted together with the contractors' project construction assessment.
Audit details	Environmental aspect (E) : Whether or not the manufacturing and storage of environmentally controlled substances are conducted in accordance with the laws and regulations. Governance (G)： Quality, production and order management, customer complaints and satisfaction follow-up, employee education and training, and external processing management.
Number of qualified households	4 companies (100% qualified rate)

Supply chain management mechanism

Work environment safety for workers: CGPC has passed the requirements of ISO 45001 Occupational Safety and Health Management System. For the safety of contract workers in factory areas, the Company has established construction operation safety regulations and supervises them according to the strictest standards to effectively manage the safety of various operations. The Company eliminates or reduces the risk of accidents, and treats the safety and health of all workers in the factory with the strictest attitude.

Support local procurement

CGPC prioritizes supporting the local suppliers in Taiwan. This is due to that it is easier to communicate with local vendors to know their status. Purchasing from foreign vendors is considered only when the materials cannot be supplied locally. In 2025, the raw materials Vinyl Chloride Monomer (VCM) of CGPC and CGPCP are supplied by TVCM, and the purchase amount accounted for approximately 68.08% and 95.03%, respectively, of the total local source. The source of the raw materials ethylene and dichloroethane of TVCM is downstream products of the oil industry. Due to the limited supply in Taiwan and cost considerations, it must be imported to maintain the stability of the supply chain.

Green procurement program

CGPC began to actively implement the green procurement program in 2019, and has planned to cooperate with the Taipei City Government to carry out an online green procurement declaration project, mainly purchasing green machinery and equipment. The amount of government-approved green products purchased was NT$26.07 million in 2025. We will continue to purchase green products in the future.

Green Procurement Statistics

(Unit: in NT$10 thousand)

Year
2023
2024
2025

CGPC
4,852
7,537
1,604

TVCM
1,391
2,091
537

CGPCP
902
236
466

Total
7,145
9,864
2,607

Note：

TVCM and CGPCP have begun reporting green procurement activities since 2023.

CGPC’s continuous commitment to green procurement has been recognized by the Ministry of the Environment, earning the company the 2025 "Outstanding Green Procurement Enterprise" Certificate of Appreciation.

Supplier management and evaluation

In response to changes in production operations and environmental protection policies, CGPC regularly evaluates the inclusion of new suppliers based on items such as service, quality certification, packaging quality, environmental protection, industrial safety, and delivery deadlines to ensure that every raw material and service obtained are of sufficient quantity, high quality, low price, while meeting the requirements of environmental protection, as well as industrial safety and policies and regulations.

♦︎ Supplier management：

Develop suppliers

Vendors' sample testing and qualification review

Qualification certification

Documentation of qualified suppliers "Group's Supplier Application Form/Qualified Vendor Application Form"

Continuous evaluation

Annual supplier evaluation process "Supplier Evaluation Form"

♦︎ Supplier evaluation：

Evaluation results of CGPC's qualified raw material suppliers and qualified material suppliers in the last 3 years
By company	Raw materials and Materials	Item	2023	2024	2025
CGPC	Raw materials	Number of companies evaluated	132	161	130
	Raw materials	Qualified rate	100%	100%	100%
	Materials	Number of companies evaluated	49	52	45
	Materials	Qualified rate	100%	98%	100%
	Descriptions			(Material supplier, 1 unqualified) Due to communication issues between the supplier and the plant regarding order delays, product returns and exchanges, and partial deliveries.

CGPCP	Raw materials	Number of companies evaluated	12	11	13
	Raw materials	Qualified rate	100%	100%	100%
	Materials	Number of companies evaluated	19	16	24
	Materials	Qualified rate	100%	100%	100%
TVCM	Raw materials	Number of companies evaluated	17	15	14
	Raw materials	Qualified rate	100%	100%	100%

Evaluated once a year with a score of 75 or above is considered qualified.

Because TVCM does not have packaging materials or supplies, it is not included as part of the supplier evaluation.

Evaluation items for qualified raw material suppliers

Selection and evaluation of contractors

The procurement unit mails the Construction Contractor Survey Form to selected contractors and asks them to fill out the form, apply company seal stamps on the form then send it back. Survey forms with incomplete submission of supporting documents will not be evaluated and such contractors will not be allowed to undertake the Company's projects.

Project construction evaluation

Project construction evaluation items

Evaluation results of CGPC's project contractors (qualifying score of 70 and above) in the last 3 years
By company	Item	2023	2024	2025
CGPC	Number of companies evaluated	47	55	26
CGPC	Qualified rate	100%	100%	100%
CGPCP	Number of companies evaluated	8	6	7
CGPCP	Qualified rate	100%	100%	100%
TVCM	Number of companies evaluated	24	11	9
TVCM	Qualified rate	100%	100%	100%

If the score is less than or equal to 69 points, it is considered unqualified. If the rating is C (69-60 points) or D (50-59 points), the request for quotation will be stopped for 6 months or 1 year, respectively. Those with a rating of E (below 49 points) will be disqualified from bidding and there will be no transactions in the future.

In the process of construction evaluation, the supervisory unit and the environmental safety and health unit record the deficiencies in the construction process, and the contract offering unit will summarize and discuss with the project contractors, informing them of the scoring results and the deficiencies, and asking them to improve.

Implementation status of supplier social responsibility commitment

Existing Suppliers: 100% of suppliers with transaction records within the past year have signed the "Supplier Social Responsibility Commitment." This requirement has been integrated into the standard internal operating procedures to ensure all newly added suppliers comply.

New Suppliers: Since the implementation and establishment of internal standard operating procedures in 2019, all new suppliers have been required to sign and submit the commitment form along with their basic vendor profiling data.

On-Site Audits: In 2025, on-site audits were completed for 4 suppliers, with another 4 planned for 2026. The "Supplier Code of Conduct and Quality Requirements Self-Assessment Form" has been fully integrated into these on-site audit items.

Self-Assessment Categories: The aforementioned "Supplier Code of Conduct and Quality Requirements Self-Assessment Form" covers six major dimensions: Labor and Human Rights, Health and Safety, Environment, Information Security, Privacy Protection, and Business Ethics.