ESG

Supplier Sustainability Management

Delta views its suppliers as long-term partners and critical partners in Delta's promotion of sustainable development. In addition to competitive quality, technology, delivery, and cost, Delta also pays close attention to their performance in governance, environmental protection, and society, including actions taken in response to climate change.

We use the Supplier Code of Conduct as the basis for dialog, collaborating with suppliers to establish sustainable development targets for energy conservation and carbon reduction, sustainable raw material procurement, and waste reduction. We also actively supervise the implementation of these targets to mitigate the impact of climate change and practice sustainable supply chain management.


Goals for Sustainable Supply Chain Management

Delta's supply chain management includes selection and recognition of new suppliers, continuous ESG risk management, and performance evaluation. Strategic guidelines include:

  • Set short- and mid-term key targets and formulate specific methods to effectively promote and implement.
  • Regularly identify high-risk suppliers and require them to perform audits and set deadlines for improvement to become medium- or low-risk suppliers.
  • Implement and abide by the supply chain ESG policy, and fulfill the business mission: "To provide innovative, clean and energy-efficient solutions for a better tomorrow."

Supply Chain ESG Committee

To strengthen the sustainable management of its supply chain, Delta has established a Supply Chain ESG Committee chaired by the director of the Supply Chain Management Division with members that include the procurement managers of business groups. An executive secretary, assigned to take charge of everyday operations and project implementation, regularly reports to the senior management team and the Board of Directors and there is consensus from top to bottom regarding all major ESG issues. Through regular meetings and KPI reports, the committee revises and updates short-, medium-, and long-term goals on a rolling basis to maintain flexible strategy adjustments.

The scope of the committee's work is divided into six core categories: "policy / regulations/ management methods", "supplier evaluation and engagement", establishment of the supply chain ESG platform, "environmental performance improvement", "communication and disclosure", and "management of special issues". To fulfill Delta's commitment to sustainable development, we actively implement three major strategies: "supplier ESG risk management", "responsible manufacturing" and "green and low-carbon supply chain". We strengthen cooperation and communication with suppliers through ESG questionnaires, the establishment of a supplier ESG platform, and regular supplier conferences. We also make the effort to gradually improve and introduce a sustainable procurement system to further enhance and optimize the efficiency and effectiveness of supply chain management, ensuring that Delta suppliers implement sustainable practices.

Supply Chain Management Procedures

Delta's supply chain management includes selection and recognition of new suppliers, continuous ESG risk management, performance evaluation, supplier engagement and long-term improvements. The targets include suppliers of materials/components, agents, and contractors.

  • Stage 1: Selection and Recognition of New Suppliers

    Delta has set clear selection criteria for suppliers. After reviewing their operations and sustainability conditions, only those who meet the selection criteria can become Delta suppliers. All suppliers must sign a procurement contract and a new supplier registration declaration, which contains clauses such as Supplier Code of Conduct, integrity commitment, environmental protection, conflict minerals, fair competition, and antitrust law. Presently, the signature rate in Taiwan, Mainland China, and Thailand has reached 100% as roll-out gradually continues in other regions.

  • Stage 2: Continuous ESG Risk Management

    Every year, we carry out classified and tiered management for different supplier categories, including product manufacturers, branch companies of manufacturers, external processing manufacturers, distributors, and service companies, and issue surveys to tier 1 suppliers that have continuous transactions with Delta. We assess supplier risk levels by managing and analyzing questionnaires formulated based on RBA and the Delta Group Supplier Code of Conduct, carrying out follow-ups and on-site audits and issuing improvement requirements based on the results.

  • Stage 3: Performance Evaluation

    When conducting our Quarterly Business Review (QBR), in addition to traditional factors like technology, quality, service, delivery time, and cost, Delta also considers suppliers’ ESG risk and capabilities, which account for 10% of the score, as a key factor for order management and continuing cooperation. The ESG performance of suppliers affects their partnerships with Delta. For example, those with higher scores may receive more orders, while those with low scores may have their collaboration with Delta reduced or even terminated. To encourage suppliers to take proactive ESG actions, Delta awards bonus points for excellent ESG practices, further promoting the sustainable development of the entire supply chain. Additionally, Delta gives out awards to the best performing vendors (MVP) and the most improved vendors (MIP) from its suppliers every year. This approach utilizes Delta’s influence as a brand, not only recognizing suppliers with outstanding sustainability practices but also encouraging the entire supply chain to make continued improvements.

  • Stage 4: Supplier Engagement and Long-term Improvements

    To promote the sustainable development of the supply chain, Delta evaluates the sustainability performance of its suppliers through questionnaires and on-site audits, actively participating in improving suppliers' environmental, social, and governance (ESG) growth. By providing "Supplier ESG Training Courses" and "Services and Product Solutions", Delta supports suppliers in improving sustainable performance, thereby promoting continuous improvement of the overall supply chain.

Conflict Minerals

Research conducted by the Responsible Minerals Initiative (RMI) discovered that the rebel groups in the Democratic Republic of Congo and neighboring countries in Central Africa use forced labor, child labor, and other illegal means to mine tungsten, tin, tantalum, gold, cobalt, and mica, and sell them in exchange for weapons, thereby causing regional instability. Minerals obtained through illegal means are referred to as conflict minerals. Tungsten, tin, tantalum, gold, cobalt, and mica are essential for electronic products to function. To avoid the use of conflict minerals obtained from illegal operations, we have established the Responsible Mineral Procurement Policy and the Due Diligence Investigation on Conflict Minerals of Suppliers. Please refer to the ”Delta Group Responsible Sourcing Policy” section of our website for more information.

To ensure that no conflict minerals are used in Delta products, Delta conducted due diligence investigations using an online questionnaire converted from the CMRT 6.31, EMRT 1.2, and the latest PRT1.1 template released in 2023. We also strengthened communication and cooperation with suppliers through webinars to practice responsible manufacturing. Delta requires suppliers to disclose and purchase minerals from qualified refineries based on the latest list of valid and qualified refineries published by the Responsible Minerals Initiative (RMI). Delta includes mica, which has received more attention from stakeholders, in the scope of due diligence investigation.

According to the investigation, Delta's supply chain sourced materials from 278 refineries in 2023, of which all 278 were included in the most recently updated list of qualified refineries. According to the analysis, most of the qualified refineries are located in Asia while others are located in Europe. Please refer to “2023 Delta Electronics Responsible Minerals Report”

Suppliers' Participation in Sustainability

Delta has long-term cooperation with suppliers to save energy and reduce carbon emissions, from waste reduction, logistics, and the application of energy-saving products. The results help to significantly save materials and operating costs and reduce carbon emissions.

Supplier Sustainability Development

Starting in 2022, Delta's suppliers are required to quantify their annual GHG emissions, establish stage by stage carbon reduction goals, and provide the necessary product-based GHG data to meet Delta's requirements for information on product carbon footprint. We also require suppliers to obtain third-party verification statements for GHG inventory data before Q4 of 2025.

To help suppliers who have not yet conducted a GHG inventory measure their annual GHG emissions in accordance with ISO standards, Delta invited external consultants to provide a two-day GHG inventory training program, which was provided free of charge to Delta's tier 1 suppliers. The course on ISO 14064-1 greenhouse gas inventory standards included an analysis of relevant requirements and terminology. The course then introduced quantitative tools and inventory calculation formulas to show the GHG inventory process and matters of note with real case studies. We also provided information on the organizational structure of the report and the key points for verification.

Supply Chain Environmental Performance

To fulfill our corporate commitment "To provide innovative, clean and energy efficient solutions for a better tomorrow," Delta continuously cooperates with suppliers to reduce carbon emissions. This not only lowers operational costs for both Delta and the supplier, but also increases the competitiveness of the entire supply chain.