Supply Chain Sustainability Management

To reduce the operational risks and enhance sustainable competitiveness of products, GIS has actively implemented supply chain sustainability management. The supplier management policy of GIS is "Social Responsibility, Sustainable Development", which complies with the requirements of Supplier CSR Management and the Conflict Minerals Management Operation Regulations. In accordance with the requirements of Supplier CSR Management, the risk assessment and supplier evaluation for both new and existing suppliers are divided into four stages of "Selection," "Validation," "Mass Production," and "Continuous Improvement." To achieve the net zero target and make advanced arrangements for relevant emission reduction plans, GIS proposed the “crucial supplier climate questionnaire survey” promotion plan and selected crucial suppliers with a purchase amount accounting for 85% of the total procurement amount or above for the pilot of the testing questionnaires. The company make revisions and adjustments to the questionnaire according to the feedback from suppliers to ensure the feasibility and effectiveness of the questionnaire to facilitate the updating and confirming the Scope 3 data of GIS.

In 2023, GIS conducted audits on 74 suppliers, all of whom passed. Notably, there were zero unqualified suppliers excluded from the list as a result of these audits

Critical Material Risk Management

GIS conducts risks assessment for key parts and identifies risk factors that may influence the stable supply of raw materials, including supply interruption caused by extreme weather, international situations, scarce materials, and conflict minerals. Critical material supply risk management is conducted in accordance with Procurement Management Operating System, Business Continuity Management Operation Regulations, Supplier Management Operation Regulation and the Newly Added Supplier Operation Regulation. Specific measures include defining critical and non-critical materials, conducting regular supplier audits, establishing diversified supplier networks, and implementing Business Continuity Management (BCM) processes. These measures ensure that GIS can promptly respond to risks such as raw material supply disruptions or quality issues, thereby stabilizing business operations and supporting long-term development. For more details of risk management, please refer to 2023 ESG Report, Chapter 2.4 Risk Management.

Crucial Supplier Climate Questionnaire

In 2023, GIS initiated the "climate change response questionnaire survey" to precisely obtain Scope 3 emission data, focusing primarily on the procurement of products and services. This survey, also known as the "climate questionnaire," aimed to update Scope 1 and Scope 2 data for GIS. The scope of the questionnaire distribution for 2023 targeted key suppliers of the Chengdu, Shenzhen, and Wuxi plants.

In October 2023 (surveying data from 2022), GIS distributed 30 pilot climate questionnaires to these suppliers, recovering responses from all 30 questionnaires, achieving a response rate of 100%. Following revisions and finalization based on the initial questionnaire results, GIS plans to distribute the comprehensive version of the crucial supplier climate questionnaire in the first half of 2024. This effort is intended to support GIS in formulating crucial actions for meeting emission reduction targets.