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Green Supply Chain Management

Green environmental protection is an important part for the construction of Gongjin’s social responsibility. While fulfilling our own green environmental protection, Gongjin also attaches great importance to the management of green supply chain.
01
Green Norms
  • Initial import, and agreement signing stage
    Initial import, and agreement signing stage
    Initial import, and agreement signing stage
    Suppliers are required to sign the Supplier Environmental Compliance Declaration, Environmental Assurance Agreement, Social Responsibility and Occupational Health Safety Commitment Letter, Business Partner Trade Safety Agreement, and Guarantee Agreement for Non-use of Conflict Minerals to constrain their behaviors and ensure compliance with laws and regulations.
  • On-site review stage
    On-site review stage
    On-site review stage
    Gongjin’s TQC team shall review the suppliers based on the Supplier Environmental Protection Review Form, the Supplier Management System Review Form and the Supplier Conflict Mineral Review form, to ensure that the suppliers meet the requirements of various systems related to environmental management system, hazardous substance control, conflict mineral management and CSR corporate social responsibility.
  • Product’s sample acceptance and mass production stage
    Product’s sample acceptance and mass production stage
    Product’s sample acceptance and mass production stage
    Gongjin is continuously monitoring and controlling the supplier’s products, not only to ensure that the products meet the latest version of the Environmental Protection Technical Standards for hazardous substances control and legal requirements, but also to fully apply the performance appraisal system to continuously follow up the supplier’s performance and make evaluations. It is ensured that supplier’s products are under control from sample acceptance to mass production.
02
Green Procurement
In the internal Environmental Protection Technical Standards, Gongjin has clarified the requirements for the restricted use of hazardous substances, and the RoHS2.0 related substances have been controlled as the company’s first-class environmental substances (first-class environmental substances: the environmental substances prohibited and restricted from being used in our electronic products, components and raw materials), as detailed in the following table:
Hazardous substances Regulations Limited value (ppm)

Cadmium and cadmium Compounds

2011/65/EU (Solder) 20
2011/65/EU (Except for designated purpose) 70

Lead and Lead compounds

2011/65/EU (Plastics including rubber, paint and ink) 90
2011/65/EU (Lead-free solder) 500
2011/65/EU (Except for designated purpose) 700

Mercury and mercury compounds

2011/65/EU 700

Hexavalent Chromium Compounds

2011/65/EU 700

PolyBrominated Biphenyls (PBBs)

2011/65/EU 700

PPolyBrominated Diphenyls Ethers (PBDEs)

2011/65/EU (Non-electronic electrical products sold separately (such as protective cases)) 500
2011/65/EU (Except for designated purpose) 700
DiEthylHexyl Phthalate (DEHP) (EU) 2015/863 700
Butyl Benzyl Phthalate (BBP)
DiButyle Phthalate (DBP)
DiIsoButyl Phthalate (DIBP)

03
Risk Control
While continuing to pay attention to the construction of green supply chain, Gongjin also attaches great importance to the identification and control of green supply chain risks. In addition to monitoring and evaluating suppliers through environmental management system, hazardous substances control system, non-use of conflict minerals, CSR and other systems, we also identify high and low-risk suppliers, and continuously track them. Supplier review for 2020, 2021 and 2022 are summarized below:
Year Review number (unit) High-risk suppliers (unit) Proportion of high risk Proportion of high risk Review completion rate
2020 122 2 1.6% All completed 100%
2021 154 2 1.9% All completed 100%
2022 171 0 0% All completed 100%

Note:

Proportion of high-risk suppliers=Number of high-risk suppliers/Number of annual reviewed suppliers *100%

Review completion rate of high-risk suppliers=Number of high-risk suppliers/Number of reviewed high-risk suppliers*100%


04
Energy Conservation and Emission Reduction
Gongjin implements the both-hands principle in terms of energy conservation and emission reduction in the supply chain:
  • Internally implement the principle of nearby procurement
    Internally implement the principle of nearby procurement

    In search of new resources of the suppliers, Gongjin adheres to the principle of choosing suppliers from original factory and local site in the context that other advantages are comparable. In the process of integrating suppliers, Gongjin adheres to the principle of prioritizing the order allocation of local suppliers to continuously promote the reduction of carbon emissions in the context that other advantages are comparable.  

  • Externally implement the principle of self construction
    Externally implement the principle of self construction
    Gongjin is continuously promoting suppliers to import the environmental-related systems, such as ISO14001 (Environmental Management System), ISO15001 (Energy Management System) and ISO14064 (Greenhouse Gas Emission Standards). Through the import of environmental systems, suppliers are allowed to make innovation and practice, reduce the carbon footprint of their own products, and truly implement the management of carbon emission. Up to now, a number of suppliers have completed the certification of ISO15001 (Energy Management System) and ISO14064 (Greenhouse Gas Emission Standards), which effectively promotes the continuous improvement of energy conservation and emission reduction among them.
     
    In 2021, there were a total of 89 suppliers to carry out the energy conservation and emission reduction work, including the improvement of energy conservation and emission reduction facilities, the recovery and treatment of waste gas, the purification of wastewater, the disposal of solid waste, etc. In terms of environmental protection, continuous monitoring and improvement measures were carried out in all aspects to constantly promote the green construction of suppliers.
    Example 1: Supplier A1572:
    ①、A large tunnel furnace was introduced: Its capacity is equivalent to that of three small furnaces, saving approximately 55% of the electricity consumption.
    ②、Full connection was introduced: It saved 60% of the number of employees, reduced 76% of the losses, and saved approximately 30% of the electricity.
    ③、New gold-spraying machine was introduced: It reduced 52% of the consumables, reduced 10% of the electricity consumption, and increased 28% of the production capacity.
     
    Example 2: Supplier A1729:
    ①、Mercury-containing fluorescent lamps were replaced with LED lighting lamps: The production workshop has replaced from the original 36W mercury-containing ordinary fluorescent lamps to 16W LED energy-saving lamps, with an annual working time of 7,200 hours, reducing electricity consumption by 117,200 kWh and saving electricity costs by RMB147,000 yuan.
    ②、The electric water heater was replaced: A large 24KW old-style electric water heater installed on the roof of the original comprehensive building was modified to a new high-efficiency and low-energy small household electric water heater that can be automatically controlled to start, which can be opened as needed, reducing electricity consumption by 62,700 kWh/year and saving electricity costs by RMB50,000 yuan.
    ③、The exhaust gas fans in sintering and printing workshops were replaced: There were two types of exhaust fans in the original sintering and printing workshops, of which number is large and power consumption is high. Now, the environmentally-friendly fans are uniformly used for printing exhaust gas, while two separate small fans are used for sintering exhaust gas. After the renovation, the electricity consumption of two motors is saved, reducing electricity consumption by 60,000 kWh/year and saving electricity costs by RMB49,000 yuan.
     
    Example 3: Supplier A1548:
    ①、Air-conditioning cooling tower cooling fan was controlled automatically: The cooling tower cooling fan can save electricity consumption of 106,600 kWh and cost of RMB68,200 yuan every year;
    ②、Air compressor waste heat was recovered (for use in the workshop): The hot water generated by air compressor waste heat is utilized to supply the air conditioning in the workshop, reducing the energy consumption of heat pump hot water unit and saving 393,800kWh annually.
    ③、Electric forklifts were purchased to replace diesel forklifts: Exhaust emission are reduced by 30%.
05
IPE Review System
Gongjin strictly controls the newly imported suppliers, and strictly restricts the import of suppliers with blemishes on environmental protection issues. In the initial stage of import, IPE query is executed to confirm whether the suppliers have environmental violations, and green procurement is implemented from the source to reduce the risk of supplier violations. After the import of the supplier, its IPE situation shall be periodically confirmed every six months and then recorded in the Supplier’s IPE Query List. The supplier’s IPE information shall be monitored regularly.
IPE Review System
06
Management Objectives of Green Supply Chain
The company will continue to maintain industry leadership, explore the construction and implementation of green supply chain, and support the key commitments on sustainability: ensuring environmental compliance, preventing pollution and reducing environmental impact, striving to develop leading green products, and continuously improving global environmental performance. Through the construction of five dimensions, “green product design + green production + supplier management + green logistics + green recycling”, and a “green information disclosure platform” (referred to as “Green 5+1”), Gongjin Electronics aims to build a green supply chain system, and sets the management objective value from 2022 to 2024.
Management Objectives of Green Supply Chain
07
Pioneer in implementing the green supply chain
In order to implement the “14th Five-Year Plan” for Industrial Green Development, fully promote green manufacturing, and help the industrial sector achieve the goal of carbon peak and carbon neutrality, in accordance with the Notice of the General Office of the Ministry of Industry and Information Technology on the Recommendation of 2022 Green Manufacturing List (G.X.T.J.H. [2022] No. 235), Gongjin has passed the qualification review for green supply chain management by the Ministry of Industry and Information Technology after being recommended by provincial industry and information technology authorities and reviewed by experts. Up to now, a total of 112 enterprises have passed the review.
Pioneer in implementing the green supply chain