We have established a systematic supplier screening process covering competence, credibility, and ESG performance to ensure that all suppliers are secure and reliable, have the ability to produce products or provide quality services that meet the Bank’s requirements, and have policies and practices that are consistent with the Bank’s Supplier Code of Conduct. Potential suppliers are invited to meet us to discuss their products and services as well as to give them a good understanding of the Bank’s guidelines and practices. We investigate the suppliers’ qualifications based on our evaluation criteria for service performance and reliability. Staff of the relevant business units may visit the supplier’s business for further screening and evaluation. For outsourced service providers, the screening committee will consider applications for internal registration of suppliers based on the screening guidelines for the outsourced company. For the ESG assessment, suppliers must each complete an ESG Self-Check List and pass the assessment criteria set by the Bank before they can qualify as our registered suppliers. If they qualify, they can sign a procurement contract with the Bank.
In the past year, the Bank revised the supplier’s ESG Self- Check List to make it clearer and more comprehensive covering several aspects such as environmental impact management, respect for human rights in compliance with international principles and standards, respect for basic rights at the workplace in compliance with the International Labor Organization (ILO) Convention, illegal use of child labor and forced labor, prevention and protection of personal information, prevention of corruption, etc. In addition, the Bank requires suppliers to provide documentary evidence for our evaluation to support their responses to the ESG Self-Check List, such as their related policies or measures.
Assessment of Risks Related to the Environment, Society, and Governance in the Supply Chain
In assessing ESG risks of our suppliers in the supply chain, the Bank attaches great importance to the risk assessment associated with our critical suppliers, such as those suppliers with whom we have high spending; critical component suppliers which produce essential goods and services for the Bank; and non-substitutable suppliers which produce products and services that cannot be easily replaced by other sources. Specifically, the Bank has identified material risks based on likelihood and severity of the risks for assessing our critical suppliers as follows: