CHENG LOONG

Committed to low-carbon procurement with a goal of achieving 50% green procurement by 2030

To support national policies, align with international trends, and achieve the UN SDGs 12: "Promote the green economy, ensure sustainable consumption and production patterns," CLC actively implements green procurement according to our green procurement standards. We prioritize purchasing raw materials, plant facilities, and office supplies that are certified by the Green Mark, Energy Label, and FSC^TM to reduce environmental impact.

In 2023, we used 1.628 million metric tons of recovered paper, with the utilization rate reaching 94.9% for all paper types (+2.4% YoY) and 97.5% for industrial paper, meeting our targets. FSC^TM-certified pulp accounted for 98.1% of our total virgin pulp procurement, achieving the set goal. To further align with SDGs 15 and demonstrate our commitment to biodiversity, we have set a goal to achieve 100% FSC^TM-certified pulp by 2030.

We continue to increase our green procurement expenditures, aiming for a 50% green procurement ratio by 2030. In 2023, our green procurement expenditures reached NT$8.99 billion, accounting for 56.4% of total procurement and achieving a 9.3% year-on-year increase. This surpasses our mid- and long-term goal of 50%, solidifying our leadership position among domestic companies.

Responsible Sustainability Procurement Policy

❙  No Conflict Minerals

To avoid using conflict minerals acquired from illegal means is what the CLC does to realize the ESG in human rights protection and environment protection for a sustainable supply chain. We hereby guarantee that all CLC industrial paper and corrugated boxes do not use conflict minerals including tin, tantalum, tungsten, and gold from the Congo Republic and nearby countries and regions in the production process. Additionally, CLC let the suppliers understand the serious social and environmental issues such as human rights violations, armed conflicts, and international disputes caused by the mining and trade of metal minerals, and the duty they need to fulfill in the supply chain. We commit to non-conflict procurement, and continue to pay attention to the mineral management requirements of international organizations, and communicate with the supply chain in real time.

❙  Substance Restriction

To ensure sustainable procurement of the supply chain and conformity to the international restrictions on hazardous substances of products, besides establishing the Hazardous Substances Inspection Instructions, we began to implement the full material disclosure (FMD) in 2021 to periodically request suppliers to provide the inspection reports and declarations of hazardous substances and strictly request business units to comply with the substance restrictions for materials, finished products, and new materials.

Fostering the upgrading and transformation of recovered paper supply chain, checking the source of recycled materials from the source, and optimizing the recycling effect in one continuous line

❙  Prospecting the Social Source Classification Problem, Implementing Corporate Recycling Capacity to Expand the Positive Influence

CLC recycled domestic recovered paper with the largest scale in Taiwan. However, recovered paper in Taiwan usually mixes with 10~13% household waste due to improper recycling practices, affecting recycling effects and increasing the energy consumption. Since 2018, CLC has guided 167 recycling companies, we enhance the local recovered paper quality in line with the international standard and the competitiveness of supply chain from the sound source recycling system. In addition, the amount of waste food paper container suppliers which increase to a total of 54 form the local purchase and recovery supply chain ecosystem.
 

❙  Upgrading and Transformation of Recovered Paper Supply Chain Plan: Reducing Paper Sludge by 50%, Decreasing the Energy Consumption by 10%

Since 2018, CLC has targeted to support over 2 supplies to upgrade to reduce impurities and waste from the source, and made the revision of procurement guidance for recovered paper, introduced the first "Recycled Paper Moisture Analyzer" in Taiwan and e-platform assistant. We planned three stages of "counseling period", "observation period" and "replacement period" for 167 recovered paper suppliers in Taiwan to implement source identification.

In 2023, we successfully guided 12 focused recovered paper suppliers to implement transformation to reduce paper sludge by 50%. Meanwhile, it improved the energy saving during the process reached 10%. More importantly, it enhanced the profit and competitiveness of recovered paper suppliers.