5.3 Responsible Procurement and Supplier Management

5.3.1 Green Procurement

As in the financial service industry, PSC is an agent or a distributor, so we cause little impact on the environment. Our suppliers in 2022 can be mainly divided into renovation projects, software and hardware maintenance, information services, and others, all of whom are local suppliers in Taiwan. To contribute to the society's pursuit of environmental protection, energy conservation, and carbon reduction, the procurement principles are clearly set out in our requisition and procurement management regulations that the items purchased shall be aligned with the environmental protection, sustainable development, and radiation protection standards, thereby reducing the impact of PSC’s procurement on the environment.

5.3.2 Supplier Management

We adopt an open and fair procurement process and have set up a section dedicated to invitation to bid on the Company's website to provide information on invitation to bid. To control the quality of suppliers, we review whether suppliers’ transaction counterparties have a record of unethical or illegal conduct as per the Ethical Corporate Management Best Practice Principles and avoid collaboration if such a record is confirmed. If unethical conduct is discovered after a contract has been signed, we may terminate or rescind the contract at any time. To maintain the principle of fairness, as per the Company's Purchase Requisition and Procurement Management Regulations, if the total purchase amount exceeds NT$ 800,000, it requires a price negotiation meeting by the members of the price negotiation team, including directors of the Finance Department, the Administration Department, the Compliance Division, and Settlement and Clearing Department, and at least one representative of the Company’s top management in accordance with the negotiated price. In addition, quotes should be obtained from three suppliers and compare the prices. In 2022, the price negotiation team deliberated on a total of 97 cases in full compliance with the Company’s regulations for price negotiation.

To maintain the service quality of suppliers, we conduct assessments of our existing suppliers per year as per the Supplier Assessment Management Regulations, and the assessments are divided into initial, regular, and irregular assessments and the assessment results are divided into four levels of A, B, C, and D, as a basis for future collaboration. Since 2017, we have conducted all supplier assessments by electronic means, which has greatly reduced paper waste. In 2021, we conducted an assessment of 158 regular suppliers, and more than 89.9% of the suppliers were rated Level B or above. Furthermore, to facilitate smooth operational processes, suppliers rated C-level will be replaced with alternatives. If it is difficult to find a replacement and interactions with such suppliers are still necessary, they will be required to make improvements, and a gradual phase-out process will be initiated for suppliers that do not meet the assessment standards.

Since 2016, PSC Securities has required its suppliers to sign a Supplier Social Responsibility Commitment Statement and has established a dedicated supplier section on the Company's website. In 2022, the overall percentage of suppliers who signed the commitment reached 94.38% (excluding one-time purchases). In the future, the commitment statement will also be included as one of the evaluation criteria for suppliers. PSC and its suppliers are jointly working towards sustainability and environmental goals to achieve shared prosperity and benefits.