Greener With Conscious Commerce: ASUS’s Sustainable Supply Chain Management

May 30, 2024

What does supply chain management have to do with corporate sustainability? A sustainable supply chain is crucial for reduction of operational risk in any business. Human rights, labor safety, obtaining responsible materials, carbon reduction, and efficient manufacturing processes are essential factors in creating a responsible, green supply chain.

As a multinational company and leader in the computer and electronics industry, ASUS has over 700 suppliers worldwide. Read on to find out how we manage sustainable, responsible supply networks in cooperation with partners.

ASUS takes social responsibility and corporate governance very seriously. In 2018, we became a full member of Responsible Business Alliance (RBA), a group dedicated to supporting the rights and safe working conditions of workers in supply chains. ASUS is dedicated to fulfilling obligations as a Full Member, which requires us to fulfill stricter requirements compared to Regular, Affiliate, and Supporter members in RBA. Hence, we strictly audit relevant partners traced deep into the supply chain. These partners’ functions include product assembling, component manufacturing, and raw material mining. To align with our sustainability goals and reassure our customers that they are purchasing from a responsible corporation, ASUS has training programs, screening and audits, partner performance incentives, and code of conducts to be abided by – all of which help validate supplier and partner quality.

Carbon Reduction Along the Supply Chain

ASUS is committed to encouraging and supporting our partners to reduce carbon footprint and minimalize carbon emission along the supply chain as a result. This is crucial because our supply network is the primary contributor to ASUS’s carbon emission. To reduce carbon footprint, we have a five-year plan for carbon reduction targeted at our key suppliers that has been in execution progress ever since 2021 and is expected to continue until 2025, from then we will reflect and set further plans to achieve the next milestone. This plan consists of three stages – identifying sections in suppliers’ production that generates most carbon emission, mapping out carbon reduction plans based on the supplier’s capacity, and finally, the execution of the drafted plan.

The expected results of this carbon reduction plan include encouraging partners to acquire the International Standard for GHG Emissions Inventories and Verification (ISO 14064), which promises the integrity and accuracy of calculated and published carbon footprint data. ASUS also aspires to improve suppliers’ equipment efficiency and increase renewable energy usage. These efforts are validated by Science Based Targets initiative (SBTi) to reduce carbon emissions and pursue the goal of ASUS 2050 Net Zero vision.

Partner Screening and Auditing

ASUS has a three-step framework for choosing partners and making sure they meet sustainability requirements. The three steps are 1) New Supplier Approval; 2) Continuous Risk Management; 3) Performance Evaluation. Each supplier must pass a New Supplier Approval process to work with ASUS. This screening process involves ensuring that the supplier meets ISO 9001 and ISO 14001 standards. These are globally recognized standards for quality management and for environmental management systems. Suppliers will then need to go through an initial audit, which includes inspections for quality, zero hazardous substances, and corporate social responsibility. Finally, suppliers must sign the ASUS Code of Conduct Declaration which provides extra protection to young and female employees, and a Human Rights Statement for promising commitment to integrity and human rights.

ASUS supervises approved partners through annual continuous risk management and quarterly performance evaluations. Partners are categorized according to risk level and are accordingly subject to on-site or document review covering labor supply, environmental and social impacts, and governance. Suppliers must also complete an annual survey to report responsible mineral sourcing, greenhouse gas emission, water footprint, and waste. The final step of performance evaluation is conducted quarterly and determines whether ASUS should continue partnership with the supplier based on quality, cost, technique, punctuality, service, ethics, environmental protection, and sustainability. Suppliers who exceed expectations and outperform are rewarded with more resources from ASUS as encouragement.

Training Programs and Conferences

It’s important to raise awareness and keep suppliers aligned on human rights regulations, carbon management trends, and sustainability goals. ASUS organizes regular training programs and conferences for suppliers to keep them up to date on related topics. Presenters such as qualified auditors from impartial third-party institutions are invited to give lectures on how to make improvements, ensuring human rights, carbon reduction and more. Along with these in-person training sessions, ASUS also offers online courses to familiarize suppliers with the RBA Code of Conduct and encourage them to achieve ISO certifications.

In 2022 more than 90% of ASUS suppliers expressed that ASUS-provided trainings and conferences provided good opportunities for communication on sustainability topics. ASUS also tries to encourage conversations in real time with partners via large scale supplier summits. We held a physical event in Taiwan in December 2023 for suppliers of which we are extremely proud to report - achieved a 100% attendance rate from key suppliers. The latest hazardous substance restrictions and sustainability regulations across countries such as Eco-design for Sustainable Products Regulation (ESPR) were shared in the event. Such endeavors of management and active communication are made because we see suppliers as our key partners and hope to create a sustainable supply chain hand in hand.

Minerals and metals such as tantalum, tin, tungsten, gold, and cobalt are essential in ASUS products, including batteries, motherboards, CPUs, hard drives, and more. ASUS smelter suppliers are located around the world, with 65% of them located in Asia. ASUS is in close collaboration with Responsible Minerals Initiative (RMI) as a verified member, an organization widely used by corporations to verify responsible mineral sourcing. RMI maintains a list of the latest qualified smelter certifications and provides suppliers with procurement resources. ASUS currently sources 100% of our tantalum, tin, tungsten, and gold from conformant smelters and will continue this commitment in the future.

To address issues of illegal child labor, low wages, local social instability caused by illegal mining, and human right concerns, ASUS follows the five principles of OECD Due Diligence Guidance for Responsible Supply Chains to investigate suppliers with potential risk and conflict. The five principles include establishing strong company management systems, identifying and assessing risks in the supply chain, designing and implementing responses to identified risks, carrying out independent third-party audits for due diligence, and finally to report annually on supply chain due diligence results.

To fully abide by these five principles in OECD Due Diligence, ASUS requires that all partners comply with ASUS Responsible Minerals Policy and the Responsible Business Alliance (RBA) Code of Conduct. The due diligence process then involves conducting responsible mineral surveys and a Reasonable Country of Origin Inquiry (RCOI) to check if minerals are sourced from the Democratic Republic of Congo. Then suppliers need to go through the Responsible Minerals Assurance Process (RMAP) which is a filtering procedure conducted to choose smelters. After smelters pass examinations, ASUS requirements are then communicated with qualified smelters and optimization plans are set. Conversion of conformant suppliers are tracked quarterly. Finally, ASUS discloses the list of suppliers involved in our supply chain on our ESG website and in our public annual sustainability report.

In 2020, we obtained the world’s first ISO 20400 certification for sustainable procurement with outstanding performance. This significant milestone verified by SGS, a globally trusted third-party, speaks for ASUS’s dedication to implementing and executing proper procurement policies. We also completed annual Environmental, Social, and Governance (ESG) audits for all high-risk suppliers during that year. After corrective actions were taken to correct deficiencies discovered, the estimated savings - measured by saved medical cost of reduced overtime hours and environmental impact - amounted to over US$750,000. These quantifications not only help us measure progress made regarding supply chain sustainability, but they also provide solid indications to prioritize investment for supply chain maintenance.

In 2022, ASUS conducted more than 1,500 interviews among suppliers and their employees and provided labor rights protection more than 410,000 person times. ASUS has also achieved an average annual increase of 20% for conducted interviews since 2016.

Our efforts to supervise and support suppliers in reducing carbon emission have been productive. Based on our latest data in 2022, ASUS’s key suppliers have successfully reduced their carbon emissions by approximately 24% compared to the baseline year 2020.

ASUS has become a leading example of supply chain sustainability management. Our core values for respecting human rights remain unwavering. We can confidently claim to have achieved human rights and labor integrity in the process of our product manufacturing throughout our supply network. As a full member of RBA that will continue to follow RBA code of conduct and complete 100% of third-party audits, we currently are and will continue to ensure suppliers and partners work with us in tandem to build a green, sustainable supply chain.