Supply Chain Management System

Acer has been a member of the Electronic Industry Citizenship Coalition (EICC) since 2008, and actively participates in the coalition’s activities and conferences to better understand international trends in corporate social responsibility and share in the practical experience of its members. All Acer suppliers are required to comply with both the EICC Code of Conduct and local regulations. In addition, since 2008 we carried out on-site EICC Code of Conduct supplier audits, gaining a deeper understanding of each location’s working environment and the human rights conditions of the workers. We also encourage tier one suppliers to implement corporate responsibility and advocate for EICC code standards in their own suppliers, thus improving the working environment in the electronics supply chain worldwide.

We implement vendor CSR scorecard assessment in order to look at performance in CSR and with regard to the environmental, social, and governance aspects. We continue to communicate with suppliers and enhance their ability to respond to sustainability issues, as well as encouraging suppliers to incorporate sustainable development matters into their management agenda. We continue to hold annual supplier CSR communication meetings, providing the latest in CSR developments and trends, as well as analyzing supply chain issues and potential actions. These meetings also provide an opportunity for two-way communication between Acer’s management and the suppliers, continue strengthening the capability of entire supply chain in terms of environment and social responsibility.

Supplier Social and Environmental Management Processes

We remain committed to developing social and environmental management practices and guidelines, making use of our multipartite communications channels to provide assistance to our suppliers in these regards. We have adopted the EICC Code of Conduct as our standard and refer to the EICC Supplier Engagement Process by dividing our suppliers' social and environmental management process into four stages: Introduction, Assessment, Validation, and Continuing Improvement.

Through this four-stage process, Acer works with suppliers on important social and environmental issues to establish a sustainable supply chain.

Vendor CSR Scorecard

In 2013, we began implementing vendor CSR scorecard assessment in order to look at implementation of and performance in CSR among our suppliers. Since 2014, we have held quarterly business reviews with CSR scorecard, including providing both Acer's own management and the senior management of suppliers with information that will hopefully motivate improvement on both sides.

Supplier Code of Conduct Expansion

In order to put into practice environmental and social responsibility in Acer’s supply chain, since 2016 we have required our tier one suppliers to implement risk assessment and management for their own suppliers based on the EICC Code of Conduct. For higher risk suppliers, the tier one suppliers should carry out on-site audits and management of follow-up improvement efforts, which we are further incorporating into our vendor CSR scorecard.

On-site Audit

Acer continues to audit supplier performance in terms of social and environmental responsibility. Auditing methods include audits led by management personnel, audits run by third parties, EICC Validated Audit process (VAP), and report review. We use different auditing methods to identify supplier non-compliance in the fields of environmental and social responsibility, and to maintain effective management of these issues in the Acer supply chain.

Acer is committed to ensuring that all suppliers treat their employees with respect, adopt manufacturing processes that demonstrate environmental responsibility, and provide safe working conditions. We have adopted the latest version of the EICC Code of Conduct, which covers five major areas: Labor, Ethics, Health and Safety, Environment, and Management System. This system is used in our on-site audits of suppliers with regard to both social and environmental responsibility, with the aim of elevating the social and environmental responsibility of Acer’s suppliers.

2016 On-Site Audit Results

On the basis of risk-based site audit assessments, we examine the risks of the nations our suppliers are located in, as well as their manufacturing processes and production. Using these results and the other considerations of importance to our stakeholders, we then plan annual audits.
In 2016, we conducted on-site audits of the manufacturing plants of 70 higher-risk suppliers. The companies audited directly employ over 40,000 people, of whom some 450 were interviewed. Between 2008 and 2016, a total of 422 supplier audits have been carried out. Acer’s tier one suppliers undertook a total of 103 audits of high-risk suppliers in 2016.

Target of 2017:70 on-site audits; 1000 workers interview; 150 thousand of workers subjected to on-site audits.

2016 Audit Result Analysis

From the audit results, we find that the greatest proportion of non-compliance occurred in labor issues, followed (in order) by health & safety, management systems, environmental issues, and ethics.

Target of 2017:Labor 85%; Health & Safety 85%; Management System 85%; Environmental 88%; Ethics 92%

Unannounced Audits

In the event of the discovery of child labor concerns, false records, or discrimination issues with a supplier, or of a supplier having relatively more priority non-compliance or a lower audit score, said supplier is then added to the list of potential subjects of unannounced audits. Subjects of such audits are notified 12 hours ahead of time of the fact an audit is impending, but not of the items that will be audited. In 2016, 2 suppliers who had received low audit scores and high risk assessments the previous year were subjected to unannounced audits, being held to even more rigorous demands regarding their practical actions and reinforcing the management of their social and environmental responsibilities.

2016 Improvement and Follow-up on Important Issues

Acer requires suppliers to submit a Supplier Corrective Action Report (SCAR) in response to any issues of non-compliance with the EICC Code of Conduct identified in the audit within 30 days. This SCAR will be approved in writing by management personnel and verified against the on-site audit the following year. With regard to high-risk suppliers, as found in the audits, Acer will make the necessary adjustments to our purchasing strategy to manage the issue.
To ensure that Acer’s suppliers clearly convey the EICC Code of Conduct to their own suppliers, and to ensure compliance with that same code in suppliers, from 2016 we require all tier one suppliers to conduct risk assessments of their suppliers. Where risk is found to be relatively high, our suppliers must also undertake review and tracking of improvement measures. We also continue to focus on managing overtime figures for our ODM suppliers and on ensuring all staff receive at least one day off every seven days. To this end, we undertook bimonthly tracking and monitoring, and should any deviations for the targets be found, we shall require the supplier affected to implement an effective solution. Our analysis of 2016 on-site EICC non-compliance found and the relevant corrective actions is as follows:

Improving Supplier Capabilities

Acer offers information and training regarding the latest trends and developments in social and environmental responsibility, thus helping improve their ability to confront the challenge of sustainable development. We continue to invite suppliers to participate in annual supplier CSR communication meetings, CDP project briefings, and major training programs on social and environmental responsibility. This helps them get access to the latest information on global trends, while also presenting opportunities for suppliers to engage in multidirectional communication with Acer senior management or relevant industry experts.

Supplier CSR Communication Meeting

Every year, we invite representatives of our major suppliers to participate in annual CSR Communication Meeting, not only sharing global trends in CSR, but also reinforcing Acer’s requirements of and goals for supply chain CSR management. In 2015, we invited chairman George Huang to attend the meeting, as well as rewarding supply partners with awards to encourage the common creation of a top-flight sustainable supply chain; In 2016, the meeting was held by CSO Richard Lai who invited Industrial Technology Research Institute consultant Lu Ying-Bin to speak on science-based targets, sharing with our suppliers means for calculating long-term carbon reduction targets. During this, we again emphasized the need for our suppliers to have set comprehensive carbon reduction goals by the end of 2018 in our ongoing efforts to reduce overall supply chain emissions.

2017 Sustainable Resource Management Conference

“Ensuring sustainable consumption and production patterns” is one of the United Nations’ Sustainable Development Goals, and in early 2017, Acer and National Taiwan University worked together to hold the Sustainable Resource Management Conference, inviting members of the academic and business worlds, along with Acer’s own supply chain, to jointly discuss ability to respond to resource sustainability issues and the opportunities they present. Through linking academia and industry, we seek opportunities in sustainable development, strive to deepen the sustainable management of resources in the industrial world, and help our supply chain respond to international sustainability issues.

Dr. Iddo Wernick delivers his keynote speech Conference

Speakers at the 2017 Sustainable Resource Management

New EICC Provisions Training

In order to deepen the implementation of the EICC Code of Conduct in our supply chain, and to expand these efforts to upstream suppliers, in 2015 we worked with EICC-member supply partners to hold three “2015 Acer Supplier EICC Conferences”, one each in Dongguan, Guangdong; Chongqing; and Kunshan, Jiangsu. At these, we not only provided explanations of new EICC Code of Conduct provisions, announced the focal points of our audits, explained common oversights, and communicated Acer’s targets and evaluation methods, but also encouraged our suppliers to take responsibility for managing audits of their own suppliers. These three conferences were very well attended by supply partners, with a total of 165 participants from 67 suppliers in attendance, helping greatly in the promulgation and implementation of the EICC Code of Conduct.

Management of Student Workers and International Trends in Labor Rights

To help the supply chain gain insight into issues around student workers, in 2015 we invited senior trainer from the Labor Education and Service Network Ms. So, Sheung to present case studies on student worker management and examples of how it could been done well. Ms. So also provided illustrations of the management framework of the EICC's “Responsible Management of Student Workers.” All of this aimed to give suppliers an understanding not only of their responsibilities in regard to student workers, but also those of schools, as well as addressing how to identify and select vocational schools that are qualified to engage in industry-academia cooperation, an aspect many companies overlook.

Not only do we insist that the use of student workers be in accordance with relevant laws and regulations, not involve the use of child labor, and provide the proper protections, we also insist that it adhere to the following five-stage management system:

Additionally, with labor rights gaining increasing attention on the global stage, not only have new laws been established in recent years to fight forced labor and human trafficking (e.g. the California Transparency in Supply Chains Act of 2010 and the United Kingdom's Modern Slavery Act 2015), public sector procurements have been required to incorporate environmental, social, and labor standards, fostering further sustainability in development. Ms. So also provided both Acer procurement staff and suppliers with an explanation of current international trends in labor rights law and management. Given developments in international human rights law, it is vital that both Acer procurement staff and suppliers understand that international trade and labor rights are inextricable from one another.