Code of Conduct for Sustainable Development of Suppliers

SDGs

Code of Conduct for Sustainable Development of Suppliers

With reference to relevant international specifications and initiatives including the RBA Code of Conduct, SA8000 social accountability standards, the UN Guiding Principles on Business and Human Rights, the UN Universal Declaration of Human Rights, and the Ten Principles of the UN Global Compact, Qisda has established the “Code of Conduct for Sustainable Development of Suppliers” that includes labor, health and safety, environment, ethics and management systems. In the labor aspect, Qisda requests that the wages and compensation paid by the suppliers shall comply with all applicable wage laws, and the suppliers are committed to paying the living wage as the target, and periodically conduct investigation, monitoring and communication of the living wage. In terms of environmental management, we have also established and published Commitment to No-Deforestation and Biodiversity to lessen impact on the environment.

We require that all suppliers understand and obey the content of the “Code of Conduct for Sustainable Development of Suppliers”.

The signing rate of the Code of Conduct for Sustainable Development of Suppliers by 2025

100 %

Code of Conduct for Sustainable Development of Suppliers

Labor	Health and safety	Environment	Ethics	Management system
Human rights risk	Occupational Safety and Industrial Hygiene	Permits and Reporting	Business Integrity	Commitment,Accountability and Responsibility
Freedom to choose an occupation	Emergency Preoaredness	Pollution Prevention and Resource Reduction	No Improper Advantage	Risk Management and Improvement Objectives
Child labor and Young workers	Occupational Injury and Illness	Hazardous Substance	Disclosure of Information	Training, Communication and Grievance
Working hours	Physically Demanding Work and Machine Safeguarding	Solid Waste and Air Emissions	Intellectual Property	Assessments, Corrective Action, Documentation and Records
Wages and Benefits	Sanitation, Food and Housing	Water Management	Fair Business,Advertising and Competition	Supplier Responsibility
Humane Treatment	Communication and Grievance	Material Restrictions	Whistleblower protection
Non-discrimination/Non-harassment		Energy Consumption and Greenhouse Gas Emissions	Responsible Sourcing of Minerals
Freedom of Association and Collective Bargaining		Biodiversity	Information Security and Privacy
Layoff

Proactive Screening

We appreciate that supplier sustainability performances may indirectly affect Qisda's reputation and even bring potential risks. Therefore, we have established evaluation criteria for new suppliers and proactively screens suppliers to reduce potential risks. Our assessment factors include ESG, operations-related factors, country of location, industry-related, and product-related risk factors. When significant international events occur, we also conduct investigation and assessment on affected regions, industries and supply sources to secure the stability and sustainability of the supply chain.

Factor	Content
Environment	Carbon footprint investigation, investigation of five persistent, bio-accumulative and toxic (PBT) chemicals under the US Toxic Substances Control Act (TSCA), ISO 14001 or relevant environmental management procedures.
Social	Human rights and ethics, labor rights
Governance	Education and training on financial status, operational competitive edge, and occupational safety and health
Operations related	Basic data, product information, major customers, production and equipment status, investment, and product planning
Country of location	Status of the supply (whether affected or not) in the located region, conflicts between countries (military coup related problems), local policy constraints, natural disasters and epidemic
Industry related	RBA Code of Conduct assessment, sustainability risk assessment, parts and components suppliers, human resources agency/ on-site service providers
Product related	Procurement fee, supply category, no legal documents related to restriction of hazardous substances, conflict mineral investigation

Supplier Reward and Elimination Mechanism

To encourage suppliers to advance toward sustainable development, Qisda has established a management system that integrates both “ reward and phase-out ” mechanisms. Through an evaluation framework, suppliers with outstanding sustainability performance are selected and granted higher procurement allocation and priority access to new product introduction opportunities. Suppliers with poor performance are subject to phase-out to drive continuous improvement across the supply chain.

In 2025, no suppliers were phased out (including suppliers with high sustainability risk). In addition, during the 2024 Supplier Conference, Qisda recognized 31 suppliers for outstanding performance in quality, technology, service, delivery, cost, and ESG dimensions, with the aim of promoting positive incentives and encouraging suppliers to jointly build a resilient and sustainable value chain.

Evaluation Mechanism:

Evaluation dimensions: Quality capability, Innovation/Technology capability, Speed/Response in service, Delivery capability, Cost leadership, and ESG capability. Suppliers are classified into five grades (A to E), where Grade A represents scores above 90 and Grade E represents scores below 60, serving as the supplier screening and management mechanism. The ESG capability factor includes sustainability, health, labor, environment, and green products, accounting for 11.4% of the total score.
Frequency: Semi-annually.

Mechanism	Content
Reward Mechanism	Reward measures: According to the evaluation results, excellent suppliers ranked Level A may have a higher proportion in procurement and priority in the adoption of new products after being confirmed by the review team.
Elimination Mechanism	For suppliers rated Level D or below, we not only reduce their proportion in procurement depending on the situation, but also require them to devise improvement plans and perform stricter incoming inspections. The elimination mechanism is as follows: suppliers rated Level D (or below) twice in a row will be required to undergo the supplier selection and management operation again at the discussion meeting of the evaluation. Based on the results, discussions over whether suppliers shall be disqualified for future collaborations with Qisda will be made. Suppliers rated Level E twice in a row will have their eligibility as a future supplier directly revoked after the discussion meeting of that evaluation.

Mechanism

Content

Reward Mechanism

Reward measures: According to the evaluation results, excellent suppliers ranked Level A may have a higher proportion in procurement and priority in the adoption of new products after being confirmed by the review team.

Elimination Mechanism

For suppliers rated Level D or below, we not only reduce their proportion in procurement depending on the situation, but also require them to devise improvement plans and perform stricter incoming inspections. The elimination mechanism is as follows: suppliers rated Level D (or below) twice in a row will be required to undergo the supplier selection and management operation again at the discussion meeting of the evaluation. Based on the results, discussions over whether suppliers shall be disqualified for future collaborations with Qisda will be made. Suppliers rated Level E twice in a row will have their eligibility as a future supplier directly revoked after the discussion meeting of that evaluation.

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