Supply Chain Management System

ESG Management in Supply Chain

Daejoo Electronic Materials is systematically operating the supplier ESG management policy it has established to create a sustainable supply chain where social and environmental responsibilities are fulfilled. With the goal of preemptively alleviating ESG risks that can occur in the supply chain, we developed a management system to identify key suppliers and conduct ESG assessment on them. In addition, all companies supplying products and services to Daejoo Electronic Materials and their sub-suppliers are systematically managed using the "List of Management Policies in Seven Areas." Moving forward, we will gradually expand the scope of assessment and help all our suppliers improve their ESG capabilities, thereby achieving responsible supply chain management and securing a sustainable supply chain.

List of Management Policies in Seven Areas

Supplier Code of Conduct

The suppliers of Daejoo Electronic Materials are required to create a safe working environment, respect workers and guarantee their integrity, and promote eco-friendly and ethical business management. To this end, we have established the Supplier Code of Conduct that clearly specifies the criteria to be met by our suppliers. Consisting of the environment (E), respect for humanity, shared growth, health and safety and quality management (S), and ethics and fair trade (G) categories, the Supplier Code of Conduct serves as a guideline helping all suppliers achieve sustainable management. Based on the Supplier Code of Conduct, we strive to establish a responsible supply chain and promote long-term shared growth and development together with our suppliers.
*The Supplier Code of Conduct was developed on the basis of the RBA (Responsible Business Alliance) Code of Conduct, ver. 8.0.

Principles of Fair Trade

For fair and transparent trade, Daejoo Electronic Materials strictly abides by the four principles of fair trade. Based on the principles, we strive to build market trust and promote sustainable growth. Moving forward, we will create an environment for fair competition, maintain transparency and honesty in all trade practices, and strengthen the fair trade culture further.

Purchasing System

The purchasing system of Daejoo Electronic Materials is operated with a focus on eco-friendly purchases, fair and transparent trade, and improved purchasing power. First, we give preferential treatment to companies that protect the environment and fulfill their social responsibilities through eco-friendly purchasing, and gradually expand eco-friendly purchases. Second, we create a reliable trading environment by keeping fairness and transparency in all transactions. Lastly, to achieve purchasing that provides optimal value, we discover and promote sustainable suppliers for strategic purchases considering the characteristics of purchase items; thus strengthening our purchasing competitiveness. Based on the purchasing system, Daejoo Electronic Materials is continuously strengthening ethical and responsible supply chain management.

New Supplier Registration

For fair and transparent supplier management, Daejoo Electronic Materials carefully selects new suppliers according to the clearly established criteria and procedures. As for the supplier registration process, the eligibility and qualifications of a supplier are assessed through an internal review, and the supplier is registered following approval. To secure the reliability of the supplier in this process, we strengthen suppliers’ competitiveness and minimize potential risks by conducting internal audit and review. In addition, we inspect the assessment criteria for each material type in detail according to the assessment items by purchase approval material type, and promote joint sustainable growth with the supplier through regular assessments. In doing so, we are creating a transparent and reliable trading environment with the goal of achieving mutual development with our suppliers.

Registration Process and Check Sheet

Supply Chain ESG Assessment

For shared growth and win-win cooperation with suppliers, Daejoo Electronic Materials conducts supply chain ESG assessment based on transparent and fair assessment criteria. In 2024, we added sustainable management-related items—such as for human rights, environment, and ethics—to the new supplier assessment. Having introduced an internal assessment system consisting of 38 items, we also conduct self-assessment once a year. This year, we conducted ESG assessments targeting ten tier 1 suppliers. Based on the results, we categorize our suppliers into high-risk, medium-risk, and low-risk groups for management. Moving forward, Daejoo Electronic Materials will systematically manage ESG risks in the supply chain by requesting improvement to suppliers in the high-risk group and thoroughly inspect their implementations.

Supply Chain ESG Assessment Process

Supply Chain ESG Assessment Items

Supply Chain Management Activities

Supply Chain ESG Assessment Result

To strengthen the ESG competencies of suppliers and create a sustainable supply chain, Daejoo Electronic Materials conducts an internal assessment consisting of 38 items. In 2024, we conducted ESG assessments targeting ten tier 1 suppliers and, based on the results for 24 key assessment items, analyzed the degree of risk of each supplier in the environmental and social sectors.
While there was no high-risk supplier, we found three low-risk and seven medium-risk suppliers in the environmental sector, and eight low-risk and two medium-risk suppliers in the social sector. For suppliers in need of improvement, we will provide active support to help them implement corrective actions. Through the effort, we will continuously strengthen the ESG competencies of our suppliers.

Win-win Cooperation with Suppliers

Daejoo Electronic Materials dedicates diverse efforts for shared growth with suppliers. For successful communication with suppliers, we operate a separate communication channel on the website. Using this channel, our suppliers can freely express their opinions and difficulties, and these are reviewed by the handling division and reflected to our management. Through active communication, we strive to increase the relationship of trust with our suppliers and promote win-win cooperation for mutual development.

Fair Trade Internalization

To establish a transparent and mature trade culture, Daejoo Electronic Materials actively provides all employees with training on fair trade. With the last session held in June 2024, this training is aimed at promoting fair trade compliance and corruption prevention. Moving forward, we will internalize the principles of fair trade and thereby continuously strengthen our corporate culture of trust.

Goals to Secure Sustainable Supply Chain

To secure a sustainable supply chain, Daejoo Electronic Materials established short-term and mid-term goals. In the short-term, our focus is to develop a supply chain shared growth policy and expand the scope of companies subject to the supply chain ESG assessment. In the mid-term, we plan to upgrade the supply chain ESG promotion system and manage the supply chain ESG training and improvements. Moving forward, Daejoo Electronic Materials will strive for continuous supply chain ESG management and internalization based on the mid-term goals.