Classification of Supplier Risks
The risks of the suppliers for FESPIXON® cream are classified into the following levels according to Oneness Biotech’s “Supplier Management Procedure” and the attributes of the products supplied:
Examination and Evaluation of New Suppliers
In order to have active control of supplier risks in relation to sustainability, Oneness Biotech examines all the supplier risk states when they first apply with us, the examination including a preliminary risk assessment based on a supplier’s business license, tax payment certificate, company profile, quality certificates, and certificate for Environment, Health and Safety (EHS).According to Oneness Biotech’s “Supplier Management Procedure”, the examination items of a new supplier are as follows:
Supplier Code of Conduct
Oneness Biotech teams up with suppliers to create sustainable enterprises. The Supplier CSR Commitment Letter has been formulated with reference to the related international initiatives and requirements, including the UN Global Compact, the Universal Declaration of Human Rights, and the UN Framework and Guiding Principles on Business and Human. All the suppliers are required to sign the Letter. As of the end of 2023, a total of 47 suppliers have signed the Commitment Letter. The main contents of the Letter include the following sustainability-related items:
- Ethical operation, comply with business ethics, and avoid conflicts of interest.
- Prohibit the employment of child labor and forced labor.
- Protect basic labor rights, including the right to work, freedom of associations, and maintaining a workplace free from discrimination and harassment.
- Ensure proper working hours and conditions.
- Comply with occupational health and safety laws and regulations, and provide a safe and compliant work environment.
- Implement environmental protection policies and manage climate change.
- Improve the efficiency of energy and resource usage.
Management Measures for Existing Suppliers (Qualified Suppliers)
As of the end of 2023, Oneness Biotech had 21 collaborating suppliers for the new drug FESPIXON® cream. The levels of risk of those suppliers have been evaluated periodically and are as follows:
Evaluation Items
Grading Results of Supplier Evaluation
Oneness Biotech issues the “Supplier Assessment Form” on a regular basis in order for each supplier to fill out the form according to their cooperativeness, delivery dates, raw material/supplies quality, and quality system(including ESG performance), thereby allowing the Company to know each supplier’s operational risks. A supplier will be disqualified if the total score of supplier assessment is lower than 70 or if the suppler has been found to have a major deficiency that may impair product quality.
Frequency of Evaluation
The following annual evaluation and review plan is made according to the “Supplier Management Procedure” and with reference to the grades of critical material suppliers and the annual evaluation results. As of the end of December 2023, the Company completed the evaluation of all its suppliers according to the evaluation and review plan.
Note: As of the end of December 2023, the Company completed the evaluation of all its suppliers according to the evaluation and review plan.
For the 21 suppliers that reviewed and evaluated in 2023, the evaluation result is listed below according to the risk level of the supplier. During the evaluation process, no serious deficiency was noted.
Numbers of Supplier
On-Site Audits
The timing of conducting an on-site audit is as follows:
- When evaluating a new supplier candidate
- When conducting a regular audit on an existing supplier (according to the Annual Supplier Audit Plan)
- When an existing supplier has a major defect in quality (e.g., when a quality-related customer complaint is attributable to the supplier as indicated by investigation results)
Sustainable Supply Chain Management
Supply Chain Sustainability
Inadequate management of Environmental, Social, and Governance (ESG) risks in supply chains can expose businesses to financial losses, diminished brand trust, and regulatory compliance risks. The International Labour Organization (ILO) has also highlighted the persistent issues of labor rights violations within global supply chains. Such challenges not only tarnish a company's corporate social responsibility image but also increase the likelihood of legal disputes and operational disruptions.
Amid increasingly stringent global regulations and heightened stakeholder scrutiny, sustainable supply chain management has become a critical strategy for enhancing business resilience and competitiveness. To address this, the Company not only focuses on traditional management metrics such as quality, cost, service, and delivery but also incorporates suppliers' ESG performance into its risk assessment framework, thereby enhancing the overall sustainability of the supply chain.
Sustainability Due Diligence in Supply Chains
The Company has undertaken comprehensive due diligence for supply chains, incorporating issues such as labor rights, ethical business practices, and environmental impacts into key supply chain management considerations. In addition to requiring new suppliers to sign a "Corporate Social Responsibility Commitment" to adhere to relevant regulations, we conduct annual sustainability risk assessments to analyze suppliers' ESG risks.
The results of these assessments are integrated into supplier risk evaluations and serve as an important reference for future procurement strategies, ensuring the supply chain works collectively toward sustainability goals. For high-risk suppliers, we conduct on-site audits to provide recommendations and support improvements, ultimately enhancing their ESG performance and strengthening the resilience of the supply chain.
Supplier Conference
On December 20, 2024, the Company hosted a Supplier Conference that garnered enthusiastic participation from key partners. During the event, we shared the latest trends in sustainable supply chain management, both domestically and internationally, including updates on the EU’s Corporate Sustainability Due Diligence Directive (CSDDD). We provided an in-depth analysis of the directive's impact on supply chains and introduced strategies for establishing sustainability management systems aligned with international standards.
To enhance suppliers' sustainability capabilities, the conference featured the following key sessions:
- Policy and Trend Sharing: Focused on global sustainability policy developments, emphasizing the critical role of ESG performance in supply chain resilience and corporate competitiveness.
- Best Practice Case Studies: Highlighted exemplary practices from leading companies worldwide in areas such as labor rights, ethical business conduct, and environmental management.
- Interactive Discussion and Exchange: Included interactive sessions where suppliers could engage in direct communication, offering practical suggestions and solutions to real-world challenges.
※The above content is taken from the ESG Report
