Risk management policy and procedure
On April 21, 2018, the Board of Directors approved the Risk Management Policy as the highest guiding principle for the Company’s risk management to ensure the Company’s sound operation and sustainable development, and as the basis for various risk management and implementation of the Group’s headquarters and subsidiaries. The Company’s risk management policy is in accordance with some of the provisions of the Financial Supervision and Administration Commission’s Circular No. 10000621315 dated December 21, 100, amending the “Guidelines for the Establishment of Internal Control Systems by Public Companies”, formulating appropriate risk management policies and procedures, and establishing an effective risk management mechanism to assess and supervise its risk taking capacity, the current status of risks it has tolerated, and the determination of risk response strategies and compliance with risk management procedures.
Every year, at the Group Summit, the directors of each center and the general manager of each subsidiary of the Company conduct risk factor judgment, so as to identify the relevant risks that may affect the sustainable development of the company, screen out the scope of risk management, monitor potential risks and implement preventive measures, in addition to strengthening risk management, and formulate annual operation strategies as the key implementation work for the next year.
At the end of the year, the conclusions of the summit will be submitted to the CEO and the CEO for approval, and then sent to the “Investment Risk Decision Committee” for review before submitting a report to the board of directors.
Risk management scope
The Company’s risk management area analyzes various strengths and weaknesses, as well as opportunities and threats from the external environment, through the four aspects of financial aspects, customer aspects, internal process aspects and learning and growth aspects, and formulates countermeasures in each risk area. The Company’s risk management scope includes “credit risk”, “market risk”, “liquidity risk”, “operational risk”, “supply chain risk”, “financial and accounting risk” (including risks such as high-risk and highly leveraged investment, capital lending to others, endorsement guarantee and derivative commodity trading operations) and “other risks” (including information security risk). The management center and the technical research center undertake, according to the impact of each risk characteristics in each region, each subsidiary formulates countermeasures and carries out the implementation plan.
Organizational structure
The company’s risk management system is organized by the chief executive officer’s office to coordinate the annual operation, through the first stage of analysis and discussion by the directors of the three major centers of the group, and in the second stage, the heads of each subsidiary at or above the vice president level and above discussed with each other according to the characteristics of the region, and then submitted to the group’s risk management and investment decision-making committee before submitting to the board of directors of the group, the organizational chart is as follows:
Operational status and results of implementation in 2024
Since 2018, the Company has held a Group Summit in the fourth quarter of each year, at which senior executives such as the Chief Executive Officer, the directors of each center, the head of audit, and the general manager of the subsidiaries discussed the major risk policies and response strategies for the following year, and reported the conclusions to the Board of Directors at the end of the year. In 2020, due to the pandemic, the event was held online, but it was also possible to discuss all risk issues in a more immediate manner.
Since the end of 2022, as the epidemic has gradually eased and countries around the world have begun to lift epidemic prevention and control measures, the company has resumed the format of physical meetings. From September 3 to 4, 2024, the Company held the first phase of the review meeting of the summit by the directors and audit supervisors of the three major centers to formulate the SWOT of the company as a whole in 2024, and held the second phase of the discussion meeting in Wuxi Sanneng subsidiary in mainland China from September 26 to 28, during which the three center directors, audit directors and deputy general manager or above of each subsidiary discussed the risk policies and response strategies, and analyzed the cross-impact of the SWOT internal organization and the external environment. By analyzing the level of “Incidence P” (1~3) and “Impact I” (1~3), when the multiplier of the two exceeds 6, it is defined as having a high risk, so it is necessary to formulate countermeasures and set strategic measurement objectives to generate a “Risk Assessment Countermeasure Table”. Then, based on the resulting risk assessment countermeasure table, the key indicators and action plan for 2025 will be formulated. Finally, it will be confirmed by the CEO and implemented by Buda as the basis for the operating strategy and key work plan of the Group and its subsidiaries in 2025. It will be submitted to the Board of Directors of the Group after the meeting of the Group’s Investment Risk Decision Committee.
Reduction target:
1. Greenhouse gases: Reduce greenhouse gas emissions by 6% in 2027 compared to the base year (FY2022)
2. Water consumption: 2% reduction in water consumption in 2027 compared to the base year (2022)
3. Waste: 2% reduction in total weight of waste in 2027 compared to the base year (FY2022)
Promotion measures:
1. Greenhouse gases:
Due to global warming, the greenhouse effect has had an impact on all mankind, Sanneng Group takes the mission of “driving the safety, environmental protection, energy conservation and carbon reduction of food utensils”, comprehensively reviews the raw material supply chain, high-efficiency product design, and production process, follows the net-zero emission timeline declared by various countries, and follows the net-zero emission path and strategy announced by the government.
In 2023, Wuxi Sanneng has set up a new solar power generation panel with an annual power generation capacity of about 1.2 million kWh on the roof of its own factory, with a total investment of 4.98 million yuan, and an average power generation of 1.1335 million kWh is expected in 2024, which is estimated to reduce 646 tons of carbon dioxide based on the purchased power value of 0.5703 kg CO2/kWh. In addition, we will also evaluate the feasibility of installing solar power panels on the roof of Taiwan’s own factories, and gradually replace equipment with higher energy consumption through energy management methods.
In addition, the carbon reduction effects brought by the company’s corporate products or services to customers or consumers are as follows:
(1) Product packaging and packaging materials: Use recycled materials, rationalize packaging, and reduce the burden of disposal on customers and consumers.
(2) R&D of energy-saving products: Provide low-energy consumption products, reduce energy consumption for customers, and achieve carbon reduction effects for customers or consumers.
(3) Promote non-stick treatment business, and use customers’ old baking utensils after environmentally friendly non-weight treatment technology, reflecting the spirit of circular economy.
It can save customers the cost of re-purchasing new products and reduce the carbon emissions caused by the use of raw materials.
2. Water Consumption:
(1) Update pure water equipment, improve water use efficiency, and reduce tap water consumption.
(2) Water recycling and reuse: Treating wastewater into reusable water resources and reducing the need for tap water.
(3) Promote water conservation: effective conservation of water use through the promotion of water-saving appliances, facilities, technologies and behavioural changes.
3. Waste:
(1) Waste sorting and recycling, promoting recycling and reuse, and reducing the impact of waste on the environment.
(2) Reduce unnecessary packaging and develop recyclable or reusable packaging materials.
(3) Strengthen education and publicity to raise awareness and awareness of waste management and reduction, and promote waste reduction.
Achievement: Greenhouse gas, water consumption and waste reduction targets were set for the first time this year, and the achievement status of each year will be reviewed in subsequent years.
In 2021, the Company established a dedicated unit for sustainable development management under the Office of the Chief Executive Officer and reported to the Board of Directors on its implementation at least once a year. In addition, at the annual Group Summit, a number of senior executives from different fields will jointly review the company’s core operating capabilities and formulate a sustainable development plan. In 2024, the Board of Directors will report the results of sustainable development implementation to the Board of Directors on December 25, and the Board of Directors will supervise the Company’s implementation results and future sustainable development matters, and relevant major issues and expenditures will also be submitted to the Board of Directors for discussion and resolution in accordance with the specifications of the Company’s approval authority.
| ESG aspect | Type of risk | Risk Management Execution Instructions |
|---|---|---|
environment | Environmental protection, energy conservation and carbon reduction | 1. In 2022, the Company established an environmental issue project, in line with the policy of organizing greenhouse gas inventory and verification in the “Sustainable Development Roadmap of Listed Listed Companies” issued by the Financial Supervisory Commission, with the Group Director of Technology Research as the person in charge, distinguishing all subsidiaries of the Company as boundary 1 and boundary 2, and appointing the person in charge of the boundary to organize the greenhouse gas inventory operation planning and implementation in accordance with the “ISO14064-1:2018” required by the Financial Supervisory Commission. In 2024, the Group (the parent and subsidiary of the consolidated financial statements) has completed the disclosure of the Scope 1 and Scope 2 data in the “ISO14064-1:2018” greenhouse gas inventory in the 2024 annual report of the shareholders’ meeting and the announcement of the public information observatory. 2. From 2023 to 2024, 6 meetings have been held on the Group’s environmental issues, and data analysis tracking of the Group’s greenhouse gas inventory, energy management, water resources management and waste management has been successfully completed. 3. Wuxi Sanneng, an important subsidiary of the Company, has completed the installation of solar power generation in the A/B/D/E/administration building in February 2024, generating 1.08 million kWh of electricity by November 2024, accounting for about 14.38% of the electricity consumption of Wuxi Sanneng. 4.Wuxi Sanneng, an important subsidiary of the Company, passed the annual re-evaluation certification of the “ISO 14001:2015” environmental management system in 2022, and obtained the “High-tech Enterprise” certificate in Jiangsu Province again in 2022, both of which are valid for the period 2022-2024, representing the Company’s recognition in environmental protection. It has also obtained Wuxi specialized, special and new small and medium-sized enterprises for a period of 2023-2025. 5. Wuxi Sanneng, an important subsidiary of the Company, has obtained the carbon footprint verification certificate of aluminum alloy non-stick baking tray (SN1072) and plastic meal basket (DS2040173) in the application for green factory (according to ISO14067:2018 audit). |
society | Social welfare | 1. In order to strengthen the ESG concept of internal employees, the company organizes and participates in the following activities: beach cleanup, tree planting, lake walking, blood donation and other activities. In addition, it also sponsored and visited the Taiwan Down Disease Foundation and the Ningjin County Liming Occupational Rehabilitation Center, hoping to achieve the goal of internalizing the ESG concept of employees through actual participation in activities. 2. In the 2024 year-end event, we will declare our supplier goals, and complete the signing of the “Supplier Sustainability Responsibility Commitment” for the top 10 suppliers of our important subsidiaries Taiwan Sanneng and Wuxi Sanneng this year. 3. Sanneng Group and Taiwan Sanneng cooperated to organize the “Used Shoes Save Your Life” activity, donating more than 100 pairs of used shoes that are not used by colleagues to the Used Shoes Saving International Christian Cares Association to protect the foot health of East African residents. |
Occupational safety | 1. The company provides employees with regular annual health check-ups in accordance with regulations, and strengthens hearing protection and various inspection operations for on-site colleagues, and implements them in a way that exceeds 85 decibels, and is committed to creating a healthy and safe working environment. 2. Since 2020, Taiwan Sanneng, an important subsidiary, has started on-site medical and nursing services, formulated a labor health service plan, and handled on-site health services according to the plan. 3. Wuxi Sanneng, an important subsidiary, obtained the “ISO 45001:2018” occupational health and safety management system certification in 2022, with a validity period of 2022-2025, representing the company’s recognition in occupational safety and health. | |
Product safety | 1. 本公司各項產品均遵守各地政府規範及法令，並經嚴謹的品質系統管理，提供客戶穩定的產品品質，同時為確保客戶服務專線及溝通網站，每年定期主動進行客戶滿意度調查，加強與客戶之間的合作關係，藉由與客戶互利共榮的關係，成為企業永續發展的基石。 2. In order to transfer the risk of commodity liability, improve product safety, protect the rights and interests of consumers, and realize the responsibility of corporate sustainable development, the company has insured product liability insurance for its products. | |
Company Goverance | Strengthen the functions of directors | 1. In order to make directors understand the relevant rights, responsibilities and legal responsibilities, the directors plan annual training every year, and provide the latest laws and regulations of directors and the latest norms of the competent authority. In 2024, all directors and independent directors met the requirements of the competent authority. 2. Purchase directors’ liability insurance for directors, when the directors have performed their duties as good managers, and protect them from lawsuits or claims. |
Stakeholder communication | 1. The Company analyzes the situation of important stakeholders and important issues of concern to various stakeholders from the perspective of various stakeholders, including shareholders, employees, customers and suppliers. 2. Establish communication channels with various stakeholders, actively communicate, and set up investor mailboxes and corresponding windows for employees, customers and suppliers, and have specialized personnel responsible for responding. In case of important issues, relevant meetings of stakeholders will be held, and the corresponding units will communicate and coordinate. 3. Report to the Board of Directors annually on the communication with stakeholders. | |
Employment-employment relations |
In accordance with the annual manpower demand plan, the Company recruits outstanding talents through multiple recruitment channels, formulates talent training plans, strengthens talent training, and attaches great importance to the cultivation and retention of talents. | |
Integrity Management |
The Company has set up a dedicated unit to be responsible for the promotion of integrity management, and reports to the Board of Directors at least once a year on the implementation of the integrity management to assist the Board of Directors in evaluating whether the implementation of integrity management is effective. In addition, we have formulated the Code of Ethics and Ethical Conduct, the Code of Ethical Conduct, the Ethical Management Procedures and Conduct Guidelines, the Internal Control System, and the “Measures for the Management of Duties and Agents”, cooperated with audit operations, internal control self-assessment, etc., and provided reporting channels to implement anti-corruption and other measures. | |
Customer Privacy |
The Company strictly abides by the confidentiality of trade secrets, attaches great importance to intellectual property such as trademarks, patents, and copyrights, and formulates the “Intellectual Property Management Measures” to implement and protect the privacy of customers. |