Environmental Footprint in Supply Chain

Environmental Footprint in Supply Chain

The environmental impacts in the production stage constituted an integral part of the supply chain management in the product life cycle. Internally, in response to product environment footprint management, ASUS performs survey on GHG and water footprint. Externally, ASUS voluntarily joins the Carbon Disclosure Program (CDP) to disclose ASUS carbon management, and we began the water footprint survey in supply chain in 2015. These help ASUS to understand the environmental impacts of our products at the production stage. We use this information as a reference,to create action plans to reduce our carbon and water footprints.

ASUS believe that corporations have the responsibility of extending environmental management to the entire supply chain. Apart from environmental footprints created within corporate operations, companies should also cooperate with supply chains to decrease environmental footprints created by manufacturing products. The supervision of environmental footprints left by supply chains by ASUS focuses on the emission of greenhouse gasses and the usage of water resources.

Greenhouse Gas Management

In 2015, ASUS continuously conducted Scope 3 GHG inventory of key suppliers. In accordance with the "Corporate Value Chain (Scope 3) Accounting and Reporting Standard" as well as the previously mentioned distribution of carbon footprint in the product lifecycle, we selected Category 1 Purchased Goods and Services out of the 15 categories from Scope 3 GHG inventory due to its higher weighting. A total of 27 key suppliers came from 6 types of suppliers to cooperate with the GHG inventory in 2015.

The inventory parameters were as follows:

  • Data period: January 2015 to December 2015
  • Business boundary: Scope 1 and Scope 2 GHG emission data
  • Data allocation: Data allocation was based the proportion of ASUS products in total shipment, ratio of production line man-hours, production output, proportion of resources used, product value as a proportion of total output, and more
  • Reference of GWP coefficient: 2007 IPCC AR4 100-yr

Analysis of GHG inventory results were:

  • Sum of Scope 1 and Scope 2 data: Scope 1 emission accounted for 26% of total emissions and Scope 2 accounted for 74% of emissions. The main source of Scope 2 emissions came from the purchase of electricity.
GHG Emission Ratios of Scope 1 and Scope 2
  • Supplier GHG management: 48% of surveyed suppliers implemented external GHG verification; 59% of surveyed suppliers had established GHG reduction programs and targets. These suggested that GHG inventory and reduction had become the focus of ICT industries, with medium- and long-term reduction targets.
Suppliers GHG Management Analysis
  • F-GHG emissions: Among the six categories of GHGs specified in the Kyoto Protocol, the top GWPGHGs are collectively called F-GHG, including HFCs, PFCs, and SF6. According to the supplier inventory results, SF6 with the highest GWP is the most commonly seen in F-GHG, as it is mostly used by panel manufacturers, while HFCs and PFCs, which are the second-most common, are usually found in fire-extinguishers. The current inventory found that SF6 accounted for 95% of all F-GHG detected and was the main source of F-GHG emissions. Total F-GHG emissions were made up of 52% of Scope 1 emissions, and thus were the main source of Scope 1 GHG.
Emission Ratios of SF6 in F-GHG Emissions Emission Ratios of F-GHG Emissions in Scope 1
  • N2O emissions: Based on the supplier inventory, the main N2O emission source is the result of burning fossil fuels such as natural gas, petroleum, and diesel; and N2O emissions were made up of only 4% of total GHG emissions, thus they were not the main emissions source.
Emission Ratios of N2O Emissions in Scope 1
  • 2015 GHG management performance: compared with the baseline 2014, 42% of suppliers within the inventory scope reduced emissions and 58% of suppliers within the inventory scope increased emissions.
Analysis of 2015 GHG Management Performance

Instead of an absolute increase/decrease of inventoried units, the above GHG increase/decrease data was correlated with the total product output in the inventory year. ASUS will refer to the data for making GHG reduction strategies and for implementing risk management of our supply chain.

Concluding the above analysis:

  • Scope 2 GHG emission is more significant than that of Scope 1. It would be more efficient to set reduction strategy with Scope 2 as priority.
  • In terms of GWP, the control of SF6 commonly used in the panel industries would be more effective in Scope 1 emissions reduction.
  • About 50% of surveyed suppliers had implemented external verification, and about 60% had set GHG reduction targets. This demonstrates that GHG management becomes a concern across the industry and thus will help push forward the GHG reduction issues.
  • ASUS has included GHG inventory, energy efficiency, and carbon reduction into supplier CSR audit, education, and training. These approaches convey ASUS' concern and requirements regarding this issue.

Water Resource Management

Water resource has become one of the international environmental concerns. ASUS recognizes that the main sources for water consumption originated from the supply chain of component manufacturing and from the assembly of products. In order to further understand the risk and the management of water resources in supply chains, water footprint was added into the ASUS supply chain annual survey in 2015. The scope aligned with that of GHG and includes 6 categories, covering 27 final assembly factories and key component suppliers.

Analysis of water resource inventory results are as follows:

  • Sum of water footprint data: The water usage in the supply chain is shown below. 83% of the inflow was discharged after used.
Ratio of Usage of Water Resource
  • Risk identification of water footprint: 100% of surveyed suppliers completed the identification of risk in water usage in the factory.
  • Risk category of water footprint: the risk for 7% of surveyed suppliers was water instability, 4% was poor water quality, and 89% had no risk in water usage.
Risk Category of Water Footprint
  • Water treatment equipment: 41% of surveyed suppliers with water treatment equipment. Among those who had treatment equipment, 65% of them with water recycling equipment, 17% with rain collection equipment, and 18% with both.
Ratios of Water Treatment Equipment Methods
  • n Future reduction plan in water footprint: 58% of surveyed suppliers had set up the reduction plan and target.
Future Reduction Plan in Water Footprint
  • 2015 Water footprint management performance: compared with the baseline of 2014, 44% of suppliers within the inventory scope reduced emissions, and 56% of suppliers within the inventory scope increased emissions.
Analysis of 2015 Water Footprint Management Performance

Instead of the absolute increase/decrease of the inventory units, the above water footprint increase/decrease data was correlated with the total product output in the inventory year.

Concluding the above analysis:

  • 83% of the inflow was discharged after use. This shows that there is still room for improvement for the recycling of water resources.
  • 100% of surveyed suppliers had completed the identification of risk in water usage in the factory, demonstrating that water resource is a concern across the industry.
  • About 90% of the surveyed suppliers had no risk in their water footprint, but 7% of surveyed suppliers with water instability and 4% with poor water quality. Most suppliers had no risk in their water footprint and thus did not pose significant effects in their operations.
  • About 40% of surveyed suppliers had water treatment equipment. This shows that there is still room for improvement for investments in water recycling equipment.
  • ASUS has included risk identification of and survey of water footprint into supplier CSR audit, education, and training. These approaches convey ASUS' concern and requirements regarding water footprint.
  • With annual supplier CSR audits itinerary, ASUS encourages suppliers to plan for water resource management and to set reduction targets.