New supplier assessment

The company establishes "Supplier Management Procedures" and regularly evaluates suppliers. In addition to quality items, the evaluation items also include environmental safety, hazardous substance management, and social responsibility scoring items. The supplier will conduct self-assessment first, and AES-KY will conduct professional review for quality, procurement, R&D, and engineering teams. If the supplier has obtained ISO 45001, ISO14001 and other professional certifications, points will be added during the evaluation, and our company will give priority Use the materials and parts provided by suppliers with higher evaluation scores. Suppliers with lower scores will be required to improve within a time limit. The company has set a threshold for supplier evaluation and elimination. If the supplier is still unable to meet the requirements of the company after being tutored by the company, AES may eliminate the provider.

Annual supplier audit

The purpose of implementing the annual supplier audit plan is to supervise suppliers' implementation of AES quality management policies to ensure compliance with corporate management standards. Suppliers with excellent performance are our company's long-term partners. AES conducts on-site audits every year. Those who fail will propose improvement and preventive corrective measures within a time limit, and provide practical guidance on the system. In 2022, 41 suppliers will be audited, with an audit pass rate of 95% (score of 80 points).

RBA VAP

AES implements the company's internal operations and management with reference to the Responsible Business Alliance (RBA) code of conduct to fulfill corporate social responsibilities and introduce it into supply chain management to build a sustainable and co-prosperous partnership. In 2022, Trend Power (Changshu) conducted an external verification of the Validated Audit Process (VAP), with a VAP score of 164.4 points, and obtained silver validation for VAP to meet the requirements of customers.

Responsible Mineral Management

The Responsible Minerals Initiative (RMI) survey has found that local rebel organizations in the Democratic Republic of the Congo and neighboring countries acquire raw mineral including Tantalum, Tin, Tungsten, Gold (3TGs) and cobalt (Co) via unlawful means such as labor and child labor abuse to sell in exchange for weapons and destabilize the region. Such minerals acquired through unlawful operations are known internationally as conflict minerals. Suppliers are required to sign the “Non-use of Conflict Minerals Declaration” through the supplier management platform to promise that products delivered to AES use no rare metals mined from conflict areas, in particular gold (Au), tantalum (Ta), tin (Sn), tungsten (W), cobalt (Co) and Mica. The 3TGs and cobalt (Co) contained in products must be recognized by certain international third-party organizations. Suppliers were reviewed on the basis of their questionnaire response including minerals, name of smelters, and source countries to facilitate the management and tracking of mineral sources. The list of smelters is disclosed to customers as well. AES must ensure that it and its suppliers adhere to the RBA Code of Conduct on sourcing of non-conflict minerals. At the same time, AES is also continuing to review and assess the necessity of conflict minerals, and fulfill our corporate social responsibility by requiring suppliers to pay attention to issue of conflict minerals as well.