The enhancement of environmental, safety, and loss prevention capabilities among suppliers is an important aspect of TSMC's sustainable supply chain management. In addition to improving the learning effectiveness of supplier personnel through small-group workshops, TSMC also aims to strengthen the emphasis on environmental, safety, and health concerns, as well as resource investment, among small and medium-sized suppliers. TSMC launched the "Supplier Senior Executive Environmental, Safety and Health (ESH) Improvement Program" for raw material suppliers whose environmental and safety audit results do not meet the expectations. High-level executives of these suppliers will be coached and trained to deepen their understanding of environmental and safety issues and establish proactive safety and health performance management, assisting suppliers in implementing self-management mechanisms in their factories. As of May 2024, a total of 17 suppliers' high-level executives have completed training and established 79 proactive ESH KPIs, with an average 10% improvement in factory audit scores and an 85.7% reduction in significant findings (Priority), empowering the sustainable operation of the supply chain.

Training for Senior Executives to Strengthen the Management of ESH

To cultivate a culture of environmental, health and safety management among small and medium-sized suppliers, TSMC adopts a top-down management strategy. Through a questionnaire survey and interviews with top management of suppliers, TSMC understands the difficulties they face in improving audit deficiencies and promoting environmental, health and safety management. Together with external experts, TSMC holds a "Environmental, Health and Safety Counseling and Training Workshop" for the top management of suppliers, focusing on "GRI 403: Occupational Health and Safety" and "Guidelines for Disclosure of Practical Practices for Sustainable Workplace Health and Safety SDGs", guiding them to deeply understand the 10 indicators of environmental, health and safety, and committing to proactively manage performance and promote implementation within the factory. Subsequently, TSMC's expert team will conduct a re-review and confirm the effectiveness of the implementation in the factory, enhancing the benefits of supplier's self-management improvement.

Adhering to the principle of deepening sustainable supply chain management, TSMC will continue to promote the "Supplier Senior Executive ESH Improvement Program", and adjust the direction of improvement based on the scale of suppliers. For small suppliers, the focus will be on cultivating dedicated personnel and establishing management systems, while for medium-sized suppliers, the emphasis will be on strengthening the implementation of proactive performance and self-management to enhance ESH and prevent losses, and jointly create an environmentally and socially responsible operating model.