The safety and stability of supply chain is the foundation for enterprises to build a new development pattern. The attention to the industrial chain and supply chain has risen to the national level. How to strengthen the management of suppliers and establish mutually beneficial and win-win cooperative relations are the key questions for Narada Power to achieve high quality development.
We adopt international standards in the whole process of supplier evaluation and management, integrate the concept of sustainable development into the procurement strategy and business process, promote the realization of an optimized cycle of the whole supply chain, and build a responsible, safe, economic and sustainable supply system.
We continue to improve and optimize social responsibility risk assessment of our suppliers. We carry out CSR (corporate social responsibility) risk rating for all production suppliers in the supplier list. Comprehensive evaluation is conducted based on enterprise property and location, EHS system, material category, CSR risk, previous year CSR performance and other indicators. The suppliers would be divided into high, medium and low risk levels, and the high and medium risk suppliers would be included in the annual sustainable development audit plan.
In 2021, we evaluated the CSR risk over 162 suppliers. We went to the high risk suppliers companies to conduct an on-site audit and require them to continuously improve the problems found in the audit. We required suppliers to implement PDCA method to improve till they met the requirements.
We have carried out suppliers evaluation, based on their sustainable development performance, on-site audit and rectification result. According to the results, we conduct the hierarchical management according to management methods, audit frequency and supplier qualification.
We consider supplier sustainable development performance as one aspect during our supplier selection and bidding. For suppliers with good CSR performance, the procurement share shall be increased under the same conditions and business cooperation opportunities shall be considered priority. For suppliers with poor performance, especially those which violate CSR red line requirements, we will cut down procurement shares or business cooperation opportunities and require their rectification within a timeline. If the rectification still fails, we will cancel the cooperation relationship.
In 2021, Narada Power requires suppliers that account for 70% of the total purchase amount of lead battery to count their carbon emissions, set carbon emission reduction targets, formulate emission reduction plans and implement emission reduction projects. By the end of 2021, all suppliers participating in the carbon emissions project have completed emissions statistics.
According to statistics, the total carbon emission of suppliers, which involved in our 2021 business cooperation was about 446,000 tons, and the carbon emission was reduced by 68,000 tons through emission reduction projects, taking as 15.2% of the total annual emissions.
We are committed to promoting a responsible way to purchase tin, tantalum, tungsten, gold, cobalt and other raw materials and products. With reference to the Organization for Economic Co-operation and Development and Chinese Due Diligence Guidance for Responsible Mineral Supply Chain, we participate in industry cooperation and jointly prevent and reduce the suppliers products, which violates human rights, endangers environment, damages health and safety, and makes corruption, etc.
Based on RMI (Responsible Minerals Initiative), we work with global enterprises to deal with conflict minerals and conduct supply chain surveys using RMI Conflict Minerals Questionnaire. Suppliers trace mineral sources in their products step by step and identify smelting plants lists. We also share the final survey results with upstream and downstream parties.
In 2021, we surveyed 15 suppliers involved in mineral procurement, identified 11 compliant smelting plants, and shared the results of its conflict mineral investigation with five major global communications equipment manufacturers.
