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Sustainable Supply Chain Management

CTCI's Value Chain

At the heart of CTCI Group's operations are EPC turnkey engineering services, backed by extensive experience across a wide range of industries, including high-tech, hydrocarbon, petrochemical, chemical, natural gas, power, transportation, steel, and environmental engineering. Leveraging its cross-disciplinary integration capabilities, the Group delivers comprehensive solutions that combine efficiency, resilience, and sustainable value. Throughout the project life cycle, CTCI adopts systematic management mechanisms to effectively identify and respond to client needs, while integrating ESG principles into every stage of engineering, procurement, and construction.

CTCI executes projects in accordance with international standards and best practices, with rigorous control over material selection, equipment procurement, construction quality, and safety management. Sustainable supply chain practices and risk management measures are further strengthened to achieve an optimal balance among project quality, schedule, cost, and environmental performance. In parallel, the Group is committed to adopting low-carbon technologies and enhancing resource efficiency, thereby reducing the environmental footprint of its operations while creating forward-looking, sustainable value for clients.

As a global leader in engineering, CTCI not only focuses on technological innovation but also integrates ESG principles into the core of its operations. Through digitalization, the integration of smart technologies, and green engineering practices, the Group is committed to delivering more efficient, safe, and sustainable solutions for its customers.
 

Suppliers Overview

As a global EPC group, CTCI serves clients worldwide across a diverse range of industries, resulting in a highly complex supplier network. To effectively manage its extensive supply chain, CTCI has established a systematic management framework that categorizes suppliers into six major groups: service providers, equipment, instrumentation, piping, electrical, and others (including service-oriented subcontractors). To further strengthen supply chain management and enhance ESG-related risk control, suppliers are additionally classified based on annual transaction value and supply chain risk level, forming a comprehensive supplier classification mechanism. By allocating resources and management priorities according to transaction scale, the Group is able to effectively identify key suppliers with greater impact on business operations, thereby enhancing overall management efficiency and risk controllability.

An additional classification is based on transaction value, with "Tier 1 suppliers" defined as those comprising the top 95% of cumulative annual transaction amount. Suppliers with annual transaction volumes exceeding US$3 million or those identified as high-risk1 are designated as "significant Tier 1 suppliers" and are subject to focused management. To mitigate risks across the entire supply chain, CTCI also oversees suppliers outside the significant Tier 1 group (known as significant non-Tier 1 suppliers)2 and require significant Tier 1 suppliers to manage the sustainability risks of their own suppliers. If high-risk conditions are identified, CTCI would conduct onsite assessments for significant non-Tier 1 suppliers. 

Note:
1. A high-risk supplier is defined as the supplier whose score in the Sustainability Risk Self Assessment Questionnaire (SAQ) is below 50, placing it within the bottom 5% among all suppliers.
2. A significant non-Tier 1 supplier is defined as the supplier with the highest transaction amount among the suppliers of CTCI's Tier 1 suppliers.
 

Supply Chain Sustainable Development Policy

CTCI attaches great importance to the partnership with its suppliers, and expects all suppliers to commit to sustainable development. The Company has formulated a supply chain sustainable development policy, which serves as guidance for the suppliers. The policy covers fundamental operational aspects, including construction safety, and further extends to integrity management, employee rights, climate action, and ecological initiatives, guiding suppliers to integrate ESG principles into their operations.
 

Sustainability Standards

To ensure that our suppliers align with CTCI's sustainability goals, we have developed the CTCI Vendor Code of Conduct and Vendor's Letter of Commitment to Corporate Sustainable Management and Net Zero Emissions, based on international sustainability trends, related initiatives, and regulatory requirements such as UN Global Compact, Universal Declaration of Human Rights, Responsible Business Alliance Code of Conduct. These two documents apply to all suppliers (including new suppliers) as well as their subsidiaries, affiliates and contractors and any providers of goods or services to CTCI. They cover all aspects including labor practices, environment, business ethics, safety and health, and management systems.
 

Sustainability Risk Investigation

To assess the sustainability risk profile of suppliers and the implementation of their sustainability practices, CTCI has adopted a two-stage risk assessment mechanism, which includes proactive investigations and the sustainability risk self-assessment questionnaire survey to comprehensively identify potential risks. For suppliers identified as higher risk based on the assessment results, CTCI conducts further evaluations and provides improvement guidance to help strengthen their management capabilities, thereby reducing overall supply chain risk and enhancing resilience.

CTCI conducts proactive investigations using various screening dimensions and methods.
 

Sustainability Audit

To gain deeper insight into suppliers' actual sustainability performance, CTCI adopts a variety of audit formats, including documentation audits, second-party audits, third-party audits, and audits conducted in accordance with industry standards. These diverse auditing methods ensure a comprehensive evaluation of suppliers' sustainability practices from multiple perspectives and help uncover potential issues more effectively. Each year, we set specific annual and long-term goals to steadily advance the auditing process. The Company provides suppliers with guidance to address audit-identified non-compliance, supporting continuous improvement in their practices. This enhances supply chain sustainability, strengthens CTCI's risk response capability, and supports long-term resilience.
 

Reward and Elimination Mechanism

CTCI has established a reward and removal mechanism to encourage suppliers to enhance their sustainability performance. Suppliers demonstrating strong sustainability performance are given priority during supplier selection and are publicly recognized at the annual Supplier Conference. Suppliers involved in misconduct or those identified as high risk for three consecutive years without improvement are submitted to the review committee every six months, which determines whether to suspend their qualification, require corrective actions, or temporarily suspend cooperation. No suppliers were removed in 2025. Through this dual approach of rewards and removal, CTCI encourages suppliers to prioritize sustainability performance while effectively managing risks, thereby ensuring the stable operation and sustainable development of the overall supply chain.
 

CTCI Supplier Meeting and Outstanding Supplier Recognition

CTCI holds a biennial Supplier Meeting to strengthen collaboration with domestic and international suppliers. The 2025 meeting, held on March 7 under the theme "Moving Forward Together for Shared Sustainability and Prosperity," focused on supply chain resilience and sustainable development. It gathered 105 suppliers from 11 countries (181 onsite and 152 online), serving as a platform to share ESG best practices and sustainability experiences. CTCI also introduced its "Mr. Energy" platform developed by CTCI Advanced Systems Inc. to support energy management and carbon reduction. During the event, 26 outstanding suppliers were recognized, including 6 Sustainability Award winners, for their innovation and long-term commitment to sustainability.
 

Capacity-building programs

To enhance suppliers' ESG performance, CTCI provides professional resources and training to help suppliers build sustainability capabilities, with all collaborative projects lasting over six months. In addition to the domestic supply chain, CTCI's subsidiaries are also required to promote the sustainability of the global supply chain in accordance with the Group's Supply Chain Sustainability Management Policy, to drive sustainability across the global supply chain and expand the influence on the entire value chain. This ensures compliance with sustainability requirements and fosters continuous improvement.
 

Green Transportation and Local Procurement

When selecting transportation contractors, CTCI prioritizes those who share its vision and have obtained ISO 14001 Environmental Management Certification.To reduce the environmental impact from transportation, CTCI actively adopts strategies of green transportation.In 2025, CTCI's main projects were concentrated in Taiwan, Saudi Arabia, and Quatar, with the procurement amount rate of 99.1%, 0.8%, and 0.04%, respectively, among this local procurement proportion made in Taiwan have reached reached 93% in 2025. Where local procurement is not feasible, CTCI prioritizes low-carbon, low-sulfur, and low-pollution transportation methods, including favoring sea freight over air freight whenever project schedules permit. Forwarders are required to place orders through shipping companies that comply with the "2023 IMO Strategy on Reduction of GHG Emissions from Ships," which sets minimum greenhouse gas emissions reduction targets of 20% by 2030 and 70% by 2040, while also requiring the use of vessels powered by low sulfur fuel oil. In addition, CTCI prioritizes vessels no older than 15 years due to their higher fuel efficiency, and consolidates cargoes with similar delivery destinations or shipment schedules during less-than-container-load (LCL) shipments whenever project timelines allow, further improving transportation efficiency and reducing environmental impact.