Sustainable procurement is an international trend and a concrete practice for companies to demonstrate positive external influence. PCSC has observed global resource depletion and forced labor issues in some developing countries. As a result, it has set sustainable procurement and improving resource sustainability as key projects for the Company’s ESG development. The Sustainable Procurement Task Force was established in 2021 to develop a sustainable procurement policy for the company's private-label products and raw materials, including coffee and retail supplies, and to routinely report to the board. Elements such as human treatment, recycling and environmental protection are included in the supplier selection system, prioritizing procurement of raw materials and suppliers that have sustainable certification or meet the principles of sustainability and carbon reduction. Key issues include animal welfare, organic vegetables, traceable agricultural products and so on, providing consumers with the choice to support sustainability in their daily life.

Sustainable Agriculture Procurement Policy

PCSC’s private-label product manufacturers adopt PB raw materials to comply with the principles of environmental protection, animal welfare, while prioritizing procurement of traceable agricultural products. In the meantime, raw material suppliers are coached to develop corresponding sustainable business concepts to ensure effective management of the sources of private-label products.
＊Environmental Standards for the Procurement please refer to 「PCSC and PCSC Subsidiaries’ Code of Conduct for Suppliers」.

Environmental Standards for the Procurement of Agricultural Raw Materials

• PCSC is in the process of formulating specifications for agricultural product procurement, with the scope covering contract signing, onboarding qualifications, traceability registration, inspection and compliance with the Act Governing Food Safety and Sanitation and relevant regulations governing agriculture. The goal is to ensure the implementation of all standards and regulations, sustainable agriculture, and food safety.
• The key points for implementation include:
  • Formulate standard operating procedures to ensure protection for the farmers, soil, and the environment
  • Continue to assist raw material suppliers in setting up the origin management center to obtain certificates of organic farming and traceability, and to implement standards and specifications
  • Promote protected culture, avoiding the risk of contaminating adjacent farms
  • Commit to biodiversity protection and no deforestation, implement pesticide toxicity and chemical fertilizer reduction, and encourage suppliers to comply with relevant norms.
  • Extend the use of local agricultural products to reduce the transport distance and the contamination risk of imported products
  • Boost sales of products which contain locally produced drought-tolerant crops, such as corn and sweet potatoes, to reduce water consumption for irrigation and protect water resources

Focus on Topics Involving Animal Welfare and Organic Vegetables

• The Company prioritizes and gradually adopts traceable raw materials that comply with national animal welfare and humane breeding. For example, raw eggs that comply with the national guidelines for animal welfare are chosen for onigiri, sandwiches and boxed meals.
• The raw materials for private-label products meet the following principles of animal welfare: Freedom from the lack of nutrition (hunger and thirst), freedom from disease and injury, freedom from physical and psychological discomfort, freedom from fear and stress, and freedom to exhibit natural behavior.
• Suppliers receive regular inspections and counseling sessions on compliance with regulations regarding Ractopamine, antibiotics, growth hormone and so forth. The Company is committed to prioritizing procurement of animal raw materials without using growth hormones and preventive antibiotics during the farming process.
• The Company is committed to not using genetically modified or cloned animals.
• PCSC continues to provide organic vegetables in a selection of areas and stores, giving consumers a variety of choices.

Sustainable Agriculture Procurement Performance

In 2022, sustainable certification obtained by the private-label products of PCSC in purchasing raw materials and store goods:

Agricultural Crops	Certifications	Coverage: the share of procurement spend on certified crops in the total procurement spend on said given crop	Exposure: the share of said given crop procurement spend in the total procurement spend
Palm oil	Unused	-	-
Soy	（U.S. Soy Sustainability Assurance Protocol）	22.47%	5.79%
Sugar	Not obtained	0.0%	0.25%
Cacao	Not obtained	0.0%	0.36%
Cereals (Rice)	Taiwan Good Agricultural Practice (T-GAP)	4.43%	6.36%
Cotton	Unused	-	-
Tobacco	Unused	-	-

Animal products	Certifications	Coverage: the share of procurement spend on certified crops in the total procurement spend on said given crop	Exposure: the share of said given crop procurement spend in the total procurement spend
Aquaculture	ASC（The Aquaculture Stewardship Council）	0.71%	0.92%
Cattle	AAWCS(The Australian Livestock Processing Industry Animal Welfare Certification System)	96.99%	2.13%
Dairy	Not obtained	0.0%	20.67%
Swine	Better Life Label、Certified Humane®、G.A.P Certification、WELFAIR™、IAWS(Interporc Animal Welfare Spain)	92.12%	4.68%
Poultry	Taiwan Animal-Friendly Product Protocol 、PAACO（Professional Animal Auditor Certification Organization）	38.88%	14.09%
Wild Fisheries	MSC（Marine Stewardship Council）	36.68%	0.75%

GMO

Private-label products take issues such as health, nutrition and genetic modification into consideration:

• PCSC promotes the concept of a healthy plant-based diet by providing products such as salad, fruit, vegetable oden and products available to meet the consumers’ needs for vegetables. PCSC’s R&D Center defines the daily vegetable intake with reference to the Health Promotion Administration’s daily dietary recommendations before proceeding to the development stage and publishing information on the official website. PCSC also works with qualified nutritionists from Taiwan Millennium Health Foundation. The nutritionists evaluate the nutritional content of the products and make recommendations.
  

  Standards for Health and Nutrition

  

  Note：For daily dietary guidelines, please refer to the "Daily Dietary Manual" of the Health Promotion Administration.

• No added preservatives in fresh food: The freshness is guaranteed by choosing special ingredients and controlling factory manufacturing processes in partnership with the manufacturers. No preservatives are added from raw materials to finished products, and each product has passed the inspection of a third-party institution prior to the product launch.
• No partially-hydrogenated oils in fresh food: There are two sources of trans fats, including the naturally-occurring type and the type derived from processing. The type derived from processing mainly comes from hydrogenated vegetable oils. When selecting raw materials, PCSC does not include partially-hydrogenated oils or added preservatives. The nutrition facts label of each product is inspected by a third-party institution prior to the product launch.
• The microbiological standards for fresh food are developed in line with statutory regulations. Suppliers are required to provide qualified third-party inspection reports and conduct regular inspections for all product categories.
• Fructose is not added to fresh food. The cases in which they exist in the raw materials are managed on a case-by-case basis and noted down in the management system.
• Genetically-modified food ingredients are tracked for products that may contain such ingredients approved by the Ministry of Health and Welfare.
• When developing products, PCSC takes stakeholders’ concerning genetic modification issues into consideration. In addition to complying with regulations, PCSC adopts the EU's 0.9% standard for private-label products and co-purchased materials to meet consumers’ needs.
• Information such as genetic modification, calories, ingredients are honestly disclosed in labeling. For example, fruit corn on the cob and golden corn on the cob are labelled as containing no GMOs.
• Each year, PCSC inspects product labeling compliance in GMO ingredients and disclose in the reports. Any subsequent use of GMOs is revised in the labeling and disclosed according to the regulations.