ST Engineering Sustainability Report 2020

CORPORATE OVERVI EW PERFORMANCE REVI EW SUSTAINABI L ITY CORPORATE GOVERNANCE F INANCIAL REPORT In 2020, we further refined our Responsible Procurement Framework and its three pillars: Vendor Conduct, Vendor Management and Vendor Relationship. Vendor Conduct, aligned to our sustainability agenda, defines our principles and policies and lays down the basic behaviours and practices in a Vendor Code of Conduct (Vendor Code). All new and strategic suppliers are required to acknowledge their responsibilities outlined in the Vendor Code. It was strengthened to emphasise our material ESG factors and give additional guidance on our expectations. Vendor Management streamlines the systems and processes we employ to screen, onboard and assess the performance of our vendors, giving them a consistent experience working with the businesses across the Group. In 2020, we screened 100% of our new vendors based on our revised screening criteria under our Vendor Code. We enhanced our new vendor onboarding Social: Responsible Procurement We are committed to procuring ethically and responsibly to ensure a sustainable supply of goods and services tomeet our business needs. We recognise the importance of our suppliers for timely delivery of quality products and services, and we actively manage our relationships with these suppliers. Purchases by Singapore Operations DISTRIBUTION OF PURCHASES By Geographical Locations Singapore Europe North America Others 2020 62 14 9 15 (%) DISTRIBUTION OF PURCHASES By Business Sectors 2020 25 2 34 10 29 (%) Aerospace Electronics Land Systems Marine Group Corporate Office 89 ANNUAL REPORT 2 0 20 / process using a digital platform which resulted in an improved cycle time and better document management. In addition, we carried out a performance assessment on 18 of our panel vendors based on our annual spend and their impact on our operations. Separately, we segmented our vendors based on profit impact and supplier risks into four categories: strategic, leverage, bottleneck and non-critical. We carried out a Vendor Sustainability Survey with 150 strategic vendors who accounted for 76% of the total procurement expenditure from our Singapore operations. The purpose of the survey was to collect information to form a baseline understanding of the ESG practices of our strategic vendors. We also helped 22 vendors in their digitisation journey, enabling them to go green, cut costs, and improve their own productivity while delivering us more productivity benefits. We will continue this effort as we grow our business together with our local partners.