The construction industry represents a highly complex, highly specialized, and highly integrated sustainable sector. Constructing towering structures from ground level requires comprehensive interface integration and collaborative coordination among diverse teams. Following acquisition of each valuable land parcel, effective utilization, planning, and construction within building regulatory frameworks constitutes a sophisticated discipline. Kedge Construction systematically and precisely delineates responsible components and construction sequences between suppliers and construction operations, maintaining on-schedule delivery, cost optimization, and quality assurance as paramount standards. From raw material quality management to comprehensive project timeline planning, all processes undergo detailed documentation and monitoring to achieve maximum efficiency, consistent quality, transparent policies, and establish collaborative partnerships with suppliers, creating mutually beneficial and high-standard engineering outcomes.
Raw Materials Procurement Policy
The construction industry represents a highly complex, highly specialized, and highly integrated sustainable sector. Constructing towering structures from ground level requires comprehensive interface integration and collaborative coordination among diverse teams. Following acquisition of each valuable land parcel, effective utilization, planning, and construction within building regulatory frameworks constitutes a sophisticated discipline. Kedge Construction systematically and precisely delineates responsible components and construction sequences between suppliers and construction operations, maintaining on-schedule delivery, cost optimization, and quality assurance as paramount standards. From raw material quality management to comprehensive project timeline planning, all processes undergo detailed documentation and monitoring to achieve maximum efficiency, consistent quality, transparent policies, and establish collaborative partnerships with suppliers, creating mutually beneficial and high-standard engineering outcomes.
Response to energy conservation and carbon reduction and green procurement
Energy conservation and carbon reduction represents a universal consensus in contemporary society. Beginning in 2023, material procurement suppliers are required to demonstrate ESG compliance, including implementation of greenhouse gas inventories, publication of sustainability reports, and other related initiatives. The annual proportion of material procurement projects must achieve 50%, with the 2024 target reaching 52.63%. To support this consensus and protect our precious planet, demonstrating sustained commitment and determination toward energy conservation and carbon reduction, Kedge Construction procures building materials featuring watersaving, energy-efficient, green building materials, environmental certifications, and carbon footprint reduction labels in accordance with client specifications or Environmental Protection Administration guidelines, while also purchasing electric motorcycles and electric vehicles, demonstrating Kedge’s continued expansion of commitment to green and sustainable practices.
Note: we outsourced a total of 76 material procurement, and 40 suppliers met the ESG requirements, accounting for 52.63% > 50%.
Procurement status of main raw materials
Calculation standard of the green procurement amount
Water Saving Label
Water-saving toilets – According to the regulations of the Water Resource Administration of the Ministry of Economic Affairs, for the comparison of general-level water-saving and gold-level water-saving: one-stage general-level water-saving standard toilets flush with a volume of 6 liters; two-stage gold-level water-saving standard toilets flush with a volume of 4.8 liters for defecation and 3 liters for urination. According to the principles and procedures of the ISO 14024 environmental labeling standard, the amounts for materials that have obtained the environmental label will be totaled.
Water-saving faucet – According to the regulations of the Water Resources Administration of the Ministry of Economic Affairs, it complies with the National Standard CNS 8088 for the flow performance test of water-saving faucets. The maximum flow rate per minute shall not exceed 9.0 liters, nor shall it be less than 0.5 liters. Non-water-saving faucets operate at a flow rate of 12 liters per minute
The amount of water saved by faucets (liter/year) = number of people x number of times x days x water saving x number of faucets
Here below is the ex-ample for calculating the annual amount of water saved by the toilet
Given in a family of 4 members, everyone defects once a day and urinate 5 times a day. The difference in the water amount within a year is calculated as below:
The example for calculating the amount of water saved by faucet
Assuming a household of 2 people, with each person daily washing hands 2 times and brushing teeth 2 times, water savings (liters per minute) are calculated based on water discharge performance test results provided by suppliers.
Energy Conservation Label
Air-conditioning – According to the calculation standard of the Bureau of Energy of the Ministry of Economic Affairs, purchasing inverter airconditioning models can save about 40% of the total quantity of electricity.
Water chiller – according to the calculation standard of the Bureau of Energy of the Ministry of Economic Affairs. Given that the general consumption model consumes the 0.77kW/RT of electricity in average, the average efficiency of the high-efficiency inverter model can be 0.5 kW/RT. The water chiller runs 16 hours a day, and it runs a total of 5840 hours in a year (365 days). Estimated energy efficiency = the electricity capacity of water chillerß x (0.77kW/RT-0.5 kW/RT) x5840hr/year
Ventilation Fans – According to Ministry of Economic Affairs Bureau of Energy calculation standards, utilizing energy-efficient bathroom ventilation fans can achieve approximately 70% electricity savings
LED Bulbs – According to Ministry of Economic Affairs Bureau of Energy calculation standards, LED bulb usage can achieve approximately 90% electricity savings compared to conventional incandescent lighting
Green Building Materials Label
Carbon Footprint Reduction Label
Products applying for carbon reduction label authorization must demonstrate carbon footprint reduction of 3% or greater within five years. Upon successful review approval, they qualify for carbon reduction label certification. Material costs are aggregated accordingly.
Supply status of main raw materials
The main raw materials we require include rebars, cement, readymixed concrete, tiles, aluminum windows, steel structures, etc.
Unless in the case with the contract specified in the contracts, we purchase all raw materials on our own. Based on the needs for actual materials used in the various construction projects, we sign procurement contract with each supplier to clarify the project requirements and the relevant responsibilities, so as to grasp the source of materials. In particular, when purchasing key materials such as rebars and steel plates, we first compare the price of the materials with the domestic market prices and then decide to purchase them in large amount, to ensure the quality of raw materials and reasonable prices. We estimate the costs of the remaining bulk materials and manpower for the second half of the year every six months, as per international economic trends and fluctuations, to bid for new projects and control costs.
Supplier Classification
To effectively monitor and manage ESG risks within the supply chain, the company categorizes suppliers based on procurement expenditure ratio rankings, thereby identifying potential ESG risks among suppliers. Through periodic site visits, inspections, and telephone interviews with tier-one suppliers, we assess suppliers’ ESG practices and risk management capabilities.
Evaluation Mechanism Strengthens Sustainable Engineering Quality
Kedge Construction undertakes diverse and large-scale engineering projects throughout Taiwan, encompassing hospitals, technology manufacturing facilities, buildings, and bridges. With deep understanding of the differences and specialization requirements across various professional domains, the company recognizes suppliers as critical partners in achieving engineering excellence. The company has established standardized evaluation and assessment protocols, emphasizing engineering experience and professional competencies from the initial supplier selection phase, while conducting regular performance reviews and management oversight post-contract execution to ensure sustained adherence to high-quality standards.
Prior to material and equipment delivery, comprehensive communication and collaborative planning with partner vendors establishes strong cooperative relationships founded on integrity and mutual trust. Through systematic management frameworks and performance-driven replacement and development mechanisms based on evaluation outcomes, Kedge Construction has successfully established a stable, high-quality supply chain that strengthens schedule and cost management while demonstrating unwavering commitment to engineering excellence and sustainable development.
Ethics Agreement Signing
In 2024, a total of 489 ethical agreements were signed. As a publicly listed company, Kedge upholds integrity in business and requires suppliers to specialize in their techniques and complete work with a sincere and pragmatic attitude. Therefore, when we sign each contract, an affidavit is attached, and the contract clearly specifies the requirements on environmental protection, participation in associations, no child labor, and no forced labor to regulate both parties’ conduct and allow Kedge to break through the stereotype of the traditional construction industry.
Greenhouse Gas Inventory Clause
In response to climate change, we add to the contracts with suppliers the clauses with regard to the Greenhouse Gas Inventory【Party A must disclose greenhouse gas inventory information year by year in accordance with the FSC’s “Sustainable Development Roadmap for TWSE/TPEx Listed Companies.” For facilitating Party A to calculate the annual greenhouse gas emissions, Party B should provide the data of various emissions as per the needs of Party A’s construction sites. The records and certificates of the emission data include but are not limited to: the consumption, weight, specification and model of fuels, refrigerant, acetylene, ground powder, engineering and construction materials, machinery and facilities, purchased electricity, etc. If Party B fails to provide the necessary records and certificates within the time required by Party A, Party A may suspend the valuation until Party B makes improvements.】, in line with the environmental policies to select collaborative suppliers.
Self-assessment sheet for newly added suppliers
To help suppliers understand our ESG policies, we have incorporated items related to environment, human rights, ethics, and corporate governance into the self-assessment sheet, enabling suppliers to align with our sustainable development goals when undertaking construction projects. Suppliers are required to reassess and complete the Corporate Social Responsibility self-assessment form every 3 years. In 2024, out of 333 contracted suppliers, 235 have completed the form, achieving a completion rate of 70.57%.
Supplier communication, education and training and health maintenance
Kedge Construction proactively enhances supplier management mechanisms aligned with construction industry supply chain characteristics, collaborating with partners to establish a stable and resilient sustainable supply chain. Addressing industry challenges including labor shortages and material delays, the company systematically develops work crew and material management databases, monitoring trade dynamics and material delivery status. Through diversified communication channels, professional education and training programs, and recognition systems, we strengthen construction efficiency, maintain consistent project progress, while implementing ESG principles in construction operations.
Supply Chain Stability Strategy
Communication and Capability Development
Annual Supplier Conference
On March 21, 2025, we hosted our annual supplier conference themed “Advancing Sustainability, Creating New Opportunities,” bringing together over 200 partner companies, including industry leaders such as TCC Group, Tungho Steel, and Champion Ceramics.
