E-BI Environmental, Social and Governance System

Appendix

Appendix

TCFD Climate-Related Financial Disclosure Executive Summary

Aspect TCFD Proposed Items for Disclosure E-BI’s Response
E-BI’s processes for identifying and assessing climate-related risks The company's Risk Management Sub-Committee follows the "ISO 31000 risk management system and guidelines" to gather information on climate developments and trends in terms of external market, regulatory, technical and physical factors, and to evaluate the probability and severity of impact, and identify major climate risks and opportunities. Then, it converts relevant climate risks into financial figures, and considers projects that may cause an annual financial impact of more than NT$10 million as impactful risks and opportunities, which are prioritized according to likelihood and severity, and corresponding countermeasures are formulated. For risks with higher assessment results, a climate scenario analysis is additionally performed, and the current operational layout is considered to calculate its potential financial impact.
E-BI’s processes for managing climate-related risks After identifying the main risks, the Risk Management Sub-Committee will discuss countermeasures with each business unit of the Company, and risk assessment will be submitted to the risk management team, the Sustainability Committee, and the Audit Committee for supervision. The chairman of the Audit Committee regularly reports to the Board of Directors based on the risk management and assessment results.
How identification, assessment, and management of climate- related risks can be integrated into the company's overall risk management system E-BI incorporates climate change into material issues and key risks of corporate sustainable development, and implements risk management plans in all plants and plans countermeasures for operations, products, and supply chain management It follows the "ISO 31000 risk management system and guidelines" to implement the PDCA model to continually improve the integration of climate change risk management on the environmental side, and overall enterprise risk management system on the management side.
Climate-related risks and opportunities E-BI has identified over the short, medium, and long term
E-BI has identified significant risks and opportunities from climate change, including:
Short-Term Medium-Term Long-Term
  • Transition risk: Voluntary regulations (SBT commitments), renewable energy regulations, uncertainties in market information
  • Physical risk: Increased severity of extreme weather events,such as typhoons and floods
  • Market opportunities. Use of low-emission energy sources, transition to decentralized energy production, development or expansion of low-carbon products and services, R&D and innovation of new products and services,supportive policy incentives
  • Transition risk: Enhanced emissions reporting obligations, cost of transition to a low carbon economy, changes in customer behavior, increased stakeholder concerns,and negative, Mandatory regulations for products and services feedback
  • Market opportunities. Towards more efficient buildings, access to government incentives, new market partnerships
  • Transition risk: Increased price of GHG emissions (cap/carbon tax/energy tax)
  • Physical risk: Average temperature increase
  • Market opportunities. Use more efficient production and distribution processes
Impact of climate-related risks and opportunities on E-BI's business, strategy, and financial planning

Most significant climate risks for E-BI come from the requirements of clients, investors and other important stakeholders for GHG reduction as a company and compliance with product energy efficiency standards. Opportunities brought about by climate change mainly appear in products and services. E-BI's diversified product lines that respond to sustainable trends are expected to receive supportive policy incentives, and it responds to market demand and develops new markets with energy-saving and waste-reducing products and services.

Major Transition Risk Major Physical Risk Major Climate Opportunities
In order to cope with the risk of changes in relevant laws and green standards, E-BI not only actively responds to international norms, but also keeps its expectations higher than international standards to reduce the cost of renewable energy. It actively researches and develop layouts in green design, and help customers reduce costs and improve efficiency with a high energy conversion rate and low-carbon product portfolio. E-BI’s green design is based on Life Cycle of Thinking. With the 3Rs (Recycle, Reuse, Reduce) rule added to the product development process, the company engages in green product design, and aims to develop nontoxic, easy to assemble/ disassemble, and environmentally friendly products. In order to reduce the impact of drought events, respective factories have successively made investments in water- conservation facilities, enhanced the recycling of water resources, extended insurance coverage to relevant scopes, and formulated emergency response plans to reduce operational losses from disaster risk. E-BI has laid a solid foundation for long-term sustainable development, and has maintained a close relationship of trust with customers for many years. It actively uses its core technologies of optics and electronics, and invests in research and development corresponding to market demand. Therefore, when the sustainable wave rises, E-BI will have the opportunity to gain the favor of customers in a wide range of green products and solutions, with resulting increase in revenue.
E-BI's strategic resilience and consideration of different climate-related scenarios E-BI refers to the 2° C scenario announced by the International Energy Agency (IEA); it simulates future effects of climate change based on the IEA 2DS and uses the results to set the GHG reduction SBT and an estimated future carbon reduction amount to serve a reference for adjustment to business strategy.
E-BI’s processes for identifying and assessing climate-related risks The company's Risk Management Sub-Committee follows the "ISO 31000 risk management system and guidelines" to gather information on climate developments and trends in terms of external market, regulatory, technical and physical factors, and to evaluate the probability and severity of impact, and identify major climate risks and opportunities. Then, it converts relevant climate risks into financial figures, and considers projects that may cause an annual financial impact of more than NT$10 million as impactful risks and opportunities, which are prioritized according to likelihood and severity, and corresponding countermeasures are formulated. For risks with higher assessment results, a climate scenario analysis is additionally performed, and the current operational layout is considered to calculate its potential financial impact.
E-BI’s processes for managing climate-related risks After identifying the main risks, the Risk Management Sub-Committee will discuss countermeasures with each business unit of the Company, and risk assessment will be submitted to the risk management team, the Sustainability Committee, and the Audit Committee for supervision. The chairman of the Audit Committee regularly reports to the Board of Directors based on the risk management and assessment results.
How identification, assessment, and management of climate- related risks can be integrated into the company's overall risk management system E-BI incorporates climate change into material issues and key risks of corporate sustainable development, and implements risk management plans in all plants and plans countermeasures for operations, products, and supply chain management It follows the "ISO 31000 risk management system and guidelines" to implement the PDCA model to continually improve the integration of climate change risk management on the environmental side, and overall enterprise risk management system on the management side.
Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process In terms of climate change mitigation, E-BI takes GHG emissions per unit revenue as the main KPI for quantitative evaluation, and also sets indicators such as proportion of renewable energy use, energy consumption per unit revenue, and water consumption per unit revenue.
Scope 1, Scope 2 and Scope 3 (where applicable) GHG emissions and associated risks
E-BI has implemented GHG inventory of Scope 1 and Scope 2 since 2008 and has obtained ISO14064 certification. We Expand the scope of inventory (with assurance) to include Scope 3 starting in 2018. Total direct and indirect greenhouse gas emissions in 2021as follow:
Scope 1: 12,08 tons of CO2e Scope 2: 8,771 tons of CO2e Scope 3: 0 tons of CO2e
Statistics cover all delivery supplier data, not checked by third parties
The targets used by the organization to assess climate- related risks and opportunities and performance in achieving that objective
  • Link relevant climate indicators to managers' performance setting of KPIs from 2023
  • Internal carbon pricing of US $1 /tonne CO2 equivalent in 2023
Carbon Emission and Energy Management Targets: Product Energy Efficiency Management Improvement Goals: Waste Management Targets: Water Resource Management Targets:
  • Taking 2021 as the base year, reduce carbon emissions by 19% per million revenue in 2025 (category one plus two)
  • Taking 2021 as the base year, the annual power saving in 2023 is 6%
  • UV-LED energy efficiency by 60% in 2025 compared to 2018
  • Energy conversion efficiency of power supply products increased by 2% to 2023 compared to 2016
  • Absolute waste reduction of 10% in 2023, using 2021 as the base year
  • Taking 2018 as the base year, the plastic reduction of packaging materials will be 30 tons in 2025.
  • 6% absolute reduction in water consumption in 2023, using 2021 as the base year

SASB Index

Topic & Code Accounting Metrics Related Information
Product security
TC-HW-230a.1 Description of approach to identifying and addressing data security risks in productsEmployee Diversity and Inclusion 2.5 Information Security and Privacy Management
Employee Diversity & Inclusion
TC-HW-330a.1 Percentage of gender and racial/ethnic group representation for (1)management, (2) technical staff, and (3) all other employees 4.2.1 Staff Structure and Distribution
Product Life Cycle Management
TC-HW-410a.1 Percentage of products by revenue that contain IEC 62474 declarable substances 3.3.4 Environment-related substances management
TC-HW-410a.2 Percentage of eligible products, by revenue, meeting the requirements for EPEAT registration or equivalent Most of E-BI products are not end products therefore cannot apply for EPEAT
TC-HW-410a.3 Percentage of eligible products, by revenue, meeting ENERGY STAR® Criteria Most of E-BI products are not end products therefore cannot apply for ENERGYSTAR®
TC-HW-410a.4 Weight of end-of-life products and e-waste recovered, percentage recycled Most of E-BI's products are B2B, and it is difficult to collect information in the current situation
Supply Chain Management
TC-HW-430a.1 Percentage of Tier 1 supplier facilities audited in the RBA Validated Audit Process (VAP) or equivalent, by (a) all facilities and (b) high-risk facilities 2.6.2.2 Sustainable Supply Chain Management Mechanisms
TC-HW-430a.2 Tier 1 suppliers' (1) non-conformance rate with the RBA Validated Audit Process (VAP) or equivalent, and (2) associated corrective action rate for (a)priority non-conformances and (b) other non-conformances 2.6.2.2 Sustainable Supply Chain Management Mechanisms
Material Sourcing
TC-HW-440a.1 Description of the management of risks associated with the use of critical materials 2.6.3 Responsible Mineral Management
Product security
TC-HW-000. A Number of units produced by product category Please refer to E-BI 2021 annual report, Chapter 5, Production in the Last Two Years, page 105
TC-HW-000. B Area of manufacturing facilities Please refer to Locations of E-BI's Major Operations Worldwide 2021 The total production area is a business secret therefore not disclosed
TC-HW-000.C Percentage of production from owned facilities Business secrets not disclosed

GRI Standards Content Index

Major themes
GRI Standard Disclosure Related Report Sections
GRI 308 Supplier Environment Assessment 2016 Management Approach 103-2, 103-3 The management approach & its components Evaluation of the management approach 2.6.1 Sustainable Supply Chain Management Policy and Targets
308-1 New suppliers that were screened using environmental criteria 2.6.2.2 Sustainable Supply Chain Management Mechanisms
308-2 Negative environmental impacts in the supply chain and actions taken 2.6.2.2 Sustainable Supply Chain Management Mechanisms / 2.6.2.3 Identification of Supply Chain Risk 3.3.3 Product Environmental Marks and Declaration
GRI 401 Employment 2016 Management Approach 103-2, 103-3 The management approach & its components Evaluation of the management approach 4.1 Employee Policy
401-1 New employee hires and employee turnover 4.2.2 Employee Retention
401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees 4.4 Protection of Employee Interest / 4.6.1 Diverse Welfare Systems
401-3 Parental leave 4.2.2 Employee Retention
GRI 402 Labor / Management Relations 2016 Management Approach 103-2, 103-3 The management approach & its components Evaluation of the management approach 4.1 Employee Policy
402-1 Minimum notice periods regarding operational changes 4.4 Protection of Employee Interest
GRI 403 Occupational Health and Safety 2018 Management Approach 103-2, 103-3 The management approach & its components Evaluation of the management approach 4.1 Employee Policy
403-1 Occupational health and safety management system 4.6.2 Occupational Health and Safety
403-2 Hazard identification, risk assessment, and incident investigation 4.6.2 Occupational Health and Safet
403-3 Occupational health services 4.6.2 Occupational Health and Safet
403-4 Worker participation, consultation, and communication on occupational health and safety 4.6.2 Occupational Health and Safet
403-5 Worker training on occupational health and safety 4.6.2 Occupational Health and Safet
403-6 Promotion of worker health 4.6.2 Occupational Health and Safet
403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 4.6.2 Occupational Health and Safet
403-8 Workers covered by an occupational health and safety management system 4.6.2 Occupational Health and Safet
403-9 Work-related injuries 4.6.2 Occupational Health and Safet
403-10 Work-related ill health 4.6.2 Occupational Health and Safet
GRI 404 Training and Education 2016 Management Approach 103-2, 103-3 The management approach & its components Evaluation of the management approach 4.1 Employee Policy
404-1 Average hours of training per year per employee 4.3 Employee Development and Training
404-2 Programs for upgrading employee skills and transaction assistance programs 4.3 Employee Development and Training / 4.4.1 Protection of Interests of Employment
404-3 Percentage of employees receiving regular performance and career development reviews 4.4.1 Protection of Interests of Employment
GRI 417 Marketing and Labeling 2016 Management Approach 103-2, 103-3 The management approach & its components Evaluation of the management approach 3.1 Commitment to Environmental Sustainability
417-1 Requirement of product and service information and labeling 3.3.3 Product Environmental Marks and Declaration
417-2 Incidents of non-compliance concerning product and service information and labeling Note: Nil / 3.3.3 Product Environmental Marks and Declaration
417-3 Incidents of non-compliance concerning marketing communications Note: Nil / 3.3.3 Product Environmental Marks and Declaration
GRI 419 Socioeconomic Compliance 2016 Management Approach 103-2, 103-3 The management approach & its components Evaluation of the management approach 2.5 Information Security and Privacy Management
418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data Note: Nil / 2.5 Information Security and Privacy Management
GRI 418 Customer Privacy 2016 Management Approach 103-2, 103-3 The management approach & its components Evaluation of the management approach 2.4 Compliance, Ethics and Anti-corruption
419-1 Non-compliance with laws and regulations in social economic area 4.4.4 Violation of Labor Standards Act
Specific Standard Disclosure (E-BI Own Metrics)
Material Topics Disclosure Related Report Sections
Conflict Mineral (Metal)-Free Procurement Management Approach 103-2, 103-3 The management approach & its components Evaluation of the management approach 2.6.1 Sustainable Supply Chain Management Policy and Targets
LOT-EN1 Supplier screening and green procurement 2.6.3 Responsible Mineral Management
Research & Development (Products) Management Approach 103-2, 103-3 The management approach & its components Evaluation of the management approach 3.1 Commitment to Environmental Sustainability
LOT-EN2 Energy efficiency improvement 3.3.2 Product Life Cycle Assessment
LOT-EN3 Material resources saving 3.3.2 Product Life Cycle Assessment
LOT-EN4 Reduction use of hazardous substance 3.3.4 Environment-Related Substances Management