Climate Change Data

Environmental Metrics

ESG Focus Areas

• Supplier Management
• Automation
• Environment/Energy
• Training and Education

Environmental Achievements

• Reduced energy consumption by 12.4% through boiler and clothes dryer efficiency improvements, and strict control of equipment on/off times.
• Replaced 425 LED tubes, exceeding the target by 42%.

Social Achievements

• Provided 20,609 hours of training to employees.
• Hired over 1,000 new employees.

Governance Achievements

• Implemented Supplier Policy and Procedures.
• Added 15 new suppliers, exceeding the target by 114%.

Climate Goals & Targets

Environmental Challenges

• Difficulty sourcing materials and trimmings from local suppliers in the Philippines and Cambodia due to a lack of efficient and mature supply chains.
• Increasing wages in Cambodia and the Philippines.
• Falling fertility rate and aging population in Taiwan impacting labor needs.

Mitigation Strategies

• Encouraged local business units to purchase packaging materials from local suppliers (Cambodia: US$1,036,403, 5.85% of total procurement costs).
• Systematically automating manufacturing processes.
• Strengthening training and improving integration of automated and manual processes.

Supply Chain Management

Responsible Procurement

• Supplier selection based on principles of fairness, impartiality, and openness.
• Supplier assessment considering financial position, quality, lead time, pricing, flexibility, and sustainability efforts.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core Options

Awards & Recognition

• 2019 Taipei Neo Trade Award (Silver)
• 2018 Alibaba Taiwan Top-Ten B2B E-Commerce Companies Competition (1st place)
• 2018 Top Exporter Award (Universal Weavers Corporation)

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Value Innovation
• Sustainable Environment
• Diversity in the Workplace
• Community Empowerment

Environmental Achievements

• Taiwan subsidiary: purchased new orbital laundry equipment to save water and electricity
• Cambodian subsidiary: automated waste disposal process with 8 electric trucks
• Philippine subsidiary: racks and pallets were built to prevent serious damage to the raw materials and finished goods in the warehouse from heavy rain or flooding

Social Achievements

• Pandemic bonus given to frontline workers
• A second office added at headquarters to improve the work environment and to provide more space to prevent the spread of the pandemic
• Introduced online career and personality tests
• Participated in the "Donut Planet: 100 Actions for a Sustainable Life" to increase the Group members’ engagement in sustainability
• Provided insurance coverage for all Medtecs employees during the pandemic with up to NT$5,000 in bonus a month to frontline workers
• The Philippine subsidiary established the first factory in Bonded Area with COVID-19 screening, to protect the health of Medtecs employees and prevent the spread of COVID-19
• The Cambodian subsidiary was awarded the International Labour Organisation's (ILO) Better Factories Cambodia
• Joined forces with various non-profit organisations and government agencies to donate PPE to countries in Asia, Europe, North America, and Africa
• Donated 200,000 masks to the Chinese Taipei Olympic Committee for the athletes participating in Tokyo Olympics.

Governance Achievements

• Set up Internal Control department dedicated to strengthening sound governance and management across the Group
• Revamped the Medtecs Express website
• Partnered with Amazon and Newegg to strengthen Medtecs' logistics and distribution capabilities in North America
• Enhanced Medtecs brand image by launching masks in collaboration with the Chinese Taipei Olympic Committee and the New Taipei City Government
• Launched the Medtecs Shield collection
• Construction of Cambodia’s first nitrile glove factory located in the Manhattan Special Economic Zone in Svay Rieng Province with an expected monthly output of 50 million gloves
• Awarded tender to supply Philippine Army uniforms

Climate Goals & Targets

Environmental Challenges

• Overall lower demand for PPE amongst our customer base, as most of our customers had already built up their PPE stockpile in the previous year, and an overall reduction in the average selling price of PPE.
• Risks of climate change affecting business operations.
• Supply chain disruptions and issues obtaining raw materials.
• Surge in demand for PPE.

Mitigation Strategies

• Transforming operations to generate operational benefits for shareholders.
• Established a robust risk management mechanism to identify all risks and threats and to take preventive measures in advance.
• Established a global sourcing platform to become the first multinational organization in Asia that can provide one-stop-shop sourcing capability.
• Addressed the risks associated with raw materials supply shortage through vertical integration and selection of multiple verified suppliers.
• Diversified risks by having back-up suppliers in place for supply chain disruptions.
• Having manufacturing and operational sites in Taiwan, the Philippines, Cambodia and China to ensure a continuous supply chain.
• Working with government agencies, international sourcing organisations and brand owners to build a resilient and flexible supply chain.
• Implemented a multi-channel sourcing strategy, sourcing suppliers from outside the Philippines to minimise possible supply shortages and disruptions caused by a single source of supply.
• All raw materials and finished goods are stacked on racks and pallets to prevent damage caused by heavy rainfall and flooding.
• Purchased its own power generators to deal with the possible impact of power outages and other incidents caused by extreme weather on the Company’s operations.

Supply Chain Management

Supplier Audits: 60 suppliers evaluated in 2021 (30% of total suppliers)

Responsible Procurement

• Comprehensive assessment and selection process based on quality, price, delivery, sustainability indicators and financial performance.
• Supplier Management Procedure
• Suppliers must be assessed and qualified before dealing with Medtecs.
• Regular or irregular audits to monitor changes in quality.
• New and existing suppliers are required to sign environmental, safety and health-related documents.

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity and frequency of extreme weather events such as typhoons and floods
• Changes in precipitation patterns and extreme climates

Transition Risks

• Emerging regulations
• Technology conversion to low carbon technologies
• Increase in raw material costs
• Changes in customer behavior
• Increased stakeholder interest or negative feedback

Opportunities

• Introduction of solar power
• Development of energy efficient and environmentally friendly processes
• Building a resilient and diversified supply chain

Reporting Standards

Frameworks Used: GRI Standards (Core option), Rule 711B and Practice Note 7F Sustainability Reporting Guide of the Rules of Catalist

Certifications: ISO 9001, ISO 13485, CE Mark, WCA Human Right Check, USA FDA, D&B (Dun & Bradstreet), Certified Safe Production Standardization (Level 3), WRAP Certificate Program

Third-party Assurance: Ernst & Young Global Ltd. (Limited assurance)

UN Sustainable Development Goals

• Not disclosed

Sustainable Products & Innovation

• Medtecs Shields collection (anti-viral masks)
• CoverU Jacket
• HEPA Sports Mask

Awards & Recognition

• 16th Golden Torch Award Top Ten Enterprises of the Year
• Top Ten Managers of the Year 2021
• Best Taiwan Global Brands Honorable Mention
• 2021 Taiwan Trademark Award Excellent Design Innovation
• 2021 Gold Award Corporate Products Excellence
• AFAB Certificate of Appreciation
• Top Employer Award (various categories)

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Value Innovation
• Sustainable Environment
• Diversity in the Workplace
• Community Empowerment

Environmental Achievements

• Xiangshan factory launched a new orbital washing machine and adopted a high-efficiency direct-fired dryer; Longde factory replaced all washing and drying machines; Cambodian subsidiary implemented energy-saving and waste-reduction measures (including replacing coal-fired boilers with gas-fired boilers and recycling leftover materials), achieving outstanding results; six factories in Cambodia implemented GHG inventory.
• Installation of ASAHI laundry machine at Xiangshan factory to reduce natural gas and electricity consumption.

Social Achievements

• Launched "Medtecs Can Help," a medical supply donation program; continued support for local and international sports events by donating essential supplies; held internal seminars with Taiwan RE-THINK Environmental Education Association to encourage employee action.

Governance Achievements

• Products registered under the 2022 EU MDR completed UDI information registration on Eudamed; Philippine subsidiary completed its internal control system; adopted the TCFD framework, identifying climate change risks and opportunities; announced and implemented Code of Ethics and Professional Conduct, Charitable Giving Guidelines, and Diversity, Equity & Inclusion Policy.

Climate Goals & Targets

Environmental Challenges

• Decrease in sales due to drop in global demand and average selling price of PPE and face masks; excess inventory of existing customers and decrease in non-recurring orders; risks related to supply chain, R&D and production, sales, operation, fixed assets, finance, legal and compliance, human resources management, and climate.
• Increased pricing of GHG emissions due to carbon taxes or carbon pricing systems; 2050 net-zero emissions regulation; low-carbon technology transformation; changes in customer behavior; increasing impact of climate change due to global warming leading to more frequent extreme weather events.

Mitigation Strategies

• Negotiating with multiple suppliers; regular assessments and evaluations of suppliers; proactive measures to mitigate the impact of natural disasters; implementing robust credit limit procedures; engaging in materials procurement for long-term customers; establishing a customer complaint handling process; implementing network security measures; keeping up with regulatory changes; insuring fixed assets; establishing a robust investment strategy; consulting external professionals to monitor regulations; developing standard operating procedures; adopting the TCFD framework; purchasing renewable energy certificates; improving process to save energy and reduce carbon footprint or use low-carbon materials; developing green energy businesses; implementing comprehensive insurance coverage.

Supply Chain Management

Supplier Audits: 99 suppliers evaluated in 2022, 94% pass rate.

Responsible Procurement

• Hazardous Substances Non-Use Guarantee & Environmental Statement; Supplier CSR & Integrity Pledge; non-disclosure agreements; promoting local procurement; using low-carbon-emission green energy; requiring suppliers to develop relevant environmental strategies; establishing a global procurement platform.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (tropical cyclones)

Transition Risks

• Increased pricing of GHG emissions due to carbon taxes; 2050 net-zero emissions regulation; low-carbon technology transformation; changes in customer behavior.

Opportunities

• Adopting more efficient transportation methods; implementing recycling and reuse; using low-carbon energy sources.

Reporting Standards

Frameworks Used: GRI Standards 2021, Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies, UN SDGs, TCFD, SASB

Certifications: ISO 9001, ISO 13485, ISO 14064-1 (planned), ISO 14001 (planned), ISO 50001 (planned)

Third-party Assurance: Ernst & Young Global Limited

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Nitrile gloves; SMMS protective clothing; medical scrubs; alcohol wipes; disinfectant anti-bacterial alcohol; acne patches; hydrogel dressings.

Awards & Recognition

• 2022 Amazon Business Seller of the Year Award - North America

Environmental Metrics

ESG Focus Areas

• Integrity Governance
• Value Innovation
• Sustainable Environment
• Diversity in the Workplace
• Community Empowerment

Environmental Achievements

• 3.7% reduction in unit natural gas usage due to leveraging benefits of natural gas for power generation and reusing waste heat
• Provided 26.57 tons of waste fabric to Ta-Yuan Cogeneration Power Plant, contributing 72,365.91 kcal/ton heating value
• 300% reduction in water consumption in Cambodia after installing water meters
• Produced 75 metric tons of flower pots from recycled waste scraps
• Invested US$65,000 in fully synthetic thermal conductive oil, expected to decrease coal consumption by 15%+ in Philippines

Social Achievements

• Developed a human rights policy for the entire Group in accordance with international human rights conventions and Taiwanese labor laws
• 7,766 training hours provided in Taiwan (a 385% increase from 2022)
• 100% office employees based in Taiwan completed anti-bribery and anti-corruption training
• $175K+ in cash and in-kind donations

Governance Achievements

• Improved policies and processes of the Group, including Scrap & Waste Disposal Policy and Visitor Policy for Cambodia, Group Grievance Procedure, Group Contract Management Policy, Group Human Rights Policy, and introduced Group Authorization Tables into the BPM system
• Conducted an online assessment of the Group's Whistleblowing Policy for the management team in Cambodia to strengthen awareness of reporting potential violations

Climate Goals & Targets

Environmental Challenges

• Decrease in sales due to the drop of global demand of PPE and face masks
• Provisions from expected credit loss and impairment of property, plant and equipment
• Global political, economic, and financial fluctuations
• Escalating geopolitical and war risks impacting global supply chains
• Climate change impacts (extreme weather events)

Mitigation Strategies

• Bolstering supply chain resilience through inventory adjustments using ERP and AI technology, strengthening supplier partnerships, optimizing production processes, and enhancing logistics and distribution efficiencies
• Leveraging technologies such as AI, APIs, data analytics, and automation to enhance operational efficiency and effectiveness
• Venturing into the longevity industry to cater to the diverse needs of the elderly
• Developing new products, applying for patents, enhancing customer service, and collaborating with partners to develop new product lines
• Adopting the TCFD framework, integrating climate-related risks and opportunities into its business strategy and corporate governance, and incorporating climate-related risks into risk management procedures

Supply Chain Management

Supplier Audits: 99 suppliers evaluated in 2023 (63% coverage)

Responsible Procurement

• Supplier Purchase Agreement
• Supplier CSR & Integrity Pledge
• Non-Use of Hazardous Substances Guarantee
• Environmental Statement
• BCI membership
• OEKO-TEX certification
• Self-inspection reports

Climate-Related Risks & Opportunities

Physical Risks

• Cyclones

Transition Risks

• Increased pricing of GHG emissions
• Net-zero emissions by 2050
• Costs to transition to lower emissions technology
• Changing customer behavior

Opportunities

• Developing green energy businesses
• Improving process energy efficiency or using composite low-carbon materials
• Promoting the use of environmentally friendly materials in customer products

Reporting Standards

Frameworks Used: GRI Standards 2021, Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies, UN SDGs, TCFD, SASB

Certifications: ISO 9001, ISO 13485

Third-party Assurance: Ernst & Young Global Limited (Limited Assurance)

UN Sustainable Development Goals

• Not disclosed

Medtecs’ sustainable development strategy aligns with 12 Sustainable Development Goals (SDGs).

Sustainable Products & Innovation

• Biodegradable materials (in development)
• Compressed product volumes to avoid excessive packaging

Awards & Recognition

• 2023 Happiest Employees Award by 1111 Job Bank
• Top Community Building Champion Award (Philippines)