Climate Change Data

Environmental Metrics

ESG Focus Areas

• Company Governance
• Environmental Protection
• Employee Care
• Supply Chain Social and Environmental Responsibility Management
• Community Participation

Environmental Achievements

• TFT-LCD manufacturing plant unit wafer area water intensity decreased by 0.2% (vs. 2016)
• TFT-LCD manufacturing plant unit wafer area electricity intensity decreased by 2% (vs. 2016)
• Process water recycling rate reached 95.4%, exceeding the Science and Technology Industrial Park Administration Bureau's standard of 85%
• Total power generation of 24,914,794 kWh from solar power systems in Taiwan and China
• Material Flow Cost Accounting (MFCA) from 2012 to 2017 resulted in a cumulative material saving of 1,149.6 tons and a carbon reduction of 3,161 tCO2e
• Packaging material reduction of approximately 26,285 tCO2e through material weight reduction and increased loading quantity

Social Achievements

• Employed a total of 998 people with disabilities, exceeding legal requirements in several locations
• Implemented a “Job Function Enhancement and Workplace Health” program for employees with disabilities
• Reduced lost-time injury frequency (FR) and severity rate (SR) by 11% and 12% respectively compared to 2016
• Maintained a zero occupational disease rate (ODR)

Governance Achievements

• Established an anti-corruption training program for all indirect employees
• Implemented a comprehensive anti-corruption policy and procedures
• Established a whistleblowing system

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to natural disasters
• Increasing pressure to reduce carbon emissions
• Competition in the LCD panel market
• Water scarcity
• Air pollution

Mitigation Strategies

• Developed alternative sourcing strategies
• Implemented various energy-saving and water-saving measures
• Improved automation and production efficiency
• Implemented a carbon offset project
• Collaborated with suppliers to reduce carbon emissions
• Improved waste management and recycling
• Engaged with experts to address air pollution issues

Supply Chain Management

Supplier Audits: 1 audit in 2017

Responsible Procurement

• RBA Code of Conduct
• Conflict Minerals Management
• Supplier Sustainability Requirements

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water scarcity

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Carbon offset projects

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 14001, OHSAS 18001, ISO 9001, IATF 16949, ISO 13485, ISO 17025, QC080000, ISO 50001, ISO 14064-1

Third-party Assurance: SGS Taiwan Ltd.

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

The report explains how Innolux's initiatives contribute to these SDGs.

Sustainable Products & Innovation

• Energy-efficient products
• Products with reduced material usage

Awards & Recognition

• Taiwan Excellence Award
• Taiwan Corporate Sustainability Awards

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance
• Supply Chain Management
• Human Rights

Environmental Achievements

• Reduced FCs equivalent emissions in TFT-LCD by 9.4% (vs. 2019)
• Achieved low-carbon logistics by reducing 1.43 million tCO2e through transportation optimization
• Electricity consumption intensity: 70.4 kWh/m2, top of the panel industry in energy conservation
• Generated 35.2 GWh clean energy from solar and biogas generation
• Saved 7.3GWh with the ISO 50001 action plan for more effective energy management
• Waste recycling up to 89.5% with emerging effectiveness in waste reduction and waste-to-resource
• Water consumption intensity: 0.263m3/m2, top of the panel industry in water conservation
• Process water recycling rate achieved 96.2%, superior to the science part administration standard
• Water withdrawal intensity at TFT-LCD stage reduced by 20% (vs. 2016)

Social Achievements

• Women's promotion to management increased by 5.1% (over 2019); development unaffected by gender
• All 15 “sexual harassment” complaints were properly resolved
• Retention rate after unpaid parental leave was up to 86%
• Arranged in-house cancer screening for 30,941 persons
• Arranged maternal care for 923 employees to optimize risk management to 100%
• Mental health care rate 100%
• Arranged health promoting activities with 8,421 participants to build a healthy workforce
• Annual training plan completion rate 100%
• Increase the total average training hours for employees by 18% (vs. 2019)
• Organized “Digital Transformation Training Academy” to train 2,100 persons to cultivate technology leaders and experts
• Hired up to 876 persons with disabilities

Governance Achievements

• “Zero” significant violation in legal compliance
• 100% completion for anti-corruption and business integrity publicity to the top 20 suppliers and customers
• Case closing rate of anti-corruption reports up to 79% to effectively control business integrity and ethical management
• Ranked the top 6–20% at the 7th Corporate Governance Evaluation in 2020

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic jeopardized the global industry and economy
• Supply chain disruptions due to the pandemic (undersupply of driver ICs and power management ICs)
• Climate change impacts (extreme weather, flooding)
• Regulatory changes
• Market shifts

Mitigation Strategies

• Implemented epidemic control measures, including procurement of strategic supplies (facemasks, thermometers, etc.) and establishment of an epidemic control command
• Developed alternative sourcing strategies, flexible changes in material specifications, organizational supply strategy, optimization of product mix, and maintaining connections with strong and smart suppliers
• Integrated the Task Force on Climate-related Financial Disclosures (TCFD) framework into business decision-making
• Developed programs to reduce environmental impacts
• Completed VOCs treatment, with a total efficiency over 92% of the best available control technology (BACT)

Supply Chain Management

Supplier Audits: 829 supplier CIP meetings, 169 communication and exchange meetings, 118 suppliers conducted GHG inventory

Responsible Procurement

• RBA Code of Conduct
• Supplier sustainability requirements
• Conflict minerals management
• GHG inventory and carbon reduction

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Flooding
• Changes in rainfall patterns

Transition Risks

• Regulatory changes (GHG Control Act, energy-related regulations)
• Market shifts
• Carbon tax
• Total quantity control
• Emission trading

Opportunities

• Development of low-carbon, energy-efficient products
• Participation in emission trading
• Low-carbon energy
• Energy conservation

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, SASB, TCFD

Certifications: ISO 14001, ISO 45001, ISO 50001, ISO 14064-1, QC080000:2017, TISAX AL2

Third-party Assurance: SGS Taiwan

UN Sustainable Development Goals

• Goal 3: Good health and well-being
• Goal 7: Affordable and clean energy
• Goal 8: Decent work and economic growth
• Goal 9: Industry, innovation, and infrastructure
• Goal 12: Responsible consumption and production
• Goal 13: Climate action

Innolux's initiatives contribute to these goals through various ESG programs and activities

Sustainable Products & Innovation

• Energy-efficient products
• Medical panels
• LC Meta-Surface Antenna

Awards & Recognition

• DJSI World Index constituent
• DJSI Emerging Market Index constituent
• EcoVadis Gold rating
• National Occupational Safety and Health Award Enterprise Prime Award
• Taiwan Excellence Awards
• Enterprise Environmental Protection Award

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Environmental Protection
• Employee Care
• Supply Chain Management
• Community Engagement

Environmental Achievements

• Reduced FC emissions intensity per unit area by 46.5% compared to 2016
• Process water recovery rate of 97.2%
• Reduced power consumption per unit input area in TFT-LCD plants by 2.9% compared to 2020
• Generated 38.28 million kWh of clean energy
• Waste landfill rate of 1.12%

Social Achievements

• Health promotion activities with over 17,400 participants
• Cancer screening event served over 38,100 employees
• Disability injury frequency rate of 0.25
• Hired 584 persons with disabilities (1.1% of all employees)
• Contributed NT$45 million to social welfare
• Zero recruitment fee policy for migrant workers

Governance Achievements

• Featured on DJSI World Index and Emerging Markets Index for 4 consecutive years
• Achieved 100% internal RBA audit and RBA training for new employees
• 81% completion rate for reported corruption cases
• Taiwan sites passed ISO27001 certification

Climate Goals & Targets

Environmental Challenges

• Global COVID-19 pandemic
• Out-of-control carbon emissions and global warming
• Increased competition in the industry
• Supply chain disruptions due to the pandemic (shortage of display driver ICs and PMICs)
• Climate change

Mitigation Strategies

• Adopted flexible materials specifications, enhanced organizational supply strategy, and product mix optimization
• Strengthened cooperation with partners
• Established Carbon Risk Management Committee
• Applied to join the Science Based Targets initiative (SBTi)
• Implemented internal carbon pricing (ICP)
• Developed the Greenhouse Gas Management Implementation Strategy “D-C-I-R”

Supply Chain Management

Supplier Audits: 100% completion rate of on-site inspections for high-risk suppliers in 2021

Responsible Procurement

• RBA Code of Conduct
• Supplier CSR Risk Self-Assessment Questionnaire (SAQ)
• Conflict minerals management
• Green procurement

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Flooding
• Changes in precipitation patterns and distribution
• Tropical cyclones

Transition Risks

• Regulatory changes
• Market shifts
• Carbon pricing
• Uncertainty of new regulations

Opportunities

• Development of energy-efficient products
• Participation in the carbon market
• Low-carbon energy

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards (Comprehensive option), AA1000 Stakeholder Engagement Standard (SES), Sustainability Accounting Standards Board (SASB)

Certifications: ISO 14001, ISO 45001, ISO 50001, ISO 14064-1, ISO 27001, QC080000

Third-party Assurance: SGS Taiwan

UN Sustainable Development Goals

• SDG 3
• SDG 4
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 12
• SDG 13
• SDG 16
• SDG 17

Innolux integrated SDGs into its company culture and daily operations, setting long-term goals and making a commitment to achieve its sustainable development goals by 2025.

Sustainable Products & Innovation

• Fan Out Panel Level Packaging (FOPLP)
• PolarBlack LCD
• MiniLED
• Smart Invisible Camera LCD Device
• Interactive LCD Monitor
• Smart Dimming Windows

Awards & Recognition

• Dow Jones Sustainability Indices (4 consecutive years)
• Taiwan Sustainability Action Awards
• Taiwan Corporate Sustainability Awards
• National Talent Development Awards
• CDP Water Management (A-)
• CDP Supplier Engagement Rating (A)
• Best Companies to work for in Asia
• Taiwan Excellence Award
• World Economic Forum (WEF) Lighthouse Factory
• FTSE4Good TIP Taiwan ESG Index
• MSCI ESG Ratings (BBB)
• Investment in People Award (AREA)
• National Talent Development Award (NTDA)

Environmental Metrics

ESG Focus Areas

• Economic
• Environmental
• Social

Environmental Achievements

• Deployment of renewable energy and water recycling created environmental benefits worth NT$140 million.
• Introduced 570,000 tonnes of recycled water and 600,000 tonnes of rainwater harvesting, resulting in NT$4.3 million in external benefits on the environment.
• 130 million kWh of renewable energy brought external benefits of NT$130 million on the environment.

Social Achievements

• Innolux’s procurement demands created approximately 24,000 supply chain jobs, generating NT$8.9 billion in social external benefits for workers.
• Economic benefits generated by reducing cardiovascular diseases in Innolux employees through regular health checkups and health management measures were approximately NT$100 million.
• Innolux generated a gross value-added (GVA) income of NT$82.8 billion for stakeholders from income tax, employee remuneration, R&D investment, depreciation, and amortization.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Conservative consumer markets due to rising interest rates and inflation resulted in a NT$18.6 billion net loss after tax.
• Occupational accidents resulted in a social cost of NT$24.73 million.
• Environmental footprint and resource depletion of the manufacturing process incurred an environmental cost of NT$4.9 billion.
• Supply chain value generated in 2023 decreased by 9.3% from the previous year.
• Employment earnings of supply chain workers generated by the demand for procurement decreased by 9.9% from the previous year.
• Environmental externalities derived from the supply chain decreased by 8.5% compared to the previous year.
• Social cost of carbon derived from production and operations decreased by 2.6% compared to the previous year.
• Social cost of air pollution has increased by 6% compared to the previous year.
• Social cost of wastewater discharge decreased by 24.9% compared to the previous year.
• Social cost of waste disposal decreased by 20.7% compared to the previous year.
• Growth in future returns from professional development for employees was NT$9.4 billion, a decrease of 13.4% compared to the previous year.
• Social costs from employee occupational accidents resulted in a 59.3% increase from the previous year.
• Economic benefits from reducing cardiovascular diseases decreased by 21.7% from the previous year.
• Innolux’s TFT-LCD product sales indirectly generated NT$164 billion in output value for its client industries, a decrease of 7.4% from last year.
• End-use products of Innolux’s TFT-LCD line resulted in a social cost of NT$92.5 billion due to product usage – a decrease of 2.7% from the previous year.

Mitigation Strategies

• Improving the sustainable impact management structure.
• Seeking opportunities to reduce environmental impacts and improve social welfare.
• Focusing more on supply chain transformation and energy-saving product development.
• Working closely with suppliers to explore ESG sustainability issues and trends.
• Encouraging qualified suppliers to adopt ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 certifications.
• Implementing 15 water conservation improvement projects, with an investment of approximately NT$100 million.
• FAB 6 plant passed the ISO 46001:2019 Water Efficiency Management Systems certification.
• Improving energy efficiency and accelerating energy transformation through process optimization, introduction of local scrubbers, use of renewable energy, enhancement of energy efficiency, and expansion of resource recycling.
• Spending a total of NT$13.1 million to implement two projects in the Tainan and Ningbo plants to improve air pollution prevention and control equipment.
• Improving the wastewater discharge classification system and establishing a wastewater discharge characteristic monitoring system.
• Promoting waste reduction at the source and resource utilization.
• Working with upstream and downstream external partners to maximize resource efficiency through resource regeneration, recycling, re-design, and extended use.
• Offering competitive market salaries, festival bonuses, educational travel stipends, incentive bonuses, and other flexible remunerations.
• Organizing health promotion activities such as health lectures, sports events, and free clinic sessions.
• Integrating individual health information across the digital health management system and mobile app management tools.
• Actively pursuing new areas in medical, automotive, and semiconductor fields to provide customers with complete solutions.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Working closely with suppliers to explore ESG sustainability issues and trends.
• Encouraging qualified suppliers to adopt ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 certifications.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Triple Bottom Line (TBL), Natural Capital Protocol, Social & Human Capital Protocol

Certifications: ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 46001:2019

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Eco-friendly green products focusing on non-toxicity, energy-saving, and material-saving.

Awards & Recognition

• Not disclosed