Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Sustainability
• Inclusive Growth
• Agile Innovation

Environmental Achievements

• Energy saving rate in 2019 reached 2.26%, the highest in recent years.
• Overall water recovery rate reached 92%, reducing tap water consumption.
• World's first panel manufacturer to obtain UL 3600 Circularity Certification (for 24-inch desktop LCD panels).

Social Achievements

• Selected as a constituent company of the Dow Jones Sustainability World Index for the 11th consecutive year.
• Ranked in the top 5% of corporate governance evaluations by the Taiwan Stock Exchange.
• Won several honors such as the Taiwan Corporate Sustainability Award and the Circular Economy Award.

Governance Achievements

• Independent directors constitute half of the Board.
• More than half of the directors are not an employee or a manager of the Company.
• Established a Corporate Governance Committee in October 2019.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic.
• Fierce competition in the TFT-LCD industry.
• Mainland China progressively expanding capacities.
• Consumer behavior affected by the global economy.

Mitigation Strategies

• Flexibly adjusted production capacity and secured supply chains to meet customer demand.
• Focused on product quality upgrades and new product development (on-cell touch panels, high-resolution panels, curved displays, commercial displays).
• Leveraged technology and product strengths, flexibility, patent quality, and a complete layout of clientele.
• Optimized product mix and decentralized the market to reduce the impact of business fluctuations.

Supply Chain Management

Supplier Audits: 63 suppliers audited in 2020

Responsible Procurement

• AUO Supplier/Subcontractor Code of Conduct
• RBA Code of Conduct compliance

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (floods, typhoons, lightning strikes)
• Chronic climate change (average temperature rise)

Transition Risks

• Increasing demand for renewable energy
• Carbon reduction requirements of brand clients
• Gross volume control and emission trading

Opportunities

• Development of energy-efficient products
• Renewable energy investments

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 14001, ISO 45001, ISO 27001, UL 3600 Circularity Certification, DREAMS (Distribution Renewable Energy Advanced Management System)

Third-party Assurance: KPMG International

UN Sustainable Development Goals

• SDG 7 (Affordable and Clean Energy)
• SDG 11 (Sustainable Cities and Communities)
• SDG 12 (Responsible Consumption and Production)

AUO's initiatives in energy optimization, water optimization, circular production, climate adaptation, quality education, inclusive growth, enjoyable workplace, and smart manufacturing contribute to these goals.

Sustainable Products & Innovation

• Energy-saving products (LTPS process, low operating frequency panels)
• Solar energy products

Awards & Recognition

• Dow Jones Sustainability Indexes
• S&P Global Sustainability Award Bronze Class
• Bloomberg Gender Equality Index
• MSCI ESG Leaders Indexes
• EcoVadis Sustainability Rating gold medal
• ISS Oekom Sustainability Rating Prime Status
• 2020 Forbes global best employer
• Vigeo-Eiris ESG ranking Top 100 Performer
• Taiwan Circular Economy Awards Best Practices Award
• Taipei Golden Eagle Micro-movie Festival awards
• 2020 Taiwan TCSA and GCSA awards
• Buying Power Award from Ministry of Economic Affairs

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Resource Management
• Circular Economy
• Talent Attraction and Retention
• Diversity and Inclusion
• Talent Development
• Occupational Health and Safety
• Social Engagement
• Supply Chain Management
• Governance

Environmental Achievements

• Reduced absolute GHG emissions from 3.01 million tons in 2020 to 2.92 million tons in 2021, a reduction of 3% (scope 1 and 2)
• Increased process water recycling to 94.5%
• Decreased tap water withdrawal and production water use intensity by 9%
• Developed the world's first display product using renewable plastics
• Expanded the application of renewable plastics to laptops
• Reduced raw materials consumption and waste generation
• Obtained Science based targets (SBT) verification
• Joined the RE100 initiative

Social Achievements

• Launched diverse activities including AUO Life, Online Sports Day, and Volunteer to create a happy workplace for our employees
• Expanded the benefits of the "Honesty-Intelligence Scholarship"
• Collaborated with NGOs to expand resources to remote schools
• Developed digital courses for promoting science education
• Improved capability in renewable technology
• Expanded the installed capacity of renewable energy around the world

Governance Achievements

• Transformed the CSR Committee into an ESG and Climate Committee
• Strengthened the application of digital tools
• Developed low-carbon technologies in manufacturing and R&D
• Deployed green business opportunities
• Passed the SBT review
• Introduced the new version of greenhouse gas verification

Climate Goals & Targets

Environmental Challenges

• Resurging pandemic
• Economic and trade fluctuations
• Port congestion and materials shortage
• Extreme weather effects due to climate change
• Supply chain disruptions
• Water resources scarcity
• Talent competition and manpower shortage
• Global restrictions on the development of the fossil fuel industry
• Rising cost of raw materials
• Variations in-home product specifications due to the changing market needs

Mitigation Strategies

• Developed alternative sourcing strategies
• Improved the flexibility of process improvement
• Upgraded handling capabilities for crisis response
• Continuously amended risk management frameworks
• Developed smart grids
• Implemented energy-saving solutions
• Planned water conservation and water supply diversification
• Sought risk transfer via insurance
• Proactively collected disaster events
• Developed forecast models
• Strengthened the application of digital tools
• Developed low-carbon technologies in manufacturing and R&D
• Deployed green business opportunities

Supply Chain Management

Supplier Audits: 30 RBA audits (23 suppliers)

Responsible Procurement

• Supplier/Subcontractor Code of Conduct
• CSR risk assessment
• Annual RBA supplier audit
• Green procurement policy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Flooding
• Water shortage

Transition Risks

• Regulatory changes
• Market shifts
• Rising cost of raw materials
• Carbon tax

Opportunities

• Development of energy-efficient products
• Expansion of renewable energy investment
• Green loan market

Reporting Standards

Frameworks Used: GRI Standards, SASB Index (Hardware), TCFD

Certifications: ISO 14001, ISO 45001, ISO 50001, ISO 14064

Third-party Assurance: DNV, KPMG, SGS Taiwan

UN Sustainable Development Goals

• SDG 6
• SDG 7
• SDG 9
• SDG 12
• SDG 13
• SDG 17

AUO's initiatives contribute to these goals through various environmental, social, and governance programs

Sustainable Products & Innovation

• Display products using reclaimed plastic materials
• Low-energy-consumption products

Awards & Recognition

• GCSA - Special Award for Pandemic Response and Sustainability
• World Economic Forum - Global Lighthouse Network
• Asia Responsible Enterprise Awards - Responsible Business Leadership
• Mr. Zhao Yaodong Memorial Medal
• National Enterprise Environmental Protection Award - 2 Golden Awards
• Ministry of Economic Affairs Energy Saving Award - Silver Award
• Taiwan Sustainability Action Awards (Environment Aspect) - Golden Award
• Taiwan Sustainability Action Awards (Social Aspect) - Golden Award
• PwC Impact Award - Bronze Award
• SID 2021-People’s choice Award-Best New Display Component
• Ministry of Economic Affairs – 4 Taiwan Excellence Awards
• Top Solar Awards
• CTSP Innovation Contest - Innovative Product Award
• Taiwan Top 10 Corporate Sustainability Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Resource Management
• Circular Economy
• Supply Chain Sustainability
• Talent Development
• Human Rights
• Corporate Governance

Environmental Achievements

• Achieved a cumulative reduction of 6.87 million metric tons of carbon emissions, exceeding the 2018 target of 6.5 million tons.
• Reduced annual power consumption by 2.57% through energy-saving initiatives.
• Achieved a process water recycling efficiency of 95%.
• Reduced total waste generated by 7.8% compared to the previous year.
• Increased the proportion of recycled materials in special specification products to over 20%.

Social Achievements

• Launched the ESG-TALENT plan to cultivate high-quality talent.
• Added the College of Business and College of ESG to AUO University to upgrade employee knowledge and skills.
• Maintained a high customer satisfaction rate of over 90% for several consecutive years.
• Implemented a zero advance payment policy for foreign workers.
• Organized various CSR co-prosperity activities with 336 supply chain partners.

Governance Achievements

• Women made up 44% of Board directors.
• Ranked among the top 5% in the TWSE corporate governance evaluation.
• Established a robust risk governance mechanism with a new KRI light management system.
• Implemented a company-wide ESG campaign to build a sustainable ecosystem.
• Received numerous domestic and international accolades for sustainability performance.

Climate Goals & Targets

Environmental Challenges

• Global inflation, COVID-19 surges, fragile supply chains, climate change, and energy crises.
• Rising raw material prices increasing production costs.
• Decreased end demand due to inflation and macroeconomic changes.
• Supply chain disruptions due to geopolitical risks and natural disasters.
• Potential impacts of China's carbon reduction policies on the supply chain.

Mitigation Strategies

• Established a risk governance organization and management mechanism.
• Strategic adjustment of parts inventory and production plans.
• Reviewing prices and controlling costs and inventory levels.
• Developing information security management strategies and action plans.
• Monitoring the external environment and implementing business continuity plans.
• Assisting key manufacturers in devising effective energy and carbon emission management measures.

Supply Chain Management

Supplier Audits: 21 suppliers (25 factories) audited under RBA standards in 2022.

Responsible Procurement

• Supplier/Subcontractor Code of Conduct
• Conflict Minerals Policy
• Green purchasing policy
• ISO 14064/ISO 50001 certifications for key suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water scarcity
• Electricity shortages

Transition Risks

• CBAM
• Carbon taxes/fees
• Changes in low-carbon product market
• Rising raw material costs

Opportunities

• Development of energy-efficient products
• Expansion of renewable energy business
• Green financing opportunities

Reporting Standards

Frameworks Used: GRI Standards (revised in 2021), SASB Index (Hardware), TCFD, UN Global Compact

Certifications: ISO 14001, ISO 45001, ISO 50001, LEED (4 global facilities), UL 3600 Circularity Certification

Third-party Assurance: KPMG (financial data, GRI, and SASB); DNV (ISO 14064 GHG emissions); SGS Taiwan (ISO 14001, ISO 45001, and ISO 50001)

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)
• Goal 8 (Decent Work and Economic Growth)
• Goal 17 (Partnerships for the Goals)

AUO's initiatives contribute to these goals through various environmental, social, and governance programs.

Sustainable Products & Innovation

• Displays manufactured with renewable materials
• Products using recycled materials
• Energy-efficient products

Awards & Recognition

• Asia Responsible Enterprise Awards - Corporate Governance Award
• Manufacturing Leadership Awards
• ROI-EFESO Industrie 4.0 Award
• Clarivate Top 100 Global Innovators
• TCSA Taiwan Top 10 Corporate Sustainability Award
• CommonWealth Sustainable Citizen Award
• Harvard Business Review Digital Transformation Awards
• Asia-Pacific Sustainability Action Awards
• Executive Yuan National Corporate Environmental Award
• Taiwan Circular Economy Award
• Science Park Carbon Reduction Excellence Award
• Hsinchu Science Park Excellent Occupational Safety and Health Unit
• TCSA Human Rights Practice and Development Leadership Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Circular & Clean Production
• Sustainable Products
• Talent Attraction & Development
• Sustainable governance operation
• Supply chain management
• Stakeholder Engagement
• Business Risk
• Biodiversity

Environmental Achievements

• Reduced energy consumption by 3.3% in 2023 (new record)
• Used nearly 1 billion kWh of green electricity, achieving RE 2.2%
• Reduced GHG emissions to 2.43 million tons of CO2e in 2023
• Achieved 95.02% process water recycling efficiency
• Reduced water intensity for production by 5%
• 96% of plastic packaging recycled and 80% of waste plastic recycled
• Financial benefits from circular economy initiatives reached NTD 14.39 billion

Social Achievements

• Launched the “All PFAS Free” project, pledging to completely phase out persistent chemical substances by 2026
• 89% internal promotion rate for supervisors and professionals
• 84% of employees identify with the company
• More than 1,000 stakeholder interaction sessions completed in 2023
• Expanded human rights risk investigation to include subsidiaries, joint ventures, and suppliers

Governance Achievements

• Upgraded the “ESG and Climate Committee” to the “Sustainability and ERM Committee”, reporting directly to the Board of Directors
• Ranked among the top 5% in the TWSE corporate governance evaluation
• Achieved ISO 27001 information security management system certification and TISAX AL3 rating for automotive information security
• No major information security incidents affecting operations in 2023
• Implemented integrity task management with 100% completion of job rotation and business replacement

Climate Goals & Targets

Environmental Challenges

• Impact on end-user market from inflation and economic recession
• Supply chain disruptions or shortages
• Operational disruptions due to electricity and water shortages
• Diverse impacts of climate change
• Uncertain future of De-globalization and Protectionism
• Personnel shortages or turnover
• Generative AI raises concerns about misuse and errors

Mitigation Strategies

• Diversification of business and vertical market integration
• Dynamic strategic adjustment of material preparation and production plans
• Strengthening emergency backup power capacity
• Smart platform for hydrology center for systematic tracking of water consumption
• Flexible sales strategy to satisfy green market requirements
• Promotion of climate-related financial disclosure operations
• Construction of a climate-resilient supply chain
• Continued promotion of the “ESG-TALENT” strategy
• Strengthening information security management through the Information Security Committee

Supply Chain Management

Supplier Audits: 24 suppliers (28 sites) underwent second-party audit in 2023

Responsible Procurement

• AUO Supplier/Subcontractor Code of Conduct (based on RBA)
• ESG Scorecard
• Quarterly Business Review (QBR)
• Conflict-free minerals policy
• Local procurement targets

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (flooding)

Transition Risks

• More stringent targets set by international initiatives
• Increased pricing of greenhouse gas emissions
• Changes in customer behavior
• Lack of supplier consensus on climate crisis

Opportunities

• Green manufacturing and innovation of low-carbon products
• Development of renewable energy opportunities and market expansion
• Investment in smart production solutions

Reporting Standards

Frameworks Used: GRI Standards, SASB Index (Hardware), TCFD

Certifications: ISO 14001, ISO 45001, ISO 50001, ISO 27001

Third-party Assurance: KPMG, DNV, SGS

UN Sustainable Development Goals

• Goal 6
• Goal 7
• Goal 12
• Goal 13
• Goal 17

Initiatives contribute to these goals through water conservation, renewable energy, circular economy, climate action, and stakeholder partnerships

Sustainable Products & Innovation

• Products incorporating recycled materials (plastic, metal, glass)
• Energy-efficient products (LTPS, local dimming)

Awards & Recognition

• MSCI ESG Rating A
• Included in the Bloomberg Gender Equality Index
• Taiwan Corporate Sustainability Awards
• Asia Responsible Enterprise Awards
• CommonWealth Sustainable Citizen Award
• Taiwan Excellence Awards