Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic Growth
• Climate Change
• Sustainable Consumption and Production
• Poverty Reduction
• Education
• Gender Equality

Environmental Achievements

• Redesigned air conditioning system to reduce energy and carbon emission; startup rate for chiller internal pump and compressor reduced by 50%
• Improved power efficiency (0.72 kwh per NT$1,000 of revenue in 2018, lower than 0.80 kwh in 2017)
• Introduced a raw material inventory retake system to categorize raw materials for reuse, recycling, and recovery
• 100% compliance with WEEE, RoHS, and REACH directives

Social Achievements

• Implemented a balanced human resource policy catering to employees' career and lifestyle
• Average salary raised by 3%~5% in 2018
• Lanner Culture and Education Foundation founded and commenced operation in August 2017, executing social responsibility programs with 4 main themes: "Education," "Culture," "Localization," and "Act of Decency"
• Industry-academia collaboration with National Chiao Tung University on edge computing and 5G mobile computing platform development

Governance Achievements

• Ranked in the 2nd tier (6%~20%) of TWSE's 5th Corporate Governance Evaluation
• Established a Remuneration Committee comprising independent directors and outside experts
• Implemented internal policies including "Corporate Governance Code of Conduct," "Business Integrity Code of Conduct," and anti-corruption guidelines
• No complaints received concerning violation of business integrity or illegal activities in 2018

Climate Goals & Targets

Environmental Challenges

• Increase in carbon emission (22% higher in 2018 than 2017)
• Strengthening of NTD and increase in the price of raw materials

Mitigation Strategies

• Continued implementation of energy conservation measures
• Improving operating costs

Supply Chain Management

Supplier Audits: QPA on 42 suppliers, QSA on 21, CSR audit on 18, HSF audit on 18

Responsible Procurement

• Supplier Management Policy; evaluation for third-party certifications (ISO9001, IECQ QC08000, ISO14001, OHSAS18001, ISO28000, AEO, C-TPAT); Business Partner Safety Statement, Conflict-free Mineral Statement, Supplier and Employee Integrity Code of Conduct, Anti-corruption Guidelines, "Supplier Commitment to Refrain Use of Prohibited and Restricted Substances"

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards (GRI Standards)

Certifications: ISO 9001, TL 9000, ISO 14001, IECQ QC 080000, OHSAS 18001, ISO 28000, Authorized Economic Operator (AEO)

Third-party Assurance: KPMG Taiwan

UN Sustainable Development Goals

• SDG 1, 4, 5, 8, 12, 13

Lanner's initiatives align with these SDGs through economic growth, education, gender equality, sustainable production and consumption, climate action, and poverty reduction.

Awards & Recognition

• Three products recognized for the 26th "Taiwan Excellence Award"

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced GHG emission intensity by 3% compared to 2018, achieving an energy intensity of 0.92 kWh/NT$1,000 revenue.
• Completed GHG survey.
• Replaced outdated chillers and adopted other GHG reduction measures.
• Achieved 11,200 raw material recoveries (up 9,901 from 2018) through a raw material inventory retake system.
• Passed certifications for ISO 14001 and IECQ QC 080000.
• Complied with REACH, RoHS, and WEEE directives.

Social Achievements

• Maintained EPS above NT$3 for 8 consecutive years, with a record-high EPS of NT$4.18 in 2019.
• Established collaborative relationship with several international carriers on the application of SD-WAN.
• Became an official partner for Verizon's uCPE 2.0 project.
• Assisted ITRI in the creation of a 5G ecosystem.
• Engaged in industry-academia collaboration with National Chiao Tung University.
• Created a 5G mobile-computing platform and a joint research lab with NCTU.
• Supported Lanner Culture and Education Foundation's charity efforts.

Governance Achievements

• Maintained a board of directors with 2 (28.57%) independent directors.
• Held 6 board meetings in 2019 with an 83% average attendance rate.
• Complied with "Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies."
• Established a Remuneration Committee comprising independent directors and outside experts.
• Complied with "Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies."
• Implemented internal policies including "Corporate Governance Code of Conduct," "Business Integrity Code of Conduct," and others to guide actions.
• Received no complaints concerning violation of business integrity or illegal activities.

Climate Goals & Targets

Environmental Challenges

• Extreme weather events
• Failure of climate-change actions
• Natural disasters
• Loss of biodiversity
• Human-made environmental damage and disasters
• Data fraud or theft
• Cyber-attacks
• Water crises
• Failure of global governance
• Asset bubbles

Mitigation Strategies

• Developed innovative wide temperature range products (R6S, LEC-6032, NCR-1510).
• Established collaborative relationships and signed outsourcing contracts with key manufacturers in Taiwan as backup factories.
• Monitored energy and carbon reduction within the organization.
• Supported Lanner Culture and Education Foundation's environmental protection activities (coastal cleanup, farmland sponsorship).
• Executed a "Supplier Concentration" program to reduce procurement costs and risks.
• Upholds stability and pragmatism in financial strategies, avoiding high-risk investments.
• Used currency forwards to hedge foreign currency debt entitlements.
• Implemented information security strategy aligned with ISO 27001 certification.
• Developed environmental strategy to address climate change risks.

Supply Chain Management

Supplier Audits: QPA on 21 suppliers, QSA on 3 suppliers, CSR audit on 16 suppliers, HSF audit on 16 suppliers.

Responsible Procurement

• Required suppliers to sign Business Partner Safety Statement, Conflict-free Mineral Statement, Supplier and Employee Integrity Code of Conduct, Anti-corruption Guidelines, and "Supplier Commitment to Refrain Use of Prohibited and Restricted Substances."
• Enforced RoHS, WEEE, and "Prohibited and Restricted Substance Content and Testing Procedures" compliance.
• Implemented "Conflict Minerals Management Procedures" in compliance with RBA requirements.
• Conducted CMRT survey version 5.12 on 211 suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Natural disasters

Transition Risks

• Failure of climate-change actions

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards

Certifications: ISO 9001, TL 9000, ISO 14001, IECQ QC 080000, ISO 45001, ISO 28000, Authorized Economic Operator (AEO), ISO 27001

Third-party Assurance: KPMG Taiwan

UN Sustainable Development Goals

• SDG 1: No Poverty
• SDG 4: Quality Education
• SDG 5: Gender Equality
• SDG 8: Decent Work and Economic Growth
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action
• SDG 14: Life Below Water
• SDG 17: Partnerships for the Goals

Lanner's initiatives contribute to these goals through various programs and policies.

Sustainable Products & Innovation

• LEC-3030
• LEC-6041
• R6S

Awards & Recognition

• Multiple recognitions for Intel™ Select Solution
• Taiwan Excellence Award (multiple years)

Environmental Metrics

ESG Focus Areas

• Environmental sustainability
• Employee care/social engagement
• Governance

Environmental Achievements

• Reduced GHG emission intensity (total GHG emission / revenues) annually by 3%
• Replaced outdated chillers and other GHG reduction and environmental protection measures that were aimed to increase power efficiency
• Developed green products that conform with RoHS, REACH, and WEEE directives as well as the 3R principles (Reuse, Recycling, Recovery)
• 100% of suppliers signed the "Supplier Commitment to Refrain Use of Prohibited and Restricted Substances"
• Achieved a 15.47% reduction in total prints compared to the previous year

Social Achievements

• Implemented a robust training system along with a management training roadmap and a wide range of skill development courses
• Engaged National Yang Ming Chiao Tung University and National Taiwan University in industry-academia collaboration
• Achieved a 91.6 customer satisfaction score in 2021

Governance Achievements

• Ranked in the 4th tier (36% - 50%) of TWSE's 8th Corporate Governance Evaluation
• Established a Corporate Sustainability Committee
• Obtained ISO 26262 - Functional Safety certification

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events
• Cybersecurity risks
• Global chip shortage

Mitigation Strategies

• Developed alternative sourcing strategies
• Devised strategies for the entire organization using a risk-based approach and devised suitable security solutions
• Sustained growth of sales orders and revenues in 2021 despite chip shortage

Supply Chain Management

Supplier Audits: 26 suppliers audited in 2021

Responsible Procurement

• Code of conduct
• Supplier sustainability requirements
• RoHS Self-declaration
• Anti-corruption Guidelines
• Commitment to Prohibition against Conflict Minerals
• Supply Chain Safety Policy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Policy and regulatory risks
• Technology risk/market risk
• Reputation risk

Opportunities

• Development of energy-efficient products
• Energy storage planning and green power development

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards (Core option), TCFD, UN SDGs, RBA Code of Conduct

Certifications: ISO 9001, TL 9000, ISO 14001, IECQ QC 080000, ISO 45001, ISO 28000, AEO, ISO 27001, ISO 26262

Third-party Assurance: AFNOR Group (AA 1000 Type 1 Moderate Assurance)

UN Sustainable Development Goals

• 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17

See Appendix 3 for details on how initiatives contribute to these goals.

Sustainable Products & Innovation

• R6S
• LEC-6032C
• ISD-O370
• NCA-1020 series

Awards & Recognition

• 29th Taiwan Excellence Award (NCA-1020 series)
• Intel Select Solution for uCPE (NCA-4020)