Climate Change Data

Environmental Metrics

ESG Focus Areas

• Ethics, Bribery & Corruption
• Product and Service Innovation
• Customer Health and Safety
• Customer Satisfaction
• Occupational Health & Safety
• Employment and Labor Practices
• Material Use
• Energy Usage & Associated GHG Emissions
• Economic Performance

Environmental Achievements

• 16.1% reduction in electricity consumption normalized by net revenue
• 18.4% reduction in paper usage normalized by net revenue

Social Achievements

• Achieved an employee engagement score of 77.6%
• Women comprised 42.9% of the global workforce
• Various CSR initiatives including charity bazaars, beach cleanups, and donations to various organizations.

Governance Achievements

• 100% completion rate in the global e-training course on K&S Code of Business Conduct
• Established a Global Sustainability Committee Oversight

Climate Goals & Targets

Environmental Challenges

• Did not achieve waste recycling target of above 40%
• Accident Severity Rate increased to 12.1 due to one case of human negligence
• Incorrect placement of general and recycled waste at Singapore site

Mitigation Strategies

• Implemented more regular status reporting on waste disposal data
• Conducted a thorough investigation on the accident and took corrective actions
• Implemented measures to ensure correct waste placement

Supply Chain Management

Supplier Audits: Ongoing

Responsible Procurement

• K&S Supplier Code of Conduct and Business Ethics

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards – “Core” reporting requirements

Certifications: ISO 9001, ISO 14001, OHSAS 18001

Environmental Metrics

ESG Focus Areas

• Economic
• Environmental
• Social
• Governance

Environmental Achievements

• 54% recycling rate achieved (above the 40% target)
• 3% reduction in energy consumption from FY2018
• 20% reduction in total paper usage from FY2018
• 2% decrease in Scope 2 GHG emissions

Social Achievements

• Zero validated cases of non-compliances regarding health and safety impacts of products and services
• Maintained Accident Frequency Rate below 1.0 for the past three consecutive years
• 100% acknowledgement from K&S employees on the annual Code of Conduct training
• More than 30 CSR events carried out globally, with over US$739,000 in community investment

Governance Achievements

• All six sites achieved IMS corporate certification (ISO 9001, ISO 14001, and OHSAS 18001/ISO 45001)
• 100% completion rate for annual Code of Conduct training

Climate Goals & Targets

Environmental Challenges

• Challenging FY2019 industry environment
• Decreased net revenue in FY2019 impacting energy and water intensity

Mitigation Strategies

• Market expansion strategy to enhance shareholder value creation
• Continuous efforts to improve energy efficiency and maintain year-on-year reduction in energy usage

Supply Chain Management

Supplier Audits: Five suppliers subjected to Conflict Minerals Audit in RY2019

Responsible Procurement

• Supplier Code of Conduct and Business Ethics
• Direct Supplier Code of Business Conduct and Ethics
• Distributor and Representative Code of Business Conduct and Ethics

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards – Core Option

Certifications: ISO 9001:2015, ISO 14001:2015, OHSAS 18001:2007 (transitioning to ISO 45001:2018)

UN Sustainable Development Goals

• Goal 9
• Goal 12
• Goal 13
• Goal 4
• Goal 8

K&S initiatives mapped to the relevant SDGs and corresponding EESG matters.

Sustainable Products & Innovation

• RAPID™ and OptoLux™ product families (RoHS-compliant)
• Asterion™ Ultrasonic Welder (RoHS-compliant)

Environmental Metrics

ESG Focus Areas

• Environmental Stewardship
• Social Responsibility
• Good Governance

Environmental Achievements

• Eindhoven site operates on 100% renewable energy
• Solar panels at Suzhou facility reduced grid electricity consumption
• 54.9% total solid waste recycling rate achieved

Social Achievements

• Hosted a summit entitled Elevating Women in Engineering and Tech in Philadelphia
• Conducted an Equitable Practices Audit at US sites
• Nine out of ten employees reported favorable employee engagement

Governance Achievements

• Achieved maximum points in the Ethics category in a full RBA VAP audit
• Implemented a Continuous Improvement Cycle to ensure ongoing compliance
• Zero validated cases of non-compliance with laws and regulations resulting in significant fines or sanctions

Climate Goals & Targets

Environmental Challenges

• Rising interest rates, inflation, and economic uncertainty
• Ongoing geopolitical tensions
• Supply chain disruptions

Mitigation Strategies

• Strategic pursuit of opportunities to bolster technical expertise and broaden market presence (e.g., acquisition of Advanced Jet Automation Co., Ltd.)
• Engaging key suppliers to reduce supply chain carbon footprint
• Developing alternative sourcing strategies

Supply Chain Management

Supplier Audits: Periodic assessments and audits performed by K&S

Responsible Procurement

• Compliance with RoHS, CM, REACH, TSCA, and other applicable product compliance requirements
• Due diligence procedures for responsible sourcing to maintain Responsible Business Alliance (RBA) Standards
• Supplier Code of Business Conduct and Ethics

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards 2021, UN Sustainable Development Goals (SDGs)

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

Third-party Assurance: CSRWorks International Pte Ltd (limited assurance for Scope 1 and 2 GHG emissions)

UN Sustainable Development Goals

• Not disclosed

K&S aligns its sustainability activities with the UN Sustainable Development Goals (SDGs).

Sustainable Products & Innovation

• AIEx Aluminum Wire & Ribbon Wedge

Awards & Recognition

• Outstanding Supplier Award from ASE Technology Holding Co., Ltd.
• Suzhou Industrial Park Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Employee Safety and Wellbeing
• Human Rights

Environmental Achievements

• Achieved ISO 14001 certification for equipment manufacturing facilities in Singapore and the Netherlands.
• Achieved ISO 14001 certification for China and Israel facilities.

Social Achievements

• Implemented “Inclusive Leader Mindset Change Training” program for all people managers.
• Established an Executive Safety Committee and site-specific EHS Committees to oversee workplace safety.
• Conducted regular health and safety training for all employees.
• Implemented a formalized career progression framework.

Governance Achievements

• Established an ESG council to oversee ESG efforts, reporting to the Nominating and Governance Committee of the Board of Directors.
• Performed an independent, limited external assurance of Scope 1 and Scope 2 greenhouse gas emissions data.

Climate Goals & Targets

Environmental Challenges

• High cost of logistics due to macroeconomic conditions, inflation, and labor shortages.
• Declining consumer sentiment and economic downturn impacting customer order rates and inventory buildup.
• Cancellation of Project W, resulting in a $15 million revenue reduction and impairment charges.
• Geopolitical tensions in the Middle East and Ukraine/Russia conflict creating uncertainty.
• Supply chain disruptions.

Mitigation Strategies

• Maintaining a strong balance sheet with $577.1 million in cash, cash equivalents, and short-term investments.
• Refocusing development resources towards growth-centric opportunities in thermocompression, Vertical Fan-Out, Automotive, and Dispense markets.
• Monitoring the economy for signs of expansion of economic or supply chain disruptions.
• Maintaining an export compliance program to meet U.S. Department of Commerce and State requirements.
• Increasing inventory levels to mitigate against anticipated future component shortages.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Natural disasters (earthquakes, fires, floods)

Transition Risks

• Regulatory changes
• Market shifts