Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Human Resources
• Supply Chain Management
• Corporate Governance
• Social Contribution

Environmental Achievements

• Greenhouse gas emissions were 26.7% lower per pair of shoes made compared to 2013 levels.
• Water usage was decreased by 22.5% per pair of shoes made compared to 2013 levels.
• Wastewater discharge was 35.7% less per pair of shoes made compared to 2013 levels.
• Energy usage was reduced by 10% per pair of shoes made compared to 2013 levels.
• Completed waste removal project at Headquarters' landfill site.

Social Achievements

• Average monthly turnover rate decreased to 1.8% in 2015 from 2.2% in 2014.
• Average monthly turnover rate of new employees declined to 0.7% in 2015 from 0.8% in 2014.
• Average number of training hours received per employee was 43.5 hours, 39% higher than in 2014.
• Established nursery schools and crèches at various locations to provide childcare for employees' children.
• Occupational injury frequency rate was 0.8% lower than in 2014.
• Launched LEAP employee support program in India.

Governance Achievements

• Established Compensation Committee in 2012.
• Enhanced promptness and transparency of information disclosure.
• Received the highest rating of “A++” in the 12th Annual Evaluation of Information Disclosure of Listed Companies in 2014.
• Participated in seven investor conferences or video conferences in 2015.

Climate Goals & Targets

Environmental Challenges

• Occupational injury severity rate was 131% higher than in 2014.
• Commuting injury severity rate was up by 2%.
• Waste disposal incident at Headquarters' landfill site in 2014.
• Received a citation for exceedance of effluent BOD limit value.
• Vietnam region received citations for discrepancies in import/export documentation and incorrect tax filing.

Mitigation Strategies

• Held quarterly review meetings on ESH management performance.
• Planned to set up an independent safety monitoring system at each production plant.
• Implemented a cleanup plan and completed waste removal project at Headquarters' landfill site.
• Increased filter capacity and installed a grease trap in the canteen kitchen.
• Established “Guidelines for Import and Export Operations” and improved documentation procedures.
• Strengthened personnel training programs and established operational guidelines to prevent tax filing errors.

Supply Chain Management

Supplier Audits: 44 suppliers audited

Responsible Procurement

• SHAPE evaluation for new suppliers.
• Vendor Quality Audit (VQA) for existing suppliers.
• Color rating system for major suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G4 Sustainability Reporting Guidelines (Core Level), Apparel and Footwear Sector Supplement (AFSS) (pilot version)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Flyweave football shoe
• Composite baseball bat

Awards & Recognition

• Hui Fong Award from Yunlin County Government
• The Social Education and Public Interest Group Award from the Taiwan Ministry of Education
• Various awards and recognitions in China, Indonesia, and Vietnam.

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employee Relationship and Social Engagement
• Corporate Governance

Environmental Achievements

• Greenhouse gas emissions were 23% lower per pair of shoes than in 2013.
• Energy usage was reduced by 13% per pair of shoes compared to 2013.
• 19,281 metric tons of buried waste removed from a closed landfill site.

Social Achievements

• Occupational injury frequency rate was 44% lower than in 2015.
• Occupational injury severity rate decreased by 73% compared to 2015.
• Established fifth nursery school in Vietnam.
• Over 50% of Factory General Manager positions held by local employees.
• SAKHI program helped 29 female employees earn college degrees since 2012.
• Received recognition from UN Women for promoting workplace gender equality.

Governance Achievements

• Established Compensation Committee in 2012.
• Received the highest rating of "A++" in the 12th Annual Evaluation of Information Disclosure of Listed Companies in 2014.
• Maintained a 98% Board meeting attendance rate.

Climate Goals & Targets

Environmental Challenges

• Rising operation costs in China.
• Quality problems resulting in inability to meet customer order quantities by delivery dates.
• Climate change impacts (e.g., typhoons causing landfill erosion).

Mitigation Strategies

• Accelerating automated production in China to decrease production costs.
• Improving product quality management and ensuring factories follow standard manufacturing processes.
• Initiating a cleanup plan for landfill site erosion (removing 19,281 metric tons of waste).
• Developing alternative sourcing strategies.

Supply Chain Management

Supplier Audits: 24 suppliers audited with SHAPE and VQA in 2016

Responsible Procurement

• SHAPE evaluation for new suppliers
• Vendor Quality Audit (VQA) for existing suppliers
• Code of Conduct for purchasing department personnel

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons and heavy rains causing landfill erosion

Transition Risks

• Rising operation costs
• Fluctuation of exchange rates and inflation

Opportunities

• Development of energy-efficient products and processes

Reporting Standards

Frameworks Used: GRI G4 Sustainability Reporting Guidelines (Core Level), Apparel and Footwear Sector Supplement (AFSS) (pilot version)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Use of environmentally preferred materials (EPMs)
• Development of eco-friendly manufacturing processes (e.g., latex laminating machine, RHM adhesive)

Awards & Recognition

• 2015 Outstanding Export Import Manufacturers
• Various awards in China, Indonesia, and Vietnam for environmental performance, labor relations, and gender equality.

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employee Safety and Well-being
• Community Engagement
• Governance

Environmental Achievements

• Reduced greenhouse gas emissions by 34.4% per pair of shoes compared to 2013.
• Reduced energy usage by 27.9% per pair of shoes compared to 2013.
• Replaced all oil-fired boilers with electric heating systems at 7 factories.
• Expanded solar power systems, generating 212,375 kWhe of electricity.

Social Achievements

• Occupational injury frequency rate 42% lower than in 2016.
• Occupational injury severity rate decreased by 49% compared to 2016.
• Established the group's fifth nursery school in Vietnam.
• Over 50% of Factory General Manager positions held by local employees.
• SAKHI program helped 54 female employees earn college degrees since 2012.

Governance Achievements

• Established a Corporate Responsibility (CR) Department in 2010.
• Maintained good corporate governance with spirits of integrity, compliance, operational transparency, and respect for shareholder rights.
• Established Compensation Committee in 2012.
• Established an independent internal auditing system.

Climate Goals & Targets

Environmental Challenges

• Rising operating costs in China.
• Climate change impacts (changes in rainfall, extreme climate).
• Customer complaints related to product quality (80 complaints in 2017, 40% higher than 2016).
• Wastewater discharge that did not meet quality standards in Vietnam (resulting in a citation).

Mitigation Strategies

• Adding automated production lines in China.
• Improving production management and manufacturing processes in Vietnam.
• Improving production management and expanding production capacity in Indonesia and India.
• Implementing carbon reduction management to achieve 2020 targets.
• Increasing energy efficiency.
• Responding to government regulations.
• Following international protocols (Kyoto Protocol, UNFCCC, Paris Agreement).
• Conducting water resource management to achieve 2020 targets.
• Increasing the use of recycled water and rainwater.
• Establishing a flood and drought emergency response system.
• Improving product quality and ensuring factories follow standard manufacturing processes.

Supply Chain Management

Supplier Audits: 19 suppliers audited with SHAPE and VQA in 2017.

Responsible Procurement

• SHAPE evaluation for new suppliers.
• Vendor Quality Audit (VQA) for existing suppliers.
• Color rating system for major suppliers.
• Sharing of CSR experiences with suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Changes in rainfall patterns (floods and droughts)
• Extreme climate (abnormal temperatures, El Niño, Arctic Oscillations)

Transition Risks

• Regulatory changes (national carbon reduction commitments and policies)
• Client emphasis on renewable energy

Opportunities

• Development of energy-efficient products
• Installation of renewable energy systems

Reporting Standards

Frameworks Used: GRI Standards

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Increased use of environmentally preferred materials (EPMs)
• Development of eco-friendly manufacturing processes (e.g., reusable silicone bags, latex laminating machine, RHM adhesive)

Awards & Recognition

• 2017 Sports Enterprise certificate (Taiwan)
• AA-Level Credit Management Enterprise (China)
• AEO Advanced Certification Enterprise (China)
• Blue certificate in environmental management and green rank for PROPER program (Indonesia)
• Best FDI Enterprise (Vietnam)
• Export Excellent Award and Largest Employer Award (India)

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employee Well-being
• Community Engagement
• Governance

Environmental Achievements

• Achieved first-stage long-term environmental impact reduction targets by 2018 (32% water usage reduction, 25% wastewater discharge reduction, 35% energy usage reduction, and 45% greenhouse gas emissions reduction per pair of shoes).
• Reduced total water withdrawal by 2.5% and water use per work hour per employee by 11.2% compared to 2018.
• Increased renewable energy share to 43% of total electricity consumption in Cheyyar Industrial Zone (India) through a Power Purchasing Agreement.
• Generated 620,000 kWhe of electricity annually from solar power systems in China.

Social Achievements

• Reduced occupational injury severity rate by 63% compared to 2018.
• Provided childcare services through nursery schools and crèches.
• Nearly 90% of Factory General Manager positions held by local employees.
• 184 employees graduated from the SAKHI program in India, empowering female employees.

Governance Achievements

• Established Audit Committee and Compensation Committee.
• Maintained a 98% Board meeting attendance rate.
• Implemented robust internal auditing system.
• Received a top 21-35% rating in the 6th Annual Evaluation of Corporate Governance of Listed Companies in 2019.

Climate Goals & Targets

Environmental Challenges

• Increasing production volumes and complexities in shoe manufacturing processes.
• Changes in rainfall patterns impacting water resources.
• Extreme climate events affecting production capacity.
• Impact of climate change on corporate reputation and consumer behavior.
• Rising operating costs in China.
• Increase in customer complaints (36% higher than 2018).

Mitigation Strategies

• Implemented environmental management policies to control greenhouse gas emissions.
• Sought alternative water resources (rainwater, recycled water).
• Developed flood and drought emergency response systems.
• Elevated factory foundations, built retaining walls and gates in low-lying areas.
• Improved production efficiency and automation in China.
• Improved production management and techniques in Indonesia and India.
• Implemented lean production and production skills improvement in Vietnam.
• Increased production capacity in major markets for speedy delivery.
• Implemented a “Propose for Improvement” system and improvement teams at each factory.
• Improved product quality and manufacturing processes to reduce customer complaints.

Supply Chain Management

Supplier Audits: 12 suppliers audited with SHAPE and VQA in 2019.

Responsible Procurement

• SHAPE evaluation for new suppliers.
• Vendor Quality Audit (VQA) for existing suppliers.
• Use of Higg Index to assess social and environmental impacts.
• Increased use of environmentally preferred materials (EPMs).

Climate-Related Risks & Opportunities

Physical Risks

• Changes in rainfall patterns
• Extreme climate events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards

Sustainable Products & Innovation

• Shoe model using Gore-Tex Invisible Fit technology
• Basketball footwear model using Knitposite technology
• Shoe model using recycled denim
• Outdoor training shoes with Anti-clog Rubber formula

Awards & Recognition

• Various awards in Taiwan, China, Indonesia, and Vietnam (see section 2.4)

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employee Relations
• Social Contribution
• Corporate Governance

Environmental Achievements

• 8.4% reduction in total water withdrawals
• 21.1% reduction in total wastewater discharge
• 23.4% reduction in ozone-depleting substances used
• 9.8% increase in solid waste recycling
• 770,000 kWhe of electricity generated by renewable energy power generation systems
• 28,870,000 kWhe of electricity generated from purchased wind power in India (40% of total electricity consumption in Cheyyar Industrial Zone)

Social Achievements

• 25% lower on-site occupational injury frequency rate than in 2020
• 43% lower on-site occupational injury severity rate than in 2020
• Launched SAKHI program empowering 1,506 female employees in India, with 324 receiving graduation certificates in 2021
• Nearly 90% of Factory General Manager positions held by local employees

Governance Achievements

• Established Audit Committee and Compensation Committee
• 100% meeting attendance rate for Board of Directors meetings
• Implemented performance evaluation of the Board of Directors and Functional Committees
• Established Integrity Management policy and plan

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting production volume and operating revenue
• Climate change risks (regulatory changes, rainfall changes, extreme climate, impact on corporate reputation and consumer behavior)
• Rising operating costs in China

Mitigation Strategies

• Strengthened technical innovation and automated manufacturing
• Prioritized employee health and helped local communities overcome pandemic difficulties
• Implemented carbon reduction management to achieve 2022 targets, increased energy efficiency, responded to government regulations, and increased renewable energy systems
• Developed alternative sourcing strategies
• Improved production efficiency and automation in China

Supply Chain Management

Supplier Audits: 6 suppliers audited with SHAPE and VQA in 2021

Responsible Procurement

• Compliance with local legal systems and occupational safety and hygiene standards; reasonable worker salaries; prohibition of excessive overtime; SHAPE evaluation for new suppliers; Vendor Quality Audit (VQA) for existing suppliers; use of environmentally preferred materials

Climate-Related Risks & Opportunities

Physical Risks

• Change in rainfall pattern (floods and droughts)
• Extreme climate (impact on production capacity)

Transition Risks

• International protocols
• Renewable energy
• Clients’ emphasis on renewable energy
• National carbon reduction commitments and policies

Opportunities

• Development of energy-efficient products
• Increase in renewable energy systems

Reporting Standards

Frameworks Used: GRI Standards

Sustainable Products & Innovation

• Basketball shoe with new cushioning system
• First basketball footwear for girls
• Sneakers with visible full-length Two-Film airbag
• Basketball footwear with adjustable forefoot lacing and X-ribs shank techniques
• Sneakers for outdoor athletes and special forces
• Soccer balls made of 100% recycled materials

Awards & Recognition

• Constituent stock of the "Taiwan Sustainability Index" for 5 consecutive years
• 2021 Economic Contribution Enterprise (Putian City Municipal People’s Government)
• Worker Pioneer (Fujian Provincial Federation of Trade Unions)
• Various recognitions for superior performance in maintenance of surrounding roads, assisting employees and neighboring communities in epidemic prevention and vaccination, taking care of disadvantaged employees, and implementing corporate social responsibility

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Employee Relations
• Corporate Governance
• Community Engagement
• Supply Chain Sustainability

Environmental Achievements

• Reduced total emissions of ozone-depleting substances by 27%
• Decreased greenhouse gas emission intensity by 7.2%
• Reduced total waste generated by 13.4%
• Increased renewable energy usage to 16.8%
• Achieved 93 million kWh of green power purchase volume
• Achieved 2.62 million kWh of solar power generation
• Waste recycling and reuse rate of 67.9%
• Reduced waste generation by 6,296 metric tons
• Reduced absolute carbon emissions by 18.7% compared to the 2019 base year (50,439 metric tons CO2e)

Social Achievements

• Launched various community investment initiatives totaling USD 5.77 million
• Employed 412 employees with disabilities
• 98.2% of top-level factory managers are local employees
• Increased the ratio of female senior executives to 43.6%
• Provided 4,747,752 hours of education and training for employees (average 35.1 hours per employee)
• Achieved a 94.5% settlement rate for grievances and suggestions (1,460 cases)

Governance Achievements

• Established a Code of Integrity Operations, Employee Code of Conduct and Discipline, and Grievance and Suggestion System
• Implemented a robust risk management system addressing operational, financial, market, investment, tax, climate change, information security, occupational health and safety, and supply chain risks
• Maintained a diverse board of directors with 31% independent directors and one female director
• Held regular board and committee meetings with 100% attendance rates
• Implemented a comprehensive internal audit system

Climate Goals & Targets

Environmental Challenges

• Turbulent international situation and global inflation impacting operations
• Decreased market demand affecting production volume
• Increased complexity of shoe models impacting environmental indicators
• Slow progress in renewable energy usage in Vietnam due to government regulations
• Increased average energy consumption per pair of shoes despite overall energy consumption reduction

Mitigation Strategies

• Enhanced product quality and increased competitiveness
• Implemented energy-saving and water-saving measures
• Increased investment in environmental protection (USD 8,241,000)
• Actively sought alternative water sources and built rainwater collection systems
• Improved waste management and increased waste recycling
• Implemented financial hedging techniques and flexible purchasing plans
• Developed low-carbon chemical material database
• Implemented low-carbon transportation action plans
• Increased local procurement to 58%

Supply Chain Management

Supplier Audits: SHAPE evaluation for new suppliers; VQA audits for existing suppliers

Responsible Procurement

• SHAPE evaluation (Safety, Health, Attitude of management, People, Environment)
• Vendor Quality Audits (VQA)
• Restricted Substances List (RSL) compliance
• ZDHC MRSL compliance
• Code of conduct for purchasing personnel

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, flooding, droughts

Transition Risks

• Regulatory changes, carbon tax, carbon trading system

Opportunities

• Improved resource efficiency, development of renewable materials and low-carbon processes, enhanced brand competitiveness

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards (GRI Standards 2021), SASB Standards, TCFD

Certifications: ISO 14064

Third-party Assurance: KPMG Taiwan (limited assurance)

UN Sustainable Development Goals

• 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)

Various initiatives contribute to these goals through renewable energy usage, waste reduction, employee training, community investment, and sustainable supply chain practices.

Sustainable Products & Innovation

• Nike ISPA Link Axis (glue-free, 100% recyclable)
• Salomon Index/Speedcross 7 (single-material recycled shoes)

Awards & Recognition

• Taiwan Sustainability Index constituent stock (9 consecutive periods)
• Taiwan Top 100 High Salary Index constituent stock (5 consecutive years)
• Taiwan Top 99 Employment Index constituent stock (6 consecutive years)
• Vietnam's top 100 sustainable development enterprises
• One of TOP 5 companies with highest local reputation
• One of 96 companies with 2030 carbon reduction targets meeting 1.5°C goal