Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced carbon emissions by 619 tCO2e
• Reduced total water consumption by 10%
• Increased water recovery rate from 81% to 86%
• Recovered resources from 8,007 tons of waste with a 69% recycling rate
• Received the 2nd Green Chemistry Application and Innovation Award from the EPA of Taiwan and the 2021 Circular Economy Achievement Award from the Taiwan Chemical Industry Association

Social Achievements

• Adopted the Responsible Business Alliance (RBA) Code of Conduct
• Implemented process safety management (PSM) program
• Held health-promoting activities for employees during the pandemic
• Donated protective equipment to nearby communities
• Plant II received a high distinction award for its participation in the Taoyuan City River Adoption Program for Businesses

Governance Achievements

• Added the Strategy Committee to the Board of Directors
• Implemented an information security management system certified by ISO 27001
• Ranked among the top 6-20% companies in the 2021 TWSE Corporate Governance Evaluation

Climate Goals & Targets

Environmental Challenges

• Challenges in communicating carbon reduction commitments with raw material suppliers
• Need to improve energy management policy
• Need to meet brand customers’ requirements regarding green chemical products and supply chain carbon reduction
• Supply chain disruptions due to climate events (ice storms in Europe and the US, extremely cold winter in China, port congestion, labor shortage, container shortage)
• Fire at Plant III in Guanyin

Mitigation Strategies

• Implemented the 12 Principles of Green Chemistry
• Enhanced production-marketing coordination
• Maintained close communications with suppliers
• Accelerated purchasing work, increased inventory, monitored shipping availability more closely, used air transport instead of sea freight
• Increased inventory and made advanced procurement
• Switched from evaluating the risk of obtaining raw materials from a sole supplier to evaluating suppliers by all raw material items
• Sent staff members to apologize to those living near Plant III after the fire
• Inspected the safety of all plants and reviewed all aspects of operations

Supply Chain Management

Supplier Audits: 24/year

Responsible Procurement

• Code of conduct
• Supplier sustainability requirements
• Letter of Hazardous Substance Free (HSF) Commitment
• Policy Manual for Controlled Substances in Raw Materials

Climate-Related Risks & Opportunities

Physical Risks

• Changes in rainfall patterns
• Extreme weather events
• Rising sea levels
• Rising temperatures
• Increased severity of extreme weather events

Transition Risks

• Carbon tax/carbon fee policies
• Increasing costs of using renewable energy
• Failure to replace existing products with lower-emission products
• Shortage of raw materials due to climate change

Opportunities

• Development of low-carbon products
• Development of sustainable products that help users reduce carbon emissions

Reporting Standards

Frameworks Used: GRI Standards 2016 (Core option), SASB standards for the Chemicals industry, TCFD recommendations

Certifications: ISO 14001, ISO 45001, ISO 27001, Bluesign

Third-party Assurance: BSI Taiwan (AA1000 AS v3 Type 1), KPMG (limited assurance on four key EHS topics)

UN Sustainable Development Goals

• SDG 6
• SDG 7
• SDG 12
• SDG 13

Initiatives contribute to these goals through water management, energy efficiency, waste reduction, and GHG emission reduction

Sustainable Products & Innovation

• Everzol ERC Solution (reactive dyes)

Awards & Recognition

• 1st and 2nd Green Chemistry Application and Innovation Awards
• 2021 Circular Economy Award
• Green Factory Label

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Sustainable development
• Green chemistry
• Circular economy
• Carbon reduction

Environmental Achievements

• Reduced total water withdrawal by 18% from 2022 to 2023.
• Increased water recovery rate to 95% in 2023.
• Increased waste recycling rate to 71% in 2023.
• Fourth plant received the 5th National Enterprise Environmental Protection Award.
• AQ Waterborne Series won the 2024 Taiwan Excellence Silver Award.

Social Achievements

• Successfully completed the SAP ERP software transition and launched multiple smart manufacturing transformation projects.
• Increased the ratio of female managers to 14.5% of the total number of managers in 2023.
• 1,156 employees received “Human Rights Policy Advocacy” training in 2023.
• Plants I-IV and Trend Tone Imaging obtained ISO 45001:2018 certification.

Governance Achievements

• Established Audit Committee and Nomination Committee.
• Passed the CG6008 General-Edition Corporate Governance System Evaluation of Taiwan Corporate Governance Association.
• Analytical laboratory obtained ISO 17043 certification.

Climate Goals & Targets

Environmental Challenges

• Weakening global economy and sluggish demand in end markets.
• Escalation of trade disputes and geopolitical turmoil.
• Declining demand in end markets and intensifying competition.
• Russia-Ukraine war impacting supply chains and customer destocking.
• Chinese market downturn.

Mitigation Strategies

• Leveraging strengths in environmentally-friendly products to pursue major customers.
• Adopting a product differentiation strategy and increasing high value-added products.
• Accelerating the launch of new products and enhancing product variety.
• Improving production equipment and increasing production efficiency.
• Strengthening R&D on new products and sales and promotion efforts.

Supply Chain Management

Supplier Audits: 19 key manufacturers reviewed in 2023

Responsible Procurement

• Green procurement
• Supplier sustainability requirements
• Hazardous Substance Free (HSF) statement
• Everlight Chemical E-ESG certification system

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water shortages
• Flooding at factory sites
• Disruptions to manufacturing processes

Transition Risks

• Carbon policy changes
• Carbon management costs
• Carbon taxes/carbon tariffs
• Changes in customer behavior and consumer preferences
• Technological risks associated with failure to substitute existing products

Opportunities

• Development of low-carbon products
• Development of sustainable products

Reporting Standards

Frameworks Used: GRI Standards 2021, SASB requirements for the chemical engineering industry, TCFD framework

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 17043, ISO 27001, ISO 22301, ISO 14064-1, ISO 50001 (planned for 2023)

Third-party Assurance: BSI Taiwan (AA1000AS v3), KPMG (limited assurance)

Sustainable Products & Innovation

• AQ Waterborne Series
• Products complying with green chemistry principles
• Low-carbon products
• Sustainable products

Awards & Recognition

• 2023 Business Weekly Carbon Competitiveness Top 100
• 2024 Taiwan Excellence Silver Award