Climate Change Data

Environmental Metrics

ESG Focus Areas

• Ethical behavior
• Employee development
• Health and safety
• Environmental protection
• Community involvement
• Supply chain responsibility
• Human rights
• Anti-corruption

Environmental Achievements

• Achieved ISO 14001 certification at all Unisem sites.
• Reduced water required to create UPW.
• Recycled water for use in own operations.
• Implemented programs to reduce energy consumption, water consumption, and waste production.
• Met target of zero chemical usage in pre-cooler main AHU 3A-5 cleaning process.
• Met target by installing the hydroball auto condenser tube cleaning system.

Social Achievements

• Decreased full-time employee turnover rate by 0.7%.
• Provided 30 hours of average training per employee.
• Organized various sports and recreation activities for employees.
• Implemented employee recognition programs.
• Provided employee benefits and welfare programs.
• Trained industrial trainees from universities and polytechnic institutions.
• Organized visits to orphanages and homes for the elderly.
• Organized blood donation campaign with 320 employee participants.

Governance Achievements

• Included in the FTSE4Good Bursa Malaysia Index in 2016.
• Implemented a zero-tolerance policy for bribery, corruption, extortion, and embezzlement.
• Established procedures and anonymous complaint mechanisms for reporting ethical concerns.
• No fines, penalties, or settlements imposed due to non-compliance with Anti-Corruption and Bribery Policy.

Climate Goals & Targets

Environmental Challenges

• Managing environmental impacts from packaging and test operations.
• Addressing risks related to labor issues, human rights, and corruption in the supply chain.
• Reducing GHG emissions from facilities and business travel.
• Reducing water consumption in wafer fabrication and packaging facilities.

Mitigation Strategies

• Implemented an environmental management system (EMS).
• Conducted regular environmental audits.
• Implemented retrofits of HVAC systems, controls upgrades, and energy efficiency measures.
• Promoted video conferencing to reduce business air travel.
• Used wet scrubbers to neutralize and absorb gases and vapors.
• Treated pollutants on-site and sent other waste to licensed disposal units.
• Regular briefings and training with suppliers on EICC Code of Conduct and Unisem’s Code of Ethics.
• Audits on major suppliers using EICC Self-Assessment Questionnaire.
• Implemented corrective action plans based on audit findings.

Supply Chain Management

Supplier Audits: 8 audits completed in 2016

Responsible Procurement

• Compliance with EICC Code of Conduct
• Supplier Corporate Social Responsibility Self-Assessment Questionnaire
• Letter of Conformance pledging compliance to Unisem Code of Ethics and EICC Code of Conduct
• Preference given to suppliers demonstrating commitment to sustainable business practices.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: EICC Code of Conduct, ISO 14001

Certifications: ISO 14001, Sony Green Partner

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Semiconductor Technology Award

Environmental Metrics

ESG Focus Areas

• Growing the Business
• Customer Satisfaction
• Effluents and Waste Management
• Occupational Health and Safety
• Greenhouse Gas Emissions
• Employee Welfare
• Labour Rights
• Supply Chain Management
• Anti-corruption
• Local Communities

Environmental Achievements

• Reduced Greenhouse Gas emissions per unit by 15% (vs. 2011 baseline)
• Achieved 58% recycling rate of scheduled (hazardous) waste
• Complied with Industrial Effluents Regulation 2009

Social Achievements

• Annual employee turnover rate of 21%
• Injury frequency rate for industrial accidents of 1.91
• RM15,000 donated to local communities

Governance Achievements

• Established a Board Sustainability Committee in January 2017
• No staff disciplined or dismissed due to non-compliance with Anti-Corruption and Bribery Policy

Climate Goals & Targets

Environmental Challenges

• Increase in employee turnover rate due to foreign workers completing contracts
• Increase in minor work-related accidents (mainly trips and falls)
• Maintaining customer satisfaction in a challenging market environment

Mitigation Strategies

• Hiring a better-skilled workforce
• Conducting awareness training and increasing warning signs to minimize trips and falls
• Continuous communication with key customers and improvement plans based on feedback

Supply Chain Management

Supplier Audits: 9 audits completed in 2017; target to audit 80% of key direct suppliers over two years

Responsible Procurement

• Group CSR Policy
• RBA Code of Conduct
• Unisem Code of Ethics
• Letter of Conformance from key suppliers
• Conflict Mineral Policy
• OECD Due Diligence Guidance

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, RBA Code of Conduct

UN Sustainable Development Goals

• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 13

Alignment of material matters with SDGs through Unisem's mission

Sustainable Products & Innovation

• Ultra-thin SLP package with footprint reduction

Awards & Recognition

• Supplier of the Year / Outstanding Supplier Award (various international customers)

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Social Responsibility
• Environmental Management
• Labour Rights
• Occupational Health and Safety
• Supply Chain Management

Environmental Achievements

• Achieved compliance with effluent regulations
• 49% of total scheduled waste is recycled
• Reduced GHG emissions intensity by 10% in 2018 (compared to 2011 baseline), but increased by 4% in 2019 due to expansion

Social Achievements

• Awarded Industry Excellence Award in Asean Corporate Governance 2018 by the Minority Shareholders Watch Group (“MSWG”), and the Award of Excellence in Corporate Social Responsibility by the American Chamber of Commerce (“AMCHAM”) in 2019
• 73.2% of employees received a minimum of 6 hours of training
• 89% of key customers reported satisfaction
• Injury frequency rate for industrial accidents: 1.80 (target <2.00)

Governance Achievements

• Recognised as amongst the top 10 achievers by the Malaysian Institute of Corporate Governance (“MICG”) in its Transparency in Corporate Reporting 2019
• No cases of non-compliance with Anti-Corruption and Bribery Policy

Climate Goals & Targets

Environmental Challenges

• Lower sales volume due to adverse market conditions (US-China trade war, supply chain shifts)
• Continuing losses in PT Unisem (Indonesia) leading to its closure
• High turnover rate in Unisem Chengdu (China)
• Global semiconductor industry downturn

Mitigation Strategies

• Implemented measures to control costs and streamline operations
• Focus on growing customers and strengthening capabilities in RF, analog, and MEMS
• Implemented corrective action plans from supplier audits
• Align compensation and benefits with local offerings and regulations in Chengdu

Supply Chain Management

Supplier Audits: 10 audits in 2019; target of 10 audits in 2020

Responsible Procurement

• RBA Code of Conduct
• Group CSR Policy
• Unisem Code of Ethics
• Conflict Mineral Policy
• Group Procurement Policy

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards – Core Option, RBA Code of Conduct

Certifications: ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, IATF 16949:2016, ANSI/ESD S20.20-2014, Certificate of Green Partner (Sony), Samsung ECO Partner, RBA VAP

UN Sustainable Development Goals

• Goal 2
• Goal 3
• Goal 9

Contribution to SDGs through customer satisfaction, occupational health and safety, business growth, technology and innovation, employee welfare, and effluents and waste management

Awards & Recognition

• Industry Excellence Award in Asean Corporate Governance 2018 (MSWG)
• Award of Excellence in Corporate Social Responsibility 2019 (AMCHAM)
• Top 10 achievers in Transparency in Corporate Reporting 2019 (MICG)

Environmental Metrics

ESG Focus Areas

• Operational excellence and quality products and services
• Long-term collaborative business partnerships
• Technological capabilities
• Alignment with international standards in sustainability management

Environmental Achievements

• 1% decrease in GHG intensity (base year: 2011)
• 40% recycling rate for total scheduled waste
• Compliance with regulatory standards

Social Achievements

• Injury frequency rate for industrial accidents <2.00
• 52.4% employees received minimum 6 hours of training per year
• 85% satisfied key customers

Governance Achievements

• No significant fines and non-monetary sanctions for non-compliance with laws and regulations
• No reported incidents of corruption nor non-compliance with the Group’s anti-corruption policies

Climate Goals & Targets

Environmental Challenges

• High Capex investment for 12” Wafer Bumping
• High material cost for 008004 passive components
• High turnover rate in Unisem Chengdu

Mitigation Strategies

• Developed a solution for low cost MIS with wettable flanks
• Developed an extreme-thin SLP package
• Reviewed and aligned compensation and benefits in Unisem Chengdu to be competitive with local offerings

Supply Chain Management

Supplier Audits: 12 audits completed in 2020

Responsible Procurement

• RBA Code of Conduct
• Performance-based criteria
• Letter of Conformance
• Business ethics letter

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core, Responsible Business Alliance (RBA), FTSE4Good Bursa Malaysia Index

Certifications: ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 (Unisem Ipoh), OHSAS 18001:2007 (Unisem Chengdu)

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)

Unisem's initiatives contribute to these goals through energy efficiency improvements, responsible supply chain management, sustainable waste management, and investment in research and development.

Sustainable Products & Innovation

• Developed solutions for low cost MIS with wettable flanks and extreme-thin SLP package

Awards & Recognition

• Huawei Quality Award 2020
• pSemi 2019 Best Supplier Award
• Menlo Microsystems 2020 Supplier of the Year
• Espressif 2020 Best Supplier Award
• SGS 2019 Best Strategic Partner Award
• Halo Microelectronic 2020 Best Supplier Award
• Vesper 2020 Supplier of the Year Best Assembly Provider
• SGMicro 2020 Best Service Award
• Convenient Power Semiconductor 2020 Supplier Excellence Award

Environmental Metrics

ESG Focus Areas

• Maintaining presence and relevance in the market
• Optimising value for shareholders and customers
• Protecting and supporting our people
• Responsible business and corporations

Environmental Achievements

• 52% recycling rate for hazardous waste generated
• 3.4% decrease in GHG intensity (base year: 2020)
• 56% reduction of water consumption intensity (base year: 2020)
• Completed LED-conversion project at Unisem Ipoh and Unisem Chengdu

Social Achievements

• Completed 14 audits on key direct material suppliers
• Injury frequency rate for industrial accidents <2.00 across the Group (1.03 achieved)
• Employee satisfaction score of 3.71
• Both manufacturing facilities awarded Silver Status in Responsible Business Alliance (RBA) Validated Audit Process

Governance Achievements

• Institutionalised RBA Code of Conduct
• Included in the FTSE4Good Bursa Malaysia Index since June 2021

Climate Goals & Targets

Environmental Challenges

• Lockdown measures in Chengdu, PRC due to Covid-19 pandemic
• Power restriction in Sichuan Province, July 2022
• Dependence on experienced personnel and manpower
• Dependence on major customers
• Cyclical nature of the semiconductor industry
• Competitive industry environment
• Cybersecurity risks

Mitigation Strategies

• Scenario analyses and alternative sourcing strategies
• Human resources strategy to attract and retain key personnel
• Adoption of automation and Industry 4.0 technology
• Strengthening existing customer relationships and expanding business propositions
• Close monitoring of industry trends and market sentiment
• Pursuing operational excellence and product differentiation
• Internal controls and IT system enhancements

Supply Chain Management

Supplier Audits: 14 audits in FY2022

Responsible Procurement

• RBA Code of Conduct
• Supplier Code of Conduct
• Business Ethics Letter
• Policy on Conflict Minerals

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, RBA, FTSE4Good Bursa Malaysia Index, SASB Standards

Certifications: ISO 9001:2015, ISO 14001:2015, IATF 16949:2016, ANSI/ESD S20.20-2014, ISO 45001:2018, Certificate of Green Partner (Sony), Samsung ECO Partner, IECQ QC080000: 2017 – HSPM

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)

Initiatives aligned with SDGs through business principles, strategies, and sustainability management

Awards & Recognition

• Qorvo Recognition Award 2021
• UMS Partner of the Year Award 2021
• Renesas Appreciation Award
• Spintrol Electronic Technology Best Potential Supplier 2022
• Big Moment Partner of the Year Award 2022
• Espressif Best Supplier 2022
• SCN Excellent Services Award 2022
• FOS Excellent Supplier 2022

Environmental Metrics

ESG Focus Areas

• Occupational Health and Safety
• Customer Satisfaction
• Growing the Business
• Technology and Innovation
• Climate Change and Air Emissions
• Supply Chain Management
• Effluents and Waste Management

Environmental Achievements

• 7.6% reduction in GHG emission intensity compared to base year 2020
• 83% reduction in water consumption intensity against base year 2020
• 49% recycling rate of hazardous waste generated

Social Achievements

• Increased representation of women on the Board of Directors to 36%
• Corporate Social Responsibility donations and contributions amounted to approximately RM80,472
• 100% of employees trained on labour standards and human rights issues
• Injury frequency rate for industrial accidents at 0.93

Governance Achievements

• 100% of Directors and employees received communication on anti-corruption
• 100% of Directors received training on ESG – Bursa Training (Compulsory)
• No fines, penalties, or settlements relating to corruption

Climate Goals & Targets

Environmental Challenges

• Negative revenue growth of 19.2%
• Missed 90% score for customer satisfaction target
• Missed target of 5% reduction in energy intensity (13.7% increased)
• Missed target of 52% recycling rate of hazardous waste (achieved 49%)
• Supply chain disruptions
• Climate change related risks (physical and transition)

Mitigation Strategies

• Implementation of corrective action plans for supply chain issues
• Initiatives to develop and expand production capacity
• Energy efficiency initiatives (LED lighting conversion, heat recovery systems)
• Collaboration with waste disposal vendors to improve recycling rate
• Exploring alternatives to reduce reliance on fossil-based power (solar power)
• Implementing the Group’s Enterprise Risk Management (“ERM”) Framework

Supply Chain Management

Supplier Audits: 14 audits conducted in FY2023

Responsible Procurement

• RBA Code of Conduct
• Supplier Code of Conduct
• Conflict Minerals Policy

Climate-Related Risks & Opportunities

Physical Risks

• Storms, floods, droughts
• Rising temperatures

Transition Risks

• Policy and legal changes
• Technological changes
• Market shifts
• Reputational risks

Opportunities

• Resource efficiency
• Renewable energy
• Sustainable products and services
• New markets

Reporting Standards

Frameworks Used: GRI Standards, Responsible Business Alliance (RBA), FTSE4Good Bursa Malaysia Index, SASB Standards, TCFD framework

Certifications: ISO 14001:2015, ISO 45001:2018

Third-party Assurance: Baker Tilly Monteiro Heng Governance Sdn Bhd (internal review); BeyondGood Consultancy (limited assurance for selected indicators)

UN Sustainable Development Goals

• Goal 5 (Gender Equality)
• 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)
• Goal 16 (Peace, Justice and Strong Institutions)

The report details how Unisem's activities contribute to these SDGs.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• MPS FY2022 Best Suppliers for Unisem Chengdu
• Spintrol Electronic Technology FY2023 Excellent Core Partner Award for Unisem Chengdu
• SGMICRO FY2023 Best Suppliers for Unisem Chengdu
• SEMCO FY2023 Outstanding Services Award for Unisem Ipoh