### Message from the Management
# A Declaration for Corporate Sustainable Development in the Face of Climate Change
We are committed to addressing climate-related risks and opportunities to pursue corporate sustainable development. The Board thus established the Corporate Governance Committee (now renamed the ESG Committee) in 2019, with a "Environmental Sustainability Working Group". The group chaired by the President assesses and manages the climate-related risks and opportunities, sets management strategies, and targets for climate-related risks and opportunities, continuously analyzes and controls climate-related risks and opportunities, and periodically reviews the effectiveness of management and reports to the ESG Committee. [...] To take action for climate change adaptation and mitigation, the Board passed the establishment of the "Regulations for Appropriation and Utilization of the Special Reserve for Climate Change Adaptation and Mitigation" in 2022 to spend the special reserve on projects and programs for climate change adaptation and mitigation, such as energy-efficient equipment, equipment performance improvement and replacement, the R&D of energy conservation technology, and the development of technology for low-emission products. [...] In the future, we will ensure full disclosures and good performance with regard to climate risks and opportunities according to TCFD recommendations and other internationally recognized frameworks."
"## 2.Climate Change-Related Governance
#### ▲The Board takes charge of the governance of climate change issues
The Board reviews and guides strategy, action plans, and objectives, monitors implementation and performance every year, and reviews GHG reduction targets and achievement rates.
We have established the Sustainable Development Committee (a functional committee) under the Board with three members. With the chairperson as the convener, over half of the committee members are independent directors and appointed by the Board to handle issues related to climate change, including the establishment, oversight, and review of the systems and targets to achieve environmental sustainable development. Each year the Sustainable Development Committee holds at least two committee meetings each year and reports content related to climate change. Each quarter the Board discusses the GHG inventory and schedule planning report. The risk management plan, strategy, and targets related to climate change in this report were approved by the 27th meeting of the 24th term of the Board on May 09, 2023.
#### ▲The competency of the Board in the governance of climate change issues
With regard to climate change-related issues, we have hired external instructors in 2021 to 2023 to provide the relevant training. All members of the Board and senior managers have attended training sessions on corporate climate governance and TCFD disclosure practices for a total of 233 hours.
Additionally, the Board actively participates in engagements between the government and industries regarding corporate issues, while facing the challenges of climate change to sustainable development with a pragmatic and forward-looking approach."
"#### ▲The representative of climate change issues under the Board
The Environmental Sustainability Working Group is established under the Sustainable Development Committee (a functional committee) of the Board, with the President and the Vice President for Production being the convener and deputy convener respectively. Consisting of members appointed by the relevant departments, the working group assesses and manages climate-related risks and opportunities, sets related strategies and targets, and makes continual analysis and control. The Environmental Sustainability Working Group periodically reports its performance to the Sustainable Development Committee."
"#### ▲The reward mechanism for climate change issues
We have established a reward mechanism for climate change issues, with the Board overseeing and directing the following systems.
Article 10 of the "Board Performance Evaluation Regulations" stipulates that the results of the Board performance evaluation shall be the reference for director election or nomination, and the results of performance evaluation of individual directors the reference for the determination of their salary and remuneration. In December 2021, we amended the "Regulations Governing Evaluation of the Performance of the Board" by including climate change-related items for evaluation to strengthen the supervision of the governing hierarchy and participate in climate change management.
In addition, we have established the "Regulations Governing Improvement Proposals" to accept proposals concerning climate-related strategies, greenhouse gas reduction, and energy efficiency. Rewards will be given based on the results of review and the effectiveness of projects. In 2021 to 2023, the Taoyuan Works and Miaoli Works submitted five proposals concerning greenhouse gas reduction and were given rewards.