Sustainable Development

Sustainable Development Vision

In order to implement the promotion of sustainable development and promote the progress of corporate governance, environment and society to achieve the sustainable development goals, we have set up the SDC as the main competent authority for the promotion of sustainable development in reference to the "Sustainable Development Best Practice Principles for TWSE/ TPEx Listed Companies" formulated by the Taipei Exchange, with a view to promoting sustainable development and sustainable practice of corporate governance, environment and society.

Vision: Fulfill responsibilities of corporate citizenship to create a sustainable future together

Environmental Sustainability: Leadership towards the goal of going green for sustainability and coexistence

Social Responsibiliy: Become a good partner of employees and society

Corporate Governance: Strengthen the functions of the board of directors and improve information transparency

Organization Structure of SDC

The Chairman is appointed as the Chairperson of the SDC, the President Manager is appointed as the management representative, and the supervisors are appointed as committee members, and the administrative unit is served as the dedicated unit that responsible for coordinating related work. The management review meeting will be regularly convened every year to jointly review the core operational capabilities of Wafer Works and set short, medium, and long-term sustainable development goals.

In order to implement corporate governance, foster a sustainable environment, maintain social welfare, the SDC of Wafer Works will discuss the internal and external initiatives such as corporate governance, environmental and social issues related to operational activities, and set the goals of the sustainable development management plan as well as commence responsibility grouping and formulate action plans based on the requirements of laws and regulations and stakeholders' expectations, etc. SDC will review the performance of various sustainable development management plan goals in corporate governance, environment, and society through the annual management review meeting. The sustainable development strategy, management plan goals and performance will be regularly reported by the management representative to the board of directors and disclosed in the ESG report.

The Sustainable Development Committee of Wafer Works is represented by the President of the Company and is responsible for driving the implementation of sustainable policies and overseeing overall sustainability initiatives. The committee reports on sustainable planning and performance to the Board of Directors annually. It regularly reviews external trends and emerging issues, responding to sustainability efforts in a transparent and open manner and creating greater value for all stakeholders involved.

Wafer Works has established the "Corporate Governance Code" and the "Procedures for Handling Material Inside Information and Preventing Insider Trading" to ensure the implementation of corporate governance functions, balance the rights of stakeholders, and facilitate communication on material information. The various departments regularly engage in interactions with stakeholders as part of their routine responsibilities. If any potential significant negative impact arises between stakeholders and the Company, the responsible departments conduct relevant due diligence investigations. They assess whether the specific findings pose a significant threat to the overall operations of the Company and decide whether to report to the Board of Directors. The Board of Directors then reviews the due diligence report from the department and makes decisions, assigning the units responsible to execute the necessary actions. All actions that involve the handling of material information are decided upon in accordance with the relevant regulations and disclosed fairly and promptly. In 2022, Wafer Works did not encounter any significant negative events with stakeholders; therefore, there were no records of reporting to the Board of Directors. The following is the ESG-related information reported to the Board of Directors in 2022:

To foster a good labor–management relationship and establish an integrity management system, all complaints or reports from stakeholders are investigated when verified to be true. In December 2022, a consolidated channel for reporting cases of dishonest behavior was established, covering shareholders, suppliers, customers, and employees. This includes dedicated e-mail addresses (H00, Public, and Public01) where complaints can be submitted. These e-mails are simultaneously forwarded to the Audit Committee, independent directors, and the internal audit manager. The physical mailbox is regularly accessed by the responsible HR staff together with staff from the internal audit team. Once a complaint is deemed valid during the preliminary investigation, it is formally registered for further investigation. The progress and outcome of the investigation are communicated to the complainant or whistleblower, and a quarterly report on received cases is presented to the Audit Committee by the internal audit team. Independent directors participate in and oversee the complaint and reporting mechanism to strengthen stakeholders' trust in the Company's system and provide timely and effective remedies for significant issues with negative impacts. Additionally, to protect whistleblowers' rights to report in accordance with the law, a complaint mechanism and anti-retaliation operating procedures have been established and announced in the internal ISO document management system. Annual training courses on illegal infringements are conducted to promote strict adherence to confidentiality rules and nonretaliation when handling complaint and reporting cases. The newly established complaint and reporting mechanism will be updated and announced on the Company's official website in 2023, fulfilling the commitment to integrity management and cooperating with stakeholders to address negative impacts.

Sustainability Policies

“A customer-centered solution provider of semiconductor materials＂ has always been the core belief of Wafer Works. In addition to the continuously improving production technologies that meet customers´ needs, “sustainable development＂ is another critical focus for the company. Achieving this goal requires the sincere fulfillment of corporate social responsibility, encompassing the commitment to enhancing the quality of life for employees, their families, and society while pursuing sustainable economic development.

Sustainable Development Education and Training

For the promotion of sustainable development, we regularly organize educational trainings and advocacy to help employees in gaining a full understanding of the Company's sustainability policies and various social welfare activities organized and implemented by the SDC. Also, we have established ESG webpage including a stakeholder webpage to disclose our implementation of the sustainable development to stakeholders. In addition to incorporating sustainability education and training into new employee onboarding programs, in 2022, Wafer Works organized four sustainability-related education and training courses, with a total of 1,868 employees participating in the event.

Stakeholder Identification

Stakeholder identification and communication is the foundation for the implementation of Company's sustainable development. The SDC will assess the global sustainable development trend and operational development goals, and analyze the main topics of corporate governance, environment and society, etc., in accordance with the five principles of AA1000 SES Stakeholder Engagement Standards (AA1000 SES): dependency, responsibility, tension, influence, diverse perspectives to identify the key stakeholders of Wafer Works, and rate and rank the stakeholders.

Six key stakeholders have been identified in 2022, including: employees, customers, suppliers/contractors, government authorities, shareholders/investors, communities/local bodies.

Stakeholder Communication

We attach importance to the rights and interests and opinions of stakeholders, and we have established open and direct communication channels for stakeholders. In addition to providing sustainable development related information, we also understand the issues of concern to stakeholders through the communication channels, and we will continue to review and improve the goals and performance of sustainable development.

The communication channels for respective stakeholders and the frequencies of communication are shown in the following table:

Analysis of Material Topics

Through ongoing communication between departments and key stakeholders in their daily operations, Wafer Works addresses the issues of concern raised by stakeholders. Based on specific topics from the GRI Sustainability Reporting Standards 2021 and the industry-specific sustainability indicators from SASB, the Company's Sustainable Development Committee assessed the economic, environmental, and social impacts, both positive and negative, that are related to these topics during the committee meetings. As a result, 23 sustainability issues were identified, covering economic, environmental, and social aspects. This ensures that Wafer Works discloses sustainability information in line with stakeholder expectations across the E (Environment), S (Social), and G (Governance) dimensions.

Identification of Material Topics

Wafer Works introduces materiality analysis in the preparation process of the ESG report. Issues of concern to stakeholders and corporate governance, environmental and social matters that are materially relevant to the sustainable operation of Wafer Works have been identified through a systematic analysis model, which are used as a reference base for information disclosure in the report.

Based on stakeholder communication questionnaires and internal committee impact assessments for the 23 sustainability issues, the top 10 ranked issues were identified as material topics. Additionally, in consideration of industry sustainability, harmonious labor-management relations, friendly workplace, and the increasing number of information security incidents affecting Taiwan's businesses, three additional issues, namely supply chain sustainability, labor–management relations, and information security, were elevated to material topics. These topics served as the basis for disclosure in the 2022 Sustainability Report.

Changes in Material Topics

Due to significant adjustments in sustainability issues compared to the previous year, there have been changes in the material topics for the current year.

The material topics of this report after analysis are categorized into four perspectives, which are "Corporate Sustainability", "Sustainability Partnerships", "Environmental Sustainability" and "Social Sustainability", and value chain is used for boundary element analysis. The discussions on the material topics of corporate governance, environment and society are regularly conducted, the implementation of the objectives for each management plan and the sustainable development directions in the future are formulated, and the relevant performance are compiled, the stakeholder engagement results and the discussions and recommendations of sustainable development are disclosed. SDC will continue to manage and disclose relevant information in the ESG report of Wafer Works.

◼︎ Direct Impact； ◎ Indirect Impact