Implementation of the Sustainable Development

I. Establishing a governance framework to promote sustainable development, setting up a dedicated unit for promoting sustainable development, and authorizing senior management by the board of directors, with supervision by the board of directors.

The company has adopted the “Corporate Social Responsibility Best Practice Principles” through a board resolution. A dedicated unit, consisting of department heads, forms the Corporate Social Responsibility Operations Team, which is responsible for promoting corporate governance, identifying sustainability issues relevant to the company’s operations and stakeholders, formulating energy-saving and carbon reduction measures, reducing environmental pollution, complying with labor regulations, and safeguarding employee rights. Each department fulfills its responsibilities, and the team regularly reviews the implementation effectiveness, ensuring that sustainable development strategies are fully integrated into the company’s daily operations.

II. Conduct risk assessments related to environmental, social, and corporate governance issues associated with company operations based on significant principles and formulate relevant risk management policies or strategies.

The company conducts risk assessments related to environmental, social, or corporate governance issues associated with company operations based on significant principles, considering their significant impact on investors and stakeholders.

1.Environmental: Emphasizing environmental protection, reducing environmental impact, setting goals, and plans to ensure their achievement.

2.Social: Focusing on occupational safety and product safety, conducting periodic occupational safety training, first aid training, and fire drills to cultivate emergency response capabilities. The company’s products also comply with RoHS hazardous substance restrictions. The company’s website provides a smooth communication channel for stakeholders, with dedicated personnel handling complaints to maintain high service satisfaction for consumers and customers.

3.Corporate Governance: Implementing internal controls to ensure that employees’ operations comply with relevant legal regulations. Planning relevant training topics for directors, providing them with the latest regulations annually, and obtaining directors’ and executives’ liability insurance to enhance their functions and safeguard against litigation or claims. To avoid differences in opinions between stakeholders and the company that may lead to misunderstandings and pose operational or legal risks, the company has established various communication channels with stakeholders. These channels aim to minimize conflicts and misunderstandings. Additionally, an investor mailbox has been set up, overseen by the spokesperson, to handle and respond to inquiries, ensuring effective communication.

The company has also formulated Group Risk Management Regulations, which encompass risks such as market risk, credit risk, liquidity risk, operational risk, and legal risk. These regulations are intended for reference and implementation by department heads to align with the company’s business philosophy of sustainable development.

III. Environmental Issues

(1)Establish a suitable environmental management system based on industry characteristics.
The Suzhou factory has passed the secondary standardized safety management system based on IATF 16949, ISO 14001, and QC080000. It focuses on major environmental considerations, controls hazardous substances, and manages occupational safety and health risks. The factory utilizes proposal improvement goals and project improvement management to prioritize improvements. Lower risks are managed through operational process management.

(2)Devote efforts to enhance energy efficiency and use environmentally friendly recycled materials.
Currently, work order fulfillment rates for various units in the factory are around 98.7%, and high-capacity equipment is applied to achieve work order fulfillment rates above 99%. Copper raw materials come from qualified suppliers and comply with RoHS standards. Each batch of raw materials is tested for heavy metal content using ICP and GC/MS bromide detection after delivery, ensuring compliance before production.The Vietnam factory has applied to increase its purchase of copper raw materials domestically from Vietnam for its expanded business scope.
This application has been approved by the Binh Duong Industrial Park Management Authority. The initiative is expected to significantly boost revenue, reduce costs, strengthen the utilization of renewable energy, and enhance the overall effects of the circular economy.The Gem Terminal Group continues to diversify its business operations with a focus on “copper and copper alloys.” Teaming up with Vietnam Gem Electronic and Metal Co., Ltd., the company has independently developed and mass-produced environmentally optimized lead-free copper. On June 9, 2021, Gem Terminal was invited to participate in an online meeting to present its initiative titled “Gem Terminal IND - A Successful Case of Replacing Electrical Contact Elements” at the RoHS stakeholder exemption online meeting (which included several major industrial associations and representatives such as Mitsubishi Materials).


 This achievement further solidifies the Gem Terminal Group’s commitment to green environmental trends and the active promotion of ESG principles. The expansion of business operations in this scope holds positive and meaningful implications for the company’s overall development.In 2022, the company has actively planned to install solar and energy storage equipment in new and existing factories to promote ESG concepts and reduce environmental impact.

(3)Evaluate the potential risks and opportunities of climate change for the company’s present and future, and take responsive measures to climate-related issues.

  1. Reduce the use of electroplating electric heating tubes and instead adopt centralized heating in stainless steel insulated water tanks. The coil circulation heating method is safe, energy-efficient, and reduces carbon and greenhouse gas emissions.
  2. Apply large-capacity equipment (material handling machines/fusion machines) to achieve a production order completion rate of 99%, reducing copper material waste.
  3. In the face of escalating global environmental pollution and ecological degradation, significant issues like ozone layer depletion, global climate change, and the loss of biodiversity are increasingly threatening the future survival and development of humanity. To align with international environmental protection initiatives, the company has achieved certifications for ISO 14001 and QC 080000 environmental management systems.
Reduce carbon and greenhouse gas emissions.
Minimize waste of copper materials.
Certification of environmental management systems.

The company regularly reports the progress of the greenhouse gas inventory and its schedules to the board of directors starting from the third quarter of 2022. This is done to control and implement impact assessments and response measures in response to climate change.

(4)Compile greenhouse gas emissions, water usage, and total waste weight for the past two years and formulate policies for energy conservation, carbon reduction, greenhouse gas reduction, and the management of water usage or other waste.

The company regularly conducts statistical control on water usage and waste, and displays slogans promoting water conservation in areas with water facilities. For waste disposal, the company engages qualified waste management companies to handle the cleaning process in accordance with the Waste Disposal Act.

Electricity usage in the last two years:

 

2021

2022

Consumption (kWh)

3,091,466

2,806,500

Carbon Emissions (KG)

1,568,262

1,416,730

Water usage in the last two years:

 

2021

2022

Consumption (kWh)

6,282

5,309

Carbon Emissions (KG)

  943

  866

IV. Social Issues

(1)Formulate relevant management policies and procedures in accordance with applicable laws and international human rights conventions.

  1. The company, aligning with pertinent regulations and drawing from the International Labour Organization’s Declaration of Fundamental Principles and Rights at Work,” “The International Bill of Human Rights,” and “The United Nations Global Compact (UNGC),” has established rules and various management regulations. These are designed to ensure the safety of employees and the working environment within the supply chain, emphasizing respect for employees’ dignity, promoting environmental protection, adhering to ethical standards, and regularly convening labor-management coordination meetings to sustain a constructive communication platform. Additionally, the company has instituted an Employee Welfare Committee to address various welfare matters.

2. The company’s employment policy guarantees equal treatment irrespective of gender, race, age, marital status, or family situation. Equality is maintained in terms of remuneration, employment conditions, training, and promotion opportunities.

3. Implementation Policies

  • Occasional communication meetings between supervisors and colleagues.
  • 24-hour employee service hotline and suggestion box.
  • Occasional promotion of sexual harassment prevention.
  • Occasional provision of employee health checks.
  • Employee satisfaction surveys.
  • Elimination of illegal discrimination to ensure equal work rights.
  • Simplifying work processes, improving work efficiency, maintaining a clean and safe environment, protecting the environment and personnel health, and enhancing communication efficiency between departments.
  • Timely salary disbursement to maintain basic living conditions for individuals and families.
  • Clear regulations on rewards and punishments, as well as financial incentives to enhance work efficiency and a sense of importance.
  • Occasional continuing education and training measures to increase employees’ long-term commitment and interdependence with the company.
  • Increase employees’ long-term loyalty to the company.

(2)Develop and implement reasonable employee welfare measures (including compensation, leave, and other benefits), reflecting business performance or results appropriately in employee remuneration.
The company, as stipulated in its bylaws, commits to allocating not less than three percent of annual profits to employee compensation when profitable. Additionally, the company has established a fair compensation policy, incorporating clear and effective incentive and penalty systems in relevant management procedures. Through quarterly performance assessments, rewards or disciplinary actions are proposed based on the assessment outcomes, aiming to enhance employee capabilities and foster mutual growth with the company.
The company places a strong emphasis on talent development, utilizing a comprehensive performance management system to connect employees’ efforts to bonuses, compensation, training, and promotions. For outstanding individuals with developmental potential, an effective career development training program is established to drive positive overall company development.

(3)Ensure a safe and healthy workplace and regular employee safety and health training.
The company prioritizes a pleasant working environment for employees by incorporating air conditioning in various production areas, including the plastic molding station. Specialized measures such as a central feeding system, dedicated closed pipelines for material delivery, and central dust collection are implemented to eliminate dust-related issues in the workplace. These efforts aim to maintain a positive working atmosphere for employees. Regular initiatives are undertaken, such as comprehensive health check-ups for all employees and the planning and execution of soundproofing projects for stamping press machines. Designated employees participate in training programs like the “Type A Labor Safety Supervisor” course, “On-the-job Training for Fixed Crane Operators,” and “First Aid Personnel Refresher Training” to ensure employee safety. To further support employee well-being, an employee coffee bar is provided for employees to relax and recharge during breaks.

(4)Build effective career development and training programs for employees
Annually, the company conducts surveys to assess the alignment of employees’ job capabilities with their positions, taking into account organizational, departmental, and individual needs. Utilizing a competency survey form, the company compiles a list of personnel and training courses for the year. This strategic approach helps plan and organize training initiatives to enhance employee capabilities and foster talent development.

(5)Addressing issues such as customer health and safety, customer privacy, marketing, and labeling of products and services, the company evaluates whether it complies with relevant regulations and international standards. The company also formulates policies and complaint procedures to protect consumer or customer rights.

Various countries, including Europe and the United States, rigorously demand environmentally friendly practices. The company has consistently promoted green production. Given that the material structure of the company’s products includes copper and plastic, measures are taken to ensure product quality meets the requirements of the RoHS environmental directive. Internally, equipment such as ICP-OES heavy metal detectors, GC/MS bromide detectors, and UV/VIS hexavalent chromium detectors are purchased for incoming and product quality testing, ensuring compliance with the RoHS environmental directive. The company pioneered the development of environmentally friendly lead-free copper alloy processing technology, achieving VDE and BSI product certifications in June 2018. The European Union’s RoHS directive, confirmed in February 2019, stipulates that the lead content in copper alloys must be less than 4% (40000ppm). The current exemption clause is set to expire on July 21, 2026, allowing the company to fulfill its corporate social responsibility for environmental protection.

Furthermore, the company’s website provides a smooth communication channel for various stakeholders, with dedicated personnel handling complaint incidents to maintain high levels of customer and consumer service satisfaction.

(6)Formulate a supplier management policy, requiring suppliers to adhere to relevant regulations on environmental protection, occupational safety and health, and labor rights, and assess their implementation.
The company places great importance on sustainable cooperation with suppliers and has established the “Raw Material Supplier Management Procedures” to ensure that suppliers comply with relevant standards in environmental protection, occupational safety, and other issues. Suppliers are evaluated based on their management quality certifications (such as ISO9001, and IATF16949) and environmental systems (such as ISO14001, and QC080000).
Additionally, an “Environmental Quality Assurance System Inspection Audit” is conducted to confirm that the materials supplied by the suppliers meet the restrictions on hazardous substances under RoHS standards. Only after passing these assessments are suppliers registered as qualified. The company has implemented a comprehensive supply chain management mechanism, including specific and actionable approaches such as supplier selection procedures, evaluation and audit management, and graded rating guidance. These approaches aim to collaboratively establish a sustainable growth environment with suppliers.

V. In accordance with internationally recognized reporting standards or guidelines, the company prepares non-financial information disclosure reports such as Corporate Social Responsibility reports. As of now, the company has not yet compiled a Corporate Social Responsibility report or a similar report disclosing non-financial information.

VI. If the company has its own sustainability guidelines based on the “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies,” please specify the differences between its operation and the established guidelines.

The company has established the “Corporate Social Responsibility Best Practice Principles” and formed a dedicated unit, the Corporate Social Responsibility Operations Team, which is composed of department heads. This team is responsible for promoting corporate governance, formulating energy-saving and carbon reduction measures, reducing environmental pollution, complying with labor regulations, and safeguarding employee rights.

Each department fulfills its responsibilities, and the company regularly reviews the effectiveness of the implementation. The company routinely evaluates its compliance with these principles, and makes improvements accordingly, and to date, there have been no deviations from the established guidelines.

VII. Other important information contributing to the understanding of the implementation of sustainable development:

(1) In activities related to community engagement, social contribution, social services, social welfare, and other social responsibilities, the company invested a total of NTD2.084 million in 2022. The breakdown of activities is as follows:

  1. For social care and emergency relief efforts, a total of NTD300,000 was allocated:
    • A、Donations to the 2022 Ukraine International Aid Project and House of the Little Angels Kaohsiung, a facility caring for vulnerable children.
  2. Dedicated to promoting educational initiatives and giving back to the community, a total of NTD1.52 million was allocated:
    • A、Donations to Dashe Elementary School, Luzhu Elementary School, Yijiaguomin Junior High School, and Lujhu Senior High School to support local education.
    • B、Donations to Luzhu Sports Club, Luzhu Zhuxi Community Development Association, Yaliao Community Development Association, Caiwun Community Development Association, Liugui Clan Association, Mt. Dagang Outdoor Mountaineering Association, Luzu Mazu Temple, Yaliao Baoan Temple, Puti Temple, and Fawang Lectorium.
  3. For animal welfare, a total of NTD264,000 was allocated:
    • A、Donations to the Animal Protection Association Of The Republic Of China, Kaohsiung Association of Caring for Stray Animals, TNR.Animal in Tainan, Pingtung Association of Caring for Stray Dogs, Hsu Garden Animal Protection Association in Tainan, Dong Wang Wang Dog Paradise in Tainan, Taiwan Happiness Dog Stray Association, and Animal Rescue Team Taiwan.

(2) Regarding environmental protection and energy conservation:

  • 1. In terms of environmental protection and energy conservation, in addition to implementing the recycling and reuse of electroplating wastewater, employees are required to practice waste sorting. The company has established energy-saving management measures, instilled the habit of turning off lights during lunch breaks, designated Thursdays as recycling days in response to recycling policies, and has posted temperature labels on all air conditioners, with the temperature set above 28℃.
  • 2. The use of boilers has been discontinued, and electric heating is adopted to achieve energy-saving and carbon reduction goals.
  • 3. Both the company and its subsidiaries obtained ISO 14001 certification in 2013.
  • 4. Placards with slogans are posted near power switches and faucets to remind employees to conserve energy and cherish water resources at all times.

(3) Regarding human rights protection and safety-related matters:

  • 1. Stamping press operators are required to wear earplugs, with 100% compliance with operating rules.
  • 2. Planning and implementation of soundproofing projects for stamping press machinery.
  • 3. In the process of handling copper raw materials, safety considerations are enforced for stamping press department personnel, and the mandatory wearing of safety shoes is implemented.
  • 4. In the plastic injection molding station, a central feeding system is adopted to eliminate dust issues.
  • 5. Comprehensive occupational safety training is provided, including training for firefighting, first aid personnel, and emergency response.

(4)、Regarding the protection of consumer rights:

Currently, various countries such as Europe and the United States strictly demand green environmental protection. Our company has always promoted green production. Given that the material structure of our products consists of copper and plastic, to ensure that product quality meets the requirements of the RoHS environmental directive, Vietnam Gem Electronic and Metal Co., Ltd. actively develops environmentally optimized lead-free copper. Internally, we have also acquired ICP-OES heavy metal detectors, GC/MS bromide detectors, and UV/VIS hexavalent chromium detectors for quality testing of incoming materials and products, fully implementing the RoHS environmental directive.