Environment
Phihong deeply recognizes the importance of Earth's resources and sustainable development. The company actively promotes environmental management systems and aligns with global carbon reduction trends. Using 2021 as the baseline year, Phihong aims to achieve a 42% reduction in carbon emissions (Scope 1+2) by 2030, working toward net-zero emissions by 2050.
Energy and Greenhouse Gas Management
To effectively manage energy use, reduce energy intensity in production, and lower greenhouse gas emissions, Phihong implemented the ISO 50001 Energy Management System in 2024. The Company also continued developing an electricity monitoring system to identify and manage significant energyconsuming
items. We maintain strict control over the addition and modification of equipment and conduct regularly reviews of energy-saving target achievement, while actively promoting energy-saving awareness throughout the organization. Phihong adheres to the principles of energy diversification and reliability, establishing a scientifically managed energy system that primarily relies on electricity with diesel as a supplementary source. This strategy enables the Company to effectively mitigate potential energy supply risks. In the event of sudden power outages or unstable natural gas supply, diesel can be swiftly activated as a backup to ensure the stability and continuity of production operations.
Starting from 2023, Phihong (Dongguan) responded to the clean energy transition trend by fully phasing out the use of natural gas, achieving 100% electricity-based energy supply, and further optimizing the energy structure. At the same time, the usage of gasoline and diesel also significantly decreased compared to the 2021 base year. In 2024, the Phihong (Dongguan) continued to promote energy-saving technological upgrades, expand solar power generation, and implement refined energy management practices. These efforts delivered significant results. In 2024, the electricity supply at the Phihong (Vietnam) remained stable, with no power outages reported. The plant’s remained focused on purchased electricity, and diesel was used only for generator testing purposes. Recognizing the positive correlation between energy usage, production scale, and revenue, Phihong acknowledges that a comparison of absolute energy usage alone cannot fully reflect energy efficiency improvements. Therefore, the Company uses “Energy Intensity” as the basis for annual target setting to more accurately measure the actual effectiveness of energy-saving measures.
Under the challenges of climate change, businesses must continually reduce GHG emissions in their operations to mitigate their environmental impact. If overall carbon emissions continue to rise, companies will face growing pressure from carbon fees or taxes in the future, and may fall short of meeting market and customer expectations for sustainable development. To effectively manage GHG emissions and reduce their impacts on the climate, Phihong actively promotes Science Based Targets initiative Targets (SBTi) and has obtained ISO 14064-1:2018 certification. We continuously promote carbon reduction actions GHG inventory, verification, and target setting. Starting in 2023, Phihong has adopted an online carbon management platform to enhance the transparency and efficiency of the its GHG emissions management. The Linkou Headquarters and major global manufacturing plants undergo annual ISO 14064-1 verification. We are also expanding the verification scope to include service locations and subsidiaries. By 2026, the Group aims to achieve 100% verification of GHG emissions data for all individual entities and consolidated subsidiaries, further strengthening our carbon reduction commitments and sustainable development goals.
In 2024, Phihong continued to conduct GHG inventories in accordance with the ISO 14064-1:2018 standard. The results show that the primary source of emissions was Scope 2 purchased electricity, which accounted for 84.76% of total GHG emissions. To reduce Scope 2 emissions, Phihong introduced the ISO 50001:2018 in 2024 to establish electricity-saving targets and enhance equipment energy efficiency. In addition, we continuously focus on green energy development and have actively promoted the planning and implementation of solar energy generation projects, striving to further reduce GHG emissions. Compared to the base year (2021), the Group achieved a 26.59% reduction in combined Scope 1 and Scope 2 emissions in 2024. This represents 63.31% progress toward the Group’s SBTi target of a 42% reduction by 2030.
Phihong expanded the scope of its Scope 3 GHG inventory based on results of materiality assessment. In addition to existing categories such as waste treatment and energy consumption, the inventory now also covers business travel and employee commuting. In 2024, Scope 3 emissions increased compared to both the base year and 2023, mainly due to higher emissions from employee commuting and business travel. In contrast, emissions from the product usage phase showed a steady and notable decrease, down by 45.01% versus the base year. Emissions from waste treatment remained largely unchanged from the previous yea and decreased by 82.47% compared to the base year. However, as waste-related emissions account for only a small share of total Scope 3 emissions, their overall impact remains limited.
In 2024, Phihong actively advanced its energy management practices by establishing an Energy Management Team and implementing an Energy Management System. Through continuous energy monitoring and audits, the Company identified opportunities for efficiency improvement, set measurable energy-saving targets, and regularly tracked and reported performance to ensure effective implementation and continuous enhancement. In terms of equipment upgrades, the Linkou Headquarters redesigned and replaced the cooling towers with high-efficiency energy-saving models in 2024 to improve the operational efficiency of the chiller systems. Meanwhile, Phihong (Dongguan) successfully operated solar power generation systems across phase 1, 2, and 3 of the plant, generating 2.14 million kWh (7.7 million MJ) of electricity over the year and reducing carbon emissions by 942.25 metric tons of CO2e. In addition, the Haiphong plant in Vietnam is actively planning the installation of a solar energy system, scheduled to begin operations in the second half of 2025. The project is expected to save 2.5 million kWh (9 million MJ) annually compared to the old equipment, reducing carbon emissions by 1,375 metric tons of CO2e. These initiatives further demonstrate Phihong’s commitment to renewable energy adoption and its broader sustainability goals.
According to the “Office Energy Saving Manual” published by Taiwan’s Ministry of Economic Affairs, implementing energy-saving improvements in electricity systems, lighting, air conditioning, and office equipment can reduce energy consumption in buildings by approximately 20%. To reduce energy usage in buildings, Phihong Group continues to promote electricity management in office buildings across its facilities. In addition to actively upgrading energy-consuming equipment, the Group also enhances employee awareness and fosters shared commitment to energy conservation through internal communication and awareness campaigns.
