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.

Greenhouse Gas & Energy Management

Greenhouse Gas Inventory

To implement energy conservation and carbon reduction measures while fully disclosing corporate carbon emissions and reduction information, Phihong adheres to ISO 14064-1:2018 for Scope 1+2 greenhouse gas inventory operations. Organizational boundaries are established based on operational control principles, with the baseline year set as 2021 for calculating and verifying greenhouse gas emissions. In compliance with the Financial Supervisory Commission (FSC) requirements, Phihong progressively includes subsidiaries, major production sites, and offices within the inventory scope, aiming to achieve 100% site coverage by 2025 and verification by 2026. Furthermore, based on significance identification results, Scope 3 inventory scope is expanded beyond established inventory items such as waste and energy consumption to include business travel and employee commuting.

Category 1-2 Greenhouse Gas Emissions (t CO2e) for the last 3 years

Emission category / year	Phihong Group
Emission category / year	2021	2022	2023	Versus base year (2021)
Category 1 - Direct emissions	612.6	906.0500	727.7034	18.80%
Category 2 - Indirect emissions	28,713.1	25,133.9687	23,853.6698	-16.92%
Total emissions	29,325.6	26,040.0187	24,581.3732	-16.18%
Emission intensity (T-CO2e/ millions of revenue)	2.39	1.8064	1.9932	-16.51%

Note: The 2023 GWP values are sourced from IPCC AR6. Electricity factors used are as follows: Taiwan region uses the Ministry of Economic Affairs, Energy Bureau announced electricity factor of 0.4950 ton-CO2e per kWh for the year 111. Dongguan region uses China’s Environmental Climate Bulletin (2023) No. 43 electricity factor of 0.5703 ton-CO2e per kWh. Phihong in Vietnam uses Vietnam’s Ministry of Natural Resources and Environment, Climate Change Department’s 2021 electricity coefficient report (p.18) electricity coefficient of 0.7221 ton-CO2e per kWh.

Unit: t CO2e

	Statistics of greenhouse gas emission types in 2023 (category 1)
Types	CO2	CH4	N2O	HFCs	PFCs	SF6	NF3	總計
Emissions	69.6904	609.8426	0.6764	47.4940	0.00	0.00	0.00	662.7954
Percentage %	9.58%	83.80%	0.09%	6.53%	0.00%	0.00%	0.00%	100.00%

Trend Chart of Total Emissions (t CO2e) for Categories 1-2 in the past 3 Years

		Linkou HQ	Zerova	Dongguan	Haiphong	Total emission
Category １ (Direct)	Fixed burning	0.0000	0.1737	0.0000	2.5998	2.7735
	Mobile burning	7.6923	7.8699	39.4186	11.7800	66.7608
	Process emissions	0.0025	0.0001	0.3430	0.2659	0.6115
	Fugitive emissions	100% 回收利用	24.7574	391.8434	209.3615	657.5576
	Total	39.2901	32.8011	431.6050	224.0072	727.7034
Category ２ (Indirect)	Purchased electricity	764.9948	917.0820	12,325.2945	9,846.2985	23,853.6698
Total emissions		804.2849	949.8831	12,756.8995	10,070.3057	24,581.3732

Category 3-4 Greenhouse gas emissions (t CO2e)

Emission sources		Description	2022 (Base year)	2023	Versus base year
Category 3 (Transport)	Business travel	Includes car, high speed rail, air	169.0952	201.4096	-19.11%
Category 3 (Transport)	Employee commuting	Includes motorcycles, cars, buses, metro, etc.	690.2332	695.6473	0.78%
Category 4 (Organizational use)	Use of the product	Includes electricity, diesel, gasoline	2009.3781	2053.0052	2.17%
Category 4 (Organizational use)	Waste removal	Includes transportation and disposal	180.6301	15.9578	-91.17%
Total emissions			3049.3366	2,966.0199	-2.73%

Note: 2022 is used as the base year as it is the first time a Category 3-6 inventory is conducted.

Towards the 2050 Net Zero Emission Target

Phihong aligns with the COP26 Climate Summit resolutions to adhere strictly to the 1.5°C pathway. In March 2024, Phihong will achieve validation of its Science-Based Targets initiative (SBTi) for 2030 goals and commits to reaching Net Zero by 2050.

Phihong 2050 Net Zero Carbon Reduction Action

Sustainability Results

Set the Group’s annual carbon emission reduction target at 4.7% (Scope 1+2, with 2021 as the base year), with
a total emission reduction of 42% by the end of 2030.
GHG (Scope 1+2) reduction of 4,744 tCO2e in 2023, a significant reduction of 16.18% from the base year.
All models are 100% WEEE compliant with a recyclability rate of >80%, and some models >90%. We continue to
develop and innovate low-carbon products to improve energy conversion efficiency and high-power density.
Report on Disclosure of Climate Change-related Financial Information (TCFD).
Through the SBTi target setting, we will continue the scientific carbon reduction pathway towards the net-zero goal
in 2050.

Energy Management

Since 2023, Phihong has been planning to implement the ISO 50001 energy management system and intelligent energy management. This initiative aims to monitor energy usage and establish an energy management system. It is expected to complete system implementation and certification by Q4 2024, with the goal of reducing energy consumption through various approaches while also lowering energy costs and carbon emissions.

Energy Resource Consumption Table Unit: 1000 Joule (GJ)

Energy category	2021			2022			2023
Energy category	Taiwan	Dongguan	Haiphong	Taiwan	Dongguan	Haiphong	Linkou HQ	Zerova	Dongguan	Haiphong
Electricity	9,954	107,409	17,973	11,201	100,327	38,331	5563.6	6.436	79,840.9	49,088
Natural	-	117	-	-	57	-	-	-	-	-
Petrol	-	5,628	-	73.9	267	130.5	-	0.109	978.1	104.5
Diesel	-	452	32	11.75	656	7.55	-	-	40.1	104.1

Energy Consumption Intensity Table

Energy intensity	Unit	2022		2023		Energy intensity (2023 vs. 2022)
Energy intensity	Unit	Dongguan	Haiphong	Dongguan	Haiphong	Dongguan	Haiphong
Energy	kWh	27,868,580	10,647,384	22,178,040	13,635,644	-20.42%	28.07%
Output value	NTD (10k)	1,015,630	236,672	463,457	228,013	-54.37%	-2.10%
Energy intensity	kWh / 10k NTD	27.44	45.71	47.85	59.8	74.38%	30.82%

Energy as a percentage of total usage

PlantType	Unit	Linkou HQ	Zerova	Dongguan	Haiphong	Total	% of each type of energy to total usage
Electricity	kWh	1,545,444	1,787,700	22,178,040	13,635.,644	39,146,828	96.25%
Electricity	GJ	5,563.60	6,433.00	79,840.94	49,088.00	140,925.54	96.25%
Petrol	L		3,338.60	16,504.69	3,006.00	22,849.29	0.74%
Petrol	GJ		0.11	978.10	104.50	1,082.71	0.74%
Diesel	L			1,115.02	2,824.90	3,939.92	0.10%
Diesel	GJ			40.14	104.10	144.24	0.10%
Solar energy	kWh		32,443.00	1,151,493.00		1,183,936.00	2.91%
Solar energy	GJ		116.80	4,145.37		4,262.17	2.91%
Total consumption	GJ	5,563.60	6,549.90	85,004.56	49,296.60	146,414.66	100.00%
Total energy % share	GJ	3.80%	4.47%	58.06%	33.67%	100.00%

Note 1: The heat value and emission coefficient for Taiwan are sourced from the Ministry of Economic Affairs Energy Bureau’s “2019 Electricity Coefficient” published on July 20, 2020. The heat value for purchased electricity is 860 kcal/kWh.
Note 2: The heat value and emission coefficient for China are sourced from the Ministry of Ecology and Environment of China’s “2019 Regional Grid Baseline Emission Factor.” The conversion coefficient for the Southern Region grid is 0.8042
metric tons CO2e/MWh. The emission coefficient for gasoline, diesel, and natural gas is derived from the original IPCC coefficients multiplied by the fuel heat value. The fuel heat values are sourced from the National Standard of the
People’s Republic of China GB/T2589-2008 “General Rules for Calculation of Comprehensive Energy Consumption.” Gasoline has a heat value of 14,110 kcal/L, diesel has a heat value of 10,200 kcal/kg, and natural gas has a heat value
of 8,500 kcal/m3.
Note 3: The heat value and emission coefficient for Vietnam are sourced from the IPCC National Greenhouse Gas Inventory Guidelines (2006) for purchased electricity. The coefficients for gasoline and diesel are sourced from the Cross Sector Tool, with gasoline having a heat value of 0.0447 GJ/kg and diesel having a heat value of 0.0455 GJ/kg.

Energy Saving and Carbon Reduction, Realize Carbon Neutrality

Detailed information on energy-saving plans and carbon reduction projects implemented across all plants in 2023 is provided in the table below:

Plant	Energy Saving Type	Major Implementation Projects	Investment amount (NTD million)	Implementation Status	Benefits created (actual vs. expected)
Linkou HQ	Air Conditioning System	Replace energy consuming 150RT chiller units	430	Construction will begin in Q2 of 2023, and it will be officially put into operation in June of the same year.	Expected annual electricity savings are 20,000 kWh (72,000 MJ), resulting in Air Conditioning a yearly reduction of 12.12 metric tons of CO2e emissions.
	Air Conditioning System	Combine and regulate chilled water piping	180	Construction will begin in Q2 of 2023, and it will be officially put into operation in May of the same year.
	Energy saving software	Implement energy management software at Linkou headquarters	200	Construction will begin in Q2 of 2023, and it will be officially opened in July of the same year.	Expected annual electricity savings are 10,000 kWh (36,000 MJ), resulting in a yearly reduction of 6.06 metric tons of CO2e emissions.
Zerova	Green power system	Installation of rooftop solar power generation system at Tainan Unit 1 and Unit 3 factories	2,500	Based on the revised planning and construction project for the Tainan plant, the original 2023 rooftop solar construction plan has been updated as follows: Phase 1 is scheduled for implementation in 2024, and Phase 3 is scheduled for implementation in 2026.	Expected annual green electricity generation after completion: Phase 1: 366,000 kWh green electricity (1,317,600 MJ), resulting in a yearly reduction of 181 metric tons of CO2e emissions. Phase 3: 467,000 kWh green electricity (1,681,200 MJ), resulting in a yearly reduction of 231 metric tons of CO2e emissions.
	Energy monitoring	Restoration and addition of power monitoring functions to the energy management platform at Tainan factory	400	Based on the re-planning of the Tainan plant area, the original 2023 Phase 1 factory energy management system plan has been updated to be implemented in 2024.	Digitized monitoring of energy management enhances the efficiency of energy use management.
	Green building	Planning and construction of Tainan Unit 3 factory according to Diamond-level green building standards	212	Confirm with the green building consultant that the project meets the standards, and the engineering unit is conducting an estimate.	Achieving the Diamond-level green building certification is under evaluation for its energy and resource-saving benefits.
Dongguan	Air compressor	Energy-saving renovation plan for air compressor inTiesong Plant	264	Construction in December 2023, put into operation in January 2024	Expected annual energy savings are estimated to reach 400,000 kilowatthours (1.44 million MJ), resulting in a yearly reduction of 228 metric tons of CO2 emissions.
	Electrical equipment	Energy-saving renovation plan for wind cabinet fans in Tiesong factory area	Energy saving sharing model cooperation	Due to the rearrangement of part of the Tiesong factory area to increase production efficiency, the original planned renovation plan in 2023 has been delayed and is expected to be re-evaluated and planned in 2024.	The target remains to achieve annual energy savings of approximately 200,000 to 250,000 kWh.
	Green power system	Installation of solar power generation systems at phase 1, 2, and 3 of the factory	Energy saving sharing model cooperation	Completed in 2023, the solar power generation systems for Phase 1, 2, and 3 factory buildings were installed and connected to the grid for official power supply.	The expected annual green electricity generation is 2 million kWh (720 million MJ). In 2023, the actual total electricity generated was 1.15 million kWh (414 million MJ), resulting in a yearly carbon reduction of 949.92 metric tons of CO2 equivalent.
Haiphong	Air Conditioning System	The central air conditioning system in the plant uses magnetic bearing chilled water energy-saving air conditioning units.	2146.36	Put into use and running	Compared to traditional equipment, the annual energy savings are 1.26 million kWh (453.6 million MJ), resulting in a yearly carbon reduction of 909.8 metric tons of CO2 equivalent.
	Heat recovery	We chose an energy-saving total heat recovery air conditioning system, which recovers heat energy for domestic hot water use.	395.35	Put into use and running	Compared to traditional equipment, the annual energy savings are 2.5 million kWh (9 million MJ), resulting in a yearly carbon reduction of 1,805 metric tons of CO2 equivalent.
	Lighting device	LED lighting fixtures are used throughout the entire plant, and solar street lights have been installed.	206.17	Put into use and running	Compared to traditional equipment, the annual energy savings are 7.5 million kWh (27 million MJ), resulting in a yearly carbon reduction of 5,416 metric tons of CO2 equivalent.