Stakeholder Communication

Management Policies and Target Setting

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E-Environment
S-Society
G-Governance

Key Issues	Climate Change	Energy and Greenhouse Gases	Green R&D and Innovation
Policy and Commitmen	Following the core elements of TCFD, conducting an inventory and disclosing actions related to climate change response and mitigation efforts.	Implement green sustainability practices to actively reduce the environmental impact and footprint of orporate operations.	Leading in low-carbon electricity and sharing sustainable development.
Management Policy	Identify and assess climate risks. Join the SBTi (Science Based Targets initiative) for carbon reduction goals.	Methods for conserving energy and resources. Management procedures for greenhouse gas inventory.	Design of low-carbon products. Transition to circular economy.
Assessment Mechanism	CDP questionnaire evaluation. SBTi Carbon Reduction Target Setting.	Energy management baseline. Greenhouse gas inventory.	R&D KPI target management. R&D patent awards.
Responsible unit	Sustainability Office Accounting department General (Factory) affairs	General (Factory) affairs unit EHS	R&D units of each business group
Highlights of the Year & Performance	CDP climate assessment questionnaire SBTi target verification	Scope 1 + 2 greenhouse gas emissions have decreased by 16.18% compared to the baseline year. Implementation of an energy management system.	Initiated product carbon footprint assessment.
Response to SDGs	Goal 13: Climate action	Goal 7: Affordable and clean energy	Goal 12: Reponsible consumption and production
Target Setting	Targets for 2023
	TCFD disclosure	Scope 1+2 greenhouse gases are reduced by 4.7% per year compared to the base year of 2021.	Product carbon footprint
	Achievements
	TCFD disclosure	Scope 1+2 greenhouse gases are reduced by 16.18% per year	Initiated carbon footprint implementation plan
	Future Goals
	Short-Term (2024) TCFD disclosure Medium to Long Term (2026-2030) Issue the first independent TCFD report.	Short-Term (2024) Scope 1+2 greenhouse gases are reduced by 14.1% per year Medium to Long Term (2026-2030) Scope 1+2 greenhouse gases are reduced by 23.5%~42% per year	Short-Term (2024) Completed carbon footprint assessment for 2 products. Medium to Long Term (2026-2030) Established a carbon emission database for components. Linked the BOM table to the carbon emission database

Key Issues	Talent Cultivation and Development	Employee Care and Attention	Occupational Health and Safety
Policy and Commitment	Using TTQS to benchmark training quality aligns with our company vision, emphasizing talent as the cornerstone of our enterprise. We aim to create a diverse development training system to enhance human resources and boost competitiveness, supporting our sustainable business goals.	Carefully selecting talent and appointing them according to their suitability.	Adhering to occupational safety and health requirements and continuously improving the work environment to prevent occupational accidents and reduce occupational health risks.
Management Policy	Management procedure for education and training. TTQS talent development quality management system.	Employment management procedure.	ISO 45001 occupational health and safety management system. Establishment of occupational health and safety committee.
Assessment Mechanism	TTQS training quality assessment. Training satisfaction survey.	Performance management system	External periodic verification. Environmental monitoring exceedance.
Responsible unit	Human resources department	Human resources department	General (Factory) affairs unit. EHS
Highlights of the Year & Performance	The average annual working hours per person is 51.4 hours. New employee mentor training has resulted in a 42.4% reduction in turnover rate.	Won the golden award for happy enterprises. Average salary adjustment rate is 6.64%.	No occupational injuries, illnesses, or serious occupational incidents occurred.
Response to SDGs	Goal 5: Gender equality	Goal 8: Decent work and economic growth	Goal 3: Good health and well-being
Target Setting	Targets for 2023
	The number of training hours per capita has reached 36, and the education and training system has been implemented and a diversified learning platform has been created.	New employee satisfaction score >8.	No major occupational incidents.
	Achievements
	The number of training hours per capita has reached 51.4.	New employee satisfaction score >8.9.	No major occupational incidents.
	Future Goals
	Short-Term (2024) The number of training hours per capita has reached 40. Medium to Long Term (2026-2030) The number of training hours per capita has reached 45.	Short-Term (2024) New employee satisfaction score >8. Medium to Long Term (2026-2030) New employee satisfaction score will be reached 8.3~8.5.	Short-Term (2024) No major occupational incidents. Medium to Long Term (2026-2030) No major occupational incidents.

Key Issues	Operational Performance	Integrity and Compliance	Sustainable Supply Chain Management	Corporate Governance and Risk Management	Information Security and Customer Privacy
Policy and Commitment	Strengthen financial structure to ensure cost control.	By cultivating a culture of integrity and enforcing corporate ethics and codes of conduct, the company ensures professionalism and integrity across all levels.	Incorporate sustainability into the procurement process and take responsibility for the social, economic, and environmental impacts caused by procurement activities.	Assessing risk issues and operational performance to implement sustainable business practices.	Strengthen information security management to safeguard customer privacy rights.
Management Policy	Establishing a robust corporate governance framework and setting up functional committees to oversee overall operations and development.	Integrity management measures Establishing reporting channels and a system of rewards and penalties.	Supervising and managing labor rights, environmental protection, ethical standards, and safety and health risk control throughout the supply chain.	Risk management policies and procedures	Information asset risk assessment. Implementation of personal data protection and management.
Assessment Mechanism	Internal audit Accountant checking and signing	Internal Audit Corporate governance assessment	Supplier performance assessment Supplier meeting	Risk identification and assessment	System management and vulnerability scanning customer satisfaction survey
Responsible unit	Each business unit Finance department	Audit department	Global strategy & procurement department	Information department	Information department
Highlights of the Year & Performance	Gross margin 26 %, up 50 % year-on-year	No corruption and bribery.	The percentage of new suppliers screened using environmental and social standards is 100%.	Implement risk management procedures for risk identification and assessment	Initiated the introduction of ISO 27001 information security management system
Response to SDGs	Goal 8: Decent work and economic growth	Goal 16: Peace and justice strong institutions	Goal 12: Reponsible consumption and production	Goal 8: Decent work and economic growth	Goal 12: Reponsible consumption & production
Target Setting	Targets for 2023
	Gross profit margin growth >10%	No corruption or bribery cases. No penalties for non-compliance with ESG-related laws or regulations	Response rate 100% of new supplier's sustainability commitment statement	Corporate governance assessment has achieved Top 20%.	ISO 27001 Certification for information security management systems.
	Achievements
	Gross profit margin growth 26%	No corruption or bribery cases. No penalties for non-compliance with ESG-related laws or regulations	Response rate 100% of new supplier's sustainability commitment statement	Corporate governance assessment achieved Top 51%.	Initiate the implementation plan for the information security management system.
	Future Goals
	Short-Term (2024) Gross profit margin growth >10%. Medium to Long Term (2026-2030) Gross profit margin growth >10%.	Short-Term (2024) No corruption, bribery cases, or penalties for ESG non-compliance. Medium to Long Term (2026-2030) No corruption, bribery cases, or penalties for ESG non-compliance.	Short-Term (2024) Response rate 100% of new supplier's sustainability commitment statement. Medium to Long Term (2026-2030) Response rate 100% of new supplier's sustainability commitment statement.	Short-Term (2024) Corporate governance assessment has achieved Top 20%. Medium to Long Term (2026-2030) Corporate governance assessment has achieved Top 5%.	Short-Term (2024) Maintain certification Medium to Long Term (2026-2030) Maintain certification

Regularly Review and Continuously Improve

For material topics, Phihong has established management policies and action plans. Based on data analysis, set goals and indicators to measure progress, regularly tracking progress. For other non-material topics, Phihong discloses relevant indicators to stakeholders based on existing management processes and measures, allowing them to understand Phihong’s overall sustainability performance.