Sustainable Development

The impact of climate change on human living environments and economic development is becoming increasingly severe. Phihong actively responds to global sustainable development initiatives and national sustainable development goals by uniting the group’s consensus. Through the Sustainability Development Office, we continuously promote the “ESG Sustainability Vision Project,” setting sustainability performance indicators to demonstrate Phihong’s commitment to sustainability. In 2023, Phihong and its subsidiary Zerova each established a ESG Committee Chair position to enhance communication and coordination efficiency, working together to drive sustainable transformation. This initiative also aligns with the Financial Supervisory Commission’s “Sustainable Development Action Plan for Listed Companies (2023),” aiming to deepen the corporate culture of sustainable governance. Over the past year, our efforts have earned us multiple accolades, including repeated wins of the “TCSA Taiwan Corporate Sustainability Report Gold Award” and the “Happy Enterprise Gold Award.” Additionally, our overseas subsidiary, Dongguan Phitek, implemented the “UL 2799 Zero Waste to Landfill” standard and achieved the highest level of recognition with the “Platinum Certification”.

Benefiting from the surge in electric vehicle (EV) sales and the initiative-taking establishment of charging stations by various countries, Zerova, an EV energy business, has shipped to over 40 countries worldwide in 2023. The company’s operations have entered a high growth phase, with revenue significantly increasing to account for 37% of the group’s total revenue. This new leading business has synergized effectively, enhancing profitability. Meanwhile, the power supply business saw a noticeable decline in revenue due to the deteriorating economic environment. However, through operational cost control, significant reductions in material costs, and product mix optimization, the gross profit margin still achieved double-digit growth, minimizing the impact. Overall, although the group’s revenue in 2023 decreased by 12% compared to 2022, the gross profit margin increased substantially by 70% to 26.1%, with profit growing more than threefold, marking the highest earnings record in the past decade.

Besides its operations, Phihong has accelerated the development of green products and continued its participation in the Carbon Disclosure Project (CDP). In 2023, it achieved a phased target of reducing carbon emissions by 16.18% compared to the baseline year of 2021. The company also completed its submission for the Science-Based Targets initiative (SBTi) and will have its SBTi targets validated in Q1 of 2024. Phihong is actively promoting the use of renewable energy. In addition to the already installed solar power systems at its Dongguan and Tainan Zerova plants, the U.S. subsidiary is expected to complete and activate its solar power system by Q3 2024, and the Hai Phong plant in Vietnam is also in the midst of construction and evaluation. The company continues to increase its investment in selfgenerated green electricity. To create low-carbon products and achieve the goal of net-zero emissions by 2050, Phihong has introduced carbon footprint improvement hotspots for its products and invited suppliers to join in the carbon reduction efforts, fostering mutual growth and benefit.

Upholding the concept of “social inclusion,” Phihong intensively participates in social sustainability and implements an employee volunteer-service-leave system. For many years, the company has been dedicated to supporting the disadvantaged, environmental protection, and social welfare, carrying out projects that create a positive impact on society and the environment. Moving forward, Phihong will actively work towards establishing social impact indicators, aiming to transform them into an impactoriented public welfare model. This will facilitate the planning and enhancement of longterm social service policies, empowering and addressing social issues or leading trends in public welfare transformation.

As a key supplier of global power supply products, Phihong looks ahead to the future, still upholding the core values of “integrity, creativity, and challenge”. The company will continue to strengthen its core competencies and maintain good interactions with stakeholders. At the same time, Phihong expresses gratitude to all friends who have supported or helped in its journey towards sustainable development, including partners, employees, and the wider community. Together, let us strive towards the common goal of creating sustainable economic, environmental, and social value, contributing to a better future for all.

Phihong Group General Manager