Issue Date: July 23, 2024

GHG Management

In 2022, we submitted our carbon reduction commitment letter to SBTi with SBT 1.5℃ scenario to set the targets and methods, and in 2023, we submitted our science-based carbon reduction targets to SBTi for review. We committed to "reduce GHG emissions (Category 1 and 2) by 50.4% and Category 3-6 by 30% by 2032, using 2021 as the base year." We expect to pass the review by April 2024 and hope to gradually achieve the SBT goals and sustainable vision through methods such as installing solar power generation systems, increasing the use of renewable energy, upgrading energy-saving equipment, and promoting energy-saving production management.
Our main source of GHG emissions is from electricity generation. Therefore, in 2020, we set short-, mid-, and long-term targets for "renewable energy consumption as a percentage of annual electricity consumption." By 2023, the renewable energy consumption at our Taiwan and China manufacturing plants have exceeded 6.75 million kWh, accounting for 16% of our annual electricity consumption, effectively reducing GHG emissions. In 2023, the GHG emissions (Category 1 and 2) from our Taiwan and China manufacturing plants was reduced by 47% compared to 2021, significantly exceeding our expected net-zero pathway. Going forward, we will continue to increase our renewable energy consumption by completing the activation of solar power generation systems in each phase according to plan.
Starting from September 2023, the Chunan plant is promoting a green building project through building information modeling, energy efficiency optimization management, sustainable procurement, and indoor air quality monitoring, and is expected to obtain the U.S. Green Building LEED "Gold" certification in the first quarter of 2024.

Coretronic continues to respond to domestic and international initiatives (Taiwan Climate Partnership, Taiwan Alliance for Net Zero Emissions, SBTi, TCFD, and CDP), introducing the ISO 50001 Energy Management System to systematically manage energy use, and regularly reviewing and controlling high-energy consumption facilities. In 2023, it will continue to improve energy-saving equipment and air conditioning equipment in the plant area to improve energy efficiency, install energy-saving lighting to reduce energy consumption opportunities, install solar power generation systems to increase the use of renewable energy, and plan green products and develop environmentally friendly technologies.

GHG Strategies

Environmental Protection Committee established environmental sustainability policies and regularly reviews carbon reduction performance to achieve GHG reduction targets.
Implement ISO 14064-1 GHG inventory and pass the verification.
Set SBTi carbon reduction targets.
The Environmental Protection Committee established the Sustainable Energy Committee, to strengthen its net-zero trajectory and energy solutions, and regularly review energy-saving performance to achieve energy-saving goals.
Introduce ISO 50001 energy management system to identify opportunities for energy reduction.
Improve energy efficiency and usage rate through regular maintenance, improvements, equipment replacement, process optimization, and system integration.
Review energy consumption status of each plant area and formulate corresponding energy-saving measures.
Build solar power generation systems to increase the use of renewable energy to achieve renewable energy usage targets.
Formulate short-, mid-, and long-term green product targets, specific implementation items, and measurement indicators.

GHG Inventory

We conduct an annual GHG inventory in accordance with ISO 14064-1, which includes 7 types of gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3). This allows us to fully understand the current status of GHG emissions and verify the effectiveness of our reduction efforts. Although we are not currently subject to regulatory requirements for inventory and emission control, we have set staged targets for reducing GHG emissions and conduct annual reviews to continuously improve. Additionally, by monitoring energy consumption, improving equipment efficiency, managing energy usage, and installing renewable energy facilities, we are maximizing energy efficiency and striving toward our low-carbon goals through data-driven scientific management as much as possible.
In 2023, the GHG emissions (Category 1 and 2) from Taiwan plants decreased by 18% compared to 2022 and by 20% compared to 2021. This was due to the implementation of various energy-saving measures at the factories, such as installing solar power generation systems, introducing magnetic levitation ice water chillers, monitoring equipment power usage, reducing energy consumption, managing night-time energy use, and improving lighting energy efficiency. At the same time, the use of renewable energy helped reduce the consumption of purchased electricity, achieving the benefit of GHG reduction. The decrease in the emission intensity of Category 3-6 compared to 2022 was due to reductions in Category 4 - "Purchased goods, disposal of solid and liquid waste, asset use". In China, GHG emissions (Category 1 and 2) from the plants decreased by 15% compared to 2022 and by 53% compared to 2021. This was because the plants set carbon reduction targets and implemented renewable energy and various energy-saving measures to address climate change, strengthening energy usage management. Solar power generation systems were also installed at the China plants, with renewable energy accounting for 20% of annual electricity consumption. Through energy conservation and the renewable energy usage, purchased electricity usage was reduced, achieving GHG emission reductions. The combined GHG emissions (Category 1 and 2) from Taiwan and China plants totaled 25,325.9 tonCO2e, representing an absolute reduction of 47% compared to 2021.
To promote industrial decarbonization, in 2023 the scopes of GHG inventory for China factories has been expanded to include Category 4 - "Purchased goods, disposal of solid and liquid waste, asset use". This means that all procured materials and customer-supplied materials will be included in the inventory. As a result, Category 4 emissions have increased significantly. Going forward, we will actively cooperate with suppliers to improve manufacturing processes in order to reduce Category 4 emissions.

Region	Taiwan			China
Indicators / Year	2021	2022	2023	2021	2022	2023
Direct Emissions—Category 1 (tCO₂e)	223.1	246.1	238.3	678.8	1,655.5	1,824.7
Indirect Emissions—Category 2 (tCO₂e)	7,985.1	7,726.6	6,324.3	38,858.2	20,382.9	16,938.6
Total GHG Emissions—Category 1+2 (tCO₂e)	8,208.2	7,972.7	6,562.6	39,537.0	22,038.4	18,763.3
GHG Emissions Intensity—Category 1+2 (tCO₂e/NT$ million)¹	0.31	0.254	0.24	0.99	0.51	0.58
Indirect Emissions—Category 3 (tCO₂e)⁴	1,493.1	1,307.7	1,422.3	-	59,964.2	8,112.7
Indirect Emissions—Category 4 (tCO₂e)⁴	6,158.6	41,511.1	12,085.7	-	563,858.6	1,668,599.3
Total GHG Emissions—Category 1-6 (tCO₂e)	15,859.8	50,791.5	20,070.6	-	645,861.1	1,695,475.3
GHG Emissions Intensity—Category 1-6 (tCO₂e/NT$ million)¹	0.59	1.52	0.74	-	14.80	52.37

1: Coverage of revenue: Taiwan plants include Coretronic, Young Green Energy, uCare Medical Electronics, Champ Vision Display, Coretronic Intelligent Cloud Service, Coretronic Intelligent Robotics, Innospectra, Coretronic MEMS, Coretronic Reality, and Coretronic Intelligent Logistics Solutions. China plants includes Coretronic Display (Suzhou), Coretronic Optotech (Suzhou), Coretronic Optics (Suzhou), Coretronic Projection (Kunshan), and Coretronic Optics (Kunshan).
2: Taiwan plants have adopted ISO 14064-1:2018 version to conduct GHG inventory and verification from 2020. China plants conducted self-inventory of GHG with reference to ISO 14064-1:2006 version in 2020-2021, and adopted ISO 14064-1:2018 version to conduct GHG inventory and verification from 2022, wherein emission source Category 1 = Scope 1, Category 2 = Scope 2, Category 3-6 = Scope 3.
3: The carbon emission factor for electricity at Taiwan plants in 2023 is referenced from the Energy Bureau's carbon emission data, 1 kWh = 0.495 kgCO2e; the carbon emission factor for electricity at China plants is referenced from the Ministry of Ecology and Environment of People’s Republic of China’s "Notice on Properly Handling Greenhouse Gas Emission Reporting Management for Power Generation Enterprises in 2023-2025", 1 kWh = 0.5703 kgCO2e. The GWP values are cited from the global potential value and inventory scope refer to the operational control approach of 201 IPCC's 6th Assessment Report.
4: Category 3 inventory items: Upstream transportation and distribution, downstream transportation and distribution, employee commuting, business travel; Category 4 inventory items: Purchased goods, disposal of solid and liquid waste, asset use.

2023 Results

Taiwan and China plants passed ISO 14064-1 GHG verification.
The GHG (Category 1 and 2) emission intensity of Taiwan and China plants increased by 0% and 14% respectively compared to 2022; decreased by 23% and 41% respectively compared to 2021.
The total GHG Category 1 and 2) emissions of Taiwan and China plants were 25,325.9 tonCO2e, a 47% reduction compared to 2021, with the absolute reduction significantly exceeding the expected net zero pathway.
All 4 Taiwan plants passed ISO 50001 energy management system certification; Coretronic Optotech (Suzhou), Coretronic Optics (Suzhou), and Coretronic Projection (Kunshan) passed certification for the first time.
The electricity consumption intensity of Taiwan and China plants increased by 11% and 17% respectively compared to 2022; decreased by 14% and 11% respectively compared to 2021.
The annual renewable energy usage of Taiwan and China plants was 950,000 kWh and 5.81 million kWh respectively, accounting for 7% and 20% of their annual electricity consumption.
Since 2015, Taiwan and China plants have implemented 359 energy-saving projects, saved 30.21 million kWh and reducing 17,547 tonCO2e.