Issue Date：August 20, 2026

Material Topics

According to the GRI Universal Standards 2021 under the Global Reporting Initiative (GRI) Standards system, specifically GRI 3: Material Topics 2021, companies are required to conduct due diligence and disclose in their Sustainability Reports the processes for identifying, preventing, mitigating, and explaining how they address their actual and potential negative impacts on the economy, environment, and people (including human rights). This process must be documented to ensure consensus and approval within the Company's sustainability-related organizations and serve as the standard procedure for future material topic identification.

In 2024, the Company followed the above “GRI Standards” to establish its Material Topic Identification Process and conducts the process once every two years. The principle of “impact level” was used to assess whether a topic qualifies as material. The process involved evaluating the positive and negative impacts, the scope of impact, and the likelihood of occurrence for each topic. In 2025, the Company reviewed and managed the 13 material topics identified in 2024 and incorporated the “13 Material Topics for 2025” into the Company's biennial risk identification process, including risk identification, potential risk analysis (likelihood of occurrence and degree of impact), and risk mitigation measures. The implementation status and results of risk management are regularly reported to the Audit Committee and the Board of Directors every year. Following assurance by an external verification body, the Board of Directors approved the “Material Topics for the 2025 Sustainability Report” on March 16, 2026. The approved content includes the material topic identification process and the 13 material topics.

Material Topic Identification

▶ Understanding Organizational Context

• Stakeholder Identification and Engagement 2-
  The Company distributed surveys to 222 mid-level and senior managers and ESG team members, requesting them to identify nine categories of stakeholders—employees, shareholders/investors, customers, suppliers/contractors, government, local communities, external rating agencies, non-governmental organizations, and media, based on the five assessment criteria outlined in the AA1000 Stakeholder Engagement Standard (AA1000 SES 2015): dependency, responsibility, influence, diverse perspectives, and tension. Respondents were also asked to identify the five stakeholder groups with the greatest influence on Coretronic based on their level of importance. Ranked from highest to lowest, the five most influential stakeholder groups were customers, employees, shareholders/investors, suppliers/contractors, and government.

  
  We actively assess stakeholders' needs and expectations of Coretronic through Annual Material Topics Surveys, Chinese/English Sustainability Report, Chinese/English Annual Report, Chinese/English TCFD & TNFD Report, ESG Quarterly E-Newsletter, official website, Facebook fan page, YouTube channel, Wikipedia, ESG mailbox, and the following various communication channels, which serves as important references for formulating the Company's sustainability policies and related plans.
   

• Collect Sustainability Issues
  Referring to standards and guidelines such as the GRI Standards, Responsible Business Alliance (RBA) Code of Conduct, TCFD, TNFD, Science Based Targets initiative (SBTi), Carbon Disclosure Project (CDP), Sustainability Accounting Standards Board (SASB) Sustainability Indicators, United Nations Sustainable Development Goals (SDGs), top 10 global risks identified by the World Economic Forum (WEF), United Nations Global Compact (UNGC), and International Human Rights Conventions, as well as the key sustainability topics of benchmark companies in the sustainability field, the optoelectronics industry, the electronics manufacturing industry, and stakeholder concerns, Coretronic compiled a list of annual sustainability issues to serve as the core framework for the development of surveys and interviews. 

▶ Identify Actual and Potential Impacts

Following the definition of “impact” under the GRI Universal Standards (2021), Coretronic identified the actual and potential impacts of its 23 sustainability issues on the economy, environment, and people (including human rights). This assessment covers impacts that may be actual or potential, positive or negative, short-term or long-term, intentional or unintentional, and reversible or irreversible.

▶ Assess the Significance of Impacts

Using the Company's daily operations as the reference background, Coretronic evaluated the 23 sustainability issues by scoring the positive impact level (benefit), negative impact level (severity), and the likelihood of occurrence for both positive and negative impacts.

• Unidirectional Quantitative Survey: Responses were collected from 222 mid-level and senior managers and ESG team members through the “Annual ESG Survey”, as well as from 692 stakeholders. In addition, responses were collected from 16 ESG Committee members through the “Annual Identification and Evaluation of Material Topics Survey”.

• Bidirectional Qualitative Survey: Conducted two rounds of interviews with the ESG Team under the ESG Committee.

▶ Prioritization and Approval of Material Topics

• Screening of Material Topics

1. Based on the results of the “Annual ESG Survey” and the “Annual Identification and Evaluation of Material Topics Survey”, the Company screened each sustainability issue by evaluating its positive and negative “impact level” and “likelihood of occurrence”.

2. Sustainability issues with both a high positive impact level and a high likelihood of occurrence (both scores ≥ 8.5) were selected as “Positive Impact Topics”, while issues with both a high negative impact level and a high likelihood of occurrence (both scores ≥ 8.5) were selected as “Negative Impact Topics”.

• Prioritization of Material Topics

1. The weighted total scores for negative impact level (with an additional weighting of 0.1 for people-related issues) and the scores for positive impact level were each ranked from highest to lowest.

2. Material topics were first prioritized based on the weighted total scores for negative impact level.

3. Positive impact topics were then added to the ranking, with priority still given to topics with higher negative impact weighted scores; in the case of a tie, the topic with the higher positive impact score was prioritized.
    

• Approval of Material Topics

1. Interviews were conducted with members of the ESG Team under the ESG Committee to discuss the Company's actual operational performance for the previous year and the implementation of management strategies, after which the annual material topics were determined.

2. The material topics were verified in collaboration with an external assurance body.

3. The material topics were submitted to the Board of Directors for approval and were formally approved on March 16, 2026, as the “Material Topics for the 2025 Sustainability Report”.

4. Relevant targets and strategies were established for each material topic.
   
    

Identification Results

Economic Aspect

• Economic Performance
• Innovative R&D Management
• Sustainable Supply Chain Management

Social/ Human Rights Aspect

• Occupational Health and Safety
• Compensation and Benefits
• Information Security
• Prohibition of Child Labor
• Prohibition of Forced Labor
• Labor-Management Relations
• Friendly Workplace
• Talent Cultivation

Environmental Aspect

• Climate Change
• Product