Material Topics

We refer to material topics identification process of the latest version of the GRI standards (2021) to evaluate the impacts of the environment, economy, people/human rights and other issues on Everlight and manage them based on actual and potential impacts.

▍Process for determining material topics

In terms of impact management on material topics, the Board of Directors is the highest governance body responsible for supervision and decision-making. Everlight has also established a risk management committee and an audit committee to prevent and improve potential or actual risks. After compiling various possible topics, the ESG Committee conducts impact assessment and topic ranking with the heads of departments through questionnaires and interviews.

No key significant incidents occurred in 2023.

Everlight defines the threshold of key significant incidents (such as the amount of property losses and casualties, etc.) in accordance with the standards set by the Risk Management Committee. The executive secretary of the Risk Management Committee, on May 11, 2023 and December 14, 2023, and the executive secretary of the ESG Committee, on August 10, 2023, will report to the Board of Directors on various risk management results in 2023.

1

Understand the organization’s context

Stakeholder identify and compile a list of ESG issues

In 2022, Everlight followed the five principles of the AA1000 Stakeholder Engagement Standard (SES) to identify eight categories of main stakeholders. These include customers/brand owners, shareholders/investors, employees, suppliers/contractors, local communities, government agencies, financial institutions, and external public associations. Considering there were no significant changes in the overall environment and industrial chain in 2023, we continued to engage with these stakeholder groups for subsequent collaboration processes.

We refered to international ESG trends, GRI standards, SASB chemical industry standards and TCFD guidelines for climate-related financial disclosures, international rating agency requirements, and the Financial Supervisory Commission’s requirements for corporate governance evaluation to select 24 sustainability topics. These topics are: 1. Product Strategy and R&D Innovation, 2. Customer Relationship Management, 3. Digital Transformation and Development, 4. Product Responsibility, 5. Greenhouse Gas and Energy Management, 6. Information Security Management, 7. Corporate Governance and Integrity, 8. Occupational Health and Safety, 9. Risk Management, 10. Chemical Safety, 11. Climate Change Mitigation and Adaptation, 12. Community Engagement and Communication, 13. Handling and Response of Significant incidents, 14. Talent Attraction and Development, 15. Diversity and Inclusion in the Workplace, 16. Employee Welfare and Care, 17. Operational Performance, 18. Air Pollution Emission Management, 19. Sustainable Development Strategy, 20. Labor Rights and Employment Relations, 21. Waste Management, 22. Regulatory Compliance, 23. Water Resource Management, 24. Supply Chain Management.

To understand stakeholders’ assessments of various issues, we conducted surveys among the eight categories of stakeholders, sending invitations through various channels and online questionnaires. A total of 185 questionnaires were distributed, and 113 were returned, achieving a response rate of 61.08%.

2

Identify Actual and Potential Impacts

Impact Assessment of Material Topics Completed by Internal Management Team

For the identified sustainability issues, we conducted interviews with the heads of departments and distributed 40 survey questionnaires to assess the actual positive and negative impacts of these issues for 2023, as well as the extent of involvement and the probability of occurrence for each issue.

In addition to understanding the negative impacts and probabilities of occurrence, we also conducted follow-up due diligence based on the topics to determine if current performance indicators and approaches are needed to be adjusted and improved. (For a detailed assessment of both positive and negative impacts, see the diagram below).

3

Assess the significance of impacts

Identify Six Material Topics and define KPIs to align with SDGs Indicators

Based on stakeholders’ concerns and the impact of various topics on Everlight’s operations, a material topic matrix was completed. After assessing the actual and potential impacts and probabilities of occurrence in 2023, six material topics were selected for management and disclosure, including:

  1. Organizational Resilience (including handling and response of significant incidents, digital transformation and development)
  2. Talent Attraction and Development
  3. Water Resource Management
  4. Pollution Prevention
  5. Product Strategy and R&D Innovation
  6. Climate Change Response – Mitigation and Adaptation

These six material topics are defined to align with the United Nations Sustainable Development Goals (SDGs):

SDG #6: Clean Water and Sanitation

SDG #7: Affordable and Clean Energy

SDG #8: Decent Work and Economic Growth

SDG #9: Industry, Innovation and Infrastructure

SDG #12: Responsible Consumption and Production

SDG #13: Climate Action.

4

Determine Material Topics with relevant performance indicators for Reporting

Determine Material Topics, Management Approaches and Performance Indicators for Reporting

Settle Performance Indicators: Continuing from the sustainability management objectives in 2022. After re-evaluating and cross-referencing them based on Everlight’s sustainability strategy and stakeholder feedback, we have established 15 performance indicators for 2023.

▍Assessment of Positive and Negative Impacts

Topic Code

Product strategy and R&D innovation, corporate governance and integrity management, handling and response of significant incidents, and customer relationship management were the topics that Everlight would demonstrate positive impacts and exert significant influences in 2023.

In 2022, a fire incident took place in Everlight. Due to immediate management, no business losses occurred; however, it still resulted in negative environmental impacts and fines in 2023. Additionally, in the area of talent attraction and development, there is a need to enhance the diversity of the talent pool through various methods.

▍Material Topic Matrix

Priority Category Stakeholder *Supervisor Assessment Matrix (Positive)
1 G Corporate Governance and Integrity Management
2 G Handling and Response of Significant
3 G Customer Relationship Management
4 G Product Strategy and R&D Innovation
5 G Risk Management
6 G Chemical Safety
7 G Product Responsibility
8 S Occupational Health and Safety
9 G Regulatory Compliance
10 G Operational Performance
11 E Waste Management

Priority Category Stakeholder *Supervisor Assessment Matrix (Negative)
1 G Handling and Response of Significant Incidents
2 S Talent Attraction and Development
3 E Water Resource Management
4 E Waste Management
5 S Occupational Health and Safety
6 G Digital Transformation and Development
7 G Operational Performance
8 E Climate Change Mitigation and Adaptation
9 G Regulatory Compliance
10 G Customer Relationship Management
11 G Supply Chain Management
12 E Greenhouse Gas and Energy Management

▍Material Topics and Correspondence with SDGs

In response to the material topics identified by Everlight in 2023, and in alignment with international ESG trends and SASB Chemicals industry benchmarks, we have selected core Sustainable Development Goals (SDGs) that are responsive to Everlight’s strategic development direction. We have also established specific targets and corresponding indicators, and pragmatically adjusted and defined concrete performance indicators.

Generally, refers to the company’s emergency response, risk management and operational continuity capabilities. In addition to the original evaluation indicators for this material topic in 2022, handling and response of significant incidents and digital transformation were also considered.

KPIs: Ratio of Own Capital to Total Assets

2023 Target: Individual 73%, Consolidated 67%
2024 Actual: > 50%

KPIs: Monthly Availability Rate of Key Information Systems and Network Services (%)

2023 & 2024 Target: ≧ 99.5%
2023 Actual: 99.9%

 

KPIs: Number of Improvements for BCM Med/High- Risk Events

2023 Target: 6
2023 Actual: 8
2024 Target: 5

Due to the requirements of sustainable transformation and digital transformation development, this issue was managed independently.

KPIs: PR value in the 104 Employer Brand Survey

2023 Actual: PR97
2024 Target: PR≥90

KPIs: Annual turnover rate (%)

2023 & 2024 Target: ≦18%
2023 Actual: 14%

KPIs: TTQS system construction and functional training system construction completed

2024 Target: Construction Completed

The management of water withdrawal, discharge, and consumption, as well as the reuse of water resources was involved. This included preparations for potential droughts due to climate change and the management of recycled water reuse issues.

KPIs: Water Recovery Rate R2 (%)

2023
Target: ≧ 84%
Actual: 95%

2024
Target: ≧ 94%

KPIs: Total Water Consumption (ML)

2023
Target: ≤872 ML
Actual: 593.9 ML

2024
Target:  ≤872 ML

KPIs: Compliance Rate of Wastewater Treatment

2023
Target: 100
Actual: 100

2024
Target: 100

Air pollution control and waste management were Included.

KPIs: Emission Reduction Rate per Unit of Production (%)

2023
Target: ≧ 2 %
Actual: -6 %

2024
Target: ≧ 2 %

KPIs: Waste Recycling and Utilization Rate (%)

2023
Target: ≥71 %
Actual: 71 %

2024
Target:  ≥71

KPIs: Recycling Rate of Hazardous Industrial Waste (%)

2023
Target: ≧ 3.1 %
Actual: 10.3 %

2024
Target: ≧ 6.3 %

In response to sustainable transformation, we extend our product responsibility from 2022, focusing on the momentum of R&D and innovation.

 

KPIs: Share of Revenue from Sustainable Products (%)

2023
Target: 58 %
Actual: 70 %

2024
Target: ≧ 73 %

KPIs: Percentage of Sales Revenue from New Products (%)

2023
Target: ≥ 13%
Actual: 15 %

2024
Target: 10 %

In response to transition risks (such as carbon taxes and carbon fees) and physical risks associated with climate change, along with corresponding adaptation strategies.

KPIs: GHG Emission Intensity (tCO2e/million NTD in production value)

2023
Target: ≦ 8.7
Actual: 8.6

2024 Target: ≦ 8.3