Implementation of the Sustainable Development │ Foxconn Technology Group

Implementation of the Sustainable Development

Item

Implementation Status

Implementation Status Difference from Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and reasons

Yes

Description

Does the company establish a governance structure to achieve sustainable development, and set up a dedicated (part-time) unit to promote sustainable development, which is authorized by the board of directors to handle senior management, and supervised by the board of directors?

The Company officially established its Corporate Social Responsibility (CSR) initiative in 2007 and changed its name to the Sustainability Committee in 2022. It is the highest-level sustainability decision-making organization within the Company. The chairman of the board acts as chairman of the committee, combines with senior executives to jointly review the Company's operational strategies and capabilities, and formulate a medium- and long-term sustainable development plan.
The "Sustainability Committee" is a cross-departmental communication function that integrates top and bottom lines. The Company has set up an ESG team to identify sustainability issues that are critical to company operations and stakeholders' concerns through monthly meetings, formulate strategies and work guidelines, plan and execute solutions, and track implementation results to ensure that the sustainable development strategy is implemented in daily management.
The Sustainability Committee will report to the Chairman on a regular basis and to the Board of Directors at least once a year on the results of sustainability implementation and future work plans. Proposal content includes (1) identifying sustainability issues that require attention and formulating corresponding action plans; (2) goals and policy revisions of sustainability-related issues; (3) supervising the implementation of sustainable management matters and evaluating the implementation. The Board of Directors will also evaluate the success of the strategies and the progress of the implementation, and will urge for adjustments when necessary.

No Difference

Does the company conduct risk assessments on environmental, social and corporate governance issues related to company operations according to the principle of materiality, and formulate relevant risk management policies or strategies?

This disclosure covers the sustainability performance of major business locations between January 2022 and December 2022. The boundary of risk assessment is primarily the Company, including business locations in Taiwan, China, other parts of Asia, the Americas, and Europe.
The Sustainability Committee conducts analysis in accordance with the materiality principle in the sustainability report, communicates with internal and external stakeholders, reviews international/national research reports and literature, integrates data from various departments, evaluates material ESG issues, and formulates effective identification , assessment, control, and supervision of risk management policies, and the adoption of specific action plans to reduce the impact of related risks.

Major Issues	Risk assessment items	Description
Environment	Countermeasures to Climate Change	The Company has constructed a climate risk identification process using the TCFD framework. After cross-departmental discussions on climate risks and opportunities, a total of 3 opportunities and 3 risks were identified. In response to opportunities and risks, the Company has formulated management strategies and goals, and implemented institutional management to effectively reduce the impact of climate change.
	Energy and Greenhouse Gas Management	The Company has established an environmental management system that has been certified for environmental and energy management. Regularly inventory greenhouse gas emissions according to the GHG Protocol, and continue to implement carbon reduction measures based on the results to effectively reduce the impact on corporate operations.
Society	Occupational health and safety	The Company has completed the certification of "ISO 45001 Occupational Health and Safety Management System". Fire drills and occupational safety education and training are held on a regular basis each year to improve employees' emergency response and self-safety management capabilities. In response to the Company's compliance with various social laws and regulations, an internal audit plan is prepared every year, and various operating procedures are checked for compliance.
	Employee Rights and Diversity and Equality	To protect the diversity and equality of employees in the workplace, the Company has established the Hon Hai/Foxconn Technology Group Code of Conduct (CoC) and the chapter on labor rights. Through regular and ad hoc employee training, the Company raises employees' and the organization's awareness towards respect and tolerance, and ensures that all internal policies are implemented in accordance with the spirit of diversity and equality The Company provides employees with various channels for grievance and feedback to protect the rights and interests of employees.
Corporate governance	Integrity and compliance	By establishing a governance organization and implementing internal control mechanisms, we ensure that all of our employees and operations comply with the relevant laws and regulations. We apply for patent to protect the rights of the Company for the products we developed. The Company has completed the "ISO 37001 Anti-Bribery Management System" verification and continues to organize training courses to strengthen its corporate culture of integrity and integrity.
	Corporate Governance and Risk management	Continue to strengthen the functions of directors, plan relevant continuing education topics and courses for directors, and update directors with the latest regulations, system developments, and policies every year. The Company provides directors' liability insurance to prevent litigation or claims against directors. The Company adopts a comprehensive risk management and control system to clearly identify, measure and control various risks, including market risk, product risk and operational risk.

No Difference

Environment Issues Does the company establish proper environmental management systems based on the characteristics of their industries?

The Company firmly believes that when promoting environmental protection, it must not only comply with relevant laws and regulations, but also need to be in line with international development trends. In 2022, the Company will formulate an environmentally sustainable development strategy based on the identification of important environmental issues. In response to international trends and customer requirements, the Company's business units have established an environmental management system that has passed ISO14001 certification (validity: 2020/4/23 - 2023/4/22), and continues to promote the Company's environmentally sustainable development. Meanwhile, the Company conducts greenhouse gas inventory in accordance with the GHG Protocol every year to track the carbon reduction effect. Details are available in the Company's Sustainability Report and on the Company's website ( https://www.honhai.com/zh-tw/CSR/focus-environment?section=focus-environment-tab1)

No Difference

Does the company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment?

The Group systematically manages the energy use of the group by adapting the ISO 50001 energy management system and passing third-party verification (Extension of validity of certificate: 2023/1/12 - 2023/7/12), thereby identifying the risks and opportunities of reducing energy use and improving energy efficiency. The Company continues to promote the implementation of energy-saving technical transformation projects.
In addition, the Company also actively develops new technologies for energy conservation and emission reduction, new products, and new business models to fully explore the potential of energy conservation, and to promote and improve the Company’s transformation and increase revenue, and ultimately, continuously optimizes the Company's energy-saving and carbon-reduction system and achieves the goal of continuous improvement.
The Company signed a green power procurement cooperation memorandum with Forest Wei. The Taiwan factory will purchase about 2.36 million kilowatt-hour (kWh) of green electricity in 2022, and the purchase volume will be increased year by year. It is estimated that by 2030, about 70 million kWh of green electricity will be accumulated, which is equivalent to a reduction of about 35,140 metric tons of carbon dioxide equivalent emissions.
The raw materials used by our company are all in compliance with EU RoHS, REACH and halogen-free specifications. The Company continues to cooperate with international customers, and conducts chemical safety information disclosure of processes used in assembly plants. Furthermore, establish a list of prohibited substances to complete the replacement of green chemicals in customer products. In terms of green manufacturing, the company requires the company to conserve resources, explore the development of waste reduction and reuse technologies, and implement a zero-waste project between the company and suppliers to maximize the economic benefits of recycling.

Does the company assess the potential risks and opportunities of climate change on its present and future operation, and take measures to respond to climate-related issues?

The Company's climate change management body is the Sustainability Committee, chaired by the Chairman. It reviews the Company's climate change strategies and goals, manages climate change risks and opportunities, and reviews the implementation status and future plans every year, and reports to the Board of Directors. The Chief Environmental Protection Officer of the Company has set up Team E under the ESG team. The team is responsible for the implementation of greenhouse gas reduction paths and proposals, and regularly tracks and reviews the progress and results. The Company officially became a supporter of TCFD in 2021. The Company follows the framework of TCFD recommendations to assess the Company's risks and opportunities from climate change, and conducts a comprehensive assessment every three years and renewal review every year. The Company completed the latest risk assessment in 2022 and identified 3 major risk issues: increased demand for renewable energy and electricity regulatory restrictions, uncertain market information, and increased stakeholder concern or feedback. The Company also identified feasible opportunities and worked out countermeasures. The Company follows the green, smart, and circular economy strategy. In terms of climate change mitigation, the Company continues to develop projects such as green operation, energy management, carbon information disclosure, and green energy fund; in terms of climate change adaptation, the Company strengthens basic measures to improve sustainable operation capabilities and building core competitiveness. For details, please refer to the chapter on Environment of the Company's Sustainability Report. https://www.honhai.com/s3/reports/CSR/CN/
2021/HonHai_2021_Sustainability Report_CN_Chapter5.pdf

Does the company conduct assessment on greenhouse gas, water consumption and waste for the last two years, and establish company strategies for energy conservation and carbon reduction, greenhouse gas reduction, water saving and waste management?

The Company has been promoting greenhouse gas emissions since 2008, and participated in the Carbon Disclosure Project (CDP) since 2010. The Company conducts inventory of greenhouse gas emission in accordance with the "GHG Protocol"/ISO 14064, and actively promotes ISO 14064 independent third-party verification within the Company (certification date: April 20, 2023).
Greenhouse gas emissions in the past two years
(Unit: tonnes of CO2e)

Scope Year	I	II (based on the location)
2021	237,946	5,982,836
2022 (Note)	208,654	5,808,914

In response to the international net zero emission initiative, the Company joined the CA100+initiative and pledged to reduce greenhouse gas emissions by 42% in 2030 compared to 2020, and achieve net zero emissions by 2050.
In order to cope with climate change and promote the sustainable operation of the company, the company plans to continue to increase the use of renewable energy, and hopes to achieve green power use accounting for more than 50% in 2030.
The Company actively implements water resource management planning, identifies water risks, formulates water management strategies and targets, implements various water-saving projects, and promotes water recycling and reuse, in order to achieve conservation of water resources, efficient use of water resources, reduction of wastewater discharge, and impact on the environment. The Company plans to reduce water intensity by 6% compared to 2020 by 2025. In 2022 (Note), the Company took 88,105,165 tons of water.
In order to implement the circular economy strategy, the Company actively promotes the "Zero Waste" project, giving priority to waste recycling at factories. In 2021, the Company established a waste management platform in Shenzhen Longhua Campus, Mainland China, to track waste generation, distribution, and conversion rate, etc. in real time through data-based management and control, combined with various solutions such as reduction, recycling, and harmless waste of factory waste to make continuous improvements to achieve zero waste and build a zero-waste comprehensive ecological park. The Company plans to obtain at least 5 zero waste to landfill gold certification (UL2799) plants by 2025. The waste in 2021 and 2022 (Note) were 1,001,771 tons and 710,464 tons, respectively.
Note: The boundary of data in 2022 is Greater China. Global data are disclosed in the Company's sustainability report.

Social Issues Does the company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights?

The Company has set employees codes of conduct in accordance with labor laws and related personnel regulations, to protect the legitimate rights and interests of employees. As an official member of RBA, in addition to actively participating in alliance activities and undertaking member-related obligations, the group is also committing to the compliance and implementation of corporate social responsibility with its peers in the electronics industry and various partners. The "Group Corporate Social Responsibility (CSR) Code of Conduct" is formulated on the basis of RBA, which is implemented after being signed by the chairman and the top managers of each business group, and is actively implemented and listed as an annual compulsory course for all new employees.
On-the-job education for employees further promote compliance with the Code.
The Group's Code of Conduct covers eight areas: Ethics, Labor and Human Rights, Health and Safety, Environment, Management Systems, Responsible Mineral Sourcing, Anti-Corruption Policy and Anti-Slavery Policy.

No Difference

Does the company formulate and implement reasonable employee benefits measures (including remuneration, vacation and other benefits, etc.), and appropriately reflect operating performance or results in employee compensation?

According to the Article 28 of the Company’s “Articles of Incorporation” adopted by the Board, 5%-7% of the Company profit shall be set aside for employee remuneration. The Company has set performance bonuses, employee compensation and other rewards systems. The Company’s operating profit is distributed to employees in accordance with employee performance, to align employee and Company growth. In addition, the Company has set a code of employee ethics, employee self- discipline, performance evaluation and reward system, leading employees to behavior in line with the Sustainability Policy.

Does the company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis?

The Company has formulated the safety and health policy and promised to achieve the goal of zero injury, zero occupational disease and zero accident so as to create a best working environment for all employees.
The Company updated Health and Safety Management System in 2019, and have received SGS Certifications ISO45001 (received 2022/11/24, and valid through 2025/11/24), and CNS45001.
The Company regularly hosts health promotion training during training for new recruits. For the 2022 health promotion training, a total of 57 sessions were held this year, totaling 28.5 hours, and a total of 57 sessions of labor health education training, totaling 171 hours.

Does the company provide its employees with career development and training sessions?

The Company’s Career Development unit is tasked with the planning and implementation of the Career Development Program.

Does the company comply with relevant regulations and international standards on the health and safety of customers, customer privacy, marketing and labeling of products and services, and formulates relevant policies and procedures to protect consumer rights and handling complaints?

The Company actively manages the product value chain, and establishes management mechanisms from raw material procurement to logistics to customers. The Company continues to track product safety information and establish a reporting mechanism to fulfill its commitment to product safety. The Company has established strict information systems and policies, including management and technical aspects, to protect the information security requirements of customers, employees, and suppliers, and to protect the privacy and property rights of relevant stakeholders. On health and safety and protection of customer privacy and rights for complaint for customers, the Company complies with relevant regulations and establishes procedures based on international standards. Detailed procedures and codes can be found on the Company's official website. https://www.honhai.com/zh-tw/CSR/Advocacy-and-Promotion
Stakeholders section has been set up on the Company's website to provide customers with complaint channels and strengthen customer relations. At the same time, the business department communicates with customers on a regular basis to confirm customer satisfaction, and handles customer complaints in the first time to protect customers' rights and interests.

Does the company formulated and implement supplier management policy, requiring suppliers to follow relevant regulations on issues such as environmental protection, occupational safety and health, or labor rights?

The Company has established supplier management policies. Requiring suppliers to adhere to environmental, occupational health and safety, and labor rights guidelines, and supervises and audits accordingly. For details, please visit Hon Hai Supplier Social and Environmental Responsibility Website: https://sser.foxconn.com/Portal/SupplierLogon.aspx
The Company's central procurement and each business unit through the selection of new suppliers, audit counseling, performance evaluation, education and training, and supplier conferences, based on long-term effective cooperation, improve supplier capabilities, strengthen supply chain resilience, and reduce operational risks. The Company's suppliers in 2022 meet the following conditions.

Selection of new supplier	Follow the supplier code of conduct, sign a letter of commitment, and pass the selection of suppliers based on environmental and social standards.
	Suppliers of raw materials are required to pass ISO 9001 Quality Management System/ISO 14001 Environmental Management System/ISO 45001 Occupational Health and Safety Management System/QC 080000 Hazardous Substance Management System/ISO 14064 Carbon Inventory Certification.
	Suppliers are required to obtain government-approved licenses based on their business type.
Supplier audit	The Company's central procurement and each business unit have set up an audit function to conduct regular online investigations and on-site audits of suppliers through the supplier management platform. At the same time, based on the severity of defects, suppliers are required to provide improvement plans and measures within a specified period of time, and then confirm them.
Supplier education and training	The Company will organize educational trainings from time to time, and collaborate with professional institutions in the industry to organize small-scale trainings and forums to effectively improve suppliers' sustainability management capabilities through different forms of communication.
Supplier Conference	The Company holds supplier conferences regularly to convey the Company's concept, strategy, and goals of sustainability and to strengthen communication with suppliers. Meanwhile, suppliers are able to provide on-site feedback and the Company can respond in a timely manner, thereby enhancing the effectiveness of communication.

For more details, please refer to the "Supplier Management" section of the Company's Sustainability Report.

Does the company compile corporate social responsibility reports or reports that disclose the company's non-financial information based on international CSR compiling standard or guidelines? Is the report accredited from accreditation agency or third-party verification organization?

The Sustainability Report of the Company has been prepared with reference to the GRI-Standard for sustainability reporting issued by the Global Reporting Initiative (GRI) and the standards issued by the Sustainability Accounting Standards Board (SASB). The aforementioned report was obtained from a third-party verification institution (BSI) in accordance with AA1000 and published on the Company's website.

No Difference

If the Company makes its own corporate social responsibilities principles according to the Rules of Corporate Social Responsibility Best Practice Principles for TWSE/GTSM-Listed Companies, please state the differences: Not applicable.

Any other important information that helps to understand the conduct of corporate social responsibility: Adopted new processing system to enhance the capacity to recover wastes and sewage. The new system has been installed and put into operation in some areas in the plant. Respecting employees, the Company emphasizes that it does not hire child labor, does not force employees to work overtime. Managers are prohibited to discriminate or harass against employees. All relevant measures are officially announced. The Company has Health and Safety Department, examining the facilities, providing training to employees on industrial safety and health and conduct performance review on a regular basis. The company has a supplier management department, providing audit and trainings on corporate social responsibilities to suppliers. The Company participates in events relating to development of society, charity groups and domestic governments via donations:

Promote the Hon Hai Starlight Project to support disadvantaged classroom bases. So far, we have cooperated with a total of 17 units in 7 counties and cities including New Taipei, Keelung, Changhua, Yunlin, Kaohsiung, Hualien, and Taitung to accompany 228 disadvantaged students. A total of NT$11,351,882 was invested in the online one-on-one lesson for 116 students twice a week, once a hour.
The scope of the 6th Whale Scholarship includes elementary, junior high, and high school students. The number of students receiving scholarships has increased from hundreds to 2,000 each year, and the total scholarship amount has increased from NT$40 million in 2021 to NT$5,478.
Through the AI camp for rural junior high school students, we have broadened the horizons of students in remote areas who are less likely to be exposed to technology education, and have narrowed the distance between them and technology. At the same time, we also strive to bridge the technology education gap between urban and rural areas. A total of 152 teachers and students benefited.
Sponsored the summer English workshop for the fourth junior high school of the KIST Foundation, giving 62 disadvantaged students in remote areas one-on-one English tutorials. A total of NT$300,000 was invested.
o support and nurture talents, the Company sponsored the inaugural high school boxing team's training, accommodation and meal costs for outings during competitions. A total of 25 team members benefited from the event, and a total of NT$100,000 was invested. (The Yucheng High School boxing team has about 80% of the student fighters from disadvantaged families, but has trained many outstanding national athletes. For example, the third place in 2020 Olympic boxing, Huang Hsiao Wen, is from the Yucheng boxing team)
Donation totaling NT$68,585,290 to the homework guidance program for Hope Elementary School children.
Donation of NT$6,000,000 to the table tennis player training program of the Kaohsiung Table Tennis Association.
Donations totaling NT$18,366,022 were made to private and government institutions.
The Group's Social Welfare Division in Mainland China launched the "6+1" volunteer service campaign to give back to society (i.e. "Cleaning Assistance, Disabled Assistance, Mobility Assistance, Medical Assistance, Education Assistance, Legal Assistance + Social Public Welfare"), and organized charity activities 694 number of screenings, number of volunteers organized: 9,608, number of hours of volunteer services: 53,782