Materiality Analysis

I. Collection and Identification of Sustainability Issues

• Based on international sustainability (GRI guidelines, TCFD, SDGs UN SDGs, RBA Code of Conduct, SASB), customer requirements, domestic and international regulations, and recommendations from rating agencies. This information is compiled into a comprehensive list of sustainability issues.

• Convene meetings to review sustainability issues, and confirm whether adjustments are needed.

II. Material Topic Decision-Making Process 1. Impact and Quantification Assessment

• The ESG Office team confirms the assessment processes of material topics

• A meeting for the assessment of material topics is convened. Through surveys and questionnaires, the various ESG committees evaluate the potential positive and negative impacts of each topic. Each issue is scored based on the likelihood of occurrence and the extent of impact.

• An Impact Significance Matrix plotting “Likelihood of Occurrence vs. Impact Degree” is created, with a priority consideration given to the evaluation of negative impacts.

III. Material Topic Decision-Making Process 2. Order by Degree of Impact

• Compile the results of the impact degree and rank them by score.

• To prevent material topics from being biased towards a single aspect, sustainability issues are divided into three dimensions: economic, environmental, and social. Those topics scoring highest within each dimension are provisionally listed as material.

• This process is discussed by the ESG Office team. In addition to score ranking, considerations include operational importance and domestic and international regulations.

III. Stakeholder Level of Concern Survey

• Collect stakeholder level of concern regarding various sustainability issues via questionnaires.

• After analyzing the survey results, rank the concern scores for each issue.

• Create a matrix diagram of “Impact Degree vs. Level of Concern”.

• Feedback from stakeholders is also reported to various departments for understanding and response.

IV. Confirmation of Material Topics and Information Disclosure

• Integrate the assessment results of impact degree and make reference to the results of the stakeholder concern level questionnaire to finally confirm the material topics.

• In the sustainability report, disclose each material topic and explain changes compared to the previous year. Also disclose descriptions of positive and negative impacts and assessments of substantive potential impacts.

• The report is reviewed by the chair of the ESG Committee and approved by the Board of Directors, and announced in June.

Collection and Identification of Sustainability Issues

Accton reviews international sustainability frameworks (including GRI Standards, TCFD, UN SDGs, RBA Code of Conduct, SASB, etc.) and customer requirements, building on the 20 sustainability issues identified from stakeholder concerns in 2022 as the basis. Based on the “Material Topic Decision-Making Process,” the material topics for 2023 are then selected.

Material Topic Decision-Making Process

1. Impact and Quantification Assessment

The decision process for material topics in 2023 primarily references the new guidance from the GRI Standards (2021) on material topics, assessing the positive and negative impact of the aforementioned 20 sustainability issues on “Economy, Environment, and Social (including Human Rights).”

Impact assessments are based on “Likelihood of Occurrence” and “Impact Degree,” each scored from 1 to 5. The scores are multiplied to derive a “Significance Degree” score. Through surveys, the chair and vice-chair of ESG Committee, the members of ESG Committee and ESG Office participate in the scoring. The chair, vice-chair, and each committee must each submit a set of results for the significance scoring. Based on the scoring results, a “Likelihood of Occurrence vs. Impact Degree” matrix is drawn, prioritizing the assessment of negative impact.

2023 Material Topics and Change Comparison

After synthesizing the internal impact significance assessments and considering the results of the stakeholder concern survey, we confirmed 9 material topics for 2023 (as indicated below).

Compared to 2022, the material topics for 2023 have been updated to include “Information Systems Security Management,” “Climate Change Response,” and “Energy Saving and Carbon Reduction,” while “Green Production” has been removed. Changes to the material topics are described below.

1. Addition of “Information Systems Security Management”

Accton, as a player in the network communications industry, has identified information systems security management as a material topic due to escalating information system risks and the constant evolution of cyberattack methodologies, which pose substantial risks to both business operations and customer privacy.

2.Addition of “Climate Change Response” and “Energy Saving and Carbon Reduction”

In light of the accelerating global climate risks, enterprises are compelled to take more proactive actions in energy saving and carbon reduction to curb the ongoing rise in global temperatures. Accton has adopted the Task Force on Climate-related Financial Disclosures (TCFD) in 2022 to analyze the Company’s potential climate risks and opportunities. Following this analysis, Accton has established ambitious targets of reducing carbon emissions by 50% by 2030 and achieving net-zero carbon emissions by 2050. In 2023, Accton further established the “Accton Academy of Sustainability” in collaboration with ten supply chain partners, aiming to progressively implement decarbonization growth and achieve net-zero carbon emissions targets. Therefore, “Climate Change Response” and “Energy Saving and Carbon Reduction” has been elevated to material topics this year, reflecting Accton’s determination to reduce carbon emissions and aiding in monitoring the progress towards its carbon reduction goals.

3. The previous material topic of “Green Production” has been

decomposed into “Water Resource Management” and “Waste Management.” Previously, “Green Production” encompassed both “Water Resource Management” and “Waste Management” as part of its sustainability focus. With this reclassification, although “Water Resource Management” and “Waste Management” are not classified as material topics for 2023, Accton will continue to assess their impact and disclose relevant information. This ongoing disclosure will be included in the “3.3 Environmental Management” section of this Report.

Stakeholder Engagement

Accton communicates with customers, employees, suppliers, government agencies, and shareholders/investors through various channels. Based on the results of the questionnaire survey on sustainability issues, we have listed the major sustainability issues, about which the five major stakeholders are most concerned, the engagement methods, and the methods adopted to respond to each issue below, with a description of the actions we have taken in sustainability management and outcome.

Stakeholder

Communication Method/Frequency

Issues of Concern

Accton’s Response and Results

Clients

  • The Company’s ESG Website and ESG Report (annually)
  • QBR audit and ESG ratings (quarterly or semi-annually)
  • Regular communication and discussion meetings (as per client needs)
  • Customer satisfaction surveys (Accton, Edgecore)
  • Brand newsletter (Edgecore/Monthly)
  • International physical exhibitions/ seminars (from time to time)
  • Webinar (from time to time)
  • The Company’s website, LinkedIn, and YouTube (from time to time)
  • Supply Chain Management
  • Human Rights
  • Energy Saving and Carbon Reduction
  • Climate Change Response
  • Information Security Management
  • Customer Relations
  • Through methods such as discussion meetings, correspondence, assessments, and more, we respond to our customers’ concerns regarding sustainability issues. Specific Results:

  • (1) We follow the Responsible Business Alliance (RBA) standards, implementing checks on labor, human rights, ethics, health and safety, environmental management, and other dimensions. We also required our supply chain partners to comply with these standards.

  • (2) We strengthen supply chain security control by implementing the ISO 28000 Security Management System, earning customer trust, and meeting their requirements for the safety of product sourcing, manufacturing, storage, and transportation from component procurement.

  • (3) We adhere to the TCFD framework to disclose climate change risks and opportunities, and we have developed an energysaving and carbon reduction plan accordingly. In 2023, we maintained our participation in the Carbon Disclosure Project (CDP), achieving a B score in their questionnaire assessment.

  • We conducted regular video conferences with clients at least once a week and made regular visits to ensure strong client engagement.
  • Under our brand Edgecore, we participated in 6 international physical exhibitions and 3 online seminars to communicate and introduce our latest solutions to clients.

✉️ Email: [email protected]

Employees

  • Labor-management meeting (quarterly)
  • Occupational Safety and Health Committee (quarterly)
  • Employee Welfare Committee (quarterly)
  • Labor Pension Reserve Committee (quarterly)
  • Employee briefing session (from time to time)
  • Hold management meetings and departmental meetings (monthly, from time to time)
  • Accton Portal (from time to time)
  • Accton Whisper physical mailbox
  • Accton Whisper e-mail (from time to time)
  • Sexual harassment complaint hotline and email
  • Care for employees’ injury or illness
  • Information Security Management
  • Occupational Health and Safety
  • Social Welfare
  • Remuneration and Benefits
  • We have established various communication channels and mechanisms, including physical mailboxes, HR email, complaint hotlines, Line@ for policy dissemination, and employee feedback channels. We encourage colleagues to provide suggestions on operational or management measures, allowing the voices and expectations of frontline employees to be directly conveyed to senior executives, serving as references for continuous improvement and corporate governance. In 2023, a total of 8 feedback items were received from all employees, with a 100% closure rate. The main topics included: (1) Environmental facilities in the workplace, (2) Equipment used for work, (3) Education training and self-growth, (4) Welfare systems and activities, (5) Healthcare, (6) Internal communication channels, (7) Meals, and (8) Initiatives related to promoting Diversity, Equity, and Inclusion (DEI).
  • We provide information system security education and training to new employees to establish literacy and awareness regarding information security issues. Information on important security measures is regularly conveyed through letters, internal websites such as Accton Portal, and other means.
  • To create a healthy and safe workplace environment for employees, we provide education and training for new and existing colleagues, and conduct contingency drills, with the following outcomes:

  • (1) Following the concept of preventive medicine in three stages and five levels, we provide comprehensive health check-up items that are superior to what is required according to regulations. We organize health promotion activities to enhance employee engagement while educating them.

  • (2) Safety education and training cover various topics including general safety and health, hazard awareness, safe equipment operation, kitchen gas safety, and industrial instrument operation. A total of 8,122 training sessions were completed, including annual safety training for contractors. All employees of Accton and contractors have passed safety and health training.

  • (3) In 2023, 10,331 contingency drills were conducted, covering scenarios such as chemical spills, civil defense training, emergency response organization training, fire evacuation drills, and confined space rescue drills.

  • (4) We conducted CPR and Automated External Defibrillator (AED) training for all employees to acquaint them with first aid skills to assist colleagues or family members in need.

  • Additionally, Accton E-Charity provides information on social welfare groups and public welfare activities from time to time, offering employees direct support and participation channels.
  • We comply with labor laws and international human rights norms, fostering good labor relations. The number of cases involving unethical conduct is reviewed monthly.
  • At the quarterly Employee Welfare Committee meetings, updates on previous quarter’s tracked items and activity information are provided to committee members, who then disseminate them to various departments, ensuring that employees fully understand welfare measures and related activities.

✉️ Email: [email protected]

Suppliers

  • Supplier conference (annually)
  • Supplier audits: As per the annual list of suppliers to be audited (from time to time)
  • Telephone/e-mail (daily)
  • Supply Chain Management
  • Green Product Management
  • Legal Compliance
  • Anti-Corruption
  • In 2023, a total of 193 suppliers completed conflict mineral management and due diligence risk identification and assessment.
  • Through the eGreen material hazardous substance management system, compliance with international regulatory requirements is ensured.
  • Established the “WIC-CE05002 Product Hazardous Substance Management Specification” for suppliers to adhere to, exceeding international mandatory legal requirements and covering the international material declaration standard IEC 62474.
  • To comply with RoHS/REACH hazardous substance requirements, a total of 420 new material reviews and 5,563 component recognitions were completed in 2023, and we requested suppliers to provide inspection reports.
  • Through raw material/process hazardous substance reduction and control, investigations of 2,242 product models were completed in 2023, with all models meeting 100% of international hazardous substance regulations/directives.
  • Suppliers signed integrity commitments, with a total of 257 supplier entities signing.

✉️ 聯絡信箱 [email protected]

Government Agencies

  • Official document correspondence and visit (from time to time)
  • MOPS (from time to time)
  • Company website (from time to time)
  • Press releases (from time to time)
  • Industry Value Chain Information Platform (from time to time)
  • Risk Management
  • Information Security Management
  • Corporate Governance
  • Legal Compliance
  • In accordance with regulatory requirements, we promptly respond to relevant messages and execute necessary measures. In 2023, we established a Risk Management Office to address regulatory demands.
  • We ensure compliance with relevant regulations and the ISO 27001 Information Security Management System, continuously enhancing information security education and training to cultivate a culture of information security awareness among all employees.
  • We regularly release updates to provide stakeholders with an understanding of the overall status of the Company.

✉️ Email: [email protected]

Shareholders/

Investors

  • The Company’s ESG Website and ESG Report (annually)
  • Annual general shareholders’ meeting (annually)
  • Investor conference (annually)
  • Annual financial report (monthly and quarterly)
  • Investor questionnaire survey (from time to time)
  • Operational Performance
  • Legal Compliance
  • Corporate Governance
  • Risk Management
  • Anti-Corruption
  • Supply Chain Management
  • Release the latest information promptly for shareholders and investors to be informed of the Company’s situation as a whole.
  • Collaborated with the Financial Supervisory Commission (FSC) to complete the corporate governance evaluation.
  • Promptly respond to investors’ concerns.

✉️ Financial Information: [email protected]

✉️ Non-financial Information: [email protected]

Stakeholder Engagement and Materiality Analysis

Stakeholder engagement and Response

We communicate with clients, employees, suppliers, government agencies, shareholders/investors, and non-profit organizations (NPO) through a variety of channels. As per the results of the questionnaire survey on ESG issues, we have listed the major ESG issues, about which the six major stakeholders are most concerned, the engagement methods, and the methods adopted to respond to each issue below, with a description of the actions we have taken in sustainability management and outcome.