ESG Sustainability Management

Implementation outcomes for 2024

Corporate Governance Aspect

Topic	2024 Goals	2024 Implementation Status
Government Sustainable Development Action Plan	Ranked in the top 6–20% in the Corporate Governance Evaluation. Ensure that all directors complete the number of training hours required by law. The Sustainability Report disclosed ESG information in accordance with the SASB Standards and was updated to comply with the 2021 version of the GRI Standards. Climate risk management was supervised by the Corporate Governance and Sustainability Committee, with climate-related information disclosed in full accordance with the 11 recommendations of the TCFD in both the annual report and sustainability report. In line with the implementation schedule of Taiwan's Climate Change Response Act, the Company prepared a pro forma financial statement for carbon tax/fee accounting functions. Monitored the progress of Taiwan's ISSB sustainability disclosure standards draft, tracked the implementation process, and organized internal training sessions for personnel involved in sustainability-related work.	Ranked in the top 6–20% in the 11th Corporate Governance Evaluation among all TWSE-listed companies. Regularly provided directors with information on relevant training courses, achieving 100% completion of the required training hours. Prepared the Sustainability Report in compliance with the SASB Standards and the 2021 version of the GRI Standards, and won the Gold Award for the Corporate Sustainability Report Awards of the First Category of the Traditional Manufacturing Industry during the 17th Taiwan Corporate Sustainability Awards Completed the climate risk assessment report, which was submitted to the Corporate Governance and Sustainability Committee and the Board of Directors. In compliance with disclosure requirements for annual reports and the “Operational Guidelines for the Preparation and Submission of Sustainability Reports by TWSE-Listed Companies,” the assessment results were fully disclosed. As Taiwan's carbon fee is set to be imposed starting 2025, and assuming a self-initiated reduction plan qualifying for the preferential rate B (NT$100/ton), the projected annual carbon fee for 2025 will not exceed NT$3 million, with minimal impact on profits and losses. Given this context, the benefits of preparing pro forma statements for 2024 are limited. The Finance Department continues to monitor carbon reduction-related topics, actively track policy developments, strengthen professional knowledge, and enhance the Company's responsiveness to the financial implications once the carbon fee is officially enforced. Additionally, a carbon credit training session was held in Q4 to build foundational knowledge among employees. Completed a gap analysis between the current framework and the IFRS S2 Climate-related Disclosures Standard. Based on the results, the Company adjusted its risk management process, climate scenario analysis, and disclosure of transition plans.
Intellectual property management	Maintained TIPS Grade A certification for intellectual property certifications (including patents, trademarks, and trade secrets). Conduct a three-hour intellectual property training course among TIPS-implementing departments in accordance with TIPS regulations and achieve a 90% training penetration rate. The Company has a total of two certified intellectual property auditors.	Progressed as scheduled according to the Company's Intellectual Property Management Manual, and passed recertification in November; certification is valid until December 31, 2026. In July, we completed a 3-hour intellectual property training course among TIPS-implementing departments, achieving a 100% completion rate. One staff member from the R&D Department and one from the Administration Department completed training and obtained the TIPS internal assessor certification.
Information security maintenance and management	Achieve zero significant information security incident. Perform website vulnerability scanning (EIP). Conduct intranet penetration tests (official website and shipping schedule). Conduct two social engineering drills. Introduction of WAF Internet application firewall.	No major information security incidents occurred in 2024. Completed initial and follow-up EIP vulnerability scans; all identified vulnerabilities were fixed. Completed initial and follow-up penetration tests on the official website and shipping schedule system; all vulnerabilities were addressed. Conducted initial and follow-up social engineering drills and completed associated cybersecurity awareness training. Introduction of the WAF Internet application firewall was completed in February.
Legal compliance	0 major violation of laws and regulations. Real-time identification of laws and regulations ≧ 90%. Employees who have attended one-hour legal compliance training ≧ 80% (insider trading prevention and integrity management).	No major violation of laws and regulations in 2024. Compiled monthly domestic regulation amendment information for each unit's reference. Each unit discussed whether to amend the relevant regulations, and with regulation identification amounted to 100%. Completed training on insider trading prevention and ethical business practices on December 23. As of the end of December, the training completion rate was 85%, and four additional makeup sessions were scheduled for January 2025.
Promote a paperless office	Continued development of digital forms to replace paper-based processes (developed more than five forms). Digitalized physical documents and stored them in cloud space (achieved document digitalization in 70% of departments). Implemented a design of paperless process for expense reporting and payment operations, including the planning and establishment of related software and hardware infrastructure.	Developed one new electronic form in Q4 (Traffic Accident Report Form for personnel injuries); a total of nine forms were completed in 2024. As of December 31, the average rate of documents uploaded to the cloud across departments was 76.09%. Programming for the paperless reimbursement system was completed; full testing is planned.

Society

Topic	2024 Goals	2024 Implementation Status
Collective Bargaining and Agreement	Conduct collective bargaining negotiations with labor union.	Held three negotiation meetings in Q1 on January 5, February 23, and March 25. Held three negotiation meetings in Q2 on April 22, May 23, and June 24. Held three negotiation meetings in Q3 on July 31, August 26, and September 25. Held two negotiation meetings in Q3 on November 29, and December 18. Reached a preliminary consensus on 74% of negotiation items in 2024.
Talent development program	Succession Planning Course Training: Mid-level management training completion rate is 90%. Implementation of employee training programs with an average duration of 30 hours. Diversification of talent recruitment channels.	Held two sessions of the Middle Management Consensus Workshop on September 4 and September 5, targeting supervisor-level staff and above (including researchers and first- and second-level supervisors); a total of 83 employees (excluding dispatched personnel) participated, with a 100% completion rate. Average training hours per person: 6.2 hours in Q1, 11.5 hours in Q2, 12.4 hours in Q3, and 9.3 hours in Q4, totaling 39.4 hours per person annually. Participated in the National Sun Yat-sen University Kaohsiung-Pingtung Region Job Fair on March 9, organized a public recruitment exam on March 24, and participated in the National Cheng Kung University campus recruitment event on October 19.
Healthy workplace certification and health promotion among employees and contractors	The Pingnan Plant received the Healthy Workplace Promotion Label from the Health Promotion Administration, Ministry of Health and Welfare. Organize at least two health promotion activities each year. Organize at least 12 consultation sessions provided by occupational medicine specialists in the factory area each year. Engage external experts to conduct at least 12 health education activities.	On December 16, the Pingnan Plant was officially awarded the Healthy Workplace Promotion Label from the Health Promotion Administration, Ministry of Health and Welfare. Completed two annual health promotion activities: a weight loss competition and a health point collection activity. Held a total of 17 occupational promotion activities during the year. Successfully organized all planned 2024 health education activities, totaling 14 sessions on topics such as hygiene, mental health, cancer screening, and sports medicine.
Supplier Management	Include environmental issues, labor conditions, human rights issues, non-use of conflict minerals, and code of social conduct as new supplier evaluation items. Achieve zero major workplace safety incident among transportation providers. Proportion of locally procured materials > 60%.	CSCC's “Supplier Due Diligence Guidelines” were published on June 20. Newly selected suppliers must sign the "Supplier Code of Conduct and Commitment" during the evaluation process to qualify as approved suppliers. This practice is ongoing; a total of five supplier site visits were completed in 2024. Achieve zero major workplace safety incidents among transportation providers in 2024. Local procurement ratio for the year reached 75.01%.
Workplace safety management and fire prevention	No major occupational accident. Zero major fire incidents. Total number of employees and contractors suffering disabling injuries per year ≦ 2.	No major occupational accidents or fire incidents occurred in 2024. On November 7, a contractor was struck in the chest by a suspended object at an excavation site, resulting in contusions. Total number of disabling injuries for the year was 5, exceeding the annual target.
Social welfare and community engagement	Promote at least two art and cultural activities per year in collaboration with CSCC Group. Adopt rural elementary schools, sponsor summer camp activities organized by local elementary schools, and sponsor environmental education activities organized by the CSCC Group Education Foundation. Carry out at least two sustainable environment awareness activities and fraternal activities with societies and associations in local neighborhoods each month.	Sponsored four cultural and artistic events, including the "We Are 2023: Our New Year's Eve" event by the General Assembly of Chinese Culture, the "2024 Children's Happiness Festival" event by the Eden Foundation, the "Love Drama Together" charity children's theater, Winter Wonderland event organized by the Bureau of Cultural Affairs, Kaohsiung City Government, the "Poetry and Song" concert by the China Steel Choral Group, and Port Area Water Feature & Light Show series hosted by Kaohsiung Music Center. Continued to support the Jin-Jhu Elementary School with annual funding for transportation, talent classes, and after-school care programs, and conducted monthly moral education courses; sponsored various steel and environmental education activities organized by the China Steel Group Education Foundation, and maintained sponsorship for air quality maintenance and greening at Siaogang District Qingshan Elementary School. Hold an average of 5 local neighborhood group activities, community associations, and environmental promotion activities each month in 2024.

Environment

Topic	2024 Goals	2024 Implementation Status
Energy Management	The cumulative average annual electricity savings rate from 2015 to 2024 is > 1.05% for the Hsiaogang Plant and > 1% for the Pingnan Plant.	The company-wide average electricity savings rate in 2024 was 1.68%.
Water resource management	Reduce water use intensity (i.e., amount of water used per unit output) by 1.5% (Hsiaogang Plant) and 1.1% (Pingnan Plant) on average. Reduce wastewater use intensity (i.e., amount of wastewater used per unit output) by 1.5% (Hsiaogang Plant) and 1.1% on average.	The cumulative average water intensity across the entire company decreased by 3.84% in 2024. The cumulative average wastewater intensity across the entire company increased by 29.75% in 2024.
Air pollution reduction and management	Switch to clean fuels to reduce sulfur oxide (SOx) emissions to less than 5 tons per year. Switch to low-NOx burners to reduce nitrogen oxide (NOx) emissions to less than 25 tons per year.	2024 Total SOx emissions amounted to 0.405 metric tons. 2024 Total NOx emissions amounted to 13.194 metric tons.
Resource recovery from waste	Increase bulk bag recycling rate to 65%. Increase pallet recycling rate to 70%.	The average annual bulk bag reuse rate was 104.4%, resulting in a total reduction of carbon emissions by 7,179 kilograms. A total of 4,614 pallets were reused throughout the year, resulting in a total reduction of carbon emissions by 19,010 kilograms.
Climate change and carbon neutrality	Reduce greenhouse gas emissions by 2% annually, based on the 2018 base year for Scope 1 and Scope 2 carbon emissions. Greenhouse gas emissions have been inventoried in accordance with the ISO 14064-1:2018 standard. The carbon footprint data of key products was revalidated based on customer requirements. Provided guidance to Changzhou China Steel for completing the greenhouse gas inventory and verification. Solar photovoltaic systems were installed at the Pingnan Plant as part of its expansion project.	Based on a 2% reduction from the baseline year (1,724 tons), by the end of Q4, the Hsiaogang Plant had completed 13 energy-saving projects, reducing 1,774.4 tons of emissions; the Pingnan Plant completed 4 projects, reducing 462.3 tons. The total reduction of 2,236.7 tons represented a 129.7% achievement rate, equivalent to a 2.60% reduction from the baseline year. Completed the 2023 GHG inventory and obtained the GHG verification statement. The GHG report was uploaded to the Ministry of Environment's online platform. Companywide emissions: Scope 1: 26,510 tons; Scope 2: 76,704 tons; Total: 103,214 tons. The carbon footprint data of five major products (T/P and BTX) were internally inventoried. Changzhou China Steel completed its 2023 GHG inventory: Scope 1: 9 tons, Scope 2: 169 tons, total 178 tons. The GHG verification was completed on 07/10, and a local GHG verification statement was obtained. The solar photovoltaic project for the Pingnan Plant's parking area passed Taipower's grid-connection review and was approved and registered with the Pingtung County Government. Construction is scheduled to begin in February 2025.
Environmental Education	The tree survival rate at Jiadong Sports Park is 80%. Organize at least two social welfare activities per year such as beach cleanup, mountain cleanup, and tree planting.	From July 2020 to December 2024, a total of 174 trees planted remain, with a survival rate of 79.1% (Typhoon Krathon on October 3 caused damage to 20 trees). On March 5, the Environmental Education Task Force participated in the Pingtung County Government's City/County Environmental Disaster Prevention Warrior Event. On April 13, a tree-planting activity was held at Jiadong Sports Park with a total of 331 participants, including employees and contractors. On May 1, a mountain cleanup activity was conducted at Shoushan National Natural Park (formerly known as Chaishan Park) with participation from 84 employees and contractors. On August 17, a corporate family day event was held at Jingyuan Farm. On August 31, the Environmental Education Task Force joined the Pingtung County Government's Environmental Heroes Gathering. On September 21, a beach cleanup activity was held at Fangliao Fishing Harbor, with a total of 359 participants, including industrial park manufacturers, local community leaders, residents, employees, and contractors. A total of six environmental education events were conducted throughout the year.