ESG
Sustainable Operations
Letter from the Chairman
In recent years, the world has been in an era of rapid change, with wars, epidemics and inflation, and corporate operations and the overall economy facing shocks and impacts. Not only that, the impact of climate change on the living environment is even more severe, and the pressure on companies to cope with these superimposed problems is even more urgent. The United Nations World Meteorological Organization (WMO) published its annual global weather report, pointing out that 2023 will be the year with the highest average surface temperature on record, 1.45 degrees Celsius higher than pre-industrialization, close to the 1.5-degree upper limit set at the 2015 Paris Climate Conference. Extreme and severe climate including heat waves, wildfires, heavy rains, floods, etc. impact our daily lives with higher frequency and greater intensity.
Implementing sustainable development of enterprises
As a global citizen, AOT has established a Sustainable Development Committee in August 2024 to promote sustainability. At the same time, the board of directors also passed the “Risk Management Policies and Procedures” to establish a sound risk management system. We hope to promote sustainable development, enhance international competitiveness, improve risk management and promote social justice. Through the joint efforts of all employees, we will create better results for all stakeholders.
Independent greenhouse gas inventory
In the face of global consensus on net zero carbon emissions at COP28, the official implementation of the Nationally Determined Contributions (NDCs) , the Climate Change Response Act, and the formal implementation of the EU’s Carbon Border Adjustment Mechanism (CBAM) in 2026, we independently conducted our own Scope 1 and Scope 2 greenhouse gas inventory in 2013 and obtained the ISO14064-1 system certificate prior to the regulation,. In 2023, we further advance the Scope 3 greenhouse gas inventory and verification. In the future, we will also follow the sustainable development path, gradually promote the completion of greenhouse gas inventory and certification of each subsidiary, and also make early preparations for possible carbon changes internationally. In 2023, in addition to implementing energy-saving and carbon-reduction solutions such as turning off lights and controlling air-conditioning temperature, we also adjusted the equipment operation time management, saving a total of 1.27 million kWh of electricity, a reduction of 8.11%. Water consumption was reduced by 4.75% by improving the operating efficiency of water storage facilities, reducing evaporation and overflow rates. In addition, we regularly inspects and manages hazardous substances in accordance with the international standards of RoHS and REACH, and the supply chain manufacturers also cooperate to reduce the impact of operating activities on the environment.
Achieving a gradual transformation in information security
In the field of information security, major global cyber security incidents continue to occur frequently in 2023. The threat of cyber-attacks will continue to rise, and threats such as ransomware, data leakage, and hacker attacks will emerge in an endless stream. The cyber security situation faced by enterprises will become more severe. In view of the importance of information security control to the sustainable development of the company, we have introduced automated control measures such as systematic control of mobile devices and two-factor authentication on the premise of systematic information security control. At the same time, we have also started the ISO 27001 certification plan introduction, and we expect to complete the certification by the end of 2025. Through the ISO 27001 certification process, we will reduce the security vulnerabilities of the company’s network and improve the company’s risk management capabilities.
Contribute to energy saving and carbon reduction benefits
Climate change is an important issue for all mankind. No one can stay out of it. In the new game of net zero sustainability, we see not only new risks brought by carbon issues, but also possible new opportunities. We will do our best to make a positive contribution to global warming, and also consider the operational risks that may arise from climate change and make comprehensive preparations for its sustainable operations. AOT is fortunate to continue to manufacture environmentally friendly products such as high-power LED products and automotive LED products for the world. Taking high-power LED bulbs as an example, compared with the annual power consumption of traditional bulbs, our high-power LED products with 2.39 million shipment volume saves about 1.738 million kWh of electricity for the environment in the overall value chain in 2023. In the future, we will continue to be committed to the research and development of high-efficiency energy-saving products and contribute to the carbon reduction benefits of LED products.
Promoting social prosperity
AOT is committed to fulfilling its corporate social responsibilities while pursuing revenue and profits. Ours corporate social responsibility practice principles are implemented simultaneously in six major categories: governance operations, environmental sustainability, supply chain sustainability, employee care, social welfare, and risk management. We are committed to environmental protection and social environmental responsibility, and we also attach great importance to employee care, health and safety, and talent. We adheres to the people-oriented concept, strives to provide employees with a reasonable salary system, implements the requirements of RBA, continuously improves the working environment and treatment of employees, implements the ISO 45001 occupational safety and health management system, and cares for employees through complete education and training and health examinations. We take measures to enable employees to work in a legal, fair, safe and healthy working environment. In addition, based on the concept of “giving back to society”, we established the “AOT Cultural Foundation” in 2019. Through community participation, we express our corporate responsibility of taking from society and giving back to society. We hope to pursue revenue and profit while also actively participate in public welfare activities, fulfill our corporate responsibilities, establish good interactions with the society, and deeply cultivate the goodwill of sustainable operations and giving back to the society. In order to implement the spirit of localization and deep cultivation, we donated and sponsored community nursing homes, disadvantaged groups in the community, charitable groups, education in remote areas of Hsinchu, and the inheritance of traditional skills, totaling more than NT$400,000, benefiting more than 1,000 people In 2023.
Finally, I believe that these efforts will have a positive impact on the company’s future development. Through continuous innovation, cooperation and strategic adjustment, we can coexist and prosper with the environment and achieve sustainable development of the enterprise. We are confident that through the joint efforts of all employees, we will eventually overcome various challenges and achieve our common sustainable development goals.
Corporate Sustainable Development Committee
AOT established Corporate Sustainable Development Committee on August 12, 2024, to incorporate the concept of sustainable development into the operation of the Company’s various mechanisms through the promotion of the ESG functional group. The Sustainable Development Committee is a functional committee directly under the Board of Directors.
The chairman of the Board, Mr. Fang, Jung-Hsi, serves as the convener. The Sustainable Development Committee is currently divided into six functional groups, namely “Governance Operations”, “Environmental Sustainability”, “Supply Chain Sustainability”, “Employee Care”, “Social Welfare” and “Risk Management”. The first-level supervisors of each relevant functional unit are responsible for promoting and responding to various issues to embody corporate social responsibility at four levels which include implementing corporate governance, developing a sustainable environment, safeguarding social welfare and improving information transparency.
The Sustainable Development Committee reports at least once a year to the board of directors on the implementation of sustainable development for the year. The company’s board of directors regularly hears reports from the management team (including ESG reports). The management team must propose company strategies to the board, which must assess the likelihood of success for these strategies, frequently review the progress of the strategies, and urge the management team to make adjustments when necessary.
The Sustainable Development Committee convened twice in 2024 and reported to the Board of Directors on August 12, 2024 and November 7, 2024 respectively, which has been approved by the Board of Directors for future reference.
Organizational
Human Rights Protection Policy
The company’s ” Sustainable development practice principle ” clearly stipulates that the company should abide by international human rights conventions and relevant laws and regulations, and recognize and support the “United Nations Global Covenant”, “United Nations Universal Declaration of Human Rights”, “Basic Principles and Declaration of Rights of the International Labor Organization” and other internationally recognized human rights standards and basic principles, formulate a human rights policy applicable to the company to prevent violations of human rights, and comply with relevant labor laws and regulations where the company is located. In the future, we will regularly assess the degree of human rights risks, and formulate improvement and strengthening measures based on the assessment results, working towards the goal of zero human rights risks in the workplace.
AOT Human Rights Policy
1. Establish a human rights code of conduct:
AOT Norms: Respect human rights, comply with the United Nations Universal Declaration of Human Rights, treat every colleague with integrity and fairness.Be kind and respect individual differences.
2. Put an end to any discrimination and ensure fairness among colleagues.
Comply with local government labor laws and ensure no discrimination based on race, gender, age, physical or mental disability, politics, religion, or pregnancy.
3. Prohibition of child labor
● Prohibit the employment of child labor (referring to anyone under the age of 15, or under the age of compulsory education, or the minimum age for employment in the country/region (whichever is the oldest of the three)).
● Conduct inspections on hired employees, Child labor shall not be used in any manufacturing process.
4. Protect labor rights and interests
All work should be voluntary, and no unwilling person should be forced or coerced to perform labor.
5. Establish a friendly workplace environment
● Provide a caring communication channel for colleagues to handle human rights-related issues.
● Pay attention to the needs of employees, promote health promotion activities and provide diverse activities, encourage colleagues to participate independently.
● Continuously communicate the company’s human rights policy concepts through supplier audits.
Specific Management Plan
The company formulates “Working Rules” in accordance with the relevant provisions of the Labor Standards Act, formulates “Sexual Harassment Prevention Measures, Complaints and Management Standards” in accordance with the relevant provisions of the Gender Equality at Work Act and the Sexual Harassment Prevention Act to safeguard the rights and interests of employees and create a work environment free from harassment.
The company also implements relevant human rights policies in accordance with the Responsible Business Alliance (RBA), and regularly dispatches labor and management representatives in accordance with the law to hold regular labor-management meetings and employee welfare committees on employee rights and welfare matters.
Related policy and implementation
1. Provision of a safe and healthy work environment
The Company has passed the ISO 14001 (environmental management system), ISO 45001 (occupational safety and health management system), and ISO 14064 (greenhouse gas inventory), and actively promotes energy conservation and carbon reduction, disaster prevention, and pollution prevention. We make reasonable guarantee of a safe work environment.
In addition to providing a safe and healthy work environment according to the laws and regulations, the Company has also established a dedicated unit and committee for occupational safety and health, and hired professional doctors and nursing staff to provide safety, health, fire safety and other related education and training. In addition, the Company will sample the operating environment periodically to grasp the actual status of the operating environment and assess the exposure status of laborers, and to take necessary preventive measures to prevent the occurrence of occupational hazards, and thereby reduce dangerous factors in the working environment.
2. Eliminate unlawful discrimination and reasonably ensure equal job opportunities
The Company has implemented its human rights policy in its internal control procedures. On recruitment, appointment, remuneration and benefits, education and training, promotion, performance evaluation, resignation, termination, severance pay, or retirement, the Company does not discriminate against employees and job seekers based on their race, class, or any form of discrimination based on language, ideology, religion, political party, nationality, birthplace, gender, sexual orientation, age, marriage, appearance, facial features, physical and mental disabilities, zodiac sign, blood type, previous trade union membership, and unfair treatment.
3. Prohibition of child labor
In order to ensure compliance with corporate social responsibility and ethical standards, the Company has explicitly stated from the beginning of recruitment that child labor is not allowed in any manufacturing process. As of December 31, 2024, there were 697 employees in total, and the number of child labor was 0.
4. Prohibition of forced labor
All work should be done by one’s will, and the Company will not force or coerce any unwilling person to perform the labor service. The Company has complied with laws and regulations regarding the daily and weekly normal working hours and extended working hours, holidays, special holidays, and leave of absence.
The time and attendance system is designed with a reminder function for employees to work overtime. Employees who work overtime are entitled to overtime pay or time off. Special personnel are assigned to inspect and control the working hours of the factory premises on a monthly basis.
5. Assisting employees in maintaining physical and mental health and maintaining work-life balance
The Company provides venue or financial sponsorship for employees, including free health check-up, stress-relieving massage, encourages employees to form their own club, and organizes a variety of ball game competitions, year-end meals, family day and other activities to enable employees to balance family life to rejuvenate the body and mind.
Human rights protection training practices
1. Orientation for new recruits
Upon arrival, employees are required to attend compliance orientation training for new recruits, including safety and health education, introduction to the Company’s administrative policies, and education on the prevention of sexual harassment.
2. Prevention of workplace violence
Through advocacy and announcements, the company has clearly stated its “zero tolerance” stance on all kinds of illegal violations in the workplace, so that employees understand that they have the responsibility to help ensure the occurrence of illegal violations in the workplace. In addition to disclosing the complaint hotline, we also established standard handling to create a friendly work environment.
3. Occupational safety training
The content includes: Safety and health education and training, fire safety training, emergency response, and first-aid training.
4. Promotion of ethical corporate management
Educate all employees on the importance of ethical corporate management and related norms, in order to establish a healthy and positive workplace culture.
5. The company held human rights awareness training for new employees and current employees in 2024, including:
● For new employees, 93 newcomers received human rights education training, totaling 93 hours of training.
● For current employees, 522 people participated in human rights education training, totaling 522 hours of training.
● In total, 615 people participated in human rights education training throughout the year, with a total of 615 hours of training.
Workplace Diversity and Equality
Reference:
Happiness in the Workplace / Employee Care / Employee welfare measures(Content)
Stakeholder Communication and Engagement
AOT refers to the AA1000 stakeholder engagement standard. Based on stakeholders’ reliance on the company, interaction levels, and importance, eight major stakeholder categories are defined: government agencies, investors, public associations, suppliers, customers, employees, communities, and financial institutions. Each category has a dedicated unit responsible for communication and engagement. Communication with stakeholders occurs through public information observation stations, annual reports, company websites, and other channels. Engagement results are submitted to the Sustainable Development Committee for review and reported to the Board of Directors.In October 2024, a total of 78 valid questionnaires were collected, and the topics of concern for each stakeholder group were analyzed (as shown in the table below) to facilitate relevant communication and engagement. This was reported to the Board of Directors in November 2024.
Primary Stakeholder Categories | The significance of primary stakeholders to the company | Issues of Concern | Communication Channels/Frequency | Communication Practices Statistics |
Government agencies | Supervision and auditing of compliance with various regulations by government agencies. | – Talent development – Human rights protection – Sustainable supply chain – Regulatory compliance – Ethical integrity – Climate change – Energy management – Greenhouse gas management – Green products – Operational performance – Compensation and benefits – Occupational safety – Innovation and research development |
– ESG Stakeholder Questionnaire Survey / irregular – Meetings (seminars, briefings, public hearings, discussion forums) / irregular – Official correspondence / irregular, questionnaire correspondence / irregular, stakeholder questionnaire survey / irregular – Telephone communication and email correspondence / irregular – Company website and MOPS reporting – Contact hotline / email: ir@aot.com.tw 03-5976988 Finance Department, Mr. Zheng |
1. 192 documents exchanged 2. 23 questionnaires exchanged 3. Sustainability Committee convened 2 times 4. Established ESG website 5. 1 stakeholder questionnaire |
Shareholders/Investors | Collaborating with the company to achieve expansion and innovation, driving strategic formulation. Overseeing corporate governance and management performance, promoting the pursuit of long-term sustainable development. | – Innovation and research development – Operational performance – Energy management – Cybersecurity – Ethical integrity |
– ESG Stakeholder Questionnaire Survey / irregular – Shareholders’ Annual Meeting and Annual Report / annually – Institutional Briefing / annually – Official website Investor Relations section / monthly – Public Information Observation Station contact hotline / email: ir@aot.com.tw 03-5976988 Finance Department, Mr. Zheng |
1. 1 Shareholders’ Annual Meeting 2. 1 Investor Briefing (with complete video link on the company website) 3. 8 monthly revenue announcements on the company website and MOPS 4. 2 quarterly financial reports on the company website and MOPS 5. 0 integrity violation incidents 6. 16 stakeholder questionnaires |
Public associations | Promoting adherence to industry standards and best practices, enhancing environmental responsibility, social impact, and governance transparency. | – Talent development – Human rights protection – Regulatory compliance – Customer service – Ethical integrity – Energy management – Social participation – Greenhouse gas management – Cybersecurity – Operational performance – Occupational safety |
– Meetings (seminars, briefings, promotional meetings, discussion forums) / irregular – Official correspondence / irregular – Telephone communication and email correspondence / irregular – Contact hotline / email: ir@aot.com.tw 03-5976988 Finance Department, Mr. Zheng |
1. 74 documents exchanged |
Suppliers/Contractors | Maintaining long-term positive interactions with supply partners; our products and services rely on stable supplies of raw materials and components from various suppliers. Additionally, leveraging the company’s industry influence to work with supply partners to prevent environmental pollution and violations of labor rights. | – Sustainable supply chain (environmental & – human rights) – Green procurement – Energy efficiency and carbon reduction |
– ESG Stakeholder Questionnaire Survey / irregular – Supplier Audit Visits / irregular – Supplier Meeting Visits / irregular – Telephone, E-MAIL / irregular – Contact hotline / email: yuki.chang@aot.com.tw 03-5976988 Purchasing Department, Ms. Chang |
1. 16 signed RBA commitment letters from new suppliers 2. 16 on-site audits of material suppliers 3. 20 stakeholder questionnaires |
Customers | Customers are the main source of revenue for the company. The company views product quality and safety, as well as after-sales service, as its highest commitment to customers. Maintaining high customer satisfaction will help the company continuously earn customer recognition. | – Corporate governance – Regulatory compliance – Operational performance – Innovation and research development – Green products – Product responsibility – Customer relations – Cybersecurity |
– ESG Stakeholder Questionnaire Survey / irregular – Customer Satisfaction Survey / annually – Official website Stakeholder Zone – Customer Visits and Business Meetings / irregular – Contact hotline / email: sales@aot.com.tw 03-5976988 Sales Department, Ms. Li |
1. Top 15 customers satisfaction survey 2. 10 customer on-site audits 3. Immediate communication and response to customer complaints as necessary 4. 24 stakeholder questionnaires |
Employees | Employees are an indispensable foundation for the company’s operations. The company is committed to providing a workplace environment that supports the physical and mental well-being and diverse development of employees, allowing them to work without worries. | – Ethical integrity – Operational performance – Compensation and benefits – Labor relations – Occupational health and safety |
– Labor-Management Meetings / quarterly – Employee Welfare Committee / quarterly – Company Bulletin Board – Computer Startup Screen / Internal Website / irregular – Employee Training Courses / irregular – Employee Complaint Hotline and Email / irregular – Contact hotline / email: betty.lo@aot.com.tw 03-5976988 Human Resources Department, Ms. Lo |
1. 4 labor-management meetings, 63 participants 2. 5 employee welfare committee meetings, 57 participants 3. 2 internal communication issues addressed 4. 5 occupational safety and health training sessions, 626 participants 5. 180 employee health consultations 6. 13 stakeholder questionnaires |
Community | Fulfilling corporate social responsibilities through donations to social welfare, public service activities, and environmental protection, creating social impact. | – Community engagement – Environmental regulatory compliance – Wastewater and waste management – Environmental issue grievance mechanism |
– Participation in Community Activities / irregular – Official Website Stakeholder Section – Charity Activities / irregular – Complaint Channels / irregular – Contact hotline / email: betty.lo@aot.com.tw 03-5976988 Human Resources Department, Ms. Lo |
1. 4 labor-management meetings, 63 participants 2. 5 employee welfare committee meetings, 57 participants 3. 2 internal communication issues addressed 4. 5 occupational safety and health training sessions, totaling 626 participants 5. 180 employee health consultations 6. 13 stakeholder questionnaires |
Financial institutions | Banks serve as a key source of operating funds, in addition to fundraising in the capital markets. Through close communication and interaction with banks, the company can secure stable operating funding and competitive interest rates, ensuring robust operations. | – Economic Performance – Regulatory compliance – Energy management – Social engagement – Climate change adaptation |
– Bank Relations Visits / irregular – Bank Information Provision / irregular – Contact hotline / email: ir@aot.com.tw 03-5976988 Finance Department, Mr. Zheng |
annual communications 10 s. |