Climate Change Risk

BizLink adopted the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and have gradually integrated these recommendations into our business decision-making to identify the risks and opportunities brought upon by climate change as well as to implement various initiatives to adapt to climate change and to minimize GHG emissions. BizLink also discloses to internal and external stakeholders the risks and opportunities brought upon by climate change on our operations：
Task Force on Climate-related Financial Disclosures - 2023

Core Elements	Implementation
Governance	1.Board of Directors' Supervision of Climate-Related Risks and Opportunities (disclosure of the organization's management of climate-related risks and opportunities) (1)Regulations approved by the Board of Directors A.On November 10, 2023, the Board of Directors approved the Group's Greenhouse Gas Inventory Guidelines. B.Corporate Governance and Sustainable Development Committee: The ESG (Environmental, Social, and Governance) Committee is the highest-level organization within the Group and serves as the primary platform for addressing climate change issues. Chaired by the President of the Group, the committee comprises functional sections, which comprise top executives from each department. Its responsibility is to formulate company policies and strategies pertaining to climate change. Furthermore, along with annual management review meetings, the committee also ensures the implementation of risk (and opportunity) plans. (2)Supervision and Governance of Climate-Related Risks and Opportunities The Corporate Governance and Sustainable Development Committee held 3 meetings in 2023, on March 30, May 11, and November 10, respectively, to discuss reports and proposals on climate-related risks and opportunities. (A)Progress report on the implementation annual GHG inventory and verification schedule. (B)Proposal for the report on the implementation of sustainable development in 2023. (C)Annual report on the implementation of risk management. B.Report or Proposal on Climate-Related Risks and Opportunities in Board Meetings (A)Progress report on the implementation of BizLink's annual GHG inventory and verification schedule. (B)Passed the report on the implementation of sustainable development in 2023. (C)Reported the Company's Sustainable Development Roadmap, including response plans and progress, to the Financial Supervisory Commission. (D)Annual report on the implementation of risk management. 2.Management plays a role in assessing and managing climate-related risks and opportunities: (1)4 functional sections. They are responsible for identifying climate-related risks and evaluating and responding to climate impacts within their respective areas of responsibility. The Group's President is the highest-ranking person in management responsible for climate issues, leading first-level supervisors in implementing climate change-related management work and reporting directly to the Board of Directors. (2)The environment section adopts green practices to boost management and risk control; upon identification of risks and opportunities, it also strategizes with company departments to address those key risks and seize opportunities.
Strategy	1.Short-term, medium-term, and long-term climate-related risks and opportunities have been identified. (1)Short-term ▪Transition risks: Autonomous commitment to science-based greenhouse gas reduction targets (SBTs), uncertainty regarding market information. ▪Physical risks: The severity of extreme weather events, such as typhoons and floods, has increased. ▪Market opportunities: Use of low-emission energy and local production to reduce CBAM and logistics costs, R&D and innovation of new products and services. (2)Medium-term ▪Transition risks: The cost of emissions inventory and verification, the cost of transitioning to a low-carbon economy, changes in customer behavior, increased concerns and negative feedback from customers and investors, and product requirements and regulations. ▪Market opportunities: Move towards green energy production and new market artnerships. (3)Long-term ▪Transition risk: Increase in the price of GHG emissions due to total quantity control or carbon tax.br /> ▪Physical risks: Increasing average temperatures and partially flooded high-risk locations require long-term consideration for the appropriate timing of factory relocation. ▪Market opportunity: Utilize more efficient production and distribution processes. 2.Major climate risks BizLink faces mainly come from customers' demands for corporate GHG reduction, whereas opportunities brought on by climate change appear mainly on the product front. Nonetheless, we continue to move towards green energy production, responding to market demands and developing new markets and with energy-saving and waste-reducing products. (1)The Impact of Climate-Related Risks and Opportunities on Business, Strategy, and Financial Planning A.Major Transition Risks (A)BizLink adheres to applicable international standards in order to mitigate the risk of renewable energy costs. (B)We are developing green design layouts to help customers reduce costs and improve efficiency, focusing on achieving high energy conversion rates and utilizing low-carbon products. (C)Our green design is based on the idea of a life cycle, incorporating the 3R principles (Recycle, Reuse, Reduce) into product development, with the goal of creating environmentally friendly products such as non-toxic, lightweight packaging, and low-energy consumption products. B.Major Physical Risks (A)To reduce the impacts of heavy rain, blizzards, and typhoon events, relevant plants have implemented emergency response and disaster prevention plans, invested in drainage facilities, strengthened various pumping and drainage facilities, and carried out various property protection measures. At the same time, emergency response plans have been formulated to reduce operational losses caused by disaster risks. For instance, regular inspections are conducted on roofs, doors, windows, drainage pipes, pumping motors, and the cleaning and unblocking of drainage pipes within the factory to prevent physical risks from climate change. In cases of significant snow accumulation on roofs, inspections are carried out to check for any deformations in the roof beams, particularly at the corners of buildings with height differences. Any abnormalities discovered should be promptly addressed. (B)BizLink's operations are often affected by natural disasters such as high temperatures, droughts, rainstorms, typhoons, or compound environmental disasters, which may directly or indirectly result in equipment failures, damages, abnormalities, or equipment delivery delays, production capacity constraints, and worker unavailability. We follow local practices by insuring fixed assets and inventory against these risks; for example, the total insurance amount for 13 BizLink companies, subsidiaries, and affiliates, is 3,194,729 RMB; this amount includes property all-risk insurance with business interruption coverage. BizLink Taiwan has a total insurance amount of NT$478,836, insuring fire and extended coverage, to mitigate the financial impact on the Company's operations when faced with physical risks caused by climate change. (2)Major Climate-Related Opportunities A.For a long time, we have been cultivating and utilizing core technologies in research and development efforts to meet market demand. Therefore, as the sustainability wave continues to rise, BizLink is well-positioned to capitalize on the opportunities to generate new revenue from extensive green products and local production for the emerging environmental market and products: (A)Develop a customer base for renewable energy in industries such as solar power and electric vehicles. (B)Develop low-carbon and green product solutions to meet evolving customer demands. B.Enhancing Sustainability/ESG Index Rating: The enhancement of BizLink's corporate governance, sustainability-related evaluations, and ESG index ratings, helps to attract domestic and international investors, increasing opportunities for capital acquisition. 3.In terms of strategic resilience, we consider different climate-related scenarios, referring to the 2°C scenario published by the International Energy Agency (IEA). Based on this scenario, and as the basis for the adjustment of our operating strategies, we simulate and analyze the impacts of future climate change, formulate science-based GHG reduction targets (SBTs), and estimate future carbon reduction quantities.
Risk Management	1.During the process of identifying and evaluating climate-related risks (1)In addition to following the "Risk Probability Matrix", "Risk Severity Matrix", "Risk Assessment Criteria", and "Matrix Action Plan Table" based on ISO 9001:2015, the sections also adhere to the "6.1 Actions to address risks and opportunities" and "8.2 Emergency preparedness and response" outlined in ISO 14001:2015. They collect external market, regulatory, technological, and physical climate trend data to identify potential climate risks and opportunities that BizLink may face. After considering the impact level and likelihood of occurrence, significant climate risks and opportunities are identified. These climate risks are then translated into financial figures, and items that could potentially cause major financial impacts each year are regarded as significant risks and opportunities. Based on the local assets (buildings, machinery, equipment, cash-generating units, inventory) and losses from operational disruptions at each site, the risks are prioritized according to their likelihood and severity, and corresponding countermeasures are formulated. (2)For risks with higher assessed levels, further climate scenario analysis is conducted, considering the current operational layout and calculating the potential financial impacts. 2.Management Processes for Climate-Related Risks (1)After identifying major risks, we discuss relevant countermeasures with each business unit of the Company. Subsequently, relevant risk assessments are simultaneously submitted to the Corporate Governance and Sustainable Development Committee and the Audit Committee for review. Regular reports, based on the results of risk management and evaluation, is given by the Corporate Governance and Sustainable Development Committee to the Board of Directors. On November 10, 2023, a proposal on the annual implementation of risk management was reported to the Board of Directors. Integrating Identification, Assessment, and Management Processes for Climate-Related Risks into the Company's Overall Risk Management System. (2)Climate change has been incorporated into major issues and key significant risk items of corporate sustainable development. In particular, risk management plans have been implemented across all sites, and countermeasures have been planned for operations, products, and supply chain management. (3)According to ISO 9001:2015, BizLink follows the "Risk Probability Matrix", "Risk Severity Matrix", "Risk Assessment Criteria", and "Matrix Action Plan Table" based on ISO 9001:2015, while also adhering to the "6.1 Actions to address risks and opportunities" and "8.2 Emergency preparedness and response" outlined in ISO 14001:2015. We collect external market, regulatory, technological, and physical climate trend data, to continuously enhance the integration of climate change risk management in managing environmental issues, as well as in the overall risk management system.
Metrics and Targets	1.Description of indicators used by BizLink to assess climate-related risks and opportunities following its strategy and risk management process for climate change mitigation: Greenhouse gas (GHG) emissions are used as the main quantitative key performance indicator for assessment of climate change mitigation, in addition to indicators such as the renewable energy usage ratio, power consumption per revenue unit, and water consumption per revenue unit. (1)GHG emissions: Scope 1 and Scope 2 inventory was conducted, recording the total GHG emissions in 2023 at 45,595 tCO2e, representing an 7.2% decrease compared to the 49,131 tCO2e emitted in 2022. (2)Renewable energy usage ratio: In 2023, self-generated renewable energy (solar power) accounted for 1.27%, while purchased renewable energy (solar, hydroelectric, wind) accounted for 8.92% and renewable energy certificates for 7.76%, totaling 17.95%. (3)Electricity consumption per revenue unit: The electricity intensity for 2023 is 0.89 tCO2e/hundred million NT$, a decrease of 2.45% compared to 2022. (4)Water consumption per revenue unit: The water intensity for 2023 is 9.95 m3/hundred million NT$, a decrease of 4.94% compared to 2022. 2.Scope 1, Scope 2, and Scope 3 GHG Emissions and Associated Risks (1)Since 2017, we have been implementing the ISO 14064 Scope 1 and Scope 2 GHG inventory, with the goal of obtaining verification statements by 2027. A study on carbon emissions from employee commuting was conducted in 2023, thus, the inventory in 2024 will be expanded to include Scope 3 emissions. The GHG emissions in 2023, measured in t-CO2e, are as follows: A.Scope 1：6105.77 t-CO2e B.Scope 2：33774.97 t-CO2e C.Scope 3： (A)Carbon emissions from employee commute in 2023 : 6,682 t-CO2e (B)Rental car carbon emissions:974 t-CO2e 3.Management of climate-related risks and opportunities, including targets and their implementation In the process of developing low-carbon product services, BizLink is dedicated to enhancing resource efficiency for both ourselves and our customers. Alongside pursuing SBTi targets, we have established targets for waste reduction and water conservation to effectively minimize our environmental footprint. (1)Development of use of climate-related opportunitie A.Carbon Emission Targets ▪ Short-term (1-3 years): Using 2022 as the base year, total GHG emissions will be reduced by 6% per year, for a cumulative 3-year reduction of 18% from 2022. ▪ Medium-term (3-5 years): Using 2022 as the base year, total GHG emissions will be reduced by 6% per year, for a cumulative 5-year reduction of 30% from 2022. ▪ Long-term (5-10 years): Using 2022 as the base year, by 2028 the total GHG emissions will be reduced by 6%, and by 2029-2030, the total GHG emissions will be reduced by 7% each year, accumulating a 50% reduction over 7 years compared to 2022. For 2031-2032, the annual reduction in total GHG emissions will continue to decrease based on actual conditions, ultimately progressing towards Article 4 of Taiwan's Climate Change Response Act, stipulating the national long-term GHG reduction goal of net-zero emissions by 2050. B.Explanation of internal carbon pricing as a planning tool: Currently, BizLink does not utilize this tool, as the products and services we provide are not prioritized for carbon pricing. However, we will strive to enhance the quality of data required for internal carbon pricing, in order to facilitate the response of phased systems. C.Energy management target: When constructing new factories or expanding production areas, BizLink prioritizes the utilization of renewable energy sources such as solar power, hydroelectric power, and wind power. D.Waste management target: The weight of recyclable waste divided by the total weight of waste times 100%, is not less than the previous year. The use of reusable materials is maximized to reduce the proportion of waste incinerated or sent to landfills. E.Water stewardship target: Water consumption intensity has reduced compared to the previous year. (2)Management Targets A.Carbon Emission and Resource Management Targets (A)Using 2022 as the base year, the total GHG emissions in 2023 was 45,595 tCO2e (Scope 1 and 2). (B)Using 2022 as the base year, annual energy savings will be reduced by 6% from 2022 to 2028. (C)Total GHG emissions in 2023 are 45,595 tCO2e, an 7.2% reduction compared to the total emissions of 49,131 tCO2e in 2022, meeting 2023 targets. B.Product Energy Efficiency Improvement Management Targets Adopt environmentally friendly technologies to reduce pollution and continue to improve pollution prevention, with the goal of using raw materials efficiently and lowering costs, reducing resource waste, and avoiding the use of prohibited substances and materials. C.Waste Management Targets Conduct research, launch recycling initiatives to enhance the value of recycled materials, and minimize environmental pollution caused by raw material waste. D.Water Stewardship Targets The 2023 statistics cover 34 global production sites, with a total annual water usage of 508,116 m3. The water consumption intensity was 9.95 m3/million NT$, a 4.94% decrease compared to 2022, indicating the ongoing effectiveness of water conservation measures at each site.

Opportunities from Climate Change 

Climate Change Issues	Types of Financial Impact	Management Measures over Opportunities
Enhance sustainability/ESG indicators and ratings	By enhancing BizLink's corporate governance and sustainability-related assessment and ESG indicator ratings, more investors will be attracted from both at home and abroad, thereby increasing opportunities for funding.	1. Invest in existing manpower research and plan ESG improvement measures to enhance external ratings related to ESG. 2. Enhance information disclosure and reinforce communications with stakeholders to foster more understanding in the Company's financial and business positions as well as CSR actions.
Develop new revenues from new environmental markets and products.	1. Develop customers from the renewable energy industries including solar energy and electric vehicles. 2. Develop low-carbon and green product solutions to address customers' new demand.	1. Train the R&D unit and build their professional skills related to sustainable products. 2. Gradually increase the ratio of relevant products to satisfy customers' demand for low-carbon and green product solutions.