Sustainability Issues Discussion and Survey

Climate Issues

Climate-related issue management

Climate change response and climate governance

Starting from 2024, Jinpao has established an ESG Promotion Office to integrate and address climate-related issues, conducting investigations into climate-related risks and opportunities. Mid-to-senior level managers from various functional teams under its jurisdiction (Corporate Governance Team, Social Care Team, and Environmental Sustainability Development Team) will evaluate the potential financial impacts of these risks and opportunities. The evaluation results classify these risk and opportunity factors into four levels based on their degree of impact, identifying significant risks and opportunities for management. The Sustainable Development Committee will report the related implementation outcomes to the Board of Directors annually.

Note:：The timeline of impact is defined as: short-term 1-3 years, mid-term 3-5 years, and long-term 10 years or more.

氣候相關機會及對營運、財務之影響

Note:：The timeline of impact is defined as: short-term 1-3 years, mid-term 3-5 years, and long-term 10 years or more.

Climate Risk Management System

Jinpao designates the Board of Directors as the highest supervisory body for climate-related issues, responsible for overseeing and reviewing climate-related policies. The Sustainable Development Committee serves as the highest management body for climate-related risk management, with the ESG Promotion Office regularly advancing sustainability-related initiatives. Additionally, the Environmental Sustainability Development Team is responsible for providing guidance and training, conducting self-initiated carbon inventory scheduling, and committing to annual emission reduction targets and plans. The ESG Promotion Office is tasked with assessing environmental issue-related risks, regularly reviewing and analyzing the requirements of environmental regulations and the geopolitical impacts in Jinpao’s key operating countries, Thailand and France.

The company's climate risk management process is outlined in the table below. At the end of each year, the ESG Promotion Office identifies climate-related risks and opportunities. After the Sustainable Development Committee confirms critical opportunities and risks, the Environmental Sustainability Development Team formulates corresponding strategic plans and action plans. These plans are then reviewed by the Sustainable Development Committee and submitted to the Board of Directors for approval of the climate-related risk assessment results and action strategies. The Environmental Sustainability Development Team reports its progress to the ESG Promotion Office quarterly, while the ESG Promotion Office reports the project progress and execution results to the Sustainable Development Committee biannually. The Sustainable Development Committee then reports the execution outcomes of the previous year to the Board of Directors during the first quarter of each year.

Climate-Related Risk Management Mechanism

Transition Plan for Climate Risks

At the 27th United Nations Climate Change Conference (COP27) held in Egypt in 2022, the Thai government officially announced an accelerated goal toward carbon neutrality, moving the original target of achieving carbon neutrality by 2065 forward to 2050. It also reaffirmed its commitment to achieving net-zero greenhouse gas emissions by 2065. In terms of specific strategies, the Thai government set clear objectives for energy transition, planning for renewable energy to account for 50% of new power generation capacity by 2050. Additionally, Thailand is advancing legislative processes to draft its first climate change law and gradually introducing carbon pricing tools, including a carbon tax system and an Emissions Trading System (ETS), to strengthen incentives for carbon reduction and corporate responsibility.

Given that the company’s primary production base is located in Thailand, and to align with the Thai government’s new strategic direction toward a low-carbon society, the company initiated organizational carbon inventory operations in 2022. This effort aims to synchronize with national policies while implementing systematic carbon reduction planning and action deployment.

To address climate-related transition risks and achieve net-zero emissions, Jinpao has formulated a clear carbon reduction plan and set the following management indicators and phased targets:

By 2030: Reduce carbon emission intensity by 15%

By 2040: Reduce carbon emission intensity by 30%

By 2050: Reduce carbon emission intensity by 50%

By 2065: Achieve net-zero emissions (Net Zero)

To achieve the 2030 target, the company has formulated corresponding action plans, which primarily include the following measures:

1. Energy Transition Strategy:

Fuel to Electricity: Gradually phase out fuel-powered equipment and fully transition to electric-powered systems.

Electricity to Green Energy: Increase the proportion of green energy in the company's electricity usage.

2. Solar Project Development:

Plan to launch the third phase of rooftop solar panel installations in 2027 at the new factory sites (CNC building and Grinding facility), with an estimated annual power generation capacity of 1.5 million kilowatt-hours (Mega kWh).

3. Green Power Procurement:

Completed registration for the Thai government's green power project (UGT) and will subsequently procure approximately 3 million kilowatt-hours (Mega kWh) of environmentally friendly green electricity by 2030 as a supplement.

Through the above action plans, the company expects to effectively achieve the 2030 target of reducing carbon emission intensity by 15%, laying a solid foundation for long-term carbon reduction strategies.

Greenhouse Gas Emissions

Jinpao (Thailand) has been inspected according to the ISO 14064-1: 2018 standard, covering scope 1 (direct emissions), scope 2 (indirect energy emissions) and scope 3 (other related emissions) sources, and has obtained a verification statement through the local SGS in Thailand for industrial verification in accordance with ISO14064-3. The relevant greenhouse gas emissions are as follows:

Note：

1. Statistical of scope 1: Diesel, refrigerants, forklifts, motorcycles, four-wheel trucks, six-wheel trucks, generators, lawn mowers, production gas usage, air conditioning units, chiller units, fire extinguishers, septic tanks, hot and cold water dispensers; included gases are carbon dioxide, methane, nitrous oxide, nitrogen trifluoride, sulfur hexafluoride, hydrofluorocarbons, perfluorocarbons.

2. Statistical of scope 2: Mainly electricity consumption from local power companies, included gases are carbon dioxide, methane, nitrous oxide.

3. Statistical scope based on organizational boundaries, data covers the production site of Jinpao (Thailand).n

4. No emissions of biogenic carbon dioxide generated.

5. As Jinpao’s current inventory boundary has not yet fully incorporated consolidated entities, the baseline year will be set during the statutory disclosure reduction target year. Statutorily for the company, the baseline year is no later than 2026.

6. Conducted under ISO 14064-1: 2018 and utilizing the latest announced global warming potential values by the IPCC, adopting GWP values from the IPCC's Sixth Assessment Report published in 2021.

7. Emission factors for Category 1 and Category 2 derived respectively from the SimaPro database and the Thailand Greenhouse Gas Management Organization (TGO) coefficient database.

8. This data is uniformly expressed to two decimal places.

9. Greenhouse gas emissions = Activity data x Global Warming Potential (GWP) x Emission factors.

Note：

3. Based on the statistical scope of organizational boundaries, the data covers the Jinpao (Thailand) production plant.

1. Statistical of scope 3: The company refers to the ISO14064-1: 2018 standard to set the materiality criteria for indirect emissions. Based on the company’s current control, stakeholder attention and current regulatory requirements, it conducts identification and assessment and then conducts an inventory of the three categories.

2. The gas types included in scope 3 include carbon dioxide, methane, nitrous oxide, nitrogen trifluoride, sulfur hexafluoride, hydrofluorocarbons, and perfluorocarbons; no carbon dioxide emissions from biological sources are produced.

4. Since the current inventory boundary of Jinpao has not been fully included in the consolidated entities, the base year will be set after the legal disclosure reduction target year. For the company, the legal system is no later than 2026 as the base year.

5. After the ISO 14064-1: 2018 inventory and using the latest global warming potential value published by IPCC, the sixth assessment report published by IPCC in 2021 was used to select the GWP value applicable to each greenhouse gas.

6. The sources of emission coefficients for Category 3 are the SimaPro database and the Thailand Greenhouse Gas Management Organization TGO coefficient database.

7. This data is expressed in the second decimal place.

8. Greenhouse gas emissions = activity data X global warming potential (GWP) X emission coefficient. 