Stakeholder Engagement

Simplo scored stakeholders as per the five principles of the AA1000 (Stakeholder Engagement Standards (SES), namely dependency, responsibility, tension, influence, and diverse perspectives), by the global non-profit organization AccountAbility, namely dependency, responsibility, influence, diverse perspectives, and tension. Through the scoring of questionnaires and discussion of results, five categories of material stakeholders to focus on for communication have been identified, namely coustmers, suppliers, employees, shareholders/investment institutions, and government agencies.The company's CSR Sustainability Committee reports to the Board of Directors at least once a year and has reported its implementation status to the Board of Directors on November 13, 2023.

Stakeholder Communication Channels

Stakeholders	Illustrate	Issue of concern	Communication method and frequency	Contact person	Implementation in 2023
Customer	The opinions and feedback of customers are the direction of our continuous improvement and endeavors.	Sustainable management of supply chain Product quality and services Green products, product carbon footprint Green production Response to climate change	Marketing Service Management Kimi Liao Tel.：+866-3-5695920 E-mail: sales@simplo.com.tw	[Regularly] Technology/business meetings (QTR/QBR/MBR) [Irregularly] Email Company website Customer’s audit	Daily emails and customer visits Participated in 45 QBR/QTR/MBR meetings Responded to 36 customer questionnaires (10 online questionnaires) Occasional customer sustainability issue exchange
Supplier	Expects to grow together with supply chain partners, and work together to fulfill corporate social responsibilities.	Responsible procurement Hazardous substance management Conflict mineral management RBA audit of suppliers	Supply Chain Management Mona Wang Tel.：+866-3-5695920 E-mail: suppliers@simplo.com.tw	[Regularly] Supplier Evaluation [Irregularly] Supplier RBA audit Supplier conference Supplier questionnaire	One sustainable supply chain communication conference, attended by 83 suppliers online 29 suppliers received ESG evaluations RBA audited 27 companies The "Supplier Code of Conduct Commitment" signing rate was 100%. Sustainability management objectives communication (10 CPO letters)
Shareholder/ Investment Institutions	Maintains a good interactive relationship with shareholders and investment institutions, and establishes a sound supervision mechanism to protect the rights and interests of shareholders.	Operational performance Dividend policy and distribution Management guidelines Information transparency Investment plans Business Integrity	Investor Relations Management Spokesperson: Wei Chin-Wen, Vice President of Administration Tel.：+866-3-5695920 E-mail: invest@simplo.com.tw	[Regularly] Shareholders’ meeting Annual reports and financial statements Shareholders’ meeting Investor conference [Irregularly] Company website Email	One shareholders' meeting held Two investor conferences held Publication of the Annual Report for the 2023 Shareholders' Meeting 3 questionnaires for investors Invited to share 1 session of the sustainable investment forum
Employee	Committed to taking care of employees, providing market-competitive salaries and benefits, and cultivating outstanding talents, which will help improve the company's operating performance and efficiency.	Occupational Health and Safety Employee benefits Professional skill education and training Labor-capital communication Career development Green life	Whistleblower/Complaint Spokesperson: Wei Chin-Wen, Vice President of Administration Tel.：+866-3-5695920 E-mail: invest@simplo.com.tw	[Regularly] Employee physical examination Labor-capital meeting Internal mailbox Welfare Committee meeting [Irregularly] Internal mailbox Website bulletin board Education training Company website	One annual employee health checkup, four labor-management meetings, and four Welfare Committee meetings. 5 employee activity registration forms and 1 group meal satisfaction survey A total of 24 issues of e-newsletter have been distributed, 45 issues of the ESG news report, and the issue if the Group’s e-newsletter
Government Agencies	Follow the laws and regulations, establish a good reputation for the company, and fulfill the responsibility of corporate sustainability and earth citizenship	Corporate Governance Risk management Occupational Safety and Health Compliance Social care Energy management	Spokesperson: Wei Chin-Wen, Vice President of Administration Tel.：+866-3-5695920 E-mail: invest@simplo.com.tw	[Irregularly] Official document Email Official letters Forum Market Observation Post System	Filing on the MOPS Participate in government briefings

Identify Material Topics

Materiality is identified based on the GRI Standards (2021). Questionnaire surveys are used to understand the stakeholder concern about various sustainability topics of Simplo and to rank the material topics. The selected material topics are assessed by the representatives of the CSR Committee for their impact on “Simplo's operations” and “on the economy, environment, and people (including human rights)”. They are then ranked according to the significance of the impact, as the basis for the information disclosure in the report.

Identify Materiality Process

Step 1: Collect and summarize sustainability issues

The task force of Simplo Technology’s CSR Sustainability Committee refers to the Global Reporting Initiative Standards (GRI Standards), the Responsible Business Alliance’s (RBA) Code of Conduct, the Task Force on Climate-Related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB), the Corporate Governance Indicators of the Taiwan Stock Exchange, and the Company's sustainability goals to aggregate 24 sustainability issues.

Step 2: Investigation of material issues

The questionnaire was used to quantify the significance of impacts. The survey content are as follows:
1. 2022 Material Issues Level of Concern Questionnaire
A survey was conducted to assess the level of concern of 5 key stakeholders on 24 sustainability issues, receiving a total of 158 valid feedbacks.
2. Impact Assessment Questionnaire
Through the impact assessment questionnaire, the CSR Sustainability Committee further evaluated the degree and probability of "actual", "potential", "positive" and "negative" impacts on the external economy, environment, human rights, Simplo Technology's own operations, as well as the individuals or groups that will (or may) be affected if each topic has a positive or negative impact.

Step 3: AIdentification of material topics

After consolidating the survey results, impact assessments were ranked, utilizing the dual materiality principles from the Draft European Sustainability Reporting Standards (ESRS). The X-axis measured the positive impact on company operations, while the Y-axis assessed the positive impact on the economy, environment, and society. A materiality matrix was then plotted to identify 10 material issues, reviewed by the internal sustainability team in alignment with international trends.

Step 4: Material issue target setting and management

Based on the results identification results, material issue management guidelines and objectives are established and reported to the CSR Sustainability Committee and the Board of Directors. The management policies and objectives for future material issues will undergo annual review. The identification process for material issues will assess execution frequency based on circumstances, to evaluate the extent of positive and negative impacts of these issues. This approach allows the management team to allocate resources effectively and provides stakeholders with a review of operational effectiveness.

Material Topics Matrix

Value chain impact description

○Indirect impact ●Direct impact

Material topics	Impact on the value chain	Corresponding to GRI	Impact on the value chain
			upstream	Operation		downstream
			Supplier	Headqualter	Factory	Client
Economic
Compliance	Simplo complies with ESG and product-related laws and regulations to reduce the risk of penalties or impact on reputation.	416-2, 417-2	○	●	●	○
Risk Management	Simplo has established risk management mechanism to minimize the risks that may affect the company's operations.	201-2	○	●	●	○
Business Integrity	Simplo commits integrity management and implements relevant education, training and management mechanisms.	205-1, 205-3, 206-1	○	●	●	○
Supply Chain Management	Simplo establishes a sustainable supply chain management system, and integrates the ESG assessment of suppliers into the procurement decisionmaking process to reduce impacts	204-1, 308-1, 308-2, 414-1, 414-2	●	●	●	○
Corporate Governance	Simplo strengthens the functions of the board of directors, and enhances sustainable governance responsibilities.	201-1, 201-3	○	●	●	○
Enviroment
Climate Change	Simplo identifies climate change risks and opportunities, and implements energy-saving and emission-reduction actions.	305-1~305-5	●	●	●	○
Cleantech Opportunities	Simplo creates opportunities to enter new markets.	302-1~302-4	○	●	●	○
Material Circular Economy	Simplo has introduced a recycling mechanism for raw materials and package to increase the recycling rate of waste.	301-1	●	●	●	○
Green Product	Simplo integrates product life cycle thinking into product design and implements product carbon footprint projects.	416-1	●	●	●	●
Society
Occupational Safety and Health	Simplo strengthens OSH management to reduce occupational accidents, occupational diseases, and industrial safety accidents.	403-1~403-9	●	●	●	○

Material Topics Management Policy and Objectives

Material topic	Actions	Achievements in 2023	2026 objectives
Legal compliance	Regularly collect regulatory trends and review regulatory changes related to operations	Compliance with regulatory requirements, with no occurrence of major violations	Regulatory identification 100% No major violations
Risk management	1. Release "Risk Management Policies and Procedures" 2. Establish a risk management team 3. Execute enterprise risk assessment questionnaire	Report to the Board of Directors to set up a risk working group to regularly review risks and countermeasures	Zero major information security incidents affecting corporate operations
Ethical management	Enhance Code of Conduct and Business Integrity Organize employee education and training	5,806 employees participated in 10,726 hours of anti-corruption education and training and 6,743 participated in RBA education and training	No violations of ethical corporate management or anti-corruption incidents occurred.
Supply chain management	Hold a sustainable supply chain communication conference and invite 83 suppliers and nearly 200 partners to participate.	Conducted the sustainability management questionnaire survey for 29 suppliers Executed supplier RBA audits of 33 suppliers Rated "A-" in the Supplier Engagement Rating (SER) by CDP Send a letter from CPO	25% reduction in GHG emissions from Scope 3 purchased goods and services.
Corporate governance	Participate in corporate governance evaluations Enhance information transparency	The score of the 10th Corporate Governance Evaluation was 6% to 20%	1. Ranked in the top 5% of corporate governance evaluation 2. Increase at least one the ratio of female directors
Climate change	ISO 14064-1 GHG verification SBTi carbon reduction targets CDP climate questionnaire TCFD climate changeRelevant financial structure disclosure RE100 Target	Passed the SBTi target review Joined RE100 CDP climate change assessment received "B" management grade	1. Compared to the base year of 2020, there has been a 51% reduction in Scope 1 and 2 GHG emissions and 25% reduction in Scope 3 GHG emissions from purchased goods and services 2. RE80
CleanTech Opportunities	Build in-plant solar power generation systems Positioned the new business of energy storage	1. Cumulative in-plant solar photovoltaic installation capacity is 10.8 MW 2. New energy storage production line	1. Strengthen the integrity of the supply chain and optimize production configuration to increase the resilience of corporate operations. 2. Continue existing core advantages and extend into the field of green energy, including: LEV, BBU and large data centers, and explore growing markets such as energy storage systems.
Material circular economy	Continue to increase the recycling rate of PCR plastics and packaging materials to reduce resource consumption	1.Plastic uses PCR 90% plastic pellets. 2. PET film is made of 100% PET recycled material.	Continuously increase the recycling rate of PCR plastics and packaging materials to reduce resource consumption.
Green product	1. Design for Product Environment (DfE) 2. IECQ QC 080000 Management System 3. Conduct Conflict Minerals Survey 4. Implement product carbon footprint projects	1. Import Design for Environment. 2. Completed 2 product carbon footprint surveys and passed ISO 14067 third-party verification	In response to standards trends, establish a systematic carbon footprint calculation platform
Occupational health and safety	1. ISO 45001 Continuous Improvement 2. Identification of risks and hazards 3. Enterprise risk management	No major safety accidents	No major safety accidents

Stakeholder Engagement