Being able to communicate effectively with stakeholders is key to developing a sustainable business. It is important to be able to identify stakeholders who are critically connected to the company's operations among the many others. It is equally important to identify and prioritize issues that have the highest level of relevance to the above mentioned stakeholders. LITE-ON has stakeholders from a wide variety of backgrounds. To present stakeholders sufficiently representative of their categories, we summoned representatives from all departments in 2017, and referred to the AA1000 Stakeholder Engagement Standard (SES) 2015 in open discussions of stakeholder identification. The primary considerations were a stakeholder's dependency on LITE-ON, influence over the company, amount of attention paid to the company, and responsibilities as well as diversity. In the end, a total of nine stakeholder categories were selected by importance. The nine stakeholder categories are employees, customers, suppliers, investors/shareholders, governments and competent authorities, nonprofit organizations, research institutions, communities, and media. LITE-ON is constantly communicating and working with different stakeholders. In 2017, the company engaged key stakeholders in the nine categories through regular and ad hoc communication channels, and achieved various results and created values for the society as a whole. We will continue to address issues important to our stakeholders via various channels as well as p14-15 of CSR report.
The LITE-ON Corporate Social Responsibility Report complies with the Global Reporting Initiative (GRI) Standards. Material issues are analyzed by following the process of identification, prioritization, validation, review in order to validate the scope of disclosure in the report as well as major internal/external sustainability challenges faced by the company. The process serves also as a comprehensive review of business performance.
LITE-ON employees based identification of stakeholders on experience from everyday business activities and previous assignments, and listed sustainability issues that would be of interest to different stakeholders. To ensure the list of material issues is generated with objectivity, integrity, and inclusiveness, the company also looked back on the material issue matrix in the previous report and examined key concerns of leading competitors in the domestic and international markets and their indicators disclosed in GRI reports before it confirmed the final list of issues. A list of 22 sustainability issues was eventually created as the scope of material issue identification in the report.
Prioritization of sustainability issues was based on two factors, "the degree of influence over stakeholders' assessment and decision makes processes" and "the degree of impact of a company on the economy, the environment, and society". The degree of importance of each issue was assessed accordingly to establish the preliminary order of issues. We used external questionnaires again this year to collect opinions from key stakeholders in order to make the data more representative. The company received 1,591 valid replies, including opinions from employees (1,350) and from external stakeholders in the other eight categories (241). Statistical techniques and quantitative analysis were applied to analyze the influence and degree of impact of individual issues and generate the preliminary material issue matrix.
To ensure the results from identification of material issues would comply with the GRI integrity and stakeholder inclusiveness principles, members of the LITE-ON CSR Committee performed a preliminary review of the results from identification of material issues and considered international benchmarking analysis results, sustainability trends, and business development strategy before allocating more weight to the four issues, "product or service life cycles", "corporate governance", "talent recruitment and retention", and "climate change strategies". The adjusted results were reviewed by the CEO, and the material issue matrix was discussed and validated. We classified the 22 sustainability issues above into significant impact, secondary impact, and negligible impact according to their locations on the matrix. The identification results provided the framework for the report and answers to the stakeholders' questions.
The 22 issues were divided into 6 significant impact issues, 13 secondary impact issues, and 3 negligible impact issues. In particular, "significant impact issues" and "secondary impact issues" are covered in the scope of material disclosure in the report; and the negligible impact issues were deemed nonmaterial issues, and would not be disclosed in the report, except where non-material issues would affect the presentation of material issues. Such non-material issues would be described and disclosed in the report as appropriate.
Furthermore, we summarized GRI indicators matching the material issues into 11 LITE-ON specific issues, and provided answers in the CSR report.
The CSR Report is intended as a review of LITE-ON's progress toward the vision of sustainability and a presentation of the company's performance in the area. Meanwhile, the report serves to maintain a two-way open communication channel between LITE-ON and its stakeholders so to enable Lite-On to follow the needs and expectations of its stakeholders and take the initiative to answer issues of interest in terms of CSR targets and routine business activities. When the next report is due for publication, we will review the material issue matrix again, and make plans and engage the stakeholders as needed to determine if any adjustment is required.