Climate Change Mitigation and Adaptation Measures

Enforce Scope 1 and 2 GHG Emissions Reduction

• Enhanced renewable energy utilization 

LITEON is committed to increasing the utilization rate of renewable energy and reducing its carbon emissions. It achieves this by increasing the amount of renewable energy it uses and the proportion of renewable energy in its electricity structure year by year. LITEON accomplishes this by reducing energy use, installing rooftop solar power systems, and procuring electricity attribute certificate. LITEON is dedicated to achieving low-carbon production and is actively seeking out renewable energy companies to sign power purchase agreements (PPAs). In 2024, LITEON used and purchased 105,000 MWh of renewable energy with the tools of bundled and unbundled energy attribute certificate, which are accounted for 33.9% of its total electricity consumption, and met its renewable energy target of 33.3%

• Energy Management

LITEON continues to improve the efficiency of energy use, improves equipment and adopts different energy-conservation methods in energy use; it increases production output while saving energy, improving production efficiency. In 2023, a total of 10 production sites will continue to operate under the ISO 50001 energy management system. The company expects to cooperate with energy-conservation plans to reduce electricity consumption for production and improve production efficiency. It established a demonstration site for the implementation of the process pilot plan, introduced power analysis tools, digitized the power consumption of intangible processes, generated a power model of the utility and process system, and the power consumption analysis diagrams of production processes, finding out the optimal control scheme for power consumption, and improving efficiency of energy use.

In 2024, a total of 20 energy-conservation plans were implemented, with a total energy savings equivalence to 3,765 tonCO₂e. Among them, the primary contributors to energy savings were energy controlling systems, production energy conservation, and electricity systems.

• Enforcing GHG Emissions Reduction

LITEON not only improved energy efficiency but also made many improvements in Scope 1 reduction to continuously adapt and reduce GHG emissions. The highest proportion of LITEON's Scope 1 GHG emissions is the basic emissions of employees (i.e., septic tanks), followed by refrigerant, gasoline, diesel, and fire equipment. We have been switching to electric equipment for years to reduce Scope 1 GHG emissions including replacing diesel forklifts with electric forklifts and natural gas or gas heating system of dormitories was replaced by a solar power heating system. LITEON developed production optimization and plant operation improvement and continues to reduce energy by implementing many energy-saving measures. The measures included updating air-conditioning electricity management, introducing inverters, managing processed equipment technology and introducing management system and other energy-saving plans to enforce energy saving and operational equipment efficiency improvement. For 2025, LITEON has outlined 33 energy-saving measures and plans to reduce electricity consumption by around 17,650 MWh.

• Strengthened internal carbon pricing strategy

LITEON has strengthened its environmental governance by establishing an Environmental Sustainability Subcommittee, chaired by the Head of Manufacturing. This subcommittee is responsible for promoting green operations, enhancing environmental management performance, and mitigating environmental risks across all business units.

To align with global carbon regulations—including the EU’s Carbon Border Adjustment Mechanism (CBAM), the US Clean Competition Act (CCA), and Taiwan’s carbon fee system—LITEON has implemented a robust internal carbon pricing strategy. Since 2023, business units have been subject to internal carbon fees if they exceed their annual carbon emission quotas, with the carbon price set at USD 1 per ton of CO₂e. This mechanism incentivizes investment in carbon reduction technologies and renewable energy.

In 2025, LITEON further advanced its approach by launching a product carbon management platform that calculates the carbon content of raw materials and manufacturing processes (including Scope 2 electricity consumption) based on CBAM rules. Under this system, an internal carbon price of €100 per ton of CO₂e is applied to the carbon emissions associated with the raw material and manufacturing phases of product carbon footprints. Business units are charged internal carbon fees on 5% of the actual carbon content of shipped products.

This pricing mechanism drives accountability and innovation:

• Business units are incentivized to reduce product carbon footprints through green design and material optimization to avoid internal carbon fees.

• Supply chain partners are encouraged to reduce Scope 1 and Scope 2 emissions to lower embedded emissions in purchased materials (Scope 3).

• R&D teams focus on developing low-carbon products to enhance competitiveness and reduce carbon-related costs.

LITEON plans to gradually increase the internal carbon fee in the future, using the proceeds to fund carbon reduction technologies and renewable energy initiatives. This strategy supports LITEON’s Net Zero commitment by 2050, while positioning the company as a leader in climate-aligned product innovation and governance.

Scope 3 GHG Reduction Measures

• Develop Low-carbon Products

The LITEON CSR Code of Conduct follows the principles of life cycle thinking and incorporates the 3Rs rule. As part of its commitment to sustainability, the company strives to design and develop environmentally friendly products that are non-toxic, easy-to-assemble/ disassemble, and contribute to reducing carbon footprint. In 2023, LITEON has set a target to reduce the carbon footprint of its next generation of products by more than 5%. The company achieves this through optimized circuit design that improves energy conversion efficiency of power products such as servers and 3C products, leading to a reduction in energy and material consumption, as well as carbon emissions. The adoption of energy-saving technology and improvements in energy and light extraction efficiency also reduce energy consumption in LED and energy-saving street light products. By incorporating low-carbon recycled materials, improving packaging technology, and extending product life, overall carbon emissions in the product use stage were reduced by 403,897 ton CO₂e. The cumulative carbon reduction due to green product design reached 416,973 ton CO₂e. Please see Green Product Management for more information.

• Collaborate with the Supply Chain to Achieve Scope 3 GHG Reduction

LITEON investigated climate-related risks and opportunities under the guidance of TCFD and identified that the supply chain was an important partner in the GHG reduction journey. LITEON assisted our supply chain in establishing carbon inventory and reduction mechanisms based on the existing sustainable supply chain management by using self-experience. We provided guidance to suppliers to build carbon management abilities and improve their understanding of sustainability trends and management required through long-term supplier engagement and projects. For carbon reduction in its supply chain, LITEON has implemented several strategies: the "LITEON Sustainable Supply Chain Green Transformation Project," supplier collaboration on carbon inventory and reduction, and internal carbon pricing to promote greenhouse gas reduction at the raw material stage. This internal pricing incentivizes carbon reduction practices such as material optimization and product redesign.

Adaptation to Physical Climate Risks

Extreme weather events, such as flooding and typhoons, can interrupt production processes. To mitigate these risks, it is essential to routinely maintain and inspect drainage systems to protect production equipment and operations during severe weather conditions. We will enhance the management of drainage systems in the factory area. Furthermore, our risk assessment and adaptation strategy for physical climate risks will extend to all new operations. This includes a comprehensive assessment of possible climate impacts, the creation of resilience strategies, engaging with stakeholders, conducting regular monitoring, and ensuring alignment with our overall business strategy.