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Corporate Social Responsibility

Social Responsibility Implementation Status

The Company has established “Corporate Social Responsibility Best Practice Principles” to implement corporate social responsibility (CSR). The Principles are divided into “Caring for Employees”, “Caring for Customers”, “Commitment to Shareholders”, “Preserving Public Welfare”, and “Fostering a Sustainable Environment”. The Principles would be reviewed and modified based on actual practice

The Company has established “Corporate Social Responsibility Committee”. Management Division is the dedicated unit in charge of CSR activities and representatives from every department are Committee members. The result described in this table.

Assessment Items Status Non-compliance and Reasons
Yes No Description
1. Implementation of Corporate Governance
(1) Does the Company establish a corporate social responsibility policy and evaluate its implementation? V (1) The Company has established “Corporate Social Responsibility Best Practice Principles” to implement corporate social responsibility (CSR). The Principles are divided into “Caring for Employees”, “Caring for Customers”, “Commitment to Shareholders”, “Preserving Public Welfare”, and “Fostering a Sustainable Environment”. The Principles would be reviewed and modified based on actual practice. None
(2) Does the Company hold training sessions for CSR? V (2) The Company holds CSR training sessions and promotes relevant policies through posters or internal booklets. All employees are required to attend those sessions or participate on-line. Their participation is incorporated in to their performance review.
(3) Does the Company have an exclusively (or concurrently) dedicated CSR unit with senior management being authorized by the Board to handle relevant issues and report to the Board? V (3) The Company has established “Corporate Social Responsibility Committee”. Management Division is the dedicated unit in charge of CSR activities and representatives from every department are Committee members. Each member shall report the operation status to the chairperson of the committee.
(4) Does the Company have a reasonable compensation policy which incorporates employees’ performance review with CSR policy and a specific and effective disciplinary system? V (4) The Company has established “Code of Ethical Conduct” where the ethics and responsibilities for business transactions conducted by Directors, Supervisors, management and all employees are specified along with the reward-disciplinary mechanism. New recruits are informed of annual performance evaluation and reward-disciplinary rules and their connections with ethical conducts. Directors and Supervisors shall attend relevant sessions for their external continuing education.
2. Sustainable Environment Development
(1) Is the Company committed to improving resources utilization and the use of renewable materials? V (1) To enhance the utilization of resources, promote the concept of recycling and reduce the adverse impacts on the environment, the Company takes the following actions:
A. Waste solvent recovery rate:
(a) 137,798Kg was processed in 2016 and generated 82,678Kg. Recycling saves energy, diminishes adverse impacts on the environment and avoids wastage.
(b) Recycling cleaning solutions to reduce waste solvent: The total reduction was 16,535Kg in 2016.
B. The Company adopts the concept of 3R (Reduce, Reuse and Recycle) in recycling. Total volume processed was 111,510 Kg. This mitigates the impact of incineration on the environment.
C. Packaging materials of raw materials are returned to vendors for reuse to avoid waste on resources. 16 types of materials were returned to vendors in 2016: 32,000Kg.
(2) Does the Company establish environmental management system designed to industry characteristics? V (2) The Company obtained ISO 14001 Environmental Management Systems certification in October, 2004; IECQ-QC080000 HSPM certification in January, 2007; and CNS15506 Taiwan Occupational Safety and Health Management System and OHSAS18001 Occupational Health and Safety Management Systems certification in October, 2008. In September, 2014, it expanded ISO14001 Environmental Management Systems and received OHSAS18001 Occupational Health and Safety Management Systems certification (for Kunshan fab). In addition, it received Excellent Prize for Excellence in Labor Safety and Health in 2011 and Golden Award for Co-Prosperity from supplier, Unimicron in 2014. The Company strives to provide a safe work environment to employees.
(3) Does the Company track the impact of climate change on operations, carry out greenhouse gas inventories, and set energy conservation and greenhouse gas reduction strategy? V (3) The Company passed the ISO14064 greenhouse gas audit in November, 2009. Strategies to reduce greenhouse gas and carbon footprints were established based on the Company’s emission level to diminish the negative impact on the environment.
In 2015, the Company purchased 50,000 kWh of green power from the Bureau of Energy, Ministry of Economic Affairs, which reduced CO2e emission by 26,000Kg. Green power refers to electricity which has zero or close to zero CO2 emission during production process.
In 2016, the Company treated waste gas with the new condensation facility to reduce CO2e generated from burning. Also, the solvent recycled can be reused. The target is set to reduce carbon emissions by 1 million Kg each year.
2016 CO2 reduction is summarized as follows:
Item Category Usage Reduction Unit CO2 Reduction Kg/year
1 Solar power 661,672 kWh/year 349,363
2 Chiller replacement 342,618 kWh/year 180,902
3 Cooling towers with variable-frequency drive 303,386 kWh/year 160,188
4 Switch to LED bulbs in offices and factories 114,048 kWh/year 60,217
5 Integrate air-conditioning compressors systems in Factories 1 and 3 54,600 kWh/year 28,829
6 Recycle of NMP solvent 107,301 kg/year 262,350
7 Recycle of MEK waste plastic 91,848 kg/year 204,086
Total 1,245,936

Note: Total reduction in carbon emissions = Total power generated x 0.528

3. Promotion of social welfare
(1) Does the Company comply with relevant labor regulations and respect internationally recognized human right principles, including protection of employees’ rights and interest and adoption of equal employment policy, and set up appropriate means and procedures for management purpose? Please specify the execution status. V (1) The Company has established “Code of Conduct”. The rights and obligations of employees and management are in conformity with labor regulations and internationally recognized human right principles. Equal opportunity is provided to all, regardless of gender, age, group and religion. None
(2) Has the Company established complaint mechanism and channels for employees and appropriately managed relevant issues? V (2) The Company has set up President Mailbox and HR hotline and email at each factory. Auditing Office will soon establish a whistleblowing system to prevent unethical behavior or misconduct.
(3) Does the Company provide a safe and healthy work environment and periodic safety and health training? V (3) Pursuant to “Procedures for Safety, Health and Environment Protection Training” in Taiflex’s occupational safety and health management system, employees are taught of dangerous machinery and equipment and “Regulations for Occupation Safety and Health Education and Training”. With regards to employees’ health, relevant caring facilities and management are in place. Measures taken include semi-annual environment monitoring, above-standard health check-up, and annual special health examination. Outcome of these examinations are analyzed to provide improvement schemes, guidance is given to employees with unfavorable outcomes and health-related seminars are available to employees.
(4) Has the Company established a mechanism for regular communication with employees and use reasonable measures to notify employees of operational changes which may cause significant impact to employees? V (4) The Company periodically holds management-labor meetings to facilitate the communication between both parties. The meeting minutes would be announced to all employees. In addition, there are on-line discussion forums for employees to voice their thoughts and ask work or system-related questions, which would be answered by dedicated personnel. Surveys on employee satisfaction are conducted annually to improve the less favorable aspects in management and services.
(5) Has the Company established effective career development training plans? V (5) The Company has introduced performance and career interview system in March 2015 to personalize employee career development training.
(6) Has the Company set policies and consumer appeal procedures in its R&D, purchasing, production, operations, and service processes? V (6) The Company places a great deal of importance on consumer rights and interests and the satisfactory level of each service rendered. Thus, a stakeholder section is created in the official website to receive instant feedbacks and take actions accordingly.
(7) Does the Company follow regulations and international standards in the marketing and labeling of products and services? V (7) Taiflex actively obtains various international safety certifications due to market globalization to ensure the quality, safety and reliability of its products.
Underwriter Laboratories Inc. (UL)
UL is an U.S. non-profit organization which aims to ascertain the safety level of products by inspecting and classifying samples from raw materials, components, system, structure, process and conditions of usage and conducting follow-up tests. The ultimate goal is to ensure the safety of users’ life and property. Certification logos are issued for identification purpose.
Japan Electrical Safety & Environment Technology Laboratories (JET)
JET is a laboratory designated by Japanese government to inspect factories manufacturing electrical products and test the outputs. It issues certification logos to electrical products which meet the safety standards stipulated by Japanese government. According to Japanese DENTORL, safety certifications are required for 498 types of products before entering the Japan market.
TUV Rheinland (TUV): German safety certification institution. It provides certification services for product safety, quality and management system.
(8) Does the Company evaluate environmental and social track records before engaging with potential suppliers? V (8) The Company would conduct a social and environmental responsibility audit on key suppliers and contractors with environmental and social risks to ensure their compliance with Electronic Industry Code of Conduct or local regulations.
Besides fulfilling the CSR, the Company would like our suppliers to join us in improving the sustainable management capability and enhancing the eco-performance of the value chain.
(9) Do the Company’s contracts with major suppliers include termination clauses if they violate CSR policy and cause significant environmental and social impact? V (9) The Company is entitled to terminate the contract if the counterparty has a serious breach of CSR policy.
4. Enhancement on information disclosure
(1) Does the Company disclose relevant and reliable CSR information on official website or MOPS? V (1) The Company’s official website, www.taiflex.com.tw, has CSR section where relevant and reliable information, including quality policy, environmental policy and charity activities, is disclosed. None
5. If the Company has established its CSR principles according to “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies”, please describe the operational status and difference:
The Company has established “Guidelines on Corporate Social Responsibility” providing guidance on topics of environmental protection, community participation, contribution to society, service to society, social and public interests, consumer rights and interests, human rights and safety and health, etc. Information can be downloaded from the website. Please refer to Corporate Social Responsibility under Corporate Governance (page 40 to 47) or CSR report for details.
6. Other important information to facilitate better understanding of the Company’s CSR practices (e.g., systems and measures that the company has adopted with respect to environmental protection, community participation, contribution to society, service to society, social and public interests, consumer rights and interests, human rights, safety and health, other corporate social responsibilities and activities, and the status of implementation.):
(1) System and measures taken for environmental protection and safety and health and the implementation status:
Taiflex applies ISO14001: Plan-Do-Check-Act (PDCA) cycle to improve its environmental protection management policies. Resource is recycled based on the concept of 3R (Reduce, Reuse and Recycle). Total volume processed was 111,510Kg. Packaging materials are reused to reduce waste and cost. The Company aims at zero waste for recycled resources. Other than compliance with national environmental protection policies and regulations, the Company also spend an enormous amount on improvement of environmental protection and green research. Optimal prevention equipment is applied to achieve process efficiency of 98% and above. Moreover, annual risk assessment management strategy and quarterly regulation identification are performed pursuant to Taiwan Occupational Safety and Health. Management System CNS15506 in order to comply with changes in regulatory requirement and reduce hazardous risks. The goal is to control risks, eliminate potential disaster, continuously improve work environment and increase the comfort and safety level of work environment to fulfill the Company’s corporate social responsibilities.
(2) Community participation, contribution to society, service to society, social and public interests:

Taiflex establishes charity clubs, i.e. Taiflex Youth Care Association and Taiflex Volunteers, to organize fund-raising events. In addition, they provide voluntary services to the community and disadvantaged teenagers.

The Company periodically donates books to children and has been sponsoring outstanding student clubs at remote areas, such as Chinese Orchestra at MeiLun Junior High School, for a long period of time. Children would have sufficient resources to develop their potentials and courage to realize their dreams. In addition, the Company arranges for children’s homes or students at remote areas to visit the Company or other educational institutions for them to enjoy different perspectives and experience. The Company also participates in blood donation and charity events held by schools or welfare organizations in Kaohsiung as ways to enhance its community participation and contributions.

Social activities participated are summarized as follows:

Feb. 2016 Provided internship to 15 students from National Kaohsiung First University of Science and Technology, National Kaohsiung University of Applied Sciences, Shih Chien University, Shu-Te University, Wenzao Ursuline University of Languages, etc.
May. 2016 Hosted study tours with Kaohsiung City Council and Puren Youth Care Foundation and took 25 children to visit Kaohsiung City Council, Pier-2 Art Center, Vigor Kobo, etc. Also, employees provided homestay services for disadvantaged groups to experience different family life.
Jul. 2016 Organized Taiflex Youth Care Concert hosted by the Kaohsiung City Council.
Jul. 2016 Hosted Taiflex summer camp and took disadvantaged groups from remote areas to visit scenic areas in Kaohsiung.
Sep. 2016 Collaborated with Ta Hwa University of Science and Technology and Kao Yuan University and provided dozens of jobs for students to work in the Company.
Nov. 2016 Assisted the Social Affairs Bureau of Kaohsiung City Government in organizing materials for the Love Bank.
Dec. 2016 Sponsored the charity sale for the 50th anniversary of Kaohsiung Export Process Zone. All proceeds were donated to Kaohsiung United Charity Association and Good Shepherd Social Welfare Foundation.
(3) Consumer rights and interests:
The Company performs its contractual obligations to protect the rights of the Company and consumers.
(4) Human rights:
The Company provides equal opportunities for employment to all individuals, regardless of gender, religion and political affiliation. It also establishes a safe environment to protect employees from discrimination and harassment.
(5) Safety and Health:
In compliance with the Labor Safety and Health Act, the Regulations for Occupational Safety and Health and Self-inspection Regulations, the Company drafts, plans, promotes and implements various safety and health measures by organization and duties of different units.
7. Other information regarding CSR report which is verified by certification bodies: None.