Sustainable Development Team Progress
The "Sustainable Development Team" is chaired by the Chairman of the Board, and in case the Chairman is unable to exercise the duties, it is represented by the General Manager. The execution of the plans of this committee shall follow the principles set forth in Article 2 of the company's "Sustainable Development Practices Guidelines." In addition to establishing or modifying the annual plans of each subgroup, reviewing the results of each subgroup's execution, and amending these guidelines, the main responsibilities are as follows:
- Promoting and strengthening sustainable development policies and systems.
- Implementing and enhancing corporate governance and integrity management systems and related work.
- Promoting and developing policies related to energy conservation, carbon reduction, and climate change issues.
- Promoting and strengthening corporate social responsibility policies and the preparation of sustainability reports.
- Promoting and assisting in the supervision of risk management-related matters.
- Implementing other matters related to sustainable development as resolved by the Board of Directors.
Execution Status in 2025
- The 2024 execution status and 2025 execution plan for each division were submitted to the 5th meeting of the 20th Board of Directors on February 24, 2025.
- The 2024 Sustainability Report completed in 2025 was submitted to the 8th meeting of the 20th Board of Directors on August 8, 2025, and approved by resolution.
- Monitoring and Promotion of Sustainable Development by Board of Directors: The Board of Directors regularly reviews reports from the management team, including the annual corporate governance report, risk management objectives and implementation, the annual intellectual property management plan and execution, progress in solar power plant construction, the implementation of greenhouse gas verification, and the promotion on ESG related issue to understand and provide guidance on the sustainable development progress. For objectives not yet completed, the Board of Directors requires continued progress toward completion according to the schedule.
- Each division continues to conduct quarterly meetings and execute the 2025 goals.
The "Corporate Governance and Ethical Operation Subgroup" is led by the head of corporate governance and is supported by the Finance Department as the executive secretary unit. The members of the subgroup include the heads of various departments such as the Finance Department, Chief Secretary's Office, Accounting Department, Planning Department, Audit Office, Administration Department, Procurement Department, Business Department, Information Department, and Legal Office. The composition of subgroup members may be adjusted as needed by the subgroup head, and their responsibilities are as follows:
- Implement the provisions of the company's "Practical Guidelines for Corporate Governance," "Principles of Business Ethics," and "Procedures for Ethical Management and Guidelines for Conduct."
- Manage and monitor corporate governance evaluation items.
- Assess potential risks and opportunities arising from corporate governance and unethical behavior and implement related response measures.
- Responsible for communication and coordination with other subgroups and the consolidation of relevant information from the Sustainable Development Team meetings.
- Provide and maintain information related to corporate governance and integrity operation in the annual report, website, sustainability report, and corporate governance evaluation indicators.
The execution goals of the 2024 Corporate Governance and Integrity Management Subgroup were reported at the 5th meeting of the 20th Board of Directors on February 24, 2025.
Execution Goals for 2025
- Monitor and assess the Company's governance evaluation performance and review improvements.
- Amend the Articles of Association to limit the number of independent directors on the next Board of Directors shall not be less than one-third of the total directors, and the term of independent directors shall not exceed three consecutive terms.
- Amend the “Corporate Governance Best Practice Principles” to enhance engagement with shareholders and stakeholders, increase corporate value and sustainable development.
- Assist directors in fulfilling the required training hours under the “Guidelines for the Continuing Education of Directors and Supervisors of Listed Companies”, with course content covering corporate governance, corporate social responsibility, risk management, and gender equality.
- Conduct internal and external performance evaluations for the Board of Directors and functional committees (every three years).
- Strengthen integrity management, evaluate the performance of integrity measures, and prevent unethical conduct.
- Continuously monitor the revisions of integrity-related regulations and review the internal policies to ensure compliance with integrity principles.
- Continuously organize integrity management education and training sessions each year.
- Achieve zero major violations of integrity management principles.
- Hold investor briefings to enhance communication with stakeholders.
- Maintain and monitor the disclosure of information on the official website to enhance transparency.
- Ensure zero cybersecurity incidents.
Execution Status for 2025
- The 11th (2024) evaluation score was 86.99, ranking the Company in the second tier for listed companies (top 6%–20%).
- To ensure that the number of independent directors reaches one-third, Articles 19 and 19-1 of the Articles of Association have been amended. These amendments have been submitted to and approved by the Regulations Review Committee. Following review by the Board of Directors, they will be submitted to the Annual Shareholders’ Meeting in June 2026.
- The “Corporate Governance Best Practice Principles” has been published on May 9, 2025.
- All directors (including independent directors) have completed the required continuing education hours, totaling 87 hours.
- The internal and external performance evaluations for the Board of Directors and functional committees (every three years) have been completed and were reported at the Board of Directors on December 29, 2025.
- The 2024 Performance Evaluation Report of Integrity Measures has been submitted to the Audit Committee on February 21 and the Board of Directors on February 24.
- Upon monitoring, the revisions of integrity-related regulations and the amendments to internal policies do not violate the integrity principles.
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Three integrity management education sessions were held in 2025:
- On March 21, invited the professional attorneys from Lee and Li, Attorneys-at-Law, delivered a course on “Civil and Criminal Liability of Corporate Managers Involved in Misconduct, and the Business Judgment Rule under Article 37 of the Commercial Case Adjudication Rules,” attended by 65 people, for 2 hours.
- On August 14, invited the professional attorneys from Lee and Li, Attorneys-at-Law, delivered a course on “Employee Personal Data Protection,” attended by 84 people, for 2 hours.
- On October 22, invited the professional attorneys from Lee and Li, Attorneys-at-Law, delivered a course on “Prevention of Sexual Harassment and Workplace Illegal Acts,” attended by 86 people, for 3 hours.
- No violations of integrity management principles occurred in 2025.
- The 2025 Investor Briefing was held on August 27, 2025, on an invitation-only basis. Relevant information was disclosed on the Company's website under “Investors” > “Investor Conference Information”.
- Assisted various units in making 136 changes to webpage content and planned the official website's update schedule in 2025.
- No cybersecurity incidents occurred throughout the year.
To align with the government's sustainable development plan, the Company has established a Sustainable Development Team, which comprises 4 subgroups. The leader of the “Environmental Sustainability Subgroup” is the Vice President (or Assistant Vice President) of the Production Department, with secretary as Environmental Protection Department and members including the Director of the Environmental Protection Department, the Director of the Public Utilities Department, the Director of the Safety and Health Department, the Director of the Equipment Department, the Director of the Steelmaking Plant, the Director of the Rolling Mill Plant, the Director of the Sales Department, the Director of the Procurement Department, the Director of the Quality Assurance Department, and the Director of the R&D Department. The group leader may adjust the composition of the team based on specific circumstances. The roles and responsibilities of the members are as follows:
- Coordinate with relevant laws, policies, and guidelines related to the environment and climate change to plan and implement policies, goals, and strategies for energy conservation, carbon reduction, and carbon neutrality.
- Assess potential risks and opportunities resulting from climate change and implement response measures.
- Provide and maintain information related to the environment and climate change in the annual report, website, sustainability report, and corporate governance evaluation indicators.
Environmental management system
The Company's “Environmental Sustainability Subgroup” sets goals for environmental sustainability promotion annually, and establishes environmental management system from them, including water-saving policy and power-saving policy. Group meetings are held regularly every quarter to review the progress and execution status.
Execution Goals for 2025
- Submit the “Self-determined Reduction Plan” and ensure the plan is reviewed and approved before the end of December 2025.
- Use 80% or more recycled raw materials (including recycled materials in the factory) for steel rolling.
- The water recovery rate of the whole factory exceeds 80%.
- The power saving rate exceeds 1.5% (including replacement of energy-consuming equipment and participation in Taipower's 6-hour daily electricity reduction program), and the quarterly electricity reduction savings rate.
- The resource recovery rate (recycling and reuse) exceeds 98% (calculated based on final disposal as reuse).
- Stay informed about the latest updates in domestic and international climate change and environmental protection regulations and policies to plan countermeasures in advance.
- Regularly hold Environmental Sustainability Subgroup's meetings to review the execution status of environmental sustainability initiatives.
- Conduct environmental sustainability-related education and training.
- Conduct annual greenhouse gas emissions inventory and verification.
- Continuously promote environmental management systems to evaluate the potential risks, opportunities, and countermeasures caused by climate change.
Execution Status for 2025
- The Company has formally submitted the Self-determined Reduction Plan application to the Ministry of Environment for review, which has convened a preliminary review panel meeting. Based on the review results, the Company has submitted a revised version of the plan and a difference comparison table to the Climate Change Administration, Ministry of Environment. After their confirmation, the plan has been submitted to the review panel and approved.
- The rate of using recycled raw materials (including recycled materials in the factory) in steel rolling has exceeded the goal of 80% from January to December.
- The whole factory's water recovery rate has exceeded the goal of 80% from January to December.
- The goals for the power saving rate 1.5% and the quarterly electricity reduction savings rate have been achieved from January to December.
- The resource recovery rate (recycling and reuse) has exceeded the goal of 98% from January to December.
- Collected the latest updates on regulations and policies each month, participated in relevant briefings, and discussed countermeasures with relevant departments.
- Completed the calculation and compilation of CBAM product carbon content for the previous quarter in January, April, July, and October, and provided the results to the importers who brought the Company’s relevant products into the EU during the respective quarters.
- The Environmental Sustainability Subgroup has held quarterly meetings on January 10, May 27, July 9, and October 28 to review the implementation of environmental sustainability initiatives.
- Conducted “Scope 3 GHG inventory” training sessions on February 25.
- Conducted “ISO 14001” training sessions on December 5.
- On July 16, a management review meeting for the Environmental Management System was held, and at present, all units have successfully achieved the expected results in their operations.
- The Company obtained the 2024 Greenhouse Gas Emission Verification Statement and passed the ISO 14001 Environmental Management System certification.
- Each month, the Company accurately tracks the generation, storage, and disposal of industrial waste, conducts control and analysis, and regularly reports the findings in department meetings.
- Energy Management Plan and 2025 Execution Status:
- Goal: The average power saving rate should reach 1.5% above, in line with “Setting Energy Conservation Objectives and Execution Plans for Energy Users” established by the Ministry of Economic Affairs.
- Plan:
1. Cooperate with Taipower to implement demand response load management measures.
2. Total solar power plants reach 8MWp above before the end of 2029.
3. Build an Energy Management System (EMS), starting from the Steel Rolling Division and expanding to the whole company.
4. Gradually replace energy-consuming old equipment with high-efficiency equipment and variable frequency drives.
5. Shut down all relevant auxiliary equipment during the annual maintenance.
- Progress: In 2025, the Company purchased a total of 102,322,713 kWh from external sources. Our solar power plants generated 3,227,085.5 kWh for self-consumption. Total company electricity consumption reached 105,549,798.5 kWh (including renewable energy). By implementing demand response load management measures with Taipower and replacing energy-consuming equipment, the Company achieved a total electricity reduction of 17,628,140.53 kWh. According to the energy-saving declaration formula by the Energy Administration, Ministry of Economic Affairs, the power saving rate = 14.31%.
- Water Reduction: Future Year Quantitative Management Goals, Promotion Measures and Progress
- Goal: Using the average water consumption of 649,789 m3 between 2020 and 2024 as the baseline, the target is to reduce total water usage by more than 3% and achieve a recovery rate by more than 80% within five years.
- Measure: Replace sand filter media with poor filtration performance, improve water recovery efficiency, and reduce supplementary water and wastewater discharge from each factory.
- 2025 Progress: The total water consumption was 584,869 m3 in 2025, and the total water recovery flow for the entire company was 3,995,697 m3. The recovery rate R2 = recovered water / (recovered water + total water consumption) = 87.23%, which achieved the quantitative management goals by reducing total water consumption by more than 3% and water recovery rate by more than 80%.
Execution Goals for 2026
- Monitor the implementation of various reduction measures under the 2026 Self-determined Reduction Plans to ensure they are completed on schedule and of high quality in order to apply to the carbon fee preferential rates.
- Upgrade the AOD mobile horizontal preheater to a regenerative preheater: Initiate in July 2026 to reduce natural gas consumption by more than 10%.
- Replace the central air conditioning system of the First Administrative Building: Initiate in July 2026, which must save 160,338.8 kWh each year.
- Upgrade the central air conditioning system on the first floor of the rolling mill building: Initiate in July 2026, which must save 188,462.44 kWh each year.
- Redesign the total horsepower of P303B and P304 pumps to 350HP: Initiate in September 2026, which must save 484,800 kWh each year.
- Upgrade the steelmaking cooling tower fan system (SP339): Initiate in September 2026, which must save 156,480 kWh each year.
- Complete 2025 carbon emission inventory and verification (Scope 1 + Scope 2 + Scope 3).
- Ensure the specific goals in Self-determined Reduction Plans are achieved in 2025.
- The use of recycled raw materials (including recycled materials in the factory) in steel rolling exceeds 80%, and the use of low-carbon nickel iron is less than 5%.
- The water recovery rate of the whole factory exceeds 80%.
- The 2026 power saving rate exceeds 1.5% (including replacement of energy-consuming equipment and participation in Taipower's 6-hour daily electricity reduction program).
- The resource recovery rate (recycling and reuse) exceeds 98%.
The Company uses 2005 as the baseline year for greenhouse gas emissions. The reduction targets are as follows: Short-term goal: Achieve a 10% reduction in greenhouse gas emissions by 2025 compared to the baseline year. Medium-term goal: Achieve a reduction of approximately 47% in greenhouse gas emissions by 2030 compared to the baseline year. Long-term goal: Achieve net-zero emissions. Each year, the Company will review the previous year's reduction targets, measures, and progress to ensure continuous improvement.
- Implementation in 2025
- Goal: The Company's total greenhouse gas emissions for 2025 should be reduced by 10% compared to the baseline year (2005).
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Measures: In 2025, the Company will continue implementing voluntary greenhouse gas reduction measures. The proposed initiatives include the following eight improvement projects:
1. Updating the preheater in the Converter Workshop.
2. Upgrading the 350HP pump for Furnace B in the steelmaking expansion area, the AOD cooling duct pump (250HP downgraded to 200HP), and the soft water pump for the AOD suction hood in the steelmaking expansion area (200HP downgraded to 150HP).
3. Updating the cooling tower fan.
4. Upgrading the central air conditioning system on the first floor of the rolling mill building.
5. Replacing the central air conditioning system of the First Administrative Building.
6. Updating the lighting system at the Steel Rolling Division.
7. Updating the lighting system of street lights and bridge cranes in entire factory.
8. Updating the variable frequency drive dust collector B.
- Progress: In progress.
- Implementation Plan in 2026
- Goal: The 2026 greenhouse gas emissions (excluding purchased steam) comply with the emission limits approved by the Self-determined Reduction Plans.
- Progress: In progress.
Greenhouse Gas Reduction: Future Quantitative Management Goals, Strategies, and Plans
The Company submits the Self-determined Reduction Plans, calculates the base year and target year emissions in accordance with the “Voluntary Reduction Plan Management Regulations,” and establishes strategies and action plans to achieve the targets.
- Goal: The total greenhouse gas emissions for 2030 should be reduced by 4.1% compared to the baseline year by the Self-determined Reduction Plan (2018-2022).
- Strategy: Report on the implementation of greenhouse gas reduction measures, regularly review the progress and benefits to ensure the set goals can be achieved.
- Plan: Conduct measures, including establishing stage 1 and 2 solar power plants, updating multiple pumps, cooling tower fan, variable frequency drive dust collector, and lighting system, replacing the central air conditioning system in the First Administrative Building and the rolling mill building, and high-efficiency motor, upgrading the AOD mobile horizontal preheater to a regenerative preheater.
The "Corporate Social Responsibility and Employee Care Subgroup" is led by the Deputy General Manager (or Assistant Deputy General Manager) of the Management Department, with the Planning Department serving as the secretariat. The members of the subgroup come from various primary units and directly subordinate secondary units. Their responsibilities include:
- Implementing relevant provisions related to corporate social responsibility.
- Writing and reviewing the content of sustainability reports.
- Providing and maintaining information related to corporate social responsibility and employee welfare in the annual report, website, sustainability report, and corporate governance evaluation indicators.
- Evaluating potential risks and opportunities resulting from community and labor relations and implementing related response measures.
The execution status of the 2024 Corporate Social Responsibility and Employee Care Subgroup and the 2025 execution goals were reported at the 5th meeting of the 20th Board of Directors on February 24, 2025.
Execution Goals for 2025
- Prepare the 2024 Sustainability Report and enhance the disclosure of information to meet the requirements set by the competent authorities. The Chinese version of the report is mandatory and must be completed and submitted by August 31, 2025, and disclosed on the Company website in accordance with regulations. The English version is voluntary and is expected to be completed and submitted by October 31, 2025, with disclosure on the Company website to meet the requirements of the corporate governance evaluation indicators.
- Submit the completed 2024 Sustainability Report to Board of Directors in August according to “Sustainability Report Preparation and Assurance Procedures”.
- Organize sustainability development-related education and training sessions, in accordance with the “Sustainable Development Practices Guidelines.”
- Continue to implement social engagement programs and employee welfare initiatives, including donations to public welfare and charitable organizations, fostering good neighbor relations, supporting domestic cultural development, and ensuring the protection of employees’ legal rights.
- Preferential Resignation Program: Encouraging employees with poor physical or mental health to voluntarily retire based on the program approved by Board of Directors to increase workplace safety and optimize workforce structure.
- Conduct sexual harassment prevention training to safeguard right to work for all genders and provide employees with a workplace free from sexual harassment.
Execution Status for 2025
- The preparation of the 2024 Sustainability Report was completed on schedule. It was approved by the 8th meeting of the 20th Board of Directors on August 8, 2025. Following the planned timeline, the Chinese version was submitted and disclosed on the Company website by August 20, 2025. The English version was completed and disclosed by October 9, 2025.
- The training for sustainability report preparation and sustainability-related guidelines was held on March 19, 2025. The training primarily targeted managers and key personnel responsible for preparing the sustainability report in each department. The number of participants was 37 and was lasted for 2 hours.
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Public Welfare Activities and Charitable Donations
- In 2025, the Company sponsored 4 public welfare activities and charitable donations, with a total expenditure of NT$270,000.
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Community Engagement
- In 2025, the Company sponsored 29 community engagement activities, with a total expenditure of NT$398,000.
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Support for Domestic Cultural Development
- To support government initiatives promoting cultural awareness, the Company has long been offering free public tours and irregularly hosted cultural events in Zhongdu Tang Eng Brick Kiln Factory (Tunnel Kiln Area), which spans approximately 1,200 Taiwanese ping, including surrounding pathways. Based on the local land rental market rate of NT$400 per ping per month, the Company conservatively estimates that the annual value of providing this cultural space is about NT$5.76 million.
- To promote the effective utilization and sustainable preservation of the overall Zhongdu Tang Eng Brick Kiln Factory, the Company planned to donate the historic structure “Inverted Flame Kiln,” located in the northeast corner of the factory, to the Kaohsiung City Government free of charge. The relevant plan was approved at the 2025 Annual Shareholders' Meeting, demonstrating our commitment to supporting the preservation of domestic cultural assets and promoting cultural development. All donation procedures were completed in December 2025.
- Due to the significant local interest in the Zhongdu Tang Eng Brick Kiln Factory, and continuous promotion in cultural assets preservation, the Company provided the area to the Kaohsiung City Government Cultural Affairs Bureau on December 28, 2025, for hosting the “Zhongdu Night Unforgotten” event. The event included guided tours of the historic site, a picnic market, and an outdoor cinema. These activities enabled visitors to explore the development of the brick kiln industry and appreciate the cultural beauty of the historic site.
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Employee Legal Rights Protection
- In 2025, the Company had no violations of labor laws that resulted in penalties from authorities. Additionally, the Company experienced zero labor disputes each month.
- According to Article 14 of the Securities and Exchange Act, a company whose stock is listed for trading on a stock exchange or over-the-counter securities exchange shall specify in its “Articles of Association” that a certain percentage of its annual earnings shall be allocated for salary adjustments or compensation distributions for its “non-executive employees”. Therefore, the Company amended Article 40 of the “Articles of Association” on June 12, 2025, stipulating that “50% to 60% of the employee remuneration allocated should be allocated to non-executive employees”.
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Preferential Resignation Program
- The 2025 Measures for Handling Employees' Special Preferential Resignation and Retirement Implementation Rules were published on November 21, 2024, with a budget of NT$60 million. A total of 37 employees were approved for preferential resignation in 2025, with an average age of 62. The total pension to approximately NT$58.5 million, achieving a fulfillment rate of 98%.
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Sexual Harassment Prevention Training
- The 2025 “Sexual Harassment Prevention” training was completed on October 22, 2025. Attorney Shu-Han Tang from Lee and Li, Attorneys-at-Law, delivered a course on “Prevention of Sexual Harassment and Workplace Illegal Acts,” attended by 86 people, for 3 hours.
The "Risk Management Subgroup" is led by the Deputy General Manager (or Assistant Deputy General Manager) of the Technical Department, with the Quality Assurance Department serving as the secretariat. Members of the subgroup come from various primary units and directly subordinate secondary units. The subgroup reports to the Board of Directors on its operations annually. The responsibilities of the subgroup include:
- Implementing the policy and operational procedures of risk management and regularly reviewing their applicability and effectiveness.
- Establishing risk management assessment items and conducting reviews of their implementation.
- Providing and maintaining information related to risk management in the annual report, website, sustainability report, and corporate governance evaluation indicators.
The execution status of the 2024 Risk Management Subgroup was reported at the 5th meeting of the 20th Board of Directors on February 24, 2025.
Risk Management Policy
- Establishing a robust mechanism for risk management to ensure operational performance.
- Implementing internal control and auditing to reduce operational risks.
- Cultivating a culture of risk management throughout the organization, promoting risk awareness among all employees.
- Implementing continuous improvement in risk management to support the sustainable development of the company.
Execution Goals for 2025
- Hold at least one Risk Management Group Meeting for each quarter.
- Complete the tracking and review of the execution status for 2024 major risk management items related to company operations in the first quarter of 2025.
- Continuously track and review the execution status of each risk management items based on the 2025 major risk management items and objectives related to company operations.
- Complete the submission and discussion of 2026 major risk management items related to company operations by the end of 2025.
- Continuously conduct risk management training.
Execution Status for 2025
- Risk Management Group Meeting Dates:
- First Quarter Meeting: January 10, 2025
- Second Quarter Meeting: May 21, 2025
- Third Quarter Meeting: August 20, 2025
- Fourth Quarter Meeting: November 18, 2025
- During the first quarter meeting of the Risk Management Subgroup in 2025, the tracking and review of the fourth-quarter and full-year execution status for all risk management objectives of the Company in 2024 were completed.
- For the major risk management items related to company operations for 2025, the execution status of each risk management objective was continuously tracked and reviewed in subsequent meetings. The review of the first-quarter execution was completed in the second quarter meeting; the second-quarter execution review was completed in the third quarter meeting, and the third-quarter execution review was completed in the fourth quarter meeting while the risk management policies and procedures were reviewed, revised, and confirmed.
- During the fourth-quarter meeting of the Risk Management Subgroup, management strategies or response measures, control objectives, and risk limits for the major risk management items related to company operations for 2026 were drafted and will be submitted to the Sustainability Development Team for review.
- The risk management training courses for 2025 were conducted on July 14 and July 23.