| ESG Practice

Implementation Item

Implementation status

Summary

I. Does the Company have a governance structure that promotes sustainable development, and have a special unit or designate an existing unit for the task of sustainable development promotion? Does the Board of Directors of the Company authorize the management to handle relevant matters? How does the Board of Directors conduct supervision?

1. The Company complies with the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and relevant regulations. In 2014, we established the "Corporate Social Responsibility Principles," which were later revised in 2022 as the Sustainability Development Best Practice Principles to reflect our ESG policy vision and mission. These Principles were reviewed by the Audit Committee, approved by the Board of Directors, and reported at the Shareholders’ Meeting. Any subsequent amendments follow the same procedure. The content is publicly available on the Company’s official website under the Corporate Sustainability section.
2. To promote sustainable development, the Company has established the Sustainability Promotion Task Force, chaired by the President and coordinated by the CFO and Corporate Governance Officer. In Q4 2024, a cross-functional IFRS Sustainability Disclosure Project Task Force was also established, with Director Pei-Chun Lu appointed as Supervising Director, participating in the operation and supervision of the responsible units. The task force holds quarterly meetings and organizes sub-groups based on specific topics. The main sub-groups are:
   2.1. Environmental Sustainability Group – Responsible for promoting environmental sustainability and sustainable supply chain initiatives, including green procurement and efforts to reduce environmental impacts from transportation.
   2.2. Corporate Governance Group – Focused on promoting ethical business practices and strengthening the functions of the Board. This group also regularly promotes and establishes regulations to ensure employee compliance.
   2.3. Social Responsibility Group – Responsible for promoting employee well-being and community engagement initiatives, fostering a happy workplace, and encouraging employee participation in sustainability and social responsibility activities.
   2.4. Business Continuity Group – In charge of managing risk and information security to ensure ongoing business operations.
   The annual implementation status of these initiatives is disclosed in detail on the Company's official website under the Sustainability section, offering stakeholders transparent insight into our progress on sustainability initiatives.
3. The Board of Directors regularly receives reports from the management team regarding corporate strategies. Management is responsible for proposing strategic plans to the Board, which then evaluates the feasibility and monitors the implementation progress. When necessary, the Board urges adjustments to ensure alignment with the Company's long-term objectives. Once approved by the Board, major strategies may also be reported to the Shareholders’ Meeting. When shareholders propose resolutions related to corporate sustainability, the Board of Directors is encouraged to consider including them in the agenda of the Shareholders’ Meeting.

II. Does the Company conduct risk assessment for environmental, social and corporate governance issues related to the Company’s operations in accordance with the materiality principle, and formulate relevant risk management policies or strategies?

1. The disclosed information covers the Company’s performance at its major operating sites from January to December 2024. The risk assessment boundary focuses on the Company itself, with wholly-owned domestic subsidiaries included in scope based on their relevance to core business operations and impact on material topics.
2. The Company provides communication channels for stakeholders (shareholders, employees, suppliers, customers, etc.) to make inquiries and express opinions. A materiality questionnaire was used to identify key sustainability topics across environmental, social, and governance (ESG) dimensions. In evaluating material topics, we referred to the Global Reporting Initiative (GRI) Standards, the Sustainability Accounting Standards Board (SASB) industry standards for Software & IT Services, and the United Nations Sustainable Development Goals (SDGs). Risk management policies and strategies were formulated accordingly, enabling effective identification, measurement, control, and mitigation of risks through concrete action plans.
3. Based on the evaluated risks, the Company has established the following risk management policies and strategies:

Environment    
Environmental impact and management    

1. As an information service provider, the Company does not operate factories or use manufacturing machinery. Its main environmental impacts—carbon footprint, water footprint, and waste—are primarily generated from office operations. In response, the Company announced its Environmental Policy in 2022 and approved the "Energy Management Guidelines" and "Waste Management Guidelines" in 2024, continuing to promote environmental awareness among employees and suppliers.
2. The Company conducts regular greenhouse gas (GHG) inventories to assess operational impacts. Based on the findings, carbon reduction measures are implemented to mitigate emissions from business vehicle use (Scope 1) and electricity consumption (Scope 2).
3. For more details on climate risk management, refer to the “Climate Risk Governance” section of the latest Sustainability Report.

Society - Occupational safety  

1.  The Company provides group insurance coverage for all employees and offers regular free health check-ups. In December 2024, the Company successfully renewed its ISO 45001 certification.
2. Occupational physicians, nurses, and HSE staff regularly organize health management activities, wellness seminars, and safety inspections to ensure employee safety and strengthen awareness, continuously enhancing internal and external occupational health and safety.
3. Since 2020, in response to the COVID-19 pandemic, the Company has implemented digital health management measures, including temperature tracking, screening reporting, and contact tracing.
4. Fire drills and occupational safety training are held annually to develop employees’ emergency response and self-safety management capabilities.
5. For the latest updates, refer to the “Happy Workplace” section of the Company’s website and Sustainability Report.

Society - Service quality and safety    

1. Through ISO 20000 and ISO 27001 certifications, and the planned implementation of ISO 27701 in the second half of 2024, including training, the Company continuously improves its management and service systems. The Company is registered with the Administration for Digital Industries, Ministry of Digital Affairs, under IT services, information security services, and AI technology services—working with enterprise clients to build a competitive digital environment.
2. Dedicated hotlines and service emails are available to respond to customer product inquiries. An 0800 customer service line and an online repair request system provide attentive after-sales support.

Corporate governance   - Socio economic and legal compliance    
The Company ensures full compliance with relevant laws and regulations through governance structures and internal control mechanisms.

Corporate governance   - Strengthen the functions of directors    

1. Plan relevant training topics for directors and provide directors with the latest laws, regulations, system developments and policies every year.
2. Providing directors with directors’ liability insurance to protect them from possible litigation and claims and to help strengthen corporate governance.

Corporate governance   - Stakeholder communication    

1. The Company identifies key stakeholders and issues of concern to reduce misunderstandings or conflicts that could pose operational or legal risks.
2. Multiple communication channels are maintained to foster engagement and reduce opposition or misunderstanding. An investor mailbox is available, managed and responded to by the Company spokesperson.

III. Environmental issues
(1) Does the Company have an appropriate environmental management system established in accordance with its industrial characteristics?

(2) Is the Company dedicated to enhancing energy efficiency and using recycled materials with low impact on the environment?

(3) Does the Company assess the current and future risks and opportunities which climate change potentially brings to the Company? Does the Company take measures in response to climate-related issues?

(4) Does the Company make statistics of the greenhouse gas emissions, water consumption and total waste weight in the past two years? Does the Company have policies for energy saving and carbon reduction, reduction of greenhouse gas emissions, reduction of water consumption or other waste management policies?

(1)    The Company is located within the Group’s industrial complex. Since 1996, the Group has implemented an ISO 14001 environmental management system to continuously enhance environmental performance. As an information service provider, the Company is not involved in manufacturing and therefore does not generate pollution typical of factory operations. Internally, the Company promotes various energy-saving and carbon-reduction policies, including implementing electronic document and approval systems. In response to environmental impacts, the Company announced its Environmental Policy in 2022 and, in 2024, approved the “Energy Management Guidelines” and “Waste Management Guidelines.” These initiatives aim to raise sustainability awareness among employees and suppliers, leveraging our expertise in information services to contribute to energy efficiency and waste reduction. Since 2023, the Company has presented quarterly reports to the Board of Directors on greenhouse gas (GHG) inventory and verification schedules. Following the ISO 14064-1 verification standard, the Company initiated internal GHG inventory procedures in Q1 2023. To strengthen our capability in tracking emissions, employees were sent to attend ISO 14064-1 internal verification training, cultivating in-house GHG inventory specialists. This supports the implementation of ISO 14064-1-compliant GHG management systems across offices and subsidiaries. In 2024, the Company engaged external consultants and successfully obtained ISO 14064-1 verification, laying a solid foundation for long-term carbon inventory practices. Regular updates on GHG project progress are reported to the Board. Going forward, annual GHG inventories and emission reduction tracking will be conducted, with results disclosed publicly.

(2)    The Company actively promotes energy-saving measures and continually enhances its digital approval systems to reduce paper usage and environmental impact. Electronic document management and HR systems have replaced traditional paper workflows, while resource recycling and waste sorting stations have been installed on each office floor. To improve energy efficiency and recycling, obsolete IT equipment is properly classified and processed. Discarded computers and toner cartridges are recycled. Data-bearing media such as hard drives undergo secure deletion and physical destruction before disposal, in compliance with data protection regulations and environmental recycling principles. In August 2022, a cross-functional Green Procurement Task Force was established to purchase environmentally certified products. The Company received the Environmental Protection Administration’s “Green Office” certification and has actively promoted green procurement. In 2024, local procurement accounted for approximately 89.67% of total expenditure, with green procurement totaling NT$3,062,746. For the products we distribute, energy-efficient devices certified by the original manufacturers have been included in our product listings. This encourages suppliers to invest in energy-saving R&D, contributing to our shared corporate social responsibility goals. Some of these products have also received the Taiwan Energy Label.

(3)    Following a risk assessment, the Company analyzed the financial impact of climate change and developed annual adaptation strategies. Disclosures include the “Climate-Related Risks and Financial Impacts” and “Climate-Related Opportunities and Financial Impacts” tables. Leveraging core competencies, the Company is committed to ESG-driven innovation and has launched carbon-reduction solutions for clients, such as the ESG AIoT Command Center, telemedicine consultation systems, and AIoT smart low-carbon restrooms. To address climate-related business risks, the Company has formulated emergency disaster response protocols and regularly conducts emergency drills and workplace safety inspections to protect employee safety and ensure uninterrupted services. For more information on our climate risk response, please refer to the “Climate Governance” section of our annual Sustainability Report.

(4)    In line with government environmental policies, the Company is dedicated to implementing energy-saving and carbon-reduction strategies. On December 20, 2024, the Company approved the “Energy Management Guidelines” and “Waste Management Guidelines,” reinforcing efforts in energy and waste management and resource recycling. Air conditioning equipment is serviced and cleaned biannually (May and October), and lighting fixtures are being progressively replaced with energy-saving LED panel lights. These upgrades enhance HVAC efficiency and reduce equipment load, achieving maximum energy-saving and carbon-reduction benefits. The Company remains committed to fulfilling its corporate social responsibility and ensuring sustainable operations through GHG inventories, identification of major CO₂ emission sources, and effective reduction measures.

(i)Main Greenhouse Gas Emission Sources (Metric tons CO₂e):

(ii) Water Consumption:
The Company’s water use is limited to domestic usage in office settings, sourced entirely from municipal tap water. Water consumption data is not yet included in the inventory. Recognizing that water is a shared and precious resource, the Company actively manages its usage, promotes water conservation awareness, and adopts water-efficient equipment with conservation labels. Sensor faucets are installed, and regular maintenance of water storage and piping systems is conducted to prevent waste and embed water-saving practices into daily routines.
(iii)  Waste Management:
In 2024, the Company approved the “Waste Management Guidelines,” which govern the disposal of outdated or damaged IT equipment. Reusable components are extracted, and the remaining equipment is sold to certified recyclers to maximize energy conservation and emission reduction. A licensed waste handler designated by the Group’s facility operator, Tatung Co., is contracted for recycling and sorting, minimizing environmental harm. To prevent pollution and data leaks, the Company tracks waste flows through in-transit monitoring and collaborates with recyclers accordingly. These practices are shared in supplier ESG meetings, along with packaging reuse initiatives, to collectively build a more sustainable environment.

Greenhouse gas reduction, water consumption reduction or other waste management policies 
(i) The Company has implemented multiple policies and initiatives to reduce greenhouse gas emissions, including green procurement, green emission reduction, and green resource recycling. Internally, we promote paperless operations and externally, we have digitalized customer services. We are progressively replacing traditional paper documentation with electronic transmission methods. In addition, we promote water conservation by replacing facilities with energy- and water-efficient devices and upgrading lighting, air conditioning, and electrical equipment to energy-saving alternatives. We proactively monitor the Company’s carbon emissions, manage energy usage, and conduct greenhouse gas inventories. In accordance with legal requirements and in coordination with Tatung Company’s timeline to complete third-party greenhouse gas verification ahead of 2025, we completed internal greenhouse gas inventory work and external verification in 2024 following the ISO 14064-1 standard. On December 20, the Company also approved the Energy Management Policy and Waste Management Policy to continuously promote energy management, waste management, and resource recycling. Going forward, we will conduct greenhouse gas inventories and verifications annually, track emission reduction results, and publicly disclose our performance.

(ii) The Company actively formulates carbon reduction strategies and voluntarily discloses greenhouse gas emissions, referencing methodologies and principles from initiatives such as the Science Based Targets initiative (SBTi). In terms of products and services, The Company also supports customers in reducing carbon emissions generated by their own data centers by providing cloud-based solutions and services. To achieve carbon reduction goals, we collaborate with original equipment manufacturers to offer environmentally friendly and high-performance commercial computers and have introduced solutions such as the ESG AIoT Command and Control System to help enterprises navigate sustainable net-zero and carbon reduction transitions.

IV. Social issues
(1) Does the Company have management policies and procedures in accordance with relevant regulations and international human rights conventions?

(2) Does the Company establish and implement reasonable employee benefit measures (including remuneration, leave and other benefits)? Is the operating performance or results properly reflected in the remuneration for employees?
(3) Does the Company provide employee with a safe and healthy work environment, and provide safety and health education to employees regularly?

(4) Does the Company have effective programs for development and training regarding employees’ career skills?

(5) Does the Company conform to the relevant regulations and international standards with respect to customer health and safety, customer privacy, marketing and labeling for products and services? Does your company establish the relevant consumer rights protection policies and complaint procedures?
(6) Does the Company have a supplier management policy that requires suppliers to comply with the regulations concerning environmental protection, occupational safety and health or labor rights? What’s the status of its implementation?

(1) The Company has established and announced a Human Rights Policy, and formulated relevant labor management regulations in compliance with laws and in accordance with international human rights conventions and fundamental labor rights principles to safeguard employees' basic rights. The Company’s hiring policy upholds equal treatment without discrimination and regularly promotes awareness of labor laws. To facilitate labor-management relations and cooperation, a labor-management meeting is held in accordance with legal requirements to promote harmony in the workplace. In addition, the Company has established an Employee Welfare Committee to offer various subsidies and activities for employees.

(2) Employee remuneration
The Company regards talent as a core source of competitiveness and differentiation, and thus as one of its most valuable assets. The Company is committed to offering competitive compensation and benefits to attract, cultivate, develop, and motivate outstanding talent. To attract top candidates, the Company guarantees a year-end bonus equivalent to one month's salary and provides holiday bonuses totaling 0.5 months for the Dragon Boat Festival and Mid-Autumn Festival. Based on individual performance evaluations and contributions, eligible employees are awarded performance bonuses. Regular employees with over two years of tenure may participate in the employee profit-sharing program, encouraging collective efforts toward corporate goals. In 2024, the salaries of full-time non-managerial employees increased by 5.3%. The Company continues to enhance its Job Plan & Review system, implementing one-on-one performance discussions between supervisors and employees and conducting satisfaction assessments.

Employee welfare measures
The Company's Employee Welfare Committee allocates over NT$3 million annually to provide high-quality benefits, including subsidies for employee travel, continuing education courses, birthday gifts, marriage and childbirth allowances, and condolence payments.
In terms of attendance and leave policies, the Company utilizes an app-based check-in/check-out system and offers one hour of flexible work time daily. In addition to regular weekends off, employees with one year of service are granted ten days of annual leave. Employees may also apply for unpaid leave under circumstances such as childcare, major illness, or personal emergencies, ensuring a balance between work and family responsibilities. Since 2023, the “Work-Life Balance Leave Incentive Program” has been implemented to encourage employees to take leave while offering bonuses, enriching their personal time and enhancing organizational resilience.The Company also promotes participation in public welfare activities and provides volunteer leave as an incentive.

Workplace diversity and equality
The Company values the uniqueness of each employee and is committed to creating an inclusive and diverse workplace. We embrace and respect employees from diverse backgrounds and actively foster a more supportive work environment for female employees, including the provision of comfortable lactation rooms. We strive to achieve equal pay and advancement opportunities for all genders. In 2024, women accounted for 30% of the workforce, and female managers made up 20% of all managerial roles.
The Company is committed to protecting employee rights and fostering a healthy work environment, including physical and mental well-being: (1) The employment of individuals with disabilities complies with government regulations. (2) Tailored rehabilitation and return-to-work plans are provided in consultation with occupational physicians for injured employees. (3) Foreign employees are treated equally in recruitment, development, retention, cultural integration, and health and safety. (4) The Company promotes a “Happy Workplace” initiative through a reporting feature in the employee app that allows for environmental improvement suggestions, enabling collective efforts to enhance workplace safety and comfort.

Operating performance is reflected in employee salaries
The Company participates in annual market salary surveys and adjusts employee compensation based on market standards, economic trends, and individual performance to maintain competitive pay levels. In accordance with Article 31 of the Company’s Articles of Incorporation, 5% to 15% of annual profit is allocated to employee remuneration to ensure that business achievements are shared. The Company’s employee benefit measures (including salary, leave, and other perks) are designed to reflect operating results. In addition to distributing employee bonuses based on performance, the Company has implemented an Employee Stock Purchase Plan (ESPP) with subsidies to enable employees to share in corporate success. Volunteer leave is also offered to encourage employee participation in community service and social contribution.

(3) Occupational safety and health policy In 2024, the Company successfully passed the periodic audit for ISO 45001 certification, and continues to enhance workplace safety and health (ISO 45001:2018 certified by SGS Taiwan, valid until 2026/12/16). The Company is the first ICT system integrator in Taiwan to receive ISO 45001 certification, which it has maintained since 2020. We systematically improve workplace conditions and safeguard employee health and safety, including subcontractor and vendor personnel, thereby earning customer trust and improving operational performance.
To protect employees, the Company provides group insurance, conducts regular free health check-ups, and organizes various health promotion programs and occupational safety inspections through collaboration with occupational physicians, nurses, and safety personnel. These efforts aim to raise awareness and reduce potential hazards.
The Company also provides lactation rooms to support working mothers, ensuring a friendly post-maternity work environment. In response to COVID-19, since 2020, the Company has implemented digital health management tools such as temperature tracking and screening notifications. In 2021, the Company was recognized by Common Health Magazine as a CHR Healthy Workplace Citizen and continues to promote initiatives focused on knowledge, activity, nutrition, and mental wellness. It has also received certifications from Taiwan’s Ministry of Education and Ministry of Health and Welfare, fostering a healthy workplace and supportive environment. These health and safety measures are continually optimized through digital reporting via the employee app.

(4) The Company places great importance on employee training, believing that the foundation of corporate differentiation lies in human capital. With over 40 specialized job types across four professional categories, each role has 5–6 identified competencies, allowing for clear identification of employee strengths and development needs to shape talent development strategies. We have established development and retention programs that encourage continuous learning. Personal development plans are discussed alongside performance appraisals to ensure growth in both professional and personal dimensions. In addition to the core competencies of innovation, service, teamwork, and integrity, we have added communication and learning to foster a strong learning organization culture. In 2024, training sessions reached a total of 9,740 participants, accumulating 20,163 training hours.

(5) 1.The Company has obtained certifications for ISO 27001 Information Security Management, ISO 20000 IT Service Management, and is registered under the Ministry of Digital Affairs’ Digital Service Capacity Registry for IT services, cybersecurity services, and AI technology services. In the second half of 2024, the Company began implementing ISO 27701 Privacy Information Management System training, aiming for certification in 2025. These efforts establish a comprehensive digital service framework to help enterprise clients build a competitive IT environment. 
2. The Company maintains dedicated hotlines and consultation email accounts for addressing customer inquiries regarding products. Additionally, a toll-free customer service line and an online repair tracking website are provided to ensure attentive and convenient after-sales service.

(6) The Company includes energy-saving electronic products in its sales portfolio, encouraging suppliers to develop low-carbon products as part of its corporate social responsibility. Priority is given to environmentally certified products, and the Company’s green procurement reached NT$3,062,746 in 2024. Some sold IT products have also obtained Taiwan’s Energy Saving Label. In addition to signing standard contracts, the Company requests suppliers to sign a “Supplier Sustainability Commitment,” covering key issues such as environmental protection, labor rights, occupational safety and health, and information security. In 2024, the Company revised its “Supplier Sustainability Policy” to align with international initiatives on sustainability, environmental protection, and human rights, inviting partners to jointly commit. Supplier site visits are planned to promote mutual learning and growth. In 2024, the Company conducted sustainability outreach to 641 suppliers, introduced 114 new suppliers, all of whom signed the commitment. ESG-related investigations included 30 written surveys and four onsite visits to assess SDG progress and implementation.

V. Does the Company use internationally accepted standards or guidelines as a reference for preparation of reports, compilation of the corporate sustainability report, and other reports disclosing non-financial information of the Company? Are assurance or guarantee opinions from any third-party verifying agent acquired for the aforementioned reports?

In 2024, the Company’s sustainability report was verified by BSI Group Singapore Pte. Ltd., Taiwan Branch, based on the AA1000AS v3 standard with Type 1 and Moderate Assurance level. The report follows international frameworks including the Global Reporting Initiative (GRI) Standards, the industry-specific standards from the Sustainability Accounting Standards Board (SASB) for Software & IT Services, and references the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), aiming to align with global sustainability disclosure practices.

VI. In the event that the Company has established sustainable development best-practice principles in accordance with the “Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies,” please describe the deviations between the implementation and the established principles: none.

VII.    Other information useful for understanding of the implementation of sustainable development:
TSTI was honored with the Platinum Award in the 2024 17th Taiwan Corporate Sustainability Awards (TCSA) under the Sustainability Report Category, recognizing the company’s outstanding efforts in sustainable development. For more key disclosures and insights into our sustainability performance and implementation, please refer to the latest annual TSTI ESG Report, available in the Corporate Sustainability section of our official websit. (Official Website > Corporate Sustainability)

Please refer to the Sustainability Report.