SSE ：601231
20
21
ESG Report
Cover Story
Transforming the Future, Leading towards Sustainability
USI's vision is to become the most reliable Electronic Design and Manufacturing company in the world
As part of our social responsibility and obligations, we are committed to sustainable environmental,
social, and governance development
The dots form a rotating spiral that symbolizes the continuous transformation of dreams into reality
Our dedication and attention to detail enable us to keep transforming and achieve sustainable development
The blue and green color scheme represents our Low Carbon and Circular Sustainability Strategy and
accentuates our respect for nature and resources
We will continue our journey with a steadfast pace and realize a sustainable future
TABLE OF 11 Operations and 46 Value Chain Management 111 Social Involvement
Governance
CONTENTS 48 Product Value Chain 113 Social Activities Overview
13 Company Profile
49 Customer Service and Satisfaction 115 Investing in Education
15 Financial Performance and Tax
Governance 51 Customer Privacy and Product Safety 117 Contributing to Society
16 Board Governance 53 Supply Chain Management 119 Conserving the Environment
18 Business Ethics and Compliance 60 Conflict Minerals Compliance 121 Promoting Arts and Culture
4 About this Report
19 Enterprise Risk Management 122 External Participation
5 Letter from the Chairman 23 Cybersecurity Management
6 Letter from the President 24 Sustainability 62 Environmental Protection 123 Appendix
Management and Occupational Safety
7 USI Contributions to 123 Management Systems
25 Sustainability Committee 64 Climate Change and Carbon Management Certification Table
the SDGs
26 Sustainability Policy 71 Water Resource Management 124 ESG Key Performance Data
9 Awards and Recognition 26 Sustainability Strategy 72 Waste Management 132 Sustainability Data - Environmental
31 Sustainable Impact Assessment 74 Air Pollution Control 136 Sustainability Data - Social
32 Stakeholder Engagement 75 Green Manufacturing and Expenditures 142 Sustainability Data - Governance
77 Occupational Health and Safety 143 Third-Party Assurance Statement
145 GRI & CASS-CSR 4.0 Index
38 Green Products 87 Inclusive Workplace 158 SASB Index
and Innovation 158 USI Specific Disclosures and
89 Human Rights Protection Additional Indicators
40 Research Patents and 94 Talent Attraction and Retention 161 Manufacturing Sites
Continuous Improvement
106 Human Capital Development 162 Sales Offices
43 Green Product Management
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About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
About this Report
Universal Scientific Industrial (Shanghai) Co., Ltd. (USI, Company, We) issues an annual ESG Report to publicly disclose our measures, achievements, and targets for all ESG key issues. This report
is the tenth ESG Report published by USI and its subsidiaries. (From 2010 to 2012, USI's indirect controlling shareholder Universal Scientific Industrial Co., Ltd. published three ESG Reports).
Stakeholders could learn about our sustainability achievements through this report and join us in our ESG journey.
This report has been prepared in accordance with GRI Standards (2016) Core option and CASS-CSR 4.0 Since 2013, USI has published an ESG Report in
basic framework. This year, we also integrated the SASB Electronic Manufacturing Services & Original Traditional / Simplified Chinese and English every July and
Design Manufacturing Standards into our reporting for the first time. We also use other recognized is accessible on the USI Sustainability Web (https: // www.
frameworks such as the Evaluation Index System of Shanghai Listed Corporate Social Responsibility usiglobal.com /csr).
Principles for
Report Index (2017) and the Shanghai Stock Exchange Environmental and Social Responsibility Disclosure
Compilation Requirements to provide ESG information. Please refer to the Stakeholder Engagement section for
material topics and report boundaries. Report Publication
Previous Current Next
Version Version Version
Released in July Released in July Planned release
The data collection period of this report was from 01 / 01 / 2021 to 12 / 31 / 2021, and financial data 2022 in July 2023
are expressed in CNY throughout the report. Environmental, health, and safety data are described
using accepted international standard units and indicators. The report scope includes Zhangjiang
Facility, Jinqiao Facility, Shenzhen Facility, Kunshan Facility, Nantou Facility (Nantou-TT and
Report Scope Nantou-NK), and Mexico Facility. If data numbers have a data scope different from the defined If you have any suggestions,
and
Boundaries
scope above, there will be a note indicating the particular scope for that data. please contact us at:
ASE Technology Holding Co., Ltd. is the parent company of USI and is referred to as our \"parent
company\" or \"ASEH\" in this report.
Address: No.1558 Zhang Dong Rd., Pudong New Area,
Shanghai 201203
Tel : +86-21-5896-6996
Email : csr@usiglobal.com
Every year, we complete a third-party verification for this report to improve information transparency Web: https://www.usiglobal.com
and accountability. SGS Taiwan Ltd. provided third-party assurance for this report following AA1000
AS v3 (2020) Type 2 Moderate Level with GRI 45 disclosures verified with High Level. This year we Address: No.141, Lane 351, Sec. 1, Taiping Road,
External Tsaotuen, Nantou County 542007
also verified 7 SASB Electronic Manufacturing Services & Original Design Manufacturing disclosure
Assurance
topics. For details, please refer to the GRI & CASS-CSR 4.0 Index and SASB Index. Tel : +886-49-235-0876
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Letter from In the past year, the world has yet to shake off the volatility brought
about by the COVID-19 pandemic while facing increasingly severe
USI pays close attention to environmental initiatives in the places
we are located. After understanding the policies, we develop
the Chairman natural disasters caused by extreme weather. As people face the
threat of environmental problems, governments have put forward
environmental protection and carbon reduction strategies in response.
To achieve our Science-Based Target (SBT) by 2030, we formed our
countermeasures to show their determination to protect the Net-Zero Carbon Emissions Strategy based on leveraging renewable
environment. Mainland China has committed to reducing carbon energy. We have been purchasing renewable energy certificates since
emissions to achieve 2030 Peak Carbon Emissions and 2060 Carbon 2018, and in 2021, our renewable energy consumption reached 80.3%
Neutral goals, with specific policies and implementation standards at the cost of approximately CNY 3.39 million, accounting for 0.006%
to be released. Therefore, environmental protection (E), social of our revenue. Our net carbon emissions are on-track and already
responsibility (S), and corporate governance (G) are not only the below our SBT target.
criteria for investment decisions but have also become key to
In 2021, USI overcame various operational challenges and reached a
sustainable business operations.
record high revenue of CNY 55.3 billion, achieving a record revenue
ESG is an essential part of USI's business operations. We constantly growth of 15.94%. As an A-share listed company in Mainland China,
enhance our practices to go above and beyond regulators' USI has taken the initiative to disclose ESG-related information and
requirements. In recognition of our efforts in sustainability, we were has issued CSR reports for 13 consecutive years. In 2021, we renamed
invited to participate in the 2021 S&P Global Corporate Sustainability the report as USI ESG Report to reflect the importance of ESG in our
Assessment for the first time and received S&P Global Bronze Class operations.
distinction in the Electronic Equipment, Instrument, and Component
By disclosing information, we hope to establish transparent and open
industry group. Not only have we maintained a BB Rating in MSCI
communication channels with the outside world. With this report,
Emerging Markets Index, but we also continued to be included in the
we also strengthen internal communication on corporate values,
SSE Corporate Governance Index and maintained our SSE information
improve various management policies to enhance our sustainable
disclosure A rating for four consecutive years.
value, and contribute to the long-term coexistence and co-prosperity
We are committed to sustainable development and are determined with our planet. Let's work and move forward together on the road to
to become the world's most reliable Electronics Design and sustainable development!
Manufacturing company. Following our Sustainability Strategy's
four dimensions, Low Carbon, Circular, Collaborative, and Inclusive,
we drive our sustainability initiatives through our Sustainability
Committee. Through the Committee, we strive to create a safe
working environment, build sustainable partnerships with our
stakeholders to accelerate our value chain's growth, and promote
social development through cooperation and innovation. Chairman Jeffrey Chen
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Letter from In 2021, the COVID-19 virus continued to mutate, the global
pandemic became even more severe, and human travel continued to
energy since 2018, with 100% renewable energy being used in our
Mainland China Facilities and 31% renewable energy being used in
the President be heavily restricted in many ways, resulting in logistics disruptions,
shortages of labor and materials, imbalances in market supply
our Mexico Facility. The solar power system built at the Nantou-NK
Facility generated a total of approximately 1,508 MWh of renewable
and demand, and inflation. At the same time, the unending trade energy electricity by the end of 2021. On the other hand, since
wars, political turmoil in some countries, and the carbon reduction 2013, the Company has been participating in the Million Tree Project
and 2050 net-zero emissions targets set by countries in response of Shanghai Roots and Shoots Youth Activity Center to promote
to global climate change are among the many challenges that are reforestation and environmental education.
sweeping the industry, making us all the more aware of the urgency
USI's efforts to promote sustainable development have been
of implementing sustainable strategies.
recognized with several awards: The Company was invited for the first
In these uncertain times, USI has been strictly self-disciplined and time to participate in the 2021 S&P Global Corporate Sustainability
initiated emergency response strategies to mitigate impact, and has Assessment and won the Bronze Award in the Electronic Equipment,
made concerted efforts to set a new record of CNY 55.3 billion in Instrument, and Component industry group. The Company also
revenue and 15.94% year-on-year growth in 2021. In terms of the achieved the first place in the electronics industry in Sina Finance's
global deployment strategy, Vietnam Facility as the first production 2021 China ESG Top 500 Excellent Enterprises and the China
base of USI in Southeast Asia, was officially put into production Corporate ESG Golden Award Corporate Social Responsibility Award.
in July 2021, which also demonstrates the Company's ability to In 2021, the Company also achieved a social contribution value per
serve overseas customers' orders more flexibly and promote the share of CNY 2.89 (1).
development of the local economy and high-tech industries.
Through the Sustainability Committee's five Taskforces -
In recent years, value chain management has become a top priority Corporate Governance, Green Products and Innovation, Value
in the technology industry. In November 2021, USI held a Greater Chain Management, Employee Care and Social Engagement, and
China Global Sustainable Supply Chain Webinar to promote the Environmental Protection and Occupational Safety, USI continues to
Company's policies and corporate philosophy and communicate utilize corporate resources and invest in social services to contribute
directly with suppliers around the world. The content included the to the long-term development of Earth. No one is an outsider when
continuous promotion of a green supply chain, in line with the trend it comes to ESG compliance. We must work together to reduce
of international environmental protection requirements, and included energy consumption and protect the natural environment, improve
the sharing of the requirements, implementation experience, and the working environment and promote diverse talents, proactively
future goals of ESG for suppliers. 276 supplier representatives disclose information, achieve fair and transparent management, and
attended the meeting, and after the meeting, we received more than strive for sustainable development.
half of the questionnaires distributed that gave us a feedback of \"very
satisfied\". Being awarded the 2021 Lenovo Lean Management Award
by our customers is a solid recognition of our achievements in driving
value co-creation.
President C.Y. Wei
In order to reduce the negative impact on the environment in our
operations, USI has been actively promoting the use of renewable
Note 1. Social contribution value per share = (earnings per share + tax payments + employee salaries + interest expenses + total social input) ÷ total number of shares issued in the year
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
USI Contributions to the SDGs
● Invested in 5 rural ● Supplied free COVID-19 nucleic acid testing and rapid testing for ● Employees have the right ● Purchased certified renewable ● Installed solar panels on the roof
revitalization programs, employees, with 9,176 participants. to equal pay for equal work energy to offset carbon of Nantou-NK Facility to promote
benefiting 1,050 ● Promoted COVID-19 vaccination, with a complete vaccination rate of regardless of gender. dioxide emissions generated solar power and generated 1,508
students. over 83%. ● Increased percentage of females by traditional electricity used. MWh of green electricity in 2021.
● Held 42 health activities, such as occupational health promotion, in senior management positions 100% renewable energy use in ● Encourage innovation and
blood donation, weight loss competition, and bone density testing, for 4 consecutive years, and Mainland China Facilities and increased R&D employees to 2,332.
with 13,028 participants. promoted 4.7% compared with 31% in Mexico Facility.
● Provide medical and emergency support for unexpected or sudden 2020. ● Saved 1,944 MWh of electricity
illnesses for employees on business trips or stationed overseas. with energy-saving measures in
2021.
● Donated Care Packages ● Donated a cumulative total of 725 boxes of books to ● 36.4% Reduction of ● 15.94% Revenue growth in 2021 compared to 2020.
with rice, oil, and dried the Philanthropic Libraries. water use intensity ● Actively engaged in sound tax policies and honest tax
goods to 18 Kunshan ● Built 5 computer classrooms through the Rural Digital from the baseline contributions to support the government's efforts to promote
households in need Education Program, benefiting 1,614 students. year 2015. economic growth.
before Chinese New ● Trained a cumulative total of 867 USIU internal ● 73.1% Recycling rate ● 84% Satisfaction rate from our major customers.
Year. lecturers. of process water in ● Starting salaries for direct laborers at each facility are higher
● Supported 133 employees to take advanced studies. 2021. than local minimum wages.
● 411 employees are enrolled in 14 On-Job Degree ● Provided 17,923 job opportunities worldwide with 97% local
Programs held in partnership with local schools. employment.
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● Tightened the banned ● Promoted green product design, reduced energy loss, and engaged ● Supported the Million ● Provide a wide range of electronic products and
substance elimination in continuous improvement to reduce CO2 emissions, saving 95,754 Tree Project for 9 services under Global Demand, Local Service to
program and limited MWh of electricity in 2021, equivalent to reducing 46,888 metric years running, planting our customers with operations covering Asia,
3 substances (Indium tonnes of CO2. a total of 107,833 Europe, America, and Africa.
Phosphide, Nickel Sulfate, ● 0 days of production interruptions due to climate-related disasters. trees covering 76.71 ● Local purchasing rate reached 39%.
Nickel Amino Sulfate) to ● Implemented TCFD (1) to analyze USI climate risks. Results include hectares. ● 100% of our key suppliers meet conflict-free
1,000 ppm or less to reduce 3 opportunities, 3 transition risks, and 3 physical risks. We will use mineral requirements.
harm to workers and the 100% renewable energy in our operations by 2035 and achieve
environment. net-zero carbon emissions by 2050.
● 85 employees volunteered in environmental conservation-related
activities.
● Employed 83 people with ● Performed corporate risk management assessment and ● Cleaned up 2 coasts ● Established Sunshine Conduct Policies and Anti-Corruption Management
disabilities. implemented relevant countermeasures. and picked 335.2 kg Measures with reporting mechanisms to ensure compliance from suppliers
● Appointed 8 ethnic ● Established an email protection mechanism to strengthen USI of trash. and employees. No corruption or bribery instances were found.
minorities to management email security. ● No major fines or violations related to anti-competitive practices or antitrust
positions. ● Introduced an APT (2) system to strengthen cybersecurity laws and regulations.
protection capabilities.
● Co-worked with suppliers to recycle pallets and packaging
Note 1. TCFD, Task Force on Climate-related Financial Disclosures
materials, saving approximately CNY 12.45 million. 2. APT, Advanced Persistent Threat
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Awards and Recognition
Maintained Four Years
Information Disclosure
A Rating on Shanghai Stock
Exchange 2018-2021
Awarded
S&P Global Bronze Class in
Sustainability Yearbook 2022
AWARDS
Awarded
Top 10 Exemplars of Pudong
Headquarters Economy Awarded
Sina Finance
2021 China ESG Top 500 #1 in
Electronics Industry &
China ESG Golden Awards 2021 -
Best Social Responsibility Award
Received Awarded
Wind ESG AAA Rating - 2021 Lenovo Supplier
Top Rated in Electronic Equipment, Lean Supply Chain
Instruments & Components Management Award
Industry Group
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Governance Social Environmental
Zhangjiang Facility Zhangjiang Facility Zhangjiang Facility
th
2020 Outstanding Contributions to Pudong Economy 11 China Charity Festival - 2021 Social Responsibility Shanghai Roots & Shoots - 2021 Million Tree Project
15th China Listed Companies Value Award - Top 100 Valued Pioneer Award Sponsorship Award
Mainboard Listed Company 15th China Listed Companies Value Award - 2021 China Listed
10th in Shanghai Top 100 Manufacturing Enterprises 2021 Companies Social Responsibility Award Shenzhen Facility
37th in Shanghai Top 100 Enterprises 2021 GoldenBee Excellent CSR Report 2021 - Foreign-Invested and 2021-2023 Shenzhen Nanshan District Green Channel
6th in Shanghai Top 100 Emerging Industry Enterprises 2021 Hong Kong, Macau, and Taiwan-Invested Enterprise Enterprise
39th in Top 50 of Shanghai Top 100 Growing Enterprises 2021
Shenzhen Facility Kunshan Facility
Shenzhen Facility 2020-2021 Shenzhen Excellent Foreign Enterprise - Jiangsu Green Factory Certification
Shenzhen Advanced Manufacturing Pioneer Award Harmonious Labor Relations Promotion Award
2020 Shenzhen Excellent Foreign Enterprise - Double
Excellence Enterprise Kunshan Facility
2020 Excellent Import and Export Enterprises 2020 Kunshan A Grade Trustworthy Labor Security Enterprise
2020 Shenzhen Top 500 Enterprises 2020 Suzhou Harmonious Labor Relations Enterprise
2020 Shenzhen Top 100 Industry Leaders
2021 Sugon - Perfect Quality Award Nantou Facility
2018-2022 Accredited Nantou County Nursing Room - Most
Kunshan Facility
Comfortable Room
Qiandeng Digital Economy Key Enterprises 2019-2021 Accredited Healthy Workplace - Health Advocate
2021 Jiangsu Industrial Internet Development Model Enterprise Badge
2015-2020 Innovative Transformation and High-Quality 2021 Occupational Health Promotion Outstanding Service
Development of Advanced Enterprises Award
2020 Qiandeng Outstanding Talent Contributing Tech
Innovation Enterprise Mexico Facility
Jalisco Distinction for Good Labor Practices
Nantou Facility
Authorized Economic Operator Certification
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Operations and Governance
USI's vision is to be the most reliable provider for electronic design, manufacturing service, and modularization with diversified global footprints and miniaturization solutions.
Through the collective contribution of employer and employees, we established effective governance mechanisms with respective responsibilities and accountabilities. We strive to
generate exceptional rewards for stakeholders and to build a better place to live.
CNY 55.3 Billion Record High Sales Revenue
CNY 1.86 Billion Net Profit
A-level Rating of Information Disclosure in the SSE
Included in MSCI Emerging Markets Index
Included in SSE Corporate Governance Index
Top 10 Exemplars of Pudong
Listed as
Headquarters Economy
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Key Performance and Targets
Achieved Not Achieved
SDGs Business Action 2021 Key Issue KPI 2021 Target 2021 Performance Status 2022 Target 2026 Target
Continue to Continue to
Included in Continue to
Improve economic growth be included in Included in be included in
Corporate SSE Corporate be included in
and productivity through SSE Corporate SSE Corporate SSE Corporate
Governance Governance SSE Corporate
sustainable development Governance Governance Index Governance
Index Governance Index
Index Index
1. Apply sustainable system Obtain ISO 22301 The certification Obtain ISO 22301 Implemented
or strategy and include Business Obtain ISO 22301
certification in was postponed due certification in BCMS to major
sustainable information Continuity certification
Nantou Facility to COVID-19 Nantou Facility Facilities
in routine report
2. Ensure all employees
can acquire the related 80% completion 85% completion 100% completion 100% completion
USI Cybersecurity
information and Cybersecurity rate of USI rate of USI rate of USI rate of USI
training
consensus of sustainable Management Cybersecurity Cybersecurity Cybersecurity Cybersecurity
completion rate
development training training training training
100% completion
USI Employee 100% completion 100% completion 100% completion
rate of USI
Forbid any kind of Business Code of rate of USI rate of USI rate of USI
Employee Code
corruption and bribery Ethics Conduct training Employee Code of Employee Code of Employee Code of
of Conduct
completion rate Conduct training Conduct training Conduct training
training
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Company Profile
Company Overview
USI (SSE: 601231) is a member of ASEH (TWSE: 3711, NYSE: ASX) and an industry
leader in SiP (System in Package) modules. We provide D(MS)2 product services: Company Name Universal Scientific Industrial (Shanghai) Co., Ltd.
Design, Manufacturing, Miniaturization, industrial software and hardware Solutions,
and material procurement, logistics and maintenance Services for brand owners. USI Registered Capital CNY 2,209,609,072
has a total of 27 manufacturing facilities with company headquarters in Pudong New
Area of Shanghai, China and over 220 SMT lines across Asia, Europe, America, and
Stock Number / Name 601231 / USI Shanghai in SSE
Africa to support customers diversified electronic products through \"global reach at
a local level\" strategy.
Date of Stock Issue Feb. 20, 2012
Provide professional services in design, miniaturization,
material procurement, manufacturing, logistics,
and maintenance of electronic products such as
Main Products and Services
communication products, computer and storage products,
consumer electronics, industrial products, medical and
automotive products
Chairman and Chief Executive Officer Jeffrey Chen
President and Chief Operation Officer C.Y. Wei
Global Total of Employees 24,768 (As of 12 / 31 / 2021)
Area of Manufacturing Facilities (1) 452,146 Square meters (45.2146 Hectares)
Note 1. The area of manufacturing facilities only includes facilities in the scope of this report. For more details, please refer to USI website (https: // www.usiglobal.com / en / global-locations)
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Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Global Operations (1)
Germany(4)
Poland(1)
United Kingdom(1)
Czech Republic(1)
France(7)
Tunisia(1)
Mainland China(6)
USA Silicon Valley(1) Taiwan(2)
Mexico(2)
Vietnam(1)
USI Manufacturing Locations (USI + AFG)
Note 1. For more details, please refer to USI website (https: // www.usiglobal.com) or corporate videos (https: // www.usiglobal.com / en / videos)
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Financial Performance and Tax Governance 55.30
Financial Performance 47.70
The global supply chain was highly impacted by COVID-19,
which increased uncertainty of business management.
However, USI achieved superior business performance and 37.20
hit new high by steady operation strategies. In 2021, USI 33.55
reported consolidated sales revenue of CNY 55.30 billion with
29.71
an increase of 15.94% comparing with 2020. Its total asset is
divided into liabilities and equity, which are CNY 22.77 billion
and CNY 13.08 billion. The earnings per share were CNY 0.85
and dividend remittance was CNY 1,099,138,448, accounting
for 1.99% of revenue. The data scope in this chapter includes
USI global operation locations, please refer to 2021 USI Annual
Report for more financial information.
2017 2018 2019 2020
Operating Revenue (in CNY billion)
Unit: CNY
Item 2021 2020
Operating Revenue 55,299,654,770 47,696,228,223 37,204,188,424
Operating Profit 2,131,813,481 1,961,650,751 1,422,151,443
Operating Cost 49,981,479,198 42,710,970,316 33,499,411,113
Total Profit 2,138,858,923 1,973,563,055 1,432,762,959
Net Profit 1,856,693,042 1,733,565,232 1,260,107,633
Taxes (1) 618,989,548 397,576,824 352,271,710
Earnings Per Share 0.85 0.80 0.58
Government Subsidies 50,678,107 76,779,477 52,011,789
Note 1. 2019 and 2020 data scope were adjusted by Financial Department
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Board Governance
Tax Governance Board Structure
USI established tax policy to organize tax governance and follow tax laws of global operation
locations, we believe that being an honest and responsible taxpayer fosters economic growth General Meeting of Shareholders
Strategy Committee
and contributes to long term business sustainability. The Chief Financial Officer supervises tax
policy compliance, financial staff must take taxation training courses to prevent any risks from
Nomination Committee
uncertain tax regulations. Board of Directors
Board of Supervisors
Compensation Committee
Tax Policy
President Office General Manager Audit Committee
1. Comply with all applicable tax laws and regulations of all countries in which we operate
and duly reporting and paying all necessary taxes in a timely manner.
2. Take both short term and long-term tax impacts into consideration when making major
business decisions. Manufacturing Sites Business Units Function Units Audit Center
3. Be transparent and disclose tax information in accordance with applicable regulations
and reporting requirements.
4. Pay taxes on the profits earned from business activities conducted in relevant
jurisdictions and ensure intra-group transactions are conducted at arm's length.
Board of Directors
5. Don't use tax havens and tax structures that are meant for tax avoidance or aggressive The USI's Board of Directors candidates are nominated by the Nominating Committee and
tax planning. then approved by the Board of Directors and the Shareholders' Meeting. Currently, USI's
6. Construct an appropriate mechanism to evaluate potential tax risks which are given rise Board of Directors is composed of 9 directors, with three independent directors. Each Board
to our global manufacturing and sales activities. Director's term is three years. Jeffrey Chen serves as Chairman of the Board. The responsibilities
7. Develop mutually trustful and respectful relationships with tax authorities in the of Chairman are to supervise the execution progress of Board resolutions and exercise the
countries we operate and communicating with them on tax matters where appropriate. authorities of legal representative. Board of Directors shall exercise its authorities according to
laws, administrative regulations, department rules or articles of the company. Material events
must be deliberated and voted by directors after full discussion. But if the events are out of
Our principal operating facilities and offices are in Mainland China and Taiwan. Therefore, a large
the authorization to Board of Directors, it should be submitted to Shareholders' meeting for
proportion of operating revenue and profit before income tax is accounted by business activities
deliberation and approval. The Company holds at least two board meetings every year. There
conducted in Mainland China and Taiwan, which contributed more than 70% of income tax
were 7 board meetings in 2021 with a 100% attendance rate.
expense and income tax paid. The statutory tax rates in Mainland China and Taiwan are 25% and
20% respectively. Mainland China Facilities qualified as high-technology enterprises, and thus Shareholders can nominate directors and independent directors. The Nominating Committee will
were entitled to a reduced income tax rate of 15% and were eligible for weighted deduction of select candidates based on their professional background and working experience. Independent
research and development expenses. Additionally, Nantou Facility was also qualified as industrial director candidates are required for the attitude of independence. Company held annual
innovation enterprise and thus entitled to reduce research and development before income tax. shareholders' meeting in April 2021. In addition to reviewing 2020 directors and supervisors'
The effective tax rates in Mainland China and Taiwan were 9% and 21% respectively in 2021. working reports and financial related issues during the meeting, a proposal of by-electing the
non-executive director was approved (1). For further details and the complete list of the Board of
Note 1. Tien-Szu Chen resigned from the 5th Board of Directors, Gilles Baruk Benhamou was approved to fill the board vacancy Directors, please refer to Section 4 of 2021 USI Annual Report.
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Board Diversity Board Performance and Compensation
USI considers diverse factors such as: age, professional background, industry experience and USI established an evaluation and incentive mechanism to measure the performance of
nationality for board composition. The directors are assigned to different committees according directors, supervisors, and senior officers respectively. Compensation Committee will draft a
to their expertise to enhance corporate core competitiveness, increase the efficiency and quality compensation proposal according to achievement rate of annual profit and operating targets.
of major investment decisions, as well as perfect the corporate governance structure. Please The proposal is generated after considering about industrial salary level and company status,
refer to USI Investor Relations website (https://www.usiglobal.com/en/corporate-governance/ir- and interlinking the business operator's annual salary, company asset, profitability, and business
board) for the Board of Directors backgrounds. goals. It is expected to enhance operator's positivity, perfect the mechanism to select the
superiors and strengthen goal constraint. For further details of Compensation of Directors,
Supervisors and Senior Officers, please refer to Section 4 of 2021 USI Annual Report.
Continuous Education for Board Members
To expand board members' competencies, USI arranges training courses that cover corporate
governance and sustainability for board members in hopes that they will incorporate the spirit
Conflict of Interests Management
of sustainability in steering USI corporate policy. In 2021, board members completed 19 hours of According to the Company Articles, any corporations related to the matters in the resolutions
training. made in the director meetings and board meetings shall not vote on such resolution or
exercise the right to vote on behalf of other directors. And company has Board of Supervisors
Course Name Hour(s) which includes the representatives of the shareholders and representatives of the employees.
Supervisors shall monitor the acts of the directors and senior officers, audit and approve the
2021 Training Course for Corporate Governance 17 regular reports prepared by the Board of Directors. External auditor will issue an internal
audit report annually. USI held 2 Shareholders' meetings in 2021; shareholder representatives
Regulatory Working Meeting of Listed Companies 2 passed resolutions of Directors and Supervisors and financial proposals in accordance with the
laws. Please refer to USI Investor Relations website (https://www.usiglobal.com/en/corporate-
Total Training Hours
governance/ir-board-supervisors) for the name list of Board of Supervisors.
To safeguard investor interests, USI has a dedicated unit to address investors' concerns and
Board Participation in Sustainability Governance developed corporate Investor Relations Management Guidelines to build a good communication
platform for direct engagement. USI is committed to providing transparency about the status of
Three USI Board Members, namely, USI President C.Y. Wei, USI Chairman Jeffrey Chen, and
our business operations and monthly updates on our Investors Relations website. Also, we retain
ASEH Chief Administration Officer Dtuang Wang, have roles in our sustainable governance.
legal counsel to provide necessary services and maintain a long-term, stable, and harmonious
USI President C.Y. Wei acts as the Chair of Sustainability Committee, and the other two board
relationship between the corporation and investors.
members are members in the ASEH Corporate Sustainability Committee. Their participation
in the Sustainability Committee can strengthen the relationship between the Board and
sustainability strategies. Each year, the Sustainability Committee submits the annual ESG Report Board Committees
to the board of directors, and a series of discussions and plans will be carried out by the board USI's Board of Directors has four special committees: Strategy Committee, Nominating
of directors regarding our implementation of Corporate Social Responsibility activities. VP Otto Committee, Compensation Committee, and Audit Committee. There are rules of procedure for
Yu, the Taskforce Leader of Environmental Protection and Occupational Safety, shared the the committees. Each special committee reports to the Board of Directors, and the proposals of
global trend of carbon reduction and USI Net Zero strategies in board meeting in July 2021. That the special committees shall be examined and determined by the Board of Directors.
will help the environmental sustainability to be more implemented by corporate governance
decisions.
17
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Business Ethics and Compliance
The members of those committees shall all be directors. The number of independent directors
in the Audit Committee, Nominating Committee, and Compensation Committee shall be in Business Ethics
the majority, and the independent directors shall be the conveners of those committees. The USI adopts a zero-tolerance attitude with the violations of fraud behaviors. To make sure
convener of the Audit Committee shall be a professional accountant. The members of the employees do not have fraud or illegal profit exchanges with related institutes, USI employees
Strategy Committee shall include at least one independent director. Please refer to USI Investor must put more emphasis on incorruptible deeds. In employees' working regulations, they
Relations website (https://www.usiglobal.com/en/corporate-governance/ir-committees) for the are required not to engage in activities for personal gain with their authority. USI has drawn
composition of special committees. up a Code of Business Conduct and Ethics (1) and a Privacy Policy (2) to be the business dealing
standards of company employees, business partners and other stakeholders.
Audit Center
Audit Center is subordinate to the audit committee under the board of directors. The employment Grievance Mechanism and Whistleblowing Protection
of the head of auditing must be approved by half of the board members. A full-time head auditor Company provides the fraud notice mailbox for all employees and outsiders to report any
is established, and auditors are established in major facilities as well. integrity-related improper or suspected illegal practices. Reporting with name or anonymous
are both accepted. The Company shall do due diligence to investigate all reported cases and
Board Meeting keep confidential of reporters in accordance with the laws to ensure safety of reporters and
no threat or damage to reporters' rights and interests.
Audit Committee
Audit Center Ethics mailbox
Audit Division IT Audit Department ethics@usiglobal.com
China Team 1 China Team 2 Promotion and Training
To ensure that employees understand and comply with the USI Employee Code of Conduct,
Internal Audit Process Fraud Risk Management Procedure and The Rule of Punishment for Fraud in the Sunshine
Range of audit: All operations and management of finance and business are included. Act. When newcomers accept training, they are given related training courses. All employees
According to related regulations, there are eight divided circles plus information circle and need to finish the required reading and pass the quiz every year. All records are listed as
financial reporting flow responsible for respective audit. tracking list to ensure the course of Employee Code of Conduct has been finished by each
Object of audit: All institutes and legal branches around the world of USI. employee. Furthermore, the Sunshine Conduct Policies must be conducted to employees
Audit strategy: The regular audit is practiced based on the annual audit project decided by regularly to remind them of relevant corporate regulations and strict observance of rules.
the board of directors; a special case audit will be practiced if needed. The goal is to prevent And the Sunshine Conduct is also announced to suppliers every year.
possible shortages from the internal control system and present improving suggestions.
Besides, the Audit Center urges all departments to practice self-examination and assessment Note 1. Please refer to USI website (https: // www.usiglobal.com / en / csr / Operation-Governance / Code-of-Ethics-And-Business-
to evaluate the rationality and effectiveness of the outcomes. The Audit Center will produce Conduct) for the complete Code of Business Conduct and Ethics
2. Please refer to USI website (https: // www.usiglobal.com / en / privacy) for our complete Privacy Policy
an auditing report after the auditing activity performed. The compiled report will be
submitted to the board of directors as the realization of the Company's governance spirits.
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Enterprise Risk Management
Risk Management Committee Risk Governance Process
Once the violations of the Sunshine Conduct Policies have To ensure sustainable business achievements, USI organized Through worldwide manufacturing sites, business units and
been verified to be true, the punished personnel must return a Risk Management Committee to execute annual risk function units, USI engages Enterprise Risk Management
unjustified enrichment to compensate company's losses, and management activities according to business environment, (ERM) project to identify risk events and factors, evaluate
their bonus, performance appraisal and promotion will be industrial trend, and company operations. The function and adopt proper countermeasures to ensure sustainable
restricted according to the degree of negligence. units of Risk Management Committee should investigate the management and achieve business operational goals.
internal and external risk factors, evaluate the risk levels, and
After identified and assessed by risk management process in 6 1. Identify corporate level and operational level risks, list
inspect the effectiveness of activities. According to evaluation
major facilities in 2021, only Financial Department identified various risks that are facing by corporate and conduct Top-
of risk level, the committee takes the responsibilities to adopt
Fraud as a high risk but controllable item, so there were no down ERM Approach by top managements to confirm the
countermeasures and ensure the risk management policy can
important corruption cases required for corrective actions. focused items.
be executed by each operation unit.
There were no instances of bribery or corruption discovered in 2. Conduct Bottom-up ERM Approach by operation units
2021. to check their management risks, inspect internal and
external risk factors, and show the control results on risk
Regulatory Compliance Risk
map according to the evaluation of Risk Level and Control
Effectiveness.
Management
USI has devoted to maintaining the corporate image for years Committee 3. Generate a corporate risk report based on risk evaluation
and strictly complied with national or international laws results from operation units and corporate level. Inspect risk
and regulations related to corporate governance, financial situations, countermeasures, and corporate opportunities.
management, intellectual property, green environmental List corrective actions and risk mitigation plans for the risk
protection and safety rules, labor rights, and fair market items identified by each operation unit.
competition. We also cherish customer value, rights, and 4. Monitor quarterly progress of risk mitigation plans to
interests. The contract review completion rate reached Operational ensure the risks are effective controlled and convert the
96% (1). For any negative impact on corporate image or Units corporate risk management to the effective behaviors of
violation of the law, a task force will be formed by USI to take organization strategies enhancement.
countermeasures. By the end of 2021, no violations resulting
in a significant penalty (2) or other non-economic punishment
occurred. And we did not use collected personal data for
any secondary purposes other than the specific purposes for
Business Function Manufacturing
which the personal data was first collected, and there were no Units Units Sites
incidents of infringement of customer privacy rights, and no
incidents of customer data leakage.
Note 1. 230 contracts remained to be reviewed by both parties by the end of 2021
2. The definition of significant penalty is sanctions over CNY 65,000
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About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Risk Assessment Matrix
Outsourcing
Production Schedule
Demand Controls for Raw
Materials
Risk H Innovation, Research, and
Response Development
Fraud
Financial Disclosure
Find out and evaluate
Risk countermeasures and
Assessment corrective actions to
control risks that
Geographical Politics Talent Management /
include:
1. Evaluate the risk Natural Disaster Risks Recruitment
Risk levels from two
Implementation
Natural and Man-made Disasters Standards of Quality
Identification cost and resources
Risk Level
aspects Legal and Regulatory Compliance Planning of Production
The possibility of
Feasibility and
possible benet M Quality Management Equipment
occurrence Compliance with Accounting Capacity Planning
The negative
Identify focused items Proposal lead time
and schedule
Standards and Policies Inventory Management
through corporate risk
impacts on nance, planning
Order Processing Factory Equipment Supply
management by senior
reputation, and Out of Materials/ Lack of Materials Suppliers Business Continuity
management, and
continuing Shipment Management and Social Responsibilities
apply Risk Evaluation
operations
Questionnaire to
2. Inspect the eective-
collect feedback from
ness of exist activities,
each operation unit.
and evaluate residual
Manage risks by Communication
risk after control
Top-down and Enterprise Development
activities
Bottom-up models to Contract Management Marketing / Sales Strategy
identify the risk factors Technology Business Concentration
of impact on USI L Supplier Chain Management Energy Management and
sustainable develop- Pricing Alternative Energy
ment. Economic Conditions / Industry Customer Satisfaction
Trends
Cybersecurity
Yes Partial No
Control Effectiveness
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
2021 USI Risk Assessment Countermeasures (1~2)
Category Item Risk Situation Countermeasure Corporate Chance
1. Enhance all employees' cybersecurity awareness
1. Lack cybersecurity awareness, mistrust 1. Hold regular cybersecurity training courses for
2. Upgrade system safety level and assure corporate
Phish or scam website employees
Cybersecurity reputation
2. Leak system account or password 2. Two-factor authentication
3. Train the employees' resilience to reduce the hazard
3. System is locked by hacker or data loss 3. Regular backup & offsite backup
impacts
Emerging Risk
Supply chain has been impacted by COVID-19
Material storage management, production schedule
Supply Chain and natural disaster, the production lines Develop local suppliers to reduce the material risk from
and logistics arrangements shall be more flexible
Management are facing the risks of manpower shortage, uncertain international transportation schedule
base on the identified supply chain risks
unstable logistics and key parts shortage
1. Evaluate macro-economy, industry trend and
emerging risk. Keep interactions with customers
and stakeholders. Adopt action plans to enhance
company core competence and operation
1. Cooperate with customers to flexible adjust production
1. In the post-pandemic era, EMS industrial resilience
facilities and improve products and services value
chain and corporate operations are 2. Adjust manufacturing sites and business allocation
2. Enhance manufacturing strategy in non-Mainland China
impacted, that results in sluggish economic to reduce regional supply chain impacts from
Strategy and areas and convert local resources to be competitive
Regional Politics recovery and highly competitive in the field trade friction and epidemic; through business
Planning advantages; strengthen company global manufacturing
2. Due to uncertainty of regional politics, the growth and merger to enhance the market
service capability
decision makers will hesitate and postpone placement of non-Mainland China areas
3. Aggressively develop and build local suppliers' capability
the major investment decisions 3. Continue to enhance supply chain management
to achieve a win-win situation
and risk identification; through corrective actions
and progress tracking to ensure supply chain
resilience and sustainability. And adjust purchasing
strategies according to regionalization trend
Note 1. Please refer to 2021 USI Annual Report for Risk Management: Section 3: (IV) Possible Risks
2. Please refer to the Climate Change and Carbon Management section for climate change related risks
21
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Category Item Risk Situation Countermeasure Corporate Chance
1. USI has bought RECs (Renewable Energy
Certificates) to offset company's carbon emission
1. Observe, evaluate, and publish the trend of regulations
since 2018, and climate change was one of the
and customer specifications to enhance the efficiency
major topics in USI sustainability committee
Violate local laws and losing business of energy usage and innovate low carbon products for
2. Mainland China Facilities achieved 100% of
opportunities from not following sustainable manufacturing
Energy Management renewable energy usage through I-REC purchased.
governmental environmental regulations or 2. Strengthen social involvement to in line with
and Alternative Energy USI will continue to enhance energy management
customer's request to plan a comprehensive governmental regulations by industrial unions or other
and use alternative energy according to regulatory
energy program stakeholders. Review company sustainable development
changes, customer requirements, and sustainable
through international appraisals. Build corporate positive
goals
image and increase market value
3. Continue manage carbon emissions to achieve
2050 Net Zero target
1. Build key successor system: 1. Ensure corporate sustainable development through a
Operation and (1) Regular inventory the requirements of key successor system, and prevent business impact from
Infrastructure positions unexpected changes in personnel
(2) Make succession development plans and 2. Implement talent development mechanism to ensure
Succession Plan and Operating risk from imperfect cultivation of provide resources the successors have the capability to perform key
Recruitment the talent team and management mechanism (3) Systematized talent database for ongoing responsibilities
regular tracking 3. Provide diversified development resources to potential
2. Build Talent development scheme: talents, increase development opportunities, and focus
the development plans of succession talents and on individual development requirements to improve the
potential talents potential talents' retention rate
1. Follow procedures for Business Continuity
A company cannot normally operate without Management and Enterprise Risk Management Through timely emerging risks plan evaluation to update
effective prevention and crisis management to ensure business continuity and recover the and implement Crisis Prevention Measures, Emergency
Disasters
for emerging infectious disease, it will result impacted facilities Response Plans, and Business Continuity Plan. It will help
in customers and company's losses 2. Prevent and manage the impacts of emerging company to convert resilience to core competence
infectious disease, such as COVID-19
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Cybersecurity Management
Effective cybersecurity management is fundamental to all operations. To ensure we have
consensus of cybersecurity goals, USI set up a committee to boost cybersecurity awareness. The
committee members are composed of CIO, CFO, GISO, Vice Presidents or Division heads level
above, CIO shall report to Senior Vice President of Administration Group. Under the committee,
there are information security representatives to assist the Information Security Committee in Cybersecurity
implementing cybersecurity affairs. USI obtained ISO 27001:2013 Certification in 2020 and the Vision Ensure the
condentiality,
cybersecurity management is further implemented in the USI Group.
integrity, and
Protect availability of
Information Technology Unit customers and information
Chief Information Officer USI's sensitive assets
information
Strengthen
Information Security employees'
Information Security Division Establish a
Steering Committee cybersecurity
CIO、CFO、GISO
Global Information Security Officer awareness holistic
cybersecurity
system and ensure
its eectiveness
Security Architecture Business Information Business Information Business Information
and Operaitions Security (Asia) Security (North America) Security (EMEA)
Cybersecurity Goals & Vision Cybersecurity Advocacy and Training
The Company's cybersecurity objectives are to ensure the preservation of Confidentiality, USI has made Enterprise Network Cybersecurity Management Approach and introduced
Integrity, Availability and Compliance of the core systems engaged in business operations. Advanced Persistent Threat (APT) to increase cybersecurity protection. Through regular
Additionally, quantitative goals are defined according to organization level and job function to announcement, employees are required to follow network cybersecurity regulations and
ensure the achievements of the ISMS (1) implementations and cybersecurity objectives. use legal software. IT Department spot-checks illegal use of software, any illegal cases will
1. Protect USI's important information assets, including USI and customer products, be punished according to regulations. USI arranges an online training course to strengthen
manufacturing processing information and recipe, R&D information, services, and maintain employees' cybersecurity thinking. All employees should take Cybersecurity courses and pass
their confidentiality, integrity, and availability. tests. IT also irregularly practices Social Engineering (Phish Insight) to enhance employees'
2. Strengthen USI employee's awareness of the company's and customer's information asset cybersecurity awareness.
protection responsibilities. To be a gatekeeper of company cybersecurity, IT members not only take professional
3. Ensure that the execution of all business comply with the requirements of relevant laws or training courses, but also need be certified to ensure the effectiveness of our cybersecurity
regulations. organization can systematically solve cyber incidents. USI had no cybersecurity incidents in
4. Construct a safe and convenient information network environment to protect employees 2021.
from internal and external cybersecurity threats.
5. Establish a cybersecurity sustainability plan to ensure the business contingency. Note 1. ISMS, Information Security Management System
6. In-depth assess existing cybersecurity level and enhance the maturity of entire
cybersecurity management.
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Sustainability Management
USI integrates core values of four sustainability strategies, Low Carbon, Circular, Inclusive and Collaborative into corporate policy and operation management. Not only bringing in
the most benefits for shareholders and investors but create social value to pursue the sustainable development of co-existing environment, society, and governance.
We commit to
Provide a fulfilling and challenging working environment
Generate exceptional rewards for stakeholders
Contribute towards building a better place to live
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Sustainability Committee
USI Sustainability Committee is the highest-level organization of corporate sustainable development management. The committee The committee coordinators will hold quarterly meetings;
covers all manufacturing facilities. The committee's mission has been divided into five taskforces, Corporate Governance, leaders and task force members will decide and track
Green Product & Innovation, Value Chain Management, Employee Care & Social Involvement, and Environmental Protection & the sustainable targets in the meetings. The sustainable
Occupational Safety. Committee members are representatives chosen from each department and the President acts as the Chair, achievements will be presented to committee Chair and
Vice Presidents and Division heads act Leaders and Coordinators respectively. Through policies and actions set by the committee members in the annual Sustainability Committee meeting.
and corporate-wide cooperation, we promote and implement a sustainable business model. A Sustainability Committee Annual Meeting & Forum was
held on December 14, 2021. Sustainability consultants were
1. Study and Develop the Vision, Policy, and invited to share and suggest directions for USI sustainable
1. Plan Operation Mechanism of Target of Group Sustainable Development performance.
Group Sustainable Development 2. Identify Risks and Opportunities of Group
2. Coordinate and Promote Group Sustainable Topics to Decide Strategies and To raise awareness about sustainable practices, USI has
Sustainability Targets USI Sustainability Investments
3. Supervise the Plans and Implementations of
a multi-stage sustainability training course in our LMS
3. Integrate and Promote Action Committee
Plans of Group Sustainable Group Sustainable Strategies (e-learning) system. First, all new employees are preliminary
Development 4. Monitor and Disclose Group Sustainable trained to recognize the concept of sustainability. Committee
4. Evaluate the Executive Performance
Performance of Group 5. Report Working Plan and Performance to members and representatives must undertake specialized
Sustainable Development ASEH Sustainability Committee training to enhance their capability and knowledge of
5. Disclose Performance of Group Executive Secretariat
Sustainable Development
sustainable standards and practices.
6. Study and Develop Group S&HS Division
Sustainable Topics
7. Manage Group Integrated
Sustainable Affairs
AFG Group
USI Sustainable
1. Evaluate Risks and
Opportunities of the Specific Development Taskforces
Sustainability Topics. Suggest Corporate Governance
and Plan the Sustainable Green Product & Innovation
Development Targets of Group
or Specific Operating Area Value Chain Management
2. Plan Actions and Assist to Employee Care & Social Involvement
Promote the Actions
3. Track Action Progress and Environmental Protection & Occupational Safety
1. Follow Corporate Sustainability Policy
Evaluate Performance
2. Manage and Implement Site Sustainable
4. Provide Professional Consulting
Actions Sustainability Committee Annual Meeting & Forum
and Experience Sharing
3. Respond and React to Local Sustainable
5. Submit Recommendation Manufacturing Topics Based on Corporate Sustainable Policy
Report to Group Sustainability
Committee
Sites 4. Support and Provide Site Sustainable
Performance Data
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About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Sustainability Policy Sustainability Strategy
Through the understanding of Environmental, Social, and To reach the United Nations Sustainable Development Goals (SDGs) and pursue corporate sustainability, USI follows four
Governance (ESG) dimensions in sustainability, USI considers sustainability strategies, Low Carbon, Circular, Collaborative, and Inclusive, to prioritize response SDGs based on the Company's
that sustainable business development is closely linked core values. This enables the Company to take comprehensive actions concerning corporate sustainability.
with the interests of employees, community, society, and
shareholders. The scope of ESG covers the issues of labor
CSR/ Sustainability
rights, workplace safety and health, environmental protection,
Decarbonized Products & Services
business ethics, and social engagement. To accomplish our
Low-carbon Manufacturing
ESG goals effectively and meet stakeholders' expectations,
Adaptaon and Resilience
USI set the following measures to achieve sustainability goals.
Low Carbon
Green and Renewable Energy
The complete policy can be accessed at the USI Sustainability
Web (https: // www.usiglobal.com / en / csr / Sustainability-
Investment
Management / Policy).
Respond to climate action;
Reduce greenhouse gas emissions Circular Design
Invest in green innovation; Energy Resources Recycling
Waste as a Valuable Resource
Improve energy eciency Circular
Promote circular economy;
Environmental
Circular Economy in Value Chains
Prevent and control pollutants
Ensure workforce diversity; Environmental Conservaon
Endorse human rights Industry-academia
Stimulate social welfare; Inclusive Collaboraons
Support community investment Community Engagement
Advocate supplier development;
Public Advocacy
Social
Achieve global partnership
Smart Procurement
Upgrade corporate governance; Strategic Partnership
Uphold business ethics Collaborave Supply Chain Management
Create company value; Go High Tech
Environmental Educaon
Connect with stakeholders
Governance Drive transparency culture;
Disclose sustainable indicators
Commitments/ Value
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Strategic Approaches and Targets of Key Sustainable Issues
In 2021, we generated strategic approaches and 2026 targets according to key sustainable issues, tracked the target achievements and published the sustainable missions and performances in the
annual Sustainability Committee meeting.
On-schedule Room for Improvement (1)
Corporate Governance
On the premise of abiding local regulations and Key Issue Strategic Approach 2026 Target Assessment Mechanism Status
eliminating corruption and fraud, continue to
increase the Company's market competitiveness
and ability in evaluating and responding to Through monthly governance
operational risks, optimize external communication Implement laws and regulations: sanctions & fines data
channels to establish a rapid, accurate and safe 1. Promote legal compliance awareness collection to control major
information network, and train the Company Regulatory Maintain 0 major
through training courses regulatory violations of each
to develop competencies and skills required for Compliance regulatory violations
2. Perfect legal compliance management facility, and analyze and track
sustainable operations. mechanism and process the progress of corrective
actions
Through e-learning system
Implement the related policies and
100% coverage of to arrange Business Ethics
specifications of business ethics:
Business Ethics employee annual Code courses for employees, track
Continue to promote training courses and
of Conduct training and follow up the completion
reflect business ethics in daily operations
rate to ensure 100% coverage
Perfect cybersecurity mechanism:
1. Strengthen USI employee's awareness
of the company's and customer's Through e-learning system
information asset protection 100% coverage of to arrange Cybersecurity
Cybersecurity
responsibilities annual Cybersecurity courses for employees, track
Management
2. Construct a safe and convenient training and follow up the completion
information network environment to rate to ensure 100% coverage
protect employees from internal and
external cybersecurity threats
Note 1. For target performance results, please refer to the respective chapter and section for more information
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
On-schedule Room for Improvement
Green Products & Innovation Key Issue Strategic Approach 2026 Target Assessment Mechanism Status
Respond to the trend of global environmental
regulations and make Green Product Specification
to control hazardous substances in the products.
Ensure the green products we manufacture and
sell are in compliance with environmental laws,
regulations, and requirements around the world in
Through USI patent review
terms of environmental protection, while satisfying
meeting to oversee patent
customers' needs and the development trends of Continue encouraging
Innovation proposals and patent
environmental protection, following company's Follow green product specifications; innovation and green
Management rights maintenance. The
standards for internal control, and continuing continue to develop product innovation and product design and
& Sustainable review meeting annually
innovation and improvement. manufacturing process improvement accumulate 1,611
Production investigates the necessity
patents
and effectiveness of patents
to maintain database
Through customer satisfaction survey
Value Chain Management Quarterly track the results
Customer to understand customers' expectations Score at least 84%
of QBR (1) and customer
Gain satisfaction and affirmation from customers Relations and needs. Precisely answer customers' customer satisfaction
satisfaction survey to ensure
and users with after-sales service, quality, and Management questions and provide the best services to rate
the achievement rate
safety of our products. On issues regarding human customers
rights, morality, and environment, we further ask
the suppliers to establish sustainable partnerships. Support local suppliers
and achieve 35% local
Calculate local procurement
supplier procurement
amount to confirm the
rate
achievement rate
Make sustainable procurement policy to 100% Key suppliers
Through CMRT (3) survey to
Sustainable evaluate and audit suppliers' environmental comply with Conflict-
ensure the achievement rate
Supply Chain and social performances, and comply with Free Policy
Through Supplier
conflict-free minerals purchasing More than 76% suppliers
Sustainability Assessment
complete RBA (2)
Questionnaire to calculate
Supplier Sustainability
the achievement rate
Assessment
Questionnaire (SSAQ)
Note 1. QBR, Quarterly Business Review
2. RBA, Responsible Business Alliance
3. CMRT, Conflict Minerals Reporting Template
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
On-schedule Room for Improvement
Environmental Protection & Key Issue Strategic Approach 2026 Target Assessment Mechanism Status
Occupational Safety
In response to climate change and global
Obey local laws and regulations to manage
environmental issues, enhance USI's capabilities Quarterly check and confirm
Air Pollution air pollution, implement air pollution
in resource utilization and pollution prevention to 0 air pollution violations facilities air pollution
Control control, continue to monitor and reduce air
reduce environmental impact during operations. emissions without violations
pollution
Promote OHS culture, enhance USI's capabilities
in risk management, injure prevention, and
emergency response to create a safe and healthy
workplace.
Finish greenhouse gas
1. Apply ISO 14064-1 to implement and
inventory to pass annual ISO
manage greenhouse gas inventory Maintain ISO 14064-1:
Climate 14064-1 evaluation.
2. Through TCFD mechanism to understand 2018 certification for
Change Through annual TCFD
operational risks and chances to make all facilities
evaluation to make
countermeasures
operations strategies
Monthly review energy
1. Implement ISO 50001 quality
consumption, and promote
management system Reduce energy
energy saving projects
Energy 2. Improve renewable energy usage rate consumption intensity
and improve renewable
Management 3. Promote energy saving program in by 11% from the
energy usage to ensure
facilities baseline year 2015
the performance of energy
4. Promote green building project
consumption intensity
1. Implement ISO 45001 to ensure the No major occupational
Through Safety and Health /
management scope covers all employees injuries
Occupational Production Committee to
and the related workers No major occupational
Safety and track the progress of filed
2. Establish internal risk assessment diseases
Health projects and departments'
3. Promote EAP (Employee Assistance No major infectious
KPIs
Program) and health promotion programs diseases
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
On-schedule Room for Improvement
Employee Care & Social Involvement Key Issue Strategic Approach 2026 Target Assessment Mechanism Status
To build an inclusive workplace for employees,
we Enforce Human Rights Policy, Enable Talent Establish a comprehensive welfare system
Employee engagement Hold employee engagement
Development, Provide Comprehensive Benefits, and harmonious labor relations:
score over 85% survey every two years to
and Cultivate Harmonious Labor Relations to create 1. Encourage employees actively to
IDL turnover rate understand employees'
a happy workplace. And we promote and expand Talent participate company activities
under 10% and DL opinions
social engagement through Investing in Education, Attraction & 2. Understand employees' needs and
turnover rate under Track turnover situation
Contributing to Society, Promoting Arts & Culture, Retention recognition through employee
50% every month / quarter / year
and External Participation to make a positive social engagement survey
Key talent retention and provide improvement
impact on our surrounding communities. 3. Maintain labor relations, provide a
over 90% plans
competitive salary and welfare system
Accumulate more
than 1,000 lecturers
through the internal Quarterly track the situation
lecturer training of lecturer training program,
Integral talents development mechanism:
program and perfect internal training
1. Plan suitable training programs to
Strengthen employee resources
Human Capital achieve information sharing and learning
sustainable Annual track the employees
Development mechanism in facilities
employment number of obtaining degrees,
2. Provide a challenging and valuable job
ability and lifelong and organize in-service
career and promotion opportunities
learning program, educated programs inside
support more than the company
80 employees get
diplomas / degrees
Perform human rights risk
Appeal Channel Enforce human rights protection: No forced assessment every year and
Stakeholders can feedback or appeal through labor; prohibition of using child labor; 100% introduce track the improvement plans
meetings, e-mail or Contact USI in USI website. Except non-discrimination; anti-harassment; human rights risks every 6-month to reduce the
internal meetings, the other appeal channels could be freely association; respect employees' assessment across all risks of endangering human
anonymous to secure whistleblowers' rights. Human Rights
privacy; follow the regulations of working global facilities rights
hour; manage and reduce risks of human Hire more than 120 Annual track the employment
rights to create a working place without people with disabilities status of disabled employees
@ discrimination to implement the diversified
workplace policy
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Sustainable Impact Assessment
USI establishes value management system step-by-step and implements sustainability
strategies to realize sustainability goals. We introduced SROI (Social Return of Investment)
and EP&L (Environmental Profit and Loss) in 2019 and 2020 separately to manage social
projects' performances and make effective decisions on environmental issues. In 2021,
USI implemented TIMM (Total Impact Measurement and Management) to inventory the
impacts and contributions to stakeholders from company's operations in Economic, Social, Employee
Environmental and Taxes in hopes to help company to improve operation performances Partnership engagement &
16,125.9 development
through key management indexes correction. 517.3
Social
Education cohesive
6.7 Health & safety
Sustainability Value and Impacts 15.2
124.0
Through TIMM assessment, USI generated CNY 25,786 million worth of sustainability Investment
value for stakeholders in 2021 that created positive and outstanding contributions. 1,244.3 Social Impact Greenhouse
gas emissions
-11.1
Economic and Tax dimensions: USI has been an industry leading position and
tomers Em
continuously improving core competitiveness through steady operation strategies. In Cus plo Air pollution
act
y
2021, USI achieved new high business profit bringing excellent benefits to shareholders, -1.3
nomic Impact
ee
n m e nta l I m p
ty
s
uni
suppliers, employees, and government. Another major value was created by payroll. Payroll Water
Comm
3,696.0
Company supports a comprehensive compensation mechanism though the growing consumption
Government
numbers of employees, that does not only attract and retain talents, enhance employees' Sustainable Value -14.4
cohesiveness and activeness, but also guarantee employees and company steady growth. CNY 25,786 Waste
Su p
-2.2
Eco
v iro
Environmental dimension: The major negative impacts were Water Consumption and
pl
er
e
rs
Greenhouse Gas Emissions. Through process water recycling system, the positive benefit old
s
Recycle water
En
Prots NGO ra eh
of recycled water has been increasing every year. The recycled water rate was 27.5% in s Sh
1,856.7
2021, and the renewable energy rate was improved to 80.3% by purchasing certified
Tree planting
renewable energy. On the other hand, USI's long term cooperation in NPO-led tree Tax I m pact <1
planting project mitigates environmental impact.
Intangible assets
Social dimension: The major performances were good relationships with suppliers 1,744.2
and human capital cultivation. USI holds a Sustainable Value Chain Webinar every
year to promote company ESG policy. Human capital cultivation was executed by Prot taxes
206.3 Other taxes
employee engagement survey to exhibit employees' working performances and values. 274.3
While creating economic performances, company also actively engages in community
construction and sustainability development, and contributes to society through various
charitable activities. Unit: CNY million
31
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Stakeholder Engagement
Material Issues Identification
USI has identified major sustainability issues and established a framework for ESG disclosure Further analyzing the results, the differences between the material issues in 2021 and the
in compliance with the GRI Standards, AA1000 SES (Stakeholder Engagement Standards) and previous year can be mainly attributed to the continuing influence of COVID-19, the increasing
AA1000 AP (Accountability Principle). The framework is established on the four major principles importance of climate change, privacy, human rights for all stakeholders, and USI's expansion.
of Inclusivity, Materiality, Responsiveness, and Impact. Also, this framework is referenced Work from home, worker shortages, investment in talent development, and net-zero action plans
for USI's long-term sustainability goals and strategies. As an integral basis for reviewing our elevated Cybersecurity Management, Data and Privacy, Climate Change, Talent Development,
sustainable development strategies, we value and solicit interaction and communication with and Human Rights to material issues.
our stakeholders by understanding their concerns through various communication channels.
Phase I. Inclusivity Phase II. Materiality
We reviewed and defined our stakeholders through USI Sustainability Committee, listing In 2021, we conducted a Stakeholder Concern Survey, analyzed, and identified material issues
stakeholders with whom we have a close relationship. The list of major stakeholders is based on for 996 stakeholders. Respondents included shareholders / investors (11), customers (11),
our previous stakeholder identification results and follows ASEH requirements. Shareholders / employees (562), suppliers / contractors (348), government (9), industry unions / associations
investors, customers, employees, suppliers / contractors, government, industry unions / (6) and communities (49). Then, we invited 84 senior managers and committee members to
associations, and communities (including NGOs and the media) were identified as the 7 major take the Operational Impact Survey to measure the impact of each sustainability issue on the
stakeholders. company's revenues, risks, customer satisfaction, and employee engagement. The results are
taken and analyzed with the results from the Stakeholder Concern Survey.
We integrated GRI Standards, Sustainability Accounting Standards Board (SASB) Standards,
Task Force on Climate-related Financial Disclosures (TCFD), Sustainable Development Goals
(SDGs), Responsible Business Alliance (RBA) Code, Morgan Stanley Capital International (MSCI)
ESG Rating, and S&P Global Corporate Sustainability Assessment (CSA) with our operational
characteristics and ASEH's requirements and summarized them into 8 governance issues, 5
environmental issues, and 7 social issues, 20 sustainability issues in total.
Step 1 Step 2 Step 3 Step 4
Investigate Stakeholder Analyze Operational Impact
Identify Stakeholders Design Sustainability Survey Concerns 84 senior executives and
7 stakeholders 20 issues summarized 996 feedbacks USI Sustainability Committee
members participated
Phase III. Responsiveness Phase IV. Impact
Investigate Stakeholder Analyze Operational Impact
Identify Stakeholders Design Sustainability Survey Concerns 84 senior executives and
Operation and Sustainability Green issues summarized Value Chain Environmental Protection Social
Inclusive Sustainability Committee
USI
About this Report members participated Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Phase III. Responsiveness Phase IV. Impact
The Stakeholder Concern Survey and Operational Impact Survey were analyzed to identify USI's five Sustainability Taskforces have formulated management strategies for all
the priorities of governance, environmental, and social issues. The issues were divided major ESG issues. Members of each Taskforce have jointly determined 21 long-term
into material issues (13 items) and non-material issues (7 items). We selected 23 topics sustainability goals. In addition to quarterly Executive Team meetings, the Sustainability
referring to the GRI Standards that respond to material issues identified, highlighted 2 topics Taskforces also meet semiannually to review the progress of each goal. At the
according to the Company's industrial characteristics, and added 4 ASEH required topics. annual Sustainability Committee meeting, we review our achievements, make rolling
Energy Management and other non-material issues are disclosed annual drive priorities and adjustments, track sustainability trends, and manage the impact of our sustainability
performance in this report as they are also important in the sustainable development of USI. goals. We publicly disclose the direction, progress, and performance of our ESG
Scope and Structure of the Report: Following the principle of comparability, our 2021 ESG sustainability objectives in our annual ESG Report.
Report follows the material issues and coverage of the previous year. The structure of this
report is based on material issues identified from stakeholder concerns and operational
impact, as well as feedback from experts and scholars, fully disclosing USI's current policy
and plans for fulfilling ESG sustainability development.
Step 5 Step 6 Step 7 Step 8
Dene Material Topics and Boundaries Formulate Long-term
Identify Material Issues 23 specic topics Goals Evaluate Impact
13 material issues 6 other topics 21 long-term goals 7 regular meetings
6 manufacturing facilities
Materiality Matrix High Material Non-material
1 2 3 4 5 6 7 1 Regulatory Compliance 8 Climate Change 14 Economic Performance
8 9 2 Business Ethics 9 Air Pollution 15 Water Resource
Management
Stakeholders’ Level of Concern
10 11 12 13 Prevention
3 Customer Relationship
Management 10 Occupational Health 16 Energy Management
and Safety
4 Sustainable Supply Chain 17 Waste and Circular
11 Talent Attraction
5 Innovation Management 18 Diversity and Inclusion
and Retention
and Sustainable
Manufacturing 12 Talent Development 19 Social Involvement
6 Cybersecurity Management 13 Human Rights 20 Work from Home
7 Data and Privacy
15 16 17
18 19 20
Low Level of Operational Impact High
Governance Environmental Social
33
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Material Issues, Topics of GRI and Influences
Boundary Impacts
Material Issue GRI Topics Influence
(1)
Supplier Internal Customer Community Direct Business
307 Environmental Compliance
Ensure we comply with all applicable laws and avoid operational
Regulatory 416 Customer Health and Safety
and financial risks from illegal activities through preventive
Compliance 417 Marketing and Labeling
measures.
419 Socioeconomic Compliance
Establishing a culture of integrity and accountability through
205 Anticorruption
Business Ethics business conduct and ethics is one of the keys to long-term
206 Anticompetitive Behavior
operation and success.
Customer Sound customer relationship management helps increase
Relationship ASEH Material Topics customer satisfaction and loyalty to effectively improves
Management profitability and core competitiveness.
204 Procurement Practices
We co-work with supply chain partners to commit to corporate
308 Supplier Environmental
Sustainable sustainability, environmental protection, labor and social welfare,
Assessment
Supply Chain and promote environmental / social performance auditing
414 Supplier Social Assessment
assessment of suppliers to avoid purchasing conflict minerals.
Governance Conflict Minerals Management (2)
We are committed to innovative green technologies to reduce
Innovation 302 Energy
production costs, improve efficiency, and continuously reduce
Management 416 Customer Health and Safety
resource waste and energy consumption. In addition, the value
and Sustainable ASEH Material Topics
chain business model strengthens our core competitiveness and
Manufacturing Continuous Improvement Program (2)
expands the scope of green R&D technologies.
Cybersecurity is the foundation for maintaining the safe operation
Cybersecurity of all services. We ensure cybersecurity through network security
ASEH Material Topics
Management maturity assessments, operational cybersecurity health checks,
and regular disaster recovery drills for information systems.
We maintain confidential business information responsibly and
Data and 418 Customer Privacy
protect personal information privacy to ensure all rights are not
Privacy ASEH Material Topics
compromised.
Note 1. The internal boundaries cover our six major manufacturing facilities, namely Zhangjiang Facility, Jinqiao Facility, Shenzhen Facility, Kunshan Facility (above facilities are Mainland China Facilities), Nantou Facility, and Mexico Facility. The disclosure boundaries of Energy and
Emissions will be explained in the Environmental Protection and Occupational Safety chapter
2. Conflict Minerals Management and Continuous Improvement Program are USI Specific Disclosure topics
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Boundary Impacts
Material Issue GRI Topics Influence
Supplier Internal Customer Community Direct Business
Climate change has become the focus of global environmental
issues, and our operations are increasingly dependent on
Climate
305 Emissions energy for growth. Hence, we are facing expectations from our
Change
customers and the government, among other stakeholders, to
increase the use of renewable energy.
Environmental
Air pollution is gradually worsening and seriously affecting
Air Pollution people's quality of life. We use different control equipment for
305 Emissions
Prevention various pollutants to treat our emissions and meet regulatory
standards.
We have adapted an occupational safety and health
Occupational management system in all our Facilities to prevent occupational
Health and 403 Occupational Health and Safety hazards and enhance emergency response. USI also works with
Safety contractors to maintain a safety culture and provide workers
with a safe and comfortable working environment.
202 Market Presence Enhance our competitiveness and become an attractive
Talent
401 Employment employer by providing competitive salary and benefits,
Attraction and
402 Labor / Management Relations understanding employees' needs, recognizing employees'
Retention
405 Diversity and Equal Opportunity performances and efforts, and maintaining labor relations.
Social Plan suitable training courses for each job, implement
Talent information sharing and learning mechanisms across Facilities,
404 Training and Education
Development and enhance the employee career development roadmap to
help achieve business objectives.
406 Non-discrimination Safeguard human rights in accordance with international
407 Freedom of Association and standards on privacy, personal data, child labor, foreign migrant
Collective Bargaining workers, forced labor, discrimination, freedom of assembly,
Human Rights
408 Child Labor equality / fairness, and conduct human rights risk assessment
409 Forced or Compulsory Labor and mitigation measures to build an inclusive and non-
412 Human Rights Assessment discriminatory workplace.
35
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Stakeholder Communication
In light of issues that highly impact the corporate operations and stakeholders are highly concerned about, to meet their expectations, we have built a good communication platform, adopt relevant
corresponding strategies, and maintain and strengthen the relationship between the Company and stakeholders. Issues that they are not so concerned about also will be responded to in each chapter of the report.
Stakeholder Material Issue Communication Channel Frequency 2021 Performance Section
Board meetings Non-periodic
7 board meetings were held.
Annual general meeting Yearly / Non-
Held 2 shareholders' meetings to explain our operating performance, investment plan, Financial
Economic periodic
passed 2021Y employee stock ownership plans and respond to investors' concerns. Performance and
Performance Regular reports (quarterly / semi- Periodic
USI discloses the Company's financial information through regular reports (quarterly / Tax Governance
Talent Attraction annual / annual report)
semi-annual / annual reports) published on the SSE website and analyzes the Company's Talent Attraction
Stockholder / and Retention Telephone conferences Quarterly
business situation and data accordingly. and Retention
Investor Regulatory Investor Relations on USI website All the time
Held a telephone conference each quarter to explain USI's production and management Business Ethics and
Compliance Shanghai Stock Exchange-SSE All the time
to investors. Compliance
Business Ethics E-interaction
Participate in brokers' strategy meetings and receive investors during their visits. Board Governance
Receptions, visits, and roadshows (1) Non-periodic
Participate in Yicai roadshow programs to promote and advertise to investors.
Other interim announcements Non-periodic
Business Ethics and
Report Self-Assessment Questionnaire (SAQ) assessment status and results through the Compliance
RBA-Online platform. Occupational
Business Ethics Constant monitoring of RMA (2) status through the system (e-RMA). Health and Safety
RBA-Online
Occupational Health All the time Carry out satisfaction surveys each quarter through sales associates, and the main Human Rights
After-sales service system (e-RMA)
and Safety All the time customers satisfaction is 84%. Protection
Customer's satisfaction
Customer Human Rights Quarterly USI set up information security committee to implement NIST CSF (3) maturity assessment Waste
questionnaire
Water Resource All the time tool, and continuous improvement cybersecurity management capabilities to enhance Management
Mail
Management assurance for customer. Cybersecurity
We held the Cybersecurity General Fundamentals Course to boost employee Management
cybersecurity awareness. Customer Service
and Satisfaction
Continue to promote green supply chain, ask, and help suppliers to pass quality
management system certifications. Control the usage of raw materials to ensure the
products and materials correspond to the regulations of USI green products.
34 new suppliers were subject to evaluation and 32 of them were approved and became
to USI's Approved Vendor List (AVL).
Quarterly business review Quarterly
In addition to the compliance with purchase contract, suppliers must sign the
Occupational Health Business meetings Non-periodic Occupational
Supplier Code of Business Integrity and Supplier's Commitment to Corporate Social
and Safety Supplier evaluation Yearly Health and Safety
Responsibilities.
Customer Purchase contracts / Conducts In contract Customer Service
A total of 475 each category contractors join our occupational safety and health
Relationship period and Satisfaction
Supplier / education and training.
Management Training of suppliers Non-periodic Human Rights
Contractor Suppliers are selected each year to carry out on-site inspection for RBA. The number of
Human Rights On-site audit for suppliers Non-periodic Protection
suppliers were selected was 83.
Sustainable Supply Questionnaire investigation for Yearly Supply Chain
A supplier survey is conducted irregular to comprehend the current situations and trends
Chain suppliers Management
of suppliers. A total of 419 suppliers were surveyed.
Supplier sustainability conferences Yearly
We held an online supplier sustainability briefing in Mainland China to promote our
policies and philosophy and explained USI's ESG requirements for suppliers and shared
future goals. A total of 276 supplier partners attended the online sharing session. We
also held 24 Executive Business Review (EBR) meetings with material suppliers and 14
new product and technology presentations.
Note 1. Roadshows: Roadshows are used to promote the issuance of securities, referring to securities issuers' promotion activities targeting institutional investors before the issuance of securities, and is an important promotion and publicity tool to facilitate the successful
issuance of shares with full communication between investors and financiers.
2. RMA, Return Merchandise Authorization
3. NIST CFS, US National Institute of Standards and Technology Cybersecurity Framework
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Stakeholder Material Issue Communication Channel Frequency 2021 Performance Section
Held a workers' conference each quarter to discuss and plan recent activities related to
employees and propose employees' opinions.
\"Employee Relationship Website\" is set up in USI's intranet. In addition to providing
information regarding employees' welfare and activities, employees can share their
opinions in the \"suggestions box for employees\" on the website. And a total of 702
employee opinions were given back.
President's Symposium was held each quarter for the general manager to announce the
future trend and expectations of USI to colleagues. Additionally, the president can listen
Employee Welfare Committee / staff Quarterly to employees' opinions in the meeting. Total held 116 employee symposiums.
congress Company has been established to irregularly provide employees with various educational
Work from Home Employee Relationship Website All the time training programs to perfect their professional skills. Every employee received 30.7 hours Occupational
Occupational Health President's symposium Quarterly of training on average. Health and Safety
and Safety Industrial relations meetings Quarterly The Company adjusts employees' salaries based on the salary management system Talent Attraction
Employee Talent Attraction Training programs Non-periodic for six consecutive years; for outstanding employees, the Company provides a stock and Retention
and Retention Employee engagement survey Every other subscription plan to reward employees; in 2021, USI will increase salaries by 6% to Human Capital
Talent Development year 16% in Mainland China, 2% to 4% in Nantou and 5% to 13% in Mexico to maintain its Development
Newsletter Quarterly competitiveness in the talent market.
Announcement All the time Share the experience of high-ranking officials through the Company's quarterly
journals and WeChat group and understand information such as the latest industrial
developments, health education knowledge, employee activities, and so on. Held 111
employee activities and 410 employee health education trainings.
In response to COVID-19, we increased the insurance coverage for our employees, and
provided them with the necessary supplies to protect themselves. To ensure employees
can work remotely, in addition to adapting Microsoft 365, we conducted a telework drill
with 63% participation rate in February to smooth out bugs before promoting work from
home. About 60 employees applied for long-term telework afterwards.
Occupational
Occupational Health
Health and Safety
and Safety
Official document Non-periodic Social Involvement
Social Involvement Actively participate in briefings / public hearings / seminars held by competent
Governmental agencies briefings / Non-periodic Water Resource
Water Resource authorities.
Government public hearings / seminars Management
Management
Business Ethics and
Business Ethics
Compliance
Occupational
Health and Safety
Occupational
Talent Attraction
Health and Safety
Industry conferences Non-periodic and Retention
Industry Talent Attraction Actively participate in conferences or forums held by Industry Unions or Associations.
Industry Union /Associations Non-periodic Waste
and Retention We participated in 40 external organizations.
Union / conference forum Management
Waste and Circular Publish operating results and development direction periodically.
Member meeting Non-periodic Air Pollution
Association Air Pollution
Control
Prevention
External
Participation
Air Pollution
Control
Waste
Air Pollution Draw up environmental protection, occupational safety & health (ESH) Standard
Management
Prevention USI Website / Email / Direct line / All the time Operation Procedure and measures of environment safety communication, consultancy,
Community Climate Change
Waste and Circular Press release and participation. Keep friendly relationships with community residents.
and Carbon
(NGOs and the Climate Change Community activities Non-periodic Actively participate in social activities and establish a good relationship with the local
Management
Human Rights communities we operate in. Held 68 philanthropic social activities.
Media) Human Rights
Protection
Social Involvement
37
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Green Products and Innovation
In response to the latest changes in international environmental regulations, we have integrated and developed \"Green Product Specifications\" to control the hazardous
substances contained in electronic components and products. Our design and R&D employees have the ability to design products ecologically to ensure that the green products
manufactured and sold meet the requirements of environmental regulations in various countries, as well as customer needs, environmental development trends and the
Company's internal control standards. We have made continuous innovation and improvement in quality, cost, delivery, service, efficiency and safety in manufacturing related
operations and processes.
696 Cases Patents Accumulated
78.76
CNY Million CIP Cost Saving
2,332 Employees R&D Job Function
1.64
CNY Billion R&D Spending
92 % Eco-design Product Revenue Ratio
96 GWh Product Energy Efficiency
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Key Performance and Targets
Achieved Not Achieved
SDGs Business Action 2021 Key Issue KPI 2021 Target 2021 Performance Status 2022 Target 2026 Target
Continue the
Promote development-
Apply for Continue the incentive system
oriented policies to Continue to apply
Patents and green product 696 patents incentive system for for green product
support production, for green product
Research and design accumulated green product and design, targeting a
job creation, creativity, design proposals
proposal design cumulative number
and innovation
of patents to 1,611
Reduce energy
Continuously Continuously 304 approved Continuously Continuously
consumption in the
Continuous introduce introduce proposals proposals for introduce proposals introduce proposals
production process
Improvement proposals for for improvement in continuous for improvement in for improvement in
and reduce CO2
improvement each facility improvement each facility each facility
emissions
The conversion The conversion
All internal All internal
International efficiency of the AC- efficiency of the AC-
power supplies power supplies
energy DC internal power DC internal power
complied with complied with
conservation supply complies with supply complies with
80 Plus Titanium 80 Plus Titanium
certification 80 Plus Titanium 80 Plus Titanium
certification certification
certification certification
Adopt green product On handheld
design to improve Green Design / devices, continue
energy efficiency and Green Product to use the latest Develop miniaturized
5 products use the
reduce waste generation of radio Design Wi-Fi Module antenna design to
latest generation
frequency (RF) with better energy reduce material and
Miniaturized of RF connectors to
connector, which is efficiency to save energy consumption
design save materials, with
light and compact energy (Target to and reduce its carbon
a utilization rate of
and materials saving, Save 30% Power) footprint (Shrink
more than 90%
with a utilization Antenna Size by 25%)
rate of more than
90%
39
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Research Patents and Continuous Improvement
Research and Patents
USI provides diversified manufacturing services for customers. The engineering In terms of patents, to encourage research, development, and innovation, USI set up Patent Management and
team assists customers in reviewing product designs for the optimal balance Incentive and regular R&D competitions. After the project has been verified, employees that proposed the
between quality and cost before mass production. For the same quality, we patents will be financially rewarded and publicly recognized. By the end of 2021, an accumulative total of 696
offer suggestions to improve product design and manufacturing costs to reach patents had been obtained. The accumulative approved patents increased by 36 cases comparing with 2020.
a win-win strategy. For staying ahead of intelligent trends, the Nantou Facility The patents obtained in the last four years are shown in the figure.
started to promote industry 4.0 since 2015 and kicked off the Ten-Year to Win
Project. We expect to develop smart manufacturing capability in USI worldwide 628
facilities and create better operating performance for investors. For years
company has presented research performances to the electronics industry
through applying patents and international journals.
Annual Filed Application
USI has 2,332 R&D employees, accounting for 9.42% of the employee Annual Granted Application
180 163 165
population and invested CNY 1.641 billion, accounting for 2.97% of the revenue Accum. Filed Patent (Pending)
in 2021. The number of products shipped was 1,000,628,071 (1). 58 59 46 44 56 39
44 Accum. Effecitve Granted Patent
2018 2019 2020
R&D Spending and Intensity Four of the proposals involved green process designs and have passed internal patent review meetings. The
green process proposal is to increase the proportion of automated and unmanned factory operations by
3.43 3.91 3.69 3.31 reducing work hours, lowering labor costs, or improving efficiency to achieve energy and carbon savings in the
2.97
process.
1.58
1.64 Facility Green Proposal Proposal Benefit
1.31 1.37 The device performs fully automatic scanning, loading and response
Testing Pen Device
testing. This saves labor, reduces working hours, and improves productivity.
1.02
Automatic clamping The device drops the rotating head to the clamping point and uses the
bearing on the rotating head to clamp onto the fixture, thus reducing the
Zhangjiang device for chip test fixture
number of operators needed.
R&D Spending Design cart rack, apply six-axis robot to replace manual clamping of pallets
Cart positioning
(in CNY billion) on the rack, AGV (2) replaces manual transport of the rack to supply to the
equipment and
R&D Intensity (%) production line, thus reducing the number of operators, lowering labor
positioning method costs and realizing the objective of an automated and unmanned factory.
2017 2018 2019 2020
Pallet transfer device Automatic pallet loading and unloading mechanism design, saving
Kunshan manpower working hours, reducing the duration of personnel contact with
and material counting system X-ray machines, thus reducing health impacts for exposure to radiation.
Note 1. Please refer to page 19~20 and 22 in the 2021 USI Annual Report for detailed information
2. AGV, Automated Guided Vehicle
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Continuous Improvement Program
Continuous Improvement Program (CIP) proposes improvement plans for the quality, costs, After the 2021 annual performance examined and approved by CRC, the actual tangible cost
lead time, services, efficiency and safety of manufacturing related operation and procedures. Its saving was CNY 78.76 million, mainly from the innovative automatic design of the Zhangjiang
purposes are as follows: Facility. Please refer to the figure for the details of each facility. The saving cost accounted
for 0.22% of revenue (target value: 0.22%) and a total of CNY 179 thousand has been reward
● Build a platform to realize ideas and approve employees' endeavors and awards employees for their commitment to continuous improvement(1).
● Encourage employees devoting to continuous improvement
● Enhance teamwork and enterprise competitiveness 2021 CIP Performance by Facility
The cases proposed by each facility are reviewed by Site Review Committee (SRC) for their
project results that including innovation and development capability, actual saving value
Jinqiao Nantou
attainment capability, technical application capability, standard operation capability, and
4.8%
reproduction operation capability. After the organizer samples the cases, Corporate Review 21.6%
21.6%
Committee (CRC) will review their saving benefits and promote cases with reproducible results Shenzen
to enlarge the benefits. According to the statistics in the figure below, over 250 cases on average 9.7%
are defined each year.
17.2% Kunshan
Zhangjiang
46.7%
Case
2017 2018 2019 2020 2021
Note 1. Due to discrepancies with quoted figures, the bonus for 2020 was revised to CNY 218 thousand
41
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
CIP Excellent Contribution Award
Each facility proposes representative or innovative cases to enter global competitions. Awarded teams are granted trophies and incentive payments. The following table explains the contribution
award and project benefits. In response to the issue of climate change, USI has included Energy Saving and Carbon Reduction in the rating system and the type of key project to promote relevant green
proposals. In 2021, 8 projects achieved the targets, included two Energy Saving and Carbon Reduction projects awarded.
Facility Ranking Project Name Project Benefit
Key Project
Improved heat recovery system to recycle thermal energy into the Facility's air conditioning system, reducing the load on boilers and ice machines,
Bronze
Jinqiao Heat Recovery System reducing water, electricity and gas consumption, saving 135,306 kWh of electricity annually and reducing carbon emissions by 606 metric tonnes,
Medal
within estimated annual savings of CNY 1,307,703.
Use pressure sensor with two-way valve modification, with three-way valve and inverter variable flow energy-saving technology, so that the feed water
Bronze Improve the operation of air
Nantou-NK pressure flow supply is stable, maintaining the best operation mode to achieve energy saving and carbon reduction effects, saving 423,948 kWh of
Medal conditioning tank feed pump
electricity annually and reducing carbon emissions by 213 metric tonnes, within estimated annual savings of CNY 195,161.
Other Project
Robot arm replacement product
The old machine was modified to add suction nozzles and laminated pallets for loading and unloading, which can improve efficiency and productivity,
Zhangjiang Gold Medal in the In-Circuit-Test platform
and reduce the purchase of 8 new machines, so that one person can operate 12 machines. It is expected to save CNY 2,907,317 annually.
improvement
NW2009 equipment using
Zhangjiang Silver Medal RF switch IC instead of RF Design RF switchboard to replace the original RF switch to save equipment investment costs. It is expected to save CNY 3,193,344 annually.
mechanical switch
Improved laser groove
Jinqiao Silver Medal Increase delay time and laser power control to improve penetration. It is expected to save CNY 1,458,952 annually.
perforation
Bronze Improved laser cutting Combine laser cycle mode and new laser cutting method (including a new base design) to reduce laser cutting path and time. It is expected to save CNY
Zhangjiang
Medal productivity 2,377,133 annually.
Bronze The locking screw fixture features a foolproof design to prevent the loss caused by worker negligence through statistics. It is expected to save CNY
Kunshan Screw fixture control system
Medal 258,325 annually.
Bronze Parallel testing is introduced to reduce the operating time of the entire PCB testing, saving on testing working hours and reducing machine loading rate.
Kunshan Parallel testing for Function Test
Medal It is expected to save CNY 378,092 annually.
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Green Product Management
With respect to the strategies of green management and ecological design on products, and through annual third-party IECQ USI designs green products that meet global regulations based
QC080000, ISO 14001, and ISO 14064-1:2018 management systems inspections. USI can quickly respond to changes in international on the four aspects of Green Product Eco-design, and constantly
environmental protection laws, directives, and clients' requests. In addition, USI integrates and stipulates Standards for Green improve ecological design capabilities so products can meet
Environmental Protection Products to control hazardous substances in electronic components and products. The design and R&D trends in green design. We design products with Eco-Design as
personnel of USI have ecological design capabilities for their products, and continue to introduce the concept of green products the principle in the planning stages of product development. In
and clean technology, which allows our environmental-friendly products to be sold around the world and ensures that the green 2020, USI introduce a professional green value chain management
products we manufacture and sell are in compliance with environmental laws, regulations, and requirements around the world in platform \"Green Parts Aggregations & Reporting System (GPARS)\"
terms of environmental protection, while satisfying customers' needs and the development trends of environmental protection, and database for environmental hazardous substances (EHS).
and following company's standards for internal control. The materials we use in our products meet Hazardous Substance
Free (HSF), RoHS and WEEE requirements. Up to 2021, we have
Four Main Aspects of Green Product Eco-design over 300 chemical substances controlled under Green Product
Specifications to ensure that our products follow RoHS European
Main Aspect Environmental Directive Requirement USI Design for Environment (DfE) Union directives. In response to REACH's announcement of adding
the 26th batch of 4 Substances of Very High Concern (SVHC), the
RoHS (1) (Restriction of Hazardous Substances)
REACH (2) (Registration Evaluation and list of REACH substances has expanded to 223 substances. For
Phase out the use of BFRs substances that have not been replaced by technology at this stage,
Hazardous substances Authorization of Chemicals) Low polluting
Phase out the use of PVC
in electronic products Halogen-free parts and process requirements Non-toxic a Prohibited Substance Eradication Plan(3) has been drawn up. In
Use non-halogen materials
Battery Directive and Packaging and Packaging addition, suppliers must provide Environmental Hazard Non-Use
Waste Directive
Declaration and Safety Data Sheet (SDS) or material composition
Reduce the number of tools used to tables. According to the Design for Environment (DfE) operating
Recyclable take machines apart procedures, USI not only takes potential environmental impacts
Recycling
WEEE (Waste Electrical and Electronic Easy to take Increase the percentage of recyclable under consideration when designing a product, but also have them
management of
Equipment) apart module designs
electronics
Easy to process Introduce the labeling for recyclable
confirmed with the project development unit and the customer to
plastics meet the requirements of Energy Star and ErP, as to meet a range
of environmental factors, such as material use, energy saving and
Energy saving Reduce the energy consumption of CO2 reduction, efficient use of water resource, pollutant emission,
Resource saving machinery in standby and off mode resource wasting and recyclability, in order to minimize negative
Ecological energy ErP (Energy-related Product)
Reduced Increase the efficiency of energy
design of products CEC (California Energy Commission) impacts to our environment during the product life cycle.
environmental conversion of EPS
impact Keep machinery in power-saving mode A green product with clean technology needs to comply with two or
more green product ecological design standards to improve energy
Reduce volume Improve the system's functions
Product SiP (System in Package) efficiency and reduce environmental pollution. In 2021, green
Easy to Reduce the complexity of the circuit
miniaturization design SOM (System on Module)
integrate Reduce the materials usage
product revenue accounted for 32.8% of USI's total revenue, which
decreased by 14.8% compared to the previous year, mainly due
Note 1. To date, we have controlled over 300 chemical substances under the Green Product Specifications to ensure that our products are in compliance with RoHS European Union to supply shortages and the percentage of green products in each
directives
2. In response to the announcement of adding the 26th batch of 4 Substances of Very High Concern (SVHC), the candidate list of REACH has been extended to 223 substances
category is shown in the table below. In the future, we will continue
3. The current plan is to ban the use of the three substances Indium Phosphide, Nickel Sulfate, and Nickel Amino Sulfate by 2023 to invest in green product research and development and increase
the proportion of green products.
43
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
The Proportion of Green Product Revenue to the Company's To intensify the promotion of green products, USI established the Green Design Innovation and
Overall Revenue Invention Patent Incentive System at the end of 2017. The objectives thereof are to give green-
related designs weighted scores; build a green and innovative corporate culture; and facilitate green
Green Product Category (1) Percentage of Revenue in 2021 (%) design proposals. The results of each product category and green related design are as follows:
Communication Product 26.5
USI's Green Design in 2021
Industrial & Automobile Electronic Product 2.2
Consumer Electronics & Computer and Storage Product Category Key Features Performances
4.1
Product
Improve energy All internal power supplies complied with
Total 32.8 Internal Power Supply
efficiency 80 Plus Titanium certification
Comply with the EU Code of Conduct Tier
Improve energy
Performance of Eco-designed Products External Power Supply 2 (CoC Tier 2) and the latest regulations of
efficiency
the US Department of Energy (DoE)
Product Revenue Ratio (%) 2017 2018 2019 2020 2021
The DC-DC conversion efficiency of the
Energy Efficiency 33.3 32.9 34.4 38.6 45.9 Improve energy
Server DC power supply of the server product is
efficiency
Electronic Waste Recycling (WEEE) 12.5 11.2 9.2 6.3 5.2 more than 90%
Light and Compact 49.2 39.6 39.0 41.6 41.0 Improve energy
efficiency
The Proportion of Total Revenue 95.0 83.7 82.6 86.5 92.1 Reduce power
True Wireless Stereo (TWS) uses low-
consumption in
Wearable Solutions power IC parts in its SiP design so that its
In our 2021 product energy-saving evaluation, USI's eco-design products saved 95,754 MWh, standby
standby power consumption is below 1mA
equivalent to reducing 46,888 metric tonnes of CO2 and accounting for 37.3% of USI's total Modularization and
revenue. compatibility
Miniaturization
Product Energy Efficiency Evaluation Continue to use the latest radio frequency
(RF) connector in handheld devices
Product Category Energy Saving in 2021 (kWh) Intelligent Connectivity
Reduce consumables and replace existing parts with smaller,
Solutions
Communication Product 1,020 thinner, and lighter components to
conserve material use
Consumer Electronics Product 40,011
Design products to meet ErP Lot 26
Computer and Storage Product 17,227,481 enterprise Access Point Improve energy
network standby requirements (standby
Product efficiency
Industrial Product 638 mode < 8W)
Improve energy Develop hearing aid charging products to
Automobile Electronic Product 78,484,431 Visual & Specific
efficiency reduce the use of disposable batteries and
Application Product
Total 95,753,581 Miniaturization reduce waste
Note 1. USI's product categories fall into six categories, and this section does not cover medical categories
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Green Supply Chain
The trend toward sustainable development of green product is inevitable. Only by establishing GPARS / EHS System
long-lasting management model of green supply chain could allow industries face up-coming
challenges. As a result, USI ensured that the entire production process which involves product
GE Sta
design, procurement of materials, manufacturing, transportation, packing, sale, and recycling of Approve
products. With an effort to integrate upper and lower-stream partners, USI vowed to create a the GP Data
safe, stable green supply chain, generated the maximum environmental benefits.
We invite our suppliers to join our GPARS platform to communicate and update on relevant Suppliers
Accept the
changes in global environmental protection laws, regulations, and customer requirements GP Request
for green product standards (RoHS, REACH, and Conflict Minerals). Suppliers can read up on
our newest green product specifications through this platform and go through its certification
Approval
process. In addition, our R&D, production, and quality assurance teams can also stay up-to-date of the GP EHS
on current standards for our products and take necessary control measures. The systematic Upload / Fill / Data Database
Revise GP Data
management of our global green product supply chain helps us improve data accuracy,
strengthen cooperation with supply chain partners, and achieve a green supply chain.
GPARS
Green Education
Besides implementing the green management internally, USI made stakeholders further aware In 2021, the total number of all facilities' green education training hours was 18,713 hours.
of the importance of environment protection and applied the correct environmental concepts To meet customer requirements, USI is not only keen to participate in international forums
to various steps in production process (i.e., the product planning, raw material control and that carbon emission disclosure, but also carried out plans for energy conservation and carbon
greenhouse gas emission reduction). We keep communicating with its employees, suppliers emission reduction. By instilling the green concepts at internal training programs while drawing
and contractors regarding our ESH-associated principles, knowledge, and requirements. The from external experiences in this regard, USI conveyed its green values and fulfilled the Green
e-learning courses of green education were added to USI's internal training that informed the Promises.
employees of GP-related regulations, requirements, operating procedures, and eco-friendly
materials.
Hazardous Substance
Course Management System Green Design Controlling Green Products Laws and Regulations Green Manufacture Green Part Verification
OQC Shipping Area Control
Requirements for Green Products Process Introduction Management and Approval
Quality Policy Green Product EU RoHS WEEE RoHS (EU) 2015 / 863 Global Green Product Operating Standards
Hazardous Substance Workflow China RoHS Halogen-Free WEEE 2012 / 19 / EU Environmental Regulations and Regulations for
Management System USI GP and HF Labeling Green Products
Taiwan RoHS CEC Green Manufacture
Green Product Management
Course Japan RoHS ErP Management QQC Items and Standards
System
Content
RoHS (EU) 2015 / 863 REACH
Halogen-Free
Green Product Workflow
45
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Value Chain Management
Facing the boundless development trend in the globe, good supply chain management can not only effectively lower production costs and enhance the quality of products to win
more satisfaction, but also expand the company business and social responsibility with partners to create a sustainable future.
84 % Customer Satisfaction
416 Suppliers Conflict-free Mineral
39 % Global Local Purchasing Rate
276 Supplier Partners Participated in the Sustainable Value
Chain Webinar
94 % New Suppliers Passed Sustainability Assessment
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Key Performance and Targets
Achieved Not Achieved
SDGs Business Action 2021 Key Issue KPI 2021 Target 2021 Performance Status 2022 Target 2026 Target
Through customer
satisfaction surveys and
complaint channels,
we gain customer Customer Major Customer Major Customer Major Customer
Major Customer Major Customer
insight and accurately Relationship Satisfaction Satisfaction Satisfaction
Satisfaction Satisfaction is 84%
respond to customers' Management reaches 84% reaches 84% reaches 84%
expectations, providing
customers with the best
quality service
Local Local
Local Global Local
Local procurement procurement procurement
procurement rate Procurement rate is
rate maintain at least maintain at least
reaches 30% 39%
35% 35%
Formulate sustainable
procurement policies, Percentage of target 100% Target 100% Target 100% Target
100% completion
promote supplier suppliers completing suppliers use suppliers use suppliers use
of conflict-free
environmental / social Sustainable the conflict-free conflict-free conflict-free conflict-free
minerals
performance evaluation Supply Chain minerals minerals minerals minerals
and audit, and avoid
purchasing conflict
minerals Percentage of
suppliers completing Suppliers Suppliers Suppliers
Suppliers SSAQ
the Supplier completing the completing the completing the
completion rate is
Sustainability SSAQ rate reaches SSAQ rate reaches SSAQ rate reaches
73%
Assessment 71% 72% 76%
Questionnaire (SSAQ)
47
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Product Value Chain
USI is the world's leading company of D(MS)2 (1) providing design, miniaturization, material sourcing, manufacturing, logistics, and after- Turnkey Service
sales services of electronic devices / modules for brand owners. In addition to manufacturing services, USI also provides customers
with Turnkey Service (2). Our Product Value Chain and Turnkey Service cover the content as shown in the figures below:
Product Value Chain Material
sourcing
(3)
& RFQ
Supplier
Customer Agent Material
Contractor planning
& purchasing
Industrial Inventory
Computer management
Communication Consumer & Car & & Storage
Medical
VMI hub
management
Products & Market Positions
Wi-Fi SiP Wearable Device SHD & POS SSD & Array RMA
WW No.1 for WW No.1 for WW No.2 for Enterprise & SMB service
Smart Phone Watch, Wristband… Logistics &
& Tablet Warehousing
Supplier
management
5G SiP LCD X-Y Board Power Module X-86 M/B &
Smart Phone TV, NB, Monitor Car LED Lighting Docking System
& Tablet Inverter Server/ WS integrator
Power Module Docking for NB relationship
xEV Powertrain
Logistic
arrangements
PCBA & Box
assembly
Note 1. USI provides D(MS)2 product services: Design, Manufacturing, Miniaturization, Industrial software and hardware solutions, and material procurement, logistics, and maintenance
services for brand owners
2. The essence of Turnkey Service is service integration
3. Material suppliers refers to suppliers of PCBs, substrates, active / passive components, other electromechanical components, mechanical components, packaging materials, and
accessories
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Customer Service and Satisfaction
Since its inception, the Company has been providing professional services and quality products service network to effectively control the collection and classification of defective products as
to meet the diversified needs of our customers. We possess cutting-edge product development well as resource allocation. Therefore, the relevant units can provide customers with product
and manufacturing capabilities to provide customers with complete services from design to exchange and failure analysis services. The customers are also allowed to monitor the RMA
distribution, and services spanning across global production locations. Regarding technical and status---anytime, anywhere---via e-RMA, where they can apply to the RMA service and submit
supporting logistics services, USI is committed to providing the most agile and fastest services status inquiries.
close to our customers. Customer satisfaction is a core goal and value pursued by the Company.
To meet or exceed customer needs and expectations provides customers with high-stability, USI After-Sales Services Scope & Categories
high-reliability, and cost-advantage products. With the experience and technology accumulation
by working with top clients in the world for years, we integrate the three core technologies:
computing, communications, and multimedia processing, and provide customers with the most
complete solution for wireless communication products, computer and industrial applications,
storage of products and servers, automotive and video products, and miniaturized products.
USI implementation of quality policies as well as the guarantee on goods and services, a
comprehensive inspection must be made for all products before shipment. Only qualified RMA Technical
products can be delivered (outgoing quality pass rate is 100%). There were 1,000,628,071 Service Support
products provided in 2021. Besides, USI has also passed various international certifications such
as TL 9000, and ISO 9001 (Please refer to the Management Systems Certification Table). Please
refer to USI website for our Quality Policy.
All-Encompassing After-Sales Service ●
●
After-sales service solutions
● On-site technical support at
customer's requirement
Project rescheduling and
The customization of our after-sales services allows USI to satisfy customers' needs with all- replacement of parts Spare ● Training program for
maintenance sta
around high-quality, high-efficiency and flexible services. Not only has each of our customer ● Warranty and out-of- Parts ●
has dedicated personnel, but also, we collect customers' feedback and opinions through regular warranty maintenance Test fixture and technical file
maintenance
and irregular meetings and questionnaire-based surveys. Their feedback enables us to, while ● Product repairs
● Product defect analysis and
understanding their needs, improve our service quality and enhance partnership to create a ● Product replacements
troubleshooting
solution where everyone benefits. Apart from standard after-sales services, USI also provides ● New product service
customized all-around after-sales services to closely cooperate with our customers and provide technical support
them solutions that really meet their needs. ● Selling regular and critical spare
In terms of after-sales service management, USI adopts e-RMA (1) and SAP (2) systems for global parts/ components service
Note 1. e-RMA, e-Return Material Authorization
2. SAP, Systems Application and Products in Data Processing (It is a world-famous and universal ERP system developed by SAP)
49
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
USI uses on-time delivery rates and maintenance turnover
days as measurement metrics for our after-sales service (1).
Customer Complaints and Product Recall products, service and other, continue to improve the Company's
service quality, strengthen the good cooperative relationship
On-time delivery rates are the percentage of batches shipped By following the quality policy of \"Each member in the company with customers, and work together to create the Company's
on time out of the total monthly shipments agreed with shall participate and endeavor for improvement continuously to greatest benefits and value. In response to the results of the
the customer. Maintenance turnover days are the interval pursue the Zero Defect in each operational segment\", USI adheres questionnaire survey, relevant units within the Company
between receiving returned products and their reshipment to \"Three Non-Defective Principles\": No acceptance of defective hold seminars to formulate feasible response strategies, and
date. With USI's wide range of product services, different products, No fabrication of defective products, and No delivery of effectively communicate with customers' feedback, needs and
returned product quantities and properties will have different defective products. The company is highly concerned about the suggestions, formulate improvement plans and action plans,
standards for maintenance turnover days. Turnover days in products with potential quality issues. USI's R&D and engineering continue to track and monitor the improvement status, and
2021 increased due to COVID-19, which resulted in longer units are invited to discuss the treatment plans and cause send feedback of the latest progress to customers constantly,
waiting periods for global supply of materials and shipment analysis and the regular study meetings to continuously track the improving communication quality and customer satisfaction to
lead times. After clear communication with customers, the countermeasure effectiveness as well as to prevent from repetition obtain customer recognition and long-term support.
agreed on-time delivery rate was 99.5%. of defective products. For the products with safety concerns or
batch issues, the company establishes preventive measures to
Customer Satisfaction Survey Process
recall them right away. The losses can be avoided, and customer
On-time Delivery Rate and Maintenance
lives and properties can be protected from damage.
Turnover Days
Regarding customer feedback, we established a system to log
99.0 99.0 99.5 and respond to quality feedback rapidly. Related personnel are
98.5 % % % Start a
%
immediately notified when there's feedback. They then will preliminary survey
36.0 analyze and propose the most effective solutions to the customers
and take steps to prevent similar issues from arising again.
31.9
29.0 According to the Company's statistics, there were 3 complaints (2)
25.3
from key customers in 2021, with a 100% resolution rate and no Conrm customer list
product recalls. The main attributes of customer complaints are
summarized and analyzed, and they all belong to manufacturing
process problems. The Company's improvement measures include
Customer
designing new molds, adding alarm devices to control the adhesive satisfaction survey
dispensing parameters and updating the inspection process to 1. Collect QBR scores
2. Conduct QBR score or
avoid recurrence of problems and to resolve root cause issues. customer survey
2018 2019 2020
Driving up Customer Satisfaction Coordination and review
Turnover Days On-time Delivery Rate of analysis reports
In order to ensure effective communication with customers around
the world, USI has set up dedicated personnel for all customers to
handle customer service incidents, and actively collects customer
opinions and demands by holding Quarterly Business Review (QBR) Follow up and
Note 1. For modularized products, it is not possible to be repaired. Thus, they must be
meetings, irregular business meetings, and questionnaire surveys case closure
replaced with new products, and they are included in the calculation.
2. Statistics cover Zhangjiang, Jinqiao, Shenzhen, Kunshan, and Nantou Facilities. in order to understand customers' evaluation of the Company's
products in the aspects of quality, delivery, technology, green
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Customer Privacy and Product Safety
(1)
USI is committed to achieving the annual goal of customer satisfaction . The statistical results of major customer Confidential customer information and customer health and safety are always treated
(2)
satisfaction in 2021 showed that the overall satisfaction rate was 84% (Successful). In terms of individual with the highest priority as they are crucial assets for both parties and the basis
satisfaction dimensions, except for \"Delivery\" and \"Other\" which did not reach 80%, all the other dimensions for mutual trust. USI has management procedures to control and restrict access to
reached \"Successful\" or above. For dimensions that do not meet the required standards, we continue to confidential information to avoid endangering customers' health and safety. If the
communicate with our customers to receive their feedback and make all necessary improvements. USI strives company violates relevant regulations or our products harm customers' health and
to improve customer satisfaction in all aspects to achieve a higher level of customer satisfaction for sustainable safety, it will seriously damage our image and cause financial losses.
corporate development and to maintain an annual goal of \"Successful\" or higher, with the expectation of moving
towards \"Excellent\" in customer satisfaction in the future.
Customer Privacy
Major Customer Satisfaction Over the Years USI commits to maintaining customer privacy and data confidentiality. We set
systems and procedures in place to center customer privacy and data confidentiality
Quality
as the foundation of all business contracts. In addition to signing confidentiality
100%
agreements with our customers to safeguard customers' proprietary and confidential
95%
information, and require related units to observe confidentiality measures, we have
90%
also established privacy and personal information protection policies that serve as the
84% 84% Other Delivery
85% basis for compliance management. This includes managing the collection, processing
80% and use of personal information, and practicing privacy and personal information
83%
75% protection to ensure the rights and interests of all. Please refer to the Business Ethics
70% and Compliance section for our Privacy Policy. At the same time, every new employee
82%
must sign the employee code of conduct after reporting to the job, which stipulates
the compliance to recusal due to conflicts of interest, and employees shall not make
public statements without authorization and disseminate operating information not
Service yet confirmed by the Company. Regarding customer document management, the
Technology
Company stipulates that all customer documents are defined to have the highest level
2018 2019 2020 2021 of confidentiality to protect product information provided by customers. Document
information shall be encrypted and stored in the Company's internal network system.
Green Product Information authorization management is adopted to ensure that customer privacy
is tightly protected. For cybersecurity management, the Company also has a set
of standard management procedures and training courses, to strictly implement
2018 2019 2020 2021 the cybersecurity policy and customer privacy protection measures and operate
in accordance with the policies and plans of the Information Security Committee,
protecting the Company's business secrets and customer information from leaks and
comprehensively enhancing cybersecurity awareness. For related content, please
Note 1. Definition of Customer Satisfaction Score: Outstanding (Satisfaction ≥ 90%), Excellent (Satisfaction ≥ 85%), Successful (Satisfaction ≥ 80%), refer to the Cybersecurity Management section. In 2021, there were no incidents of
Improvement Required (Satisfaction ≤ 80%) infringement of customer privacy rights, and no incidents of customer data leakage.
2. Major customers refer to the top 20 customers with the best annual revenue (accounting for above 90% of USI revenue) according to USI
President Office data
51
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Customer Health and Safety
USI emphasizes customer satisfaction and safety, so all suppliers must label materials according to our Green Product Specification For the protection of users, compliance with product
Procedure and we set up a mechanism that incorporates customers' demands into the product design. The company's products safety regulations is a basic requirement for imported
and operating system are also in line with international standard requirements and the safety guidelines of countries that its electronic products around the world. The system products
products are sold to. For example, it adopts stringent rules and uses only the low-pollution, non-toxic raw materials. For product manufactured by USI must comply with the product safety
planning, USI ensures products meets the specifications required by environmental regulations (EU RoHS, REACH, and related regulations of the country of sale or customers and meet
compounds etc.), and then conducts the life cycle assessment and eco-design evaluation. Meanwhile, USI generates eco-profile one of the safety regulations in the right table. In addition, in
in response to EU's Energy-related Products (ErP) Directive (please refer to the Green Product Management section). USI also the early stages of product design, we also consider various
developed a Chemicals Management Procedure to assess and prevent risks that may arise whenever we introduce a new chemical usage scenarios, and take imperfect laws and regulations
into our production process as detailed in the Occupational Health and Safety section. into account, and strengthen product safety standards. The
Company shall continue to expand product safety-related
As part of product safety, we use the Factory Inspection Mechanism (1) to ensure all manufactured products comply with relevant
certifications for retail, industrial, and special field applications
laws, regulations, and ordinances internationally and of the sales area. For all electronic system products that have obtained safety
related to IoT to provide customers with high-quality, health
certification, relevant safety warnings and description of correct operations are clearly stated within the user manual, and are
and safety-compliant products. In 2021, the Company
regularly checked by a third-party (ex. UL, TUV, CCC) on a quarterly or annual basis.
established a certification pipeline for product safety-related
certifications for home security (including access control,
USI Products Compliance with Directive in 2021 home burglary prevention, area burglary prevention, and fire
alarm notification), and conducted an online session to share
Percentage of USI Products within the Directive knowledge and introduce the certification process at our
Nantou Facility. In 2021, we did not receive any complaints
Green Products Automotive Advanced
Directive Intelligent Advanced Low about products endangering human health and safety, and no
Visual and Specific Electronics and Mobile and
Connectivity Cost Module product safety-related violations were found.
Application Module Turnkey Miniaturization
Solutions Manufacturing
Mgmt. Solution
USI System Products Compliance with
EU RoHS 100% 100% 100% 100% 100% Safety Regulations in 2021
Percentage of USI Products within
Halogen Free (HF) 15% 77% 0% 100% 100% the Regulations
Safety
Regulations Intelligent
Visual and Specific
CHINA RoHS 100% 100% 100% 100% 100% Connectivity
Application
Solutions
EN / IEC 60950-1 96% 100%
EN / IEC 62368-1 100% 100%
CNS 14336.1 75% 0%
Note 1. Factory inspection mechanism: A manufacturing factory that manufactures products which are labeled with safety regulations shall receive factory inspection (to be audited
GB 4943.1 50% 0%
by an external certification unit) based on the request of a certification issuance unit to ensure that its products conform to safety regulations
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Supply Chain Management
In 2021, the rapid mutation of COVID-19 virus has resulted in the global pandemic continuing
unabated, with extreme climate causing frequent natural disasters in various countries. In the
Supplier Code of Conduct
face of unprecedented impacts and challenges, we have joined hands with our global partners As a responsible corporate citizen, USI takes proactive action to ensure that business practices
to fight against the global pandemic. To avoid supply chain interruptions and maintain meet the highest standards of professionalism and ethics. The supply chain is an important
operational productivity, we conduct regular annual reviews and evaluations of supplier extension of the business value chain, and we are actively engaged in supply chain development
financial risks. We would adjust our procurement strategies, find alternative vendors, and to ensure that suppliers, contractors, and service providers work together to achieve the goal
prepare backup materials. In 2021, we evaluated 46 suppliers for financial risks. of sustainable development. Therefore, USI has established a code of conduct for its suppliers
to comply with. In addition to fully complying with the laws and regulations of the countries /
To build a sustainable supply chain, USI has implemented measures to support local suppliers, regions in which they operate, suppliers are also required to follow set standards for business
implement human rights and protect labor rights, restrict the use of hazardous substances practices in the areas of labor, occupational health and safety, the environment, business ethics,
and avoid using conflict minerals, as well as adjusting our procurement strategy according and management systems. At the same time, suppliers are required to communicate these
to global industry trends. We have adopted various procurement strategies according to the requirements to their next-tier suppliers and monitor their respective compliance. USI regularly
major categories of raw materials to diversify our sources of supply to reduce risks and ensure sends out annual supplier code of conduct communication letters to ensure that all suppliers
competitive pricing, reasonable cost, accurate delivery, and sound quality. In addition, we continue to comply with relevant domestic and international regulations, relevant international
also conducted cross-departmental communication and coordination, executed regular audits standards, and anti-corruption and anti-competitive conduct requirements. Please refer to USI
of suppliers to ensure sustainable management of the supply chain, and invited suppliers to website for our full Supplier Code of Conduct. (https: // www.usiglobal.com / files / images /
attend new product and technology presentations to establish solid partnership relationships supply / Supplier_CoC_EN.pdf)
with suppliers. In 2021, we held 14 new product and technology presentations with material
suppliers.
Supply Chain Strategy
In addition, to reduce material costs, prevent material shortages or improve quality, USI
USI fully understands that the overall power of procurement is a unique resource. In order to
conducts alternative material evaluation programs, and the Procurement Department,
pursue sustainable growth while meeting the needs of our customers, in the Company's daily
together with the R&D, Manufacturing, and Engineering departments, actively discusses with
procurement operations, in addition to cost and quality considerations, we also evaluate the
customers in advance about the introduction of alternative materials to avoid supply chain
overall sustainable value generated by the supply chain, hoping to develop stable partnerships
disruptions. We continue to drive a positive cycle with our supply chain, communicating and
with suppliers, continuously improve the overall supply chain resilience, grow together with
collaborating with each other. For materials with unique characteristics, customized materials,
suppliers, and implement sustainable procurement in concrete terms. Through the development
or materials subject to market supply constraints, we have identified five key material
of different projects such as supply chain diversity and sustainable procurement, we aspire to
categories for production and established the following operations for key materials to reduce
create a win-win future together with our suppliers.
the risk of occurrence:
● Development of alternative material mechanisms
● Emergency response management measures
● Purchase mechanism from spot dealers
● Material shortage review mechanisms
● Inter-facility transfer and rebalancing mechanisms
53
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
USI Suppliers
Supply Chain Management Strategy USI products are diverse and can be applied in many sectors. We
mainly procure active / passive components, substrates, mechanical
components, and other peripherals. Our raw material suppliers, spread
Value-Oriented
throughout the world, include original manufacturers, agents, and off-
To obtain a competitive
overall value in the the-shelf suppliers. In the face of the ongoing pandemic and global
Responsible supply chain. Diversified shortages, in 2021, we traded with over 1,900 material suppliers, an
Minerals Sources increase of 200 suppliers compared to 2020, to meet the needs of
Sourcing To maintain at existing and new customers.
To ensure that least two suppliers
suppliers are using for the same
only responsibly material to ensure a Category of Raw Material Suppliers in 2021
sourced, conict-free continuous supply.
minerals in their products. 14%
Sustainable 8% Acive
Sourcing Quality First
To raise suppliers' 3% Passive
To obtain the best
economic, environ-
quality products
mental and social 7% Mechnical
and services
performance in 68%
sustainability.
Strategic from PCB
Cooperation suppliers.
To integrate suppliers' Others
resources and capabilities for
greater innovation.
Sustainable Supply Chain Projects Distribution of Raw Material Suppliers in 2021 (1)
Project Quantitative / Qualitative Results
18%
To reduce material costs, avert serious material shortages, and replace unsuitable suppliers to optimize Mainland China
product quality, we strive to establish more than two alternative materials for each material for original
1% Taiwan
Bringing in Second or collaborative design and manufacturing projects to increase flexibility in supply. In 2021, for Customer 41%
Sources Z we have introduced the optional material mechanical components solution, with an estimated annual Southeast Asia
volume of 800,000 pieces, and the optional substrates with an estimated annual volume of 530,000
pieces. The two projects are estimated to save approximately CNY 5.12 million annually. 14% Northeast Asia
Pallet Recycling and In cooperation with local suppliers, the Nantou Facility recycled and reused 13,105 plastic pallets and North America
Reuse 6,798 wood pallets in 2021, and saved approximately CNY 3.31 million. 2%
Mexico
We collaborate with major processing vendors to recycle packaging materials and reduce environmental 4%
Packaging Materials damage. In 2021, the Nantou Facility recycled a total of 1.13 million trays, 230,000 partitions, and 60,000 Europe
Recycling recycling bins, a total of 562.66 metric tonnes of waste were reduced and saved approximately CNY 9.14 20%
million.
Note 1. The percentages of the amount purchased calculated according to the supplier distribution regions
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
The proportion of 2021 transactions with suppliers in each facility is shown in the table below. In Percentage of Purchasing from Local Suppliers at All Facilities (1)
this table, Zhangjiang and Jinqiao Facilities mainly manufacture the products for the biggest OEM
customer. The type of material procurement was relatively simple, with the most substantial 69%
proportion of purchase amount. However, Shenzhen and Kunshan Facilities have multiple 61%
production lines with a wide range of material procurement, and the transactions of suppliers Global
were relatively high. 43% 42% 43%
38%37% Mainland
39% China
Number of Suppliers and Percentage of Transaction Amount at All 30%
29%
22% Mexico
Facilities in 2021 18% 19%
16% 12% Taiwan
14%
Facility Zhangjiang Jinqiao Shenzhen Kunshan Nantou Mexico
No. of Suppliers 429 70 884 829 780 428 2018 2019 2020
Percentage of Authorized Economic Operator
the Transaction 38% 17% 8% 12% 20% 5%
Over the years, the company has strictly complied with the relevant national and international
Amount
regulations and attaches great importance to the rights and values of customers. Nantou Facility
passed the Authorized Economic Operator (AEO) certification on October 1, 2021 and was
USI supports local suppliers. This strategy not only facilitates the growth of the local economy awarded the certificate by the Taichung Customs. AEO aims to establish a partnership between
and increases local employment rates, but also effectively saves energy and time consumed customs and enterprises with complete supply chain security measures and certified operators
in transportation, helping us to minimize the impact on our environment. Therefore, our raw through AEO certification. It helps to enhance the corporate image and strive for international
materials are primarily purchased from local or nearby suppliers. In 2021, the proportion of local trade supply chain cooperation opportunities. Through the AEO certification system, it enhances
raw material supplier purchases in Mainland China increased by 5% due to the introduction of cargo production management, strengthens corporate risk control mechanisms, and ensures
new projects and changes in key supplier counterparties. In Mexico, in response to customers' the provision of secure product distribution services to meet the trend of global trade security
requests for production locations, some of the models originally produced in Mainland China and convenience. When AEO-certified entities process customs clearance for shipments, they
were transferred to Mexico, resulting in an increase in the number of suppliers in Mexico from can enjoy preferential measures such as fast clearance, so that products can be shipped out
309 to 428. It also led to a 7% decrease in the percentage of local procurement in the Mexico efficiently. Through the world-class security certification of entity, procedures, cargo, and
Facility. information, it effectively enhances international competitiveness.
For our six major manufacturing facilities in Zhangjiang, Jinqiao, Shenzhen, Kunshan, Nantou,
and Mexico, we divide them into three regions: Mainland China, Taiwan, and Mexico. The local
sourcing of raw materials suppliers in 2021 is as follows: The average local procurement rate
grew to 39% in 2021, based on the average ratio of local procurement to global procurement
by those manufacturing facilities. Our strategic procurement department will continue to
strengthen the management of target suppliers and select local vendors with competitive
advantages. We will continue to develop local vendors with competitive advantages and aim to
maintain a local procurement rate of at least 35% worldwide in 2022 to enhance the competitive
advantage of the local industry and strengthen the partnership with suppliers.
Note 1. Procurement amount statistics by all facilities
55
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Supplier Evaluation and Regular Assessment
The progress of the suppliers' CSR will be one of the key factors behind USI's prospects. that they will include the effects of environmental sustainability, social labor and human rights
Therefore, USI establishes a standardized supplier evaluation system and Vendor Rating System in the assessment and control. USI will give a corresponding approval level to the supplier after
to select suppliers according to the supplier evaluation criteria for protecting human rights and the evaluation. The relevant results and qualified supplier list can be looked up in PDM system.
environment, as well as providing customers with high-quality products that meet health and In 2021, a total of 34 new suppliers of USI entered the evaluation process, and finally 32 of them
safety requirements. Through continuous and close cooperative relationships with suppliers, a passed the review. The proportion of new suppliers that passed the screening was 94%.
sustainable supply chain can be jointly established.
After becoming our qualified supplier, we must regularly assess the supplier's performance. USI
Following the company's demand trends and purchasing strategy of products of the future, USI forms an assessment team composed of members from the Supply Chain Management and
establishes the supplier evaluation and approval process to investigate if the productivity, technical Quality Assurance Departments and quarterly evaluates suppliers from three aspects: quality,
innovation ability, quality & service management of potential suppliers meet the requirements delivery and communication, and price. According to our Supplier Performance Measurement
and serve as the basis of becoming an official supplier. When evaluating a new supplier, an Procedure, we divide the evaluation scores into five grades. For Superior suppliers, the company
evaluation team must be formed by purchase, quality, CSR, R&D, and engineering units to will give incentives to give priority to obtaining the right to manufacture new products or increase
conduct a supplier capability survey for the Quality Review Board to verify the final assessment the order volume. If suppliers do not meet expectations, they will receive Vendor Corrective
result. The supplier evaluation and approval process include basic company information, product Action Report (VCAR) requests for relevant replies and improvement reports. The improvement
information, major customers and financial status, the supplier's green control procedure, plans and results proposed by the suppliers shall be reviewed by the relevant units and audited by
commitment to green products, supplier quality, and supplier sustainability assessment survey. the supplied commodity management department as required. We expect to improve the delivery
For all new suppliers developed by USI, they are required to sign the Certificate of Non-use of of incoming materials, reduce the price of incoming materials, improve the quality of incoming
Environmentally Hazardous Substances, Conflict Minerals Representation, Supplier Code of materials, strengthen communication with suppliers, and continuously improve and find long-term
Business Integrity, and Supplier's Commitment to Corporate Social Responsibilities to ensure cooperative supplier partners through supplier performance evaluation.
Evaluation Procedure Supplier Regular Assessment
1 3 5 A+
Superior
Apply for Follow up on
Conduct Corrective
Supplier On-site Audit
Evaluation Actions and
Close Case
able
Excel
Quality Price
A
e
D
Replac
lent
Performance
績效考核
Measurement
2 4 6 Delivery &
Ask Supplier Evaluate Determine Ob Communication
to Fill Out se le
Veried Results Supplier r tab
Questionnaire Viability C ved ecc p
A B
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Supplier Sustainability Risk Assessment
USI abides by and uses the RBA Code of Conduct to audit our suppliers. Our RBA audit team is formed by members from our Human Supplier Definition
Resources Department and EHS Department and assesses suppliers in five dimensions: labor, health and safety, environment,
ethics, and management systems. The assessment highlights labor rights protection, workplace safety, environmental management,
and anti-corruption. To ensure suppliers' compliance with corporate social responsibilities and enhance their competitiveness we
Tier 1
request suppliers to uphold human rights, ensure the rights and benefits of their employees, and advance their companies' social Suppliers
performances. Material suppliers
(including direct
materials, indirect materials,
Sustainability Risk Assessment Procedure and packaging materials) that
we have traded with for two
1 consecutive years and have an annual
Suppliers sign the
letter of
2 3 4 purchase amount exceeding USD 200,000
commitment to Select suppliers Suppliers f ill Review the
promise to follow out SSAQ suppliers' SSAQ
RBA Code of Critical Tier 1 Suppliers
Conduct
Top 85% of direct material procurement amount
Indirect and packaging material suppliers with a
5 6 7
procurement amount of more than USD 1 million
Preferred supplier: Proposed by procurement unit, approved by
Conduct on-site Suppliers make Conf irm
audit for high-risk improvement Case closed the Business, Supplier Quality Engineering, and R&D Unit
improvement
suppliers based on results
deciencies
Distribution of Critical and Non-Critical
To implement effective supplier management, the Company screens Tier 1 suppliers for control through annual procurement
Suppliers in 2021 (1)
amounts and identification of Critical Tier 1 Suppliers as the basis for focused management. The Company conducts risk assessments
of suppliers through the Supplier Sustainability Assessment Questionnaire (SSAQ) to ensure that risks can be effectively controlled
and reduced. We also identify suppliers with potentially high governance, environmental and social risks, and conduct on-site audits
of suppliers with potentially higher risks to gain an in-depth understanding of the current status of supplier sustainability.
In 2021, we conducted an SSAQ survey for 419 Tier 1 suppliers, with a response rate of 73%. According to supplier replies, we 92%
review and assess the suppliers with high risk and conduct on-site audits. Due to the COVID-19 pandemic, we imposed stringent
travel restrictions to protect all employees. Therefore, in 2021, document audits and online audits of 47 material suppliers were
8%
conducted. In addition, On-site audit of 36 on-site service contractors. Audit results are 100% low-risk. For the deficiencies found in
the audit, the suppliers were required to propose an improvement plan, and to complete the improvement within the deadline. The
improvement plan was also revisited by us, with the supplier required to have a 100% completion rate of improvement items after
the review. We analyzed the deficiency items in supplier audits and found that of the five major areas 45% were labor-oriented. The
detailed results are shown in the chart below. In 2022, we will continue to focus on labor-oriented improvements through counseling Critical Supplier Non-Critical Supplier
and advisory measures. For suppliers that we had not terminated relationships with in 2021 after evaluation, we will continue to
assist suppliers with the goal of complying with the RBA Code of Conduct and contribute to the improvement and enhancement of Note 1. Statistics by annual purchase amount of suppliers
the supply chain business environment together with suppliers.
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Supplier Audit Deficiencies and Improvement Actions in 2021 (1) Distribution of Supplier Sustainability Audit Findings
RBA Major Nonconformance
Category Corrective Action 23%
Classification Finding
Revision of performance Labor
Reduction of salary as a
evaluation and bonus
disciplinary action
adjustment system as 22% Health and Safety
Wages and Failure to revise salary
disciplinary action
Benefits management related
Revision of the company's
documents in a timely Ethics
salary management-related
manner
regulatory documents 45%
Enforced payment for work The cost of work uniforms is 10% Management System
uniforms and other items borne by the company, and
Freely Chosen when employees resign the relevant provisions were
Labor Employment Failure to declare that deleted
employees are allowed to have Amendment of company
free association and assembly documents In addition, the results of the human rights risk assessment of suppliers in 2021 found that
Establishing regulations \"Wages and Benefits, Freely Chosen Employment, Occupational Safety, Occupational Injury and
No management system to prohibiting the use of child Illness\" were the main human rights risk issues. We identify suppliers that were likely to face
Young Workers
prohibit the use of child labor labor and remedial measures high risks and take corresponding measures to continuously track the effectiveness of their
after the misuse of child labor
different risk profiles and ensuing improvement plans.
No in-depth understanding Adding sexual harassment
Humane of the specific content of and sexual assault to the
Treatment humane treatment in the RBA relevant management Supplier Human Rights Incident Mitigation and Compensation Measures
Code of Conduct regulations
Occupational hazards notice Category Labor Health and Safety
Occupational signs not posted at sites Posting occupational hazard
Safety with potential occupational notification cards Wages and Benefits Occupational Safety
Risk Issue
hazards Freely Chosen Employment Occupational Injury and Illness
Health and
Safety Failure to establish Annual audits or RBA VAP to assess suppliers' human rights risks through each
Develop management
management procedures for
Occupational procedures for handling Mitigation facility to mitigate risks.
prevention of work-related
Injury and Illness occupational accidents and Measure Requiring suppliers to adopt corrective measures for human rights risks and
injuries and occupational
preventing occupational
diseases conduct follow-up on implementation.
Failure to establish an anti- Requiring suppliers to provide guidance or compensation, or to implement
Establish a management
Business Integrity corruption policy for business
system for business integrity policy changes or other measures for employees whose human rights have been
integrity
violated.
Failure to establish policies / Compensation
Protection of Develop a complaint If a high-risk vendor is identified, the Company shall conduct on-site audits and
procedures to protect the Measure
Ethics Identity and Non- reporting and whistleblower provide recommendations for improvement and require the vendor to submit
identity of employees and
Retaliation management system
supplier whistle improvement reports on a regular basis to track the performance of continuous
Failure to establish a policy or Establish a policy or system improvement.
Privacy system to protect the privacy for protecting the privacy of
of customers and employees customers and employees The grievance mechanism for external whistleblowing: for details please refer to
Appeal Channel
the Business Ethics and Compliance section.
Management Legal and
Failure to establish regulatory Establish regulatory
Customer
System identification procedures identification procedures Note 1. Identify the top 3 RBA classification audit deficiencies in each category
Requirements
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Supplier Communication
Good communication channels and frequent interactions promoted USI's philosophy and implementation policies, and communicated directly with suppliers around the world, including
with our suppliers build solid relationships. For this, we the continuous implementation of green supply chain in line with international trends for environmental protection, and the
established a supplier evaluation team with members from sharing of our requirements, implementation experience, and future goals for suppliers' ESG. At the same time, we invited
our Quality, Engineering, and Procurement units to handle Senior Product Manager, Kyle Lu from SGS Taiwan to share \"Net Zero Carbon Emission Trend and Response\", which explained
supplier communication. We invite suppliers to attend USI's that in the upcoming battle against climate change, enterprises should have the correct concept of carbon management when
quarterly Executive Business Review (EBR), where we share facing the goal of carbon reduction, emission reduction, and even achieving net-zero emissions, and gradually carry out carbon
our views on future market trends and experiences. We also inventory calculation as the basis for setting up carbon sustainability management. Through information disclosure, companies
take the chance to promote our environmental health and can improve the effectiveness of corporate governance, effectively enhance their corporate image, and gain the credibility of
safety policies, focusing on their role in our green supply stakeholders to achieve the win-win sustainability goal of environment, society, and governance. A total of 276 supplier partners
chain. We reiterate the importance of social responsibility attended this online sharing conference, and 155 questionnaires were recovered after the session, with USI rated as \"very
and sustainability by updating them with the latest hazardous satisfied\".
substance restrictions, environmental regulations, and
customer product quality requirements. In 2021, USI and our Supplier Feedback
material suppliers held 24 EBR meetings.
\"The webinar provided insight into the industry and global trends\"
In addition to quarterly meetings, USI regularly holds courses
to communicate with suppliers on market dynamics. We will \"Webinars are a great way to learn without being limited by location\"
host webinars for suppliers in light of new regulations to let
the entire supply chain learn about the latest information
and upcoming changes. Suppliers then can prepare and
comply with USI's requirements regarding green procurement
standards such as WEEE, RoHS, REACH, and Conflict Minerals.
We expect our suppliers to value corporate ethics, enforce
anti-corruption practices, and uphold our Supplier Code
of Business Integrity. To monitor this, USI has a dedicated
whistleblower mailbox (Please see the Business Ethics and
Compliance section) for all to report any violations in our
business practices with our supplier partners. In 2021, there
were no cases where the suppliers provided feedback or made
complaints.
Sustainable Supply Chain Webinar
The Sustainable Value Chain Webinar is an annual event
held by the Company for its suppliers. In 2021, the
Global Sustainable Supply Chain Webinar for the Greater
China region was held at the Nantou Facility. The event
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Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Conflict Minerals Conflict Minerals Management
Compliance Item Management Approach
Establish procedures governing
2021 Performance
Conflict minerals are metals such as tantalum, tin, tungsten, conflict minerals according to Complete Conflict Minerals Management Process information, please refer to
regulations and customers' https: // www.usiglobal.com /en /csr / Conflict-Minerals-Compliance
gold, and cobalt that are illegally mined and traded from requirements Complete Conflict Minerals procurement policy information, please refer
the Democratic Republic of the Congo and its neighboring Make corporate policy for sourcing to https://www.usiglobal.com/files/images/csr/2020/Conflict_Minerals_
Management
countries (1). These metals were obtained by local armed conflict minerals Management/USI_Conflict_Minerals_Policy_EN.pdf
System All suppliers must comply with our All our targeted suppliers (2) comply with our conflict-free minerals policy
militias through long-term violent coercion of labor or child
conflict-free minerals procurement Opened a \"Conflict Minerals Management\" online training course. This course
labor to destroy the environment and ecology, and they are policy is required for all personnel engaging in relevant affairs. In 2021, 73 employees
also the main source of funding for illegal armed organizations. Conduct relevant personnel completed the training
ASEH joined RMI (Responsible Minerals Initiative) in 2015. As trainings
a member of ASEH, USI utilizes the resources and guidance Investigate smelters materials are The materials used by USI's suppliers come from qualified smelters. The use of
provided by RMI to make wise choices in the supply chain procured from (3) 3TG smelters and cobalt smelters in 2021 is as follows and the distribution in
Due Diligence Conduct suppliers / materials risk recent years is shown on the following page
regarding conflict minerals, achieving a conflict-free mineral
(DD) assessment Risk Identification and Mitigation Plan: Continued Trading for Mitigable Risks,
supply chain. Risk Identification Suspension of Trading during Mitigation Periods, Termination of Trading for Non-
Identify new materials Mitigable Risks, Management Process as shown on the following page
Make corporate policy for sourcing
conflict minerals
Require suppliers to use qualified USI continues to promote the procurement of conflict-free minerals to the
smelters supply chain, and expanded supply chain due diligence. In 2021, a total of 416
Supplier Conduct supplier on-site audits and suppliers completed the CMRT (4) survey. The situation over the years is shown on
counseling the following page. In addition, we completed the CRT (5) survey of 150 suppliers
Management Encourage unqualified smelters to Written and online interviews with a total of 15 suppliers
work with RMI Announced USI's requirements and future direction at the 2021 Sustainable
Sudan Promote relevant requirements Supply Chain Webinar
and plans through sustainable
suppliers' briefings
Central African Carry out third-party audits and
Republic Independent USI's parent company, ASEH, is required to report annually to the SEC (6) and the
Uganda meet the annual conflict-free
related conflict minerals reports have been audited by IPSA (7)
Democratic Rwanda Private Sector mineral declaration
Congo Republic Repulic of the The IPSA is conducted on the results of due diligence, and our target suppliers
Burundi Audit Abide and comply with customer
Congo (DRC) use 100% qualified smelters
Tanzania conflict mineral audit requirements
ASEH's annual conflict minerals report covers USI and its subsidiaries, the scope
Angola Compile annual conflict mineral of the report is on the first page and can be accessed at: https://www.usiglobal.
Zambia report com/files/images/csr/2021/Conflict_Minerals_Management/2021_cm_report.
Annual Report
Provide CMRT requirements to the pdf
customers Provide a complete conflict mineral report form in accordance with customer
requirements
Note 1. The neighboring countries: Central African Republic, Republic of the Congo, Angola, Zambia, 4. CMRT, Conflict Minerals Reporting Template
Tanzania, Burundi, Rwanda, Uganda, and South Sudan 5. CRT, Cobalt Reporting Template
2. Target supplier, annual 92% of the total purchase amount 6. SEC, United States Securities and Exchange Commission
3. USI requests suppliers to source minerals from RMI approved qualified refining plants 7. IPSA, Independent Private Sector Audit
(https: //www.responsiblemineralsinitiative.org / smelters-refiners-lists / )
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Number of Qualified Smelters 3TG and Cobalt Gold Cobalt
1 6
3
Tin
2 2
Tantalum 12 Tungsten
110
109 Conformant
2 2 6
1 101
73 77 73 Active
40 40 55 41 43 45 42
39 39
11
2 9 Non-Participating
2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021 2019 2020 2021
Risk Identification Management Process Number of Qualified Suppliers
Identify
Supplier Provides/ Qualied Smelter
3TG Parts Smelter Case Closed
Updates CMRT 352
Risks
Non-Qualied Smelter
Risk List High Risk Suppliers
Yes No
Mitigation and Evaluate to
Risk Mitigation Risk Mitigation Continue Trading 2018 2019 2020 2021
Options
Eorts Non-Feasible
Conflict Minerals Commitment and Future Plans
With the resources and guidance provided by RMI and Organization for Economic Co-operation 2. Carry out an annual survey to evaluate suppliers' purchase or use of smelters, and immediately
and Development (OECD), USI has started the supply chain conflict minerals response measures request removal if found to be unqualified.
by requiring suppliers to refer to the criteria of procurement from RMI's qualified smelter list, 3. Analyze and identify suppliers' smelter risks, continue to conduct supplier on-site visits, and
to achieve USI's commitment and future plans for a conflict-free minerals supply chain. The guide suppliers to establish management mechanisms.
measures taken are as follows: 4. Optimize supplier management system to improve the management of smelter information
quality, while achieving customers' reporting requirements.
1. Establish a conflict-free supplier procurement policy and communicate USI's management and
5. Set up a plan to investigate the sources of cobalt and mica to meet RMI and RMAP (Responsible
investigation requirements through supplier conferences.
Minerals Assurance Process) standards.
61
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Environmental Protection and Occupational Safety
With an emphasis on environmental protection, USI takes aggressive measures against climate change. We look forward to considering environmental protection as well as
achieving environmental sustainability while pursuing high quality products and services. In addition, we are committed to promoting a culture of occupational safety and health
and providing a quality working environment for our employees.
100 % Renewable Energy Use in Mainland China Facilities
93 % Non-hazardous Waste Recovery Rate
1,508 MWh Renewable Energy Produced through Solar Panels
CNY Million Invested in Environmental Conservation
410 Occupational Health & Safety Trainings
0 Case Contractor Occupational Injuries
83 % Employees Fully Vaccinated Against COVID-19
13,098 People Attended Health Promotion Activities
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Key Performance and Targets
Achieved Not Achieved (1)
SDGs Business Action 2021 Key Issue KPI 2021 Target 2021 Performance Status 2022 Target 2026 Target
Obtain / maintain
Maintain ISO Maintain ISO 45001
Maintained ISO ISO 45001
45001 certification certification
45001 certification certification
Formulate health and Major occupational No major No major
in all facilities No major
safety policies creating disease incidences occupational occupational
No cases of occupational
a work environment Occupational Health Major occupational diseases diseases
occupational disease diseases
where all workers & Safety injury incidences No major No major
No major cases of No major
can be fulfilled while Major infectious occupational occupational
occupational injuries occupational
working disease incidences injuries injuries
No major cases of injuries
No major No major infectious
infectious diseases No major infectious
infectious diseases diseases
diseases
Electricity intensity Electricity intensity Electricity intensity Electricity intensity
Energy decreases by 6% decreased by 23.4% decreases by 7% decreases by 11%
Electricity intensity
Management from baseline year from baseline year from baseline year from baseline year
2015 2015 2015
Water use intensity Water use intensity The water use The water use
Establish Water Resource decreases by 6% decreased by 36.4% intensity decreases intensity decreases
Water intensity
environmental Management from baseline year from baseline year by 7% from by 11% from
objectives, include 2015 2015 baseline year 2015 baseline year 2015
them in the business Hazardous waste Hazardous waste Hazardous waste Hazardous waste
strategy, and review generation generation intensity generation intensity generation intensity
the performance Hazardous waste
intensity decreases increased by 14.7% decreases by 7% decreases by 11%
annually generation intensity
by 5% from from baseline year from baseline year from baseline year
Waste and baseline year 2015 2015 2015
Recycling
Non-hazardous Non-hazardous Non-hazardous Non-hazardous
Non-hazardous waste recovery waste recovery waste recovery waste recovery
waste recovery rate rate recycling rate rate recycling rate rate recycling rate rate recycling rate
reaches 90% reached 93% reaches 90% reaches 90%
Conduct an inventory Maintain ISO Obtain / maintain
Obtain ISO Obtain ISO Obtain ISO
of carbon emissions 14064-1:2018 ISO 14064-1:2018
Climate Change 14064-1:2018 14064-1:2018 14064-1:2018
and implement carbon certification in all certification in all
certification certification certification
reduction projects major facilities major facilities
Note 1. For unachieved targets, please refer to the corresponding sections for relevant explanations and future improvement plans
63
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
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Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Climate Change and Carbon Management
USI integrates the concept of ecologically sustainable development with company's managerial
decision-making and operation management. The board of directors and the executives assume
Task Force on Climate-related Financial
management responsibility and take the opinions of stakeholders as reference to formulate
the corresponding management strategy. Through the continuous promotion of management
Disclosures (TCFD)
systems ISO 14001, ISO 50001, and ISO 14064-1:2018 (please refer to the Management Systems In response to international initiatives and our Low-Carbon Strategy, USI adopted the TCFD
Certification Table), we have improved and reduced environmental impact of our operations and framework and discloses the risks and opportunities brought by climate change, demonstrating
hereby make a public disclosure about USI's environmental information for the implementation corporate responsibility and strategy to allocate capital more reasonably and effectively to
of corporate environmental responsibility. achieve the vision of low carbon economic transformation.
Our Environment, Health, Safety, and Energy Policy (EHS & Energy Policy) follows the principle
●Climate risk is incorporated into the
of Regulatory Compliance & Responding to Environmental Campaigns to optimize resource
utilization, and create an eco-friendly, healthy, and safe working environment. Please refer to ● The USI Sustainability Committee, the Enterprise Risk Management (ERM)
USI website for the complete EHS & Energy Policy. A telephone hotline and mailbox are provided highest organizational unit to manage management process
● Collaborate across departments to
for feedback from stakeholders. In 2021, no official complaint about environmental impact the Group's sustainable development,
was received, and no violation against environmental regulations and environmental pollution annually prepares an ESG report that identify climate-related risks / opportuni-
incidents. There are no significant environmental or ecological related fines or penalties (1) within includes climate change-related ties along the value chain, assess
4 years. issues for the Board of nancial impacts and develop
Directors' review countermeasures to manage
The global warming caused by greenhouse gas emissions over the years has exposed the world Risk
Governance Management
them using Mitigation and
economy to significant risks and has threatened many businesses around the world. As a
Adaptation methods
result, stakeholders are starting to focus on risks and opportunities due to climate change. The
Financial Stability Board (FSB) published the Task Force on Climate-related Financial Disclosures
(TCFD) Framework in June 2017. The framework provides a clear picture of how to address the Metrics
risks and opportunities associated with climate change and gives companies and investors a Strategy and ●Set climate-related
● Identify short,
comprehensive assessment framework that can also be reflected in financial reporting. Targets
medium, and long-term performance indicators and
climate change risks and quantitative targets; regularly track
opportunities progress, and disclose to the public
● Assess risks and opportunities based on without concealing information
● Set a long-term goal for Net-Zero
dierent climate scenarios
Carbon Emissions in 2050
Note 1. Major fines or penalties refer to a fine of more than CNY 65,000
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Climate Change Risk and Opportunity Management Process Climate Change Risk and Opportunity Matrix
Background Data Collection High
● Collect background and scenario data from news, internet, other
countries or company events
● Consider the transition risks (policy and law/ market/technology/
reputation), the physical risks (chronic and acute) and the opportunities
(resource eciency, energy, products and services, markets and
Financial Impact Severity
adaptation)
Risk /Opportunity Possibility Analysis
● To analyze the targets in the value chain that are being aected
6
(including direct operations, supply chain or customers)
● Impact duration (now within 0 to 1 year, short-term 1 to 3 years,
medium-term 4 to 10 years and long-term 11 to 30 years)
● Possibility (almost sure, highly possible, possible, unlikely, and extremely unlikely)
Low Risk / Opportunity
Financial Impact Analysis 1 2
● Use impact on monthly revenue as an indicator (The indicator levels Moderate Risk / Opportunity
are divided into 1 to 5, with the fth level having the highest impact) 8 9
High Risk / Opportunity
Low Risk Probability High
Risk Assessment
● Evaluate risk / opportunity indices based on the possibility and nancial
impact scales
● According to the risk /opportunity indices, it is classied as
Opportunities Transition Risks Physical Risks
★ Red: High risk /opportunity (for immediate action) 6 Develop energy saving components 3 Energy Transition 1 Drought (Supply Chain)
★ Blue: Moderate risk /opportunity
7 Demand for electric cars market 5 International carbon tax
★ Green: Low risk /opportunity 2 Floods (Supply Chain)
and emission quota
8 Introduce an energy management requirements 9 Drought (USI)
system to improve energy eciency
Control Mechanism 4 Customer demand for
● Review the existing control mechanism and set feasible control green products
indicators
65
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
The Financial Impact from Risk and Opportunity
Risk and Description of Risks and
Potential Financial Impact Countermeasures
Opportunity Types Opportunities
Improve equipment efficiency, upgrade the power supply and replace power systems
Energy Transition Increase in energy costs
Organize regular sessions of successful power saving case studies with related taskforces
We have developed biodegradable plastics (emission reduction) that fit the customers' needs based on
climate change issues to facilitate the energy-saving and carbon-reducing product applications for our
Customer demand for green Additional carbon reduction equipment
customers
products installation and R&D costs
We absorb cutting-edge knowledge through papers, seminars, and exhibitions to effectively meet customers'
Transition Risks requirements for Energy Star and CoC Tier 2
We propose to introduce eco-friendly materials in the early stage of product development, which can
effectively reduce carbon emission in line with customers' product development plan for carbon neutral
International carbon tax and products
Additional operating costs
emission quota requirements We have developed a carbon supply chain management plan that will allow us to understand the carbon
emissions from our supply chain in the future
We have adopted green power gradually to minimize the impact of carbon pricing
Establish a substitute mechanism for materials
Purchase mechanism for spot dealers
Drought (Supply Chain) Implement cross-site material transfer mechanism
Floods (Supply Chain) The production was adversely influenced, Provide market information to prepare materials in advance (MPA)
Physical Risks resulting in financial losses and revenue When an emergency occurs that causes a lack of material, the emergency response management procedures
decline will be activated according to the SOP
Simulate flood and drought risks using physical scenarios of climate change and propose contingency
Drought (USI)
preventive measures
We can reduce the material and energy consumption by increasing the output per material unit through the
miniaturization design; in addition, the energy consumption required for transportation is lower than that of
Develop energy saving
other products
components
To meet customers' energy-saving product We can meet the design requirements such as ERP, CEC, and DoE for different types of products to improve
needs; therefore, we can increase the the overall power efficiency in the system
Transition revenues We have developed a series of flip-chip PEC (1) to meet the high current density requirements of headlights,
Opportunities Demand for electric cars focusing on LED chip life, reliability, and brightness for Car Lights
market For the Powertrain, we continue to design and promote low energy consumption and high efficiency products
to our customers. We also design and develop products to meet the IATF 16949 requirements
Introduce an energy We can identify primary energy consumption areas through our ISO 50001 energy management system,
management system to Reduce electricity cost for operation formulate energy-saving plans, and control our energy performance to effectively save energy and reduce
improve energy efficiency carbon emissions through the PDCA Cycle every year
Note 1. PEC, Pad Extension Chip
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Carbon Management
Metrics and Targets Related to Climate Change USI continues launch greenhouse gas reduction policy. The greenhouse gas (GHG) emissions
inventory was performed in 2007 according to ISO 14064-1. Another check was conducted in
● 35% reduction in absolute GHG Category 1 & 2010 on our worldwide production bases and the results were verified by a third-party institution
Category 2 emissions in 2030 (base year: 2016, to establish USI inventory benchmark data. Since the initial inventory of GHG emissions Category
Manage 2.5% reduction per year) 3 of Nantou Facility in 2018, we fully inventoried Mainland China Facilities the next year. In
carbon emissions ● 15% reduction in absolute GHG Category 3 2020, a more comprehensive and in-depth inventory was conducted. In 2017, we also started to
emissions in 2030 (base year: 2020, 1.5%
and improve conduct product carbon footprint inventory; and disclosed relevant information in compliance
reduction per year)
energy with international regulations, initiatives, and customers' requirements. USI collaborates with
ASEH on the Carbon Disclosure Project (CDP) and conducts annual inventory surveys. For
eciency
detailed information, please refer to the 2021 ASEH ESG Report.
Climate change has impacted USI operations. Our Mainland China Facilities are using 100%
Increase the ●
85% Renewable energy use in 2025 renewable energy, while the Mexico Facility used 31% of its annual electricity consumption
use of renewable ●
100% Renewable energy use in (I-REC, please refer to the Renewable Energy section for details). In addition, Zhangjiang Facility
energy operational processes by 2035 and Shenzhen Facility have also initiated carbon quota management in accordance with local
regulations. Cap and trade system for GHG and possible energy or carbon taxes are issues
USI is always paying attention to. In addition to the continuous efforts in energy efficiency
improvement, the promotion of Green Promise and the environmental protection measures of
will be in facilities to minimize risks from climate change.
R&D for low
carbon products ● Increase R&D expenses for low-carbon
products and continue to increase the ratio Greenhouse Gas Emissions
of energy-saving benets and revenue for USI's total GHG emissions in 2021 were 206,131.55 metric tonnes of CO2e (Category 1 &
low-carbon products Category 2), an increase of 15,103.32 metric tonnes of CO2e from 2020, and our GHG emissions
intensity was 4.13 metric tonnes of CO2e, an increase of 0.11 metric tonnes of CO2e from 2020.
According to our analysis, in 2021, our operation expansion and continuous production capacity
According to the analysis of the Climate Change Risk and Opportunity Matrix, there are three growth increased our revenue. However, due to the exchange rate loss from USD to CNY, our
transition risks, three physical risks and three transformation opportunities, among which the GHG emissions intensity increased. Calculated in USD, our GHG emissions intensity would be
high risk of USI is the demand for green products from customers. We announced our goal of 26.63 metric tonnes of CO2e, 1.12 metric tonnes of CO2e less than in 2020. The analysis is shown
achieving net zero carbon emissions by 2050 and continues to implement climate change and in the following figure:
energy management, water management, waste management and air pollution prevention to
help customers produce energy-saving and carbon-reducing products. For the first time, we are
presenting our efforts and results in response to climate change through a systematic disclosure
framework, further raising awareness of climate crisis, formulating relevant mitigation plans
and measures, accelerating the implementation of risk control and climate change mitigation
actions, strengthening our operating sustainability management capabilities, and moving
towards sustainable corporate development. For more details, please refer to Sustainability Data
- Environmental A. TCFD Framework Response.
67
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
The Ratio of Category 1 to Category 2 Greenhouse Gas Emissions (1~6) Indirect Greenhouse Gas Emissions
Fugitive Emission USI continued to promote the greenhouse gas inspection (ISO 14064-1). Following the
1.1% introduction of the Category 3 inspection at Nantou Facility in 2018, beginning in 2020, we
conducted inventory and identification of Category 3 to Category 6 emissions on the value chain.
In 2021, the verification results by the third-party verification unit are as follows:
Category 2 Category 1 Indirect Greenhouse Gas Emissions (7) Unit: metric tonnes CO2e
97.8% 2.2%
Greenhouse Gas
Category Description
Emissions
Mobile Burning
Emission Indirect greenhouse gas emissions from
0.1% Fixed Burning Emission Category 3 103,140.41
1.0% transportation
Emissions from upstream transportation and
48,016.13
distribution of goods
Greenhouse Gas Emissions and Intensity
Emissions from downstream transportation and
44,545.17
6.24 distribution of goods
5.86
5.31 Emissions from employee commuting 10,364.53
4.85
4.48
4.02 4.13 Emissions from business travel 214.58
Indirect greenhouse gas emissions from
Category 4 12,877,738.29
products used by the organization
Emissions from goods purchased 12,843,600.91
Emissions from capital goods 30,571.58
201,538.85
184,225.84
151,993.76 168,730.49 Emissions from solid and liquid waste treatment 1,230.79
142,043.16 149,881.38 148,201.93
Emissions from the use of assets 2,335.01
8,057.25 7,853.69 8,438.83 Total 12,980,878.70
8,017.46 7,024.93 6,802.39 4,592.71
2015 2016 2017 2018 2019 2020 2021 Note 1. The data presented came from the ISO 14064-1:2018 inventory results
2. The data organization boundary is summarized by the operation control method
3. The significant threshold is set at 3%, and the substantial threshold is set at 5%
GHG Emissions-Category 1 (metric tonnes CO2e) GHG Emissions-Category 2 (metric tonnes CO2e) 4. The greenhouse gas emission includes various categories such as CO2, CH4, N2O, HFCs, PFCs, NF3, and SF6
5. GWP value adopts the IPCC Fifth Assessment Report (2013)
6. Due to the revision of the calculation formula of GHG emissions in 2020, the value of Category 1 is revised
GHG Intensity (metric tonnes CO2e / M CNY)
7. The data presented came from the ISO 14064-1:2018 inventory results, rounded to the 2nd decimal place
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Energy Management Energy Intensity
In the green-house gas emissions, power loss shares about 97.8% in USI. The key to reducing 31.3
carbon emission is to save power, making maximum efforts for electricity efficiency. To reduce 29.1
26.1
energy consumption during the operational activities and product processes and save the cost, 25.5
the external power supply unit with low energy consumption will be selected in priority when 22.0
20.6 20.6
the products are designed, as well as the tests will be evaluated to ensure the products can
meet the requirements of environmental protection. The different energy-saving improvement
plans will be executed for air conditionings, lighting equipment and heavy-energy consumption
facilities in all facilities as well, continuously reducing the energy consumption and saving the
electricity bill, such as variable-frequency control, seasonable adjustment of air-conditioning
temperature, replacement of old equipment, monitoring and management of electricity bill.
The total energy consumption of USI in 2021 was 986,633.2 gigajoules, an increase of 37,706.9 878,276.21 948,926.31 986,633.19
gigajoules from 2020. Based on the turnover, the energy consumption per million CNY in 2021 776,645.71 731,386.15 758,413.08 738,890.36
decreased by 0.002 gigajoules. In terms of energy saving, there were 10 major energy-saving
schemes, which saved a total of 1,944 MWh of electricity and reduced carbon dioxide emissions
by 1,175 metric tonnes. The total investment is CNY 10,299,102, and the annual cost saving is
CNY 1,653,485. The detailed results are shown in the following chart: 2015 2016 2017 2018 2019 2020
Energy Consumption (GJ) Energy Intensity (GJ / M CNY)
Energy Consumption (1~3) Unit: GJ
Direct Energy Consumption Indirect Energy Consumption
Category Total Energy Consumption
Diesel Gasoline Natural Gas Electricity
2021 1,335.80 2,575.20 34,238.98 948,483.21 986,633.19
2020 1,393.59 2,523.89 74,103.64 870,905.19 948,926.31
2019 1,065.38 3,572.89 103,881.07 769,756.87 878,276.21
2018 639.08 4,011.47 76,708.71 657,531.10 738,890.36
Note 1. The data presented came from the ISO 14064-1:2018 inventory results, rounded to the 2nd decimal place
2. The data includes Zhangjiang, Jinqiao, Shenzhen, Kunshan, Nantou Facilities
3. Conversion data of the heat value index:
Facilities in Zhangjiang, Jinqiao and Kunshan have adopted Annex A (referential energy conversion standard coal factors) of General Principles for Calculation of the Comprehensive Energy Consumption (GB/T 2589-2008)
The Shenzhen Facility adopted Table E.2 (Fossil Fuel Combustion Emission Factors) of the Organizational Guidelines for Greenhouse Gas Emissions and Reporting (SZDB/Z 69-2018)
Nantou Facility have adopted \"Heat Content of Energy Products\" from Taiwan Energy Statistics Handbook (2020)
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Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Power Saving Performances in 2021 Renewable Energy
Power Saving CO2 Reduction (1~2) USI actively responds to the call for renewable energy use. We
Facility Project Description purchased 222,319 MWh International REC (I-REC, the registration
(MWh) (Metric tonnes CO2e)
The high temperature generated from the operation
authority is I-REC Registry) in 2022 to offset CO2 emitted by traditional
Heat recovery power in 2021 (the annual electricity use for Zhangjiang, Jinqiao,
of the air compressor is effectively converted to
Zhangjiang system 45.1 35.7
provide air conditioning for the facility, reducing the Shenzhen, Kunshan Facilities were all offset, and 31% of Mexico
improvement
demand for operating the water-cooled chiller unit
Facility's electricity was offset). Low-carbon products produced in
Improvement of facilities using renewable energy accounts for 69.93% of USI's annual
Replacement of old water pumps with energy-
Kunshan water-cooled chiller 640.1 507.1
efficient pumps for the water-cooled chiller unit revenue. According to GHG Protocol Scope 2 Guidance, the statements
unit
B1 Ice water Added two new Centrifugal Water Chiller Unit
are used to neutralize Category 2 Market-based emissions. The
machine 500RT to replace the old six original 300RT Water 813.7 408.5 greenhouse gas emissions amount by location and market (3) are as
replacement Chiller Units (two retired, four for backup use) follows:
1. The original 15HP old motor is replaced by
Exhaust fan motor IE3 / 10HP high efficiency motor
replacement 2. The original 16.5kW motor was replaced with a
34.3 17.2 Category Item Category 1 Category 2 Total
new 16.13kW motor to improve efficiency
Adjustments of air GHG Emissions
Adjusted the effective air pressure from 7kg / cm2 to 4,592.71 201,538.85 206,131.56
compressor supply 5.3 2.6 Location- (Metric tonnes CO2e)
6.5kg / cm2
pressure
based
Equipped with a variable frequency drive to Percentage (%) 2 98
Air compressor save energy and lower the load operation and
with variable automatically load the backup unit when the air 53.1 26.6
frequency drive pressure is insufficient to prevent the production GHG Emissions
line from being interrupted due to loss of pressure 4,592.71 26,617.41 31,210.12
Market- (Metric tonnes CO2e)
Nantou Add variable
To meet the demand of supply pressure for the based
frequency drive
operation of pumps in facilities, an inverter is added 173.7 87.2 Percentage (%) 15 85
inverters to area
to effectively regulate the power
pumps
Replace the original emergency lighting with LED
Energy-saving
lighting in the facility, parking lot and restaurant
improvement of 23.6 11.8
under the condition that the illumination level and
facility lighting
service life are not lower than the original
Energy-saving The traditional cooling tower fan blades are
improvement of changed to thick airfoil energy-saving blades, and
74.7 37.5
Air Conditioning the streamlined airfoil design reduces air resistance, Note 1. Carbon emissions reduction = Electricity saving x electricity emission coefficient
Cooling Tower Fan reduces motor load current, and thus saves energy 2. Electricity emission coefficient:
Replaced the constant temperature and humidity Zhangjiang, Jinqiao, and Kunshan Facilities adopt the Huadong Power Grid 0.792 metric
Replace Constant tonnes CO2e / MWh which in \"2019 Emission Reduction Project: China's regional grid
chamber with a newer, energy saving model and
Temperature and 80.5 40.4 baseline emission factor\" by the Department of Climate Change
reduced the annual energy consumption from 450
Humidity Chamber Nantou Facility adopt the \"2020 Electricity Emission Factor\" announced by the Bureau of
MWh to 312 MWh
Energy, with a CO2 emission factor per kWh of 0.502 kg CO2e/kWh
Total 1,944.1 1,174.6 3. The data presented came from the ISO 14064-1:2018 inventory results, rounded to the 2nd
decimal place
Operation and Sustainability Green Products Value Chain Environmental Protection Inclusive Social
About this Report Appendix
Governance Management and Innovation Management and Occupational Safety Workplace Involvement
Water Resource Management
USI does not have issues on contaminating catchment areas as our facilities are not built around USI total water consumption in 2021 was 861.89 ML, an increase of 7.2% from 2020 (803.69
it. But Mainland China's regulation has become increasingly rigorous and ASEH paid close ML). However, our water intensity is reduced by 36.4% compared with 2015, achieving the goal
attention, the storage and distribution of water resources have also become an important topic of water saving. In terms of water intake, except for the use of underground water sources in
for us. USI has been making efforts in conserving water resources and continues to manage Nantou-TT Facility, all other facilities use tap water sources. The annual underground water
the resources in our production and daily life. Apart from regularly tracking the water usage consumption is 61.03 ML, and the water consumption of tap water is 800.86 ML. In terms of
of USI's six major manufacturing facilities, USI also commissions a third-party to check the water discharge, 742.46 ML of wastewater was discharged into the sewage systems. Analyzing
quality of effluents on a regularly basis to prevent water pollution from happening. Each facility the data, operational expansion is the main reason why the overall water intake of USI has
tests the watch items in accordance with local laws and regulations: In Zhangjiang and Jinqiao increased compared with the previous year.
Facilities, the watch items include pH value, SS, BOD, COD, ammonia nitrogen, total phosphorus,
To make the use out of every drop of water, USI is planning to recycle as much water as possible
petroleum, animal and vegetable oils, and sulfides; in Nantou Facility, the watch items include
via improvement of equipment and technology. In 2018, the process water recycling system was
water temperature, pH value, SS, BOD, and COD; in Mexico Facility, the watch items include
introduced to Zhangjiang Facility. This system enables USI to recycle process water produced
BOD, TSS, copper, nickel, cadmium, lead, hexavalent chromium, zinc, arsenic, and mercury; in
from the cutting process; filter and sterilize the water through filtration, disc filter, ceramic
Shenzhen Facility, there are no relevant watch items and the discharge water management
ultrafiltration membrane and UV sterilization processes; and reuse the water in the production.
follows the national discharge water standards; Kunshan Facility leases some floors of the ASEH's
With respect to the second-phase installation of process water zero discharge system at Jinqiao
factory. In the water intake and discharge, ASEH is responsible for control and the Kunshan
Facility, this project has adopted advanced oxidation technology. In 2021, USI recycled 236.97
Facility only shares water-related costs. There was no violation of water discharging regulations
ML of water, with a recycling rate of 27.5%, and estimated savings of CNY 879,187. In addition,
in 2021, and USI will continue to keep a track on the use of precious water resource and save as
the process water consumption is 314.13 ML, with a recycling rate of 73.1%.
much water as possible for a friendly environment and reduction of environmental impacts.
Water Withdrawal and Discharge in 2021 Unit: ML
Nantou
Facility Zhangjiang Jinqiao Shenzhen Kunshan Mexico
TT NK
Source Tap water | 环旭电子：环旭电子股份有限公司2021年可持续发展报告书(英文版) （下载公告） |
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| 公告日期:2022-07-29 |
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| 附件：公告原文 |
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