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Hon Hai Group
Czech Republic
Corporate Sustainability
Sustainable Operations = EPS + ESG
Letter from Chairman

As one of the top 20 enterprises in the world, Hon Hai has 173 campuses and offices around the world and employs more than one million employees during seasonal peaks. In addition to being a multinational company and huge economic entity, we are also an important corporate citizen subject to public attention and benchmarking. In an era filled with constant change, it is our responsibility as a corporate citizen to promote positive economic growth and sustainable environmental development through innovation.

Hon Hai proposed 6 major ESG strategies and formulated 32 long-term goals in 2022. Since then, all of our employees have made every effort to advance towards these goals. We clarified division of labor by establishing three ESG teams that respectively oversee environmental sustainability, social participation, and corporate governance. These teams work with relevant departments and lead all employees in building diverse, inclusive, happy, development-oriented, healthy, and safe workplaces. We also implement eco-friendly measures to build green, smart, and circular economies as well as lead our entire supply chain in making progress on green issues. We use smart technological innovations to drive economic growth while making social and environmental contributions to create mutual prosperity.

Hon Hai has set clear sustainability targets and is on track to achieve sustainable management. In terms of smart green technologies, we actively invest in electric vehicles and work with industries all around the globe to reduce reliance on fossil fuels, reduce carbon emissions, and jointly achieve net zero goals. We hope our efforts in the electric vehicle industry can promote industrial aggregation, generate mutual prosperity for our supply chain, drive economic growth in local communities, and create more job opportunities as we work to form sound partnerships worldwide and create prosperous economic ecosystems within global industry chains.

Employees are Hon Hai's most important business partners. This marks the third year of our Childcare Subsidies for 0 to 6 Year Olds Program. We have created the best workplace environment for employees to care for their children and employee postpartum retention rates reached 90%. Our corporate contributions help to alleviate the increasingly serious issues of declining birth rates and labor shortages in Taiwan while also enhancing future national and industrial competitiveness.

Hon Hai attaches great importance to talent cultivation. We established the ""Foxconn Technology Awards"" in line with core development needs. In 2022, we awarded 250,000 NTD and priority internships to 18 winners. Additionally, we plan to host our first ""Summer Internship Program"" in 2023 to give students a chance to serve as interns at our core central units, experience corporate environments, and obtain practical industrial experience. We will also provide priority hiring opportunities to these interns and encourage them to formally become Hon Hai employees.

This April, we officially obtained verification for our SBTi 1.5 °C targets, indicating that our commitments and efforts in response to climate change have garnered international recognition. In future, we will continue to advance toward our goals and enhance corporate sustainability and competitiveness. We have released our TCFD Net Zero Vision Report and actively work to reduce greenhouse gas emissions and increase usage of green energies through energy-saving operations as well as construct, purchase, and invest in green electricity equipment. This year, Hon Hai joined forces with the financial industry to establish a green energy investment platform which uses an innovative model to provide funds and resources supporting future green energy developments. We combined industrial electricity demands, the financial expertise of investment institutes, and developer green power supplies to achieve mutual benefits for all.

As part of our contributions to environmental sustainability, we seek to maintain sound and diverse ecosystems, and have identified potential issues that require our help. We worked with National Taiwan Ocean University to invest in marine environmental protection as well as sustainable and circular resource utilization, transforming land waste into useful marine resources, thereby restoring marine ecosystems and enhancing biodiversity.

As the biggest technological manufacturing service provider in the world, we are working to ensure that our supply chains and industries understand the importance of sustainable management. The Internet now makes it possible to disclose our corporate information using diverse, public, and transparent methods. We maintain sound interactions with our stakeholders through management of our Facebook, LinkedIn, Twitter, and YouTube accounts, and we also continue to optimize our corporate website to build diverse communication channels that enable smooth information flows and motivational impacts.

Our ability to generate record-high revenues is based on the efforts of multiple parties, including the dedication of our employees, the trust of our clients, the collaborations with our supply chain partners, the support from our shareholders, and the supervision of local governments. Hon Hai operations are spread out all over the globe and we have a responsibility to care for local communities and maintain close collaborative relations to drive continued economic growth. We also consider it our duty to continue investments in environmental sustainability, social participation, and corporate governance.

We fulfill our social and sustainability responsibilities through our innovative collaboration model of ""Share, Collaborate, and Achieve Mutual Prosperity."" We pursue economic growth while contributing to environmental protection, optimizing ecosystems, and working with our industry chain partners and economic peers to move toward sustainable development and achieve our vision of ""Sustainable Management = EPS+ESG."" Hon Hai believes that sustainable management can create infinite opportunities for the future. We hope that this report can inspire your continued trust in Hon Hai as we continue to set high standards and advance toward a brighter future.

Global economic and social developments have been severely challenged by extreme weather, pandemics, and trade conflicts in recent years. As the world's largest technology manufacturing service provider and a member of society, we continue to make environmental, social, economic contributions while pursuing operational performance and innovations in core technologies. Group operations adhere to our Double-E formula of “Sustainable Management = EPS + ESG,” and we continue to promote green ecosystem cycles, humanoriented care, and smart living while controlling risks and obtaining opportunities to realize sustainable management across the globe.

As a Fortune 500 company with the highest corporate revenues in Taiwan, we continually promote ESG from five aspects which are organizational positioning, international alignment, target setting, audits and verification, and transparent communications as a corporate citizen, through corporate social responsibilities, and by achieving sustainable corporate management as an industry leader.

We formulated 6 ESG strategies which are Green Solutions, Circular Economy, Employee Satisfaction, Win-Win Strategy, Group Sustainability, and Corporate Governance and 32 long-term targets in 2022 to serve as a cornerstone for consolidation with our core capabilities and provide clear indicators for adherence across the entire Group to enhance environmental sustainability, social participation, and corporate governance.

We emphasize development of green solutions and actively invest in electric vehicle (EV) and energy storage systems, building an open EV platform (MIH) with technical specifications available to all partners to form an EV ecosystem with hardware and software components, reducing R&D barriers and accelerating progress in the EV industry. Our goal is to decrease speed time to market and lower costs for ecofriendly EVs to provide better accessibility and environmental contributions.

The Group aligns with international trends in the face of increasingly severe climate issues. We support the Climate Action 100+ initiative, committed to a net zero emissions target by 2050, participated in CDP, and have submitted an application for the SBTi 1.5°C target. We became a founding member of the Taiwan Alliance for Net Zero Emission and pledged to achieve net zero emissions in our offices in Taiwan by 2030 and in our production bases by 2050. We further implemented the Task Force on Climate-related Financial Disclosures (TCFD) framework and issued a TCFD Net Zero Vision Report to disclose our efforts in achieving net zero emissions.

The Group attaches great importance to employee issues, and nine of our long-term targets are directly related to employee interests. We have clear indicators for talent selection, utilization, retention, and cultivation, as well as rigorous standards for employee health and safety that enhance employee satisfaction. The Group shares the burden of employee childcare through the “Childcare Subsidies for 0 to 6 Year-Olds” and achieved a postpartum reinstatement rate of 90%. In terms of social welfare, we donated vaccines following the spread of the pandemic last year and prioritized vaccination for our employees in different regions. We co-organized AI camps for rural junior high schools to cultivate next-generation talent and bridge urban-rural gaps in technology education. We also recently formed a volunteer club, enabling more of our employees to participate in social welfare activities.

For corporate governance, we established a Nomination Committee under the Board this year and nominated five independent directors (more than half of Board members) for Board re-election; the number of female directors was increased from one to two. We also established information security and anti-corruption measures to protect our corporate interests. We also incorporated our suppliers in our long-term ESG goals and plan to track supplier performance on green products, environmental protection, use of renewable energies, carbon management, zero waste to landfill operations, and other CSR aspects.

We followed our F1.0, F2.0, and F3.0 strategic path for transformation to new industries and focused on ESG investments, working with our supply chain and other major enterprises to achieve smart, green, and eco-friendly actions, as well as establish responsible manufacturing standards and win-win strategies. We understand that our revenues are built on the efforts of our employees, the contributions from our supply chain partners, the trust of our clients, and the support of the general public. Corporate sustainability is a long and hard road, but we strongly believe that our solid capabilities enable us to lead all employees, supply chain partners, and industry peers in continued investments for environmental sustainability, social participation, and corporate governance, creating unlimited possibilities for the future.

Hon Hai Technology Group Chairman Young Liu
June 2023

Sustainability Committee

The Group Global CSR Committee was established in March 2007 and was renamed the Sustainability Committee in 2022. The Committee is headed by Group Chairman Young Liu, and has established a promotion office staffed with a dedicated team responsible for compilation of sustainability systems and regulations, monitoring of sustainability policies and plans, regular follow-up and evaluation of sustainability execution and performance, and review of sustainability reports, as well as promotion and internalization of sustainable development within the Group’s corporate culture. Each business group under the Group has established promotion sub-committees as well as a dedicated ESG team composed of more than 1,000 people from Campuses all around the world to interact closely with clients, the government, and all sectors of society, enhancing corporate transparency as part of our comprehensive commitment to implementation of Group sustainability policies which are monitored by the Sustainability Committee. The Sustainability Committee organizes internal audit activities each year and convenes personnel from dedicated units including human resources, safety management, hygiene management, environmental management, and administrative affairs. Internal audits for labor, ethics, health and safety, environment, and management systems are conducted at each campus in accordance with RBA standards to ensure compliance with sustainability policies and guidelines. We conduct internal campus audits each year to ensure that the Group’s sustainability policies and guidelines are implemented and executed at all Campuses.