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Materiality Analysis

Materiality assessment is the fundamental and most important process for both risk identification and the quality of sustainability reporting. Focusing on its core business WNC aligns its business model with customer needs and maintains open communication and trust with stakeholders through diverse channels. Following the requirements of the GRI General Standard for identifying material topics, when compiling our sustainability report we reexamine the items of significant impact in the previous year’s report to see if they are still applicable in the current year. The CSO then submits these items to the Sustainable Development Committee for confirmation, then the Board of Directors conducts review and approval of the material topics gathered from these items. After reexamination, the operational activities and items of significant impact in 2023 were still applicable for the 2024 report. Therefore in 2024, following the requirements of the GRI 3 for identifying material topics and the recommendations for assessing and disclosing material topics in sustainability reports, we conducted the following four key steps to identify and define material topics related to our operational strategies and ensure their full disclosure in the sustainability report.

1. Identifying Organizational Context and Key Stakeholders

Identify all activities in the value chain, verify partner relationships involved in upstream and downstream activities, explore relevant issues within the context of sustainability, identify key stakeholders, and investigate their areas of concern.

59 activities were identified.

2. Identifying Positive and Negative Impacts

Summarize all activities in the value chain, identify actual and potential impacts that are involved or may be involved. The impacts can be positive or negative, short-term, or long-term, intentional or unintentional, reversible or irreversible.

52 activities have financial impact.

35  activities have environmental impact.

56 activities have social and human rights impact.

3. Identifying Degree of Significance

Integrate impact identification results. The magnitude of positive impacts is assessed based on their scope and scale, while the irreversibility of negative impacts is further considered. The occurrence rate is considered for potential positive and negative impacts.

Top three activities with positive impacts are:
Green Products, R&D Innovation, and Supply Chain Management
Top three activities with negative impacts are:
Environmental Management, Supply Chain Management, and Climate Strategy

4. Determining Material Topics

Compile all activities and categorize them into sustainability issues. Create a matrix to illustrate the significance of these issues based on the magnitude of positive and negative impacts and the level of stakeholder concern.

A total of

14 topics of positive impact and

14 topics of negative impact have been determined.

Operational Risks and Opportunities Posed by Material Topics

Five Focuses Material Topic Opportunities Risk
Growth Business Performance WNC values the legitimacy and transparency of its operations, continuously improving corporate governance systems and safeguarding shareholder rights to promote overall industry development and the interests of stakeholders. Unequal resource distribution hampers overall industry development and technological innovation.
Innovation Customer Relationship Management WNC works with customers to develop innovative products/technologies and promote industry advancement. In addition to providing local employment opportunities, we prioritize human rights and strive to enhance labor conditions. Failure to meet certain customer expectations and requirements (technology, quality, service, RBA) results in negative economic and social impact.
Innovation and R&D Through the development of innovative technologies and R&D capabilities, WNC ensures that product performance and green design meet the evolving requirements of customers and international green standards. This not only enables us to create more strategic products and generate more employment opportunities but also reduces environmental impact. The development of new products may not always prioritize environmentally friendly design concepts. New processes or technologies may generate new types of emissions or require higher-performing but more energy-consuming products.
Trust Supply Chain Management Through continuous optimization of supplier management strategies and operational efficiency, WNC works with suppliers to manage sustainable supply chains. Suppliers are unable to provide a steady supply of materials, impacting production schedules and overall operations.
Information Security
  • We have improved product security development processes to design and develop products and services that have better security functionality.
  • The information system services we provide have been enhanced and now have better security and resilience.
  • Vulnerabilities in third-party software used during product development lead to information security risks in company products or services.
  • Vulnerabilities and cybersecurity risks in systems used for product development or production lead to production system issues that impact production quality and efficiency.
Empowerment Human Resource Management
  • We provide training, career planning, and competitive salaries to employees, fostering technological innovation, industry development, and self-realization among our team members.
  • Establishing a diverse workplace has helped us build a good corporate image, and the perspectives and experiences of employees from different backgrounds have stimulated innovation and helped solve problems.
  • The growth of WNC’s operations leads to higher manpower requirements. However, as the declining birth rate in Taiwan and China has led to a manpower gap, manpower deployment at sites around the world needs to be better optimized.
  • Conflicts between employees from different backgrounds may negatively impact team cohesion; effective methods for managing and resolving such conflicts are needed.
Employee Relations and Communication We offer abundant, open, and effective communication channels and mechanisms that enhance employee identification and trust in the company, promoting positive relationships among departments and colleagues. Distrust among employees towards the company or other departments indirectly affects work morale and team cooperation efficiency, potentially leading to talent attrition.
Occupational Safety and Health
  • We provide a healthy, safe, and convenient working environment and facilities to enhance employee cohesion and promote stability in our operations.
  • By reducing the frequency in which occupational accidents occur, we have reduced operational risks and increased the willingness of customers and investors to work with and invest in WNC, respectively.
  • Medical costs, legal liabilities and risk of work stoppage caused by occupational accidents negatively impacts the company's reputation.
  • Lack of a workplace safety and health management culture adversely impacts employee retention, leading to manpower loss and increases in operational risk.
Social Participation
  • WNC has established good relations with local communities.
  • Building a good brand and corporate image has helped WNC attract local talent, improve customer relationships and enhance its overall performance.
 Not fully understanding or meeting the needs of locals makes it difficult to provide them with effective help.
Inclusive Workplace
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  • Promoting an inclusive workplace may lead to cultural conflicts, affecting team collaboration and increasing management costs and operational complexity, requiring additional resources for training and effective communication, which can raise overall operating costs.
  • An inclusive workplace fosters diverse innovation, attracts talent from various backgrounds, and enhances product competitiveness and market position.
Green Initiatives Climate Strategy WNC focuses on improving energy efficiency within its facilities, such as self-built solar panels and green buildings to enhance the utilization of energy resources. We also purchase green energy and engage in tree planting activities, which contribute to community development. Increases in operational costs and inconsistent green energy supply in certain areas make it difficult to purchase green energy, and thus WNC is unable to reach its goals regarding renewable energy usage and carbon reduction.
Green Products WNC has designed green products to stimulate industry innovation and community development. Not meeting customer expectations leads to higher risk of losing orders, increased pressure from public opinion, and potential undermining of company reputation.
Environmental Management - Energy Management
  • WNC implements energy management initiatives (such as energy-saving projects and replacement of old equipment) to lower carbon emissions.
  • To meet customer expectations, we have reduced environmental pollution risks in a number of areas.
 With the continuous growth of WNC's operations and recent facility expansions, there is an increase in electricity consumption, costs, carbon emissions, which has increased the management complexity of climate-related issues.
Environmental Management - Water Resource Management WNC implements water conservation measures and promotes the adoption of water recycling technologies to minimize direct water resource usage. As WNC continues to grow its demand for water increases, leading to increased costs for managing drought risks. Domestic and process wastewater also increases, requiring more resources to mitigate the harmful effects of discharged water and imposing additional burdens on natural water bodies.
Environmental Management - Waste Management
  • We use circular economy concepts when designing products and manufacturing processes as well as when selecting packaging materials to reduce operational costs (which include purchase costs and handling fees), boost the effect of recycling.
  • We have reduced our operational impact (which includes reducing environmental pollution risks) to meet customer expectations regarding low pollution and zero waste and in turn enhance our partnership with said customers and increase the willingness of company stockholders to invest.
  • Rising waste disposal fees lead to increase in manufacturing costs and loss of profit.
  • The government has insufficient waste disposal capacity, thus WNC has to store waste in its own sites or on rented lots, leading to reduced production value per unit of factory area and increased risk of environmental pollution.
Resource Management
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 Using renewable materials may pose challenges such as supply chain instability and cost fluctuations, affecting production planning and product quality control. Using renewable materials combined with circular economy strategies can effectively reduce resource waste, enhance product sustainability, and create new business models.