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Message to Stakeholders

Dear friends and supporters of sustainability at LITE-ON,

For 2019, LITE-ON's earnings per share (EPS) was NT$4.03, which was the highest of the last three years and represented an 18% year-on-year increase. The figures reflected LITE-ON's effort to focus on optimizing revenue sources and creating stronger operations in recent years, thereby achieving a successful upgrade and transformation. Going forward, we will focus on opportunities created by cloud computing and growth in switching power supplies and optoelectronic components, as well as 5G and AIoT applications. Furthermore, we will continue to invest in and build up the company as a competitively smart manufacturer that is always up to date with current developments, targeting Industry 4.0 and lighthouse factories, and will strive to put down deep roots and grow into a centenarian corporation.

LITE-ON has always placed a great emphasis on transparency and corporate governance and worked hard to carry out the company's sustainability strategies. We have also started taking responsible actions to protect the environment by supporting the United Nations Sustainable Development Goals (SDGs) and exploring ways to better protect the environment in terms of green products, application and innovation, responsible manufacturing, employee development, and social impact. Meanwhile, we do our best to work as closely as possible with stakeholders to attain SDG goals that facilitate prosperity, peace, and the planet's future.

To achieve green operations and counter the uncertainty caused by climate change, LITE-ON created a corporate sustainability committee directly under the board of directors in 2019. The committee works actively to support and strengthen corporate governance mechanisms related to environmental sustainability, develops low carbon products and green operations, and adopts environmental strategies focusing on reducing the risk impact of global extreme weather events. The committee also devises LITE-ON's improvement plan for climate resilience to make the company better equipped to adapt the risk of slowdown in business activities due to climate change. Additionally, LITE-ON sets global Science Based Targets (SBTs) and is committed to reducing carbon emission per unit revenue by 39.3% by 2025, compared to the base year 2014. LITE-ON managed to reduce greenhouse gas emissions by a total of 46,665 tonnes CO2e in 2019 compared to the base year. The emissions intensity went down by 18.32%; the total amount of waste was reduced by 3,534 tonnes or 14.89% compared to the base year

Furthermore, we have combined the idea of circular economy with our strengths in low carbon products and launched the SEAHOPE campaign. The project brings together volunteers and stakeholders inside and outside the company to organize events such as coastal cleanups, plastic reduction campaigns, and sea turtle conservation, raising awareness for ocean conservation. We work with the environmental authorities and social enterprises to further process recycled Styrofoam marine waste, and further work with national research institutions to modify and reuse the recycled plastics and turn them into computer peripherals, such as keyboards and mice. We hoped that the project would reduce the use of plastic materials derived from fossil fuels. The LITE-ON SEAHOPE campaign has helped clean up more than 30 tonnes of Styrofoam marine waste on islands off the shore of Taiwan since the end of 2018. We will take a step further to develop a one-stop and on-site solution to reduce the volume of Styrofoam marine waste in the future in an effort to facilitate the recovery of the marine ecosystem.

Regarding social inclusion, we continue to work with communities, charitable organizations, industries, government agencies, and academia to promote several plans such as community assistance, community college, the LITE-ON Award, educational support, and the corporate volunteer system. We also respond to the SDGs by further expanding and taking actions including marine conservation advocacy, green energy charities, and eco-friendly and sustainable technological products. Taking the Charity Project of the Green Energy for the Julin Nursing Home in Yilan as an example, it combined three social aspects: environmental protection marathon, green energy and carbon reduction, and social empowerment. The project is expected to generate 35,000 kWh of green energy per year after its completion, saving 370 tonnes CO2e of carbon emissions and about 10% of the electricity expenses; the Julin Nursing Home will be able to earn additional income by trading Taiwan Renewable Energy Certification (T-REC) in the future.

In terms of human capital and long-term training, LITE-ON follows its own business strategies and targets to design a learning system that helps employees improve professional skills and achieve the company's mission and vision. The learning blueprint of the system contains 12 modules. New employees can follow the blueprint to learn more about LITE-ON and its future developments. All employees are able to access self-learning resources through digital learning and LITE-ON Lectures. For professional training, specialized courses are offered to individual departments as needed. These courses aim to improve employees' core management competency and quality management; advanced management and leadership programs are provided for managers as well. In 2019, LITE-ON Group employees completed 31.3 training hours per person.

Thanks to the effort made by interdepartmental collaboration, LITE-ON was rated "A" by the Carbon Disclosure Project (CDP 2019) at the beginning of 2020, elevating LITE-ON to one of the leading companies worldwide in terms of information transparency and action to fight climate change. LITE-ON has been listed as a member of the Dow Jones Sustainability Index (DJSI) for nine years in a row since 2011, and has had a place on the MSCI ESG Leaders Index for six years in a row. In Taiwan, LITE-ON has been ranked top 5% in the 2019 Corporate Governance Evaluation Survey jointly implemented by the Taiwan Stock Exchange (TWSE) and the Taipei Exchange (TPEx), listed as a constituent stock in the FTSE4Good TIP Taiwan ESG Index, awarded Commonwealth Magazine's Corporate Citizen Award in the large enterprise category for the 13th time, and named a winner in the electronics technology category of the 2019 Corporate Social Responsibility Survey by Global Views Monthly, the 2019 TCSA Taiwan Top 10 Sustainable Companies, the Corporate Sustainability Report Platinum Award, and the Climate Leadership Award.

We would particularly like to thank the countless stakeholder groups and representatives who participated in the aforementioned projects and activities or gave LITE-ON support and recognition. We could not have done it without your support. The growing number of extreme weather events induced disasters around the globe in recent years, and the sustainable development and mutual prosperity of the overall environment have become a challenge yet an opportunity for all businesses around the world. As a global corporate citizen, we promise to use LITE-ON's influence in the industry and in the community to expand the horizon and adopt international regulations. We will continue to work with all stakeholders and contribute to sustainable development.

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LITE-ON Sustainability ▸

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