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Biodiversity Risk Assessment

To gain insight into the impacts and dependencies of the operations on nature, Inventec has adopted the Taskforce on Nature-related Financial Disclosures (TNFD) framework. Utilizing the LEAP methodology (Locate-Evaluate-Assess-Prepare approach), we identify the risks and opportunities associated with our operating sites and upstream suppliers. This systematic approach allows Inventec to better identify and evaluate our impacts and dependencies on nature. Additionally, to effectively understand the issues and status of dependency and impact, we engaged both our own operations and supplier partners. In the first phase, we focused on our Shilin Headquarters and Taiwan factories, setting up relevant mitigation plans. This effort will be expanded to major overseas production sites in the future. In 2024, in terms of our own operations, the assessment involved key departments responsible for disaster response, pollution prevention, energy management, plant management, and finance. We also invited 17 upstream supplier partners with factories in Taiwan to participate in the assessment. By looking into the four main types of nature dependency ("Provisioning Services", "Regulating and Supporting Services", "Cultural Services", and "Non-biotic Flows"), we identified five major categories. Within the five main impact types ("Ecosystem Change", " Natural Resource Use and Exploitation ", "Climate Change", "Pollution" and "Invasive Species and Others"), we also identified seven major categories.

Assessment Framework：LEAP

Step 1
Locate

Using Geographic Information System (GIS) spatial data overlay analysis, Inventec maps the locations of the assets, operating sites, and the supply chain. The analysis determines whether these areas overlap with biological habitats or protected areas and identifies if they have a direct relationship with Inventec’s value chain activities.

Step 2
Evaluate

Inventec evaluates the impacts and dependencies of the various activities on nature, determining whether the activity has a positive or negative impact.

Step 3
Assess

Further analysis is conducted to assess the nature-related risks and opportunities faced by Inventec. These findings are then integrated into the Company’s annual risk management processes.

Step 4
Prepare

Inventec prepares comprehensive strategic plans to respond to nature-related risks and opportunities.

Inventec’s Own Operations: Nature Dependency Risk Identification Results for 2024

Category/Item	Risk Level	Number of Affected Factories
Water Resources Insufficient Water Supply	High	2
Global and Local Climate Regulation Extreme Heat	High	3
Storm Mitigation Severe Wind Disasters (Sandstorms, Typhoons, etc.)	Medium	3
Local Climate Regulation Extreme Rainfall Events	Medium	3
Disease Control Outbreaks of Large-scale Epidemics	Low	3

Inventec's Nature Dependency Results and Mitigations in 2024

Item (Ecosystem Services)	Duration of Physical Risk Impact	Financial Impact Analysis	Potential Opportunities	Strategies
Water Resources Insufficient Water Supply	Long-term	Impact on revenue: Seasonal water shortages affect production capacity Increased operating costs	Enhanced drought resilience Improved water-saving performance Increased opportunities for water recycling technology partnerships	Deploy a group response team to promptly gather government information on each plant’s location Strengthen and promote daily water-saving measures among employees
Global and Local Climate Regulation Extreme Heat	Long-term	Increased operating costs: Higher air conditioning and electricity demand Impact on revenue: Extreme Heat results in power rationing, leading to reduced production capacity	Improved energy-saving performance Development of alternative energy solutions	Deploy a group response team to promptly gather information on significant temperature anomalies in various locations Establish more flexible energy plans, such as installing renewable energy facilities and optimizing plant equipment usage
Storm Mitigation Severe Wind Disasters Sandstorms, Typhoons, etc.	Short-term	Increased capital expenditure due to damage to plants or equipment Revenue is affected by operation disruptions	Establishing robust emergency response capabilities within the group	Strengthen the response team’s capabilities, improve plant facility disaster prevention plans, and reduce operational disruption risk and disaster damage Enhance the disaster SOPs and drills, and reinforce real-time weather information system alerts
Local Climate Regulation Extreme Rainfall Events	Short-term	Increased capital expenditure due to damage to plants or equipment Revenue is affected by operation disruptions	Reorganize and optimize infrastructure to improve factory disaster prevention and response capabilities	Strengthen disaster response capabilities, maintain normal operation of drainage facilities, and improve remote work mechanisms for employees
Disease Control Outbreaks of Large-Scale Epidemics	Long-term	Decrease in revenue: Disruption of operations due to inability to gather during the epidemic	Decrease in revenue: Disruption of operations due to inability to gather during the epidemic	Strengthen the response team’s capabilities, improve remote work mechanisms for employees, and stock sufficient protective equipment such as masks

Inventec’s Own Operations: Nature Impact Risk Identification Results for 2024

Based on the extent of risk exposure and the impact on operations, seven categories have been identified.

Items	Ranking
Indirect Energy Use Such as the Use of Steam, Electricity and Thermal Energy	1
Climate Change Greenhouse Gas Emissions	2
Pollution Solid Waste	3
Resource Use Use of Fossil Fuels	4
Pollution Emissions of Non-Greenhouse Gas Air Pollutants	5
Resource Use Use of Freshwater Resources	5
Resource Use Mineral resources, such as metals and non-metals	6

Inventec's Nature Impact Results and Mitigations in 2024

Taking into account policy/legal, financial, technological, market, and reputational aspects of transitional risks, along with the short-, medium-, and long-term timeframe of impacts, we conducted the assessment and identified three categories of impacts with corresponding countermeasures to promptly monitor and mitigate the risks and impacts on our operations.

Items	Duration of Transitional Risk Impact	Potential Transition Risks	Financial Impact	Potential Opportunities	Strategies
Resource Use Indirect Energy (Electricity) Use	Short-term	Market: Increased customer requirements and investor concerns Technology: Development of renewable energy technologies Financial: Increased operating costs	Higher operating costs, such as electricity bills Increased expenses for installing renewable energy facilities Increased electricity procurement costs	Reduced carbon fee/tax expenses Meeting customers’ expectations and cooperating with them to create low-carbon product opportunities Lowering loan interest rates to reduce funding costs	Actively collaborate with the value chain to procure renewable electricity Evaluate the feasibility of building in-house renewable energy solutions
Climate Change Greenhouse Gas Emissions	Short-term	Financial: Rising operating costs Technology: Development of low-carbon technologies Market: Accelerated demand for carbon neutrality or net-zero emissions from customers Reputation: Diminished brand value for high-carbon emission products	Increased operating costs such as carbon fees/taxes, electricity bills, etc. Loss of customers and decrease in revenue	Developing smart production models to reduce carbon emissions effectively Reducing carbon fees/taxes Enhancing competitiveness by developing low-carbon product technologies	Optimize energy efficiency to reduce energy consumption Increase the use of renewable energy
Pollution Solid Waste	Short-term	Regulations: Increasingly stringent regulations requiring goal setting and public disclosure Technology: Development of recycling technologies Market: Increased customer requirements	Higher operating costs, such as waste treatment and certification fees	Opportunities in developing a circular economy	Obtain certifications and implement recycling practices

Inventec is equally attentive to the nature dependencies and impacts related to our supplier partners. The results of the first phase of identification for 2024 are as follows. We will also seek to understand and monitor the response measures of our suppliers, and incorporate relevant issues into our supplier management mechanisms as necessary, including adding controlled topics to ESG assessment items, ensuring compliance with regulations, and implementing audits and improvement measures to reduce the impact on Inventec’s operations.

	Nature Dependency Items	Nature Impact Items
1	Global and Local Climate Regulation Extreme Heat	Resource Use Indirect Energy Use
2	Water Resources Insufficient Water Supply	Climate Change Greenhouse Gas Emissions
3	Local Climate Regulation Extreme Rainfall Events	Resource Use Mineral Use
4	Air Filtration Services Deterioration of Air Quality	Pollution Solid Waste
5	River Flood Control Services Occurrence of Floods	Pollution Water Pollution
6	Non-biotic Flows - Metal Minerals Shortage of Metal Mineral Supply	Resource Use Water Resource Use
7	Disease Control Outbreaks of Large-scale Epidemics	Resource Use Fossil Energy Use
8	Precipitation Pattern Regulation Uneven Rainfall	Pollution Air Pollution Emissions
9	Precipitation Pattern Regulation Drought Events	Ecosystem Changes Terrestrial Ecosystem Use
10	Landslide Mitigation Occurrence of Landslides or Mudslides

Long-term Adoption of Wetland of National Importance

Since 2012, Inventec and the Inventec Group Charity Foundation have been carrying out the "Love‧Happiness-Let’s Take Care of the Local Ecological Environment" project for 12 consecutive years by adopting the wetland of national importance, Guandu Nature Park. In the year of 2023, the ecological experience of a total of 108,752.

"Love‧Happiness─Let's Take Care of the Local Ecological Environment.”

Innovative Outdoor Ecological Value Chain Exchange Program

Since 2015, Inventec has been promoting the “Migratory Birds' Ark, Ecological Sustainability Program." In order to enhance the concept of green life education and link the direction of the United Nations Sustainable Development Goals, on August 25, 2023, Inventec hosted the "Biodiversity Environmental Education Walk" and "Handmade Silk-Screened Eco-Bags for Rural School Children" at Guandu Nature Park. With a total of 108 representatives from 78 suppliers in attendance, Inventec joined hands with its supply chain partners. The ecological experience activities on that day were arranged in a way that highlights the significance of sustainability, including:

The event location was Guandu Nature Park which is rated as an environmental education facility. Professional guided tours led four groups of participants through the Biodiversity Environmental Education Walk. Participants experienced the meaning of "environmental sustainability" and appreciated the “installation art“ of 2023 Guandu International Nature Art Festival.
Supplier representatives participated in the "Handmade Silk-Screened Eco-Bags for Rural School Children" activity and donated their handmade silk-screened eco-bags to students from the five sessions of the wetland environmental education program held in 2023. While receiving environmental education, the children also received eco-bags that symbolized ecological awareness.
For lunch, "Angels' Lunch Boxes" from the "Children Are Us Bakery & Restaurant" were prepared, showing support for sheltered workplaces together with suppliers. This practical action supported individuals with intellectual disabilities who are capable and willing to work but are unable to find employment in the general job market.

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