Climate Governance

Task Force on Climate-related Financial Disclosures (TCFD)

Climate change not only threatens humanity and ecological environments but also poses direct or indirect impacts on corporate operations. Inventec proactively discloses climaterelated information in line with the Task Force on Climate-related Financial Disclosures (TCFD) guidelines. The Company also reviews its governance, strategy, risk management and key metrics annually to strengthen climate change management and enhance its capability to control climate risks, with the aim of improving the eectiveness of its business decision making.

Category	Inventec’s Actions
Governance	The Board of Directors serves as the highest supervisory body for climate governance at Inventec. Under Sustainability Committee, the Sustainable Environment Functional Team led by senior executives has been established to focus on climate change, risk management and environmental sustainability issues. This team integrates resources to drive cross-department initiatives, communicates with stakeholders, and submits the report of implementation results for the Sustainability Committee’s review at least once a year before presenting to the Board of Directors.
Strategy	Based on the international TCFD framework and the implementation experience of benchmark companies, Inventec, through its Sustainable Environment Team, conducts cross-department discussions and evaluations to identify climate risks and opportunities within its value chain. From both "mitigation" and "adaptation" perspectives, the Company formulates climate performance targets, action plans, and management mechanisms, and regularly discloses management outcomes every year. Inventec has developed a "Low-Carbon Transition Plan" and, in conjunction with the IFRS S2 adoption project, has established short-term (1 year), medium-term (2 to 4 years), and long-term (over 5 years) phased targets to systematically identify climate-related risks and opportunities associated with its operations. The Sustainable Environment Team conducts cross-departmental governance and assessments to identify climate-related risks and opportunities across the value chain. Based on mitigation and adaptation strategies, the Company formulates performance targets, action plans, and management mechanisms, while regularly disclosing management outcomes. Specifically, climate risks are evaluated based on their likelihood and impact to derive material risk values. According to these risk values, risks are prioritized and categorized into three levels: high, medium, and low. Inventec further identifies the material climate risks closely related to its operations and integrates these risks into the operational management mechanisms across all Group units to ensure the effective implementation of risk controls and the low-carbon transition.
Risk Management	Under the Sustainability Committee, a Risk Management Team has been established to incorporate climate issues into the risk management system. This team utilizes the TCFD framework to identify potential climate-related risks and opportunities that may arise under different scenarios. For each identified climate risks and opportunities, the dedicated team formulates corresponding response strategies, which are then publicly released after approval. The team also regularly monitors and evaluates the implementation status to ensure that climate issue management progresses in sync with the Company’s operations. Inventec has followed four steps to Identify and Manage Risks：1) Identify Risks and Opportunities, 2) Assess Value Chain Impact, 3) Determine Materiality, and 4) Manage and Disclose.
Indicators and Targets	Based on the identified risks, Inventec sets up mitigation targets and disclose them to the public. Additionally, Inventec also sets its carbon reduction targets for 2030.

Inventec Climate Risk Matrix

All risks

High-risk

Moderate-risk

Low-risk

Circle size：Likelihood high, moderate and low.

Climate Risk Summary Table

Type	Dimension	Item
Transition Risk	Regulations and policy (inculding leagl risks)	Increased sustainability-related requirements and norms
	Regulations and policy (inculding leagl risks)	Increased cost of greenhouse gas emissions
	Technology	Low-carbon technology transformation cost
	Market	Changes in customer behavior
	Reputation	Increased negative feedback from stakeholders
Physical Risk	Chronic Risk	Rising average temperature
	Acute Risk	Increased extreme weather events - typhoon/rainstorm
		Extreme weather events – extreme low temperature
		Increased extreme weather events - drought
		Increased extreme weather events – heat

Adaptation and Mitigation Measures for High-risk Issues

Actively cooperate with customers and voluntarily carry out product carbon footprint related activities within the value chain.
Complete various applications for energy efficiency labels, product carbon labels, etc.
Adopt the SBT Science Based Target Reduction Tool to set goals.
Continuously build and implement disaster emergency response measures and business continuity plans (BCP), and work with supply chain partners to reduce the impact.

Analysis of the Value Chain Impacts Arising from Major Climate-related Risks

Issues		Value Chain Impact Assessment
Issues		Upstream suppliers	Inventec	Downstream clients
Transition Risks	Changes in customer behavior	Moderate	High	Low
Transition Risks	Transition costs of low-carbon technologies	Low	High	Moderate
Physical Risks	Extreme weather events - heat	Moderate	High	Moderate

Diagrams of Major Climate-related Risks

Changes in customer behavior
Transition costs of low-carbon technologies
Extreme weather events - heat

Scenario Analysis of Transition Risk Arising from Changes in Customer Behavior

Identify Material Climate Risks

"Transition risk - high proportion of renewable energy and process energy saving" due to changes in customer behavior is used as the quantitative assessment and analysis item for potential financial impact.

Adopt Appropriate Scenarios

The assessment includes Inventec's major production sites in Taiwan, Mainland China, Mexico, and the Czech Republic.
Simulations for 2025-2030 are conducted based on the Business as Usual (BAU) scenario, which projects current development trends, and the 2050 net-zero strategy scenario.

Quantify Risk

Impact

Evaluate and analyze the process energy saving and renewable energy procurement required by each factory to achieve the 2050 net-zero strategy.
Calculate the cumulative costs of process energy saving and renewable energy procurement by 2050.

Mitigation and Adaptation Actions

Formulate future response plans and action strategies.

Scenario Analysis of Physical Risk Arising from Extreme weather events - heat

Identify Material Climate Risks

Based on climate risk ranking, likelihood, and management expansion scope, we conducted a quantitative assessment of the potential impact of the three risks in the short-term materiality analysis, "Transition costs of low carbon technologies, Increase in extreme weather events - heat, Changes in customer behavior". Therefore, we decided to use "Increase in extreme weather events - heat" as a further analysis and evaluation item.

Adopt Appropriate Scenarios

Inventec's major production bases in Taiwan, China, Mexico and Czech were included in the assessment.
Simulations were conducted based on extreme high emission (IPCC SSP5-8.5) and very low emission (IPCC SSP1-2.6) climate scenarios from 2023 to 2050.

Quantify Risk

Impact

Evaluate and analyze the potential impact, level and expected value of extreme high temperature in each factory area.
Calculate the amount of impact in 2040 and 2050 (including future factory expansion plans).

Mitigation and Adaptation Actions

Formulate response plans and action plans for each factory.
1. Formulate mitigation measures for predictable scenarios and review them regularly.
2. Preliminary adaptation assessment before plant expansion plan.

Scenario Simulation

Transition Risk

Inventec conducted a scenario simulation for "transition risk arising from changes in customer behavior - high proportion of renewable energy and process energy saving" based on the Group's 2050 Scope 1 and 2 net-zero carbon reduction target (with 2020 as the baseline year). Business as Usual (BAU) scenario based on current development trends: Under the assumption of no carbon reduction measures by the Company, two scenario hypotheses were made based on the estimated annual Scope 1 and 2 carbon emissions.

Given the high uncertainty surrounding future climate change, Inventec Group will continue to implement relevant energy-saving measures, as well as renewable energy installation and procurement, to reduce carbon emissions. Additionally, we will regularly review the impact of climate-related issues on operations to ensure that we remain vigilant and adaptive to evolving medium- and long-term climate trends.

Category	Scenario Assumption	Scenario simulation results
Transition Risk	Self-estimated electricity consumption demand simulation: Carbon emissions were forecast based on each factory's projected future electricity consumption.	Total cumulative cost by 2050 accounts for 0.1% of 2024 revenue.
Transition Risk	SSP3-7 pathway electricity consumption demand simulation: Considering the international context, the "SSP3-7 scenario" from the Shared Socioeconomic Pathways (SSPs) was used to estimate carbon emissions resulting from future electricity consumption.	Total cumulative cost by 2050 is approximately 0.6% of 2024 revenue.

Physical Risk

Inventec quantified the financial impacts of extreme heat risks using physical risk climate scenarios from the IPCC SSP1-2.6 (low emissions) and SSP5-8.5 (high emissions). These scenarios assess potential impacts under different policies, reflecting future global conditions under either low-carbon transition or continued economic growth driven heavily by fossil fuels. The assessment focused on simulation and evaluation periods in 2040 and 2050, because data before 2040 may not clearly reflect scenario changes. According to IPCC AR6, by 2040, there is a high likelihood of global temperatures rising to 1.5°C under any emission scenario. Therefore, post 2040 timelines were selected to simulate and evaluate potential impacts on critical production sites at Inventec, reflecting the global net zero targets and their joint achievement timeline. Additionally, climate physical risk management was based on metrics such as "adaptation plans under high temperature conditions at production sites" and "tracking indicators significantly affected by power shortage risks." These measures served as criteria for assessing the severity of risks, facilitating controlled adjustments and preventive measures.

Category	Major Production Base^註1	Risk level	Financial Impact ^{Note 2}
			2030		2035		2040		2050
			SSP1-2.6	SSP5-8.5	SSP1-2.6	SSP5-8.5	SSP1-2.6	SSP5-8.5	SSP1-2.6	SSP5-8.5
Physical Risk	Mexico	High	Medium	Medium	Medium	Medium	Medium	Medium	Low	Medium
	China	High	High	High	High	High	High	High	High	High
	Taiwan	Medium	Low	Low	Low	Low	Low	Low	Medium	Low

Category	Major Production Base ^{Note 1}	Mitigation Measures
		2030	2035	2040	2050
		Short-term	Medium-term	Long-term
Physical Risk	Mexico	1. High-temperature conditions are managed in accordance with the contingency protocols established by the municipal civil defense authority, while external climate anomaly alerts continue to be monitored and received. 2. Assess and gradually replace combustion-based heating equipment with electric alternatives.	1. Replace combustion-based heating equipment with electric alternatives. 2. Improve the efficiency of existing fuel use to reduce operating costs.	1. Establish appropriate response mechanisms to address high-temperature hazards. 2. Develop production models that are adaptable to prolonged high-temperature conditions.
	China	1. Select high-efficiency, energy-saving cooling systems for different applications, such as production workshops, warehouses, and server rooms, to avoid the high energy consumption associated with conventional fixed-speed equipment. 2. Mitigate risks related to power rationing and unexpected outages by ensuring continuous power supply for critical production processes and core equipment, thereby preventing production disruptions and safety incidents. 3. Reduce unnecessary energy consumption through behavioral changes, laying the foundation for future technological upgrades and fostering a company-wide culture of energy conservation.	1. Fundamentally reduce energy consumption per unit of output through equipment upgrades, which serves as a core approach to achieving the Company's medium-term decarbonization targets. 2. Optimize electricity load management to reduce purchased electricity costs, while facilitating the transition toward a low-carbon energy structure and enhancing energy self-sufficiency. 3. Elevate energy conservation and carbon reduction to a long-term corporate strategy, integrate them into market-based mechanisms, and support sustainable development.	Enhance awareness and establish a continuous implementation plan for power shortage contingency measures, such as deploying solar photovoltaic systems integrated with energy storage solutions, to strengthen independent power supply capabilities.
	Taiwan	1. Develop a climate action plan and establish short-, medium-, and long-term decarbonization targets. 2. Upgrade to high-efficiency equipment and improve process energy efficiency to reduce both direct and indirect energy consumption.。 3. Invest in renewable energy, explore alternative energy sources such as biomass and hydrogen, and participate in green electricity procurement and trading.	1. Strengthen supply chain sustainability and implement green procurement practices. 2. Enhance employee training programs to increase sustainability awareness and engagement among employees.	1. Gradually develop and implement medium- to long-term production adjustment plans to respond to extreme heat conditions. 2. Continuously monitor changes in extreme heat conditions and adjust response levels as necessary.

Note 1: ICZ is excluded due to lower local temperatures and absence of extreme heat risks in climate scenarios. IET is also excluded because it has minimal production activities, which allows for faster response even in case of extreme heat conditions.

Note 2: Financial impact is assessed based on the proportion of 2022 Group revenue.

Note 3: Currently evaluated operational sites cover 100% of all existing production plants. Additionally, the assessment for 100% of the new expansion in Mexico has been synchronized to address future climate risks.