L1

Span of the business model and value chain

1. Chicony operates in the downstream segment of the consumer electronics industry value chain. Its upstream suppliers include manufacturers of electronic components, metal parts, packaging materials, and plastic components, while its downstream partners consist of consumer electronics product assemblers and end-use customers.
2. Chicony has planned buffer zones with radii of 2.5 kilometers and 5 kilometers for the purpose of assessment. These zones represent indirect impact and potential impact areas, respectively, ensuring that Chicony Electronics delineates a comprehensive scope of natural capital impacts.

L2

Dependency and impact screening

Using the ENCORE database recommended by the TNFD, Chicony has compiled ecosystem services and impact drivers that are associated with dependencies relevant to its value chain sectors. The identification results are as follows:

1. Dependency:
   Surface water, groundwater, flow maintenance, quality stability and corrosion control, flood and wind protection, atmospheric and ecosystem dilution, mitigation of sensory impacts, water quality, climate regulation.
2. Impact:
   Water Pollutants, Soil Pollutants, Solid Waste, Air Pollutants, GHG, Land Use, Water Resource Utilization

L3

Interface with nature

L4

Interface with sensitive locations

We conducted value chain priority location screening based on two key factors: identification of high-dependency and high-impact operational sites, and ecological sensitivity assessment. After accounting for buffer zones around each site, a total of 10 sites—including CEC's operational locations and its top 50 suppliers in 2023—were found to be located within 2.5 km buffer zones of key biodiversity areas (KBAs), representing 14.7% of the assessed sites. Additionally, 15 sites, or 22%, were located within 5 km buffer zones of KBAs.

E1

Identification of environmental assets, ecosystem services and impact drivers

E2

Identification of dependencies and impacts

To better understand our dependencies and impacts on nature, we referred to the Natural Capital Protocol and TNFD guidance to establish dependency pathways and impact pathways for operational activities at each site. The relevant explanations are as follows:

1. Dependency Path:
   Potential external environmental or social changes may impact the natural state, leading to alterations in the ecosystem services we rely on, which in turn affects the operational activities of Chicony.
2. Impact Pathway:
   The driving factors of operational activities lead to changes in natural conditions, resulting in a reduction or loss of ecosystem services, which in turn triggers external environmental or social changes.

E3

Dependency and impact measurement

E4

Impact materiality assessment

1. Based on the importance of ecosystem services and the level of external impact, we assessed nature-related risks with a focus on the potential material impacts to operations arising from the loss or disruption of these services.
   (1)High Dependency on Services: Establish indicators to mitigate risks, based on the operational critical dependency matrix. This will assess the weakening of service-driving factors and their impact on society and business. By integrating stakeholder perspectives and ENCORE data, we'll identify significant driving factors.
   (2)Moderate-to-High Level Impact: Establish indicators/baselines to monitor the reduction of natural capital impacts.
2. The results of the ecosystem services analysis are as follows:
   (1)High: Flood and Wind Protection, climate regulation
   (2)Moderate: Water quality, atmospheric and ecosystem dilution
   (3)Low Level: Water flow maintenance, surface water quality & quantity stabilization and corrosion prevention & control and mitigation of sensory impacts
3. The results of the analysis of significant impact driving factors are as follows:
   (1)High: Water pollutants, solid waste
   (2)Moderate: GHG emissions
   (3)Low: Air pollutants, land use, water resource utilization

A

Assess risk & opportunities

1. In accordance with the TNFD risk and opportunity framework and international reporting analyses, we have identified and preliminarily assessed potential risk and opportunity issues within our value chain. For detailed information, please refer to Climate- and Nature-related Risk Identification.
2. In line with the TNFD scenario analysis guidance, and considering nature and environmental changes, macroeconomic trends, and regulatory developments relevant to the company, we have developed scenario assumptions aligned with our long-term business trajectory. For further details, please refer to Climate and Natural Scenario Analysis .
3. According to our risk and opportunity assessment process, risks and opportunities identified as high or above are prioritized for active monitoring and management. For detailed information, please refer to Material Climateand Nature-related Risks and Opportunities .

P

Prepare to respond & report

1. For high risks and opportunities, we have formulated corresponding response strategies to address potential impacts. We regularly follow up with responsible units to monitor implementation progress and evaluate the effectiveness of these strategies. For detailed information, please refer to Material Climate-and Nature-related Risks and Opportunities .
2. Regarding nature-related indicators and targets, we are currently focusing on climate change as a key impact driver and have established ambitious climate-related targets accordingly. For other impact drivers, we have also taken initial steps to respond through the implementation of Green Production and Green Regeneration measures under Chicony Green Octagon framework.
3. To provide a comprehensive disclosure aligned with the TNFD recommendations, the Company will integrate the TCFD and TNFD frameworks and publish the TCFD and TNFD report.