Environmental Sustainability

We focus on energy saving, waste management, greenhouse gas emissions and green products and other aspects, comply with relevant laws and regulations and improve continuously. We also call on our upstream suppliers to be aware of the environmental requirements of production process based on international regulations, and the environmental trends of future. Dynamic guarantees the compliance of its products with international regulations and customer requirements to enable Dynamic to obtain the recognitions of all the major customers and make them our green partners to work together to care for our environment.

Dynamic strives to provide a safe and healthy working environment for employees. The Occupational Safety and Health Committee is set up to conform to the Occupational Safety and Health Management Measures. Regular meeting is held every quarter to fulfill the promise of allowing consultation and participation of the staff and the staff representative.

We implement the company's environmental safety and health policy, so that all departments of the company operate safely to prevent accidents. We established an Accident Investigation & Handling System to investigate work-related accidents (including environmental accidents) in order to identify the cause of the accident and take effective corrective measures to avoid recurrence and prevent work-related injuries and health damages.

Environmental Sustainability Short, Medium and Long-term Goals

Short-term Goals (2025-2026)

• Concrete science-based carbon reduction targets have been submitted to SBTi and are expected to be approved by January 2025.
• Work closely with the supply chain to optimize the carbon footprint platform to meet customer requirements.
• Taking the greenhouse gas emission intensity in 2020 as the baseline, the goal of reducing carbon emission intensity by 20% will be achieved in 2025.
• Monitor the effectiveness of action plans through continuous ISO14064 (carbon emission inventory).
• Work with supply chain partners to set emission reduction targets and promote action plans.
• Continuously improve the recycling and reuse rate of water resources.
• Continuously enhance the reusability of waste, promote the utilization rate of recycled copper materials, and advance the circular economy.
• Continue to maintain the effectiveness of environmentally related systems such as ISO14001 (environment), ISO50001 (energy), QC080000 (materials do not contain environmentally related substances), AWS (sustainable water management), UL 2799 (zero waste to landfill).

Medium-term Goals (2027-2030)

• Work with partners to develop low-pollution raw materials to reduce the treatment load of wastewater and waste.
• Work with partners to develop low-carbon raw materials to reduce carbon footprint.
• Taking the greenhouse gas emission intensity in 2020 as the baseline, reach the goal of reducing carbon emission intensity by 50% in 2030.

Long-term Goals (2031-2040)

• It hopes to develop collaboratively between economic benefits and resource utilization, become an "environmentally friendly enterprise", and fulfill Dynamic's commitment to environmental sustainability.
• Achieve carbon neutrality by 2040.

Energy

• Kunshan Plant maintains the ISO 50001 energy management system,and reduces energy consumption through equipment consolidation and production line adjustment. The total electricity consumption in 2023 decreased by 39,621 kWh (29.4%) compared to 2022.
• In 2023, Huangshi Plant purchased 42 million kWh of green electricity (accounting for 18.6% of the factory's electricity consumption). It is planned to expand the purchase of green electricity to 90 million kWh/ year by 2025. The second phase of rooftop solar power generation has been completed, with a total self-generation power capacity of 2,073.57 kWp, and it is planned to complete a photovoltaic power generation project with an annual total power generation capacity of 6,859.6 kWp before 2027.
• The online energy monitoring system will be introduced for the expansion of the new factory to monitor and display energy consumption data in real time, which can not only improve the accuracy of product carbon footprint inventory, but also provide an important basis for energy improvement.

Greenhouse Gas Emission

In 2023, greenhouse gas inventories were completed across the three regions of China, Taiwan, and Hong Kong. The inventory status and results are as follows:

Taoyuan Operation Center has replaced fuel-consuming company vehicles; Kunshan Plant discontinued the use of old, energy-consuming machinery, reducing carbon dioxide emissions; Huangshi Plant installed wind and solarpowered streetlights and electric vehicle charging stations during the expansion of the factory’s roads, and encouraged employees to commute using electric vehicles. The Company developed an in-house carbon footprint tracking platform to assist clients in low-carbon design and implemented low-carbon supply chain management to promote a net-zero transition among suppliers.

Management of Water Resources

Environmental Investment

At Kunshan Plant, the originally designed pollution control facilities had a large processing capacity. With current production capacity reduced, operations are relatively smooth, so there are no new environmental protection facilities planned. Environmental expenditures remain stable, focusing mainly on operational maintenance and chemical materials. In 2023, due to the expansion of Huangshi P2 Plant, there was an increase in wastewater treatment and exhaust gas treatment facilities, which led to a proportional growth in these two areas.

Circular Economy

• Huangshi Plant established a Dynamic Circular Economy Industry Research Center, which was dedicated to waste recycling and reduction, such as copper recycling, gold recycling, and more. The center has obtained three provincial-level scientific research achievements and multiple patents, with a production value of approximately RMB 70 million in 2023. Of the recyclable waste, 28% has been prepared for reuse or recycling within the factory.
• Through electrolysis treatment, Huangshi Plant reduced the amount of copper-containing waste liquid transported for external disposal by 13,591.5 tons, with the proportion of recycled copper balls accounting for 53% of total usage.

Green Products and Processes

Dynamic constantly reduces the use of resources and generation of hazardous substances in the design of products, the purchase of raw materials and regular materials, and during the production process to minimize impacts on the environment and to enhance the environmental friendliness of its products.

Waste Reduction

Kunshan Plant has implemented zero cross-border processing and zero violations in its storage facilities, and has continued to maintain the effective operation of the ISO 14001 system; in the past five years, no fines have been imposed by the competent authority for any waste disposal issues.
Huangshi Plant promoted UL2799 zero waste to landfill certification and obtained the highest level of platinum certification.

Dynamic conducted an indicator comparison based on the Task Force on Climate-Related Financial Disclosures (TCFD) to identify the risks and opportunities associated with climate change. In 2020, Dynamic’s identified and ranked the climate-related risks through internal discussions among each department of the headquarters and subsidiaries to inventory the climate change risk issues. In 2023, nine major climate risk issues were identified based on the identification results of 2020, and a matrix of climate risk materiality was drawn up. The potential financial impacts as well as the related risk management approaches and countermeasures brought by climate change were also revealed, to refine Dynamic’s governance of climate change. Results of the evaluation show that the risk exposure percentage of revenue from the analysis of the simulated RCP2.6 scenario was 0.0160% and that of RCP8.5 was 0.0169%. Primary suppliers of Dynamic are not exposed to significant physical risks and hence there will be no significant financial impacts.

Climate Change Risk Management - Implementation in 2023

Analysis of Scenarios Where Climate Change Impacts Finance

The risk of climate change has had a profound impact on Dynamic's daily operations. The proliferation of extreme weather events in China in recent years, coupled with increasingly stringent environmental regulations in Taiwan and China, will impose significant costs on Dynamic. In other words, for “physical risk” or “transition risk”, Dynamic carefully evaluates their resultant impacts and plans ahead of time the response mechanism and related measures to minimize the operational risk.

Dynamic conducted climate risk exposure inventories for the top three suppliers and assessed rainfall hazards in key suppliers' locations. According to the “Representative Concentration Pathways (RCPs)” in the Fifth Evaluation Report of the Intergovernmental Panel on Climate Change (IPCC) of the United Nations, the difference between the Radiative Forcing in 2100 and 1750 is used by Dynamic as indicators. Both RCP 2.6 and RCP 8.5 scenarios were used, and Climate Analytics' RCP 2.6 and RCP 8.5 scenario data are referenced.
Results of the evaluation show that the risk exposure percentage of revenue from the analysis of the simulated RCP2.6 scenario was 0.0160% and that of RCP8.5 was 0.0169%. Primary suppliers of Dynamic are not exposed to significant physical risks and hence there will be no significant financial impacts.

．Scenario Analysis of Transition Risk and Financial Impacts - Risk Analysis of Carbon Charge
To achieve the goal of “net zero emissions by 2050”, the Executive Yuan of Taiwan recently approved the draft amendment to the “Greenhouse Gas Reduction and Management Act” and the title of the act was changed and modified into “Climate Change Response Act”. It is expected that carbon charge will apply to emission sources throughout the nation in the future. In China, on the other hand, under the background goal of “carbon peaking by 2030 and carbon neutralization by 2060”, the National Carbon Trade Market was commissioned in 2021. Therefore, Dynamic evaluates the impacts of carbon charge on its finance in the future according to the current climate change strategy and current operational status as the fundamental scenario.
The overall greenhouse gas emissions of Dynamic throughout 2020 came to 217,322.5717 tonnes (only Scopes 1 and 2). With 2020 as the baseline, the annual carbon reduction ratio is forecast according to Dynamic’s carbon reduction goal of 4% linear reduction a year and the five criteria of carbon prices, namely: the “EPA-recommended rate”, “EU-estimated carbon tax rate”, “IEAestimated rate”, Greenpeace-recommended rate”, and “Estimated carbon price of the China Carbon Forum” and is calculated according to the current actual carbon credit trade ratio while Dynamic is evaluated for its extent of risk exposure under different scenarios in the future and up to 2050.
Results of the evaluation show that under each of the five estimated rates by 2050, financial impacts are the most significant applying the EU carbon tax and the Greenpeace-estimated rate and the minimal with the EPA-recommended rate. Although the analysis results did not show harmful impacts on Dynamic’s operations, the Company remains highly focused on carbon-related issues. In addition to actively installing renewable energy equipment, it also advocates for upstream carbon emission inspections and prioritizes 100% procurement of raw materials with low carbon emissions, aiming to reduce carbon output at every stage of the product life cycle, and providing customers with environmentally friendly, low-carbon products.

Biodiversity and Zero-Deforestation Policy

We are committed to maintaining the natural environment and habitats around our operating locations, actively investing in biodiversity affairs, aiming to achieve the standard of zero deforestation by 2030 at all operating locations, and making continuous progress towards the goal of net positive impacts on biodiversity.

In 2024, the Company will implement "Nature-related Financial Disclosures" to evaluate the impact of its business activities on the environment and habitat restoration. Following the LEAP framework of the TNFD, Dynamic will analyze and define its relationship with the natural environment and biodiversity, assess the business impacts on nature and biodiversity, propose relevant countermeasures and development directions, and disclose the evaluation results.