Environmental Management

In terms of environmental management, Advantech not only implements environmental protection work related to sewage and waste in accordance with relevant laws and regulations, but has also formulated an Environmental Safety and Health Management System Manual as a guiding principle for the operation of the management system, and regularly inspects and implements management. All sewage meets discharge standards and is reported as required. Business waste is also entrusted to be disposed of by qualified removal companies.

The Company's environmental declaration and environmental policy are as follows:

1. 1. In our design and production of products and services to our customers, we are committed to the concept of green to reduce and prevent the generation of waste and pollution through the 3R (Reuse, Recycle, Reduce) as far as possible. Also committed to energy conservation, waste reduction, emission reduction, and circular economy to reduce the impact of products and production activities on the environment.
2. 2. Evaluate the risk and opportunity to establish management program to promote energy conservation and reduce waste of resources in accordance with global climate change, environmental issues and international regulations and standards related to environmental protection, energy and resource efficiency.
3. 3. Establish a green supply chain from design, production, delivery and service through the cooperation with customers, suppliers and outsourcing parties.
4. 4. Ensure that all our activities comply with requirements of environmental, health, safety & HSF regulations and customers’ designation. Promote relevant environmental, health, safety & HSF protection knowledge and activities through education and training, so that all personnel may participate in achieving the objective of continuous improvement and zero disasters, occupational diseases and pollution.
5. 5. Continuously promote improvement through the management system, deeply construct the corporate risk management culture for environment, safety, and health, strengthen the important responsibility and awareness of sustainable development with all employees, joint ventures and stakeholders. Also follow this policy due diligence when merging and acquiring related businesses.

Highlighted Performance

In order to achieve the promise of eco operation and sustainable development, the Company has established an environmental management system since 1996. We have done so in order to better implement the planning of environmental protection issues and to achieve the effectiveness of resource use. Meanwhi le , through our Environmental Safety and Health Committee, we have established Advantech's environmental safety and health conceptual framework, advocated energy conservation, improved energy efficiency, and listed energy cost reduction as an annual key audit item.

Furthermore, we regularly review performance through our environmental management system and GHG inventory. The table shows the environmental management system and greenhouse gas inspection and certification of each factory region of Advantech. This chapter’s writing scope covers Advantech’s main global operations and production factories, together accounting for 92.3% of total consolidated revenue. There was no environmental violations in 2022. The environmental violations at Advantech’s main global operations and production factories in the past four years are summarized in tables.

Advantech's factories use water-saving faucets and toilets and promote water-saving measures in order to find ways to reduce water consumption per person. All factories are located in developed industrial areas or campuses in metropolitan areas. In terms of tap water supply, there is no extraction of groundwater or well water. The total water consumption of Advantech’s global main operating locations and production factories in the past four years is shown in Figure 4.4.1. To further analyze of the increase in total water consumption of revenue in 2021 and 2022, it is because of the expansion of the scope of disclosure to include information on overseas factories in addition to the expansion and operation of the Kunshan Factory (Phase 5).

Advantech has successively implemented water-saving improvement plans in recent years. In Taiwan, water-saving solutions such as rainwater recycling and reuse are mainly used for domestic water, intelligent irrigation water saving, and intelligent airconditioning cooling water and chilled water system monitoring and control. In 2022, the water consumption was saved for about 9,800 tons of water compared with 2021. The Kunshan factory area has installed water meters in the production workshops of each factory and conducted water metering management. This distinguishes water used for Phase 1, Phase 2, Phase 3, 4, and 5, dormitories, kitchens, and equipment, analyzing reasonable water consumption. In addition, water quality has been improved in the manufacturing process, and a total of 6,900 tons of water was saved in 2022. The main water-saving measures in the US factory are the installation of low-flow toilets and faucets, and leak detection and maintenance programs are carried out on a regular basis.

In the future, more improvement plans will be planned to save water resources. Except for Kunshan, China, which contains industrial wastewater discharge, Advantech's other factories do not discharge industrial wastewater. The amount of water discharged by the Kunshan factory in the past four years is shown in Figure 4.4.2. The Kunshan factory has been introduced reclaimed water reuse and overflow water reuse plans since 2022. The waste water in the process is recycled and reused to reduce the discharge of waste water. As a result, waste water consumption was reduced by 31% compared to 2021.

Zero waste is the ultimate goal of Advantech's waste management. We take total waste reduction and waste recycling as a strategy in addition to reducing waste output and achieving waste reduction through source management measures such as reduction of raw materials. Advantech also actively promotes the recycling of waste, such as reusing packaging materials to replace the existing end-of-pipe treatment model, and turning waste into useful resources. This not only truly achieves resource recycling, but also reduces energy consumption and waste disposal costs. Advantech devotes attention to its waste contractors every year. If a contractor breaches the contract or violates government regulations, it will undertake corresponding disposal or guidance or replacement. In 2022, Advantech did not have any major breach of contract or violation of laws by waste contractors. The Company's waste management model is shown in table.

Regarding the final disposal weights of waste at Advantech's main global operations and production factories, because the weight of domestic waste is an approximate estimate of the contracted clearance, weight information for further disposal classifications is not yet available. Therefore, only information waste is disclosed

Figure:Disposal Volume of Business Waste among dvantech’s Main Global Operations and Production Factories in Recent Years

According to the statistics, the total waste disposal volume of Advantech’s main operating bases and production regions in 2022 was 1,242.53 metric tons. Out of this, there was 1,000.48 metric tons (80.5%) of non-hazardous waste and 242.05 metric tons (19.5%) of hazardous waste.

Air pollutants have become one of the important environmental issues of global concern. In 2017, the International Agency for Research on Cancer (IARC) listed air pollutants as known primary human carcinogens. Volatile organic compounds (VOCs) are one of the most important portions of air pollutants that are harmful to ecology and health. Advantech also cares about the effectiveness of air pollution controls and about atmospheric air quality. Volatile organic compounds is one of the important sources of contribution to the formation of PM2.5 and so fine that it penetrates into the lungs very easily; thus, the impact of VOCs on human health cannot be ignored. Regarding air pollution data and information disclosures, Advantech has put together three key points:

Advantech's production process does not generate ozone-depleting substances (ODS) and hence there are no ODS emissions.

Advantech Taiwan and Advantech Japan mainly utilize assembly processes with low air pollution load, so there is no emission of nitrogen oxides, sulfur oxides, or volatile organic compounds (VOCs).

Advantech's Kunshan (China) Campus utilizes liquid coating and powder coating processes, and the volatile organic compounds (VOCs) emitted are all in compliance with local regulations

Volatile Organic Compounds (VOCs) Emitted by Advantech’s Main Global Operations and Production Factories in Recent Years (Unit: mt)