Message from Top Management

Starting from the Company's core capabilities, Advantech responds to issues of SDG 9 (Industry, innovation, and infrastructure) and SDG 4 (Quality Education) by deepening the innovative application of the IoT and education. We offer long-term support for IoT education and various innovative and sustainable education, and we look forward to cultivating the children, teenagers, and youth in Taiwan with a sustainable outlook on the environment to become citizens of the world.

SDG 4 is also echoed in social investment and education, cultural and public welfare. Advantech promotes sustainable education and aesthetic literacy for the public. It invests in educational innovation and encourages and hosts sustainable education promotion programs in elementary and secondary schools. We also support private education platforms to promote the Project-Based learning model (PBL). In addition, we continue to invest resources to assist professional schools and art teams in cultivating outstanding artistic talents and actively promote aesthetic literacy for the public. In the future, we will also expand our support to develop talent in art creation in Taiwan, enhancing Taiwan’s artistic soft power.

The vision statement of the foundation is "combining the participation of corporate stakeholders based on Advantech's altruistic concept to promote "IoT innovation,” "sustainable education", and "humanistic quality" to promote the development of an intelligent and happy community.” Advantech is committed to becoming an intelligent promoter of sustainable earth and a brand enterprise of truth, goodness, and beauty. The goal is to promote sound social development through talent cultivation in which science, technology, and humanities go hand in hand. From 2022 to 2025, we have continued to deepen the IoT education topic using the Company's core capabilities. Also, we promote art and public welfare activities that combine social development and strengthen the connection between the Company and our employees. The promotion of the annual goal is carried out in a planned way with "innovative research and development of IoT,” "sustainable innovation education,” "humanistic and aesthetic quality,” and "charity care for rural areas" as key projects.

2023 marked Advantech‘s 40th anniversary. Following the completion of Linkou Phase III, we held three world partner conferences in Taiwan. The VIP guests expressed their appreciation for Advantech’s long-term focus on IIoT and implemented various solutions in our own factory building, both expressed high affirmation. The Company‘s subsidiaries around the world also participated in the “Cycling 40” global cycling event and invited local customers and partners to celebrate. In addition, nearly 9,000 employees around the world also enjoyed special 40th anniversary incentive activities, and were given high satisfaction feedback to mark the end of the 40th anniversary celebration.

In addition to operating activities, Advantech‘s ESG sustainability projects have also been actively expanded from the headquarters to overseas subsidiaries, and have received positive feedback from the outside world.

In 2023, Advantech made significant progress in sustainability performance. In terms of overall ESG performance, Advantech was included as a constituent of the Dow Jones Sustainability Indices (DJSI) for the first time and was rated as the Global 5%

Sustainability Benchmark Company by All Industries, and Computers & Peripherals and Office Electronics ranked fourth. The Corporate Governance Evaluation continues to maintain a top 5% ranking among listed companies. In 2023, it significantly improved its position in the Taiwan‘s Excellence in Corporate Social Responsibility Award, moving from 27th to 12th place. Additionally, in the 2023 Global Views ESG Corporate Sustainability Award, Advantech received dual recognition for the first time, winning awards for both Comprehensive Performance Model Award and Education and Outreach.

However, in the face of the development of various emerging issues in the field of ESG, especially global climate change, corporate decarbonization, biodiversity and forestation protection, diversity, equity, inclusion-DEI and other issues, we still need to areas for improvement. Advantech will continue to integrate sustainable responsibility with its operation and risk management, benchmark against international frameworks such as TNFD, SBT, ISSB, and the EU Taxonomy, and work together with industry and supply chain partners to move towards a better future.

Looking forward to 2024, the ESG corporate sustainability development office has defined the following key issues. External experts, partners, and internal teams are engaged to continuously drive sustainable transformation:

Environmental:

• 2040 Accomplish RE100 achievement: Committed to achieving the goal of using 100% renewable electricity in our global operations by 2040, and achieving the RE50 goal of energy-intensive manufacturing plants in Taiwan and Kunshan, China by 2030.
• Introduce carbon pricing and move towards decarbonization: Advantech plans and implements greenhouse gas inventory roadmaps with a schedule better than the requirements of the Financial Supervisory Commission (Taiwan, ROC). and year by year completes greenhouse gas inventory projects for the Taiwan parent company, Kunshan subsidiary and global RBUs (Regional Business Units, including AJP, AKR, AESC, and ANA). In 2023, we obtained the first product carbon footprint statement (ISO 14067) and launched the carbon pricing project. In 2024, we expect to incorporate carbon costs into business management and take more proactive actions to decarbonize the enterprise.
• Develop sustainable intelligent solutions: Focusing on our core business, we work with partners in the value chain to launch smart energy solutions, such as Intelligent Energy Management System (iEMS), smart healthcare, smart factories, and smart transportation and other sustainable intelligent solutions. The goal is to generate revenue from intelligent solutions. The proportion of products and revenue is increasing year by year. In 2023, with reference to the EU Taxonomy framework, we calculated that 39.9% of Advantech's revenue from sustainable intelligent solutions contributed to climate change mitigation and climate adaptation promotion in 2023. Advantech will strive for low-carbon innovation and continue to move forward.

Social:

• Promote IoT Industry-Academia co-creation value chain: Work together with industry, government, academia, and research to help youth find employment and start entrepreneurship. Collaborate with ecosystem partners to help with biodiversity monitoring and smart forest management.
• Diversity, Equity, Inclusion (DEI) workplace: Advantech, an enterprise operating in 27 countries across the globe, is confronted with the formidable task of effectively managing and fostering a workforce that is diverse in nature, encompassing various generations and backgrounds. Advantech introduced its Diversity, Equity, and Inclusion (DEI) strategy framework and objectives in 2023. By incorporating an inclusion and diversity framework into the processes of talent selection and planning, this approach fosters a greater sense of workplace belonging among employees and manages the performance of global talent development through data-driven decision making. The objective of this endeavor is to foster a culture of agile management and provide employees with continuous career advancement. Let each Advantecher unleash their potential and demonstrate outstanding contributions.

Governance:

• Information security and risk management: High-risk items are defined through the Risk Management Committee and corresponding countermeasures are generated. In 2024, the Company will continue to improve the performance of global taxation, information security, and data governance brought about by generative AI.
• ESG sustainability governance: In 2023, Advantech launched the sustainability performance and positive incentive mechanism for senior executives to examine sustainability trends at home and abroad, set KPIs to integrate corporate operations and risk management. The initiative also establishes sustainability performance metrics to drive accountable ESG management and achieve tangible results. In the coming year, we will evolve our incentive mechanisms and share our sustainability achievements.

The above are the main directions of Advantech's ESG work in 2024. We will implement sustainable development through the above actions, and the team will combine the forces of various stakeholders to create a future of inclusiveness and sustainability.