Stakeholder Engagement

The ESG Corporate Sustainability Development Office utilized the operational status of the Company as well as annual international sustainability trends, internal operational developments, the sustainable development progress of relevant peers, and discussions with the Company's top sustainability executives to lay the groundwork for reporting in previous years' sustainability reports and written reports. The primary stakeholder groups, as per the AA1000 SES (AA1000 Stakeholder Engagement Standard), will persist in their previous iterations. These groups comprise employees, customers, business partners, universities and research institutions, suppliers and contractors, the media, public associations and the government, shareholders and investment institutions, the communities, and nonprofit organizations are the eight primary categories of stakeholders.

We interact with stakeholders through various channels, including telephone communications, online customer service (Live Chat), physical and online meetings/forums, event satisfaction surveys, customer satisfaction surveys, customer visits, supplier audits, participation in public association initiatives, etc. Additionally, contact information is publicly available on the ESG Corporate Sustainability Official website at Contact Us - ESG (advantech.com), where units respond to stakeholder concerns and provide feedback.

The Sustainability Report is one of Advantech's main channels for communicating ESG issues to stakeholders. To this end, in addition to routine stakeholder communication media, we engage stakeholders through the material topic analysis process. Advantech adheres to the reporting principles of the GRI 2021 Standards, which incorporate the European Union’s concept of Double Materiality. This methodology distinguishes between the “impact on sustainable development concerning the economy, environment, and people (human rights)” and the “financial impact on organizational operations.” This methodology identifies significant, impactful topics, with a focus on long-term challenges and opportunities that can be concretely realized through operational essence. This enables the observation of sustainability trends, the response to stakeholder expectations and suggestions, and the tracking of progress toward long-term sustainability goals.

Conduct an annual survey to identify Advantech-related sustainability issues, inventory the positive and negative impacts of sustainability issues, and disclose the relevant information in the sustainability report after ranking the issues to fully convey the essence of Advantech's management of various material sustainability topics and performance.

In order to confirm the objectivity of the analysis results, in addition to the perspectives of stakeholders and Advantech's ESG priorities in recent years, the materiality was verified through internal and external consultants and the Sustainable Development Committee, and the results were reported to the Board, as well as the basis for developing sustainability strategies and planning sustainability-related projects.

Advantech's Sustainable Goal Setting and Strategy Development Process

Prior to conducting the stakeholder survey, we improved the process of gathering feedback from stakeholders. For example, we held numerous communication sessions with investment institutions and customers and actively participated in external sustainability-related meetings. During these interactions, we learned about the importance of various issues such as human capital and associated risks, product energy consumption standards, eco design, and Advantech's overall carbon reduction goals. As a result, we elaborated on these topics in the questionnaire. In addition, we proactively reached out to responsible units within our organization (including units of business, public relations, employee relations, investor relations, emerging business development, supply chain, etc.) to gather feedback. Based on the initial draft of issues identified through this process, we sought feedback from middle and senior managers in each unit on additional topics they wanted to include or discuss. This enabled us to better understand the perspectives of key stakeholders involved in the process on questionnaire design and Advantech's key sustainability themes.

On the other hand, in accordance with Advantech's ESG vision - “Enable an Intelligent and Sustainable Planet,” we believe that Advantech's core IoT technologies and solutions, as well as its corporate culture of open innovation, co-creation with partners, and deep industry-academia IoT development. Collaboration allows us to effectively use our core competencies to address the United Nations Sustainable Development Goals (SDGs). For details, see the Material Management Approach. For the management policies of material topics, please refer to the relevant chapters of each material topic.

Process of Advantech’s material issues survey

The method for prioritizing sustainability issues is explained as follows: The ESG issues should be assessed and ranked in accordance with the EU's Double Materiality framework and “the level of impact that Advantech has on the economy, environment, and society in the process of providing products or services through its business relationships and activities.” Furthermore, the evaluation of “Financial Materiality” pertains to the influence that environmental, economic, and social concerns have on the internal financial and accounting statements of the Company.
• Level of impact of the material topic = Positive impact + Negative impact
• Probability of occurrence of the material topic = Positive impact probability + Negative impact probability

Advantech's 2023 materiality analysis results were ranked through the following three steps: Multiply the probability of impact on economy/ environment/people by the level of impact on economy/environment/people for each sustainability topic, and rank the results according to the results.

Rank the results of each sustainability topic by “level of financial impact on the Company”. Cross-considered the ranking results of the above two points and judged them based on the level of double material impact of the materiality topic matrix.

In 2023, 1,105 valid internal and external questionnaires were gathered. To ensure that the assessment results are representative, important stakeholders' opinions are obtained through external communication meetings with key customers, suppliers, and experts, as well as internal sustainable development committee meetings. Identify the impact and extent of each issue through statistical and quantitative analysis to generate the preliminary material topic matrix.

Materiality Analysis Results

10 Material Topics Addressed by This Report