Stakeholder Engagement

The ESG Corporate Sustainability Development Office drew upon the Company's operational status, annual international sustainability trends, internal developments, and the sustainable development progress of relevant peers, along with input from the supervisor of the Sustainability Development Office, to lay the groundwork for reporting previous years’ sustainability reports and related written documents. Based on the international AA1000 SES (Stakeholder Engagement Standard), the stakeholder groups remain unchanged from previous years. These include: Employees, customers, business partners, universities and research institutions, suppliers and contractors, media, public associations and government, shareholders and investors, as well as communities and NPOs, totaling eight major stakeholder categories

We interact with stakeholders through various channels, including telephone communications, online customer service (Live Chat), offline 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 Contact Us - ESG (advantech.com), where we can respond to stakeholder concerns and provide feedback.

The Sustainability Report is an important method for Advantech to communicate with its stakeholders and clarify ESG topics. Besides engaging in in-depth communication through various channels during day-to-day business operations, Advantech collaborates with stakeholders in identifying, discussing, and prioritizing the most impactful sustainability topics through its annual material topics analysis process. By consistently listening to and addressing feedback from various stakeholders, Advantech is dedicated to implementing its corporate mission of "Enabling an Intelligent and Sustainable Planet" within its global IoT market deployment. This involves facilitating green transformation across industries as well as fostering social harmony and shared prosperity.

To ensure that the report content complies with international frameworks and accurately reflects the essence of the organization's business, Advantech follows the reporting principles of GRI 2021 Standards. Concurrently, it considers the Double Materiality perspective promoted by the EU Corporate Sustainability Reporting Directive (CSRD). Analysis is performed across two major dimensions: the impact on sustainable development (covering economy, environment, and human rights), as well as the impact on the organization's operations and financial performance. This approach allows for a more accurate identification of Advantech's risks and opportunities in areas including green transformation, smart manufacturing, energy conservation and carbon reduction, as well as human capital development. Furthermore, it helps clarify the strategic adjustments and resource allocation required by the organization in responding to global trends.

Every year, Advantech utilizes diverse tools such as questionnaires, interviews, and consultations with internal and external advisors to systematically review the positive and negative impacts of sustainability topics. These topics are further prioritized according to their level of impact and urgency. The analysis results are incorporated into the Sustainability Report, serving as a foundation for stakeholder communication. At the same time, they guide Advantech's ESG strategy formulation, project planning, and tracking of long-term sustainability goals. Dynamic review and annual iterative updates ensure timely and quick responses to external needs and industry shifts.

To ensure the completeness and objectivity of materiality analysis, Advantech not only incorporates stakeholder feedback but also includes the professional insights of internal and external experts and consultants. The results are reviewed by the Sustainable Development Committee before final submission to the Board of Directors for approval. This rigorous decision-making process ensures that Advantech's material topics is endowed with strategic depth and a forward-looking perspective.

Advantech's Sustainable Goal Setting and Strategy Development Process

Continuing last year's enhanced feedback-gathering method, we engaged a wide range of stakeholders before this year's questionnaire survey. This was achieved through extensive communication with investment firms and clients, as well as participation in external sustainability-related meetings. Building on this foundation, we have invited Advantech's middle and senior management to propose their professional insights and opinions on the preliminary draft of topics. This ensures that we can meet the needs of internal employees and external communities more comprehensively. This feedback allow us to reexamine the questionnaire content and integrate it in a more forward-looking and inclusive manner.

On the other hand, driven by Advantech's ESG vision of "Enabling an Intelligent and Sustainable Planet," we are convinced that through our commitment to IoT core technologies, innovative solutions, and an open co-creation business culture, Advantech can harness its core competences to address diverse challenges associated with the United Nations Sustainable Development Goals (SDGs). We will also continue to bolster IoT industry-academic cooperation, combining expertise from smart manufacturing, green transformation, energy conservation and carbon reduction, and other fields to promote industrial upgrading and sustainable development. For more specific management guidelines concerning various material topics, please refer to the subsequent sections.

In 2024, our materiality impact assessment was primarily based on "Advantech's impact on the economy, environment, and society through its various activities and business relationships in the process of providing products or services." At the same time, referencing the EU Double Materiality assessment framework, we conducted an independent and detailed quantitative analysis of the impact of environmental, economic, and social topics on the Company's internal financial reporting (i.e., financial materiality).

• Materiality impact level = Positive impact level + negative impact level
• Likelihood of occurrence of materiality = Likelihood of occurrence of positive impact + likelihood of occurrence if negative impact

Advantech's 2024 materiality analysis results were prioritized through the following three steps:

In 2024, a total of 2,078 valid internal and external questionnaires were collected for data gathering and opinion integration. Additionally, we held numerous in-depth meetings with key external stakeholders—including customers, suppliers, and experts—as well as cross-departmental discussions within the internal Sustainable Development Committee. These efforts yielded extensive and valuable feedback from all parties, ensuring the representativeness of the assessment results. Through rigorous statistical and quantitative analysis, we were able to accurately identify the impact and its level of each topic, ultimately forming a preliminary materiality matrix.

Materiality Analysis Results

10 Material Topics Addressed by This Report