The board of directors is the highest level of climate governance decision-making in the Company and is responsible for overseeing iST’s governance performance and goal achieving status on climate-related issues, as well as reviewing corporate sustainability performance annually. Including climate-related governance situation and goal achieving status.

The Company has conducted an annual review of its climate-related objectives such as energy saving, carbon reduction and water saving in 2023. Meanwhile, the Company would also include the climate-related topic in reviewing significant capital expenses, annual budget, and business plan. And, the considerations of climate-related issues were incorporated in the review of the important capital expenditures, annual budgets and business plans of the Company.

The ESG Steering Committee is established under the Board of Directors as the highest steering unit for implementation of sustainable practices and the decision-making unit for ESG activities and policies. It reviews and approves ESG reports with the directors as the members, and reports the management performance of climate-related risks and opportunities to the Board of Directors on a regular basis every year. The Risk Governance Team is responsible for collection and summarization of domestic and foreign climate issue trends and periodical establishment of the overall climate risk and opportunity management policies and response strategies for the Company to ensure the appropriateness of the iST’s climate governance direction and practice.

In 2023, the annual implementation results on climate issues and the net-zero emission reduction action plan will be reported to the board of directors.

The ESG Committee is established under the ESG Steering Committee with the Chairman serving as the chair and the managers of the departments as the committee members. The ESG Committee integrates the ESG strategy direction and resources across departments while the convener leads the ESG Secretariat to prepare the promotion of the ESG policies and activities.

The ESG Committee shall report material ESG topics that stakehoders are concerned about and the implementation effectiveness to the ESG Steering Committee and the Board of Directors on a regular basis. It shall hold regular meetings and review the effectiveness of the ESG goals and activities to ensure the implementation of sustainability policies.

In charge of identifying and evaluating climate-related risks and opportunities, and analyzing climate-related indicators and objectives such as energy usage and carbon emissions regularly to assist in adjusting and formulating climate management strategies. In 2023, the dedicated reported the implementation effectiveness of sustainability to the ESG Committee, including measures to address climate risks and opportunities, and disclosed the results to stakeholders.

iST has narrowed down the climate risk factors identified by the ESG Steering Committee into 12 risk factors based on their risk characteristics and influence on the industry, supply chain, and R&Drelated functions of iST. Furthermore, iST has asked the internal experts to identify the materiality of the risk factors and compare them with the results of the top companies in the industry, and to review and confirm the impact on the supply chain in order to adjust the materiality of the risk factors. According to the identification results, 5 items are distributed in the short to medium term; 4 items are distributed in the medium to medium to long term; and 3 items are distributed in the long term. The distribution of these items is shown in the following climate risk matrix.

In response to the climate issue, iST conducted a resilience analysis by considering the risks and carrying capacity of iST. The company developed a list of 12 climate risk factors as follows. After considering the effect of urgency and the level of financial impact, a risk management plan was developed respectively for two opportunity issues and three risk issues of high priority (marked with * in the table below):