1 About TSRC

Index
About this Report

1

Letter from the CEO

2

Stories for Sustainability

3

ESG Strategy

7

Appendix

12

2 Governance32

1.1 Industry Positioning

14

2.1 Strengthen Corporate Governance36

1.2 Communication with Stakeholders

22

57

1.3 Identification and Analysis of ESG Material
topics25

2.2 Integrate Sustainability and Business
Strategies
2.3 Strengthen Innovation Momentum

60

1.4 E
 SG Initiatives and Participation in
Associations30

2.4 Increasing the Resilience of Operations
and Supply Chain

64

126

3 Environmental

69

3.1 Towards Carbon Neutrality Operation

73

3.2 Reduction of Product Carbon Footprint81

3.3 Develop Model of Circular Economy

85

3.4 Water Resource Optimization

90

3.5 Environmental Management95

4 Social

98

4.1 S trengthen Organization’s Sustainability
Capability

99

4.2 Improve Health, Safety & Wellbeing of
Employees

108

4.3 Enhance Social Engagement

121

1

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance2021
Sustainability Report

About this Report
This is the 2021 Sustainability Report (hereinafter referred to as this "Report") of TSRC
Corporation (also called “the Company”)and discloses corporate environmental (E), social(S), governance (G), and sustainability plans and implementation. This Report is prepared in

3. Environmental

comply with the GRI Standards: Core items for disclose, chemical industry standards of the

4. Social

Sustainability Accounting Standards Board (SASB), and discloses climate-related risks andAppendix

Financial Disclosures (TCFD). This Report is reviewed by the TSRC ESG Committee and issued

opportunities according to the framework recommended by the Task Force on Climate-related
after being approved by Chairman of TSRC Corporation.

Reporting Period and Publishing Cycle
TSRC Corporation issued the Corporate Social Responsibility (CSR) Report five times from 2016
and 2020. The Report is renamed as the Sustainability Report in this year. The information anddescriptions in this Report are the implementation status of governance including economic,
social, and environmental topics in 2021 (from January 1 to December 31). The previous Report
was issued in June 2020, and the next Report is expected to be issued in June 2022. TSRC
Corporation plans to publish the Sustainability Report once a year.

Scope of the Report
The contents of this Report cover implementation and performance in governance including
economic, social, and environmental aspects in TSRC including the global businessheadquarter, Kaohsiung plant, and Gangshan plant and six subsidiaries, Shen Hua Chemical,
TSRC Nantong Industrial, TSRC-UBE, TSRC-Shanghai, TSRC (Vietnam) Company Limited, andTSRC Specialty Materials LLC. The scope of this Report is consistent with all manufacturing
entities included in the consolidated financial statements. In this year, we include TSRC (Vietnam)
Company Limited into the scope of Report. In this Report, the global business headquarter
refers to the head office of TSRC located in Taipei City, Taiwan. For readers to understand thenames of related organizations, explanations are provided as follows:•

TSRC Corporation: Refers to TSRC Corporation located in Taiwan, including the global
business headquarter located in Taipei, Kaohsiung plant, and Gangshan plant.

•

TSRC: Refers to TSRC Corporation and six subsidiaries, including Shen Hua Chemical, TSRC
Nantong Industrial, TSRC-UBE, TSRC-Shanghai, TSRC (Vietnam) Company Limited, TSRC
Specialty Materials LLC, global business headquarter, Kaohsiung plant, and Gangshan plant.
The terms TSRC, TSRC Group, and the entire group are used interchangeably in this Report.

•

TSRC Specialty Materials LLC were originally named Dexco Polymers L.P. in 2020. it
was renamed in 2021 as TSRC Specialty Materials LLC.

Restatements of Information
The data on GHG emissions, energy usage, water resources, waste, and air pollutants etc.
in 2019 and 2020 disclosed in this Sustainability Report have been restated due to c theadjustment of data source or the change of coefficient citation, etc. Restated data will be notedin the statistical chart.

Third Party Veriﬁcation and AssuranceThis Report is prepared by TSRC's ESG Taskforce, which collected and summarized data, andreviewed by supervisors of each function to ensure that the contents cover all Material topics.
The Company engaged SGS Taiwan to provide assurance that this Report is in compliancewith the GRI Standards: Core items and AA1000 Type 2 moderate level assurance. Additionally,
SASB indicators and TCFD information disclosed by TSRC also are assessed by SGS Taiwan,
and the assurance statement is provided in the Appendix.
Furthermore, KPMG Taiwan was commissioned to provide limited assurance of four chemical industry
indicators for this Report in accordance with the Assurance Standard No. 1 "Assurance Engagementof Examinations or Audits of Non-historical Financial Information" (established in accordance with ISAE
3000 Revised) issued by the Accounting Research and Development Foundation. The independent
assurance statement issued by the accountants is included in the Appendix.
This Report can be downloaded at: https://www.tsrc.com.tw/tw/csr/publication-download/

Contact Person
If you have any advice or recommendations regarding this Report or TSRC's ESG strategies andpractices, please contact:
TSRC ESG Taskforce
Address: 18F, No. 95, Sec. 2, Dunhua S. Rd., Taipei City 106, Taiwan R.O.C.
Web Site: https://www.tsrc.com.tw/tw/
Telephone: +886 2 3701 6000
Email: ESG.admin@tsrc-global.com

2

About this Report
Letter from the CEO

Letter from the CEO

1. About TSRC

For the past many years, TSRC devoted to keep stable operations, well communication with

2. Governancestakeholders and contribute to the environment and society. In response to the global ESG

3. Environmental

trend (Environmental, Social, Governance) and the impact of climate change, TSRC aimed tosustainability as mission and continues to strengthen operation mechanisms and measures to

4. Socialenhance the corporate long term operation capability.

Appendix

Despite the challenges brought by global logistics and supply chain issues, as well as China's

Environmental

ESG Strategy

Stories for Sustainability

2021
Sustainability Report

TSRC continues to develop green manufacturing technologies and reduce energy
consumption at production sites. Emission intensity (i.e., carbon emissions per ton of
product) reduces 4.67% to 1.02 versus 2020. The two subsidiaries TSRC-UBE andNantong Industrial stopped using coal-fired boilers, reducing black coal usage by 47,000
metric tons. Furthermore, waste intensity (i.e., metric tons of waste per ton of thousands ofproducts) is down to 7, which is lower than 2020 by 14.32%. The Company will continue toreduce its environmental impact and product’s carbon footprint.

dual control system on energy intensity and total consumption in 2021, we achieved the best
market demand and raw material price changes, achieving a consolidated net operating profit
of NT$3.928 billion, lifted 378% compared to 2020. With regard to the implementation of ESG,

Socialbusiness performance in the past decade by seizing favorable conditions in downstream

The Company devoted to talent cultivation. In 2021, we held 16 online sharing events to shareoperational topics for employees’ interdisciplinary learning. We continue to implement talentdevelopment and leadership training plans. Furthermore, we organized social caring activities
during the pandemic and donated medical supplies to the medical team in Shanghai, PRC.

we converted the original CSR Committee into the ESG Committee in 2021 and established theWe also organized green chemical education activities in Kaohsiung, Taiwan to support the

ESG Taskforce under it to facilitate joint implementation among functions. In response to thelearning and development of underprivileged students. Facing the rapid spread of new variants

risks and impacts brought by extreme weather events to operations, we assess climate-relatedof COVID-19, protecting the health and safety of our employees has become our primary task.

risks and opportunities according to the methodology of the TCFD, and formulate measures to

The Company quickly took emergency response measures to maintain the normal operations

strengthen our operational resilience to climate change. We not only disclose ESG informationof production sites and continuously cared about employees' health conditions.

according to the framework of the Global Reporting Initiative (GRI) but also state ESG measuresaccording to chemical industry standards of the SASB, so that stakeholders will fully understandour ESG performance and future plans.

strategies and focus on three major aspects: "promoting environmental protection," " creatingsocial positive impact" and "strengthening governance resilience." We developed nine focus
area for improvement, including towards carbon neutrality operations, optimizing water resourceuse, reducing product’s carbon footprint, strengthening employee safety and health, andGovernanceWith facing the trend of climate change and low-carbon economy, we have formulated ESG

Corporate governance is the foundation of business management. We amended numerous
policies and strengthened implementation in 2021. In light of the volatile environment, wehave also dedicated our efforts to improving risk management mechanisms. In addition tomonitoring operational risks, information security has also been a critical area to improve.
We conducted numerous drills and organized multiple training sessions in 2021 while
installing anti-virus devices to improve information security.

enhancing operational resilience. We set targets for each area such as reducing total carbon
emissions, using renewable energy, increasing the use of recycled water, and lowering theoccupational injury rate. In terms of product innovation, we will dedicate our efforts to developing
new generation rubber, such as SSBR, to increase the wear resistance of tires and improve thefuel efficiency of vehicles, which will reduce carbon emissions. We will also develop recyclable
styrene block copolymers (SBC) for application in medical equipment, shoe materials, andplastic modification. These ESG efforts aim to achieve TSRC's sustainability.
TSRC's ESG performance in 2021 is as follows:

Looking forwards the future, the threat of new variants of COVID-19 still exists, geopoliticalconflicts are still ongoing, global supply chains remain strained, and extreme weather events
continue to cause disasters. All of these keep challenging our long-term operations. To facingthese challenges, we maintain a pragmatic attitude. We not only focus on business growth
but also actively implement strategies to achieve TSRC's ESG targets. We cherish Earth's
resources by developing low carbon manufacturing processes and working together with
upstream and downstream partners to create solutions with scientific methods. We aim toachieve mutual prosperity with the environment and increase interactions with stakeholders
to create our positive impact.

Chai Wei Cheang Joseph
CEO of TSRC Corporation

3

About this Report
Letter from the CEO

2021
Sustainability Report

ESG Strategy

Stories for Sustainability―Contribution of Saving Energy to Environment

1. About TSRC

Responding to the global trend of carbon reduction, TSRC continues to pursue product

The SSBR produced by TSRC has been tested and proved with a significant improvement in

2. Governanceinnovation for a contribution to the environment. We develop new-generation synthetic rubbers

the stability of the linkage between silicon dioxide and rubber molecules. TSRC’s SSBR can

3. Environmental

for green tires, such as solution polystyrene-butadiene rubber (SSBR). The new-generation

effectively reduce the rolling resistance of tires and improve the wear resistance and grip, making

synthetic rubbers can improve vehicle fuel efficiency, reduce tire rolling resistance by 20%, andit the indispensable raw material for energy-saving tire manufacturers.

Stories for Sustainability

4. Social
Appendix

reduce fuel consumption by about 2-3%.

As countries gradually phase fossil-fuel vehicles out and vigorously promote the popularization

When a vehicle is operated, the tire bears a weight load. The trend contacts the ground, andof electric cars, the desire for low tire rolling resistance and high wear resistance is even greater.

the tires are squeezed and deformed, resulting in energy loss and slowness of the speed.

An electric vehicle is equipped with heavy batteries, which increases a load of tires and theWhen the rolling resistance gets greater, the vehicle needs to consume more fuel to generateenergy loss when tires are in contact with the ground. Meanwhile, an electric vehicle can start

propulsion for moving forward. The rolling resistance of tires has a decisive impact on a vehicle’s

faster than a gas car because of the greater instantaneous torque, which transmits more force

fuel efficiency. Thus, the development of energy-saving green tires focuses on reducing rollingto the ground. To maintain decent performance, electric vehicles need tires with low rolling

resistance while maintaining a certain degree of wet grip and wear resistance as well as

resistance. TSRC's new-generation SSBR products, combined with other synthetic rubbers,

reducing noise, which is also known as the golden triangle—safety, environmental protection,

have successfully reduced rolling resistance compared with the previous generation products.

and comfort.

With TSRC’s innovative products and technologies, we bring excellent growth opportunities forthe future automotive market.

Comfort

SafetySSBR

Environmental
protection

4

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
Appendix2021
Sustainability Report

Stories for Sustainability―Sharing & Learning towards Transformation
Facing the fourth industrial revolution, TSRC realizes that the traditional production model must be transformed from a single
and standardized way to a customized, intelligent, and service-oriented business model to respond to the rapidly changing
market and customers’ requirement. The transformation needs diverse talents from different fields, and it also requires
horizontal and vertical integrated applications across various functions to stay ahead of the industry trends and acceleratecrossover innovation.

Core competencies and technologies
Â

TSRC's crisis and risk management

ÂProblem solving and innovation

Since 2021, TSRC has held a series of knowledge-sharing events in Taiwan. Experts from various fields and departmentsof the Company to share their professional experience and insights with other colleagues. The knowledge-sharing series
comprise four themes including future trends, products and markets, department business, and core competencies andtechnologies. The zero-distance sharing activities break the barriers between departments and support knowledge
and skills transmitted among different business units, resulting in amazing "chemical reaction." With 1,800
colleagues’ participating, the sharing activities obtained up to 93% satisfaction. We will soon expand

the activities to other sites and combine the content with colleagues ‘career development paths toleverage infinite potential.

The future trends

Products and markets
ÂÂ

Exploring the infinite possibility of your careerÂ

How to build self-development

ÂÂ

The business of departments

Main raw material supply and demand analysis andprice forecastÂTrade secrets and Non-CompetitionÂ

The market of advanced materials

Â

How to read financial statements

Robotic Process Automation (RPA) learning and digitalÂÂStrategic planning

analytics

The application of synthetic rubberÂÂThe process of the five-year plan

What is enterprise digital transformation

Product knowledge that TSRC people must knowÂ

Taiwan's tire market and main product characteristics

Â

Understanding the salary research5

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
Appendix2021
Sustainability Report

Stories for Sustainability―Taking Care of People to Overcome the Pandemic
COVID-19 has caused varying degrees of impact around the world. The pandemic began in

The target of TSRC's pandemic prevention measures is to "ensure the physical and mental health2020 and continues to spread in 2021. Taiwan raised the COVID-19 alert to Level 3 in May 2021,

and safety of all employees." We sympathize with colleagues about the risks and pressurescluster infections occurred in China in July and the pandemic hit Vietnam and the United Statesbrought by the pandemic. Thus, we provide employees with masks every day and distributein the third quarter. Since 2020, all TSRC subsidiaries have established response teams sobasic anti-COVID kits. We also offer appreciation incentives to thank employees who went to thethat TSRC can respond to the rapid outbreak in 2021. By keeping abreast of all the pandemic

factories during the pandemic. With colleagues’ hard work and persistence, TSRC can maintain

information and local authorities’ prevention measures, the Company plans and develops

stable production and profit even when the pandemic is raging. We then reward colleagues forpandemic prevention procedures and contingency plans. We establish anti-pandemic measures

their hard work with decent allowances and salaries. In addition, considering that many expatriate

in the factories, including the work-from-home mechanism, regular disinfection, and the strict

colleagues are unable to return home due to the pandemic prevention and control measures,control of foreign guests entering the factory area to reduce the risk of infection that employees

TSRC provides these colleagues with paid leave and allowances. Meanwhile, we assist non-local

may face during work.

employees in applying for local government epidemic subsidies and provide substantial assistanceas much as possible. In 2021, TSRC spent more than NT$2.3 million on anti-COVID materials,
benefiting more than 1,500 employees and more than 400 outsourcers and contractors.

Shen Hua
Shanghai
UBE

Nantong

Taipei

Kaohsiung
Gangshan

TSM

Vietnam6

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental

2021
Sustainability Report

Stories for Sustainability―R&D Center for Innovative Capability
TSRC is a leading manufacturer of styrene block copolymer (SBC) and synthetic rubber(SR). To strengthen TSRC's innovation capability and global configuration for effectively
supporting customers based in the European and American markets, TSRC accelerates

4. Social

the production growth of the specialty polymers. In 2021, TSRC established global R&D

Appendix

headquarters of TSRC Specialty Materials LLC, a subsidiary of TSRC.

Proprietary Processing
Monomer Puriﬁcation, VOC Reduction, Metal
Removal and Finishing Technology.

center in Katy, a western suburb of Houston, Texas, USA, also the regional operating

The global R&D center located in the United States is TSRC's second multifunctional

Precision Polymerization

R&D center in the world and the first one overseas. The R&D center realizes TSRC's

Anionic Polymerization, Coordination Polymerization,
Coupling Technology

strategy of expanding its globalization and accelerating the growth of the specialty
polymer business. Through collaborating with local customers and integrating thesales and production capabilities of TSRC Specialty Materials, the R&D center
will accelerate the development of specialty chemical applications and productcommercialization.
The global R&D center will focus on the development of specialty styrene block
copolymer (SBC) products, including polymer structure and functionalization design,

Scale-Up Technology
Smooth scale-up capability including Lab, Pilot,
Semi-commercial Pilot Plant and Plant stages.

process technology development, end application, and customer technical services.
It will effectively combine TSRC's global technical capabilities and will be dedicatedto markets such as medical materials, hygiene products, adhesives, films, asphalt

Hydrogenation

modification, and elastic non-woven fabrics.

Homogeneous Catalyst, Heterogeneous Catalysts,
Selective Hydrogenation System, Benzene Ring
Hydrogenation

Technology platforms serve as the foundation and building blocks for our differentiatedproducts that perform in a wide variety of applications. At TSRC we have been
continuously investing in sustainable innovation over the past decades, developing
enabling technologies, and improving our fundamental know-how. These platforms
provide flexibility in new product design and enable us to shorten development cycles.

Post-Functionalization
Reactive Grafting, Chain-end Modiﬁcation, Post
Reactor Functionalization

Environmentally Friendly
Waste Water Recycling, Vent Gas Recovery, Waste
Heat Recovery, Pollution Prevention

7

About this Report
Letter from the CEO

2021
Sustainability Report

ESG Strategy

ESG Strategy

1. About TSRC

In response to the global ESG trends and climate change, TSRC has held an ESG consensus-

should focus on in the future and can make contributions including Good Health and Well-being

2. Governancebuilding workshop led by the ESG Committee in 2021. With participants composed of managers(SDG 3), Clean Water and Sanitation (SDG 6), Affordable and Clean Energy (SDG7), Decent Workof the headquarters and production sites, we review the global ESG development trend, theand Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), Responsible

United Nations Sustainable Development Goals (SDGs), and ESG strategies and practices ofConsumption and Production (SDG 12), Climate Action (SDG 13), and Partnerships for the Goals

benchmarking companies in the chemical industry. We jointly discussed the SDGs that TSRC

(SDG 17).

Stories for Sustainability

3. Environmental
4. Social
Appendix

TSRC Practices
TSRC adopts corporate social responsibility practices,manages chemicals and waste for the environment, andreduces the possibility of spillage and emissions to theatmosphere, water, and soil during manufacturing andtransportation. We develop products that can reduce
environmental impact. We also increase the sustainability
and recyclability of products, aiming to minimize any
potential negative impact on the environment in the life
cycle of products.

TSRC continuously optimizes our manufacturing processes,
improves resource efficiency, applies green chemistry
principles, and adopts environmental-friendly and clean
production technologies. We proactively enhance R&D andinnovation, increasing the added value of products and thechemical industry.

Pursuing carbon neutrality, TSRC sets short-term (2025)
and medium-term (2030) carbon reduction targets,
supports global climate change actions, and implements
our low-carbon measures.

By increasing the proportion of reclaimed water, increasing
the recycling of wastewater, and optimizing the use
efficiency of water resources, TSRC ensures enough fresh
water for human beings and reduces water shortage.

TSRC continues to increase the added value of products
and promote economic growth. We protect labor rights,
create a safe and secure working environment for all TSRC
employees, and use TSRC's influence to assist suppliers instrengthening labor rights.

TSRC Practices

TSRC ensures the health of human beings and promotes
the well-being of people of all ages through our products
used in medical materials and health care.

TSRC is committed to increasing the proportion ofrenewable energy, reducing energy consumption per unitof product, increasing energy efficiency, and supporting
renewable energy development.

TSRC continuously strengthens cooperation with partners
along the value chain and with stakeholders in various files,
including but not limited to science, technology, innovation,business, environment, and social development. We
together create sustainable value.

8

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
Appendix

TSRC ESG Committee formulates our ESG Strategy for the next decades by integrating the Company's long-term

Social·Pursuit the common good of human beingsand build a safe and healthy environment
for employees

vision and core business goals. The Strategy is composed of 9 major areas and 24 targets. The ESG Committee will
regularly monitor and review all areas. The milestones will be checked in the short-term (2023), mid-term (2025), andlong-term (2030). We will enhance TSRC's ESG performance with a proactive and practical attitude.

·Create a friendly workplace and cultivate
employees with multi-functions·Maintain good communication with stakeholders and support local environment andincrease social engagement

SocialEnvironmental

Environmental·Take actions to global carbon reduction andinvest in developing green manufacturing process·Lift product value and be the ﬁrst choice for clientsto reduce environmental impact and carbon
emissions·Develop an innovative circular economy businessmodel and strengthen the eﬃciency of energy
and resource

Governance

Governance·Implement corporate governance and integrate
long-term strategies and operational plan

·Build a corporate culture encouraging innovationand create a diversiﬁed business portfolio·Build operational resilience and cooperate withbusiness partners to create sharing values

9About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance

Environmental
In response to the global trend of carbon reduction and the scarcity of energy resources, TSRC cherishes the earth's resources and formulates our carbon reduction targets. We will be towards
carbon neutrality by increasing the use of renewable energy, recycled water, and recycled raw materials. We also develop products and services that support customers to reduce resource usage.
With our innovative thinking, TSRC cooperates with business partners towards low-carbon economy.

3. Environmental
4. Social

2021
Sustainability Report

Focus Area

Reduce total carbon
emission

Appendix

Water Resource
Optimization

2025

2030

Total carbon emissions reduction by
5% versus base year

Total carbon emissions reduction by
10% versus base year

Total carbon emissions reduction by 22.5%
versus base year

Increase the use ofrenewable energy

Increase renewable energy to 5% of total
electricity consumption

Increase renewable energy to 10% of
total electricity consumption

Increase renewable energy to 30% of
total electricity consumption

Increase wastewater
recycling

Increase wastewater recycling to 25% of
total volume of wastewater

Increase wastewater recycling to 36% of
total volume of wastewater

Increase wastewater recycling to 40% of
total volume of wastewater

Increase recycled water utilization to
15% of total water consumption

Increase recycled water utilization to
34% of total water consumption

Increase recycled water utilization to
40% of total water consumption• Develop new-generation synthetic
rubber for green and EV tires/shoematerials to reduce carbon emissions
by around 300,000 mt (based onsales projection)• Develop new-generation synthetic
rubber for green and EV tires/shoematerials to reduce carbon emissions
by around 1,500,000 mt (based onsales projection)• Develop eco-friendly foaming productswith recyclability• Develop eco-friendly foaming productsthat use renewable materials and morerecyclability

Scope1+2; Base year:2021

Towards Carbon
Neutrality Operation

2023

TargetIncrease recycledwater utilization

Develop eco-friendly
products

Lower Products’
Carbon Footprint• Develop new-generation synthetic
rubber for green and EV tires/shoematerials to reduce carbon emissions
by around 150,000 mt (based onsales projection)• Develop eco-friendly foaming product• Special styrene block copolymer (SBC)
developed for medical equipment,
shoe materials, plastic modification
aim to increase recyclabilit y anddecrease medical waste• New type of special styrene blockc o p o l y m e r (S B C) d e ve l o p e d fo r
reducing energy consumption
and organic solvents in customer
production process• Medical TPE products developed
for reducing medical waste by 10%
compared with previous generation
products by sales

Product processoptimization

Optimize production process of TPE
products, reduce use of steam to achieve
1,800 mt per year of carbon emissions
reduction

Optimize production process of TPE
products to reduce electricity and energy
consumption

Optimize production process of TPE
products, reduce electricity and energy
consumption to achieve 9,000 mt per
year of carbon emissions reduction

Use of renewablematerials*

Develop renewable raw material suppliers

Renewable raw materials account for 5%of total raw material purchase

Renewable raw materials account for
15% of total raw material purchase

Increase Sustainableproducts**

Sustainable Products account for 3% of
total sales

Sustainable Products account for 20%
of total sales

Sustainable Products account for 40%
of total sales*Renewable Materials : (1) Agriculture based (2) Bio-based (3) Waste of other products** TSRC sustainable product: (1) Reduction: reduce product carbon emission intensity /product for reducing environmental impact/products for reducing customer’s energy consumption of process (2) Recycle: product with recyclability(3) Renewable: products using renewable materials (4) Replace: Products that can safely replace other products

10

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
Appendix2021
Sustainability ReportSocial
To increase competitiveness, TSRC continues to strengthen organizational ESG development, talent cultivation as well as promote multi-functional development and learning and external cooperationand exchanges to lift TSRC long-term sustainable value. Employee safety and health are the foundation of TSRC's stable operation. We will continue to optimize the global operating environment,
improve employees’ physical and mental health, and enhance the sense of belonging and cohesion. With our resources and employee enthusiasm, we make positive influence on humanities andsociety by improving chemistry education, supporting social welfare, and helping local education and community development.
Focus Area

2023

2025

• 30% of employees (cumulative)
undergone multiple competency training• 60% of employees (cumulative)
undergone multiple competency training• Build organizational ESG mindset
through completion of ESG training
program globally• Strengthen organizational ESG capacity
via development and integration of ESG
information & management systems

Achieve > 300 participants (cumulative)
for academic or technology exchange withbusiness partners or outside institutions

Achieve > 1,000 participants(cumulative) for academic or technology
exchange with business partners or
outside institutions

Achieve > 5,000 participants(cumulative) for academic or technology
exchange with business partners or
outside institutions

TRIR ≦ 0.36

TRIR < 0.3

TRIR < 0.3 and achieve one or more
years of zero recordable injuries

Strengthen employee
engagement

70% engagement score via employee

72% engagement score via employee

75% engagement score via employee

Enhance employee’s
physical andmental care

> 500 employees (cumulative)

More than half of global sites provide
physical and mental consulting services

All global sites provide physical andmental consulting services

TargetEnhance organizational
ESG development andemployee competency

Strengthen
Organization’s
Sustainability
Capability

Sustainable
Cooperative Programwith business partners
or outside institutions
Enhance global
workplace safety

Improve Health,
Safety & Wellbeingof Employees

Support environmental
protection and social
care programs

Enhance social
engagement

Promote scienceeducation programs

engagement survey

participated in physical and mental
health activities or lectures

engagement survey2030• 80% of employees (cumulative)
undergone multiple competency training• Enhance ESG performance analysis

engagement survey> 1,000 volunteers (cumulative) for> 300 volunteers (cumulative) for social> 600 volunteers (cumulative) for social

care or environmental protection activities

social care or environmental protection
activities> 150 participants (cumulative) for science> 300 participants (cumulative) for> 1,000 participants (cumulative) for

care or environmental protection activities

education activities

science education activities

science education activities

11

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social

2021
Sustainability Report

Governance
TSRC is committed to enhancing the governance and supervision mechanism. Based on integrity, we embed ethical standards in our daily operations. We abide by relevant laws and regulations
and pay close attention to the risks and challenges faced by various operating sites worldwide. We build a risk-tolerant and flexible supply chain to ensure the stability of products and service. TSRC
actively innovates products and enhances service. We aim to be the best partner for our customers and pursue sustainable growth of operations.
Focus Area

Target

2023

2025

2030

Enhance risk & crisis
management

Refine climate risk management
mechanism, protection measures, andtimely disclosure

Strengthen risk monitoring and improve
operation management via digitalmanagement system

Continuous improvement on global
risk management and crisis response
mechanisms

Build new sustainablebusiness

Evaluation of new businessNew business contributes >5% of total
consolidated revenue

New business contributes >10% of total
consolidated revenue

Strengthen innovation
momentum

Increase new products development
activities

New products contribute >15% ofconsolidated revenue

Increase new product revenue
contribution

Increase the sales of easy-to-processsynthetic rubber by more than 8%
versus 2021, and evaluate other solutions
for customized services

Increase The sales of easy-to-processsynthetic rubber by 20% versus 2021,
and pilot other new customized products
or services

Increase the sales of easy-to-processsynthetic rubber by > 50% versus 2021
and commercialize other new customized
products or services

Require top 20 suppliers (by purchasespent) to implement GHG emission
reduction target and actions

Require top 5 0 key supplie rs bypurchase spent) implement GHG
emission reduction target and actions

Require all suppliers implement GHG
emission reduction target and actions>70% (total purchase spent) of raw>75% (total purchase spent) of raw>80% (total purchase spent) of raw

AppendixStrengthen Corporate
GovernanceIntegrate Sustainability
and Business Strategies

Uplift customized -service value*

Accelerate reduction of
supplier’s GHG emission

Build Resilient Operation

Strengthen supply
chain integrity

m ate r i a l s f ro m l o c a l s o u rc i n g a n ddevelop local suppliers of renewable raw
materials

m ate r i a l s f ro m l o c a l s o u rc i n g a n ddevelop local suppliers of renewable raw
materials

m ate r i a l s f ro m l o c a l s o u rc i n g a n ddevelop local suppliers of renewable raw
materials*TSRC customized service: (1) Easy Processibility: Assist customers to reduce production process to save energy or resource consumption (2) eco-friendly packaging: Assist customers to reduce carbon emissions in transportation andlogistics process (3) High-value application: cooperate with value chain partners, provide solutions, and assist customers enter green industry chain (4) Others

1. About TSRC

1.1 Industry positioning
1.2 Communication with Stakeholders
1.3 Identification and Analysis of ESG Material topics
1.4 ESG Initiatives and Participation in Associations

13

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

1. About TSRC

1.1 Industry Positioning
1.2 Communication with
Stakeholders
1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

Business strategies and performance

Material topic

Corresponding
chapter

1.1.4 Business Performance

Management
purposeTo establish the Company's sustainability strategy and business model, ensure business performance, create return to shareholders, and share economic value
with employees and society to have a positive impact on society.

Management
approach• Execute sustainability and business strategy , enhance the ability of innovation, and upgrade R&D and product innovation

Assessment
mechanism• Consolidated revenue, net operating profit, and earnings per share each year

2. Governance
3. Environmental
4. Social
Appendix

Mid and long-term
management goals• Maintain close relationships with clients, seize opportunities responding to market changes, and maintain stable operational performance• Employees’ compensations in each year

• Maintain the company's growth momentum and continue to achieve excellent performance• Improve strategies for sustainable development and share economic value with stakeholders• Objective: Maintain the company's growth momentum and continue to achieve excellent revenue performance
2021
Achievement of KPIImplementation status: Consolidated revenue was approximately NT$32.533 billion in 2021, up 35% compared to 2020. Net operating profit was NT$3.928

billion, up 378% compared with the previous year. The earnings per share reach to 4.76, up 479% compared to 2020.
• Objective: Enhance sustainability strategies and share economic value with stakeholders

Implementation status: Compensation and benefits of employees are over NT$2.2 billion in 2021, up 22% compared to 2020.

14

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
1.1 Industry Positioning

2021
Sustainability Report

1.1 Industry Positioning
TSRC was founded in 1973 and is a listed company in Taiwan. TSRC has been the leader of the rubber industry in Asia's market. TSRC targets the global market with its R&D and technology andmainly develops high value-added products. We also developed customized products to expand the scope of applications and increase product sales. Besides application in synthetic rubber

1.2 Communication with
Stakeholders

products, such as tires, airbags, and shoe materials. TSRC has accelerated the development of specialty chemicals in response to market changes in recent years, and successfully expanded

1.3 Identification andAnalysis of ESG
Material topics

products, the Company has developed a new generation of rubber products for electric vehicle tires and eco-friendly tires, as well as styrenic block copolymers (SBC) for medical devices, shoe

1.4 ESG Initiatives andParticipation in
Associations

to high-value applications, such as high-end shoe materials, medical materials, and hygiene products. In response to international sustainability trends and the rapidly growing demand for green
materials, and plastic modification. We continue to improve product quality to enhance the Company's competitiveness.

Association of TSRC with Upstream, Midstream and Downstream Industries ／2. Governance
3. Environmental

Synthetic Rubber

4. Social

Butadiene rubber (BR)Appendix

Emulsion polymerized
styrene-butadiene rubber (E-SBR)

NaphthaSolution styrene-butadiene rubber (S-SBR)

Butadiene

Butadiene-acrylonitrile rubber (NBR)

Tire and auto parts
Tire and conveyor belt
Green tireShoe soles and foaming

Crude oil
Advanced Materials
Aromatichydrocarbons
StyreneNatural gas

TSRC

Polymer

High-end shoe materials
Foaming material

Yoga mat andfootwear accessories

Soft material

InsoleOvermolding meterial

Auto Accessories and tool grip

Thermoplastic elastomer
Styrene-Butadiene-Styrene copolymers (SBS)

Packaging and family hygiene

Styrene-Isoprene-Styrene copolymers (SIS)

Plastic modifiers andfamily hygiene

Styrene-Ethylene/Butylene-Styrene
copolymers (SEBS)

Infusion bag and medical tubing

15

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

2021
Sustainability Report

1.1.1 Globalization
TSRC is headquartered in Taiwan but seeks to expand its global presence with locations in Europe, Asia, and America. TSRC's head office and two plants (Kaohsiung and Gangshan) are located in
Taiwan, four subsidiaries are located in mainland China (Shen Hua Chemical, TSRC Nantong Industrial, TSRC-UBE, and TSRC-Shanghai), TSRC Specialty Materials LLC is located in America, and

1.1 Industry Positioning

subsidiaries with only trading function are located in Singapore and Luxemburg. Furthermore, TSRC and ARLANXEO established the joint venture ARLANXEO-TSRC with each company holding

1.2 Communication with
Stakeholders

50% shares. TSRC jointly established its India factory with IndianOil. To expand into the high-end shoe-materials market, TSRC (Vietnam) Company Limited located in Vietnam also provides growth

1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental
4. Social
Appendix

momentum for TSRC.

TSRC Globalization ／TSRC Corporation
TSRC (Shanghai) Industries Ltd.

Manufacture and sales of thermoplastic
elastomer and plastic compound products

Global Business Headquarters - Manage global sites
Gangshan Factory - Production and processing of rubber color masterbatch,thermoplastic elastomer and plastic compound products
Kaohsiung Factory - Manufacture and sales of ESBR,BR and TPE

Shen Hua Chemical Industrial Co., Ltd.
Manufacture and sales of styrene andbutadiene synthetic rubber

TSRC Specialty Materials LLC
Manufacture and sales of TPE

TSRC (Nantong) Industrial Ltd.
Manufacture and sales of TPE

TSRC-UBE (Nantong)
Chemical Industrial Co., Ltd.
Manufacture and sale of TPE

TSRC (Vietnam) Company Limited
Production and processing of rubber color masterbatch,thermoplastic elastomer and plastic compound products

16

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
1.1 Industry Positioning
1.2 Communication with
Stakeholders
1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2. Governance2021
Sustainability Report

TSRC Corporation Profile ／Company name
Address

TSRC Corporation

Industry

Headquarter - 18F, No. 95, Sec. 2, Dunhua S. Rd., Taipei City

Paid-in capital

NT$ 8,257,099,780

Number of employees

1604 employees

Output volume of main
products in 2021

Synthetic rubber productsr - 548,218 metric tons

Female - 265 (16.53%)

Rubber industry

Registered Address - No. 2, Singgong Rd., Dashe Dist., Kaohsiung City

Male - 1339 (83.47%)
Non-synthetic rubber products - 13,920 metric tons

3. Environmental
4. Social1.1.2 Vision and Mission

Appendix

Be an essential partner to our customers, a socially
responsible member of our community, and an
enterprise committed to innovation, sustainablegrowth, and excellence
A global specialty materials enterprise that enriches
the quality of life for humanity through innovativetechnologies and creates sustainable value andreturns for our stakeholders

MissionIntegrity, Innovation, Teamwork,
Excellence, Accountability

VisionCore Value

17

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

2021
Sustainability Report

1.1.3 Main Products and Applications
Synthetic Rubber

1.1 Industry Positioning
1.2 Communication with
Stakeholders

Product description

Main applications

TrademarkBR

BR has excellent elasticity and is wear resistant, low temperature resistant,and impact resistant. It is mainly used to make high speed radial tires andmodify high impact resistance HIPS. Market demand on BR has continued
to increase following the widespread application of HIPS in personal
computers, home appliances, and electronics.

High speed tires, HIPS, outsole, sports equipment,
and other industrial products

TAIPOL® BR

E-SBR

E-SBR has higher wear resistance than natural rubber and is easier toprocess. Moreover, its quality and production capacity are not limited byweather and geographic environment, which has made ESBR the mostextensively used synthetic rubber product.

Tires, outsoles, conveyor belts, rubber belts, tankand trailer tracks, sports equipment, toys, and otherrubber products

TAIPOL® ESBR

S-SBR

S-SBR has low rolling resistance, wet-skid resistance, and wear resistance.
Eco-friendly or electric vehicle tires made using SSBR can increase the fuelefficiency of vehicles.

Energy-saving (low rolling resistance) tires, highperformance tires, winter tires, and all-weather tires

TAIPOL® SSBR

NBR

NBR has excellent oil resistance, solvent resistance, heat resistance, andageing resistance.

Oil pipes, oil seal, roller, industrial gasket, drive belt,
shoe materials, foaming materials, and conveyor belt

TAIPOL® NBR

1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental
4. Social
Appendix

18

About this Report
Letter from the CEO
Stories for Sustainability

2021
Sustainability Report

Thermoplastic Elastomer (TPE)

ESG Strategy

Product description

Main applications

TrademarkSBS

SBS has relatively high strength and is easy to process. It has excellent
cohesive force, low initial viscous force, high viscosity, high transparency,
excellent tensile strength, and easy to process at low temperatures It is
suitable for modification of styrene impact/resilience applications and styrene/
olefins compatibilizer and adhesive.

Elastic film, composite materials, medical
supplies adhesives, labels, adhesives, andshoe materials

TAIPOL®/ VECTOR® SBS

SIS

SIS has good thermal stability, relatively high cohesive strength, coating ability,and excellent adhesive force. It has excellent flexibility, high initial viscous force,
low viscosity, and excellent processability and flexibility.

Hot glue, elastomer blending and plastic
modification, elastic film, label adhesive, tapeadhesive, and medical supplies adhesive

TAIPOL®/ VECTOR® SIS

SEBS

SEBS has high strength, ozone proof, and UV resistance, and also has thermal
stability, resistant to high temperature, and easy to process. It is resistantto oxidation, ozone, UV, heat, and chemicals, and has high oil absorption,
resilience, and compression resistance, and easy to process. It is highly
compatible with styrene/olefins, elastic, and has excellent hysteresis.

Composite materials, plastic modification,
packaging, flexible die, adhesive, medical,
automotive, wires, and shoe materials

TAIPOL®/ VECTOR® SEBS

1. About TSRC
1.1 Industry Positioning
1.2 Communication with
Stakeholders
1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental
4. Social
Appendix19

About this Report
Letter from the CEO
Stories for Sustainability

2021
Sustainability Report

Advanced Materials

ESG Strategy

Product description

Main applications

T-BLEND
Advanced Shoe Materials

The T-BLEND ASM series consists of SEBS composite materials that are mainly used in shoematerials. It is compatible with EPDM and EVA, and makes new designs possible while increasing
product value. Materials produced by TSRC have excellent performance, including excellent resilienceand stable continuous force, high shock absorption, alleviates heel and sole pain, and reduces
energy return. It is a high value material that has both resilience and shock absorption.

Midsole and outsole of running shoes,
walking shoes, and fitness and training shoes

T-BLEND
Foaming Material

T-BLEND foaming materials have simple formulas and manufacturing processes, better than EPDM,
EVA, and SBR, but also highly compatible. It has numerous characteristics, including high rate ofelongation, rigidity, higher compressive strength and deformation resistance, soft touch, outstanding
flexibility and resilience, and better performance than EVA, PU, and CR.

Yoga mat, sports products, highly supportiveand elastic shoes, and polymers that requirefoaming

T-BLEND
Soft Materials

T-BLEND's soft touch and gel products make shoes stronger, more durable, comfortable, safe, andappealing. It can be used to make soft and flexible shoe pads and durable and warm snow bootcovers. TSRC's materials can be bound to common plastics, such as PP, ABS resin, PC, and nylon,
expanding the scope of application.

Shoe pad, midsole and outsole of footwear,
and sports accessories

T-BLEND
Overmolding Material

T-BLEND overmolding materials make products comfortable, safe, flexible, durable, and appealing.
The materials make new designs possible and create a competitive advantage. The materials are
suitable for handles that generate vibration and impact when used.

Handles of various tools, handles of onroad and off-road bicycles, stylus, daily life
accessories, and automobile accessories

1. About TSRC
1.1 Industry Positioning
1.2 Communication with
Stakeholders
1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental
4. Social
AppendixAbout this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

1.1.4 Business Performance
TSRC provides solutions through scientificmethods and achieves business growth to

1.1 Industry Positioning

vision of sustainability. TSRC achieved excellent

1.2 Communication with
Stakeholders

business performance in 2021. Despite the

1.3 Identification andAnalysis of ESG
Material topics

supply chain issues, the spread of new variants

1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental

2021
Sustainability Report

20

challenges brought by global logistics andBusiness Overview ／Consolidated revenue

2019

Unit: NT$1,000

Unit: NT$1,000

Operating profit

28,910,723

3,928,099

TSRC seized the opportunities brought by

1,084,861

the recovery of downstream market demand,tide supply of synthetic rubber products, andand butadiene. We effectively implemented

Appendix

operational resilience. We maintained close

our marketing strategies to demonstrate ourUnit: NT$1,000

Operating cost

25,732,774
25,533,439
21,087,174

24,024,443

on energy intensity and total consumption,

4. Social

2021

32,533,238

of COVID-19, and China's dual control systemincreasing price difference of natural rubber

2020

2019

2020

Net profit after tax

2021

Unit: NT$1,000

822,315

2019

2020

2021

Unit: NTD

Earnings per share

2019
Dividends

2020

2021

Unit: NTD

contact with customers and made timely
adjustments in response to market changes

3,930,939

to maintain growth momentum, which allowed

4.76
2.40

TSRC to achieve the highest revenue and profits
in the past decade. With regard to investments,

740,3160.90

our t wo joint venture s, Indian Synthetic
Rubber Private Limited and ARL ANXEOof India and China's markets, and profits grew
substantially. Our consolidated revenue was
NT$32.533 billion in 2021, up 35% compared2019
Financial cost

0.36

2019

2020

(0.03)(21,891)

TSRC (Nantong), benefited from the recovery

0.50

2020

2021

Unit: NT$1,000

2019

2020

Income tax expense

2021

Unit: NT$1,000

Employee Salary and Benefits

to NT$24.024 billion in 2020. Consolidated net
operating profit of NT$3.928 billion increased

1,944,457

378% compared to 2020; consolidated net
profit after tax reached NT$3.931 billion and
EPS was NT$4.76.

2021

1,168,683

Unit: NT$1,000

2,230,365
1,828,747

188,550
123,569

110,741

437,518
305,410

2019

2020

2021

2019

2020

2021

2019

2020

2021

21

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

Overview of Revenue from Products ／Synthetic rubber products

1. About TSRC
1.1 Industry Positioning
1.2 Communication with
Stakeholders
1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental

27,108,301

2019

Non-synthetic rubber products

1,802,422

23,173,891

2020

31,440,852

6%

24,024,443

96%
850,5522021

4%

32,533,238

97%
1,092,386

Overview of Domestic Sales and Exports of Products ／20,000,000

3%Synthetic rubber products

21,016,189

Domestic sales amountExports sales amount65%

19,140,916

Percentage of total domestic sales amount
Percentage of total exports sales amount

17,024,568

66%

71%

Non-synthetic rubber products
Domestic sales amountExports sales amount

15,000,000

Percentage of total domestic sales amount
Percentage of total exports sales amount

10,424,663

10,000,000

32%

7,967,385

28%

6,149,323

26%

5,000,000
1,383,249 5%0
Unit: NT$1,000

Total

28,910,723

94%

4. Social
Appendix

Unit: NT$1,000

419,173

611,391 2%

478,667 2%

1%

2019

371,8852%

2020

480,995

1%

2021

2021
Sustainability Report22

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
1.1 Industry Positioning
1.2 Communication with
Stakeholders
1.3 Identification and Analysisof ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2021
Sustainability Report

1.2 Communication with Stakeholders
TSRC identified seven primary stakeholders based on the five principles of the AA1000 Stakeholder Engagement Standard, daily operations and external business communication of related
departments. The primary stakeholders are employees, customers, society (including communities, NGOs, and residents affected by operating activities), media, shareholders and investors,
suppliers, and the government (competent authorities). TSRC attaches importance to internal and external engagement and communication. We make timely revisions and adjustments based on
feedback from stakeholders. We also promote sustainable operation and exert our influence on society to fulfill our corporate social responsibility.

Communication Results with Stakeholders ／Stakeholders

Issues of concern

Main communication channel/frequency

2. Governance2021 communication results

Corresponding chapters in this report• Invest in employee education and training andprovide a safe workplace

3. Environmental
4. Social• Employee care andlabor protection

Appendix

Employees• Talent appointment
and development• Business strategies
and performance• Employee Welfare Committee meeting/Multiple times a year
• Health promotion forum/Multiple times ayear• Employee complaint mailbox/Irregular• Labor Union Representatives
Conference/Regularly each year

• Organize online sharing events to provide
employees with cross-disciplinary learning
opportunities• Provide employees with English language courses• Provide multiple health seminars to improve
employee health• Periodically organize CEO communication
meetings to accelerate employees' understandingof the Company's developing direction

2.2 Integrate Sustainability andBusiness Strategies
4.1 Strengthen Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees• Annual Interactive Seminar/Irregularly
each year• Customer meetings or interviews (e-mail,telephone, video chat)/Irregularly• Customer relations• Innovation
management
Customers• Material events andrisk management• Technology or industry seminar/
Irregularly each year

• Complete customer satisfaction survey each year
to maintain high level of satisfaction

2.1 Strengthen Corporate
Governance• Domestic and overseas exhibitions/
Irregularly each year

• Immediately respond to customers' questions andmeet their needs

2.2 Integrate Sustainability andBusiness Strategies• Information disclosure on the company
website/Irregularly• Conduct interviews to build long-term partnerships
with customers

2.3 Strengthen Innovation
Momentum• Customer satisfaction survey/Annually• Customer CSR audit/Once a year
• Corporate Social Responsibility Report/
Updated on the website each year23

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

Stakeholders

Issues of concern

Main communication channel/
frequency

2021 communication results

Corresponding chapters in this report

1.1 Industry Positioning
1.2 Communication with
Stakeholders• Community visits/Irregularly each year

1.3 Identification and Analysisof ESG
Material topics• Employee care and labor
protection

1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental
4. SocialSocialIncludes communities,
NGOs, and residents
affected by operating
activities• Talent appointment anddevelopment• Communication with
communities• Industrial Park Service Center Meeting/
Regularly each year
• Information on the company website/
Irregularly updated• Corporate Social Responsibility Report/
Regularly each year

• Compliance• Waste and hazardous
substance management• Employee care and labor
protection• Investor conference/At least once a year
• Set up a mailbox on the website/Any time
• Telephone communication and interviews/
Irregularly each year
• Information disclosure on the CSR Reportwebsite/Updated annually• Information disclosure on the CSR Reportwebsite/Updated annually• Corporate Governance• Compliance
Shareholders
and investors• Visited nearby communities of our
Kaohsiung factory to understand issues
they are concerned about• Take action to support local farmers• Sponsor lunches of elementary schools

4.1 Strengthen Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 Enhance Social Engagement• Set up CSR mailbox on the company
website/Any time

AppendixMedia• Industrial Park Manufacturers Association/
Regularly each year

• Customer relations• Investor service mailbox on the company
website/Any time
• Market Observation Post System/
Irregularly updated• Shareholders' meeting/Once a year

• Convened 2 investor conferences• Information on the company website and
MOPS is updated each month• Responded to material issues via
telephone and e-mail2.1 Strengthen Corporate Governance3.3 Develop Model of Circular
Economy4.2 Improve Health, Safety &Wellbeing of Employees• Convened a shareholders’ meeting• Convened investor conferences twotimes in 2021
• Information on the company website and
MOPS is updated each month• Responded to all questions ofshareholders regarding material issues
via telephone and e-mail2.1 Strengthen Corporate Governance
2.2 Integrate Sustainability andBusiness Strategies

24

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

Stakeholders

Issues of concern

Main communication channel/
frequency

2021 communication results

Corresponding chapters in this report

1.1 Industry Positioning
1.2 Communication with
Stakeholders• Supplier CSR assessment/Once a year

1.3 Identification and Analysisof ESG
Material topics• Set up CSR mailbox on the company• Employee care and1.4 ESG Initiatives andParticipation in
Associations

2. Governancelabor protection• Talent appointment
Suppliersand development• Compliance

3. Environmental
4. Socialwebsite/Any time
• Supplier CSR promotions/Irregularly
each year• Supplier environmental protection
assessment/Regularly each year

2.1 Strengthen Corporate• Irregularly interviewed local suppliers and formed
partnerships• Completed annual supplier audits

Governance
4.1 Strengthen Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees• Information disclosure on the CSR
Report website/Updated annually• Annual supplier evaluations/Once a year

Appendix• Participated in the EPA's forums on strengthening• Water resource
management• Compliance
Government
Competent authority• Waste andhazardous substancemanagement• Interviews (telephone or physicalmeetings)/Irregularly• Corporate Social Responsibility Report/
Regularly uploaded each year
• Promotion of government laws andregulations/Irregularly• Official documents/Irregularly

climate change adaptation regulation – Company
risks and disclosures under climate change• Responded to public company surveys of the
TWSE• Participated in seminars organized by the TWSE
• Maintained close contact with the TWSE toinquire about and verify material information andannouncements

Note: The name was not yet changed in 2021, so this table still uses the terms "Customer CSR audit", "Supplier CSR assessment", and CSR
Report in website. We expect to change names from CSR to ESG at the end of July 2022.

2.1 Strengthen Corporate
Governance3.3 Develop Model of Circular
Economy3.4 Water Resource Optimization

25

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

1.3 Identification and Analysis of ESG Material Topics
In 2021, TSRC identified 16 ESG topics with the consideration of stakeholder feedback (regularly

1.1 Industry Positioning

and irregularly collected), concern by international ESG ratings agency (such as Dow Jones

1.2 Communication with
Stakeholders

Sustainability Indexes(DJSI), international standard such as carbon disclosure Project (CDP), and1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental

2021
Sustainability Report

Sustainability accounting Standards Boards(SASB), benchmarking companies in the chemical• Feedback from stakeholders
Identiﬁcationindustry, and our internal business strategy. These topics are used as the basis of disclosures in• International ESG rating, such as Dow Jones Sustainability Indexes (DJSI)• International standards and norms, such as Carbon Disclosure Project (CDP)and Sustainability Accounting Standards Board (SASB)

this Sustainability Report and internal management.

• Topics that chemical engineering companies pay attention to

TSRC uses "the impact on stakeholders' decision-making" as the main principle for assessment• TSRC operational targets and strategies

the materiality of sustainability topics. We distribute online and offline questionnaires to 7 types of
stakeholders to understand stakeholders' level of concern about these topics. In addition, we take
into account the impact of sustainable topics on TSRC's operations. We invited our employees

Develop a list with 16 ESG topics

and members of the ESG Committee to assess the impact of the 16 sustainable topics on the

4. SocialCompany's four aspects—income, cost, reputation, and operational risks to determine the materiality.

Appendix

We collected 345 effective questionnaires during the survey process, including 256
questionnaires from employees (8 members of the ESG Committee also included) , 51

Analysisquestionnaires from customers, 16 questionnaires from suppliers, 7 questionnaires frominvestors and shareholders, 3 questionnaires) form media, 6 questionnaires from community,• The impacts on stakeholders’ decision-making
345 effective questionnaires, including 256 questionnaires from employees(8 members of the ESG Committee also included) , 51 questionnaires
from customers, 16 questionnaires from suppliers, 7 questionnaires frominvestors and shareholders, 3 questionnaires) form media, 6 questionnaires
from community, and 5 questionnaires from competent authority .
• The impact on the Company's income, cost, reputation, andoperational risks
256 questionnaires from employees (8 members of the ESG Committee
also included)

and 5 questionnaires from competent authority .
We develop the materiality matrix based on the two principles—"the impact on stakeholders'
decision-making" and “the impact on the Company's income, cost, reputation, and operationalrisks." The matrix was then reviewed and discussed by the ESG Committee. The materiality of
ESG topics was adjusted based on responses and feedback obtained from communicating withstakeholders during daily operations, potential future changes, industry development trends, andthe Company's business plans. We then selected 8 Material topics that have the highest level ofimpact on stakeholders' decision-making and the Company. The Material topics are Innovation

Conﬁrmation

management, corporate governance, business strategies and performance, material event

ESG Committee reviews the matrix and adjust the ranking of materiality
according to:• Feedback and response from stakeholders in the daily operation
communication

risk management, compliance, climate strategy and GHG emissions, waste and hazardous• Future environment changes

substance management, and water resource management.

• The industry development trends• The corporate operation planning

To make stakeholders easily understand TSRC’s ESG performance, in 2021, we made someadjustments to rearrange the ESG topics and their implications. Compared with the Material
topics in 2020, we added "Innovation management" and "Material event risk management"

Confirm 8 Material topics

to TSRC's material issues in response to the Company's business plans and stakeholders'
expectations. With regard to "Occupational health and safety", even though it was not selected
as a material issue, we still voluntarily disclosed it according to GRI Standards in this Report,
considering the characteristics of the chemical engineering industry.

Disclosure• Disclose the management results of the Material topics to the public

26

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
1.1 Industry Positioningt The 8 material issues in 2021

16 ESG issues in 2021

2021
Sustainability Reportt The 13 material issues in 2020

Corresponds to 34 ESG issues in 2020 Changes compared to the contents in 2020

Reason for adjustment

Newly added

Newly added in 2021 because innovation is one of the main forces driving
TSRC's sustainable developmentt Corporate governancet Anti-corruption• Taxation• Anti-competitive behavior• Public policy

Renamed, merged, andadjusted the meaning

Merged material issues in 2020 and expanded the scope to "Corporate
governance", including ethical corporate management, anti-corruption, anticompetitive behavior, and Board operations

t Business strategies andperformancet Economic performance• Market position• Indirect economic impact

Renamed, merged, andadjusted the meaning

Merged material issues in 2020 and expanded the scope to "Businessstrategies and performance", including business management vision andgoals, sustainable development strategy, and economic performance

Newly added

Newly added in 2021 in response to TSRC and stakeholders' concern aboutrisk management (including climate risks)t Environmental compliance• Socioeconomic compliance• Marketing and labeling

Newly added

Merged material issues in 2020 and expanded the scope to "Legal
compliance", including compliance and implementation of ESG regulations

t Emissions

Renamed and merged

Strengthened TSRC's concern about climate issues; renamed and adjusted
the meaning to "Climate strategy and GHG emissions"

Renamed and merged

Strengthened TSRC's waste and hazardous substance management;
renamed and adjusted the meaning to "Waste and hazardous substancemanagement"

Renamed and merged

Strengthened TSRC's overall management of water resource use, recycling,
and discharge; renamed and adjusted the meaning to "Water resource
management"

Renamed, merged, andadjusted the meaning

Merged contents of supplier management, and integrated social assessmentand environmental assessment into "Sustainable supply chain management"t Innovation management-

1.2 Communication with
Stakeholders
1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental
4. Social
Appendixt Material event
risk managementt Compliancet Climate strategy and
GHG emissionst Waste and hazardous
substance managementt Water resource
management

Sustainable supply chain
management-t Effluent and wastet Water and effluent• Procurement practices• Supplier social assessment• Supplier environmental assessment

27

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
1.1 Industry Positioning
1.2 Communication with
Stakeholders
1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental
4. Socialt The 8 material issues in 2021

16 ESG issues in 2021

2021
Sustainability Reportt The 13 material issues in 2020

Corresponds to 34 ESG issues in 2020 Changes compared to the contents in 2020

Reason for adjustment

Customer relations

t Customer privacy

Renamed and merged

Expanded the scope to "Customer relations", including customer satisfaction
and customer relationship management

Energy managementt Energy

RenamedStrengthened management measures and renamed it "Energy management"

Product accountability
and circular economy• Materials
t Customer health and safety

Renamed, merged, andadjusted the meaning

Strengthened TSRC's management and concern about the social andenvironmental responsibility of its products, merged material issues in 2020,and expanded the scope to "Product accountability and circular economy"

Ecological impactof operations• Biodiversity

RenamedEmphasizes the potential impact of TSRC's operations on surrounding areas;renamed "Ecological impact of operations"

Employee care andlabor protectiont Employer-employee relations
t Labor-management relations
t Occupational health and safety• Forced or compulsory labor• Freedom of association andcollective bargaining• Human rights assessment

Renamed, merged, andadjusted the meaning

Merged material issues in 2020 and expanded the scope of this issue to"Employee care and labor protection", emphasizing TSRC's protection oflabor conditions and workplace safety

Talent appointment
and development

Training and education
Rights of indigenous people
Security practices
Non-discrimination
Employee diversity and equal
opportunityt Child labor

Renamed, merged, andadjusted the meaning

Focuses on talent appointment and career development opportunities, andmerged into "Talent appointment and development"

Communication
with communities• Local communities

Renamed and adjusted the meaning

Strengthened the community engagement and communication process ofTSRC, and changed the name to "Communication with communities"

Appendix

•
•
•
•
•

Besides identifying the impact of Material topics on operations, TSRC also identifies the boundaries of Material topics and discloses performance indicators. We collect internal data, information, andmanagement policies according to the GRI Standards. TSRC has established related management strategies, policies, goals, and indicators for Material topics. We track the achievement of annual goals
and implementation results. The achievement and implementation results are disclosed in this Report. We also commissioned external third parties to verify the contents of disclosures and accountants
for assurance, which serve as the basis for implementing sustainability management. For other ESG topics that are not material, TSRC also discloses annual performance in related chapters.

28

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

Material Topic Matrix ／HighMaterial topic

1. About TSRCl Compliance

1.1 Industry Positioning

1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental
4. Social
Appendix

Influence on stakeholders assessments & decisions

1.2 Communication with
Stakeholders

Innovation managementlCorporatell	Climate strategy andgovernance
GHG emissions

Waste and hazardousl	substance management

l Water resource management

Business strategies land performancel Material event risk management

Mediuml	Communication with
communities

Employee care and llabor protection
Energy management ll Customer relations
Talent appointmentl	and developmentl Sustainable supply chain management
Ecological impact of operations l

Low

l Product accountability and circular economy

MediumHigh

Significance of economic, environmental, & social impacts
No.

Governance

Environmental

Social1

Corporate governance

Climate strategy and GHG emissions

Employee care and labor protection

2Compliance

Energy management

Talent appointment and development

3

Business strategies and performance

Water resource management

Communication with communities

4

Sustainable supply chain management

Waste and hazardous substance management

5

Material event risk management

Product accountability and circular economy

6

Innovation management

Ecological impact of operations

7

Customer relations

2021
Sustainability Report

29

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

Boundaries of Material Issues ／Aspect1.1 Industry Positioning
1.2 Communication with
Stakeholders

3. Environmental
4. Social
Appendix

Environmental

2. Governance

Governance / Economic

1.4 ESG Initiatives andParticipation in
Associations

Boundaries of material issues in 2021

Material topic

Importance of the material issue to TSRC

Innovation
management

Innovation management is the momentum for TSRC's sustainable
development. We provide customers with innovative products/services, andensures that solutions developed by TSRC meet the market and customers'
expectations. The constant development of high-quality products drives
TSRC's continued profit growth.

Business strategies
and performance

The value of companies in sustainability is based on companies having longterm competitiveness and meeting environmental and social expectations.
TSRC has made precise plans and executed forward-looking businessstrategies to pursue better business performance. In the meantime, we
emphasize the ability to create economic value for stakeholders, generate
opportunities for communities, make actual contributions to society, andcreate a virtuous cycle.

Corporate
governance

A good governance framework and well-developed management
mechanisms are the foundation of TSRC's development. TSRC upholds
the principle of ethical corporate management and continues to improve
operations management to drive business growth, while creating a positive
impact on society and the economy.

Compliance

TSRC implements the code of ethics in daily operations, and strictly abides
by laws and regulations to avoid any violations on governance, environment,
products or services, and finance. We put efforts to reduce the negative
impact on society, the economy, and the environment.

1.3 Identification andAnalysis of ESG
Material topics

2021
Sustainability Report

Material events andrisk management

We monitor and step up risk assessment and forecasts, establish complete
risk management mechanisms, and lower the potential damages and impactof risks. This is an important foundation for the Company's stable operations
and continued growth.

Climate strategy and
GHG emissions

Climate change is an opportunity but also a risk. TSRC has exerted every
effort to strengthen the capacity of all production sites to respond to climatechange. We have implemented GHG reduction measures, including preparing
for climate disasters, conducting GHG inventories, setting GHG reduction
policy, and disclosing information about carbon emissions of our product/
service life cycle. We accelerate the low carbon transformation.

Waste and hazardous
substance management

We reduce waste and hazardous substances generated by operations, such aswaste reduction and recycling. We aim to reduce TSRC's negative impact on
the environment. Furthermore, we are actively managing substance recycling todevelop new business opportunities for TSRC.

Water resource
management

Some sites of TSRC are in regions with high water resource risk. Hence,
it is fundamental for TSRC’s sustainable development to reduce water
consumption, examining and managing the Company's water withdrawal,
water consumption, and discharge measures, including water resource
reduction and recycling or recycled water management.

Related GRI Standards

TSRC
Suppliers Operations
Customers●

103: Management Approach 2016

103: Management Approach 2016

103: Management Approach 2016●●

201: Economic Performance 2016●

Social

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

103: Management Approach 2016
307: Environmental Compliance 2016
416: Customer Health and Safety 2016
417 Marketing and Labeling 2016
419: Socioeconomic Compliance 2016

103: Management Approach 2016

103: Management Approach 2016
305: Emissions 2016

103: Management Approach 2016
306: Waste 2020

103: Management Approach 2016
303: Water and Effluent 2018

●

●

30

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
1.1 Industry Positioning
1.2 Communication with
Stakeholders
1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental
4. Social
Appendix

1.4 ESG Initiatives and Participation in Associations
1.4.1 International ESG Initiatives

TSRC supports and respects the spirit and principles of the International Labor Office Tripartite

TSRC supports the UN Global Company and emphasizes that companies must strictly abide

Declaration of Human Rights, exerting every effort to protect basic human rights and notby the 10 principles of human rights, labor, environment, and anti-corruption in their operations.

allowing any factors and events from infringing on human rights.

Declaration of Principles, The OECD Guidelines for Multinational Enterprises, and UN Universal

TSRC has incorporated principles of the UN Global Compact in its internal regulations governing
labor, gender equality in the workplace, and environment protection, and has established humanrights protection and labor policies and measures on this basis.

1.4.2 Participation in Industry Associations

TSRC supports global climate actions and the Paris Agreement, and strives to reduce GHG

To gain an in-depth understanding of the industry's sustainable development trends and fulfill

emissions in its operations. We support the Carbon Disclosure Project and respond to its

its CSR by making substantial contributions to sustainability issues, TSRC is a member of thequestionnaire, taking action to reduce carbon emissions and appropriately disclosing information

following industry associations, and participates in discussions and organizational operations in

on carbon emissions. TSRC also supports the Task Force on Climate-related Financial

related issues. This allows us to exert our influence and drive even more chemical companies toDisclosures (TCFD), identifies climate related risks and opportunities, and formulates response

fulfill their corporate social responsibility.

strategies, which are disclosed in detail in Chapter 2 of this Report.
Association nameOperation

Role

Benefits

Petrochemical Industry Associationof Taiwan• The general meeting is held annually.
• The Petrochemical Industry Journal is published every month/The
Petrochemical Industry Annual Report is published every year.

Director• Develop the whole petrochemical industry and collect information about
the petrochemical industry.
• Maintain good relationship with other petrochemical companies to solvecommon problems.

Taiwan Rubber & Elastomeric
Industries Association• The general meeting is held annually.
• Information about rubber technologies is provided.

Member• Maintain and develop good relationship with downstream manufacturers.
• Collect information about rubber processing technologies.

Dashe Petrochemical Industrial Park
Manufacturers Association• Hold regular meetings to discuss and solve the common problemsof the companies in the industrial park (including Good Neighbor
Feedback activities).

Member• Participate in the operation of the Association to protect the rights andinterests of the Company in the industrial park, collect the information onother companies, and solve common problems.

The Institute of Internal Auditors, R.O.C.

• Organize theoretical and practical researches, workshops,
discussions and visits with respect to the internal audit andpromote audit education.

Member• Introduce the latest theories and practices of internal audit, improve theaudit capability, and exchange experience in internal audit techniqueswith other companies.

Human Resource Managers Associationof Petrochemical Companies• Organize regular activities, exchange information, and communicate
and coordinate human resource related policies.

Member• Understand the status of the industry and keep close contact with othercompanies.

Industrial Safety and Health Associationof the R.O.C.

• Hold one general meeting every year to review the operation of the
Association.

Member• Collect relevant information on occupational safety and health to facilitate
inspection and coordinate of industrial safety.

Member

• Exchange safety and health information with other factories, provide
supports with safety equipment, discuss safety and health issues andpropose relevant suggestions.

Ren Da Industrial Park Association for
Promoting Labor Safety and Health• The administration center holds regular meetings.

31

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
1.1 Industry Positioning
1.2 Communication with
Stakeholders
1.3 Identification andAnalysis of ESG
Material topics
1.4 ESG Initiatives andParticipation in
Associations

2. Governance
3. Environmental
4. Social
Appendix

Association nameOperation

Role

Benefits

Taiwan Responsible Care
Association• Hold the general meeting on a regular basis, reflect theopinions of the members to the government, and organize
relevant training courses.

Director• Understand the responsibility of the petrochemical industry to the society in Taiwan and improve theperformance in the environment, health and safety on an ongoing basis.

International Institute of Synthetic
Rubber Producers (IISRP)• Hold the annual meeting every year.

Director• Collect the information on the global synthetic rubber to form international horizons.

Member• Understand the status quo of the industry and facilitate communication with other companies.

Member• Prevent accidents with respect to safety, health and environment and perform relevant investigation,
research, implementation and prevention.

Member• Explore the development trend of biomass technology, promote technical exchange in the industry,
facilitate cooperation with other companies and participation in large- scale cooperative programs,
and strive for external supports.

Chinese National Association ofIndustry and Commerce, Taiwan

Safety & Health Associationof Taiwan
Association of Bio-based
Material Industry• Provide members with relevant information and promoteinternational economic and trading cooperation.
• Organize trading and investment events as well as technology
discussion and visiting activities for the industries.

• Hold one regular meeting every year.

• The members hold regular meetings by rotation.
• Provide e-paper for the members to collect more information
about the industry.

Taiwan Chemical Industry
Association• Hold the annual industrial forum and TSRC dispatches
representatives for the forum.

Member• This is the window for international communication and cooperation. It follows the international
development trend and leads the chemical industry in Taiwan to bring innovation and transformation
into practice.

Kaohsiung City Gangshan Benjhou
Industrial Park Manufacturers
Association• Hold regular meetings to discuss and solve the common
problems of the companies in the industrial park

Member• Participate in the operation of the Association to protect the rights and interests of the Company inthe industrial park, collect the information on other companies, and solve common problems.

Member• Communicate the information of the industry and the latest development in the technique, production,
safety and environment. Facilitate the healthy and long-term development of the industry.

Member• Understand the development of the international standardization in a timely manner, give effective
guidance in the evaluation of quality indicators, and improve the quality development of the products.

China Rubber Industry Association• Hold one industrial production technique exchange meeting
every year.
• Hold forums and seminars on an irregular basis.

Nantong Standards Association• Hold one annual meeting every year.
• Hold forums on an irregular basis.

Production Safety Management
Network, Nantong Economic andTechnology Development Area

• Hold one board meeting every quarter

Director• Maximize the capability of corporate safety production management and continue the improvementof the self-control, mutual control and joint control capability for the safety production in the area
where the factory is located to effectively prevent occurrence of accidents.

Kaohsiung City General Industrial
Association• The general meeting is held once a year pursuant to theIndustrial Group Act.

Member• Understand the status of the industry and keep close contact with other companies.

• Organize committees.

Chinese Society for Quality• Issue monthly publications.
• Hold the annual meeting every year.

• Collect information on QC technique and training.
Member• Attend QC related workshops.
• Introduce applicable QC techniques to improve the QC level of the factory.

2.1 Strengthen Corporate Governance
2.2 Integrate Sustainability and Business Strategies
2.3 Strengthen Innovation Momentum
2.4 Increasing the Resilience of Operations and Supply Chain

2. Governance
TSRC continues to strengthen corporate governance, improve risk supervision and management
mechanisms, and makes innovative breakthroughs to develop new products and services,
becoming the best partner for customers to achieve sustainability. At the same time, TSRC
monitors the risks and challenges faced by our global sites, builds a supply chain able to withstandrisk and flexibly respond, and ensures the high stability of products and services.

Green procurement amount in Taiwan in 2021

NT$ 97.96 million
Domestic procurements accounted for 81%
of the total procurement amount in 2021,
up 6% compared to 2020

Increased local
procurement by 6%
Total R&D expenses of NT$370 million in 2021,
up 6% compared to 2020

Increased R&D
expenses by 6%

33

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

Corporate Governance

Ethical Corporate Management

7

There was a totally
participantsin business ethics and insider trading
prevention training sessions in 2021

Innovation Management

2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental

board members

695

4. Social

Established

1 global R&D centerin Texas, USA

Green Procurement

Appendix3

independent directors

Female director is

14%

Green procurements in Taiwan amounted
to NT$

97.96 million

Local procurements accounted for81%of the total procurement amount,up

6% compared to 202016 patents were approved,
7 more than in 2020

R&D expenses of NT$
increased

370 million

6% compared to 2020

2021
Sustainability Report

34

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance

2. GovernanceMaterial topic

2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental
4. Social

Corporate GovernanceMaterial Events and Risk Management

Corresponding
chapter

2.1 Strengthen Corporate Governance

2.1 Strengthen Corporate GovernanceManagement
purposeTo disclose the Company's long-term business management performance,
policies, strategies, and goals. In addition, to effectively implement ethicalcorporate management, strictly abide by the Code of Ethics, strengthen theprofessional competencies of the Board of Directors and senior management,
increase the Company's sustainable value, and improve stakeholder engagement
and communication, exerting TSRC's positive influence through good interactions.

To step up risk assessment and forecasts, establish sound risk management
mechanisms, implement risk management strategies and countermeasures, andlower the potential damages and impact of risks, in order to stabilize the Company’s
operation and sustainable growth.

Management
approach• Implement ethical norms in daily operations along with our principle of integrity• Strengthen the implementation of the company's ESG short-, medium- andlong-term goals, and regularly report ESG performance and future planning to
the Board of Directors• Clarify and standardize the risk management principles, responsibilities, and theoperation mechanism• Execute all risk management procedures and related operations, and implement
risk management at all levels of operations and decision-making

Assessment
mechanism• Chinese and English sustainability reports with third party assurance/verification
are published every year, transparently disclosing the impact on ESG.
• The remuneration of directors and managers is disclosed in the annual reportaccording to regulations and rules every year.
• The implementation of corporate governance is updated on the Company’s
website each year.

Mid andlong-term
management
goals• Strengthen corporate governance supervision and management mechanisms
and improve the corporate governance culture• Monitor international ESG trends and development and continue to improve
TSRC's overall ESG performance• Establish risk management and supervision mechanisms and strengthen risk
management and crisis management response.
• Strengthen climate-related risk management mechanisms, assess the financial andnon-financial impact of risks, and use it as the basis for business strategies andimportant capital expenditures.

• Objective: Strengthen corporate governance supervision and management
mechanisms and improve the corporate governance culture• Objective: Establish risk management and supervision mechanisms, andstrengthen risk management and crisis management response

2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum

2021
Sustainability Report

Appendix2021
Achievementof KPI

Implementation status:
1. Published Chinese and English version of sustainability reports prepared according
to the GRI Standards and obtained third party assurance/verification
2. Established the “Corporate Governance Guidelines”, “Code of BusinessConduct”, and “Management Procedure for Insider Trading”
3. Amended the “Procedure Rules of the Board of Directors meeting”, “Procedureof performance evaluation of Board of Directors”,” Audit Committee Charter,
Remuneration Committee Charter”, “Code of Ethics”, and “Management
Procedure for Whistleblowing”• Objective: Monitor global ESG trends and development and continue toimprove TSRC's overall ESG performance
Implementation status: Established TSRC's ESG strategy, and set short-, mid-,and long-term (until 2030) goals and indicators• Risk management status is reported to the Board of Directors every year
• The implementation of risk management and climate risk assessment are disclosed
in the Sustainability Report and on the company website every year

Implementation status:
1. Established the Risk Management Policy and completed the 2021 group risk
assessment and action plan
2. Included the operational risk management status in the quarterly operation
report to the Board of Directors, with detailed report about the management andimplementation situation
3. Reported to Board of Directors about the information security risk in May 2021
• Objective: Strengthen climate-related risk management mechanisms, assess
the financial and non-financial impact of risks, and use it as thebasis for business strategies and important capital expenditures
Implementation status: Implemented the TCFD framework and conducted anassessment, which is disclosed in the Sustainability Reportand company website

35

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. GovernanceMaterial topic

Compliance

Corresponding
chapter

2.1 Strengthen Corporate Governance

2.3 Strengthen Innovation Momentum

Management
purposeTo ensure TSRC is compliant with the law with respect to production
manufacturing, operations, procurement, labor, and environment, and reduce thenegative impact on the environment and society.

Innovation is TSRC's core value. Patent and intellectual property rights are important
indicators of TSRC's technology and R&D capabilities. It is also the foundation for
driving the Company's sustainable growth. TSRC enhances product competitivenessthrough R&D and innovation, and develops solutions based on scientiﬁc methods tocreate long-term value for the Company.

Management
approach• Employees must abide by the “Code of Business Conduct”, “Code of Ethics”,“Administrative Measures for Business Gifts and Entertainment”, and abide by
relevant laws and regulations in daily operations• Encourage employees to innovate technology and apply for patents

Assessment
mechanism• Number of violations each year

• Annual R&D expenses• Number of reports each year

• Number of patents approved each year

Mid andlong-term
management
goals• Improve the reporting and whistleblower system to provide internal and external
personnel with reporting channels• Upgrade proprietary technologies to increase product sales and patent acquisition

2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental
4. Social
Appendix• Reward colleagues for applying innovative thinking in various ﬁelds of daily work,and continue to optimize the process• Comply with laws and regulations, reference the standards of the industry
benchmark, and provide the highest quality products and services• Deepen the corporate culture of innovation• Objective: Improve the reporting and whistleblower system to provide
internal and external personnel with reporting channels• Objective: Upgrade proprietary technologies to increase product sales andpatent acquisition

Implementation status:
1. Amended the “Management Procedure for Whistleblowing”
2. Added a whistleblower mailbox and address for written reports on thecompany website
2021
Achievementof KPI

Innovation management

3. None of reported cases in 2021
• Objective: C omply with laws and regulations, reference the standardsof the industry benchmark, and provide the highest quality
products and services
Implementation status: The Kaohsiung factory was ﬁned approximately
NT$710,000 for violating the Air Pollution Control Act.
TSRC immediately took response measures to improve
process equipment and intensify inspections (seeSection 3.5 Environment Management)

Implementation status:
1. Established a global R&D center in Texas, USA and focused on innovative
specialty polymer products and total solutions
2. 16 patents were approved in 2021, over 7 cases compared to 2020
3. The R&D expense in 2021 was NT$ 370 million, an increase of 6% compared
to 2020• Objective: Accelerate corporate culture of innovation
Implementation status: Distributed a total of NT$ 1.18 million in rewards for 17
innovation cases

36

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental
4. Social
Appendix

2.1 Strengthen Corporate Governance2.1.1 Management Approach
TSRC has upheld stable operations as mission for many years and owned a good governanceframework and supervision mechanisms as the foundation for management. TSRC upholds
the principle of ethical corporate management in governance, implements the code of ethics indaily operations, and strictly abides by laws and regulations to avoid violations of governance,
environmental, products or services, and finance. We continue to strengthen operation management
and enhance our operations to have a greater positive impact on society and economy.
TSRC regularly identifies and manages potential risks and opportunities in its operations andformulates business goals and plans according to the Company's long-term business strategies.
We balance the concerns and interests of stakeholders and strive to reduce the negative impact
on society and environment.

2.1.2 Corporate Governance

The Company incorporated the concept of diversity and the knowledge, experience, andabilities required by Board members to perform their duties which is regulated in the Article
21 of the Corporate Governance Guidelines to have a better implement in Board of Directors
governance system and considering diversity and profession of directors. The compositionof Board members must be diverse and compliant with laws and regulations, and consider
the Company's business type, operations, market, and future development. The Board of
Directors as a whole must have business judgment ability, accounting and financial analysis
ability, business management ability, crisis management ability, knowledge of the industry, andthe leadership for global operation, and decision-making ability, and global perspective. The
Company's directors do not concurrently hold managerial officer positions. The abilities of theBoard of Directors as a whole comply with the diversity policy and meets the Company's needs
for future business development.
The Company has liability insurance for directors each year which cover the individual liabilities
of directors due to negligence when performing their duties.

Board of Directors and Related Duties

Furthermore, the Company also schedules continuing education courses for directors and senior

TSRC's Board of Directors is consisted of 7 directors, including 1 female director (14%) andeconomic, environmental, and social topics. Topics of courses for directors in 2021 include "Key

3 independent directors (43%). The term of directors is 3 years, and directors are elected

to Be a Sustainable Enterprise: ESG Practice," "Sustainability Training Course" organized by theunder Shareholder Nomination of Directors. Shareholders elect directors from the list of

Taiwan Institute for Sustainable Energy, "Digital Resilience of Companies – Emergency Response

candidates announced by the Company; directors may be elected to consecutive terms. The

to Ransomware Incidents" organized by Taiwan Corporate Governance Association, and "ESG

Board of Directors is led by the chairperson and meets at least once a quarter to decide on

Sustainable Finance Trends and Response Strategies" organized by the Accounting Research

the Company's business policy, implement a good corporate governance system, strengthen

and Development Foundation. The 7 directors took totally courses of 62 hours in 2021.

managers each year to enhance directors' competencies, and increase the overall knowledge insupervision, and enhance management functions, exerting efforts to maximize stakeholders'
rights and interests. This includes environmental (including climate related issues) and social
risks, opportunities, and economic impacts. 9 Board meetings were convened in 2021 andattendance rate reached 100%. (The Operations of the Company's 17th Board of Directors isannounced on the company website, or scan the QR code below)

The Operations of
the Company's 17th
Board of Directors

37

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

In recent years, the Company's Board of Directors continues to monitor the physical and

1. About TSRC

transformation risks brought by climate change, and periodically examines the management ofAudit Committee
Compensation
Committee
Secretariat Division ofBoard Directors

Internal Auditing
OfficeChairman's Officefollowing year and reported to the competent authority according to regulations. Depending

commissions a third party to conduct Board performance evaluations at least once every three
years. Evaluation results are reported to the Board of Directors as the basis for review andimprovements and also for selecting or nominating directors.
The 2021 evaluation was conducted via a self-evaluation questionnaire, and the meeting affair unit
was responsible for execution. The evaluation period is from January 1 to December 31, 2021,
and the scope of evaluation includes the Board of Directors, functional committees, and individual
Board members. The 2021 Board performance evaluation results are summarized below:

1. Overall Board performance evaluation results were "meet expectations." The Board of
Directors has a complete system and transparent information in compliance with regulations.

CEO

All directors highly agree that the Board composition and structure is professional anddiverse. All Board members were attendance during Board meetings, directors fully
participated in discussions, provided the management team with directions for improvement

Safety, Health &Environment Section

and risk issues they should pay attention to, and fulfilled their responsibility to provide
guidance and supervise the Company's strategies to meet expectations for directors.

2. Overall performance evaluation results for functional committees were "meet expectations."
The Audit Committee and remuneration Committee are highly professional and independent,

Operation Division

Appendix

Corporate
Governance Officer

Advanced Materials Division

4. Social

Performance evaluation results must be completed before the end of the first quarter of thecommissioning external professional institutions, experts, or other appropriate methods. TSRC

Board of Directors
ChairmanSynthetic Rubber Division

3. Environmental

at least once a year. The evaluation period is from January 1 to December 31 each year.

evaluation of the Board of Directors, self-evaluation by Board members, peer evaluation, andTSRC Organizational Structure ／and Supply Chain

TSRC focuses on the results of Board operations, and thus conducts a performance evaluationon the focus and purpose of evaluation that year, the evaluation method may include internal

and fully understand their duties. Committee members were all in attendance during
Corporate Development
Department

2.4 Increasing theResilience of Operations

expenditures planned in annual budgets.

Legal Department

2.3 Strengthen Innovation
Momentum

team, and improves protection equipment and operational resilience through capital

Human Resources &Management Department

2.2 Integrate Sustainability
and Business Strategies

the Company's response measures through operation reports prepared by the management

Finance Division

2.1 Strengthen Corporate
Governance

operational risks through quarterly audit reports. The Board of Directors understands risks andResearch & Development Division

2. Governance

Performance Evaluation of the Board of Directors

committee meetings and fully participated in discussions, helping the Board of Directors
make decisions. Independent directors showed their independence and expertise andwere able to effectively evaluate and supervise the internal control system; they provided
recommendations and reminders that greatly assisted the Board of Directors in making
decisions, which effectively enhanced Board functions.

3. Overall performance evaluation results for individual directors were "meet expectations."

Board members approve of the Company's complete system and information transparency,
which provide directors with sufficient information to monitor the Company's operations.
Board members have the necessary professional abilities, and used their professional
knowledge, and experience to contribute significantly to the Company's operations
management and decision-making quality.

38

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental

Remuneration Policy for the Board of Directors
and Senior Management

Corporate Governance Manager

The remuneration of Board members is determined by the Board of Directors based on the

March 11, 2021 to implement corporate governance and assist in meeting affairs of the Board

participation and contribution of each Board members to operations and industry standards.

of Directors and shareholders' Meeting. The corporate governance officer's main duties

Pursuant to Article 28-1 of the Company's Articles of Incorporation, if the Company is profitable ininclude: Mainly responsible for handling matters of Board meetings and shareholders' meetingthat year, it shall allocate no less than 1% as employee bonuses, and no more than 1% as directors'

and preparing the meeting minutes, assisting in the appointment and continuing education of

remuneration, which must be reviewed by the Remuneration Committee and approved by the Board

directors, providing data needed by directors to perform their duties, assisting directors withof Directors. The remuneration to directors is reported to the shareholders' meeting each year.

compliance, and other matters specified in the Articles of Incorporation or contracts, and also

The remuneration to the management is determined based on industry standards and followed
relevant regulations, such as the TSRC Level of Authority Table. In comply with the level or

4. Social

nature of the position, the remuneration is submitted to the Remuneration Committee for review

Appendix

determined based on the annual performance.

and Board of Directors for discussion. The annual performance bonus of each manager isFramework and Duties of Functional Committees
The Company established an Audit Committee and Remuneration Committee under the
Board of Directors to enhance corporate governance. The Audit Committee is formed by 3
independent directors who are responsible for supervising the fair presentation of financial
statements; the appointment (dismissal), independence, and performance of accountants; theeffective implementation of internal controls; compliance with related laws and rules; control of
the Company's existing or potential risks. The Committee meets at least once quarterly andmay convene meetings at any time if necessary. A total of 8 Audit Committee meetings wereconvened in 2021, and average attendance percentage was 100%.

The Board of Directors passed the resolution to appoint a corporate governance officer oncoordinates related departments in carrying out planning and implementation of corporate
governance operations. The corporate governance officer completed 21 hours of continuing
education courses related to corporate governance in 2021, including "Key to Becoming a
Sustainable Enterprise: ESG Practices," "How Corporate Governance Personnel Improve the
Performance of the Board of Directors and Functional Committees," and other courses related
to sustainable development.

Internal Audit
The Company established an Auditing Office under the Board of Directors to assist the Boardand managers in checking and evaluating the effectiveness of internal controls and assessing
the results and efficiency of operations, providing timely recommendations for improvement, andensuring the continued effective implementation of the internal controls system. The Company
has assigned competent full-time internal auditors. The appointment and dismissal of the chiefinternal auditor must be approved by the Audit Committee and Board of Directors. Pursuant to
the "Management Regulations for Audits of Subsidiaries," subsidiaries appoint competent fulltime internal auditors based on the scale of their operations. The Auditing Office formulates annual

The Remuneration Committee is formed by 3 independent directors who are responsible for

audit plans and conducts audits. The Audit office submits audit

establishing and periodically reviewing director and manager performance evaluation standards,

reports to independent directors according to the annual planand the remuneration policy, system, standards, and structures. The committee regularly

and attends meetings of the Audit Committee and Board ofevaluates the achievement of performance by the Company's directors and managers andDirectors to give reports. The status of communications between

determines their individual remuneration. Meetings are convened at least twice yearly, and may

TSRC's independent directors and accountants in 2021 is

be convened at any time if needed. The Remuneration Committee convened 5 meetings in 2021

available on the company website or QR code.

with 100 % of attendances.

The status of communications
between TSRC's independent
directors and accountants

39

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance

Framework and Duties of the ESG Steering Committee
TSRC cherishes Earth's resources and pursue stable operations and growth. We have dedicatedefforts to fulfill our corporate social responsibility, reduce the negative impact of business operations
and products on the environment and society and aim to have a positive impact on society.

2.2 Integrate Sustainability
and Business Strategies

Since 2011, TSRC has established the CSR Steering Committee to fulfill its corporate social

2.3 Strengthen Innovation
Momentum

responsibility and long-term operations, and establishes related systems, policies, and plans.

2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental
4. Social
Appendix

Framework of the ESG Steering Committee ／ESG Steering Committee

responsibility. The committee manages the Company's implementation of corporate social
It is responsible for improving the Company's management mechanisms for sustainability,

ESG Task Forceand effectively responds to issues that stakeholders concerned which are relating to TSRC's
corporate governance, environmental protection (including climate-related issues), and social
care. With consideration to the growing emphasis of stakeholders on ESG, TSRC renamed theCSR Steering Committee into the ESG Steering Committee. The ESG Steering Committee isformed by the Company's management team and responsible for planning and implementing
TSRC ESG strategies. The ESG Steering Committee convened 6 meetings in 2021, andEnvironmental
implementation
team

Energy conservation and carbon reduction, water
resource optimization, energy saving, reduction ofwaste, promotion circulation and innovation, productdevelopment and process optimization that reduces
environmental impact, development of renewablematerials, and reduction of climate risks.

Socialimplementation
team

Cultivate sustainable talent, strengthen workplacesafety and environment, employee care, genderequality, employee health, and community
involvement.

Governanceimplementation
team

Establish and implement corporate governancerelated systems, ethical corporate management, risk
management, strengthen supply chain management,
and promote supply chain GHG reduction.

Implementationteam ofstakeholder
maintenance

Strengthen communication with stakeholders andresponse, and increase the completeness andimmediacy of information disclosure

discussed the Company's strategies and goals for sustainable development. Two additional
meetings were convened to discuss climate-related risks. TSRC established the TSRC Task
Force under the ESG Steering Committee to effectively implement ESG. The task force plans
and effectively implements the Company's ESG strategies and action plans through crossdepartmental cooperation for the Company's long-term development. The ESG Task Force
convened six meetings and numerous discussions on specific issues in 2021, and actively
formulated ESG-related goals and action plans. After TSRC's ESG Steering Committee
formulated strategies and goals, it reports and discusses them with the Board of Directors, anddiscloses ESG performance in the annual Sustainability Report, providing stakeholders withimmediate and complete ESG-related information.
The five committees originally subordinate to the CSR Steering Committee were merged into
four implementation teams according to different ESG aspects including: environmental, social,governance and stakeholder maintenance. The ESG Steering Committee, ESG Task Force,and individual implementation teams convene regular meetings each year, and strengthen the
Company's implementation of short-term, mid-term, and long-term targets according to theirduties. They report their ESG implementation status and future plans to the Board of Directors atleast once a year, and let directors fully understand and fulfill their supervision duties in ESG issues.
The four implementation teams under the ESG framework are described below according totheir implementation items and functions:

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

2.1.3 Risk Management
Risk Management Policy and Framework

TSRC's Risk Management Framework ／Board of Directors

The Company established the Risk Management Policy to provide a basis for risk management by TSRC and its(including functional committees)

subsidiaries. The policy sets forth clear risk management principles, responsibilities, and operating mechanisms.
The Company also established the “Risk Management Operating Procedures” to carry out all risk management
procedures and related operations, implementing risk management in all aspects of its operations and decisionmaking. TSRC conducts risk assessments every year and regularly tracks 9 categories of risks. We mapped therisk level based on possibility and severity of impact, and formulate reactions based on the level.

Supervise the risk management system,
process, and implementation results

Internal Auditing Office
Audits the implementation ofrisk management by each unit

CEO and heads of each functional unit

The Board of Directors is the highest-level governance body of risk management at TSRC and is responsible forsupervising the implement of risk management and process. TSRC's management team, which is composed ofConfirm risk identification, assessment,
prioritization, action plans, and risk disclosures

CEO and heads of functional units (9 people in total), is responsible for the management of TSRC's risks. Depending

3. Environmental

on the nature of the risk, risk management is carried out by the Risk Management Team or the Risk Management

4. Socialregarding risk management. Internal auditors audit the risk management of functional units and subsidiaries

Appendix2021
Sustainability Report

40

Task Force, which is formed by members from each functional unit, whereas functional units implement all measures

The Risk Management Teamor the Risk Task Forceaccording to annual and special audit plans, ensuring that risks are managed and controlled.

Implement risk management items or projects

The risk management process includes identification, assessment, prioritization, action plan implementation,and risk disclosure. The management and control results of key risks is assessed by examining the operationor management reports of each subsidiary and functional department.
The Risk Management Task Force regularly updates risk management and improvement actions, andRisk Identification Timetable ／periodically reports to the CEO based on the level of importance of topics. The management of important
operational risks is included in the management team's quarterly operational reports to the Board of Directors.
The management team reports overall risk management and implementation to the Board of Directors to let• Identify material risks• Determine risks that require
immediate action andformulate action plans• Develop an annual risk
management plan

June toJuly

Sep. toDec.

directors fully understand the status of operations. Furthermore, with consideration to the rising importance of
information security to companies, the implementation status of information security risk was reported to theBoard of Directors in May 2021.

March

Risk Identification and Management
Functional units and business departments of TSRC periodically identify risks in the first quarter of each year basedon the external environment and the Company's operational needs. For risks that are identified, the X-axis stands for"probability of occurrence" and Y-axis is "level of impact." The risks are quantitatively or qualitatively divided into threelevels, and a risk matrix is developed accordingly.
The management team divides risks in to level 1 (low risk), level 2 (medium risk), and level 3 (high risk) according to
the risk matrix. High risks are these have a high probability of occurrence and high level of impact on the Company.
Medium risks are risks that have a low probability of occurrence but high level of impact on the Company, or a highprobability of occurrence but a low level of impact on the Company. TSRC selects risks of concern from high andmedium risks based on their priority to its operations, and then determines risks that require immediate action basedon the Company's current risk management measures and implementation results.

April toMay
• Select risks ofconcern

August• Develop an annual
report on risk
management results

41

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

Risk Identification Process ／Risk Category ／No. Risk category

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum

Step 1 | Risk Identiﬁcation
identify risks based on the external
environment and the Company's

4. Social
Appendix

Strategic risk

Environment changes, constrained industrial development,
investment risks, value chain impact

2

Contractmanagement andcompliance risk

Growingly strict environmental protection laws andregulations, lawsuits, increased cost of carbon emissions,carbon emission limit

3

Asset management
and subsidiarymanagement risk

Increased management cost, substantive management
and ﬁrewall issues, regulatory restrictions on asset use

4

Financial risk

Exchange rate ﬂuctuation risk, higher interest rates onloans, diﬀerent regulations on lending in other countries

5

Operating risk

Risk of concentrated procurements, risk of concentrated
sales, severe product price competition, raw material priceﬂuctuations, supply chain tightening, business suspension,
information security issues

6

Geographical andindustrial risk

Regulatory restrictions on production locations, growingly
strict requirements on the chemical engineering industry
in each region, challenge of replacing raw materials due toindustry structure

7

ESG related risk

Increased cost of carbon emission, development speedof carbon reduction technologies, changes in customer
behavior, stigmatization of the industry, the Company's
implementation of ethical corporate management, climatechange risks, diﬃculties with talent recruitment, relatively
slow talent cultivation, and increased sustainability
regulation of each country

8

R&D andintellectual properties
management risk

Leakage of important R&D information, leakage of
trade secrets, disputes or lawsuits over intellectual
property rights

9

Information Technology,
Cybersecurity, andTechnology risk

Weak information security, increased threat of viruses,
insuﬃcient information security judgment of employees

operational needs

and Supply Chain

Step 2 | Risk Prioritization
Divide risks into levels based on probability ofoccurrence and level of impact, and develop
the risk matrix

Step 3 | Risk Eﬀectiveness Analysis
Select risks of concern based on the prioritiesof the Company's operations. Further analyze
management actions for various risks, andcarry out effectiveness analysis to verify if
effective management actions are being taken

Step 4 | Response Strategies Formulation
Identify risks that require immediate action,

Risk description1

Functional units and business departments

2.4 Increasing theResilience of Operations

3. Environmental

2021
Sustainability Reportand formulate risk management actions andresponse strategies

42

About this Report
Letter from the CEO
Stories for Sustainability

With regard to the identification of risks in 2021, we added COVID-19, information security related

ESG Strategy

risks, and climate-related risks in response to changes in the external environment and market

1. About TSRC

management actions and response strategies for 7 risks that require immediate action determined

2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies

and the top 10 global risks published by the World Economic Forum in 2021. We formulated risk
through the identification and assessment process. The following actions and strategies were
implemented in 2021, including increasing stakeholder engagement and communication,
reexamining equipment with high failure rate and adjusted the maintenance cycle, improving
equipment to increase production capacity, and improving formula design and manufacturing ability.

2.3 Strengthen Innovation
Momentum

7 Risks that Require Immediate Action and Response Strategies ／2.4 Increasing theResilience of Operations

No.

Risks

1

Regulatory changes may
cause the risk of lawsuits
in production sites

Response measuresand Supply Chain

3. Environmental
4. Social
Appendix• Continue to negotiate with associations and actively
engage and communicate with stakeholders• Review equipment with high failure rate andreexamine the maintenance cycle2

Mechanical equipment
suspension• Strengthen education and training for the repair ofmachinery, instruments, and electrical equipment

Business Continuity Management
When facing uncertain changes in the environment, TSRC monitors the impact of various risks
and considers emergency situations and develop business contingency management schemewith the consideration of all emergencies. The TSRC’s business contingency management
scheme is composed of Business Contingency Plans, Emergency Response Plan for Continued
Supply, and Crisis Management based on the level of continuousness and emergency. Throughthese three management procedures, TSRC takes immediate and effective response measures
to reduce the impact of various risks.

• Business continuity plan
To effectively assess risks and ensure that response procedures meet actual needs, TSRC
simulates emergency response to strengthen response mechanisms, and makes adjustments tothe system's deficiencies. The simulation process includes creating an annual schedule, plans,
drills, rehearsal, and actual drills, preparing for risks that may be encountered. After completing adrill, we prepare a drill report and conduct review to determine if it is necessary to revise the plan.

Work Flow ／• Adjust the running method to lower the shut-down
frequency of important facilities

Annual Schedule

Establish plans for a drill

3

Price competition• Production, sales, and procurement units actively
cooperate, coordinate, and reallocate resources

4

Changes inindustry structure• Improve equipment to increase production capacity,and improve formula design and manufacturing ability

Walkthrough script

Conduct a drill(sand disc deduction / actual drill)

5

Excess market supply• Monitor changes in product prices and markets todetermine sales opportunities

6

Changes incustomers' behavior

7

Changes in raw
material costComplete the drill reportand review
Revise Contingency
plans (if necessary)• Continue to monitor the inventory and difference inproduct prices of raw materials suppliers, and effectively
determine the right time to purchase raw materials

2021
Sustainability Report

43

About this Report
Letter from the CEO
Stories for Sustainability

TSRC's business continuity plan focuses on the following 10 potential events:

ESG Strategy

2.1 Strengthen Corporate
Governance

2.4 Increasing theResilience of Operations

ability to continue supplying products to customers during emergencies is TSRC's primary consideration.
TSRC established the “Regulations of Governing Emergency Response Plan for Continued Supply” toeffectively manage and control the impact of emergency events to maintain business continuity.
Emergency events mainly affect the production schedule and delivery to customers. These events3.
Natural disasters

1.
Malfunction ofmajor equipment

and Supply Chain

5.
Infectious
diseases

3. Environmental
4. Social
Appendix

products as schedule is one of the factors TSRC has been successful over the years. In particular, the2.
Suspension of raw
material supply,
processes, or services

2. Governance

2.3 Strengthen Innovation
Momentum• Emergency response plan for continued supply
With regard to business continuity management, fulfilling our commitment to customers and delivering

1. About TSRC

2.2 Integrate Sustainability
and Business Strategies

2021
Sustainability Report

e.g. earthquake,
typhoon, ﬂood

6.
Suspensionof utilities

4.
Fire accident

include the following:
Risk Item

Level of impact

Malfunction ofmajor equipment

Equipment stops
operating and products
cannot be produced

Suspension of
external productsupply, processes,
and services

Delay in the process
prevents timely delivery
and causes thecustomers' production
line to be suspended

raw material shortage

Natural disaster8.
Cyberattacks on
IT systems

7.
Labor shortagee.g. water supply cut
oﬀ, power outage

9.
Suspension ofbasic measures

Fire accident
Suspension ofutilities

e.g. water supply cut-off,
power outage

Labor shortage

10.
Other

includes labor shortage
caused by epidemics

Suspension of
infrastructure

e.g. suspension of IT
systeme.g. cyberattacks on IT
systems cripples logistics
and manufacturing
operations, ransomware, orsystem suspensionaﬀects productdeliveryEmergency response measure
1. The engineering unit carries out repair or seeks external
support
2. sales negotiate how to deal with the matters with customers
1. Ask suppliers to make an emergency delivery/allocate raw
materials
2. Sales negotiate how to deal with the matters withcustomers
3. Adjust the priority of shipments in response to customers'
inventory and needs

Equipment stops
operating

1. Carry out recovery according to the Emergency Response
Operation Management Regulations

Equipment stops operating/
Supply of raw materials
and personnel transportation is suspended

3. Check damages, evaluate the stability of supply, andhandle dispatch

Shut down of equipment
and products cannot be
produced

2. Sales timely negotiate shipments with customers,
and production units carry out emergency production
procedures

1. Purchased water
2. Adjust production capacity in response to diﬀerent water
shortage situations
3. Operate the co-generation plant according to the situation

Unable to deliver on time

1. Flexibly adjust the manpower allocation of each factory

Shipments are affected
because the system wasshut down

1. Disconnect and isolate the equipment
2. Use backup data for recovery
3. Emergency shipment via manual operations

TSRC conducts annual drills of emergency supply to completely assess the risk of emergency eventsand ensure the effectiveness of response measures. We prepare drill reports and reviews basedon scheduling and scenario planning results. If necessary, we revise the “Regulations of Governing
Emergency Response Plan for Continued Supply”.

44

About this Report
Letter from the CEO
Stories for Sustainability• Crisis management mechanism

ESG Strategy

TSRC emphasizes the immediacy of response to crises, whether it may or already has affected or

1. About TSRC

damaged the Company's reputation, asset or personnel , must be immediately handled to prevent

2. Governanceon the principle of DISCO (Dual Path Process, Immediate Process, Stakeholder, Containment,

Furthermore, in response to the physical risks that occurred at TSRC's global production sites inand effectively control further damage. TSRC manages the decision-making process based

2.1 Strengthen Corporate
Governance

Ownership). When a crisis occurs, the CEO of TSRC launches emergency response procedures,

2.2 Integrate Sustainability
and Business Strategies

and effectively monitor and assess the impact and response method of events, taking immediate

2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental

2021
Sustainability Report

members of the emergency response team and CEO assign responsibilities to other members

2021, such as water shortage at the Kaohsiung plant and the hurricane that hit the USA plant,
the management team reported the impact of climate change on the Company's operations andresponse measures to the Board of Directors during quarterly operation reports, so that directors
immediately understood the impact of climate risks on TSRC and management mechanisms.

• Climate Risks and Opportunities
TSRC identified13 climate-related risks and 5 climate-related opportunities with reference to theaction to mitigate the impact and providing suitable explanations to stakeholders.

risk types recommended by TCFD, international sustainability index, and climate risks concerned

Categories of TSRC's Crisis ／by peer benchmarking companies, as well as TSRC’s operating bases and characteristics. The

1

Personnel casualties
caused by accidents

2

Incident impacts
business operations

3

Protest actions

4

Cyberattacks

4. Socialrisks cover transition risks such as policy and legal risks and market risks and physical risks suchas extreme weather events.
To clearly understand the impact of climate-related risks on TSRC's value chain, the TCFD
Task Force and colleagues at each site reviewed the impact level and scope of each risk on
TSRC's suppliers, TSRC’s operations, and clients. The 3-level scoring method is used to identify
the impact of climate-related risks on the value chain (the scoring scale is from 1 to 3, with 3

Appendix

standing for the highest degree of impact and 1 standing for the lowest degree of impact). TSRC
then ranked the impact level of each risk in each category (suppliers, TSRC’s operations, andclients) by serial percentile, with the top 33.4% as high impact, 33.4% to 66.7% as moderate
impact, and the last 33.3% as low impact. The level of impact of 13 climate-related risks on

Emerging Risks: Climate-Related Risks• Climate Risk Governance Framework of Climate Risk
The Board of Directors is the highest governance body to oversee the management of climaterelated risks while the TSRC's management team is responsible for managing the Company's
climate-related risks. In light of the increasing frequency of extreme weather events and growing
impact on the Company, TSRC identified climate-related risk as an emerging mid-and long-termrisk in 2021 and adopted the Recommendations of the Task Force on Climate-related Financial
Disclosures for identification, analysis, quantification of the risks. TSRC's TCFD Task Force,

TSRC's value chain serves as one of the reference bases for operational strategies planning.
To manage climate-related risks according to materiality, the TCFD Task Force and colleagues
at various sites, including Mainland China, Taiwan, the United States, and Vietnam, dived into
the impact of climate-related risks on TSRC's operations. We assessed the materiality of 13
climate-related risks according to the following three aspects: the potential impact on TSRC, thevulnerability of TSRC when facing these risks, and the possibility. Colleagues at the operating sites
in the region were responsible for scoring the materiality of risks of the region. The comprehensive
process is applied to assess the materiality of climate-related risks to TSRC’s operations.
The potential impact on TSRC refers to the impact level of the climate-related risk on TSRC

which is identical to the Risk Management Team with identical members to the ESG Task Force,

before any mitigation and improvement measures are taken. This aspect includes threecarries out climate-related risk management.

indicators: the direct financial impact, the indirect financial impact, and the impact on brandIn 2021, the TCFD Task Force and supervisors and employees of global production sites held 3 large
workshops, which the Company determined climate-related risks and opportunities applicable to
TSRC, with reference to international research reports on climate risks and opportunities, practicesof the industry benchmark in climate-related risk management, and the recommendations of external
consultants. TSRC's management team convened 2 meetings to verify the climate risks that wereidentified, their impact, and risk level based on climate risk assessment results.

image. The direct financial impact refers to the property loss caused by the climate-related
risk. The indirect financial impact refers to the impact of the climate-related risk on TSRC's
daily operations, and the impact on brand image refers to the impact of climate-related risk on
TSRC's reputation. Each indicator is scored on a 5-Point Scale, and then the total score of thethree sub-facets is summed up into a score of "potential impact ". The vulnerability of TSRC
focuses on assessing whether a company's current level of preparedness and adaptation

45

About this Report
Letter from the CEO
Stories for Sustainability

competency is sufficient to deal with climate-related risks. This aspect includes two indicators: a

ESG Strategy

company's readiness and adaptability. If the company is relatively well prepared and adaptable,

1. About TSRC

the total score of the two sub-facets is then summed up into a score of "potential vulnerability".

2. Governance
2.1 Strengthen Corporate
Governancethe potential vulnerability is low, and vice versa. Each sub-facet is scored on a 5-Point Scale, andRegarding the possibility, it refers to the possibility and frequency of climate-related risks that

2.3 Strengthen Innovation
Momentum

After synthesizing the scores from the three aspects of the potential impact, the vulnerability, and2.4 Increasing theResilience of Operations

score. We have the total score of four regions (Mainland China, Taiwan, the United States, and

4. Social
Appendix• Analyze global trends and the industry benchmarking
companies• The TCFD Task Force conducts discussion meetings toanalyze the relevance of each risk to TSRC's operation• Determine the list of climate-related risks

climate-related risks and the length of time that affects TSRC. It is scored on a 5-Point Scale,with short-term and frequent risk scored 5 points, and long-term and rare risk scored 1 point.

3. Environmental

Develop thelist of climatereatled risks

may occur in the future, taking into account the short, medium, and long-term time horizons of

2.2 Integrate Sustainability
and Business Strategies

and Supply Chain

2021
Sustainability Report

the possibility of occurrence, we multiplied the scores of the three aspects to obtain the total
Vietnam) and rank the score by serial percentile, taking the top 20% as high risk and the last

Analyze thescope ofcliamte-related
risks• The TCFD Task Force and colleagues from diﬀerent
departments has discussion meeting to analyze theimpacts of risks on the TSRC's value chain

40% as low risk. We developed four regional climate-related risk matrixes. The TCFD Task Forcethen adjusted the climate risk matrix of each region based on factors such as the operation ofeach region, the development of relevant laws and regulations, and suggestions from external
consultants. The adjustment was agreed upon and approved by the management. For example,
considering the implementation of carbon pricing in Taiwan, TSRC may be incorporated in
the first tier of charging and adjusted the level of impact and possibility of the risk of increased

Identify themateriality

pricing of GHG emissions in Taiwan. Another example is that considering the future climate• Distribute surveys to all sites and functional units toscore risks according to the potential impact, thevulnerability, and the possibility of occurrence• The TCFD Task Force integrates results and develops
the climate-related risk matrix• Develop responding strategies and countermeasureschange scenarios of the Northwest Pacific, such as the increased intensity of typhoons and thelocation of TSRC's operations, the impact and probability of extreme weather events (typhoons)may increase in the mainland China.
After the management adjusted the climate-related risk matrix of each region, we integrate four
regional matrixes into a group risk matrix. With the revenue ratio of each region as the weight,
the scores of each risk of each regional are weighted into the group risk score. We ranked theConfirmation
and reportingscores by serial percentile, taking the top 20% as high risk and the last 40% as low risk. In the• The TCFD Task Force reports responding strategies andrisk matrix to the management• The responding strategies and risk matrix are conﬁrmedby the management

group risk matrix, the top 3 high risks are increased pricing of GHG emissions, costs to transition
to lower emissions technology, and enhanced sustainability requirement and regulation.
The moderate risks are the change of customer behavior, increased cost of raw materials,
stigmatization of sector, and increased severity of extreme weather events – heavy downpours.
The remaining 6 risks are low risks.
According to the impact of climate-related risks on TSRC's value chain and the materiality ofclimate-related risks, the TCFD Task Force thoroughly discussed the corresponding adjustmentsof operational strategies and relevant countermeasures. We consider all aspects of TSRC'soperations that may be affected by climate-related risks and opportunities to formulate
response strategies and measures. These measures were brought to the management team for
confirmation. Measures are implemented in the daily operation and risk management procedures.

Continueous
managementand disclosure• The Board of Directors oversees the risk management,
and the management is responsible for the
implementation and management of climate-relatedrisks. And the TCFD Task Force is responsible forsupporting the management in implementing the
responding strategies and risk management operations• Disclose climate-related risk management tostakeholders in the Sustainability Report and company
website every year

46

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

Climate-Related Risk Matrix ／2. GovernanceHigh

2.1 Strengthen Corporate
GovernanceTechnology costs totransition to lower emissions

2.2 Integrate Sustainability
and Business Strategies

The Change incustomer behavior

2.3 Strengthen Innovation
Momentum• Size of Dots:
Representing
Likelihoodand Supply Chain

Heavy Downpours

4. Social
AppendixPotential Impact

3. Environmental

Enhanced sustainability
requirement and regulation
MediumStigmatization of sector
Hurricane/ Typhoon

Shifts inconsumer preferences

Drought
Extreme Low
Temperature

Rising sea
levelsRising mean
temperature

Low
Low

MediumPotential Vulnerability

Medium Risk
Low Risk

Increased cost of
GHG emission

Increased cost of
raw materials

2.4 Increasing theResilience of Operations

High Risk

High

47

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

2021
Sustainability Report

Level of Impact of Climate-Related Risks on the Value Chain and Countermeasures ／Type ofrisk

Risk
profileRisk

Impact on TSRC

Increased cost of
GHG emission

TSRC will need to pay carbon fees, carbon tax, and carbon tariﬀs
for its products, and will also need to pay fees if GHG emissions
exceed the quota due to climate-related policies and regulationsof other countries (such as carbon tax/tariﬀs, carbon trading
system, and carbon price/fees). Controls may become stricter
each year and carbon fees and taxes will gradually increase.

2. Governance
2.1 Strengthen Corporate
Governance

Policy and Legal

2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental

Enhancedsustainability
requirement andregulation

The international trend of net zero emissions has caused
sustainability requirements and regulations to increase, and also
aﬀected customers' requirements on products. This has caused
TSRC to accelerate its climate actions, such as increasing theratio of renewable energy use, reducing the carbon footprint of
products, improving environmental safety and management, andincreasing the transparency of information on green chemistry
and related information.

The Change
in customer
behavior

Customers switch to raw materials and products with lower carbon
emissions and environmental impact in response to the global trendof net zero emissions and to reduce impact on the environment.
Customers may also require that the Company provide products/
services with more transparent environmental information.

Increased cost of
raw materials

In response to the IPCC's study, the world will gradually transition
to low carbon energy sources before 2050. It is expected toentirely eliminate fossil fuels by 2100. In the long-term, TSRC'svalue chain will signiﬁcantly increase raw materials costs.

4. SocialMarketTechnology

Technology costs
to transition tolower emissions

Stigmatization of
sector

Reputation

Transition risks

Appendix

Shifts in consumer
preferences

In response to the global trend of sustainable development,
TSRC is gradually planning low carbon transformation. Afterevaluating technologies of carbon reduction and equipment
currently available in the market or being developed, the cost of
low carbon technologies, maturity of technologies, and largescale commercialization will aﬀect TSRC's carbon reduction costand return on investment.
Emphasis on climate change issues will continue to increase.
Stakeholders prefer companies with low carbon emissions or
have a positive impact on humanity or the environment. The
petrochemical industry has the stigma of having high carbon
emissions and high pollution.
Extreme weather events can easily aﬀect the stability ofsupply chains, and customers may switch to local suppliers.
Furthermore, customers prefer low carbon raw materials andsustainable products. TSRC has to understand customers'
needs and enhance the competitiveness of products.

Level of impact on TSRC'svalue chain
Upstream
suppliers

Own
Downstream
operations customers

Countermeasure• Reduce carbon emissions from processes and products
High

High

Medium

• Improve energy eﬃciency of processes and use renewable energy• Develop renewable raw materials• Continue to develop low-carbon solutions• Accelerate the reduction of product carbon footprint• Improve energy eﬃciency of processes and use renewable energy
High

High

Medium• Develop renewable raw materials• Optimize water resource use• Waste reduction management• Use more eﬃcient transportation models

MediumMediumHigh• Develop products/services with low carbon emissions andenvironmental impact• Provide customers with customized services

High

High

High

• Continue to require suppliers to engage in climate adaptationand energy transformation, and develop a supply chain withclimate resilience• Continue to develop renewable raw materials• Jointly develop high performance equipment and technology andproducts together with partners

High

High

High

• Replace old electricity consuming equipment• Actively search for low carbon transformation talent, and train
employees for the low carbon transformation era• Assess low carbon investments within an acceptable scope of risk
• Strengthen response and prevention of climate change• Appropriate disclosure of company informationHigh

MediumLow• Accelerate low carbon transformation and GHG management• Optimize water resource use• Improve communication with stakeholders

Low

MediumMedium

• Implement climate risk assessment and continue to improve
the prevention measures and response mechanisms of eachproduction location• Strengthen the stability of local supply• Strengthen communication with customers and understandtheir needs

48

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

Type ofrisk

Risk
profile2. Governance

Risk

Increased severityof extreme
weather events– Hurricane/
typhoon

2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations

Increased severityof extreme
weather events –Heavy Downpoursand Supply Chain

3. Environmental
Acute

4. Social

Chronic

Physical risks

Appendix

Increased severityof extreme
weather events– Extreme Low
Temperature

Impact on TSRC

Level of impact on TSRC'svalue chain
Upstream
suppliers

Own
Downstream
operations customers

Increase in frequency and intensity of hurricane/typhoon will havethe following impact:• Hurricane/typhoon may destroy power systems and cause power
outage in certain regions, causing business or service suspension• Strengthen loss control measures of production locations with
an emphasis on ﬂood prevention
MediumMediumMedium• Strengthen emergency response measures• Hurricane/typhoon causes disruption of supply chain• Establish a manpower allocation mechanism• Increase in insurance premiums for assets in "high risk"
regions will increase operating costs• Step up the localization of suppliers

When the frequency and rainfall of heavy downpours increases,
it may damage production sites, causing services to besuspended, or preventing employees from going to work

• Strengthen ﬂood prevention measures and response measuresat production locations

MediumMediumMedium• Establish a manpower allocation mechanism

Sudden drop in temperature or snowstorm may have the following
impacts:• Extreme low temperature events may cause water pipes, equipment, and instruments of operations or production locations tobecome frozen, which will cause water pipes to rupture, instruments to be damaged, and further cause supply chain disruption

MediumLow

Low• Strengthen loss control measures of production locations with
an emphasis on low temperature prevention• Strengthen emergency supply mechanisms• Employees will not be able to go to work when roads are closed,
which will lower production capacity and increase operating costs• Implement water conservation measures

Increased severityof extreme
weather events –Drought

Water supply may be cut oﬀ due to droughts. Water shortage
will increase water fees and external water sources to be cut
oﬀ. This will aﬀect process water consumption and may cause
operating shut down

Low

Rising sea levels

Sea level rising will cause business and production sites to be
ﬂooded and result in signiﬁcant ﬁnancial losses

Low

Low

Low

• Cause employees to have a heat stroke or other healthconditions, resulting in lower work eﬃciency• Persistent high temperature may increase electricity demandor impact production performance• Drought caused by persistent high temperature creates therisk of business suspension• Strengthen process wastewater recycling and improve water
resource usage eﬃciency• Increase use of recycled water• Strengthen emergency supply mechanisms

Low

Low

Global climate change will extend the drought season in East
Asia and increase the duration of extremely high temperatures,
which will cause the following impacts:
Rising mean
temperature

Countermeasure

Low

Low

Low

• Strengthen loss control measures of production locations with
an emphasis on coastal areas• Continue to carry out equipment maintenance and monitor
electricity consumption to maintain the stability of electricity
consumption• Strengthen process wastewater recycling and improve water
resource usage eﬃciency• Strengthen emergency supply mechanisms

49

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

Climate-Related Opportunities and Countermeasures ／Opportunities

Name of opportunity

2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum

Products andServices

2.4 Increasing theResilience of Operations
and Supply Chain

Impact on TSRC

Development and/or
expansion of low emission
goods and services

Evaluate the development of low carbon markets and market
demand of each country, provide low carbon solutions to
help customers produce low carbon products and expand
their market share, and continue to maintain the Company's
competitiveness by meeting customers' needs

Development of climate
adaptation solutions

As extreme weather events continue to occur, provide customers
with products for responding to extreme weather events• Develop high-value low-carbon products or reduce theenvironmental impact of products• Help customers reduce the carbon footprint of theirproducts or reduce their environmental impact• Develop products with climate tolerance• Equipment replacement

3. Environmental
4. Social
Appendix

Countermeasures

Resource
Efficiency

Use of more eﬃcient
production and distribution
processes• Work with value chain partners and adopt highly eﬃcienttransportation processes to increase resource eﬃciency andlower operating costs.
• Adopt highly eﬃcient processes to reduce resource use andlower operating costs• Implement energy conservation and carbon reduction plans• Establish water-saving processes or increase recycledwater processes• Increase renewable energy use and take energy
conservation measures• Promotion of waste recycling and reuse• Select low carbon transportation to deliver products

Increase sustainable ﬁnancing

Good ratings from international investment and rating institutions
for the Company's ESG performance will help the Company
attract capitalMarketPositive reputation

In-depth connection with SDGs and gaining a good business
reputation will have a positive impact on the Company• Strengthen contact and communication with stakeholder• Complete and timely disclosure of ESG performance• Strengthen risk management and supervision mechanisms• Implement climate risk assessment and response mechanisms• Expand stakeholder communication in climate issues• Disclose the Company's connection to the SDGs andresults of eﬀorts

TSRC formulates climate risk management strategies based on the materiality of risks. We first conduct quantitative analysisof the impact of high risks, and then adjusts the Company's business strategies based on quantitative analysis results. We willcontinue to expand the scope of quantitative assessments of risk impacts, analyze the financial impact of medium and low
risks, reexamine the Company's risk tolerance and appetites, and formulate countermeasures.

50

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum• Analysis of the impact path of material climate risks
TSRC analyzes the potential impact path of the three high risks: increased cost of GHG emission, technology costs
to transition to lower emissions, and enhanced sustainability requirements and regulation. We analyze the potential
impact of these three risks on production, sales, procurement, and R&D, so that we can assess the required
resource of investment and allocation when risk mitigation and adaptation measures are taken. In the future, TSRC
will gradually complete the financial impact assessment of material climate risks and update assessment results in
response to related policies, regulations, and low carbon technologies.

2.4 Increasing theResilience of Operations
and Supply Chain

Risk Type/Transition Risk

Increased cost of
GHG emissions

Impact and Influence on TSRC

Production

Appendix

Financial Impact

Financial Impact• Increased carbon fee fordomestic production emissions

Operation costs• Increased carbon fee, tariﬀ or
permit for overseas production
emissions•

Increase inoperation expenses• Increased import cost for overseas sites

Sale

4. Social

Risk: Increased cost of GHG emissions ／• Product carbon emissions higher
than overseas standards• Face challenges of selling as overseas clients
face increased cost of products

Revenue•

Procurement

3. Environmental• Increased operation costs forenergy suppliers• Increased operation costs
for upstream equipment/raw
material manufacturers• Increased shipping costs forlogistics providers• Transferred energy
costs• Transferred
procurement costs

Decrease inrevenue• Increased
electricity bill

Procurement
costs

51

About this Report
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies

Risk: Enhanced Sustainability Requirement & Regulation ／Risk Type/Transition Risk

Enhanced
Sustainability
Requirement andRegulation

Impact and Influence on TSRC

Production

Letter from the CEO

2021
Sustainability Report• Increased the demand forrenewable energy in the energy
market, as well as the price of
renewable energy certiﬁcates risen

2.3 Strengthen Innovation
Momentum

Procurement

2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental
4. Social

Financial Impact

Energy costs
increase

Increase inoperation expenses

Capital goods
increase

CAPEX increases• Purchase new equipmentwith higher eﬃciency

Capital goods
increase

CAPEX increases• Retire old &ineﬃcientequipment

Early retirementof assets

Increase inoperation expenses• Procurement of renewableenergy power generationequipment• Installed renewable energy facilities

Financial Impact• Procurement of energy
storage equipment• Signed renewable energy directpurchase agreement

Appendix• Provide low
carbon products(including carbon
neutral product)• Purchase carbon permit

Procurement• Obtain product carbon
neutrality and carbon
footprint certiﬁcation• Adjusting existingprocess parameter

Manufacturingcosts increase• Use of low-carbon fuels• Using of low-carbon
raw materials

Procurement
costs increase• Adopt low-carbon
transport logistics

R&D

Enhanced
Sustainability
Requirement andRegulation

Production• Improve existingproduction processes• Low carbon productdevelopment

R&D costs
increase

Increase inoperation expenses

52

About this Report
Stories for Sustainability
ESG Strategy

1. About TSRC

Risk: Technology Cost to Transition to Lower Emissions ／Risk Type/Transition Risk

2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental

Technology costs totransition to lower
emissions

Impact and Influence on TSRC
Investment Production Procurement

Letter from the CEO

2021
Sustainability Report

Financial Impact• Seek low-carbon alternative
raw materials (e.g. renewable
raw materials)• Introduce low carbon
manufacturing process

Procurement
costs increase• Improve existingproduction processes

Capital goods
increase• Introduce low carbon
technology

R&D costs
increase
Investment
expenditure
increase• Invest in low-carbon
businesses

Financial Impact

Increase inoperation expenses

CAPEX increases

4. Social
Appendix• Climate risk financial impact assessment
With consideration of the Company's business strategies and international development trends

response to the continued increase in upstream costs, TSRC is actively implementing energy

in carbon management, TSRC first assessed the financial impact of "increased cost of GHG

transformation and plans to work with new suppliers that have completed climate response

emission" with reference to examples of climate risk disclosures by domestic and overseas

measures, establishing a supply chain with climate resilience. We will also periodicallybenchmarks in the industry. As climate change becomes even more severe, countries intend to

examine upstream costs to lower the financial impact of this risk.

implement climate-related policies. For instance, the international carbon tariff and Taiwan’s carbon
pricing are to charge a certain fee on companies whose GHG emissions exceed the allocatedamount. This may increase costs when customers import TSRC's products. Furthermore, carbon
pricing-related policies and regulations will not only affect TSRC but also impact suppliers. The
cost of raw materials, equipment, and electricity may gradually increase. Hence, TSRC dived
into the three dimensions—the increase in upstream costs, climate-related policy proposals, and

2. Climate-related policy proposals:
TSRC evaluates the additional carbon fees that production sites may need to pay while theoverall GHG emissions decrease each year, with consideration of the proposed regulations ofcountries where our main production sites are located, including Taiwan's "Climate Change
Response Act (Draft)", California's Western Climate Initiative (WCI), emissions quota in China's

customers shifting or reducing purchase orders—to assess the corresponding financial impact.

"Interim Regulations on the Management of Carbon Emissions Trading" and "Measures for the

1. The increase of upstream costs:

Vietnam's Environmental Protection Act. We also reference domestic and overseas carbon pricing

Administration of Carbon Emissions Trading (for Trial Implementation)", and the amendment to

TSRC will increases procurement costs due to climate factors in 2023-2030. In terms ofresearch reports, as well as the spot price of the carbon exchange. Our analysis shows that theelectricity, considering that power companies located in the same region as TSRC's businesscost of carbon emissions that our business sites need to pay until 2030 in the 1.5˚C and 2.0˚Csites may increase costs due to responding to climate change and incorporating new energy(e.g., renewable energy) into the portfolio, the electricity price may rise by 2030. Furthermore,
the cost of electricity may continue to increase until 2030 due to electricity purchases
under TSRC's carbon reduction strategy. As for the cost of raw materials, equipment, andlogistics, the production cost of suppliers may increase due to controls on carbon emissions
in the country where they are located, the charge of a carbon tax and carbon fees, or the
implementation of a carbon trading system. Suppliers may transfer their costs to TSRC. In

scenarios will increase each year along with the carbon pricing. Furthermore, TSRC also considers
the potential impact of carbon tariffs when products are exported in the future. According tocarbon tariffs that have been formulated and implemented on a trial basis by other countries,
such as the Carbon Border Adjustment Mechanism (CBAM) announced by the European Union,
TSRC's carbon tariffs cost will be peak in 2026 in the 1.5˚C and 2.0˚C scenarios. As the carbon
pricing and carbon tariffs increase but our carbon emissions per unit product decrease until
2030, the amount of payment of carbon tariffs will decrease each year. Forward looking, TSRC

53

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance2021
Sustainability Reportwill continue to monitor the progress of climate-related legislation in Taiwan and overseas, andis to reduce carbon emissions from its operations or reduce the carbon footprint of its

periodically examine if the direction of TSRC internal carbon reduction strategies meets the

products, and thereby provide customers with more competitive products and services withrequirements of authorities. We will make corresponding improvements and adjustments torespect to carbon reduction, continuing to lower business or market risks.

business strategies, in order to minimize the financial impact of climate-related policies.

• Metrics and targets

3. Challenges from the market:

2.1 Strengthen Corporate
GovernanceIn response to the climate-related policies of different countries, the carbon tariffs scheme

In response to the impact and challenges of climate change, TSRC set short-term and mid-term

2.2 Integrate Sustainability
and Business Strategies

may also impact the downstream of the value chain. Since customers may need to bear the

climate risk targets of mitigation in 2021. Climate risk-related targets are integrated the annual

cost of carbon tariffs when they import TSRC's products, it may cause customers to shift

targets of the management and connected with annual performance appraisals to ensure an

2.3 Strengthen Innovation
Momentumor reduce purchase orders. TSRC references the "Report on the Manufacturing Purchasing

effectively achievement. It is regularly monitored by the Board to facilitate better performance.

2.4 Increasing theResilience of Operations

the China Manufacturing PMI released by the National Bureau of Statistics of the Peoples

Managers' Index (PMI)" published by the Chung-Hua Institution for Economic Research andand Supply Chain

Republic of China to assess the value and market position of products. We assume that a

3. Environmental

related fees in the future and assess the financial impact on this basis. TSRC's main strategy

certain percentage of customers will shift their purchase orders due to carbon tariffs and

TSRC hopes to protect the earth through the joint efforts of itself and its business partners andhas contribution to the next generation and the future environment. We disclose greenhouse gas
emission data in this report (covering Scope 1 and Scope 2, please refer to Section 3.1). It is
expected to complete the external third-party verification of ISO14064-1:2018 by the end of 2022.

4. Social
Appendix

Focus Area

Towards Carbon
Neutrality Operation

Water Resource
Optimization

Target

2023

2025

2030

Reduce total
carbon emission
Scope1+2; Base year: 2021

Total carbon emissions reduction by 5%
versus base year

Total carbon emissions reduction by 10%
versus base year

Total carbon emissions reduction by 22.5%
versus base year

Increase the use ofrenewable energy

Increase renewable energy to 5% of total
electricity consumption

Increase renewable energy to 10% of
total electricity consumption

Increase renewable energy to 30% of
total electricity consumption

Increase wastewater
recycling

Increase wastewater recycling to 25% of
total volume of wastewater

Increase wastewater recycling to 36% of
total volume of wastewater

Increase wastewater recycling to 40% of
total volume of wastewater

Increase recycledwater utilization

Increase recycled water utilization to 15%
of total water consumption

Increase recycled water utilization to 34%
of total water consumption

Increase recycled water utilization to 40%
of total water consumption

Develop eco-friendly
products• Develop new-generation synthetic rubber
for green and EV tires/shoe materials
to reduce carbon emissions by around
150,000 mt (based on sales projection)• Develop eco-friendly foaming product• Special styrene block copolymer (SBC)
developed for medical equipment,
shoe materials, plastic modification aim
to increase recyclability and decrease
medical waste• Develop new-generation synthetic rubber
for green and EV tires/shoe materials
to reduce carbon emissions by around
300,000 mt (based on sales projection)• Develop eco-friendly foaming productswith recyclability• New type of special styrene block
copolymer (SBC) developed for reducing
energy consumption and organic
solvents in customer production process• Develop new-generation synthetic rubber
for green and EV tires/shoe materials
to reduce carbon emissions by around
1,500,000 mt (based on sales projection)• Develop eco-friendly foaming productsthat use renewable materials and morerecyclability• Medical TPE products developed
for reducing medical waste by 10%
compared with previous generation
products by sales

Product process optimization

Optimize production process of TPE
products, reduce use of steam to achieve
1,800 mt per year of carbon emissions
reduction

Optimize production process of TPE
products to reduce electricity and energy
consumption

Optimize production process of TPE
products, reduce electricity and energy
consumption to achieve 9,000 mt per
year of carbon emissions reduction

Use of renewable materials*

Develop renewable raw material suppliers

Renewable raw materials account for 5%of total raw material purchase

Renewable raw materials account for
15% of total raw material purchase

Lower Products’
Carbon Footprint*Renewable Materials: (1) Agriculture based (2) Bio-based (3) Waste of other products

2021
Sustainability Report54

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance

Emerging Risks: Information Security
TSRC actively protects the Company's important information assets and defends and prevents
internal and external information security threats whether planned or unintentional. We haveestablished a complete information security management framework and corresponding

2.2 Integrate Sustainability
and Business Strategies

information security risk management regulations, implementation regulations, and details. The

2.3 Strengthen Innovation
Momentuminformation and communication equipment, and conducting annual information security risk

2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental
4. Social
Appendix

Information Security Organization Structure ／Head of the IT Department

scope of processes includes Identifying the risk level of the core system, periodically reviewing

Information security supervisor

assessments. The head of the IT Department, Finance Division also serves as the head of theinformation security unit, which has one information security supervisor and several professional
IT personnel responsible for planning the internal information security policy, planning andimplementing information security operations, and promoting and implementing the information
security policy. A summary of the Company's information security governance is reported to theBoard of Directors each year. The Company established the Information Security Policy, which

Information
security engineer(Taiwan, Luxemburg)

Information
security engineer(mainland China)

Information
security engineer(USA)

Information
security engineer(Vietnam)clearly specifies the scope of technology and information assets, responsibilities when using theCompany's information assets, preventive measures when facing information security threats,
and response procedures when the Company encounters information security threats.
In 2021, TSRC delivered the annual information security report to the Board of Directors inMay, and expanded virus prevention measures in Taiwan, America, Europe, and Southeast Asia

Information Security Response Procedures ／Cyber Security Incident

in the second quarter, enhancing the threat detection and active defense abilities of terminal
equipment. We conducted 2 penetration tests each quarter in the second quarter and third
quarter, in order to strengthen the Company's security against external systems and reduce
information security risks. We conducted 2 social engineering drills and training sessions eachquarter in the third and fourth quarters, raising employees' awareness of information security.
Considering the importance of information security, in the upcoming year, TSRC will expand

Declare security incident

NO

Case closed

YES
Report to IT

Finalize Incident Reportvirus behavior protection, enhance the threat prediction and active defense capabilities ofterminal equipment, improve the information security protection network, and establish a zerotrust structure and physical network access control. We aim to strengthen network accessCritical

Incident eliminate & follow-up

control, enhance the security strength of the company's information environment, and reduce
information security risks. In the long-term, TSRC will strengthen the information security offactories, comprehensively monitor OT/OA network traffic, reduce the possibility of network

Report to CEO

hacking, and reduce information and network security risks.
Set up a response
team and initiate
response plan

External
consultants

Internal team

YES

NO

Require External Support

55

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies

2.1.4 Integrity

2021, the employee immediately reported the situation, and TSRC terminated its cooperation

Integrity is the foundation of TSRC's governance and also most important corporate culture.

has also been used as an example for promoting TSRC's position and measures for refusing
unreasonable gifts and entertainment to units.

the Board of Directors and describe the philosophy and principles of integrity, establishing thePrevention items in the Code of Business Conduct ／framework for all employees to abide by. The Legal Department is responsible for implementing
the policy and unethical conduct prevention measures, and the Audit Office audits the

2.4 Increasing theResilience of Operations

suppliers, customers, agents, and distributors). Before forming business relationships, it isCompany's ethical management position when interacting with business counterparts (including

and Supply Chain

necessary to first evaluate if the counterpart previously engaged in unethical conduct. During

3. Environmental

principles, and to protect intellectual property rights and trade secrets. In the contract signing

contract signing, we require counterparts to agree to abide by TSRC Corporation's integrity
stage, we also include compliance with the ethical management Policy in audits and evaluations.
To strengthen the implementation of ethical management, regarding anti-corruption and anti-

1

Offering andaccepting bribes

Inappropriate funds, gifts, commission,
positions, services, preferential
treatment, and kickbacks in any formor name due to the employee's
position or influence

overall management, in order to strengthen the implementation of ethical corporate management.

4of interest to form a task force to investigate and determine how to deal with the case. If the caseof TSRC. In principle, the whistleblower should be named when filing a report, but anonymous
reports may be accepted when the contents of the report and evidence is clear.

Insider trading

7

Depending on the aspects involved in each case, CEO will designate personnel without a conflict
involves the CEO or a director, then it will be handled by the chairperson or Audit Committee

6
Infringement intellectual
property rights andtrade secrets

provides norms that employees must follow when providing or accepting gifts and entertainment
immoral conduct (e.g. e-mail or address for delivering documents) with the CEO responsible for

Unreasonable gifts andentertainment

5bribery, TSRC formulates the "Administrative Measures for Official Gifts and Entertainments", which
when performing official business. TSRC establishes channels for reporting illegal, unethical, and32

implementation of related systems.
The Code of Business Conduct states that the Company's personnel must clearly express the

Appendixwith the supplier. This event shows employees' emphasis on ethical corporate management and

TSRC established the Code of Business Conduct and Code of Ethics, which were approved by

2.3 Strengthen Innovation
Momentum

4. Social

2021
Sustainability Report

Political donations or
improper charity donationsor sponsorship

Unfaircompetition

Furthermore, TSRC also regularly organizes training and promotion activities, and provides
information on the Company's ethical corporate management philosophy, policy, unethicalconduct prevention measures, and consequences of violations to employees and businesscounterparts. We have incorporated the implementation of ethical corporate management
into the performance management system of each department. A total of 4 training andpromotion activities were organized in 2021, including online sessions on conflict of interest anddisclosures, online courses on trade secrets and non-compete clauses, insider trading, andonline and offline courses on unlawful infringement in the workplace; the activities had a total of
625 participants. New employees also took basic courses on legal affairs and trade secrets in
2021, and a total of 51 employees completed training.

TSRC established the Management Procedure for Insider Trading in 2021. The procedure clearlystipulates that the Company's personnel may not use material information that has not yet been
disclosed for insider trading, disclose the information to others, and let others make trades on theirbehalf. The Legal Department is responsible for maintaining and implementing the Management
Procedure for Insider Trading and organizes training and promotion activities on insider tradingeach year to improve employees' understanding of insider trading regulations and maintain theconfidentiality of material information. One 1-hour online training session was held in 2021 and had
a total of 93 participants. We send e-mails to employees each quarter to promote the preventionof insider trading and conflict of interest and sent written notices in the third quarter to promote the

TSRC has stepped up promotion of the importance of ethical corporate management and"Procedures and Notices for Changes in Shareholding of Insiders" and "Common Violations of theprovided education and training. A supplier attempted to bribe the Company's personnel in

Securities and Exchange Act by Insiders Applying for Changes in Shareholding."

56

About this Report
Letter from the CEO

2.1.5 Compliance

Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance

Code ofBusiness
Conduct

Management
Procedure for
Insider Trading

2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental
4. Social
Appendix

TSRC complies with laws and regulations for governance, environment, products or services, and finance, and requires
the management team and employees to comply with the Code of Ethics, uphold the principles of honesty andcreditability, and abide by professional standards and related laws and regulations. TSRC Corporation did not have any
one of the following situations in 2021:

2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies

2021
Sustainability Report

Training Session•

Receive fines or non-monetary sanctions due to violation of corporate governance or economic laws and regulations•

Receive fines or non-monetary sanctions due to violation of labor rights or human rights laws and regulations•

Products or services violated consumer health and safety laws and regulations•

Products or services violated information or labeling laws and regulations•

Compliance of products or services with marketing and communication related regulations

In 2021, three environmental fines have occurred: :1. In the TPE manufacturing procedures of the Kaohsiung plant, the value of one part of process equipment
exceeded the standard for VOCs and emissions regulations, and a fine of NT$450,000 was imposed for violating
Article 20, Paragraph 1 of Taiwan's Air Pollution Control Act.
2. Due to the replacement of monitoring facilities, a weekly test was not conducted before the review of themonitoring facility verification report was completed, and the number of effective monitoring hours did not reach
85% in the third quarter and fourth quarter. A fine of NT$200,000 is expected to be imposed for violating Article
22, Paragraph 2 of Taiwan's Air Pollution Control Act.
3. In the three-part form for outsourced joint disposal of business waste, the weight of waste (flammable waste
liquid) reported by Kaohsiung plant did not match the weight reported by the disposal company, and a fine of
NT$60,000 is expected to be imposed.
Please see 3.5 Environmental Management for details on enhanced management measures for air pollution.

2.1.6 Looking Forward
Corporate governance is the most important foundation for ESG. Along with TSRC ESG Strategy, we have set short, mid,and long-term targets for strengthening corporate governance. In the future, TSRC will continue to improve governanceand supervision mechanisms and implement related systems. We will effectively implement ESG strategies and goals
through the ESG Committee, and periodically report the status of ESG implementation to the Board of Directors, sothat the Board of Directors is updated on the attainment of key ESG goals. Furthermore, TSRC will continue to improverisk management mechanisms for its operational resilience, and will periodically report the implementation status of risk
management to the Board of Directors, while conducting quantitative analysis of the financial impact of climate-relatedrisks and taking preventive measures. Looking towards the future, TSRC will continue to improve its ESG performancethrough integrating with digital information system and enhancing risk monitoring and management. We will also increase
the engagement with stakeholders and achieve our goal of low carbon transformation.

57

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies

2.2 Integrate Sustainability and Business Strategies
2.2.1 Management Approachemissions from product processes. TSRC utilizes its technologies to support the climate actions

TSRC's main strategy to its business expansion over the years has been to accurately identify

and service targeting green applications. Regarding raw materials, we have increased the use

global market trends, and plan and implement forward-looking business strategies. TSRC firmly
believes that a company's sustainable value is based on its long-term competitiveness andmeeting environmental and social expectations. TSRC pursues business growth and emphasizes

2.3 Strengthen Innovation
Momentumthe ability to create economic value for stakeholders, create opportunities for communities,

2.4 Increasing theResilience of Operations

mutually prosper and achieve the goal of stable long-term development.

make actual contributions to society, and create a virtuous cycle for companies and society to

and Supply Chain

3. Environmental

2.2.2 Business Strategies and Business Models

4. Social

TSRC plays a crucial role in the upstream industry. Besides being one of the main producers

Appendix2021
Sustainability Reportof synthetic rubber products, TSRC has been actively engaging in high-value transformationin recent years based on its core technologies. Our long-term business strategy is to achieveorganic growth, improve our business portfolio, and increase our profits, which are our threemajor themes. We are developing product applications for transportation, sports and leisure, andhealthcare, and are expanding to markets in North America, Europe, Southeast Asia, and South
Asia. We have gradually been a global company for special chemical materials.

of value chain partners. At the same time, TSRC has increased the development of productof biomass materials. About our products, we are stepping up the development of customized
products with lower carbon emissions and reducing the fuel consumption of cars and energy
consumption of rubber product production. We have established a vertically integrated businessmodel that links together the electric vehicle and eco-friendly tire industry chain, playing a crucialrole in green low-carbon supply chains through triangular strategic cooperation.

TPE
The main product applications of TSRC's TPE are adhesives, flexible film, automobile materials,
plastic modification, asphalt modification, and water-proof materials. Demand has rapidly grownin the thermoplastic elastomer market following changes in population structure, rapid growthof e-commerce, higher quality requirements on consumer products, eco-friendly non-toxic
materials, and the trend of carbon reduction. TSRC's business strategy is to develop innovative
product technologies, innovative business models, close partnerships, immediate customer
support, stable and reliable global supply and localized services, combining different productand material application abilities to provide customers with total solutions. Development focuses

TSRC's mission is to provide customers with the best solution through scientific methods, and ouron new markets and new technology platforms, replacing materials that are hazardous to themain products and services can be divided into three categories: Synthetic rubber, thermoplastic

environment and health, simplifying downstream product production procedures, improving

elastomer, and advanced materials. We have different sales strategies and business models forthe production efficiency and performance of downstream products, and optimizing process

the characteristics of product application markets, in hopes that products will not only increasetechnologies to reduce consumption and emission.

our profits but also continue to solve customers' problems, create value for shareholders, have apositive impact on the environment and society, and create sustainable value for TSRC.

Advanced Materials

Synthetic Rubber Products

Main applications of advanced materials include high-end footwear, soft overholding materials, andMain product applications of synthetic rubber are automobile accessories, tires, and outsoles,

midsoles and special accessories, providing soft and comfortable materials that are also strong. In

which are commodities. Demand on electric vehicles and related markets has significantly

response to the features of different shoe models and the pursuit of differentiation by brands, TSRC

increased as global climate actions are being accelerated, and countries are implementing

strives to make breakthroughs in physical properties to meet customers' needs, and provides a

growingly strict standards on automobile energy consumption. Brand customers are thus

total solution for precision color inspection, production optimization, and stable quality. Following

attaching greater importance to GHG emissions in the life cycle of rubber materials. TSRC isthe trend of products that feature sustainability and lower environmental impact, TSRC has begun

actively implementing the strategy of "optimizing products, reducing emissions, and increasing

developing non-crosslinking physical foaming technology platform to replace the use of chemical

applications," and continues to adjust processes and optimize formulas for current products,

additives. We have also added the option of closed loop recycling to the recycling, upgrade, andmaking products easier to process to help customers reduce energy use, while reducing GHG

re-engineering of foam products to improve the quality and stability of recycled products.

plastic modification. The development of high-end footwear in recent years has focused on foam

58

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental
4. Social
Appendix

2.2.3 Customer Relations
Over the years, TSRC continued to provide customers products and services that meet theirneeds through its global network. We insist on pursuing better quality, safety, and services, andfirmly believe that only high quality will bring high value. Hence, all products and services musthave the highest quality and also meet regulatory requirements of each sales region on productsafety and performance to provide services that meet and even exceed customers' expectations.
TSRC actively builds close relationships with customers based on accountability and has obtained
a high level of trust from customers and understanding of customers' needs. TSRC created value
for customers through aligning with TSRC's triangular business strategies and models.
In response to global ESG trends, brand customers have growingly strict requirements on the
ESG performance of their suppliers. Customers have significantly higher requirements on ourratings of international rating institutions (e.g., Ecovadis and CDP). Besides closely monitoring

TSRC upholds the spirit of providing customer-oriented services and has established standard
operating procedures to properly handle customer complaints and refunds. The quality
assurance unit of each factory serves as the contact person for customer complaints, regulatory
requirements, and customers' special needs. It is responsible for monitoring the progress ofrelated units when handling a quality assurance case, so that product quality and delivery issues
can be quickly resolved. When quality specifications are incorrect or do not meet customers'
needs, the knowledge management system established through standard operating procedures
provides consistent response, ensuring that TSRC provides professional responses. We also
analyze the cause and use it as the basis for improving product quality, sharing information withlocations worldwide for global customer relationship management. We continue to improve
product quality to exceed customers' expectations.

customers' expectations on our ESG performance, we also provide supplementary ESG
information to individual customers as needed and make timely adjustments to our businessstrategy based on customers' needs.

Global Customer Relationship Management
TSRC has established sales and supply locations across Europe, America, and Asia basedon the four critical sites in Luxemburg, Houston, Taiwan, and mainland China, and is able toimmediately provide comprehensive technical services. In order to provide customers with
better services and accurately provide customers' opinions to each site, TSRC implemented
a customer relationship management system and established a global customer relationshipmanagement platform, allowing employees around the world to exchange issues and opinions
on the customer end, which helps sales personnel on the front lines to provide first-handinformation to production locations and the R&D center. This accelerates the improvement andcustomization of product quality and allows customers' problems to be accurately resolved.

TSRC Customer Relationship Management System

59

About this Report
Letter from the CEO
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental
4. Social
AppendixEnhance Customer Satisfaction

2.2.4 Looking Forward

TSRC pays attention to customers' needs and attaches even greater importance to customer

Continuing to strengthen customer relationships is a key point of TSRC's development. TSRC

satisfaction. TSRC conducts customer satisfaction surveys on major customers and obtains
customer feedback through a variety of methods, including e-mail, interviews, and business
communication. Satisfaction survey items mainly include business services, transportation
services, product quality, technical services, and complaint handling. Due to the different customer
characteristics and composition at each site, the actual survey items are adjusted in each region.
TSRC conducts customer satisfaction surveys at its production sites (Taiwan, mainland China,
USA) every year. Overall satisfaction reached 90% and above in 2021. For parts that customers
in Taiwan, TSRC Nantong Industrial, and TSRC Shanghai Industrial were unsatisfied with, suchas the service quality, technical service quality, and customer complaints during product delivery
and transportation process, TSRC has already formulated improvement plans and will make
improvements as fast as possible.

will further focus on the development of products with low environmental impact and customized
green services for its business model in the next three years. We will strengthen interactions andcooperation with customers through diverse platforms and even stronger business partnerships.
With regard to green customized services, TSRC will gain a thorough understanding of customer
characteristics when they use and process TSRC products to provide customized services
accordingly. We have made TSRC products easier to process, helping customers reduce
excessive processing procedures and further avoiding unnecessary energy and resource use.
At the same time, TSRC will continue to utilize its advantages and integrate upstream anddownstream partners in the green transportation value chain in an attempt to form a strategic
alliance to show its leadership in the chemistry industry. Regarding green products, besides
continuing to optimize products and help customers reduce GHG emissions in the productusage phase, we will accelerate the development of renewable raw materials, improve formulas
to make products easier to recycle and reuse, and reduce the amount of waste generated.

Customer Satisfaction ／100

Customer satisfaction (%)

Stories for Sustainability

2021
Sustainability Report

99.9% 99.4%

91.9% 92.8%

94.4%

91.8%

94.8% 95.4%

97.1% 96.4%

92.2% 90.2%

80

2020
2021

60

40

20

0
TSRC Corporation(includes Global Business
Headquarter, Gangshan factory,
and Kaohsiung factory)

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Note: TSRC (Vietnam) Company Limited has not conducted the customer satisfaction survey yet.

60

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

2.3 Strengthen Innovation Momentum
2.3.1 Management Approach

Global R&D center in Texas, USA

Innovation is one of the main forces driving TSRC's sustainability. Over the years, TSRC has

2.2 Integrate Sustainability
and Business Strategies

The Global R&D Center in Katy, a city in the Houston metropolitan area in the Texas of U.S.A, isdedicated its efforts to creating a corporate culture of bravely making breakthroughs, encouraging

located at the same place as the regional operations head office of TSRC Specialty Materials LLC.

2.3 Strengthen Innovation
Momentum

employees to develop new technologies, and applying for patents. TSRC rewards employees for

It is the second multi-functional R&D facility of TSRC, following the Global Application Research

applying innovative concepts in their field of work and continuing to optimize processes. TSRC's

Center established in Shanghai, China, in 2010. The center strives to upgrade advanced materials

R&D team and business units have found a way to work together by understanding from the frontand synthesis formula R&D personnel and technologies and improve global innovation capabilities

lines what customers really need. We integrate market sales, R&D, production, quality assurance,and efficiency with a particular focus on quality improvement to provide customers with specialty

product safety and regulations, and supply chain through the global customer relationshippolymer products and total solutions that are friendly to the environment.

2. Governance
2.1 Strengthen Corporate
Governance

2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental

management platform and global R&D centers located in Asia and America to ensure that the

4. Social

developed solutions meet the expectations of markets and customers. This reflects the actual

Appendix

manufacturing company to a first mover that delivers value through innovation and services, whichmeaning of customization and has transformed the image of TSRC from being a conventional
will continue to maintain the Company's growth momentum.

2.3.2 Innovation Capabilities

As the base of TSRC's innovation, the R&D center in the US will integrate sales, R&D,
production, quality assurance, product safety and regulations, and supply chain to focus ondeveloping SBC products and providing cost-effective solutions. The center will also integrate
process technology development, terminal applications, and technical services for customers.
It will utilize TSRC's global sales network and technical abilities to develop medical-grade
materials, hygiene products, adhesives, film, asphalt modification, and elastic non-woven fabrics.

TSRC's R&D strategy is to continue enhancing its innovation capability and accumulating technicalability. Developing high-quality products for customers has also become crucial to TSRC'scontinued profit growth. We have a total of 168 R&D personnel worldwide responsible for theplanning, development, and implementation of new products and new processes, as well as the
management of know-how. The R&D personnel jointly visit customers together with sales andquality assurance departments and discuss trends in product applications with customers. The
personnel actively understand customers' expectations for products and their needs for new
materials, and the R&D experts utilize the information as the basis for product development.
TSRC’s R&D expenses totaled approximately NT$370 million in 2021, up 6% compared to 2020.
To be a global company for special chemical materials, TSRC in 2021 established the R&D
center in Texas, USA, which is its second R&D center worldwide and first R&D center overseas.
The R&D center integrates the production base and business system of TSRC Specialty
Materials LLC and is expected to accelerate the development and commercialization of special
chemicals, expand cooperation and innovation with customers in Europe and America, andrealize TSRC's strategy of accelerating the business growth of specialty polymer products byincreasing its global presence according to its long-term plan.
TSRC Global R&D Center (Shanghai, Mainland China) / TSRC Global R&D Center (Taiwan)
TSRC Technology Center / TSRC Global R&D Center (USA)61

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental

Innovation Incentives
TSRC established several innovation incentive mechanisms, which reward teams or individuals
that contribute to developing new products and processes and to accelerating change and

TSRC Innovation Incentive Mechanisms ／innovation. A total of 139 employees worldwide received the innovation incentives in 2021;
a total of 17 incentives were provided, and the Company offered a total of NT$1.20 million in
rewards. The innovation incentive encourages employees to convert their ideas into projects
that can be implemented to improve product quality and increase the value of TSRC products.
Besides developing new products and projects, TSRC emphasizes continual
improvement and encourages teams to use innovative methods for continual

4. Social

improvement of processes and quality. We organize continual improvement contests

Appendix

strategies, creating a corporate culture of continual improvement and improving

based on changes in the industry environment, customer feedback, and businessthe team's problem-solving ability. A total of 7 continual improvement projects were
implemented in 2021, and approximately NT$70,000 in rewards were distributed.
The Company encourages employees to use logical and statistical analysis methods

Incentives for contribution
to innovation

Incentives for error
cause removal

Encourage the use of innovative
methods to develop new
products or processes, optimize
production, and propose new
key projects

Reward the use of logical andstatistical analysis methods
for improving product quality
and processes

Incentives for continual
improvement
Reward product and process
and improvements that
improve product quality

for error cause removal and continues to propose quality and process improvement
measures. The Company has thus established mechanism incentives. A total of
approximately NT$300,000 in rewards was distributed to 1,725 projects in 2021.

Exchanges of Innovative Technologies
Despite the impact of the pandemic in 2021, TSRC still provided information
on innovative products and technologies through online platforms (e.g., online
webinars) or technology sharing and exchanges with teams of business partners(e.g., engagement with footwear manufacturer PUMA and sporting goods retailer
DECATHLON); a total of 619 participants. In developing advanced materials, we have
expanded future cooperation opportunities in the advanced materials and high-end
footwear market and with business partners through technology exchanges.

Number ofParticipants

Promotion item

Benefits

SIS new productapplication promotion
and technology
exchange event

323• Promotion of new
VECTOR SIS Elastic
Film• 90% of suppliers that participatedwere satisﬁed, and discussed acollaborative development projectwith one of the suppliers

SEBS medical
materials and new
product technology
exchange event

296• Promote medical
solutions and SEBS
related products• 90% of suppliers that participatedwere satisﬁed

Name of meeting

62

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies

2.3.3 Innovative Products

Patent Management and Results
TSRC has successfully obtained numerous patents through innovation incentives and technology
exchanges. Patents are an important indicator of TSRC's technological innovation and R&D
and product innovation. Hence, we have established complete patent management regulations
and incentives system. We also distributed bonuses for each patent right obtained in each country.
A total of NT$80,000 was distributed as a bonus for 4 patents that were obtained in 2021. TSRC
received 16 patents, over 7 patents versus in 2020, and the highest over the years. As of the endof 2021, TSRC applied for a total of 519 patents worldwide, and 422 patents were approved.

2.4 Increasing theResilience of Operations

TSRC regularly organizes patent training courses to raise employees' patent awareness and skills,
which will enhance the Company's competitive advantage and provide customers with high-quality
solutions. The Company has a patent evaluation committee, which engages in in-depth discussions

3. Environmental

of invention proposals and ensures the quality and applicability of patents. Each year the committee

4. Socialvalue. The committee continues to optimize TSRC's patent strategy and our patent portfolios. TSRC

evaluates whether to maintain or abandon patents based on their patentability and commercial

SSBR

TSRC targeted green tire and electric vehicle market whendeveloping the latest generation of innovative, customized S-SBR
products, contributing its key technological capabilities for reducing
energy consumption by the automobile market. As international
automobile manufacturers are attaching greater importance to environmental protectionand energy conservation, the resistance and wear of tires have become a key factor
in reducing fuel consumption. TSRC's third-generation solution polymerized styrenebutadiene rubber for green tires effectively reduces rolling resistance by approximately
10% compared to the second generation. It is expected to reduce rolling resistanceby approximately 2-3% when applied to downstream tires. When used together withother special synthetic rubber products, it will further reduce rolling resistance by 20%

also established a trade secret incentives mechanism for the promotion of intellectual property andcompared to the second-generation SSBR.

protection of trade secrets. The mechanism encourages employees to generate even more trade

According to data from the National Highway Traffic Safety Administration (NHTSA), when tiresecrets, allowing the Company to gain technological leadership and customers' trust.

rolling resistance is reduced by 20%, it will reduce fuel consumption by 4%. This contributes
to the reduction of energy and resource consumption and GHG emissions. The third-

Patents and R&D Expenses over the Years ／R&D expenses

generation products have successfully obtained the certification of domestic and foreign tire
Number of patents approved

3,900,000

18

16

389,8403,800,000

371,67912

113,600,000109
350,678

3,500,000

8

3,400,000

63,300,000

4

2019

2020

2021

their vehicles. We expect green tires made from SSBR and other special synthetic rubber

16
14

3,700,000

brand customers and will continue to help customers reduce the environmental impact of
products will reduce carbon emissions by over 150,000 tons in a year.

Number of patents approved

4,000,000

R&D expenses (thousands NTD)

Appendix

Synthetic Rubber

capabilities, and the Company continues to encourage R&D personnel to engage in technology

2.3 Strengthen Innovation
Momentumand Supply Chain

2021
Sustainability Report

Advanced Materials

Supercritical fluid foaming material

Regarding foaming technologies for midsoles, chemical crosslinking
foaming technology is still mainly used in the current phase, but thistechnology causes residue chemical foaming agent that is a risk to thehuman body and environment. Products cannot be restored after crosslinking. The highend footwear market is gradually shifting to supercritical fluid foaming technology, which
injects non-toxic gas (e.g., nitrogen) into raw materials for physical foaming. No chemical
foaming agent is added, achieving lightweight, non-crosslinking, and 100% recyclable.
TSRC is currently dedicating its efforts developing supercritical fluid foaming materials,
developing lightweight foam products with high energy feedback, durability, andtransparency. We are gradually increasing the percentage of supercritical fluid foamingmaterials to reduce our environmental impact.

63

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental
4. Social
Appendix

TPE

SEBS V-8245D

SEBS V-8245D is a specialty product developed to meet the needs of high-end
markets, especially medical materials. As the elderly population continues toincrease, the demand in the medical market will rapidly increase, and customers

Unit: NT$1,000

Name of research project

Expected R&D expenses

Development of new generation high performancetire products

50,000Differentiated new butadiene rubber products

37,000High added value TPE products

178,000

High-performance shoe materials and formulas

106,000

Cutting-edge process technology development

86,000and regulations will have growingly strict requirements on raw materials. Medical
materials will attach greater importance to materials that do not harm theenvironment and health, and producers will give priority to recyclable and easy-toprocess materials.
Common soft medical materials (such as medical bags and tubes) are mainly madeusing PVC, which needs to add plasticizers in the manufacturing process to increase
its flexibility and softness. There is the risk of releasing the commonly used plasticizer
DEHP when using PVC. DEHP is an environmental hormone, and PVC is hazardous
to ecology and human health, potentially causing cancer, harming fetal health,and causing sexual precocity. Furthermore, incinerating waste containing PVC will
generate dioxin, which is highly toxic and may cause cancer and other diseases. It
will also become a global threat because it can be scattered in the environment andwill not disappear. More and more medical institutions around the world are reducing
the use of PVC and DEHP and switching to other alternatives.
V-8245D is easy to process, eco-friendly, non-toxic, and recyclable. It
has good transparency and physical properties and is considered an excellent
substitute for PVC in medical applications. The recycling
and reuse of medical bags and tubes made using
V-8245D will reduce the amount of waste generated
from disposable medical products.

2.3.4 Looking Forward
In the future, TSRC will continue to develop a technological platform for micro-structure
adjustment and modification of properties, develop new generation S-SBR rubber products,
and use it to develop green, environment-friendly, and high-performance tires for electricvehicles. The BR technological platform will be another focus of R&D to develop more productapplications, meet customers' requirements for shoe materials and plastic modifications,and improve product performance. Regarding material development, we will focus on HSBC
products for differentiated applications, including the development of high-end medical
materials, hygiene materials, lubricating oil viscosity modifiers, and other high-added value TPE
products. We will continue to develop special functional film materials for application in medical
and electronic products to meet the requirements of different customers. Besides continuing todevelop new products, TSRC will increase the ratio of sustainable specialty products.
Concerning internal innovation, TSRC plans to organize Box 3 mobile learning and ESG green
proposal activities, and we will implement plans with sustainability value, which will be combinedwith TSRC's long-term business strategies. We will facilitate the integration of upstream anddownstream partners in the value chain based on green products and services, make products
more recyclable and reusable, and help customers reduce the negative environmental impact of
GHG emissions from processes.

64

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

2021
Sustainability Report

2.4 Increasing the Resilience of Operations and Supply Chain
2.4.1 Management Approach

environmental, social, labor safety, and rights management. We continue to urge value chain

TSRC views suppliers as business partners that jointly create value in hopes of building a service

TSRC's Partner Code of Conduct (PCC). TSRC understands and actively utilizes its influence tovalue chain that can achieve sustainable development together with suppliers. We aim to lower

ensure that the products and services provided by value chain partners meet and even exceed

environmental and social risks while providing customers with the best solutions, creating an

requirements outlined in laws and regulations, reducing any negative impact on the environment

active and responsible value chain.

and society, and further fulfilling our corporate social responsibility.

2.3 Strengthen Innovation
Momentum

TSRC not only attaches importance to the quality of products and services provided by suppliers andTo effectively implement supply chain management, TSRC divides Tier-1 suppliers into raw materials

2.4 Increasing theResilience of Operations

the timeliness of delivery but also monitors the ESG performance of our partners. We conduct periodic

suppliers, contractors, and general vendors. Raw materials suppliers refer to suppliers who provide

evaluations to understand the business situation of suppliers and engage in two-way communication,

primary raw materials (including butadiene and styrene) and auxiliary materials. These suppliers are

improving the abilities of both parties to achieve sustainability. We also encourage suppliers to

mainly located in Asia, mainland China, and the USA. Contractors refer to labor contractors (including

3. Environmental

internalize ESG into their company management and operations to benefit their long-term operations.

cleaning, security, cafeteria, and administrative work), equipment repair, civil engineering, warehousing,

4. Social

2.4.2 Supply Chain Management

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies

and Supply Chain

Appendix

partners to comply with the TSRC CSR Procurement Basic Policy and require all suppliers to signand logistics. General vendors are suppliers that do not fall into the two categories above.

TSRC's main production processes rely on petrochemical raw materials purchased from suppliers

New Supplier Selection Procedure and Standards

for polymerization. After completing synthesis, it is made into chemical and rubber materials that are

TSRC's supplier selection standards incorporate ISO 9001, QC 080000, ISO 14001, andsold to downstream customers (including tire manufacturers and medical product manufacturers),

ISO45001. We prohibit suppliers from forcing and exploiting workers, and we require suppliersand downstream customers use the materials to produce the end consumer product. Upstream

to comply with statutory work hours and freedom of association and to provide employees

raw material suppliers are TSRC's most crucial value chain partners. Furthermore, each site’s laborwith reasonable salaries and benefits. We hope that suppliers will jointly establish a businessand service contractors are partners that assist TSRC in creating value. TSRC monitors humanmodel with TSRC that is friendly to society and the environment, so the companies can achieve

rights, environmental, and social values. We attach importance to suppliers’ and contractors'

sustainable development and create a win-win situation.

TSRC CSR Procurement Basic Policy ／Emphasis on Integrity• TSRC is devoted to CSR and encourages ourpartners to promote open and fair competitive
business activities based on fairness and ethics forthe long-term profits and sustainable operations of
TSRC and our partners.

Joint Commitment toSocial Responsibility

Compliance with the
Law and Regulations• TSRC believes that the members of the supply
chain play a very important role in the execution
and development of the CSR and expects thatour partners will agree on and spare no efforts tofulfill their social and environmental responsibilities,
and take these as a guideline of their business.

• We expect that our partners will follow
TSRC's Partner Code of Conduct (PCC),
including the categories of environment,
occupational safety and health, human rights/
ethics and labor policies, and ensure that the
products and services provided comply with allnational and other applicable laws and regulations.

65

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental
4. Social
Appendix• Suppliers of Raw Materials
TSRC's selection standards for raw materials suppliers consist of three indicators—quality of raw materials, none of hazardous substances, and corporate social responsibility. We require suppliers
to meet the highest standards for quality, environment, and social responsibility. TSRC strictly inspects the quality of raw materials. The R&D department reviews raw materials and products provided
by suppliers, ensuring the source of raw materials is stable, and the quality meets TSRC's high standards. All new raw materials suppliers must sign the Hazardous Substances Free (HSF) or provide
a statement verifying that raw materials and products do not contain any hazardous substances and are safe. Suppliers must pass the screening standards of raw materials quality and none of thehazardous substances before entering the trial production phase. Once suppliers enter the trial phase, TSRC conducts actual tests to ensure that raw materials meet our process requirements. Afterthe trial phase, suppliers must complete the CSR evaluation form, sign the Supplier Code of Conduct and complete the safety ability evaluation to become a qualified supplier of TSRC.

Raw Materials Supplier Selection Procedure ／• Step 1
New raw
materials
suppliers join

• Step 2
Suppliers provide
specifications
for raw materials
and products• Step 3
TSRC verifies
that supplierspass the review
of raw materials
specifications• Step 4
Suppliers sign
the HSF• Step 5
TSRC verifies
that raw materials
passes the trial• Step 6
Suppliers fill out
the CSR evaluation
form and sign the
Supplier Code of
Conduct• Step 7
Become aqualified raw
materials
supplier• Suppliers of Contract
For contractors and general vendors, TSRC selects suppliers based on three principles—service performance, professional abilities, and corporate social responsibility. TSRC requires suppliers toprovide their previous performance to verify suppliers' abilities to provide services. We then inspect suppliers' professional abilities based on whether or not they have obtained related ISO certificates.
After verification, the supplier must complete the safety ability evaluation, fill out the corporate social responsibility evaluation form, and sign the Supplier Code of Conduct before becoming animportant partner of TSRC.

Contract Supplier Selection Procedure ／• Step 1
New contract
supplier joins• Step 2
Supplier service
performance andability verification• Step 3
Verify that the
supplier has
related abilities• Step 4
Suppliers fill out
the CSR evaluation
form and sign the
Supplier Code of
Conduct• Step 5
Become a qualified
contract supplier,general supplier66

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies

2021
Sustainability Report

Supplier Evaluation System
TSRC attaches importance to suppliers’ products and services with stable quality, including no

submit improvement results within a specific period to meet C-grade requirements. If suppliers do

hazardous substances and a rate of on-time delivery. We monitor the management and performancenot complete the improvement within a certain period, they will be unqualified and blacklisted. Gradeof suppliers in human rights, safety and health, environmental impact, Code of Ethics, and social

E is for unacceptable vendors that are deemed unqualified suppliers after evaluation.

impact. We evaluate our suppliers at each site on an annual basis to ensure the actual implementation
status of suppliers meets our strict standards and requirements. The evaluations are mainly in the formof on-site audits. For suppliers in Europe and America, TSRC may conduct a documentary audit due
to considering labor and transportation costs and the distance making on-site audits inconvenient.

TSRC evaluated a total of 123 suppliers in 2021. The audit included 10 raw materials suppliersof the Kaohsiung plant and Gangshan plant, 30 suppliers of Shen Hua Chemical, 21 suppliers ofShanghai Industrial, 12 suppliers of Nantong Industrial, 4 suppliers of TSRC-UBE, 43 suppliers ofTSRC(Vietnam), and 3 suppliers of TSRC Specialty Materials LLC, in which on-site audits were

2.3 Strengthen Innovation
Momentum

Documentary audits may be conducted if sites are in the event of force majeure, such as a pandemic.

2.4 Increasing theResilience of Operations

The evaluation results are divided into five grades. Grade A is for outstanding suppliers without any

suppliers were rated as Grade A, accounting for 38.21% of all suppliers evaluated; 37 suppliers

flaws. Grade B is for reliable suppliers with minor deficiencies that have been immediately improved.

were rated as Grade B, accounting for 30.08% of all suppliers evaluated; 32 suppliers were

Grade C is for qualified partners that are requested to provide improvement measures for significant

rated as Grade C, accounting for 26.01% of all suppliers evaluated; 7 suppliers were rated as

deficiencies. Grade D is for conditionally qualified vendors. TSRC will require the D-grade vendors to

Grade D, accounting for 5.69% of all suppliers evaluated.

and Supply Chain

3. Environmental

conducted for 15 suppliers and documentary audits were conducted for remaining suppliers. 47

4. Social
Appendix

Grade A

Grade B

Grade C

Grade D

Grade E• Outstanding
Vendor• No deﬁciencies• Reliable Vendor• Has minor deﬁciencies
that were immediately
improved• Qualiﬁed Vendor• Request the vendor reply
improvement measures
for major deﬁciencies• Conditionally qualiﬁed vendor• The vendor must submit improvement results andmeet Grade C requirements within the speciﬁedtime period. Becomes an unqualiﬁed vendor if
improvements are not completed within the time limit• Unacceptable vendor• Deemed an unqualiﬁedvendor after evaluation

2021 Supplier Audit Method ／TSRC Specialty
Materials LLC

On-site Audit

3

TSRC (Vietnam)

Documentary Audit12.20%

21
4

TSRC-UBE
Nantong Industrial

9

3
30

Shen Hua Chemical(includes Kaohsiung
Factory, Gangshan
Factory)

On-site Audit

43

Shanghai Industrial

TSRC Corporation

Documentary Audit

The Percentage of the Overall Audited
Suppliers in 2021 ／2887.80%

67

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

2021 Supplier Audit Result ／TSRC Specialty
Materials LLC

Grade A

1

Grade B

Grade C

Grade D

18
2

4. Social

TSRC Corporation(includes Kaohsiung
Factory, Gangshan
Factory)

Grade A

Grade B

Grade C

Grade D

Grade E53

126.02%

38.21%

2
4

8

Nantong Industrial
Shen Hua Chemical

Grade E36

Shanghai Industrial
TSRC-UBEThe Percentage of the Overall Audited
Suppliers in 2021 ／
5.69%

TSRC (Vietnam)

3. Environmental

Appendix2

2021
Sustainability Report

1

22
8

7

30.08%

2

2.4.3 Green Procurement and Local Procurement
TSRC is actively implementing green procurement, prioritizes the purchase of products with theenvironmental protection label and energy label, supports reuse and circular economy throughthe rent-to-own model, and takes action to promote green manufacturing and eco-friendly
products. TSRC Corporation's (including Kaohsiung factory, Gangshan factory, and the Global

Local Procurement Ratio of the TSRC Group (by Procurement Amount) ／Business Headquarters) green procurement amount reached NT$97.96 million in 2021, in

Local procurement

which the amount for leased metal boxes was NT$94.78 million, and the procurement amountof energy saving products, such as highly efficient motors, inverters, energy-efficient lighting,energy-conservation certified air-conditioners, computer peripherals and consumables, etc.,

Overseas procurement

2019

74%

26%

2020

75%

25%

was NT$3.18 million. The green procurement amount of subsidiary Nantong Industrial was RMB
54,160, with mainly the purchase of energy-saving refrigerators, lights, copy machine, printers,
and inverters.
TSRC is actively reducing the carbon footprint of its value chain activities and has converted
our supplier management into e-commerce to reduce paper use. Over 90% of suppliers use

81%

2021

19%

the online supplier management platform. TSRC also actively supports local procurement byprocuring the primary raw material butadiene and other chemical raw materials (e.g. potassiumNote:hydroxide) locally. The transportation of materials is mainly through pipelines to ensure the1. "Local procurement" in this table refers to procurement in the country of the business sites.

safety of chemical materials and reduce air pollution and GHG emissions from tank cars. Local
procurement by the TSRC Group accounted for 81% of the total procurement amount in 2021.

2. The business locations in this table has the same boundaries as this report.

68

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
2.1 Strengthen Corporate
Governance
2.2 Integrate Sustainability
and Business Strategies
2.3 Strengthen Innovation
Momentum2.4 Increasing theResilience of Operations
and Supply Chain

3. Environmental
4. Social
Appendix

2.4.4 Looking Forward
In the future, TSRC will continue to dedicate its efforts to increasing the resilience of its value chain. We will revise supplier-related policies and procedures and strengthen
the supplier evaluation mechanism to achieve ESG strategic goals. We expect to complete the first phase of ESG evaluation in 2022 and will also integrate risk
management concepts into the supplier management system. We will identify the ESG risks of different suppliers and divide suppliers by risk level so that supplier ESG
evaluation can be implemented in the supplier selection system.
TSRC has committed to joint carbon reduction with suppliers. We plan to support the GHG emissions reduction of our top 20 suppliers in 2023 in terms of procurement
amount. We aim to have all suppliers have GHG reduction targets and action plans by 2025, and the GHG reduction measures of suppliers will be included in our
supplier selection standards. Furthermore, we will continue to search for local suppliers of renewable raw materials and improve the local procurement ratio of eachproduction location to lower the value chain's carbon footprint quickly. We aim to make fundamental contributions to the mitigation of climate change.
In the future, we will comprehensively understand the potential impact of value chain partners' operations on society and the environment. We will further work with
suppliers to promote GHG reduction, value chain connection, and value sharing. We shoulder greater social and environmental responsibility while strengthening theresilience of our supply chain.

2021
Sustainability Report3.1 Towards Carbon Neutrality Operation
3.2 Reduction of Product Carbon Footprint
3.3 Develop Model of Circular Economy
3.4 Water Resource Optimization
3.5 Environmental Management

3. Environmental
In response to the international trend of carbon reduction and the pressure of energy and resource shortages,
TSRC cherishes the Earth's resources and has set active carbon reduction targets to achieve carbon
neutrality. We accelerate renewable energy usage, water recycling, and the use of renewable materials. We
also develop products and services to help customers reduce their energy and resource use and jointly
engage with all partners along the value chain for green innovation in chemical industry.

Carbon emission per unit product in 2021
decreased by 4.67% compared with 2020

Carbon emission per unit productdecreased

4.67%

Water use per unit product in 2021 decreasedby 7.63% compared with 2020

Unit water consumption decreased

7.63%

Waste generated per unit product in 2021
decreased 14.32% compared with 2020

Waste generated per unit productdecreased

14.32%

70

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation

Carbon emissions per unit product

1.20
1.15

Unit: metric tons CO2e/metric tons

Carbon emissions per unit revenue

0.026

1.20
Carbon emission per unit product decreased
by 4.67% (YoY) compared with 2020)

1.10

3.3 Develop Model of
Circular Economy

1.05

3.4 Water Resource
Optimization

1.00

3.5 Environmental
Management

0.95

0.016

0

0

4. Social
Appendix

1.07

2020

Water consumption per unit product

11.00

2021

Unit: metric tons/metric tons production

11.24

11.25

0.021

0.018

Water use intensity per unit product decreasedby 7.63% (YoY) compared with 2020

11.50

0.022

0.023

0.020

1.02

2019

Carbon emission per unit revenue decreased
by 24.87% (YoY) compared with 2020

0.024

3.2 Reduction of Product
Carbon Footprint

Unit: metric tons CO2e/NT$1,000

0.017

2019

9.00

2021

Unit: m etric tons/thousands ofmetric tons production

Waste generated per unit productWaste generated per unit product in 2021
decreased 14.32% (YoY) compared with 2020

8.50

10.97

2020

8.17

8.00

10.75

7.50

10.50

7.00

10.38

10.25
0

7.31
7.00

6.50
0

2019

2020

2021

2019

2020

2021

2021
Sustainability Report

71

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

2021
Sustainability Report

3. Environmental

1. About TSRC
2. Governance

Climate strategy and GHG emissions

Material topic

3. Environmental
3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization

Corresponding
chapter

3.1 Towards Carbon Neutrality Operation

Management
purposeClimate change is an emerging risk for TSRC but is also a critical opportunity for transition. TSRC's products are sold worldwide and have extensive applications
that have profoundly impacted consumers’ daily life and healthcare. TSRC supports global initiatives for net-zero and has adopted strategies to implement green
process technologies and improve energy and resource efficiency. We aim to enlarge the use of renewable energy and renewable materials to exert our influenceon climate change.

3.5 Environmental
Management

4. Social
Appendix

Management
approach• Facilitate low-carbon innovation in the manufacturing process and reduce energy consumption in all stages, including product research and development,
manufacturing, processing, and others• Adopt renewable energy to accelerate carbon reduction• Invest in the circular economy and use recycled raw materials

Assessment
mechanism

Mid and long-term
management goals• TSRC Group's Scope 1+2 GHG emissions gradually decrease• Carbon emission intensity and energy intensity (per unit product) continue to decrease• Renewable energy accounts for an increasing percentage of total electricity consumption• Support global carbon reduction target to achieve carbon neutrality• Increase the ratio of renewable energy usage• Objective: Support global carbon reduction target to achieve carbon neutrality
Implementation status:

1. Carbon emission intensity was 1.02 metric tons CO2e/metric ton of product, reducing 4.67% compared to 20202021 Achievementof KPI

2. The Kaohsiung factory adopted a heat-recoverable dryer in 2021 and activated the combined heat and power equipment to reduce GHG emissions
3. Shen Hua Chemical Industrial Co., Ltd. completed upgrading the circulating water system with lifting pumps to reduce the electricity consumption in the
manufacturing process• Objective: Increase the ratio of renewable energy usage
Implementation status: Completed the evaluation of installing renewable energy facilities in the Kaohsiung factory and accelerated the feasibility assessment of
renewable energy in other sites

72

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental

Material topic
Corresponding
chapter

3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy

Management
purpose3.4 Water Resource
Optimization
3.5 Environmental
Management

4. Social

Management
approach

Appendix

Waste and hazardous substance management
3.3 Develop Model of Circular Economy
To implement the circular economy concept with the lifecycle and the mindset of considering thewhole value chain, replace hazardous materials with non-hazardous ones whenever possible fromthe product development and design phase, and reduce the amount of waste generated.
Actively explore renewable materials and reduce the amount of hazardous waste generated
from raw materials input. Actively communicate and cooperate with customers, implement
the product reverse logistics recycling plan and product formula adjustment plan, and reduce
the amount of waste generated in downstream. Increase the recyclability of the end product.
• Actively develop sources of renewable materials and reduce the generation of hazardous
wastes from raw materials input• Cooperate with customers to optimize product formulations and logistics, reduce thegeneration of waste from the downstream, and increase the recyclability of products

Water Resource Management
3.4 Water Resource Optimization

To actively respond to water resource risks and reduce the potential
negative environmental impact of operating activities when using andemission; to implement water conservation measures, increase water
recycling at factories, and develop water recycling technologies for acomprehensive water circulation management.
• Strengthen the eﬀective use of water resources in factories, increase
process wastewater reuse and the recovery and reuse of condensate water• Build reclaimed water facilities to reduce possible negative environmental
impacts on water-stressed areas• Carefully handle wastewater discharge to reduce potential negativeeﬀects on the ecosystem

Assessment
mechanism• Total weight of waste generated each year

• Wastewater recycling of total wastewater• The recycle rate of waste generated each year

• Recycling water of total water consumption

Mid andlong-term
management
goals• Continue to adjust process formulas and parameters and reduce the amount of hazardousand general waste generated by operations• Increase the ratio of wastewater recycling• Continue to develop products that use renewable materials and reduce the use of
petrochemical materials• Objective: Continue to adjust process formulas and parameters, and reduce theamount of hazardous and general waste generated by operations
Implementation status:
1. The total weight of general industrial waste generated in 2021 was 3,937.77 metrictons, decreasing 323.48 metric tons, 7.7% compared with 2020

2021
Achievementof KPI

2. The total weight of hazardous industrial waste recycled in 2021 was 1,186.75 metrictons, increasing 48.71% compared with 2020
3. The total weight of hazardous industrial waste generated in 2021 was 1,346 metrictons, increasing 581 metric tons, 30.15% compared with 2020

• Objective: Continue to develop products with renewable materials, and reduce theuse of petrochemical materials
Implementation status: Conducted an assessment on suppliers for renewable materials,
investigate the feasibility of materials supply channels, and formulate mid-term and longterm procurement plans• Increase the use of recycled water to reduce the consumption ofnatural resources• Objective: Increase the ratio of wastewater recycling for circular use
Implementation status: Wastewater recycling to 22.6% of TSRC
Group's total wastewater• Objective: Increase the use of recycled water to reduce theconsumption of natural resources
Implementation status: Completed the evaluation of installing recycledwater equipment and procurement of recycled water

73

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

3.1 Towards Carbon Neutrality Operation
3.1.1 Management Approach

2. GovernanceThe climate crisis has been in progress in 2021. According to Intergovernmental Panel on

3. Environmental

Climate Change (IPCC) report, climate change has caused several extreme weather events

3.2 Reduction of Product
Carbon Footprint

and reduce GHG emissions. In the manufacturing process, we will reduce energy consumption

worldwide, and Earth's surface will continue to become hotter until the middle of this century
at least. Unless carbon dioxide and other GHG emissions are significantly reduced within a few
decades, global warming will surpass 2℃ in the 21st century.
Facing the severe challenge of climate change, TSRC will continue to review and examine the

3.4 Water Resource
Optimizationand carbon reduction with the vision to achieve carbon neutrality. TSRC has adopted

4. Social
Appendix

per unit of production through the innovation of green processes. Furthermore, TSRC will
accelerate investments in process optimization. Subsidiaries in mainland China, including
Shen Hua Chemical Industrial, TSRC (Nantong) Industrial, and TSRC-UBE (Nantong) Chemical
Industrial, have suspended the use of boilers from 2020, which has significantly reduced direct
carbon emissions (Scope 1). Considering the geographic limitations and overall carbon reduction
benefits of factories in Taiwan and the United States, TSRC prioritizes the improvement of

3.3 Develop Model of
Circular Economy

3.5 Environmental
Managementof sustainability and reduce environmental impact. TSRC has developed easy-to-process
products that will help customers reduce unnecessary energy consumption in their processes

1. About TSRC

3.1 Towards Carbon
Neutrality Operation

2021
Sustainability Reportbalance between industry and the environment and dedicate our efforts to energy conservationinternational environmental management systems based on our energy policy—to comply
with laws and regulations, implement energy inventory, use high-efficient equipment, improveenergy-saving performance, constantly make improvements, and reduce GHG emissions.
Besides establishing standard procedures for GHG inventory complying with ISO14064-1, we
also implemented ISO 50001 Energy Management Systems. The ESG Steering Committee set
carbon reduction targets and formulated action plans to improve energy efficiency management
and build resilience against climate change.

energy efficiency while increasing the use of renewable energy. We are also searching for ways
to reduce Scope 1 emissions (such as reducing natural gas consumption) and effectively reduce
our overall carbon emission to improve our carbon reduction.

Direction for Carbon Reduction• Direction 1: Innovation for low carbon processes
TSRC dedicates its effort to energy saving and carbon reduction. We view energy conservation
as critical target when designing and manufacturing product. We plan to calculate productcarbon footprint at each production site and will inspect high-energy consumption equipment.
All factories will replace energy-consuming equipment with energy-saving devices gradually.

3.1.2 Reduce Carbon Emissions

Green process technologies, such as the stripping heat exchange vapor recovery technology,
will be implemented.

Carbon Reduction Target

The Kaohsiung factory adopted heat-recoverable drying machines and cogeneration equipment

TSRC sets short-term (2023), mid-term (2025), and long-term (2030) carbon reduction targets
with the vision to achieve carbon neutrality in response to global climate action. We plan tocontinue developing green processing technologies and renewable energy, improve processes
and equipment efficiency, and implement carbon reduction measures.

in 2021, increasing the overall thermal efficiency of processes. It also replaced old motors to
reduce GHG emissions of energy use. Shen Hua Chemical Industrial completed the modificationof the water circulation system with lift pumps, leading to the result that the ammonia condenser
can lower the temperature by 2°C during the summer, and the electricity consumption was
reduced by 4%. Shen Hua Chemical Industrial also changed non-inverter and high-energy-

As the leader of the rubber industry, TSRC is focusing on low-carbon transition and prioritizes

consumption motors into inverter motors in 2021 to reduce carbon emissions. TSRC (Nantong)

the reduction of Scope 1 and Scope 2 emissions, planning climate strategies while looking into

Industrial and TSRC-UBE (Nantong) Chemical Industrial added filters in low voltage segments ofcarbon offset plans. In terms of products, TSRC continues to develop products with the feature

their SEBS production line to lower their energy use in 2021.

Base year
2021
Reduce total carbon
emissions(Scope 1 + Scope 2)2023 Target

2025 Target

2030 Target

Reduction by 5%
versus base year

Reduction by 10%
versus base year

Reduction by 22.5%
versus base year

74

About this Report
Letter from the CEO
Stories for Sustainability• Direction 2: Development of renewable energy

ESG Strategy

TSRC will continue to improve energy efficiency and reduce the energy consumption of

1. About TSRC

processing at production sites to achieve our carbon reduction targets. We will develop

2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation

renewable energy to support our carbon reduction actions. TSRC plans and evaluates theinstallation of solar panels, renewable energy purchase agreements, renewable energy
certificates, or other approaches to enlarge renewable energy usage at production sites in
Taiwan and mainland China. We aim that the renewable energy use to 5% of total electricity
consumption in 2023, 10% in 2025, and 30% in 2030 to reduce our carbon emissions.

3.2 Reduction of Product
Carbon Footprint

In 2021, in response to Taiwan's "Renewable Energy Development Act" and "Regulations for3.3 Develop Model of
Circular Economy

Users Above a Certain Contract Capacity", TSRC Kaohsiung factory has planned to complete

the Management of Setting up Renewable Energy Power Generation Equipment of Power3.4 Water Resource
Optimization

the installation of solar power generation equipment within three years. TSRC's subsidiaries in

3.5 Environmental
Management

prioritize self-generation and use. Only when excess electricity occurs will it be provided to the

4. Social
Appendix

mainland China have completed the assessment of the installation of solar panels in 2021. We
local grid. The self-generated electricity will replace coal-fired electricity purchased from thelocal power grid and reduce TSRC's indirect carbon emissions.

• Direction 3: Application of renewable materials

In 2021, the GHG emissions of TSRC global sites were 571,197 metric tons, slightly increasing by
2.13% compared with the past year. This was mainly attributable to the newly added productionlines of Nantong Industrial and the deactivation of boilers by Nantong Industrial and TSRC-UBE
to increase indirect energy usage. TSRC has taken measures by inventorying the high-energyconsuming equipment and arranging regular replacements to ensure that the long-term carbon
reduction target will be achieved.
TSRC's revenue and production volume in 2021 reached the highest point over the past
three years, but the carbon emission intensity was at the lowest, showing that TSRC's GHG
management strategy in recent years has achieved significant results. In 2021, due to the phaseout of coal-fired boilers in Nantong Industrial and the replacement of fuel oil with natural gas inKaohsiung factory, the scope 1 emissions of TSRC Group were 115,600 metric tons, decrease
50.29% compared to the previous year. Meanwhile, the carbon emission intensity per unit
product in 2021 was 1.02 (tons CO2e/ton of product), decrease 4.67% compared to the previous
year. The carbon emission intensity has continued declining for the third consecutive year since2019, decreasing an average of 7.7% each year. This year’s carbon emission intensity per unit ofrevenue was 0.018 (tons CO2e/NTDK), decreasing 24.58% compared to the previous year.

Scope 1 Emissions in 2021 under the Emissions-Limiting Regulations ／Unit: Metric tons CO2eWith the international net-zero initiatives, renewable materials will be the key to future changes.
This has triggered TSRC to step up its efforts to find renewable materials for the circular
economy. TSRC cherishes natural resources and actively reduce the consumption of highcarbon-intense raw materials such as petrochemical materials. We are gradually developing
sources of renewable materials with supply chain partners and customers and continue to
conduct product evaluation and testing for renewable materials, utilizing our core competencies
to create a low-carbon circular economy business model.

The GHG Inventory
TSRC has adopted ISO 14064-1 Greenhouse Gas Inventories Standard at our major sites.
Among all sites, the Kaohsiung factory is the first batch of industries requested by thecompetent authority to report GHG emissions; thus, since 2011, the factory has compliedwith the regulations to conduct the inventory. Since 2015, the Factory has conducted theinventory and commissioning external organizations to verify annually. The data is registeredon the reporting platform required by the competent authority. Subsidiaries in mainland China,

2021
Sustainability Report

Emissions under theemissions-limiting
regulations

Emission not underemissions-limiting regulated
but voluntary disclosure

Kaohsiung Factory,
Shen Hua Chemical,
Nantong Industrial,
TSRC-UBE

Global Business Headquarters,
Gangshan Factory, Shanghai Industrial,
TSRC (Vietnam) Company Limited,
TSRC Specialty Materials LLC

Total

Scope 1

101,369.9

14,230.1

115,600

As a percentage of
TSRC Group's
Scope 1 emissions

87.69%

12.31%

100%

Scope 2

409,110.2

46,486.8

455,597

Scope 1+2

510,480.1

60,716.9

571,197

including Shen Hua Chemical, Nantong Industrial, and TSRC-UBE, also report their annual GHG
inventory based on the “Report on Greenhouse Gas Emissions of Key Enterprises in Jiangsu
Province” and the requirements of the local authority. Regarding TSRC (Shanghai) Industries,
TSRC (Vietnam) Company Limited, and TSRC Specialty Materials LLC, these three subsidiaries
voluntarily conduct GHG inventories. TSRC plans to adopt ISO 14064-1:2018 at all sites andcomplete the external verification by the end of 2022.

Note: 1. Sites under the emissions-limiting regulations refer to sites that are required to report GHG emissions incomply with local laws. These sites include Kaohsiung factory, Shen Hua Chemical, Nantong Industrial, andTSRC-UBE.
2. The GHG emissions are calculated by multiplying activity data with emission factors and GWP values, inwhich the emission factors is referred to Taiwan Environmental Protection Administration GHG Emission
Factor Management Table Version 6.0.4, and the GWP value is referred to the IPCC AR5 Report.

75

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Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

GHG Emissions by Each Site and Carbon Emission Intensity Per Unit of Production in the Past Three Years ／3. Environmental

3.2 Reduction of Product
Carbon Footprint2019

3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization

NantongIndustrial

TSRC-UBE

ShanghaiIndustrial

Scope 1

83,081

4,365

152,690

2,153

69

Scope 2

79,61592,85443,731

74,439

Scope 1+2

162,696

97,219196,421

Production volume (metric tons)

169,431

151,831

Emission intensity per unit ofproduction (Metric tons CO2e/

0.96

Scope 1

4. Social
2020

Total

0

20,100262,458

3,834

040,989335,462

76,5923,903

061,089597,920

57,51954,956

12,785050,308496,854

0.64

3.41

1.39

0.31

0

1.21

1.20

89,910

4,785

52,00068,87427

0

16,935232,531

Scope 263,548106,322

91,22422,3542,329

040,988326,765

Scope 1+2

153,458

111,107

143,224

91,2282,356

057,923559,296

Production volume (metric tons)

173,773

170,426

55,56063,036

12,214046,521

521,529

Emission intensity per unit ofproduction (Metric tons CO2e/

0.88

0.65

2.58

1.45

0.19

0

1.25

1.07

Scope 189,937

5,467

3,959

2,033

33

5.5

14,165

115,600

Scope 2

70,275

106,677

150,590

83,046

2,893

1,937

40,179455,597

Scope 1+2

160,212112,143

154,550

85,080

2,926

1,943

54,344571,197

Production volume (metric tons)

194,194

170,988

73,81565,2859,934

047,921

562,138

Emission intensity per unit ofproduction (Metric tons CO2e/

0.83

0.66

2.09

1.30

0.29

0

1.13

1.02

metric tons of production)

2021

Unit: Metric tons CO2e

TSRC Specialty
Materials LLC

metric tons of production)

3.5 Environmental
Management

AppendixShen Hua
ChemicalIncludes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

2. Governance
3.1 Towards Carbon
Neutrality Operation

TSRC
Corporation

2021
Sustainability Report

metric tons of production)

TSRC (Vietnam)
Company Limited

Note: 1. The GHG emissions are calculated by multiplying activity data with emission factors and GWP values, in which the emission factors is referred to Taiwan Environmental Protection Administration GHG Emission Factor Management
Table Version 6.0.4, and the GWP value is referred to the IPCC AR5 Report.
2. The GHG inventory covers seven types of GHGs (CO2, CH4, N2O, HFCs, PFCs, SF6, NF3), but TSRC's operating activities do not generate PFCs, SF6, and NF3.
3. The GHG inventory adopts the control approach. The status of third-party verification of all sites is explained as follows:a. T he 2019-2021 GHG inventory in Kaohsiung was conducted based on the ISO14064-1:2006 Standard with the base year of 2005 and verified by a third party. To respond to the revision of ISO14064-1:2006 to ISO14064-1:2018,
the GHG inventory will be re-conducted based on the new version of the Standard, and the base year will be revised to 2021. The inventory will be verified by a third party by the end of 2022.
b. The 2019-2021 GHG inventory in Shen Hua Chemical, Nantong Industrial, and TSRC-UBE was conducted and reported in comply with the “Report on GHG Emissions of Key Enterprises in Jiangsu Province”. To respond to therevision of ISO14064-1:2006 to ISO14064-1:2018, the GHG inventory will be re-conducted based on the new version of the Standard, and the base year will be revised to 2021. The inventory will be verified by a third party by 2022.
c. The 2019-2021 GHG inventory in Global Business Headquarters, Gangshan factory, TSRC (Shanghai) Industries, TSRC (Vietnam) Company Limited, TSRC Specialty Materials LLC, was voluntarily conducted based on the
ISO14064-1:2006 Standard. To respond to the revision of ISO14064-1:2006 to ISO14064-1:2018, the GHG inventory will be re-conducted according to the new version of the Standard, and the base year will be revised to 2021.
The inventory will be verified by a third party by 2022.
4. The 2020 GHG inventory and the emission intensity per unit of production are restated due to changes in data and parameters.

76

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation

GHG Emissions of TSRC Group ／3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization
3.5 Environmental
Management597,920

Scope 1

571,197

1.3
562,1381.20

550,000

4. Social
Appendix

Emission intensity per unit of production

600,000
455,597

326,765

335,462500,000

Emission Intensity Per Unit of Production of TSRC Group ／Production volume559,296

600,000

Scope 2

1.2
521,529400,000
500,000

300,000
262,458

200,000

Unit: metric tons CO2e

1.1

1.07
1.02

232,531

100,000

0496,854450,000

1.0

00115,600

2019

2020

2021

Note: 1. The GHG emissions are calculated by multiplying activity data with emission factors and GWP values, inwhich the emission factors is referred to Taiwan Environmental Protection Administration GHG Emission
Factor Management Table Version 6.0.4, and the GWP value is referred to the IPCC AR5 Report.
2. The GHG inventory covers seven types of GHGs (CO2, CH4, N2O, HFCs, PFCs, SF6, NF3), but TSRC'soperating activities do not generate PFCs, SF6, and NF3.
3. T he 2020 GHG inventory and the emission intensity per unit of production are restated due tochanges in data and parameters.

Unit: metric tons

2019

2020

2021

Unit: Metric tons
CO2e/metric tons of
production

Note: 1. The GHG emissions are calculated by multiplying activity data with emission factors and GWP values, inwhich the emission factors is referred to Taiwan Environmental Protection Administration GHG Emission
Factor Management Table Version 6.0.4, and the GWP value is referred to the IPCC AR5 Report.
2. T he GHG inventory covers seven types of GHGs (CO2, CH4, N2O, HFCs, PFCs, SF6, NF3), but TSRC'soperating activities do not generate PFCs, SF6, and NF3.
3. The 2020 GHG inventory and the emission intensity per unit of production are restated due to changes indata and parameters.

77

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization
3.5 Environmental
Management

3.1.3 Energy Management
The type of energy used by TSRC's production sites mainly includes naturalgas, liquefied petroleum gas, diesel, steam, and electricity. TSRC no longer

TSRC Group's Energy Consumption in the Past Three Years ／uses coal after phasing-out two coal-fired boilers in Nantong Industrial in the2019

end of 2020. The Kaohsiung factory completed the adjustment of boiler fuel1,179,652,248

0Fuel oil

22,804,398

22,762,089

0Diesel infactory area

9,551,193

14,775,473

5,283,020

Direct Energy
Consumption

Natural gas

1,685,903,497

1,621,896,169

1,822,886,213(Non-renewableenergy)Liquefiedpetroleum gas

6,393,279

4,161,604

1,824,435

Gasoline

1,174,120

1,070,078

1,415,941

Recycledbutadiene

47,540,131

53,400,506

59,917,153

Subtotal

3,283,886,491

2,897,718,167

1,891,326,762

Purchased
electricity

869,032,800

921,085,200

975,171,600

Purchased
steam

1,530,006,440

1,402,533,400

2,290,025,727

Subtotal

2,399,039,240

2,323,618,600

3,265,197,327

Total energy consumption

5,682,925,731

5,221,336,767

5,156,524,089

15%

18%

19%

no longer uses fuel oil as well. At the same time, in 2021, we began using
waste gas and waste for energy recovery, including flare and VOCs. We also
recycle butadiene and styrene, not only cutting GHG emissions from theuse of primary petrochemical fuel but also reducing the potential negative

TSRC adopts the ISO 50001 Energy Management Systems to periodically

4. Socialanalyze energy use and consumption of main production sites. We also

Appendix

consumption areas. This will improve our energy efficiency and reduce

established energy performance indicators to monitor major energy
energy consumption, and we will continue to improve production processes
and replace equipment to achieve energy management goals. In recent
years, all subsidiaries have established ISO 50001 Energy Management
Systems to check performance in order to improve the energy efficiency offactories. Among them, the Kaohsiung factory has received the ISO 50001
certificate. For high energy consumption sites such as the Kaohsiung factoryand Nantong Industrial, we will continue to review energy performancework plans, implement energy conservation measures, and regularly review
operation outcomes.
TSRC total energy consumption in 2021 was 5,156,524,089 million joules,
decreasing 1.24% compared to 2020. TSRC's energy intensity per unit ofproduction has declined for three consecutive years since 2019, reaching
9,173 million joules per metric ton of production in 2021, decreasing 8.38%
compared with the previous year.

2021

2020

1,510,519,874

Black coalin the same year and completely replaced oil with natural gas. The groupenvironmental impact of air pollutants released in the manufacturing process.

Unit: Million Joule

Indirect Energy
Consumption

The percentage of grid electricity
to total energy consumption

Note: 1. Total energy consumption of the organization is calculated as Direct energy (non-renewable energy) consumption + Consumptionof purchased electricity and steam.
2. C alorific value conversion factor used for each type of energy: Black coal 5,600 kcal/kg, fuel oil 9,600 kcal/L, diesel 8,400 kcal/L,
natural gas 8,000 kcal/m3, liquefied petroleum gas 6,635 kcal/kg, gasoline 7,800 kcal/L, and recycled butadiene 7,800 kcal/L.
3. All factories of the TSRC no longer use coals and fuel oil from 2021.
4. The 2019 and 2020 data are restated due to changes in data and parameters.
5. The data is calculated with higher heating values (HHV).

78

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Letter from the CEO
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ESG Strategy

1. About TSRC

Energy Purchased by Each Site in the Past Three Years ／Includes Global Business Headquarter,
Gangshan , and Kaohsiung factory

Consumption of purchased electricity

2. Governance3.3 Develop Model of
Circular Economy

3.5 Environmental
Management

TSRC Specialty
Materials LLC

Total

0

241,398

72,537

169,983

54,883201,3690

178,2220676,994

Electricity

389,678,400

165,682,800

143,715,600

73,864,800

16,740,000

79,351,200

0869,032,800

Steam

163,933,620

384,161,580

124,035,580

455,093,940

0402,781,720

0

1,530,006,440

Electricity + Steam

553,612,020

549,844,380

267,751,180

528,958,740

16,740,000

482,132,920

0

2,399,039,240

Production volume (metric tons)

169,455

151,831

57,51954,956

12,78550,3080496,854

Indirect energy intensity per unit ofproduction (Million Joule/metric tons)

3,267

3,621

4,655

9,625

1,309

9,584

0

4,828

105,790

53,46749,993

21,868

4,576

20,1630

255,857

49,068

192,784

176,435

22,935

0

179,3680620,590

Electricity

380,844,000

192,481,200

179,974,800

78,724,800

16,473,600

72,586,800

0921,085,200

Steam

110,893,680

435,691,840

398,743,213

51,832,987

0405,371,680

0

1,402,533,400

Electricity + Steam

491,737,680

628,173,040

578,718,013

130,557,787

16,473,600

477,958,480

02,323,618,600

Production volume (metric tons)

173,773

170,426

55,56063,036

12,214

46,521

0521,529

Indirect energy intensity per unit ofproduction (Million Joule/metric tons)

2,830

3,686

10,416

2,071

1,349

10,2740

4,455

108,106

54,05160,513

21,338

4,170

20,4132,290

270,881

59,025

192,407392,510230,1900139,15401,013,286

Electricity

389,181,600

194,583,600

217,846,800

76,816,800

15,012,000

73,486,800

8,244,000

975,171,600

Steam

133,396,500

434,839,436

887,072,600

520,229,400

0314,487,791

0

2,290,025,727

Electricity + Steam

522,578,100

629,423,036

1,104,919,400

597,046,200

15,012,000

387,974,591

8,244,000

3,265,197,327

Production volume (metric tons)

194,194

170,988

73,81565,285

9,934

47,921

0562,138

Indirect energy intensity per unit ofproduction (Million Joule/metric tons)

2,691

3,681

14,969

9,145

1,511

8,096

0

5,809

Total
consumptionof purchaseelectricity

Consumption of purchased steam(metric tons)

AppendixTotal
consumptionof purchaseelectricity(Million Joule)

Consumption of purchased electricity(thousands kWh)

Consumption of purchased steam(metric tons)

2021

TSRC (Vietnam)
Company Limited

22,042(thousands kWh)

2020

ShanghaiIndustrial

4,650

Consumption of purchased electricity

4. Social

TSRC-UBE

20,518(Million Joule)

3.4 Water Resource
Optimization

NantongIndustrial

39,921(metric tons)

2019

Shen Hua
Chemical

46,023

Consumption of purchased steam

3.1 Towards Carbon
Neutrality Operation

TSRC
Corporation

108,244(thousands kWh)

3. Environmental

3.2 Reduction of Product
Carbon Footprint

2021
Sustainability ReportTotal
consumptionof purchaseelectricity(Million Joule)Note: 1. 1 kWh = 1 Kilowatt-Hour, 1W = 1 J/S, 1,000 kWh = 1000kW*3600S/H = 3,600,000 KJ = 3,600 MJ. The heat absorption needed to vaporize a ton of water = 2,260,000 J/kg (vaporization heat of water) x 1,000 kg = 2,260,000,000 J = 2,260 MJ.
2. TSRC Specialty Materials LLC ware originally named Dexco Polymers L.P., and was renamed TSRC Specialty Materials LLC in 2021.
3. TSRC (Vietnam) Company Limited provided OEM services to TSRC's Gangshan factory in 2021, so it used energy with no production volume which was counted as part of TSRC Corporation.
4. The 2019 and 2020 data are restated due to changes in data and parameters.

79

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization
3.5 Environmental
Management

TSRC Group's Energy Consumption in the Past Three Years ／Direct Energy Consumption

6,000,000,000
5,000,000,000

Indirect Energy Consumption

replacement of process equipment to achieve the targets of carbon reduction, thesesites use electric transportation vehicles and LED lights in factory areas. Furthermore,

5,156,524,089

2,323,618,600

efficiency and reduce energy consumption. Besides low-carbon process innovation andwe have made major adjustments to energy selection, increased the ratio of process

3,265,197,327

gas recycling as fuel, and recycling butadiene and styrene as fuel, reduced the use of
petrochemical fuel and created a circular economy in factories.

4,000,000,000
Shen Hua Chemical recycling hot wastewater
for heating rubber latex

3,283,886,491

3,000,000,000

2,897,718,167

Shen Hua Chemical water circulation
system lift pump modification

2,000,000,000
1,891,326,762

1,000,000,000

4. Social
Appendix

TSRC's business locations continue to implement measures to improve energy

5,682,925,731

5,221,336,767
2,399,039,240

2021
Sustainability Report0

Unit: Million Joule

2019

2020

2021

Note: The 2019 and 2020 data are restated due to changes in data and parameters.

Energy Intensity Per Unit of Production of TSRC Group ／Production volume

600,000

500,000

12,00011,43810,012550,000

Energy intensity per unit of production

562,138

11,000521,529
496,854

10,0009,173

450,000

0

Unit: metric tons

Nantong Industrial and TSRC-UBE SEBSSIS Steam pipes replacement

2019

2020

2021

Note: The 2019 and 2020 data are restated due to changes in data and parameters.

9,000

0

Unit: Million Joule/metric ton of product80

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation

Key Energy Conservation Measures and Results of TSRC Business Locations in 2021 ／Location ofoperations

ShanghaiIndustrial

3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization
3.5 Environmental
Management

Shen Hua
Chemical

4. Social
Appendix

NantongIndustrial
TSRC-UBE

Energy conservation benefits (annual energy saving)

Key energy conservation measures• Replacing diesel forklifts with electric fork lifts• 224 GJ

• Replacing equipment with energy-saving electrical equipment• 1.17 GJ• Recycling hot wastewater for heating rubber latex• 3000 tons of steam per year

• Water circulation system lift pump modiﬁcation• 900,000 kWh per year

• Changing non-inverter motors with high energy consumption into inverter motors• 150,000 kWh per year

• Changing the pilot light for production equipment from liqueﬁed petroleum
gas to natural gas• 1172 GJ• Replaced the steam pipes for SEBS and SIS production lines from rock wool
to aluminum silicate wool to reduce thermal loss

• 8,790 GJ of thermal energy from steam

Note: Saved 40 tons of standard coal per year, and calculated using one ton of standard coal equal to 29.3 GJ

Note: Saved 300 tons of standard coal per year, and calculated using one ton of standard coal equal to 29.3 GJ

3.1.4 Looking Forward
TSRC actively responses to the global trend of net-zero and plans to reduce group GHG emissions in 2025
by 10%, with the long-term target of reducing emissions in 2030 by 22.5% based on the baseline of 2021.
TSRC not only continues to optimize processes and reduce energy intensity and carbon emission intensity
per unit product but also uses renewable energy on a large scale. We aim the use of renewable energy by
10% of total electricity consumption in 2025 and 30% in 2030. We will accelerate the installation of solar
power equipment in each factory, expand purchases of renewable energy certificates, and utilize energy
storage systems to stabilize energy dispatching in factories. We implement innovative process technologies
for SEBS products, comprehensively improve product production performance and reduce energy
consumption. We will continue to reduce the product carbon footprint. TSRC will actively explore supply
channels for renewable materials to aiming to increase the use of renewable materials by 5% of total raw
material procurements in 2025 and reduce the carbon footprint. We will gradually achieve group carbon
reduction targets at a steady pace.

81

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy

3.2 Reduction of Product Carbon Footprint
3.2.1 Management Approach
TSRC strives to develop green various products and offers customers high performance, high quality, and differentiated solutions with environmental benefits. TSRC's sustainable products are basedon the four core values—Reduce, Renewable, Recycle, and Replace. We adopt innovative R&D and energy conservation technologies in the production process with an emphasis on product safety,
reducing the negative environmental impact of the product lifecycle while assisting customers to achieve energy-saving targets and reducing GHG emissions.

3.4 Water Resource
Optimization
3.5 Environmental
Management

4. Social
Appendix

Core Values of TSRC Products (4R) ／• TSRC's products help customers reduceenergy use, reduce GHG emissions, reduce
the negative environmental impact, and makea positive contribution to the environment• Strive to reduce carbon emission intensity perunit of production

ReduceRecycle• Recycled or circular materials are used in
the production and operation process• Dedicate eﬀorts to increase therecyclability and circularity of products• Continue to reduce product carbon footprint

Replace• Renewable materials areused in the production

Renewable• Use eco-friendly chemicals that are harmless to theenvironment or human health to replace other hazardous
substances in the production and operation process• TSRC products can safely replace other products that havenegative environmental impacts

82

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

3.2.2 Green Products

1. About TSRC

Product Stewardship

2. Governance

TSRC highly focuses on the impact of products on the environment, human health, and

3. Environmental

safety in each stage of its life cycle. In the raw materials procurement phase, we emphasize

3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy

transportation safety by using underground pipelines, reducing chemical leakage and GHG
emissions from vehicles. In the R&D phase, we use superior technologies with patents andstrictly abide by international regulations regarding environmental and chemical substance safety• Conduct sampling inspection according to principles of CNS2779-Z4006• If an abnormality is discovered, the supplier is immediately asked toprovide an explanation and make improvements

manufacturing process, we use product safety management systems to assess and manage
the effects on health and safety in each phase of the product life cycle. TSRC discloses the

3.5 Environmental
Management

product, fully disclosing the components of chemicals, their physical and chemical properties,

Appendix

Raw materials
enter factory

management, reducing the potential environmental impact of the manufacturing process. In the

3.4 Water Resource
Optimization

4. Social

Product Quality Control Process ／Certificate of Analysis (COA) and Safety Data Sheet (SDS) to customers and the public of ourecological toxicity, and waste disposal method. This helps customers and the public better
understand TSRC products and ensures that products are reasonably and correctly used to

Factory raw
material
preparation• Monitor process• If an abnormality is discovered, components are adjusted on site
until sample analysis meets the required preparation speciﬁcations

minimizes the hazard to the environment and health.
TSRC strictly controls product quality to ensure that products not only meet international
standards and specifications but also even exceed regulatory requirements, protecting the• Take samples at ﬁxed times (continuous) or take samples by barrels(batch)health and safety of users and stakeholders. TSRC complies with ISO 9001: 2015 Quality
Management Systems. All products are required to pass quality testing and user safetyassessment through quality management procedures. Experts at each site inspect raw materials
according to standard procedures in the incoming raw materials phase. Professional personnel
sample products in the manufacturing process, notifying sales personnel of the condition ofPolymerization,
blending, andagglomeration

products if any non-conforming products are found. The sales personnel can sell these products
to customers that accept them after first notifying the customer of the quality situation. When

• If a quality abnormality is found, re-blend until it reaches standards.
• If the abnormality is too severe, then semi-ﬁnished products are
isolated and independently output as abnormal ﬁnished products.
The abnormal ﬁnished products are isolated and moved to the nonconforming products area.

a new production line begins, product quality testing is handled as a special case until quality
stabilizes, and then quality control personnel of each production site review quality data on anannual basis to ensure the quality of products.

• Samples are taken at ﬁxed intervals every 2 or 4 hours by barrel orbatch.

Finishedproduct
inspection• If an abnormality occurs and adjustments can be made, the ﬁnishedproducts are physically separated, labeled, and moved to therecycling area.
• If an abnormality occurs and adjustments cannot be made, theﬁnished products are deemed non-conforming products and physicallyseparated, labeled, and moved to the non-conforming area.

83

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization
3.5 Environmental
Management

4. Social
Appendix2021
Sustainability Report

Chemical Substance Management
TSRC upholds the principles of abiding by the law and protecting customers and consumers' interests andcomplies with Hazardous Substances Free (HSF), ensuring that all raw materials and products are in compliancewith the EU's Restriction of Hazardous Substances (RoHS) and provisions related to Substances of Very High
Concern (SVHC) in the Registration, Evaluation, Authorization and restriction of Chemicals (REACH). Furthermore,
TSRC follows the 12 Principles of Green Chemistry and reduces waste generation and environmental impact.

TSRC Chemical Management Process ／1

Evaluate the effect of RoHS, SVHC and REACH on products

The Kaohsiung factory has implemented QC 080000 Hazardous Substance Management Systems in 2011 andreceived certificates from a third-party. The Gangshan factory, Shen Hua Chemical Industrial, TSRC (Nantong)
Industrial, TSRC (Shanghai) Industries, TSRC-UBE, and TSRC Specialty Materials LLC follow the principle of QC
080000 to manage hazaroud substance. Kaohsiung factory, Gangshan factory, TSRC (Nantong) Industrial and2

Evaluate health, environmental, and physical hazards based on

3

Manage risks that are identified, including new product4

Regularly and irregularly monitor the compliance of products

5

Generate corresponding product compliance statements andproduct composition

Shen Hua Chemical Industrial use the Green Data Manager (GDM) System to assess and manage the chemical
substance database of each product, ensuring that products meet requirements of international regulations.
TSRC’s management for the GHS Category 1 and Category 2 Health and Environmental Hazardous substances(including toxicity, respiratory hazard, skin corrosion and environmental impact, etc.) used in the production isdevelopment and the use of substitute materials

explained as follows.
• TSRC does not produce GHS Category 1 and Category 2 Health and Environmental Hazardous
substances, including corrosive substances with strong acid or strong alkali that causes corrosion,and their health, environmental, and physical hazards

skin irritation, and eye irritation, acute toxic substances such as cyanic acid that causes environmental
hazards and health hazards such as respiratory hazards or allergies, carcinogenic or genetic mutations,etc. TSRC only store and use such substances.
• TSRC does not use acute toxic substances, but some of the substances used contain strong acids
and strong bases. In addition, the use of some chemicals with high water solubility and not easy to
decompose may cause harm to the water resource environment and human health. TSRC uses Chronic
toxic chemicals of benzene and butadiene.
• In terms of management measures, all TSRC sites set priorities to effectively manage these substancesthat are harmful to health and the environment—elimination, replacement, engineering improvement,
safety management and personal protective equipment (PPE). Management and prevention measures
include the use of low-toxic chemicals (cyclohexane instead of benzene) by changing manufacturing
process initiating by the R&D department, the protection of strong acid and alkali pipeline flanges andthe anti-corrosion and anti-leakage of the pump area, the annual monitoring of soil and groundwater,process safety management, hazard analysis and control, secondary leakage prevention and control
such as overflow dikes and actual diversion of rainwater and sewage, chemical handling, the analysis
and actual wearing of personal protective equipment, respiratory protective equipment such as Class A
protective clothing and air respirator SCBA wearing drills, firefighting facilities improvement and effective
maintenance, emergency response drill planning implementation and review and improvement, etc.

product SDS for response to customers

84

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental

Environmental Benefits of Products

green strategies for each phase of the product lifecycle to effectively lower the carbon
footprint, increase product value, and help customers reduce energy consumption andthe use of organic solvents in their processes. This will further reduce GHG emissions and3.1 Towards Carbon
Neutrality Operation

make us an important partner for our customers to achieve their carbon reduction goals.

3.2 Reduction of Product
Carbon Footprint

products’ the actual carbon reduction results.

We demonstrate our concept of sustainability and brand value to customers through our

3.3 Develop Model of
Circular Economy• Synthetic Rubber Products

3.4 Water Resource
Optimization

Major automakers around the world are gradually raising their requirements on rubber tire

3.5 Environmental
Management

4. Social
Appendix

TSRC's Green Strategies for the Product Life Cycle ／In response to the rise of environmental protection awareness worldwide, TSRC focuseson the development of eco-friendly circular economy business models and formulates

Acquisitionof raw materials
for productrubber to lower rolling friction and reduce GHG emissions. Since SiO2 is used to replacecarbon black, it is necessary to use SSBR to increase the force between rubber molecules

Product
development
and design

functionalization platform in 2018 and explored different types and technologies forfunctionalization to continue improving tire resistance and traction and develop ecofriendly rubber products for vehicles that can reduce GHG emissions. The new generation• Evaluate market demand and increase purchase of recyclable raw materials• Product formula and process optimization• Innovative products that can be recycled and reused or reduce procedures on
the customer end• Develop medical grade products and reduce the environmental impact and waste• Develop durable and energy-saving synthetic rubber products to increase theservice life of terminal products

Manufacture
low carbon
products• Lower the carbon footprint of production locations and replace equipmentwith high energy consumption• Evaluate the installation of solar panels and purchase renewable energy

and SiO2.
TSRC led the industry to establish a solution polymerized styrene-butadiene rubber• Develop suppliers of recyclable raw materials and evaluate the stability ofsupply• Form alliances or collaborate with upstream or downstream companies tojointly develop and use biomass materials/recyclable raw materials

performance and energy conservation and carbon reduction, and have switched to green
tires in response to global climate actions. Green tires use SiO2 to replace carbon black in

2021
Sustainability Report

Producttransportationand delivery• Promote local procurement and reduce carbon emissions from thetransportation of products and raw materials

synthetic rubber series developed by TSRC will become an essential material in green
tires and will effectively reduce rolling friction by 10% and above while reducing vehicle fuelconsumption by 2-3%. We expect our new generation synthetic rubber products to reducecarbon emissions by approximately 300,000 tons annually by 2025 which make substantial
contributions to global climate action.

• Develop durable rubber products to increase the service life of products

Product use
and waste• Develop synthetic rubber for green tires, improve the fuel eﬃciency of vehicles
and reduce carbon emissions• Implement circular economy to achieve process waste recycling and reuse• Advanced materials
TSRC is actively developing SBCs materials, which are not only recyclable but also help
customers reduce their production procedures and energy consumption during processing.
In the future, customers will not have to use organic solvents during production processes
to reduce their negative environmental impact.
Plasticizers are added to conventional products that contain PVC materials in order tomake medical materials soft and elastic such as medical bags and tubes. However,plasticizers have an environmental hormone, and long-term exposure to the environment
may be hazardous to ecosystems and physical health. TSRC's medical SEBS products caneffectively replace PVC medical materials containing plasticizers and effectively reduce thenegative environmental impact of medical waste.

Revenue from Products with Environmental Benefits
in the Past Three Years ／New generation synthetic rubber products
The application of new-generation synthetic rubber totires can help reduce tire rolling resistance, increase
wear resistance, and improve vehicle fuel eﬃciency. The
application to shoe materials can increase wear resistanceand prolongs the lifecycle of shoe materials. All of the above
can achieve the purpose of reducing carbon emissions in
the environment and extending the lifecycle of products

Unit: USD

2019

2020

2021

7,562,776

6,321,302

13,309,484

Note: A ccording to data of the National Highway Traffic Safety Administration (NHTSA), when tire rolling resistance isreduced by 20%, it will reduce fuel consumption by 4%.

85

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

3.2.3 Looking Forward

For waste that cannot be avoided due to technological bottlenecks, TSRC properly and carefully

In the next 1-3 years, TSRC will continue to uphold the core values of 4R (Reduce, Renewable,

to the environment. We clear, dispose, or reuse waste with high standards in comply with

Recycle, and Replace) in developing sustainable products. The development of new generation

2. Governancesynthetic rubber products will help customers reduce energy consumption and continue improving

3. Environmental

SBCs are recyclable and help customers reduce production procedures and their negative

3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization
3.5 Environmental
Management

4. Social
Appendix2021
Sustainability Report

the fuel efficiency of vehicles, the durability of tires, and the service life of footwears. Highly liquid
environmental impact. We will continue to use medical-grade SEBS products to replace PVC
materials that contain plasticizers so as to reduce the negative impact of plasticizers on humanbeings and the environment. TSRC will continue to expand suppliers of recyclable raw materials andexert every effort to reduce the carbon footprint of products. We will consider the product life cyclein every aspect of development and continue to develop chemicals and solutions that are non-toxic
and non-hazardous to the environment and human beings. We plan for sustainable products toaccount for 40% and above of all products in 2030 to show our foresight in eco-friendly innovation.

manages each factory’s industrial and general waste with our concern and responsibility
environmental protection regulations of the country or region where each factory is located.
TSRC holds itself to strict standards and references the basic principles and framework of ISO
14001: 2015 Environmental Management Systems when formulating waste management plans
and management goals. We regularly supervise and analyze the waste management results.
Industrial waste generated at each site of TSRC can be divided into two categories: Generalindustrial waste and hazardous industrial waste. Hazardous industrial waste is identified basedon regulations announced by the competent authority where each factory is located. Waste
generated from Shen Hua Chemical, Nantong Industrial, TSRC-UBE, and Shanghai Industrial
is applied to the definition in China's Directory of National Hazardous Wastes. Waste generated
from sites in Taiwan is applied to the definition in the Standards for Defining Hazardous Industrial
Waste. Among the hazardous industrial waste generated by each factory, only waste oil
generated by Nantong Industrial and TSRC-UBE is recycled and reused by third parties. Waste

3.3 Develop Model of Circular Economy
3.3.1 Management Approach
TSRC's main production activities include the polymerization, hydrogenation, and synthesisof primary petrochemical materials (including ethylene, propylene, butadiene, and styrene) tomake rubber and chemical materials. Additives are used in processing and polymerization toenhance product performance and generate processes involving organic compounds. TSRC
implements the circular economy concepts to reduce waste generated along the value chain.
In the product design and development phase, we consider replacing hazardous materials andadditives with non-hazardous ones. TSRC has established smooth communication mechanisms
with customers to help customers understand processing procedures and methods after our
products are delivered. We facilitate customers to understand the recyclability of products. If
products cannot be used due to customers’ process errors, they can return to TSRC throughreverse logistics, reducing unnecessary waste. TSRC and customers work together to recycle
end products, making improvements and adjustments to product formulas to make materials

oil generated by other sites is incinerated and not recycled.
Except for hazardous industrial waste, all other waste directly cleared and disposed of isgeneral industrial waste. All TSRC sites have established reporting, tracking, and management
regulations for industrial waste; all sites report industrial waste to the competent authority
according to the regulations of their respective country or region. The clearance process ofindustrial waste has obtained waste clearance plans approved by the competent authority. We
commission qualified clearance and disposal companies to handle and report waste, and we
also require clearance companies to provide documentation that waste is properly disposed of.
TSRC also generates recyclable materials, including rubber, metal, plastic, waste pallets, andpaper/cardboard, in the operations and production process at all sites. The recyclable materials
are sorted, collected, and recycled by local qualified recycling companies.
In recent years, TSRC's production has continued to increase, and each factory has
strengthened waste management and increases recycling measures. The total weight of all
waste generated by TSRC in 2021 was 3,937.77 metric tons, down 323.48 metric tons orapproximately 7.7% compared with 2020. The total weight of recycled general industrial waste
was 1,186.75, increasing 48.71% compared with the previous year. The result shows themore recyclable for the circular economy.

significant effectiveness of TSRC recycling measures. This result comes from TSRC's active

3.3.2 Waste Management

release, and discharge in the manufacturing process as much as possible, such as improving

During the product design and development phase, TSRC considers the end of the productseparation towers to concentrate the heavy substances and reduce the amount of cyclohexane

lifecycle. Thus, we continue to input our knowledge and technologies to develop recyclable
foaming materials and related products. These efforts aim to reduce the environmental impact ofwaste generated from the end-product application.

adoption of source reduction and pollution prevention measures to avoid waste generation,
manufacturing equipment to reduce the amount of waste rubber, installation of heavy substancewaste liquid. In sum, TSRC's waste generated per unit of production in 2021 was 7 (metric tons/
thousands of metric tons of production), a decrease of 14.32% compared with 2020. In the
future, we will continue to strengthen waste management measures.

86

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

Weight of Waste Generated at Each Site in the Past Three Years ／NantongIndustrial

TSRC-UBE

ShanghaiIndustrial

966

410

94

30.86

8

-

434

1,943

37

377

228

381

40

-

625

1,688

Total weight of all waste

1,003

787

322

411.86

48

-

1059

3,630.86

Production volume169,455

151,831

57,51954,956

12,785-50,308496,854

5.92

5.18

5.6

7.49

3.75

-

21.05

7.31

1161

485.1

91

20.5

4.65

-

572

2,334.25

45

469

294

215

31

-

873

1,927

Total weight of all waste

1,206

954.1

385

235.5

35.65

-

1,445

4,261.25

Production volume173,773

170,426

55,56063,036

12,214046,521

521,529

6.94

5.60

6.93

3.74

2.92

0

31.06

8.17

1283.31466.20

65.60

16.98

21.50

8.99

729.192591.77

Hazardous industrial waste

75.23

392.06335.57348.50

48.80

0.50

144.021344.68

Total weight of all waste

1358.54858.26401.17365.48

70.30

9.49

873.21

3,936.44

Production volume194,194

170,988

73,81565,2859,934

047,921

562,138

7.00

5.02

5.43

5.60

7.08

0.00

18.22

7.00

General industrial waste

3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint

Shen Hua
Chemical(including general and recycled waste)

3. Environmental

Hazardous industrial waste

2019

3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization

Waste generated per unitof production (Unit: metric tons/

3.5 Environmental
Management

thousands of metric tons)

General industrial waste

4. Social(including general and recycled waste)

Appendix

Hazardous industrial waste

2020

Waste generated per unitof production (Unit: metric tons/
thousands of metric tons)

General industrial waste(including general and recycled waste)2021

Unit: metric tons

TSRC
Corporation

Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

2. Governance2021
Sustainability Report

Waste generated per unitof production (Unit: metric tons/
thousands of metric tons)

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Note: 1. All source of data is from waste transfer record
2. TSRC Specialty Materials LLC ware originally named Dexco Polymers L.P., and was renamed TSRC Specialty Materials LLC in 2021.
3. TSRC (Vietnam) Company Limited provided OEM services to TSRC's Gangshan factory in 2021. It generated waste but the actual output volume was counted as part of TSRC Corporation.
4. The 2019 and 2020 data are restated due to changes in data and parameters.

Total

87

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation

Weight of Waste Generated of TSRC Group ／3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization
3.5 Environmental
Management

4. Social

Waste Generated Per Unit of Production of TSRC Group ／General industrial waste

5,000

4,000

Hazardous industrial waste

1,927

10
562,138

3,937.77
1,346

550,000

9521,529

1,688

Appendix

Waste generated per unit of production

600,000

4,261.25

3,630.86

Production volume

3,000

500,000

496,8548

2,591.77

2,334.25

2,000

8.17

1,943

7.31

450,000

7

7

1,000

0

Unit: metric tons

0
2019

2020

2021

Note: 1. All source of data is from waste transfer record
2. The 2019 and 2020 data are restated due to changes in data and parameters.

Unit: metric tons

0
2019

2020

2021

Note: 1. A ll source of data is from waste transfer record
2. The 2019 and 2020 data are restated due to changes in data and parameters.

Unit: metric tons/
thousands of metric tons

88

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

Weight of Recycled Waste at Each Site in the Past Three Years ／2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint2020

3.5 Environmental
Management

TSRC-UBE

ShanghaiIndustrial

469

280

24

0.86

6

-

0

779.86

169,455

151,831

57,51954,956

12,785-50,308496,854

Waste recycled per unitof production (Unit: metric tons/

2.77

1.84

0.42

0.02

0.47

-

0.00

1.57

Recycled general industrial waste

443

347

3.4

1.2

3

-

0

798

173,773

170,426

55,56063,036

12,214

46,521

521,529

Waste recycled per unitof production (Unit: metric tons/

2.55

2.04

0.06

0.02

0.25

-

0.00

1.53

Recycled general industrial waste

465.84326.80

7.91

3.81

8.50

2.90

370.991,186.75

Production volume194,194

170,988

73,81565,2859,934

047,921

562,138

2.4

1.91

0.11

0.06

0.86

0

7.74

2.11

Production volume

Production volume

thousands of metric tons)

4. Social
Appendix

NantongIndustrial

thousands of metric tons)

3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization

Shen Hua
ChemicalRecycled general industrial waste

2019

2021

Unit: metric tons

TSRC
Corporation

Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

1. About TSRC

2021
Sustainability Report

Waste recycled per unitof production (Unit: metric tons/
thousands of metric tons)

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

0

Total

Note: 1. All source of data is from waste transfer record
2. TSRC Specialty Materials LLC ware originally named Dexco Polymers L.P., and was renamed TSRC Specialty Materials LLC in 2021.
3. TSRC (Vietnam) Company Limited provided OEM services to TSRC's Gangshan factory in 2021. It generated waste but the actual output volume was counted as part of TSRC Corporation.
4. The 2019 and 2020 data are restated due to changes in data and parameters.

Weight of Recycled Waste of TSRC Group ／1,186.75

1,200
900

Waste Recycled Per Unit of Production of TSRC Group ／779.86500,000

562,138
521,529

496,854

1.57

2019

2020

2021

Note: 1. All source of data is from waste transfer record
2. The 2019 and 2020 data are restated due to changes in data and parameters.

0

Unit: metric tons

2.5
2.11

2.0
1.5

1.53

450,000

300
0

Waste recycled per unit of production

600,000
550,000

798

600

Unit: metric tons

Production volume

1.0

2019

2020

2021

Note: 1. All source of data is from waste transfer record
2. The 2019 and 2020 data are restated due to changes in data and parameters.

0

Unit: metric tons/
thousands of metric tons

2021
Sustainability Report89

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental

Weight and Percentage of Hazardous Waste Recycled in 2021 ／Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

TSRC
Corporation

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

Total weight of hazardous
industrial waste

75.23

392.06335.57348.50Recycled

0

0

7.91

Percentage of hazardous
industrial waste recycled

0%

0%

2%

3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization
3.5 Environmental
Management

Unit: metric tons

2021

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Total

48.80

0.50

144.02

1,344.68

3.81

0

0

0

11.72

1%

0%

0%

0%

1%

Note: 1. Waste oil is the hazardous waste that was recycled and reused by third parties.
2. TSRC Specialty Materials LLC ware originally named Dexco Polymers L.P., and was renamed TSRC Specialty Materials LLC in 2021.

4. Social
Appendix

3.3.3 Looking Forward
TSRC will dedicate its efforts to carefully manage waste generated by all production sites inaccordance with laws and regulations to achieve the short-term target of zero fines and zeropollution. Our mid-term target is to recycle, reuse, and reduce at least 50% of waste, and our longterm target is to achieve a complete circular economy with zero waste generated.
TSRC adopts innovative processes and chemical recycling technologies to help customers reduce
unnecessary waste generated from processing. We are working with partners along the value
chain in developing a circular economy model, starting from material changes and adjustments toincrease the recyclability of the end products (e.g., athletic footwear, tires, medical bags, medical
tubes, and diapers), making the world a better place through science-based solutions.

90

About this Report
Letter from the CEO
Stories for Sustainability

3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization

cie
Eﬃ

Disasters caused by rainfall pattern change are frequently occurring around the world due to
growingly severe climate change in recent years. Taiwan suffered a drought in March 2021 due

n t wa t e ruse

to insufficient rainfall, while persistent heavy rain in Henan, China, caused an extremely rare
flood. This made TSRC fully aware that water is the key that connects the climate system withhuman society and the environment and the foundation for companies to achieve sustainable
development. TSRC needs a large amount of water in the manufacturing process; thus, therge

We have incorporated water resource risk into our overall risk management system, especially

Appendix

climate-related risk. We will assess the water resource risk of each site and review response

effectively utilize water resources that enter our factories. We reuse wastewater generated in our
processes and continue investing in and installing equipment for water recycling. Wastewateris carefully treated before being discharged according to regulations and standards, reducing
energy and resource consumption at wastewater treatment factories and the potential negative
impact on ecosystems.

3.4.2 Water Resource Management
Source of Water Resources
Water resource used in the manufacturing process of TSRC's production sites is mainly tap
water provided by water companies. In recent years, we have gradually expanded processwater recycling and reuse measures and equipment. We have enhanced water conservation
measures and carefully use water resources to ensure that every drop of water that enters ourfactories can be repeatedly used. This will reduce our total water withdraw and lift the burden
on local water resources. According to Aqueduct, which is a tool to measure water risks
and developed by the World Resources Institute, among all sites and subsidiaries (includingdthree principles: efficient water use, circulation and recycling, and clean discharge, which aim toeameasures on an annual basis. Our primary strategy for water resource management includesn

4. Socialnanabout the continued optimization of water resource use.

ca
d is

importance of water quality and volume to TSRC goes without saying. We are highly concerned

Circ ulat io

3.5 Environmental
Management

3.4.1 Management Approachg

3. Environmental

Cl

2. Governance

3.4 Water Resource Optimization

c li ncy

1. About TSRCre

ESG Strategy

2021
Sustainability Report

91

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability

mainland China, Taiwan, USA, and Vietnam) of TSRC, factories in mainland China are at the

ESG Strategy

highest baseline water stress reaching "moderate to high risk (20-40%)"; factories in the USA

1. About TSRC
2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy

is at "low to moderate risk (10-20%)," while factories in Vietnam and Taiwan are both at low
risk1. However, if we zoom in to the province and county/city level, based on the drought risk
map2 drawn by Taiwan’s National Science and Technology Center for Disaster Reduction withconsideration of the impact of climate change, regardless of the dry season or wet season,
TSRC's Kaohsiung factory will be at high risk of drought within the foreseeable future (20152039). According to the WRI Aqueduct, the water resource risk of Jiangsu Province, where
Shen Hua Chemical Industrial, TSRC-UBE, and TSRC (Nantong) Industrial are located, therisk of Louisiana State, where the TSRC Specialty Materials LLC is located, and Binh Duong
Province, where the TSRC (Vietnam) Company Limited is located are all at low to moderate

3.4 Water Resource
Optimization

risk (10-20%)3.

3.5 Environmental
Management

The total water consumption of TSRC in 2021 was 5,835 million liters, and the consumption ofKaohsiung factory was 2,091 million liters. As the Kaohsiung factory is in an area with a high

4. Socialrisk of drought, TSRC is actively implementing water conservation, condensed water recycling,

Appendix

set quantified water resource management targets for the usage of recycled water and theand process wastewater recycling measures in the Kaohsiung factory. In addition, TSRC has
recycling of wastewater in our ESG strategy established in 2021. This is to respond to theenvironmental regulations of Jiangsu Province, China requiring new factories to use recycledwater, as well as the decrease of freshwater withdrawal permitted by the local authorities. In
2021, the total tap water withdrawal of TSRC was 3,972 million liters, down 9.78% comparedwith 2020. The main reason is that TSRC (Nantong) Industrial and TSRC-UBE phased out
coal-fired boilers in 2020, and the boiler water consumption has greatly reduced.

Wastewater treatment and discharge
TSRC's main production sites are all located in local industrial parks and are subject tomanagement and supervision by the competent authority of the industrial parks. Regarding
wastewater generated during manufacturing and operations, TSRC primarily recycles andreuses as much water as possible and reduces wastewater discharge to lower water stress on
the ecological environment. Wastewater that cannot be recycled and reused is pre-treated byfacilities until it meets local effluent monitoring standards and then discharged into the industrial
park's wastewater treatment systems.
Wastewater discharge standards of Gangshan factory meet the sewage system limits ofGangshan Benjhou Industrial Park, and the discharge standards of Kaohsiung factory comply
with the regulations of Ren-Da Industrial Park. The Kaohsiung factory had 2 incidents ofexceeding the effluent standard of the industrial park's wastewater treatment factory in 2021
and thus received fines from the competent authority. Besides being charged additional
wastewater treatment fees, TSRC immediately improved water management when the violation
was discovered. Shen Hua Chemical Industrial, TSRC (Nantong) Industrial, and TSRC-UBE
are required to meet Level 3 of the local regulations, including wastewater PH value, chemical
oxygen demand (COD), suspended solids (SS), and five-day biochemical oxygen demand (BOD).
All factories have an online COD analyzer, ammonia nitrogen analyzer, pH meter, and flowmeter.
TSRC also installs the rainwater detention pond in factories and online COD monitors to monitor
the water quality of effluent in real-time.
Understanding how precious water resources are, TSRC innovates processes to lower water
demand and reduce wastewater discharge. For example, Shen Hua Chemical Industrial uses
heat insulation paint to reduce the use of tap water for cooling. This measure has significantly
reduced wastewater by approximately 6,000 metric tons per year. Shen Hua Chemical Industrial

1. Source: Aqueduct 3.0 Country Rankings | World Resources Institute (wri.org)+
2. Source: National Science and Technology Center for Disaster Reduction, 2014, Disaster Risk Map Under the
Impact of Climate Change
3. Source: Aqueduct 3.0 Country Rankings

took measures to separate rainwater from wastewater and reduce the amount of rainwater thatenters the wastewater system, which has diminished inefficient waste of resources.

92

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Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance

Water Withdrawal, Discharge, and Consumption of Each Site in the Past Three Years ／In provincial- and country-level:

3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

1,493

945

640

409

11

0

557

4,055

Consumption ofpurchased steam (B)

90

170

55

0

0

0

178

493

Wastewater recycled (C)

563

89

71

179

0

0

0

902

Water usage (D) = A+B+C

2,146

1,204

766

588

11

0

735

5,450

Water discharge (E)

1,127

695

481

168

11

0

348

2,830

Water consumption = D - E

1,019

509

285

420

0

0

387

2,620

Fresh water withdrawal (A)

1,487

1,021

572

513

13

0

797

4,403

Consumption ofpurchased steam (B)

49

193

176

23

0

0

179

620

Wastewater recycled (C)

516

88

90

146

0

0

0

840

Water usage (D) = A+B+C

2,052

1,302

838

682

13

0

976

5,863

Water discharge (E)

797

825

462

325

13

0

348

2,770

Water consumption = D - E

1,255

477

376

357

0

0

628

3,093

Fresh water withdrawal (A)

1,458

1,058

438

363

9.228

11

635

3,972

Consumption ofpurchased steam (B)

59

192

393

230

0

0

139

1,013

Wastewater recycled (C)

574

87

122

67

0

0

0

850

Water usage (D) = A+B+C

2,091

1,337

953

660

9.228

11

774

5,835

Water discharge (E)

974

817

441

316

9.647

11

348

2,916

Water consumption = D - E

1,117

520

512

344

-0.419

0

426

2,919

Fresh water withdrawal (A)3.1 Towards Carbon
Neutrality Operation2019

3.4 Water Resource
Optimization
3.5 Environmental
Management

4. Social
Appendix

2020

2021

Unit: Million liters= Thousand tons

Regions with low and moderate water stress

TSRC
Corporation

Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

3. Environmental

Regions with highwater stress2021
Sustainability ReportNote:
1. All water withdrawal is freshwater supplied by the local water company (≤1,000 mg/L TDS).
2. The purchased steam is also used as one of the sources of process water after the purpose of heat exchange has
been achieved.
3. E xcept for the global business headquarter located in Taipei, all discharge is treated by wastewater treatment
factories of industrial park.
4. TSRC does not have permanent water storage facilities but take measures according to the situation of each site
during the water restriction period.
5. The TSRC Group's total tap water withdrawal from water companies in 2021 decreased 9.78% compared with theprevious year. The main reason is that TSRC (Nantong) Industrial and TSRC-UBE phased out coal-fired boilers in
2020, and the boiler water consumption has greatly reduced.
6. TSRC Specialty Materials LLC ware originally named Dexco Polymers L.P. and was renamed TSRC Specialty
Materials LLC in 2021.

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Total

7. The water discharge of TSRC (Shanghai) Industries higher than water usage in 2021 was due to surface runoff.
8. TSRC (Vietnam) Company Limited provided OEM services to TSRC's Gangshan factory in 2021, so it used water
resources, but actual output volume was counted as part of TSRC Corporation.
9. The evaporation of purchased steam is not considered.
10. The water resource risk assessment results of the locations in mainland China, Vietnam, and the United States
covered in this table are from WRI Aqueduct 3.0 provincial-level data, and the water resource risk assessment
results of the Taiwan location are from the National Disaster Prevention and Rescue Science and Technology
Center of Taiwan, published in 2014.
11. In 2021, the total water withdrawal in areas with high water stress risk is accounted for 36.7% of the group’s
total water withdrawal. The total water usage in areas with high water stress risk is accounted for 35.83% of thegroup’s total water usage.
12. The 2019 and 2020 data are restated due to changes in data and parameters.

93

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation

3.4.3 Water Resource Recycling and Reuse
Water resource is a material issue that must be considered as global warming occurs. After holisticallyconsidering the usage efficiency and discharge of water, TSRC has strengthened water recycling
measures and increased the circulation of water resources in factories in recent years to lower the
impact of water resources on operations and move forward to zero discharge. We have alreadyobtained significant results.

3.2 Reduction of Product
Carbon Footprint

Condensed Water Recycling

3.3 Develop Model of
Circular Economy

Our Kaohsiung factory uses large amounts of steam for heating in BR and TPE processes. When

3.4 Water Resource
Optimization

condensed water. Besides recycling condensed water as much as possible, we also recycle heat

3.5 Environmental
Management

4. Social
Appendixlatent heat of steam is released into the process, the steam is transformed into high-temperature
to fully utilize resources. The recycled condensed water is stored in two tanks and used in the
production of SBR, which requires large amounts of hot water for preparation. The subsidiaries
TSRC (Nantong) Industrial and TSRC-UBE also recycle condensed water from steam equipment
and channel condensed water into the cooling water circulation system by lowering its temperatureand pressure. The excess condensed water is also sold to nearby companies, helping partners
reasonably use thermal energy and reduce resource waste.

Wastewater Recycling in the Manufacturing Process
The BR process of TSRC's Kaohsiung factory mainly involves solvent reaction, and the factory
recycles and reuses wastewater at the back-end of the process. Currently, 1,200 tons of wastewater
are recycled each day. Process wastewater is recycled and supplied to the cooling water tower
through pipelines, replacing tap water. Process wastewater recycling equipment was also installedin the new SEBS production line of subsidiary TSRC (Nantong) Industrial, increasing production
without increasing pollution. Process wastewater is used to replenish water in the cooling water tower
instead of using fresh water. Shen Hua Chemical Industrial recycles decanted water from its SBR
manufacturing process and recycles approximately 8,000 tons of process wastewater each year.
Shen Hua Chemical Industrial uses recycled water instead of clarified water in AS-402, reducing thewithdrawal of clean freshwater resources while minimizing wastewater discharge.
As TSRC factories in Taiwan are located in high-risk drought area, we devote great efforts to recycling
wastewater. In 2021, the wastewater recycling rate of factories in Taiwan was 27.45%, reaching
the highest level among all TSRC factories. TSRC will continue enhancing and expanding theimplementation of wastewater recycling measures; in addition to increasing the water use efficiency
and reducing the potential impact on the high-risk area, we will further mitigate climate-related water
risks to stabilize operations.

1
2

3

4
5
1. Condensed water recycling in
TSRC Kaohsiung factory
2. 3. Condensed water recycling
in TSRC (Nantong)
Industrial and TSRC-UBE
4. Wastewater recycling in
TSRC Kaohsiung factory
5. Wastewater recycling in
TSRC (Nantong) Industrial
and TSRC-UBE

2021
Sustainability Report

94

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

The Volume of Wastewater Recycling ／1. About TSRC

TSRC
Corporation

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

Wastewater recycled

563

89

71

179

0

0

0

902

Wastewater recycled/
Total water usage

26.23%

7.39%

9.27%

30.44%

0.00%

0.00%

0.00%

16.55%

Wastewater recycled

516

88

90

146

0

0

0

840

Wastewater recycled/
Total water usage25.15%

6.76%

10.74%

21.41%

0.00%

0.00%

0.00%

14.33%

Wastewater recycled

574

87

122

67

0

0

0

850

Wastewater recycled/
Total water usage27.45%

6.51%

12.80%

10.15%

0.00%

0.00%

0.00%

14.57%

2019

3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy

2020

3.4 Water Resource
Optimization
3.5 Environmental
Management

4. Social
Appendix

Unit: Million liters. %Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

2. Governance
3. Environmental

2021
Sustainability Report

2021

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Total

Note:
1. TSRC Specialty Materials LLC ware originally named Dexco Polymers L.P., and was renamed TSRC Specialty Materials LLC in 2021.
2. The 2019 and 2020 data are restated due to changes in data and parameters.

3.4.4 Looking Forward

The Volume of Wastewater Recycled of TSRC Group ／Wastewater recycled

Wastewater recycled/Total water usage

1,000
900

20%
902

16.55%

18%

850

840

800

use recycling water instead of clean water to replenish water in the equipment of
production sites in Taiwan and mainland China, reducing water withdrawal fromsurrounding areas. We are also trying to reduce the amount of process wastewaterthat enters wastewater treatment of industrial parks as much as possible, reducing
unnecessary energy and resource use and potential environmental impacts. We aim

14.57%

14.33%In the future, TSRC will significantly increase process wastewater recycling. We will

16%
14%

700

that the percentage of wastewater recycling will reach 25% in 2023, 36% in 2025, and
40% in 2030. Besides process wastewater recycling, we are also expanding condensed
water recycling. We manage the quality of water discharged into the wastewater
treatment factory of industrial parks. TSRC-UBE plans to build new treatment facilities
to strengthen treatment before discharge, which will reduce the medicines used bywastewater treatment factories and lower the potential environmental impact. In addition
to condensed water, process wastewater recycling, and water quality improvement for0

Unit: Million liters

2019

2020

2021

Note: The 2019 and 2020 data are restated due to changes in data and parameters.

0%

effluent, TSRC is fully aware of the effect of climate change and extreme weather eventson water resource stability. We plan to build recycled water facilities or increase thepurchase of recycled water at some sites. We aim to the group recycling water usage toreach 15% of total water consumption in 2023, 34% in 2025, and 40% in 2030.

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint

3.5 Environmental Management
3.5.1 Management Approach
TSRC takes its environmental protection responsibility seriously, and all sites haveadopted consistent high standards when managing the air pollution, waste, and soil andenvironmental impact of operations. TSRC continues to promote energy conservation andwaste reduction, air pollution prevention, and wastewater reduction and recycling throughISO 14001 Environmental Management Systems. We periodically conduct comprehensive

3.4 Water Resource
Optimization

regulations and reduce our environmental impact.

4. Social
Appendix

Environmental Management Strategy ／groundwater pollution generated by processes. We exert every effort to reduce the negative

3.3 Develop Model of
Circular Economy

3.5 Environmental
Management

2021
Sustainability Report95

reviews, and use technology to monitor factories and surrounding areas to comply with

TSRC's environmental management strategy focuses on "process improvement" andProcess improvement

Environment monitoring• Reduce fugitive VOCs andemissions through process
improvement, tail gas recycling,
and adding burning towers• Establish a digital monitoring system
to monitor emissions at factories
and surrounding areas, and set
up a real-time connection with theindustrial park monitoring system"environment monitoring," in which the global business headquarters is responsible forenvironment management and supervision and for formulating related plans while factories
are responsible for implementation.

3.5.2 Air Pollution Prevention and Management
TSRC continues to upgrade equipment and optimize processes, reduce air pollutantsreleased in the production process, and minimize environmental and health hazards. The

Air Pollutants Emission of TSRC Group ／Unit: metric tons

SOx emissions have continued to decrease in the past three years. After the phase-out ofNOx

coal-fired boilers at TSRC (Nantong) Industrial in 2020, the TSRC Group no longer releases
any VOCs generated by boilers.
In 2021, the Kaohsiung City Government Environmental Protection Bureau tested equipment
parts in the TPE manufacturing procedures of the Kaohsiung factory. The value of one partexceeded the standard for VOCs and emissions regulations, and a fine of NT$450,000

VOCs

192.12200
162.10

150

SOx

132

162.10134

was imposed for violating Article 20, Paragraph 1 of Taiwan's Air Pollution Control Act.
In addition, due to the replacement of monitoring facilities in 2020, a weekly test was notconducted before the monitoring facility verification report was reviewed. The number ofeffective monitoring hours did not reach 85% in the third quarter and fourth quarter; thus,
a fine of NT$200,000 was imposed for violating Article 22, Paragraph 2 of Taiwan's Air
Pollution Control Act. TSRC immediately took response measures and purchased valves
that can pass the VOCs leakage 100 ppm test to replace the original parts, improving
process equipment parts. We began scheduling alternative tests starting in December 2021
and conducted weekly tests until the monitoring facility verification report was reviewed.

100
50

26

18

0
Unit: metric tons

2019

2020

15.66

0.86

2021

Note: The 2019 and 2020 data are restated due to changes in data and parameters.

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

2021
Sustainability Report

96
Air Pollutants Emission ／Unit: metric tons

TSRC
Corporation

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

NOx

7

0.5

59

49

0

0

16

132

SOx

4

0

12

9

0

0

1

26

3.2 Reduction of Product
Carbon Footprint

VOCs

140.51

0.711

5.77

2.47

0

0

12.64

162.103.3 Develop Model of
Circular Economy

NOx

6.22

0.94

45.58

70

0

0

11.63

134

SOx

3.41

0

5.6

8

0

0

0.87

18

VOCs

140.51

0.711

5.77

2.47

0

0

12.64

162.10

NOx

5.02

0

0

0

0

0

10.64

15.66

SOx

0.1344

0

0

0

0

0

0.73

0.86

VOCs

169.77

3.25

2.41

2.46

0

0

14.23

192.12

1. About TSRC

Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation

3.4 Water Resource
Optimization

2019

2020

3.5 Environmental
Management

4. Social
Appendix

2021

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Total

Note:
1. Data of TSRC Corporation, Shen Hua Chemical Industrial, TSRC (Nantong) Industrial, and TSRC-UBE is from continuous measurement. Data of TSRC Specialty Materials LLC is calculated based on mass balance.
2. TSRC does not have HAPs data because it is not required by air pollution regulations.
3. The 2019 and 2020 data are restated due to changes in data and parameters.
4. Although the Chemical Sustainability Accounting Standard published by Sustainability Accounting Standards Board requires the data of nitrogen oxides (NOx) shall deduct N2O, TSRC conducts the data from CEMS monitoring inaccordance with regulations for air pollution monitoring and has not monitored specific items. The N2O cannot be deducted yet.

Factory found in
violation

TSRC
Corporation

Regulation violated

Reason for fine

Article 20, Paragraph 1of the Air Pollution
Control Act• process equipment parts in TPE manufacturing procedures(M04) of the Kaohsiung factory, Kaohsiung City Government
Environmental Protection Bureau found that the value of one part,in TPE manufacturing procedures (M04) of the Kaohsiung factory,
exceeded the standard for VOCs and emissions regulations.

NT$450,000• We replaced the plug cock valve (1 pc screwed endball valve) in the butadiene system with a valve (3pc screwed end ball valve) able to pass the VOCs
leakage 100 ppm test.

Article 22, Paragraph 3of the Air Pollution
Control Act• Due to the replacement of monitoring facilities, a weekly test was
not conducted before the review of the monitoring facility verification
report was completed, and the number of effective monitoring hours
did not reach 85% in the third quarter and fourth quarter.

NT$200,000• We began scheduling alternative tests starting in
December 2021 and conducted weekly tests until themonitoring facility verification report was reviewed.

Kaohsiung
Factory

Amount of fine

Solution or improvement plan97

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
3.1 Towards Carbon
Neutrality Operation
3.2 Reduction of Product
Carbon Footprint
3.3 Develop Model of
Circular Economy
3.4 Water Resource
Optimization
3.5 Environmental
Management

4. Social
Appendix

TSRC continues to strengthen VOCs management at each site. TSRC (Nantong) Industrial
implements RTO to purify waste gas containing VOCs from processes using high temperature andoxidation, thereby reducing VOCs emissions. Starting in 2020, we added two cyclohexane recycling
devices in the storage tank area, channeling the factory's low concentration waste gas into the RTO.
In the past, the VOCs emissions caused the odor. With RTOs, the tail gas was burned, and the odor
was reduced. In the future, we will continue to increase RTO capacity to handle high concentration
tail gas. Besides channeling waste gas into RTO, TSRC (Nantong) Industrial replaced its activatedcarbon facilities in 2021 to better absorb air pollutants. Shen Hua Chemical Industrial has focused onprocess improvement and equipment optimization in recent years and has adopted AI management,
strictly managing VOCs emissions in coordination with the competent authority of the industrial
park, irregularly conducting sampling inspections of eco-friendly cruisers, and sending personnel toconduct factory inspections.

3.5.3 Soil and Groundwater Pollution Prevention
and Management
Shenhua Chemical Industrial, TSRC-UBE and TSRC (Nantong) Industrial conduct a regular soil
and groundwater monitoring and inventory in accordance with the local regulations of "HJ 12092021 Technical Guidelines for Self-Monitoring of Soil and Groundwater for Industrial Enterprises" inmainland China. No leakage or contamination occurred in 2021.

3.5.4 Ecological Conservation
TSRC's production sites are neither located in the habitats that need protection or have been
restored, nor in any of the 6 protected areas or biologically diverse areas or genetically diverse areas
specified by the IUCN (International Union for Conservation of Nature). None of the species in theindustrial park is listed in the "Red List" or "National List of Protected Species in Taiwan."

3.5.5 Looking Forward
The VOCs emission will be the key point of TSRC’s future environmental management. We will improve
manufacturing processes, add a tail gas recycling system, replace old equipment parts and use newleakage prevention parts, continue utilizing infrared VOCs detectors (FLIR), optimize the equipment partleakage map, properly monitor high-risk leakage points in factories, and accelerate equipment parts
testing and monitoring. TSRC will also utilize digital technologies to periodically monitor the soil andgroundwater pollution potential at factories and surrounding areas to prevent pollution.

2021
Sustainability Report4.1 Strengthen Organization’s Sustainability Capability
4.2 Improve Health, Safety & Wellbeing of Employees

4. Social

4.3 Enhance Social Engagement

In response to global ESG initiatives and sustainability, we will enhance the professional skills of ouremployees with respect to ESG and develop talent cultivation plans. We will expand competency
development, knowledge learning, cooperation with industry, government, and academic institutions
to enhance our competitiveness. Employee safety, health, and welfare are the key factors to TSRC's
long-term development. TSRC will continuously optimize the work environment of all sites and care for
employees' physical and mental health to uplift TSRC’s employees’ engagement. We will expand our
positive influence on society by integrating the Company resources and employees' voluntary actions into
chemical sustainable education and social welfare to benefit local education and community prosperity.

16.53%

Female employees byof total employees

Employee salary and benefits in 2021 increased
21% compared to 2020

Employee salary and beneﬁts
expenses increased

21%

Began promoting chemistry education in 2012 andbenefit 1,000 students and more

Up to1000+ students attend thechemistry activities

99

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

2021
Sustainability Report

4. Social

1. About TSRC
2. Governance
3. Environmental
4. Social

4.1 Strengthen Organization’s Sustainability Capability

4.1 Strengthen
Organization’s
Sustainability Capability

4.1.1 Management Approach

4.2 Improve Health, Safety &Wellbeing of Employees

Along with the global trend of carbon reduction and transformation of the chemical industry, cultivating talents are crucial for TSRC's sustainability and an indispensable key asset for low-carbon

4.3 E nhance Social
Engagementtransformation. As the chemical industry is facing a decline in talent supply and difficulties in recruiting professionals, TSRC has transferred into a learning organization for talent cultivation, aiming
to build a pool of sustainable talent to drive the Company's low-carbon transformation and seize opportunities for sustainability. With this vision, TSRC formulates four approaches for talentmanagement—selection, recruitment, cultivation, and retention.

Appendix

TSRC’s Talent Management Approaches ／• Professional learning: We organize internal and external professional• Internships: TSRC provides graduates or students with corporate

training courses for new and exising employees in response to futureinternship opportunities. TSRC optimizes the recruitment process andchanges of the market and environment.

the process of new employee training to recruit suitable talens.

Talentselection• Local recruitment: With regard to the recruitment of new employees,
when job applicants have the same professional skills and work
experience required for a position, we give priority to local residents.

Talentcultivationcommendations, attracting and retaining outstanding talent.

gender, region, religion, marital status, and sexual orientation.

Evaluation Regulations.

achieve lifelong learning.

model employee commendations, and long service employee

performance evaluation results. We do not discriminate against age,evaluations twice a year according to the Employee Performance

Company's annual business strategies and market trends, in order tosites inTaiwa, we provide regular raises, promotions, bonuses,

promotion, and salaries based on their individual abilities and annual• Fair evaluation: All employees are subjected to performance

strategic thinking and innovation management) according to the• Rewards and recognition: For employees located in TSRC

• Equality and transparency: We adjust talent recruitment, evaluation,

Talentrecruitment• General education: We offer general education courses (e.g.

Talentretention• Benefits: For employees located in TSRC sites in mainland China,
we retain outstanding talent through an employee benefits systemthat encourages work-life balance, including birthday parties, travel,
experiences, special work hours, as well as a reasonable leave system.

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social
Engagement

Appendix2021
Sustainability Report100
4.1.2 Diversity, Inclusion, and Recruitment
TSRC creates a diverse and equal workplace and focus on labor rights and gender equality. We
do not discriminate against age, gender, region, religion, marital status, and sexual orientation
during talent recruitment. We attract outstanding talent to join TSRC through industry-academia
collaboration and internships and create a culture of diversity and inclusion. We cherish thedifferences and uniqueness of employees for encouraging each other and supporting innovation.

TSRC does not treat employees differently or discriminate against gender and age during
recruitment. In terms of the gender distribution of our employees, full-time male account for 80%
and above of all full-time employees due to the nature of characteristics of the chemical industry.
In terms of distribution by age, the highest percentage of employees are 30-50 years old by 67%
of total employees. Their professional skills and experiences accumulated over the years arevaluable assets for TSRC. In addition, TSRC hires underprivileged social groups and provides

The Composition of Employees

opportunities to workers with disabilities in a suitable workplace. We hired a total of 5 employees

As of the end of 2021, TSRC had 1,604 full-time and non-fixed-term contract employees (alsowith disabilities in 2021 based in Taiwan factories, Shen Hua Chemical, and Shanghai Industrial.

called full-time employees) based in all sites. As TSRC(Vietnam) was firstly included in the scopeof Sustainability Report and increased recruitment in Taiwan factories in 2021, the total numberof employees increased 2% compared with 2020.

Employees at Each Site of TSRC in 2021 (by Age, Region, and Type of Employment Contract) ／TaiwanIncludes Global Business Headquarters,
Gangshan factory, Kaohsiung factory

Mainland China

TSRC
Corporation

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

Vietnam

USA

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Number of
Number of
Number of
Number of
Number of
Number of
Number ofPercentage
Percentage
Percentage
Percentage
Percentage
Percentage
Percentage
peoplepeoplepeoplepeoplepeoplepeoplepeopleFull-time
non-fixedterm contract
employees

Full-time fixedterm contract
employees

Total
Number ofpeoplePercentage

Male

578

83%

252

87%

280

90%

87

80%

58

75%

19

59%

65

72%

1339

84%

Female

116

17%

38

13%

30

10%

22

20%

19

25%

13

41%

25

28%

263

16%

Subtotal

694

100%

290

100%

310

100%

109

100%

77

100%

32

100%

90

100%

1602

100%

Male

0

--

0

0%

0

--

0

--

0

--

0

--

0

--

0

0%

Female

0

--

2

100%

0

--

0

--

0

--

0

--

0

--

2

100%

Subtotal

0

--

2

100%

0

--

0

--

0

--

0

--

0

--

2

100%

Total number of employees

694

292

310

109

77

32

90

1604

Percentage accounted for by
full-time non-fixed-term
contract employees (%)

100%

99%

100%

100%

100%

100%

100%

100%

Note: 1
 . For full-time fixed-term contract employees or contract employees, their employment contract is terminated when a specific period of time expires or when the work agreed upon is completed.
2. Full-time non-fixed-term contract employees or full-time employees have a continuous employment contract and carry out work during statutory work hours set forth in labor regulations.
3. This table only includes employees whose employer is TSRC on their employment contract and does not include contractors and dispatch workers stationed in factories of TSRC or provides services to TSRC.
4. The number of employees in this table is calculated as number of people employed on 31 December 2021.

2021
Sustainability Report101

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance

Employees at Each Sites of TSRC in 2021 (by Age and Diversity) ／3. Environmental

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Number of
Number of
Number of
Number of
Number of
Number of
Number ofPercentage
Percentage
Percentage
Percentage
Percentage
Percentage
Percentage
peoplepeoplepeoplepeoplepeoplepeoplepeople

4. Social
4.1 Strengthen
Organization’s
Sustainability Capability

TSRC
Corporation

Includes Global Business Headquarters,
Gangshan factory, Kaohsiung factory

Total
Number ofpeoplePercentage

Age of 30 and younger

42

6%

47

16%

72

23%

22

20%

5

7%

11

34%

5

6%

204

13%

Age between 30~50

455

66%

193

66%

221

71%

82

75%

65

84%

18

56%

45

50%

1,079

67%

Age of 50 and older

197

28%

52

18%

17

6%

5

5%

7

9%

3

9%

40

44%

321

20%

The total number of full-time non-fixedterm contract employees and full-time
fixed-term contract employees

694

100%

292

100%

310

100%

109

100%

77

100%

32

100%

90

100%

1,604

100%

Recruitment of persons
with disabilities

3

0.4%

1

0.3%

0

0.0%

0

0.0%

1

1.3%

0

0.0%

0

0.0%

5

0.2%

Age

4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social
Engagement

Appendix

Diversity

Note: 1
 . Ratio of employees with disabilities = Number of persons with disabilities hired / (Number of full-time non-fixed-term contract employees and full-time fixed-term contract employees).
2. For full-time fixed-term contract employees or contract employees, their employment contract is terminated when a specific period of time expires or when the work agreed upon is completed.
3. Full-time non-fixed-term contract employees or full-time employees have a continuous employment contract and carry out work during statutory work hours set forth in labor regulations.

Full-Time Non-Fixed Term Contract Employees of TSRC Group (by Gender) ／Full-Time Non-Fixed Term Contract Employees of TSRC Group (by Age) ／Age of 30 and younger

Male

16%

84%

Female13%20%

Age of 50 and older

Note:
1. Full-time non-fixed-term contract employees or fulltime employees have a continuous employment
contract and carry out work during statutory work
hours set forth in labor regulations.
2. T his table only includes employees whose
employer is TSRC on their employment contractand does not include contractors and dispatch
workers stationed in factories of TSRC or provides
services to TSRC.
3. T he number of employees in this table iscalculated as number of people employed on 31
December 2021.

Age between 30~50

67%

Note:
1. Full-time non-fixed-term contract
employees or full-time employees havea continuous employment contract andcarry out work during statutory work hours
set forth in labor regulations.
2. T his table only includes employees whose
employer is TSRC on their employment
contract and does not include contractors
and dispatch workers stationed in factories
of TSRC or provides services to TSRC.
3. The number of employees in this table iscalculated as number of people employedon 31 December 2021.

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social

Talent Recruitment
TSRC upholds the principle of equal opportunity. We hire new employees based on theselected through a public process, and recruitment and selection decisions are not affected by age,gender, region, religion, marital status, sexual orientation, and other factors unrelated to candidates’

Male

New Recruitment of TSRC
Group (by Age) ／Age of 30 and younger
Age between 30~50
Age of 50 and older

Femaleability. When applicants have the same qualifications, TSRC gives priority to residents to promotelocal development and employment. TSRC provides good salaries and benefits, people-centered
management, and a sound system for promotion and development to retain outstanding talent.

4.2 Improve Health, Safety &Wellbeing of Employeesof all full-time employees. As TSRC (Vietnam) Company Limited was firstly included in the

Engagement

New Recruitment of TSRC
Group (by Gender) ／professional competencies and work experience needed for the position. Outstanding talent is

4.1 Strengthen
Organization’s
Sustainability Capability

4.3 E
 nhance Social

2021
Sustainability Report

102

15%

A total of 166 full-time employees joined TSRC in 2021. New employees accounted for 10%

5%

85%

Sustainability Report and recruited employees in Taiwan factories in 2021, the number of new46%

employees increased by 46.8% compared with 2020. New employees are mainly male due

49%

to the industry’s characteristics, but new employees in TSRC Specialty Materials LLC wereAppendix

predominantly female in 2021 as we continue to uphold the principle of equal opportunity.
In terms of distribution by age, employees in Taiwan and USA are mainly at the age of 30-50
due to the need for experienced talent in critical fields for local and organizational businessdevelopment. New employees of the USA factory and Vietnam factory are mainly under 30.

New Recruitment at Each Site of TSRC in 2021 (by Age and Gender) ／Includes Global Business
Headquarters, Gangshan factory,
Kaohsiung factory

GenderShen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Number of
Number of
Number of
Number of
Number of
Number of
Number ofPercentage
Percentage
Percentage
Percentage
Percentage
Percentage
Percentage
peoplepeoplepeoplepeoplepeoplepeoplepeopleTotal
Number ofpeoplePercentage

Male

47

84%

26

90%

31

91%

16

89%

2

100%

17

88%

2

29%

141

85%

Female

9

16%

3

10%

3

9%

2

11%

0

-

3

12%

5

71%

25

15%

56

100%

29

100%

34

100%

18

100%

2

100%

20

100%

7

100%

166

100%

Age of 30 and younger

7

12%

17

59%

25

74%

12

67%

1

50%

17

85%

2

29%

81

49%

Age between 30~50

44

79%

10

34%

9

26%

6

33%

1

50%

3

15%

3

43%

76

46%

Age of 50 and older

5

9%

2

7%

0

0%

0

0%

0

0%

0

0%

2

29%

9

5%

56

100%

29

100%

34

100%

18

100%

2

100%

20

100%

7

100%

166

100%

Total number of new hires

Age

TSRC
Corporation

Total number of new hires
Total number of full-time employees

694

290

310

109

77

32

90

1602

New hire ratio

8%

10%

11%

17%

3%

63%

8%

10%

Note: New hire ratio = Total number of new employees / Total number of full-time employees.

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social
Engagement

Appendix2021
Sustainability Report

103
TSRC had 151 employees’ resignment in 2021, and the turnover rate is about 10%. As Vietnam factory
was firstly included in the Sustainability Report and the COVID-19 pandemic impacted the stability of
employees in 2021, the turnover rate increased by 1.5% compared with 2020. The Vietnam factory had
a higher turnover rate because new technicians were under high stress to adapt to the impact of thepandemic, there was a high level of manufacturing automation, and there was low employment stability.
Factories in mainland China were impacted by the COVID-19 pandemic and result in difficulty in talent
recruitment. In addition, the shortage of chemical talent also has impacts on personnel changes. In thisregard, the turnover rate in these two regions was relatively high. In terms of distribution by age, theaverage age of employees who resigned from factories in mainland China and Vietnam was under 30.

Resigned Employees of TSRC
Group (by Gender) ／MaleResigned Employees of TSRC
Group (by Age) ／Age of 30 and younger
Age between 30~50
Age of 50 and older

Female9%

The turnover rate and new recruitment ratio were about the same level at each site in 2021. We make
improvements and review for factories with a high turnover rate, such as Vietnam (44%) and TSRCUBE (16%). Besides examining local labor regulations and salary levels, we also analyze the reasonsfor employees’ resignations based on the opinions of employees and supervisors. We also make timely
adjustments to the salary and benefits system to lower the turnover rate. For example, we adjusted therecruitment process of our Vietnam factory by inviting applicants to visit the factory, which will reduce
their cognitive gap and help them get familiar with the workplace. We also provide comprehensive
training and help new employees adapt to their work and environment. For factories in mainland
China, we plan to adjust the titles of employees to respond to their needs and make a structural salaryadjustment to enhance the overall competitiveness of salaries and benefits. We will dedicate our efforts
to delivering more diverse and sound opportunities for employees’ career development, continuing to
attract and retain excellent talent creating significant momentum for TSRC innovation.

15%

91%

40%

45%

Resigned Employees and Turnover Rate at Each Site of TSRC in 2021 (by Age and Gender) ／Includes Global Business Headquarters,
Gangshan factory, Kaohsiung factory

TSRC
Corporation

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Number of
Number of
Number of
Number of
Number of
Number of
Number ofPercentage
Percentage
Percentage
Percentage
Percentage
Percentage
Percentage
peoplepeoplepeoplepeoplepeoplepeoplepeopleTotal
Number ofpeoplePercentage

Male

46

88%

25

96%

31

97%

18

95%

1

100%

12

86%

4

57%

137

91%

Female

6

12%

1

4%

1

3%

1

5%

0

0%

2

14%

3

43%

14

9%

Number of employees resigned

52

100%

26

100%

32

100%

19

100%

1

100%

14

100%

7

100%

151

100%

Age of 30 and younger

2

4%

16

62%

19

59%

11

58%

0

0%

12

86%

1

14%

61

40%

Age between 30~50

32

62%

9

35%

13

41%

8

42%

1

100%

2

14%

3

43%

68

45%

Age of 50 and older

18

35%

1

3%

0

0%

0

0%

0

0%

0

0%

3

43%

22

15%

Number of employees resigned

52

100%

26

100%

32

100%

19

100%

1

100%

14

100%

7

100%

151

100%

GenderAge

Total number of full-time employees

694

290

310

109

77

32

90

1602

Turnover rate

7%

9%

10%

17%

1%

44%

8%

9%

Note: Turnover rate = Total employee resigned / Total number of full-time employees.

104

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social

2021
Sustainability Report

4.1.3 Talent Development
TSRC has built a comprehensive learning roadmap for employees, which is divided into two
categories "general education" and "technical specialty (also referred to as on-the-job learning)".
We develop courses for employees at different job levels. As of the end of 2021, TSRC has
offered general education courses for managers at each level of the TSRC Group. The topics
include performance management, innovation management, and strategic thinking. As fortechnical specialty, each function unit and department organize relevant competency training,

ranking, quiz contests, ranking on lecturers, and after-class activities. In the future, TSRC will
strengthen new employee training courses. Besides providing diverse general education courses
on industrial safety, corporate governance, and compliance, we will establish a self-learning
platform and increase opportunities to cultivate the corporate culture of continuous learning.

Training and Learning

4.1 Strengthen
Organization’s
Sustainability Capability

including manufacturing and production, R&D, warehouse management and logistics. We also
encourage employees to participate in external professional courses and technical forums.

The core concept of TSRC's talent development is to "improve the quality of human resources."

4.2 Improve Health, Safety &Wellbeing of Employees

TSRC irregularly conducts surveys to understand each function unit and department’s needs for

We invest resources into the education and training of employees in response to rapid changes

4.3 E nhance Social
Engagement

Appendixeducation and training. The result helps our headquarters to design talent development courses.
For example, in mainland China, we arranged new employee training courses, successor training
projects, and on-the-job training and evaluation. We also provide sessions about organizational
management and professional and general training per the annual training plan. We publicly reward
employees for their learning results and participation with approaches including participation rate

The Training Hours of TSRC Employee and Resources Invested ／2021

training hours for TSRC employees have gradually increased, and the average training hours per
employee also shows an upward trend compared with 2020. In 2021, the total amount invested
reached NT$6.9 million.

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

18,185

14,500

6,565

2,632

764

17

4,527

47,190Total number of employees

714

280

312

109

77

17

90

1,599

Average training hours (Hours)

25

52

21

24

10

1

50

30

Total Amount Invested(in thousands of NTD)

8,035

1,633

1,318

563

143

4

2,018

13,714

Total training hours

16,464

16,702

13,657

5,567

388

494

2,794

56,066

Total number of employees

687

289

309

109

76

26

90

1,586

Average training hours (Hours)

24

58

44

51

5

19

31

35

Total Amount Invested(in thousands of NTD)

3,032

731

712

250

96

62

1,355

6,238

Total training hours

31,884

17,27016,768

7,334

424

310

2,242

76,232

Total number of employees

694

292

310

109

77

32

90

1,604

Average training hours (Hours)

46

59

54

67

6

10

25

48

2,951

1,619

1,014

592

64

25

635

6,900

Total training hours

2020

follows the principle of gender equality and equality of opportunity. Starting in 2019, the total

TSRC
Corporation

Includes Global Business Headquarters,
Gangshan factory, Kaohsiung factory

2019

in the market and environment. All training is organized to respond to the work requirements andTotal Amount Invested(in thousands of NTD)

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Note: The amount invested by each factory is converted from the local currency into NTD using the following exchange rates: CNY: TWD = 1:4.5322; VND: TWD = 1:0.001259; USD: TWD = 1:28.8224.

Total

105

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

Average Hours of Training Per TSRC Employee (by Gender and Employee Category) ／Includes Global Business
Headquarters, Gangshan factory,
Kaohsiung factory

1. About TSRC
2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability

Rank

2019

4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social

GenderEngagement

Appendix

ShanghaiIndustrial

TSRC(Vietnam)Company
Limited

TSRC
Specialty
Materials
LLC

TSRC
Corporation

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

Senior Management

14

86

48

48

0

0

8

Mid/Entry Level

25

58

38

82

11

0

23

Indirect Employees

26

57

18

16

24

17

35

Direct Employees

26

48

20

20

8

0

65

Male

25

53

22

26

20

10

62

Female

27

42

16

14

18

7

17

Senior Management

19

77

74

58

0

1

12

Mid/Entry Level

32

57

68

70

15

5

39

Indirect Employees

27

57

38

42

20

19

22

Direct Employees

20

58

44

53

9

1

38

Male

23

59

45

57

13

14

32

Female

29

49

35

27

19

12

20

Senior Management

21

43

54

134

0

1

2

Mid/Entry Level

38

67

87

124

15

5

22

Indirect Employees

38

64

46

47

18

20

18

Direct Employees

57

57

55

68

13

6

35

Male

48

61

56

76

15

19

28

Female

37

47

39

34

18

13

14

Rank

2020

GenderRank

2021

GenderNote: 1. Senior managers refer to G19 and above managers, mid/entry level managers refer to deputy managers and managers.
2. D
 irect employee refers to personnel directly responsible for production lines, including operators, technicians, shift leaders, and analysts.
Indirect employees are all employees that are not direct employees.

2021
Sustainability Report

106

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social
Engagement

Appendix2021
Sustainability Report

Career Development
TSRC conducts investigation on talent development every March.
We review talents in key positions and formulate development plans.

In Mainland China

Starting from 2021, we organized a series of "TSRC Sharing andExchange Panels” in Taiwan and invited internal experts from each

Shen Hua Chemical develop mentor

field to share their professional experiences and insights. The online

activities for new employees and transferredsharing events facilitate interactions among colleagues and remove

employees to obtain suitable skills and meetbarriers between departments and allowing knowledge and skills

the requirements of their position. Completion

to be shared between different function units to break the silo. We
organized 16 selected topics with 24 internal experts to share theirexperiences in 2021. The sharing panels received positive feedback
and had a total of 1,800 participants. The feedback showed thatthe satisfaction rate reached to 93%. In the future, we will gradually
expand the sharing activities to other sites and connect thecontents with employees’ career development paths to leverage
infinite potential and possibilities. TSRC also invests resources toincrease employee engagement and has organized panels in the
USA and mainland China to strengthen employee engagement anduplift TSRC employees’ engagement.

Performance Management
TSRC's employee performance includes goal setting, authorization,c o m m u n i c ati o n a n d g u i d a n c e, th e c o n n e c ti o n b et we e nperformance and rewards, and career development, aiming to
improve the overall performance of individuals, departments,of the mentor plan reached 100% in China

In USA

in 2021. We also completed two batches of

We began promoting “Grow Together” in 2021 to increasedevelopment" training. We finished the update

employee engagement, which includes activities in four aspects:
1. TSRC Summit:
Senior managers at the headquarters share annual
development plans and engage in exchanges with
employees.
2. Manager Kit:
We provide short videos to communicate concepts on
managerial competencies and shared 2 short videos in 2021.
3. T-Talk (TSRC-Talk):
Regardless of employees or managers, all employees
share knowledge, experience, and trends on topics they
are in charge of, but the activity was postponed to 2022

and the organizations. According to the Employee Performancedue to the pandemic.

Management Regulations, all employees, regardless of gender and

4. Engagement Team:

employee category, are subjected to the biannual performance
evaluation. The majority of TSRC employees are direct employees.
Managers periodically conduct performance interviews with all
employees regardless of employee category and provide feedback
to support employees’ career development.
TSRC cares about employees' career development. We not
only arrange face-to-face communication between managers
and individual employees, which facilitates discussion andimplementation of an individual’s career plan but also provide
guidance for employees who are underper formance in theevaluation. We provide timely resources or opportunities for
employees to shift to a suitable position.

Internal employees voluntarily serve as members of the
Engagement Team and jointly plan internal team activities
with supervisors and the Human Resources Department,
increasing employee exchanges while strengthening
their engagement. The Engagement Team was formallyestablished at the end of 2021 and will begin organizing
team building activities in 2022.

"performance management and employeeof numerous training manuals, including
audiovisual materials which are incorporated
into the online video learning system.

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance2021
Sustainability Report

107
Number of Employees Periodically Subjected to Performance Evaluations (by Rank and Gender) ／Includes Global Business
Headquarters, Gangshan factory,
Kaohsiung factory

TSRC
Corporation
Number ofpeoplePercentage

Shen Hua
ChemicalNantong Industrial

Number ofPercentage
peopleNumber ofPercentage
peopleTSRC-UBE

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Number of
Number of
Number of
Number ofPercentage
Percentage
Percentage
Percentage
peoplepeoplepeoplepeopleTotal
Number ofpeoplePercentage

3. Environmental

SeniorManagement

23

3%

1

0.40%

1

0.32%

1

0.92%

0

0%

1

5%

2

2%

29

2%

4. Social

Mid/Entry Level

76

11%

26

9.40%

20

6.41%

9

8.26%

15

19%

3

14%

9

10%

158

10%

Indirect Employees

263

37%

80

29%

68

21.79%

33

30.28%

40

52%

18

82%

46

51%

548

35%

Direct Employees

352

49%

169

61.20%

209

66.99%

63

57.80%

22

29%

0

0%

33

37%

848

54%

Male

603

84%

238

86%

274

87.82%

88

80.73%

56

73%

11

50%

67

74%

1337

84%

Female

111

16%

38

14%

24

7.69%

18

16.51%

21

27%

11

50%

23

26%

246

16%

SeniorManagement

22

3%

2

0.70%

1

0.32%

1

0.92%

0

0%

1

4%

2

2%

29

2%

Mid/Entry Level

79

11%

26

9.20%

22

7.12%

9

8.26%

16

21%

5

19%

11

12%

168

11%

Indirect Employees

258

38%

81

28.60%

71

22.98%

32

29.36%

37

49%

20

74%

47

52%

546

35%

Direct Employees

329

48%

174

61.50%

205

66.34%

66

60.55%

22

30%

1

4%

30

33%

827

53%

Male

577

84%

245

87%

271

87.70%

89

81.65%

56

75%

14

52%

67

74%

1319

84%

Female

111

16%

38

13%

28

9.06%

19

17.43%

19

25%

13

48%

23

26%

251

16%

SeniorManagement

29

4%

1

0.40%

1

0.32%

1

0.92%

0

0%

1

3%

1

1%

34

2%

Mid/Entry Level

75

11%

27

9.50%

20

6.45%

9

8.26%

16

21%

5

16%

12

13%

164

10%

Indirect Employees

260

38%

82

28.80%

74

23.87%

29

26.61%

37

49%

20

63%

48

53%

550

35%

Direct Employees

330

47%

175

61.40%

209

67.42%

65

59.63%

23

30%

6

19%

29

32%

837

53%

Male

578

83%

248

87%

275

88.71%

82

75.23%

57

75%

19

59%

65

72%

1324

84%

Female

116

17%

37

13%

29

9.35%

22

20.18%

19

25%

13

41%

25

28%

261

16%

4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees

Rank

2019

4.3 E
 nhance Social
Engagement

GenderAppendix

Rank

2020

GenderRank

2021

GenderNote: 1
 . Senior managers refer to G19 and above managers, mid/entry level managers refer to deputy managers and managers.
2. Direct employee refers to personnel directly responsible for production lines, including operators, technicians, shift leaders, and analysts. Indirect employees are all employees that are not direct employees.

108

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social
Engagement

Appendix2021
Sustainability Report

4.1.4 Looking Forward
TSRC continues to strengthen talent cultivation. We not only pursue excellent performance but also help colleagues have a fruitful life and gain a sense of belonging to the organization. Looking towards
the future, TSRC will focus on two main aspects of human resources development—the employee competency development plan for sustainable transformation and the promotion of collaboration
among industry, government, and academia on sustainability topics. Our short-term goal (2023) is for 30% of employees to receive ESG-related training. With regard to industry-academia collaboration
on sustainability topics, we aim that our sharing activities will reach 300 people. Our mid-term goal (3-4 years) is to increase the percentage of employees who receive ESG-related training to 60%. We willcontinue to implement industry-government-academia collaboration projects to create a mutually beneficial ecosystem and expect to reach 1,000 people. In the long term, we aim to have at least 80% of
employees receive ESG-related training and cultivate sustainability talent through industry-government-academia collaboration to create shared values, with 5,000 people being reached.

4.2 Improve Health, Safety &Wellbeing of Employees
4.2.1 Management Approach
TSRC believes that the safety of the workplace, the cohesiveness among
employees, and the harmony between employees and employers are theCore Elements of the TSRC HSE Core Value ／People-centric

Zero incidents

People we work with will be valued,

Commit to achieve andrespected, listened to, while creating

sustain zero incidents througha friendly workplace.

continuous improvement.

backbones of corporate sustainability. As employees are key factor to the
TSRC’s competitiveness, TSRC focuses on building a harmonious workplace
for sustainable development. In recent years, TSRC has continued to improve its
occupational safety and health through providing employees rewards and training
opportunities and developing transparent employee communication channels.
These three measures support TSRC in attracting and retaining talent as well as
pursuing the mutual prosperity of employees and the management.

4.2.2 A Healthy and Safe Workplace
The core value and policies of the health and safe
environment

Compliance

TSRC HSE Core Value

Full compliance withlaws, company policies,
and standards are

Commitment

minimum requirements.

Determined to operate
without compromising

TSRC has been promoting the “TSRC safety culture” since April 2021 forthe health, safety, andpersonnel at each level to better understand and attach greater importance toworkplace health and safety. By establishing behavioral safety observations (BSO)

environment.

scheme, hand protection devices, and the head-to-toe 100% PPE utilization,

Discipline

TSRC strengthens the core value of health and safe environment (HSE). The five

Be self-disciplined, build safecore elements of the TSRC HSE core value are people-centric, zero incidents,
commitment, discipline, and compliance.

habits, and a safety-first mindset
to demonstrate HSE practices.

109

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2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

We further formulated the “TSRC safety and health policies and principles” in accordance with
the TSRC safety culture. We pursue zero accidents and zero injuries with a people-centric

2. Governanceapproach through technology, safety culture, responsibility, and communication.

3. Environmental

In pursuing employee workplace safety and health and maintaining zero accidents and

4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social
Engagement

Appendix

injuries among stakeholders, Taiwan and mainland China factories have implemented ISO

Elements of TSRC's Safety and Health Policies and Principles ／Allow employees andrepresentatives to consult andparticipate, and continue to care
for and protect employees

Develop management
strategies and production
technology with theconsideration of theemployees’ health and safety.

Continue to improve safety management
and establish excellent safety culture
through setting goals and encouraging
all employees to participate inorganizational safety activities.

45001 Standard. Taiwan factories also adopt CNS45001 Occupational Safety and HealthManagement Systems and obtain certifications. We establish a Responsible Care Committee
at our headquarters in Taiwan. Subsidiaries in different regions set up a dedicated committee
or department responsible for labor safety and health matters in accordance with thePeople-centric

Safety &Health Culture

Technology

Occupational Safety laws and regulations. The person in charge of the business operation or
his/her designated representative holds labor safety and health meetings on a regular basis.
The Responsible Care Committee is formed by the Product Specification and Distribution Safety
Sub-committee, Process Safety and Energy-saving Management Sub-committee, Regulation andContractor Safety Management Sub-committee, and Emergency Response Sub-committee. It

Responsibility

Communicationis responsible for the management and review of the ISO 45001 Occupational Safety and HealthManagement System. The Responsible Care Committee convenes quarterly meetings and ischaired by the vice president of the Production Operations Division. The Committee members
include labor representatives, who participate in discussions on the planning and implementationof occupational safety and health policies. Duties of the committee are as follows:
1. Implement and integrate the Company's environmental protection, safety and health policies,
and management system, and carry out safety, health, environmental protection, andgreening work.

It is not only the Corporate Social Responsibility
but also my responsibility to comply with theapplicable safety and health regulations andother requirements to prevent occupational
accidents, injuries, and disease.

Communicate the need for implementing
occupational safety and health measures
to all employees under the authority andmanagement of TSRC through education
training and safety and health meetings.

2. Incorporate and meet the six management requirements of TRCA , in order to comply with4

industry regulations and meet the expectations from communities/society.

3. Implement the core values of our people-centric safety culture through operations of
the permanent sub-committees and aim to be an enterprise benchmarking model for

The structure of TSRC Responsible Care Committee ／sustainable development.

4. Taiwan Responsible Care Association (TRCA) promotes the responsible care system and established 6 standard
management guidelines, including process safety management, emergency response safety management,
distribution safety management, contractor safety management, waste management and reduction management,
and product safety management guidelines.

Responsible Care Committee

Product
Specification andDistribution Safety
Sub-committee

Process Safety
and Energy-saving
Management Subcommittee

Regulation andContractor Safety
Management Subcommittee

Emergency
Response Subcommittee

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Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

The Coverages of Occupational Safety and Health Management System Audits ／2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social

2019

Engagement

Appendix

TSRC Corporation
Gangshan Factory、
Kaohsiung Factory

Shen Hua Chemical

Nantong Industrial

TSRC-UBE

Shanghai Industrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Number As a percentage
ofof all employees
people based in the site

Number As a percentage
ofof all employees
people based in the site

Number As a percentage
ofof all employees
people based in the site

Number As a percentage
ofof all employees
people based in the site

Number As a percentage
ofof all employees
people based in the site

Number As a percentage
ofof all employees
people based in the site

Number As a percentage
ofof all employees
people based in the site

Number ofpeople being
internallyaudited

TSRC Employee

584

93%

281

100%

312

100%

109

100%

-

-

-

-

-

-

Non-employee*

22

15%

70

100%

113

100%

41

100%

-

-

-

-

-

-

Number ofpeople being
externallyaudited

TSRC Employee

589

94%

281

100%

312

100%

109

100%

-

-

16

73%

-

-

Non-employee*

22

15%

70

100%

0

0%

0

0%

-

-

0

0%

-

-

Number ofpeople being
internallyaudited

TSRC Employee

579

92%

291

100%

309

100%

109

100%

76

100%

23

88%

-

-

Non-employee*

7

7%

70

100%

105

100%

41

100%

12

100%

0

0%

-

-

Number ofpeople being
externallyaudited

TSRC Employee

573

94%

291

100%

309

100%

109

100%

76

100%

23

88%

-

-

Non-employee*

10

9%

70

100%

0

0%

0

0%

12

100%

0

0%

-

-

Number ofpeople being
internallyaudited

TSRC Employee

565

93%

299

100%

310

100%

109

100%

73

95%

29

91%

-

-

Non-employee*

5

5%

70

100%

105

100%

41

100%

4

100%

0

0%

-

-

Number ofpeople being
externallyaudited

TSRC Employee

579

94%

299

100%

310

100%

109

100%

59

77%

29

91%

-

-

Non-employee*

10

9%

70

100%

0

0%

41

0%

4

100%

0

0%

-

-

2020

2021

Note: 1. N on-employee means that the person is not an employee of the TSRC Group. The person is neither a full-time non-fixed-term contract employee nor a full-time fixed-term contract employees, but
the person's work and/or workplace is managed by TSRC, such as personnel stationed by vendors or interns from industry-academia collaboration projects.
2. TSRC employee refers to full time non-fixed-term employees and fixed-term contract employees whose employer is TSRC on their employment contract.
3. TSRC's Shanghai Industrial system was established in 2020, so there is no data on the system in 2019.
4. TSRC (Vietnam) did conduct external audit in 2019 during the time of site construction but did not conduct internal audit.
5. TSRC Specialty Materials LLC has yet to establish ISO 45001 Occupational Health and Safety Management Systems.

111

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Letter from the CEO
Stories for Sustainability
ESG Strategy

Occupational Injury Prevention and Improvement

1. About TSRC

Through ISO 45001 Occupational Health and Safety Management Systems and self-safety management,

2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social
Engagement

Appendix

TSRC schedules health examinations for personnel working with occupational hazards at each site. All
sites have identified occupational hazard factors and carried out preparations to reduce the probability ofhazards via management, process changes, improvement methods, work hours adjustment, separation,and personal protection. TSRC particularly manages five occupational hazard factors: noise, carbon
disulfide, benzene, dust, and butadiene. Employees that engage in the five special operations above are

Types of Injuries Suffered by TSRC Employees in 2021 ／Hand laceration, crush, bruise, fracture
Burn from high temperature

Chemical burnInsect bite

Commuting traffic accidents

divided into four levels and are periodically examined by a doctor to determine if they have any abnormal• Laceration caused by stirring blade

health conditions. As all sites have noise as an occupational hazard factor, TSRC requires related personnel
to properly use PPE to effectively manage the health of personnel in operating areas with noise. In addition,
TSRC does not utilize hepatotoxins, nephrotoxins, neurotoxins, and sensitizers. Regarding corrosives and• Crushed by cover plate

9• Fracture caused by packaging
machine3

suspected carcinogens, we conduct biannual monitoring of the workplace to identify the risk. We further
improve the workplace and facilitate employees’ behavior change when operating, aiming to reduce the

Total
14

exposure to chemicals. TSRC also conveys special health examinations to scrutinize the potential negative
impacts of chemicals on employees. We invite occupational health medical doctors to factories once a1
1

month, providing consultation services to employees. We also analyze employees’ health examination data
to monitor potential negative impacts on colleagues for reducing occupation diseases.

• Bitten by centipede

To provide better care for employees’ health, TSRC continuously organizes health promotion activities, suchas health examinations, health education promotions, and sports activities. We invite occupational medicine
specialists to provide on-site services, improving employee health management performance.

Occupational Hazard Factors of TSRC Sites／

Group locations

Occupational hazard factors

TSRC Corporation (includes Global Business
Headquarters, Gangshan factory, Kaohsiung factory)

Noise, dust, chemicals

Shen Hua Chemical

Noise, chemicals

Nantong Industrial

Noise, dust, chemicals

TSRC-UBE

Noise, chemicals

Shanghai Industrial

Noise, dust

TSRC (Vietnam) Company Limited

Noise, dust

TSRC Specialty Materials LLC

Noise, dust, chemicals

Types of Injuries Suffered by TSRC Non-Employees in 2021 ／Hand laceration, crush, bruise, fracture
Burn from high temperature

Chemical burnInsect bite

Commuting traffic accidents

1• Collision with push plate

1

Total
2

112

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Letter from the CEO
Stories for Sustainability
ESG Strategy

Occupational Injuries Suﬀered by Employees of TSRC Group ／TSRC Corporation
Gangshan factory、
Kaohsiung factory

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Total recordable incidence rate (TRIR)

0.33

0.93

0

0.84

0

0

0

Occupational disease rate (ODR)

0

0

0

0

0

0

0

Lost day rate (LDR)

2.17

3.73

0

25.18

0

0

0

Absent rate (AR)

0.43%

0.9%

0.80%

1.10%

0.50%

0

1.80%

Number of work-related fatalities

0

0

0

0

0

0

0

Total recordable incidence rate (TRIR)

0.83

0.61

0.62

0.87

0

0

0

Occupational disease rate (ODR)

0

0

0

0

0

0

0

Lost day rate (LDR)

5.83

19.18

0

0

0

0

0

Absent rate (AR)

0.48%

1.00%

0.70%

0.80%

1.20%

0

0.90%

Number of work-related fatalities

0

0

0

0

0

0

0

Total recordable incidence rate (TRIR)

0.51

0.29

0.28

0

0

0

0

Occupational disease rate (ODR)

0

0

0

0

0

0

0

Lost day rate (LDR)

9.88

0

15.3

0

0

0

0

Absent rate (AR)

0.48%

1.03%

1.10%

0.68%

0.88%

0

1.70%

Number of work-related fatalities

0

0

0

0

0

0

0

1. About TSRC
2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability

2021
Sustainability Report2019

4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social
Engagement

Appendix

2020

2021

Note: 1. T he TSRC Group established a unified calculation method for TRIR and LDR in August 2020. In the past, the scope of calculation varied with factories due to different definitions of occupational injury incidents according to local
regulations. The figures for 2019 and 2020 disclosed in this report are different from previous reports because they were recalculated after the calculation method was unified.
2. The data presented in this table does not include information of the global business headquarters.
3. Total recordable incidence rate (TRIR) calculation method: TRIR/Total work hours X 200,000
4. Occupational disease rate (ODR) calculation method: Number of occupational disease cases/total work hours) X 200,000
5. Lost day rate (LDR) calculation method: Number of lost work days/total work hours) X 200,000
6. Absent rate (AR) calculation method: Total hours absent/Total work hours X 100%
7. TSRC Specialty Materials LLC ware originally named Dexco Polymers, and was renamed TSRC Specialty Materials LLC in 2021.

2021
Sustainability Report

113

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance

Employee Health Promotion Activities at Each Site of TSRC Group ／Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees

TSRC Corporation

Shen Hua Chemical

Nantong Industrial

Number ofparticipants

Number ofparticipants

Number ofparticipants

Number ofsessions

Number ofsessions

Number ofsessions

TSRC-UBE
Number ofparticipants

Shanghai Industrial

Number ofsessions

Number ofparticipants

Number ofsessions

TSRC (Vietnam)
Company Limited
Number ofparticipants

Number ofsessions

TSRC Specialty
Materials LLC
Number ofparticipants

Number ofsessions

Health examination

539

4

201

1

262

2

102

2

88

1

18

18

91

1

Health education promotion

194

7

281

14

262

12

102

12

81

1

0

0

0

0

Sports activities

41

1

0

0

0

0

0

0

0

0

0

0

0

0

On-site service by occupational
medicine specialist

106

12

36

4

0

0

0

0

0

0

0

0

0

0

Health examination

472

2

206

1

298

2

107

2

0

0

23

6

90

1

Health education promotion

87

3

286

22

298

12

107

12

80

1

26

14

0

0

Sports activities

0

0

0

0

0

0

0

0

0

0

0

0

0

0

On-site service by occupational
medicine specialist

112

12

38

4

0

0

0

0

0

0

0

0

0

0

Health examination

536

4

205

1

287

2

107

2

78

1

6

6

90

1

Health education promotion

191

5

295

16

287

12

107

12

77

1

32

25

0

0

Sports activities

38

2

0

0

0

0

0

0

0

0

0

0

0

0

On-site service by occupational
medicine specialist

127

12

32

4

0

0

0

0

0

0

0

0

0

0

2019

4.3 E
 nhance Social
Engagement

Appendix

2020

2021

114

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social

2021
Sustainability Report

Emergency Response Drills
TSRC has established emergency response procedures for potential raw material leaks, industrial
pipeline leaks, fire accidents, and process safety incidents that may result from operating activities.
We conduct annual drills and labor safety education and training. Furthermore, we explicitly
specify the rights and obligations in the guidelines for employees and contractors about safety
standards, training, health guidance, first aid and emergency rescue, and reporting accidents.

The Emergency Response Process of TSRC ／1

Engagement

Planning andemployee training

2

Appendix

Scenario planning3

On-site rehearsal

4

Formal drill

5Evaluation and review

Number of Drills in 2021 ／TSRC
Corporation

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

Raw materials leaking response

9

6

13

8

1

0

1

38

Industrial pipelines leaking response

2

2

12

2

0

0

0

18

Fire accidents response

4

5

50

4

1

2

0

66

Production process safety response

2

3

8

4

0

0

0

17

Others

1

8

111

22

1

0

2

145

Total number of drills

18

24

194

40

3

2

3

284

Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

2021

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Total

115

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ESG Strategy

COVID-19 pandemic prevention measures at TSRC group

1. About TSRC

Facing the COVID-19 outbreak in 2021, TSRC adopted three main measures to care for employees and their family members, including managing the work environment, providing subsidies and

2. Governancesupplies, and encouraging vaccination. The following table demonstrates details of the measures.

3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability

Pandemic Prevention Measures of the TSRC Group ／Sites

4.2 Improve Health, Safety &Wellbeing of Employees• The contact person reports employees' health conditions via the
network service every day ( including employees and family members
living in the same household are quarantined)

4.3 E
 nhance Social
Engagement

Appendix

Environmental prevention measures at workplace

TSRC
Corporation(includes Global
Business
Headquarter,
Gangshan factory,
and Kaohsiungfactory)• Employees with a body temperature over 37° C are prohibited fromentering workplace (only employees who are diagnosed by a doctor
as not having COVID-19 may enter the factory after their fever
relieved)• Prepare lists related to the workplace for inspection• Strengthen the cleaning and disinfection of the workplace• Establish a mechanism for employees to take rapid test kits
• All non-employees, visitors, or contractors are required to use the
SMS contact tracing system and verify that they have received 2
doses of vaccine or have a negative rapid test result within a week
before entering factories.

• The contact person reports employees' health conditions every day
via the cloud service• Employees with a body temperature over 37° C are prohibited fromentering the work environment• Provide and disseminate information about the pandemic• Strengthen the cleaning and disinfection of the work environment• Provide pandemic prevention childcare leave• Assist employees in applying for government subsidies

TSRC-UBE• A total amount of NTD 1.92 million subsidies is provided
to expatriates who remained in their position during the
pandemic for rewarding their contribution to maintain the
Company's continuous production• A spending of approximately NTD 660,000 on thermal
imaging cameras, automatic disinfectants, forehead
thermometers, ear thermometers, medical masks, 75%
alcohol spray, hand sanitizer, rapid test kits, PVC/latex
gloves, protective hat screens, protective clothing, andprotective face masks

Vaccination promotion• Provided 8 hours of
paid leave, which is
better than requiredby law, to encourage
employees to be
vaccinated• Employees who could not go home during Chinese New
Year were given paid family visit leave or transportation
subsidies

Shen Hua
ChemicalNantongIndustrial

Subsidies or supplies provision• Provide hand sanitizer and disinfectant, with investmentof approximately RMB 83,000 in infrared forehead
thermometers and every-day masks for employees• Employees who could not go home during Chinese New
Year were given paid family visit leave or transportation
subsidies• Provide hand sanitizer and disinfectant, with investmentof approximately RMB 32,000 in infrared forehead
thermometers and every-day masks for employees• 694 employees and 200 contractors• 9 employees took paid family visit leave• 1 employee received transportation subsidies• 300 employees and contractors received carepacks

• Provide hand sanitizer and disinfectant, with investmentof approximately RMB 80,000 in infrared forehead
thermometers and every-day masks for employees• Employees who could not go home during Chinese New
Year were given paid family visit leave or transportation
subsidies

Number of people that benefited frompandemic prevention measures• 20 employees received government subsidies• 16 employees took paid family visit leave• Promote vaccinationrelated information• 1 employee received transportation subsidies in
the amount of RMB 800• 310 employees and 110 contractors received
care packs• 25 employees received government subsidies• 4 employees took paid family visit leave (3 daysof leave per person)• 1 employee received transportation subsidies(RMB 800 for 1 person)• 110 employees and 40 contractors received
care packs(continued on next page)116

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

Pandemic Prevention Measures of the TSRC Group ／Sites

2. Governance
3. Environmental
4. Social

ShanghaiIndustrial

Appendix

Subsidies or supplies provision

Vaccination promotion• Employees are divided into groups for lunch break to preventthe possibility of cross infection• Strengthen the cleaning and disinfection of the work

• Provide every employee with one free-of-charge mask a day• Divide employees into groups to adopt work-from-home;administrative personnel worked from home when the

TSRC(Vietnam)Company
Limitedpandemic ﬁrst began• Manufacturing and technical units were stationed infactories in advance so that factories were able tocontinue production• Provide free rapid test kits for all employees to be tested
each week to ensure that the factory is safe
• Have medical personnel be trained at a medical institution
to obtain government certiﬁcation to conduct rapid tests

Number of people that benefited frompandemic prevention measures• 84 employees and contractors received care packs• Spent approximately RMB 9,000 on medical masks,
disinfectant, 75% alcohol spray, hand sanitizer, andinfrared thermometers• Promote vaccinationrelated information

environment

4.2 Improve Health, Safety &Wellbeing of Employees
Engagement(continued from previous page)• Divide employees into groups to adopt work-from-home

4.1 Strengthen
Organization’s
Sustainability Capability

4.3 E
 nhance Social

Environmental prevention measures at workplace2021
Sustainability Report• 12 employees took paid family visit leave• 14 employee received transportation subsidies• Front line workers at Xiaokunshan Community Hospitalreceived Chinese New Year gifts worth RMB 3,000• Provide subsidies of VND 3 million per employee• Provide healthcare supplies: Alcohol spray, masks,
face shields, protective clothing, gloves, rapid test
kits, PCR expenses, pandemic prevention vehicles,
oximeters, NRICM 101 medicine, and blood pressure
meters• Promote vaccinationrelated information• All 32 employees in the factory• Daily life related (supplies required for being stationed
in factories): Mattresses, pillows, blankets, toiletries,
and food• A total cost is VND 867,149,713• 2021 was the second year of the COVID-19 outbreakin the United States, and the outbreak was graduallycontrolled after vaccination began. Employees not working
in the production lines (such as engineers, procurement,

TSRC
Specialty
Materials
LLC

and logistics personnel) were gradually allowed to enter
the factory and improved operational eﬃciency• The Houston oﬃce adopts work-from-home measures.
Necessary equipment is provided to employees (e.g.,monitors and headsets)• Promote pandemic prevention measures in the factory,
including maintaining social distancing and wearing masks.
• Regularly disinfect public areas• Provide paid leave per laws to employees diagnosed
with COVID-19 or requested to be quarantined.
Employees can apply for the Company's groupinsurance beneﬁts to maintain their income once theleave days exceed the statutory number of paid leavedays.
• Provide alcohol spray for disinfection and medical
masks• Promoted
vaccination-related
information andcollect recordsof employees’
vaccination• 50 employees who continued to work in the factoryduring the pandemic had a total of 1,044 hours ofhonorary leave

117

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2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

4.2.3 Remuneration and Benefits

1. About TSRC

Employee remuneration

2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social
Engagement

Appendix

TSRC provides reasonable salaries to attract and retain chemistry and chemical engineering

The employee remuneration and benefits of the TSRC Group reached NT$2.2 billion in 2021,

talent. In addition to proper compensations, we attempt to boost morale at appropriate timing

increasing 22% compared with 2020. The average remuneration and benefits expenses

with the consideration of different employees’ needs. TSRC abides by labor laws and regulations

significantly increased to NT$1.39 million, increasing 21% compared with 2020. TSRC continues

at each site and does not discriminate against employees with different salaries and benefits

to provide competitive remuneration and benefits connecting with profits to attract and retain

whatever their race, skin color, age, religion, nationality, marital status, gender, sexual orientation,

outstanding talent to contribute to the prosperities of the chemistry industry.

gender identity, military service, or political position, which are unrelated to their ability. Due tothe nature of work and characteristics of the chemistry and chemical engineering industry, asignificant salary difference between genders occurs.

Ratio of Basic Salary and Remuneration of Women to Men at TSRC Group ／TSRC Corporation

Shen Hua
ChemicalNantong Industrial

TSRC-UBE

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

The management

77%

105%

66%

70%

103%

No male88%

Indirect employees

96%

75%

72%

68%

84%

100%

76%

Direct employees

No female85%

No female67%

No femaleNo female73%

Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory2021

Note: 1
 . Direct employees refer to personnel directly responsible for production lines, including operators, technicians, shift leaders, and analysts.
2. The management refers to high-, medium-, and basic managers. 3. Indirect employees refer to non-managerial employees and non-direct employees.

Number of Non-Managerial Staff and Remuneration and Benefits Expenses of TSRC in 2019-2021 ／Unit: NTD

Number of
employees

Number ofnon-managerial staff

Average salary of
non-managerial staff

Median salary of nonmanagerial staff

Salary and benefits expensesof the group's employees

Average salary and benefits
expenses of the group's employees

2019

1,608

1,577

917,622675,490

1,944,457,000

1,209,239

2020

1,587

1,557

950,624

708,234

1,828,747,000

1,152,330

2021

1,604

1,571

1,064,601

815,555

2,230,365,000

1,390,502

Note: 1. Fluctuations in employee compensation and benefits expenses were due to government subsidies for salaries and insurance premium reductions and waivers due to the impact of COVID-19 in 2020, as well as the different
percentage of profits allocated as bonuses and directors' remuneration in 2017-2019 due to the business performance each year.
2. The average salary of non-managerial staff and the median salary of non-managerial staff are calculated according to the “Salary Information Reporting for Full-time Employees Who Are Not in Supervisory Positions” Guideline
published by Taiwan Stock Exchange.
3. The salary and benefits expenses of the group's employees and the average salary and benefits expenses of the group's employees are based on the financial report, including food expenses, employee benefits, training expenses,
employee remuneration and the director's remuneration in Taiwan.
4. 4 The exchange rate used in the table is from data at the end of each year, using the Company's cumulative average exchange rate.

118

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social
Engagement

Appendix2021
Sustainability Report

Employee Benefits
To encourage colleagues to enjoy work, TSRC provides employees with benefits and insurance
which are better than local laws while considering the business performance and market
competitiveness. The Company offers group insurance including family members, mealGroup insurance
better than laws
requirement

Meal allowanceand year-end party

Annualhealthsubsidies

Annual company
trip subsidies

Wedding gift money,
childbirth gift money,
and consolation money
for injury and illness

All factories
have arecreationroom

allowance, year-end parties, health examination subsidies, travel subsidies, wedding gift money,
childbirth gift money, and consolation money for injury and illness. We provide awards for senior
employees and model employees in recognition of their years of outstanding contribution andefforts for the Company. All factories of TSRC have a recreation room with table tennis, pooltable, fitness equipment, and other sports and exercise equipment, allowing employees to relax
and expand their interpersonal relationships after work.

Employee Benefits Expenses at Each Site of TSRC Group ／Includes Global Business
Headquarter, Gangshan factory,
and Kaohsiung factory

Unit: NTD

TSRC
Corporation

Shen Hua Chemical

Nantong Industrial

2019

25,697,000

22,710,854

23,241,122

7,899,625

6,843,622

378,033

403,5142020

18,358,000

28,135,898

23,372,555

8,955,627

6,848,154

895,814288,2242021

24,567,000

24,043,321

26,921,268

10,573,623

7,682,079

1,270,710

345,869

TSRC-UBE

Shanghai Industrial

TSRC (Vietnam)
Company Limited

Note: 1
 . Benefits include holiday bonuses, cash gifts on birthday, other subsidies, and lucky draw during year-end party.
2. The amount by each factory is converted from the local currency into NTD using the following exchange rates: CNY: TWD = 1:4.5322; VND: TWD = 1:0.001259; USD: TWD = 1:28.8224.

TSRC Specialty
Materials LLC

2021
Sustainability Report

119

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social
Engagement

Appendix

Retirement Plans

4.2.4 Employee Rights and Communication

TSRC provides employees with insurance and pension in accordance with relevant laws

Human Rights Protection

and regulations. Per the regulations specified in the Labor Standards Act, the Labor
Pension Act and its Enforcement Rules, and the Pension Fund Accounting Guidelines,

TSRC exerts every effort to protect employees' human rights and respects their fundamentala monthly pension is set up by TSRC to a personal account of the Taiwan Bank and thefreedoms. We reference internationally recognized standards for human rights, such as thestaff of the Labor Insurance Bureau. The Labor Pension Reserve Supervisory Board

United Nations Universal Declaration of Human Rights, and prohibit all forms of discrimination,holds regular meetings to review the pension fund utilization status to protect employees'

forced labor, and child labor. We also do not obstruct employees' freedom of association. In

retirement benefits. For subsidiaries in mainland China, per relevant provisions of China's

order to create a safe and healthy workplace and provide channels for employees to freely

Social Security Act, both the Company and employees contribute at a set percentage toexpress their opinions, we establish the "Sexual Harassment Prevention Measures, Grievancebasic retirement insurance, basic medical insurance, work injury insurance, unemployment

Appeal and Punishment Regulations," which meet the SA8000 Code of Conduct and ensure

insurance, maternity insurance, and the housing provident fund. When retiring, thethat the investigation process of employee grievances is kept confidential to protect the privacy

employee shall receive the pension uniformly distributed by the National Labor and Socialof the parties involved. We also establish the "Employee Grievance Management Regulations,"

Security Departments in accordance with the laws and regulations. The subsidiary in

set up employee opinion boxes, and provide training courses to promote and protect employee

the USA provides insurance in accordance with the local Social Security Act and 401(k)rights and interests. We received 1 sexual harassment complaint from a subsidiary in 2021.

Retirement Savings Plan.

The case was handled based on the grievance process and Employee Handbook, which is
conducted an investigation, interviewed employees while maintaining confidentiality, reported
investigation results, and then imposed a penalty by the Human Resources Division.

Training Course about the Promotion and Protection of Employees’ Rights and Interests ／Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

TSRC
Corporation

Shen Hua Chemical

Nantong Industrial

TSRC-UBE

Total
number ofparticipants

Total
training
hours

Total
number ofparticipants

Total
training
hours

Total
number ofparticipants

Total
training
hours

Total
number ofparticipants

Total
traininghours

Sexual harassment and preventionof workplace violence

313

466

0

0

311

233

109

Internal audit training(e.g., ISO45001 Standards)

8

1

51

14

2

24

Occupational safety
training series

1,735

6,995

54

2

4,944

Mental and physical health andwork-life balance

120

240

0

0

Total

2,176

7,702

105

16

Shanghai Industrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Total
number ofparticipants

Total
training
hours

Total
number ofparticipants

Total
training
hours

Total
number ofparticipants

Total
training
hours

81

0

0

0

0

91

106

0

0

0

0

0

0

0

0

9,270

1,728

3,240

77

3

32

46

0

0

3,444

3,444

1,284

1,284

0

0

0

0

0

0

8,701

12,971

3,121

4,605

77

3

32

46

91

106

Note: 1. The number of participants is the number of people that participated in physical and online trainings.

2. The unit of total training hours is hours.

120

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social

2021
Sustainability Report

Communication with Labors
Parts of TSRC factories have a labor union and regularly hold labor/management meetings. Labor rights and interests are communicated and coordinated through formal meetings on specific topics
about labor practices are discussed to reach a consensus. The labor union in Taiwan entered into a collective agreement in 2005, with the scope extending to shift employees in the Kaohsiungfactory. The collective agreement covers 37.4% of total employees. In addition, the annual Labor Union Representatives Conference invites the directors and members of the labor unions every year.
Subsidiaries in mainland China organize different communication meetings for employees to express their opinions or suggestions about the work and living to the Human Resources Department.
Relevant departments and supervisors shall answer their questions and propose improvement solutions.

4.2.5 Looking Forward

4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees

Employees' health and welfare are a crucial path to the cultivation of sustainable talent. TSRC will focus on the

4.3 E nhance Social

environment of all sites around the world, (2) providing employees with mental and physical care, and (3) enhancing

following three aspects to continue enhancing our caring for employees including (1) improving the safety of the work

Engagement

employee engagement. Our short-term goal (1-2 years) is to decrease TRIR to 0.36 and below to create a safer andhealthier workplace. We will conduct physical and mental health activities or lectures with 500 participants to improve

Appendix

employees’ health and welfare. We target to enhance employee engagement of at least 70% satisfaction rate in thenear future.
Our mid-term goal (3-4 years) is to decrease TRIR to 0.3 and below. We will provide mental and physical consultation
services in the workplace to support employees’ welfare, and the cover at least 50% of all sites. We aim to increase
employee engagement to have a 72% satisfaction rate.
Our long-term goal (5-10 years) is to decrease TRIR to 0.3 and below and a achieve one or more years of zerorecordable injuries. Mental and physical consultation services will be available at all sites and employee engagement
will be up to 75% satisfaction rate.

TSRC’s Labor Union Data at Each Site ／TSRC
Corporation

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Year established

1988

2007

2011

2011

2017

2020

None

Labor union members (number of people)

500

292

310

109

76

24

None

Ratio of labor union members

72%

100%

100%

100%

99%

100％

None

Is there a collective bargaining agreement

Yes

No

No

No

Yes

Yes

None

Does the collective bargaining agreement include ashortest notice period for material changes to work

90 days

N/A

N/A

N/A

60 days

3 daysNone

Includes Global Business Headquarters, Gangshan
factory, and Kaohsiung factory

Note: 1. TSRC Corporation (includes Global Business Headquarters, Gangshan factory, and Kaohsiung factory) follows the organization regulations of the union in Taiwan. Only employees with a grade of 14 (inclusive) or below are eligible tobe labor union members, and employees with a grade of over 14 are not eligible to join the union.
2. New employees of Shanghai Industrial will be eligible to join the union only after passing the probationary period.

121

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC

2021
Sustainability Report

4.3 Enhance Social Engagement
4.3.1 Management Approach

4.3.2 Implementation Framework and Resources

TSRC upholds the spirit of "investing resources and making contributions for the society

TSRC established a Social Care Committee in 2011 to guide employees of each department

to create mutual prosperity” and dedicates long-term efforts to engage with communities.

to participate in charity events, fulfilling its corporate social responsibility while giving back to

Ensuring industrial safety and environmental protection is TSRC's primary mission in thecommunities. We adjusted the units responsible for community involvement in 2021 from theproduct manufacturing process. Facilitating factories and communities to mutually prosper

Social Care Committee to the social task force, which is subordinate to the ESG Taskforce,and jointly create value is the foundation for TSRC's sustainability. To achieve the vision, wein order to more systematically roll out community engagement activities and expand the

4.2 Improve Health, Safety &Wellbeing of Employees

keep close relationship with communities and actively respond to the needs of communities.

implementation. The task force oversees activities related to social care, science education,

4.3 E
 nhance Social

Since chemistry and chemical engineering applications cover the many aspects of daily life, we

NGO donations, care for underprivileged groups, and social groups. The social task force ishave dedicated effort to promoting chemistry education and attach importance to cultivating

divided into four sub-groups according to topics, including social care, science education,

chemistry talent. We work with employees and related organizations to jointly invest resources

employee benefits, and environment maintenance. TSRC invested a total of approximately

for sustainable development and leverage our positive impact.

NT$1 million in community engagement in 2021, in which activities related to social care

2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability

Engagement

Appendix

TSRC has 5 main principles for community engagement—education cooperation, talentcultivation, care for the underprivileged, environmental protection, and social assistance. We
strengthen communication with stakeholders based on these five principles. Over the years, we
continued to develop chemistry education through our community volunteering program, fulfilling
our corporate social responsibility while gradually achieving the vision of mutual prosperity for

mainly focus on charity projects held where factories are located, while activities about scienceeducation focus on chemistry education projects for rural areas. Resources invested in thesetwo categories account for 86% of the total resources invested. Resources invested in NGO
donations accounted for 7%, activities about underprivileged groups accounted for 6%, andactivities related to social groups accounted for 1%.

industry and communities.

Five Principles for Community Engagement ／TalentCultivation

Statistics of Resources Invested by TSRC in Community
Involvement in 2021 by Category ／Environmental
Protection

Social care

45%

Social groups

1%
Care for underprivileged groups

Science education

6%

41%

NGO donations

Education
Cooperation

Care For The
Underprivileged

SocialAssistance

7%

122

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees

4.3.3 Social Care
TSRC attaches importance to the risks and opportunities brought by operations to local communities. With companies located in the same industrial park and the Industrial Park Manufacturers
Association and Service Center, we hold regular meetings to communicate with local residents and understand the potential impacts or opportunities our operations bringing to residents’ daily life.
We also conducted interview with the chiefs of villages when preparing the Sustainability Report to understand material topics that communities are concerned about. The interview in 2021 showsthat residents pay attention to TSRC's talent recruitment and development and attach importance to how TSRC can bring greater development and prosperity to communities. To respond to local
expectations, TSRC dedicates its efforts to mutual prosperity with society and actively creates value together with communities. We facilitate community development with our activities and provide
substantial assistance to underprivileged social groups, such as farmers, students, and low-income households.

In Taiwan

4.3 E
 nhance Social
Engagement

Appendix

Annual budget for donations ／1. Meal allowance and after-school tutoring
TSRC cherishes the potential and development of ever y child. We suppor t
underprivileged children to intake sufficient nutrition through donations. Starting in
February 2012, TSRC allocates NT$440,000 every year to sponsor the lunch feesof underprivileged students in three elementary schools (Dashe Elementary School,
Guanyin Elementary School, Jiacheng Elementary School) located around ourKaohsiung factory. TSRC has expanded its sponsorship to emergency aid and afterschool tutoring since 2011, aiming to better meet the actual needs of local students.
An average of over 100 students each year is benefitted. As of the end of 2021, thecumulative sponsorship amount is NT$4.4 million, and over 700 students are benefited.

Recipient elementary
schoolAmount of
donation

Dashe Elementary
School

200,000

GuanyinElementary School

200,000

Jiacheng
Elementary School

40,000Total amount

440,000

2. Organizing activities with communities
TSRC's Kaohsiung factory and nearby factories in the same industrial park form the Industrial Park Manufacturers Association.
TSRC served as the director in 2021 and called on other factories to participate in neighbor activities, giving back to residentsof nearby communities. For example, migrant workers in Ren Da Industrial Park (Dashe and Renwu District) were tested for
COVID-19 a total of 580 times in 2021; we commissioned National Cheng Kung University to organize a presentation on the"Ren Da Industrial Park Pollution Reduction and Risk Improvement Project," building mutual trust with residents through events.
These activities provide an opportunity for residents to directly communicate with TSRC, helping TSRC understand theirrecommendations and opinions about the relationship between community development and our operations.

123

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social

3. Assisting local farmers
TSRC's Kaohsiung factory is located in Dashe
District. Except for areas designated as anindustrial zone, agriculture is the main economic
activity in the district. We actively work with
communities to jointly create value and support
farmers’ local production and local sales.
The Employee Welfare Committee purchases
agricultural products from local communities
each year. In 2021, we bought camellia oil from farmers and sent it to every
employee. The cafeteria of factories uses vegetables and fruit from local
farmers, taking action to give back to local agriculture.

Engagement

Appendix

4. Supplies and scholarships donated
TSRC is aware of the adverse effects of the urban-rural development gap
and the difference between the rich and poor. As more and more community
residents cannot receive decent education due to poor economic conditions,
it will deteriorate the community's human capital and prevent it from creating
value, and it may even affect the community's safety and stability. We,
therefore, attach great importance to supporting low-income households andactively provide supplies and scholarships to underprivileged social groups todrive community development.

Factories overseas
1. Supplies and scholarships donated
TSRC subsidiaries Shen Hua Chemical, Nantong Industrial, and TSRC-UBE have madedonations to the Taiwanese Enterprises Association and Nantong Old Liberated Areas
Foundation for Poverty Alleviation since 1999. The donations have been used to provide
scholarships, help families in straitened circumstances, and support underprivileged groups.
Over the past 20 years, the subsidiaries have invested an average of approximately RMB120,000
each year. During special holidays, such as Chinese New Year, Mid-autumn Festival, and Double
Ninth Festival, daily commodities are provided to impoverished students, elderly people living
alone, and orphanages. Scholarships are also provided to students with excellent grades.

5. Supplies donated and consolation money for health workers
Noticing the hardships endured by medical workers during the pandemic,
TSRC donated versatile pillows (also used as the souvenir of TSRC's 2021
shareholders' meeting) made with our advanced materials to medical workers
at Cardinal Tien Hospital, in the attempt to support medical workers andfamily members of patients in gaining sufficient and good rest.

124

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

2 . Consolation money for medical workers

3. Supporting local charity initiatives

1. About TSRC

At the peak of the pandemic

TSRC's subsidiaries in mainland China, including Shen Hua Chemical, Nantong Industrial, and

2. Governancein Januar y 2021, TSRC

TSRC-UBE, actively support the charity initiative brought by Nantong City, Jiangsu Province, andShanghai Industrial donatedthe proposal to construct a city of charity in Nantong Development Zone. These three subsidiaries

supplies of RMB3,000 to

made a commitment to jointly establish a "TSRC-Nantong Charity Foundation" in January 2022,

front line medical workers

making an annual donation of RMB 150,000 to the Nantong Development Zone Charity Foundation

at Xiaokunshan Community

for 5 consecutive years. The Foundation will use the funds for those in straitened circumstances,

Hospital to suppor t thehealth workers, students, elderly people, persons with disabilities, and people living alone. The

c o mmu ni t y’s pa nd e mi cfunds can also be used to support TSRC employees who face financial difficulties or other TSRC

prevention.

charities. TSRC exerts its social influence by participating in local charity initiatives and has assisted

3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability
4.2 Improve Health, Safety &Wellbeing of Employees

underprivileged social groups for years to achieve mutual prosperity.

4.3 E
 nhance Social
Engagement

Appendix

4.3.4 Science Education
Chemistry and chemical engineering are the foundation of consumption goods. Students who received
chemistry education will have more options in their future careers. This will also help TSRC recruit
outstanding talent from local communities and further facilitate the prosperity of communities to creating
a win-win situation for enterprises, schools, and local communities.
TSRC began allocating an annual budget of NT$400,000 in 2012 for sponsoring the plan--“Chemistry On
The Go” hosted by Tamkang University. It utilizes a retrofitted 3.5-ton truck to create a mobile chemistryvenue, which tours schools to popularize chemistry education. TSRC has provided teaching supplies tosupport more than 10 events of the plan--“Chemistry On The Go” in Kaohsiung and adopted activities
held in schools where the factory is located. TSRC employees served as volunteers when assisting inchemistry education promotion events. TSRC participated in almost 20 events over the past decade,and more than 170 TSRC volunteers contributed to nearly a thousand hours of services. The events
attracted a thousand students. Due to the pandemic prevention controls in 2021, offline events werelimited, but TSRC employees still participated in the only offline event and played the role of chemistryteacher at Longdu Elementary School in Meinong District, Kaohsiung City, guiding students to conduct
simple chemistry experiments.
The plan--“Chemistry On The Go” uses experiments to support students to experience intriguing chemical
reactions and explains the diverse applications of rubber products in daily life, helping students understand
why TSRC's rubber products are indispensable and better understand TSRC's business strategies andvalues. TSRC employees engage in in-depth exchanges with students through volunteer services, whichbring out their passion for chemistry and create greater momentum for innovation and R&D.

125

About this Report

2021
Sustainability Report

Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
4.1 Strengthen
Organization’s
Sustainability Capability

R&D Division Rubber
Polymerization
Technology GroupI-Ting Shen

After participating in the plan--” Chemistry On The Go” for two

I am honored to participate in the plan--“Chemistry On The

consecutive years, I found that the event not only allows students toGo” and see firsthand how junior high school students gain

better understand our company but also gives us an opportunity toknowledge of chemistry through interesting experiments.

share our work experience with them, so that they will know that they

Doing experiments with children allowed me to once again

can shine in any field as long as they persevere!

experience the fun of absorbing new knowledge!

R&D Division Process
Verification Division

Hung HsienChang

4.2 Improve Health, Safety &Wellbeing of Employees
4.3 E nhance Social
Engagement

Appendix

Besides primary chemistry education, TSRC works with the chemical engineering industry-academia
collaboration program and sets up specialty courses on the petrochemical industry in Renwu HighSchool, Kaohsiung City. The course covers carbon management in factories, air pollution reduction, soil
and groundwater pollution remediation, and on-site visits. TSRC colleagues also offer off-site practicalcourses in colleges. We not only provide 30 scholarship slots but also connect outstanding students
with our partners. Students who participate in the special course but decide to pursue higher-level
education will also be offered priority if they have an interest in joining TSRC when they graduate.

4.3.5 Looking Forward
Even though TSRC postponed several community engagement activities and educational exchange
programs in 2021 in coordination with the COVID-19 pandemic prevention controls, we have used thisopportunity to re-examine the influence of resources invested in community engagement projects andthe actual impacts on local communities to gain a better understanding of what local communities
need. In the future, TSRC will continue to focus on activities related to "social care" and "scienceeducation", formulate action plans with the consideration of local conditions, and increase the benefitsof participation and sponsorships. We will continue to organize new forms of volunteer activities togive back to society and encourage employees to dedicate their expertise to public services while
increasing the number of participants in volunteer activities. We aim for our chemistry educationexchange activities to reach 150 participants and volunteer activities to reach 300 participants within
the short-term (1-2 years). We plan that the chemistry education exchange activities to reach at least
300 participants and volunteer activities to reach 600 participants in the mid-term (3-4 years), with
our provision and donation of toolkits and resources. Our goal for the long-term is for the chemical
education exchange activities to reach 300 participants and volunteer activities to reach 1,000
participants in order to expand our influence on society.

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

126
Supplementary Data for the Social Aspect
Fatality of occupational injury incidents ／3. Environmental
4. Social

TSRC
Corporation

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Fatality for direct employees

0

0

0

0

0

0

0

Fatality for contract employees

0

0

0

0

0

0

0

Fatality for direct employees

0

0

0

0

0

0

0

Fatality for contract employees

0

0

0

0

0

0

0

Fatality for direct employees

0

0

0

0

0

0

0

Fatality for contract employees

0

0

0

0

0

0

0

Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

1. About TSRC
2. Governance2021
Sustainability Report

2019
2020

Appendix

2021

Note:
1. Direct employees are non-fixedterm and fixed-term contract
employees whose employer
is TSRC on their employment
contract.
2. Contract employees are
employees who employer is
not TSRC on their employment
contract but supervised by
TSRC, including contractors andpersonnel stationed by vendors.

Physical examination statistics of personnel with special position in each site of the TSRC Group ／TSRCCorporation

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Number of employees requiring examination

219

201

222

77

30

22

47

Actual number of examined employees

216

201

222

77

30

18

47

Implementation results (%)

99%

100%

100%

100%

100%

81%

100%

Number of employees requiring examination

294

207

251

83

31

26

53

Actual number of examined employees

292

207

251

83

31

23

16

Implementation results (%)

99%

100%

100%

100%

100%

88.50%

30%

Number of employees requiring examination

330

206

231

80

30

32

49

Actual number of examined employees

329

206

231

80

30

6

42

Implementation results (%)

99.70%

100%

100%

100%

100%

18.75%

85.71%

Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

2019

2020

2021

Process safety incidents count, process safety total incident rate, process safety incident severity rate, and number of transport incident of the TSRC Group in 2021 ／Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

TSRC
Shen Hua
Corporation Chemical

NantongShanghai TSRC (Vietnam)
TSRC-UBE
Industrial
Industrial Company Limited

TSRC Specialty
Materials LLC

Process safety incidents count (PSIC)

0

0

0

0

0

0

0

Process safety total incident rate (PSTIR)

0

0

0

0

0

0

0

Process safety incident severity rate (PSISR)

0

0

0

0

0

0

0

Number of transport incident

0

0

0

0

0

0

0

Note: 1. Process safety incidents count (PSIC) is defined as the total (annual) count of all incidents that meet the definition of a Tier 1 PSI per ANSI/API RP 754.
2. Process safety total incident rate (PSTIR) is defined as the cumulative (annual) count of incidents normalized by man hours, is calculated as the PSIC multiplied by 200,000 and divided by the total annual hours worked by employees,
contractors, and subcontractors.
3. Process safety incident severity rate (PSISR) is defined as the cumulative (annual) severity-weighted rate of process safety incidents, is calculated as the Total Severity Score for all Process Safety Incidents multiplied by 200,000 anddivided by the total annual hours worked by employees, contractors, and subcontractors.
4. Number of transport incident is defined as a death or injury leading to intensive medical treatment, a stay in hospital of at least one day, or an absence from work of more than three days.

127

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Stories for Sustainability
ESG Strategy

1. About TSRC

2021
Sustainability Report

Supplementary Data for the Environmental Aspect
TSRC energy usage status in 2021 ／2. GovernanceIncludes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

TSRC
Corporation

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Total

3. Environmental

Consumption of purchased electricity(Million Joule)

389,181,600

194,583,600

217,846,800

76,816,800

15,012,000

8,244,000

73,486,800

975,172,680

Total electricity generated(Million Joule)22951620

0

0

0

0

0

0

22,951,620

Total electricity consumption(Million Joule)412,133,220

194,583,600

217,846,800

76,816,800

15,012,000

8,244,000

73,486,800

998,124,300

0

0

0

0

0

0

0

0

4. Social
Appendix

Renewable energy use

0%Percentage of renewable energy use

0%

0%

0%

0%

0%

0%

0%

Note: 1 kWh = 1 Kilowatt-Hour, 1W = 1 J/S, 1,000 kWh = 1000kW*3600S/H = 3,600,000 KJ = 3,600 MJ. The heat absorption needed to vaporize a ton of water = 2,260,000 J/kg (vaporization heat of water) x 1,000 kg = 2,260,000,000 J = 2,260 MJ.

The sale of products that contain Globally Harmonized System of Classification and Labeling of Chemicals (GHS) substances ／
2019

2020

2021

Total sales of products containing GHS Category 1 and Category 2 substances (in thousands of NTD) (A)27,108,301

23,173,891

31,440,852

Total sales of all company products (B)28,910,723

24,024,443

32,533,238

93.77%

96.46%

96.64%

27,108,301

23,173,891

31,440,852

100%

100%

100%

Total sales of products containing GHS Category 1 and Category 2 substances as a percentage of total sales of
all company products (%) (A/B)
Total sales of products containing GHS Category 1 and Category 2 substances that have been through the Company's
hazard evaluation (in thousands of NTD) (C)Total sales of products containing GHS Category 1 and Category 2 substances that have completed the Company's hazard
evaluation as a percentage of total sales of products containing GHS Category 1 and Category 2 substances (%) (C/A)

The production in the past three years ／Unit: metric tons

TSRC
Corporation

Shen Hua
ChemicalNantongIndustrial

TSRC-UBE

ShanghaiIndustrial

TSRC (Vietnam)
Company Limited

TSRC Specialty
Materials LLC

Total

The amount of production in 2019

169,431

151,831

57,51954,956

12,785050,308496,854

The amount of production in 2020

173,773

170,426

55,56063,036

12,214046,521

521,529

The amount of production in 2021

194,194

170,988

73,81565,2859,934

047,921

562,138

Includes Global Business Headquarter,
Gangshan factory, and Kaohsiung factory

128

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Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
Appendix2021
Sustainability ReportGRI Standards Index
General Disclosures
Discourse
Number

Disclosure Title

Discourse
NumberCorresponding Chapter

Name of the organization

102-48

Restatements of information

About this Report102-49Changes in reporting

1.3 Identification and Analysis of ESG
Material topics

102-50

Reporting period

102-51

Date of most recent report102-52

Reporting cycle

102-53

Contact point for questions regarding the report102-54Claims of reporting in accordance with the GRI
Standards

20-21

102-55100

102-5614

102-2

Activities, brands, products, and services

102-3

Location of headquarters

102-4

Location of operations

102-5

Ownership and legal form

102-6

Markets served

102-7

Scale of the organization

102-8

Information on employees and other workers 4.1.2 Diversity, Inclusion, and Recruitment

102-9

Supply chain

2.4.2 Supply Chain Management102-10Significant changes to the organization andits supply chain

No signiﬁcant changes

102-11

Precautionary Principle or approach

2.1.3 Risk Management102-12External initiatives

1.4.1 International ESG Initiatives

102-13

Membership of associations

1.4.2 Participation in Industry Associations

102-14

Statement from senior decision-maker

Letter from the CEO2102-16

Values, principles, standards, and norms of
behavior

1.1.2 Vision and Mission

16

2.1.4 Integrity

55

102-18Governance structure

2.1.2 Corporate Governance102-40

List of stakeholder groups

1.2 Communication with Stakeholders

102-41

Collective bargaining agreements

4.2.4 Employee Rights and Communication

102-42

Identifying and selecting stakeholders

102-43

Identifying and selecting stakeholders

102-44102-45

1.1.4 Business performance

25-29

List of material topics

1.1 Industry Positioning

1.1.1 Globalization

1.3 Identification and Analysis of ESG
Material topics

102-47Page

14

1.1.1 Globalization

Page

Defining report content and topic Boundaries

1.1 Industry Positioning

1.1.3 Main Products and Applications

Corresponding Chapter

102-46

GRI 102：General Disclosures (Core)
102-1

Disclosure Title

17-19

16

16

64-67

1
25-29

About this Report

1

GRI content index

GRI Standards Index

128

External assurance

About this Report1

GRI 102：General Disclosures102-15Key impacts, risks, and opportunities

2.1.3 Risk Management102-17

Key impacts, risks, and opportunities

2.1.4 Integrity

102-20Key impacts, risks, and opportunities

102-22Composition of the highest governance bodyand its committees

102-23Chair of the highest governance body102-24

Nominating and selecting the highest governance
body

36

102-27

Collective knowledge of highest governance body

22-24

102-28

Evaluating the highest governance body’s
performance102-29Identifying and managing economic, environmental, 1.3 Identification and Analysis of ESG
and social impacts
Material topics

25-29

102-30Effectiveness of risk management processes

2.1.3 Risk Management

40-44

102-31

Review of economic, environmental, andsocial topics

2.1.2 Corporate Governance39

2.1.3 Risk Management40

102-32Highest governance body’s role insustainability reporting

About this Report

1

40-44
30
30-31

120

1.2 Communication with Stakeholders

22-24

Key topics and concerns raised

1.3 Identification and Analysis of ESG Material
topics25-29

Entities included in the consolidated financial
statements

About this Report1

2.1.2 Corporate Governance

40-44
55

36-39

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1. About TSRC

Material Issues Disclosure
Discourse
Number

Disclosure Title

GRI 103: Management Approach (2016)

3. Environmental

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

Appendix

Corresponding Chapter

Page

416-2
1.3 Identiﬁcation and Analysis of ESG
Material topics
1 About TSRC

29

13

Direct economic value generated and distributed

201-2

Financial implications and other risks andopportunities due to climate change

1.1.4 Business performance
4.2.3 Remuneration and Beneﬁts
2.1.3 Risk Management20
117-118
44-53

Material Issue: Corporate Governance
GRI 103: Management Approach (2016)
103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

1.3 Identiﬁcation and Analysis of ESG
Material topics
2. Governance

29

34-35

GRI 103: Management Approach (2016)
Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

1.3 Identiﬁcation and Analysis of ESG
Material topics
2. Governance

29

34-35

Material Issue: Compliance
GRI 103: Management Approach (2016)
103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

1.3 Identiﬁcation and Analysis of ESG
Material topics

29

307-1

Page

Incidents of non-compliance concerning the healthand safety impacts of products and services

2.1.5 Compliance56

2.1.5 Compliance56

2.1.5 Compliance56

1.3 Identiﬁcation and Analysis of ESG
Material topics

29

GRI 417: Marketing and Labeling (2016)
417-2

Incidents of non-compliance concerning productand service

417-3

information and labeling

419-1

Non-compliance with laws and regulations in thesocial and economic area

Material Issue: Material events and risk management
GRI 103: Management Approach (2016)
103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

2. Governance

34-35

Material Issue: Climate strategy and GHG emissions

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

1.3 Identiﬁcation and Analysis of ESG
Material topics

29

3 Environment

71-72

3.1.2

73-76

GRI 305: Emissions (2016)
305-1

Direct (Scope 1) GHG emissions

305-2

Energy indirect (Scope 2) GHG emissions

305-4

GHG emissions intensity

Reduce Carbon Emissions

Material Issue: Waste and hazardous substance management
GRI 103: Management Approach (2016)

2. Governance

34-35

GRI 307: Environmental Compliance (2016)
Non-compliance with environmental laws andregulations

Corresponding Chapter

GRI 103: Management Approach (2016)

Material Issue: Innovation management

103-1

Disclosure Title

GRI 419: Socioeconomic Compliance (2016)

GRI 201: Economic Performance (2016)
201-1

Discourse
NumberGRI 416: Customer Health and Safety (2016)

Material topic：Business strategies and performance

2. Governance
4. Social

2021
Sustainability Report

2.1.5 Compliance

56

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

1.3 Identiﬁcation and Analysis of ESG
Material topics
3 Environment

29

71-72

130

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Stories for Sustainability

Discourse
NumberESG Strategy

GRI 306: Waste (2020)

1. About TSRC

306-1

Waste generation and signiﬁcant waste-related impact

2. Governance

306-2

Management of signiﬁcant waste-related impacts

3. Environmental

306-3

Waste generated

4. Social

Material topic: Water Resource Management

Appendix

Disclosure Title

Corresponding Chapter

Page

103-2
103-3

Explanation of the material topic and its Boundary
The management approach and its components
Evaluation of the management approach

3.3.1 Management Approach
3.3.2 Waste Management

85
85-89

1.3 Identiﬁcation and Analysis of ESG
Material topics
3 Environment

29

71-72

402-1

303-1

Interactions with water as a shared resource

303-2

Management of water discharge-related impacts

303-3

Water withdrawal

303-4

Water discharge

303-5

Water consumption

3.4.1 Management Approach90

3.4.2 Water Resource Management

90-91

3.4.2 Water Resource Management91

3.4.2 Water Resource Management

92

Proportion of spending on local suppliers

Occupational health and safety management system403-3

Occupational health services

403-4

Worker participation, consultation, andcommunication on occupational health and safety

403-6

Promotion of worker health403-7

Prevention and mitigation of occupational healthand safety impacts directly linked by business
relationships

403-8

Workers covered by an occupational health andsafety management system

Energy consumption within the organization

302-3

Energy intensity

302-4

Reduction of energy consumption

Corresponding Chapter

Page

2.4.3 Green Procurement and Local
Procurement67

3.1.3 Energy Management

77-80

GRI 401: Employment (2016)
New employee hires and employee turnover120

4.2.2 A Healthy and Safe
Workplace108-1144.1.3 Talent Development

104-105

GRI 404: Training and Education (2016)
404-1

Average hours of training per year per employee

404-3

Percentage of employees receiving regularperformance and career development reviews

416-1

GRI 302: Energy (2016)
302-1

4.2.4 Employee Rights andCommunication

Ratio of basic salary and remuneration of women to men

4.2.3 Remuneration and Beneﬁts

117

Supplementary Data for theEnvironmental Aspect

127

3.2.2

82

GRI 416: Customer Health and Safety (2016)

GRI 204: Procurement Practices (2016)

401-1

Page

GRI 405: Diversity and Equal Opportunity (2016)

Other Disclosure
Disclosure Title

Minimum notice periods regarding operationalchanges

403-1

405-2

204-1

Corresponding Chapter

GRI 403: Occupational Health and Safety (2018)

GRI 303: Water and Eﬄuents 2018

Discourse
Number

Disclosure Title

GRI 402: Labor/Management Relations (2016)

GRI 103: Management Approach (2016)
103-1

Discourse
Number2021
Sustainability Report

4.1.2 Diversity, Inclusion, and Recruitment 102-103

Assessment of the health and safety impacts ofproduct and service categories

GRI 417: Marketing and Labeling (2016)
417-1

Requirements for product and service informationand labelingGreen Products

131

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Sustainability Report

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Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance

Sustainability Accounting Standards Board (SASB) Index
Code

Account Metric

3. Environmental

Sustainability Disclosure Topics & Accounting Metrics

4. Social

Greenhouse Gas Emissions

Appendix

RT-CH-110a.1

Gross global Scope 1 emissions, percentage covered under emissions-limiting
regulations

Unit of Measure

Metric tons (t) CO2-e,

Corresponding Chapter

3.1.2 Reduce Carbon Emissions

Percentage (%)

Data Table

GHG Emissions by Each Site and Carbon

Page

75

Emission Intensity Per Unit of Production in
the Past Three Years
Scope 1 Emissions in 2021 under the74

Emissions-Limiting Regulations
RT-CH-110a.2.

Discussion of long-term and short-term strategy or plan to manage Scope--

1 emissions, emissions reduction targets, and an analysis of performance

3.1.2 Reduce Carbon Emissions

73-74

against those targets
Air Quality
RT-CH-120a.1.

Air emissions of the following pollutants: (1) NOx (excluding N2O), (2) SOx, (3)Metric tons (t)volatile organic compounds (VOCs), and (4) hazardous air pollutants (HAPs)

3.5.2 Air Pollution Prevention andManagement

Air Pollutants Emission

96

Energy Management
RT-CH-130a.1(1) Total energy consumed, (2) percentage grid electricity, (3) percentage

Gigajoules (GJ),

renewable, (4) total self-generated energy 2

Percentage (%)

3.1.3 Energy Management
Supplementary Data for the

TSRC Group's Energy Consumption in the

77-79

Past Three Years
127

Environmental Aspect
Water Management
RT-CH-140a.1.

(1) Total water withdrawn, (2) total water consumed, percentage of each in

RT-CH-140a.2.

Number of incidents of non-compliance associated with water quality permits,

RT-CH-140a.3.

Description of water management risks and discussion of strategies andregions with High or Extremely High Baseline Water StressThousand cubic meters (m³),
Percentage (%)
Number

3.4.2 Water Resource Management

Water Withdrawal, Discharge, and Consumption of Each Site in the Past Three Years92

3.4.2 Water Resource Management91

3.4.2 Water Resource Management

90-93

standards, and regulations

practices to mitigate those risks

Hazardous Waste Management
RT-CH-150a.1.

Amount of hazardous waste generated, percentage recycled

Metric tons (t),3.3.2 Waste Management

Percentage (%)

Weight and Percentage of Hazardous Waste

89

Recycled in 2021

Community Relations
RT-CH-210a.1.

Discussion of engagement processes to manage risks and opportunities
associated with community interests

4.3.3 Social Care

121

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Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social

Code

Account Metric

Unit of Measure

Corresponding Chapter

Data Table

Page

Workforce Health & Safety
RT-CH-320a.1.

RT-CH-320a.2.

Appendix(1) Total recordable incident rate (TRIR) and (2) fatality rate for (a) direct
employees and (b) contract employees

Rate

4.2.2 A Healthy and Safe Workplace
Supplementary Data for the Social Aspect

Description of eﬀorts to assess, monitor, and reduce exposure of
employees and contract workers to long-term (chronic) health risks

Occupational Injuries Suﬀered by Employees of
TSRC Group

112
126

4.2.2 A Healthy and Safe Workplace111

Supplementary Data for the Social Aspect

126

Product Design for Use-phase Eﬃciency
RT-CH-410a.1.

Revenue from products designed for use-phase

Reportingcurrency

3.2.2 Green Products

Revenue from Products with Environmental
Beneﬁts in the Past Three Years

84

Safety & Environmental Stewardship of Chemicals
RT-CH-410b.1.

RT-CH-410b.2.

(1) Percentage of products that contain Globally Harmonized System ofPercentage (%)
Classiﬁcation and Labeling of Chemicals (GHS) Category 1 and 2 Health andby revenue,
Environmental Hazardous Substances, (2) percentage of such products that
Percentage (%)
have undergone a hazard assessment

Supplementary Data for the Environmental
AspectDiscussion of strategy to (1) manage chemicals of concern and (2) develop
alternatives with reduced human and/or environmental impact

3.2.2 Green Products

--

127

82-84

Genetically Modiﬁed Organisms
RT-CH-410c.1.

Percentage of products by revenue that contain genetically modiﬁed
organisms (GMOs)

Percentage (%)

Not applicableby revenue

Management of the Legal & Regulatory Environment
RT-CH-530a.1.

Discussion of corporate positions related to government regulations and/or
policy proposals that address environmental and social factors aﬀecting theindustry--

2.1.3 Risk Management

Risk category

41

7 Risks that Require Immediate Action andResponse Strategies

42

Climate-Related Risk
3.1.2 Reduce Carbon Emissions
3.2.2 Green Products
3.3.2 Waste Management
3.4.2 Water Resource Management

44-53
73
82-83
85
90-91

Operational Safety, Emergency Preparedness & Response
RT-CH-540a.1.

Process Safety Incidents Count (PSIC), Process Safety Total Incident Rate
(PSTIR), and Process Safety Incident Severity Rate (PSISR)

RT-CH-540a.2.

Number of transport incidents

RT-CH-000.A

Production by reportable segment

Number, Rate

Supplementary Data for the Social Aspect

126

Number

Supplementary Data for the Social Aspect

126

Cubic meters(m³) and/or
metric tons (t)Supplementary Data for the Environmental
Aspect127

2021
Sustainability Report133

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
Appendix

Taiwan Stock Exchange Corporation Rules Governing the Preparation and Filing of Sustainability Reports
by TWSE Listed Companies Article 4 Subparagraph 2
Item Number
A

B

C

D

Item
Total energy consumption
Total amount of water withdrawn, and volume of eﬄuent required to be disclosed under the law or to
be disclosed voluntarily
Total quantity of hazardous wastes generated during the production process of products required tobe disclosed under the law or to be disclosed voluntarily
Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number ofwork-related fatalities

Corresponding Chapter

Page

3.1.3 Energy Management77

3.4.2 Water Resource Management92

3.3.2 Waste Management86

4.2.2 A Healthy and Safe Workplace

E

Operations with signiﬁcant actual and potential negative impacts on local communities

4.3.3 Social CareF

Negative environmental or social impacts in the company itself and its supply chain and actions taken

2.4.2 Supply Chain Management
2.4.3 Green Procurement and Local Procurement111-112

122
64-67
67

3.1.2 Reduce Carbon Emissions

73-74

3.1.3 Energy Management

77-80

3.2.2 Green Products

82-84

3.3.2 Waste Management
3.4.3 Water Resource Recycling and Reuse
3.5.2 Air pollution prevention and management
4.2.2 A Healthy and Safe Workplace85
90-91, 93
95, 97108-109, 111-115

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Third Party Verification and Assurance

1. About TSRC
2. Governance
3. Environmental

ASSURANCE STATEMENT

4. Social

SCOPE OF ASSURANCE AND REPORTING CRITERIA
The scope of the assurance included evaluation of quality, accuracy and reliability of specified performance
information as detailed below and evaluation of adherence to the following reporting criteria:
Reporting Criteria Options
1. GRI Standards (Core)

Appendix

2. AA1000 Accountability Principles (2018)

SGS TAIWAN LTD.’S REPORT ON SUSTAINABILITY ACTIVITIES IN THE TSRCCORPORATION’S SUSTAINABILITY REPORT FOR 2021
NATURE AND SCOPE OF THE ASSURANCE/VERIFICATIONSGS Taiwan Ltd. (hereinafter referred to as SGS) was commissioned by TSRC CORPORATION (hereinafterreferred to as TSRC) to conduct an independent assurance of the Sustainability Report for 2021. The scope of
the assurance, based on the SGS Sustainability Report Assurance methodology, included the sampled text, anddata in accompanying tables, contained in the report presented during verification in the period of 26 April 2022
to 4 June 2022. SGS reserves the right to update the assurance statement from time to time depending on thelevel of report content discrepancy of the published version from the agreed standards requirements.
INTENDED USERS OF THIS ASSURANCE STATEMENT
This Assurance Statement is provided with the intention of informing all TSRC’s Stakeholders.
RESPONSIBILITIESThe information in the TSRC’s Sustainability Report of 2021 and its presentation are the responsibility of thedirectors or governing body (as applicable) and the management of TSRC. SGS has not been involved in the
preparation of any of the material included in the Report
Our responsibility is to express an opinion on the text, data, graphs and statements within the scope of verification
with the intention to inform all TSRC’s stakeholders.
ASSURANCE STANDARDS, TYPE AND LEVEL OF ASSURANCEThe SGS ESG & Sustainability Report Assurance protocols used to conduct assurance are based uponinternationally recognized assurance guidance, including the Principles contained within the Global Reporting
Initiative Sustainability Reporting Standards (GRI Standards) 101: Foundation 2016 for report quality, and theguidance on levels of assurance contained within the AA1000 series of standards and guidance for Assurance
Providers.
The assurance of this report has been conducted according to the following Assurance Standards:
Assurance Standard Options and Level of AssuranceA.

SGS ESG & SRA Assurance Protocols (based on GRI Principles and guidance inAA1000)B.

AA1000ASv3 Type 2 Moderate Level(AA1000AP Evaluation plus evaluation of Specified Performance Information)

3. SASB••••evaluation of content veracity of the sustainability performance information based on the materiality
determination at a moderate level of scrutiny for TSRC and applicable aspect boundaries outside of theorganization covered by this report;
AA1000 Assurance Standard v3 Type 2 evaluation of the report content and supporting management
systems against the AA1000 Accountability Principles (2018);
evaluation of the report against the requirements of Global Reporting Initiative Sustainability ReportingStandards (100, 200, 300 and 400 series) claimed in the GRI content index as material and inaccordance with; andevaluate of the report against the SASB Disclosures and Metrics included in the CHEMICALS
Sustainability Accounting Standard (VERSION 2018-10) and conducted alongside an evaluation of
accuracy assurance at moderate level of scrutiny.

ASSURANCE METHODOLOGY
The assurance comprised a combination of pre-assurance research, interviews with relevant employees,
superintendents, CSR Steering Committee members and the senior management in Taiwan; documentation andrecord review and validation with external bodies and/or stakeholders where relevant. In response to COVID-19
pandemic situation the assurance process was conducted via Teams remote assurance.
LIMITATIONS AND MITIGATION
Financial data drawn directly from independently audited financial accounts has not been checked back to sourceas part of this assurance process.
STATEMENT OF INDEPENDENCE AND COMPETENCEThe SGS Group of companies is the world leader in inspection, testing and verification, operating in more than
140 countries and providing services including management systems and service certification; quality,
environmental, social and ethical auditing and training; environmental, social and sustainability report assurance.
SGS affirm our independence from TSRC, being free from bias and conflicts of interest with the organisation, its
subsidiaries and stakeholders.
The assurance team was assembled based on their knowledge, experience and qualifications for this assignment,
and comprised auditors registered with ISO 26000, ISO 20121, ISO 50001, SA8000, QMS, EMS, SMS, GPMS,
CFP, WFP, GHG Verification and GHG Validation Lead Auditors and experience on the SRA Assurance service
provisions.
FINDINGS AND CONCLUSIONSVERIFICATION/ ASSURANCE OPINION
On the basis of the methodology described and the verification work performed, we are satisfied that the specified
performance information included in the scope of assurance is accurate, reliable, has been fairly stated and has
been prepared, in all material respects, in accordance with the reporting criteria.
We believe that the organisation has chosen an appropriate level of assurance for this stage in their reporting.

TWLPP5008 Issue 2201

TWLPP5008 Issue 2201

135

About this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
Appendix

AA1000 ACCOUNTABILITY PRINCIPLES (2018) CONCLUSIONS, FINDINGS AND RECOMMENDATIONS
Inclusivity
TSRC has demonstrated a good commitment to stakeholder inclusivity and stakeholder engagement. A varietyof engagement efforts such as survey and communication to employees, customers, investors, shareholder,suppliers, communities, NGO and other stakeholders are implemented to underpin the organization's
understanding of stakeholder concerns. For future reporting, TSRC may proactively consider having more direct
two-ways involvement of stakeholders during future engagement.
Materiality
TSRC has established effective processes for determining issues that are material to the business. Formal review
has identified stakeholders and those issues that are material to each group and the report addresses these at
an appropriate level to reflect their importance and priority to these stakeholders.
ResponsivenessThe report includes coverage given to stakeholder engagement and channels for stakeholder feedback.
Impact
TSRC has demonstrated a process on identify and fairly represented impacts that encompass a range ofenvironmental, social and governance topics from wide range of sources, such as activities, policies, programs,
decisions and products and services, as well as any related performance. Measurement and evaluation of its
impacts related to material topic were in place at target setting with combination of qualitative and quantitative
measurements.
GLOBAL REPORTING INITIATIVE REPORTING STANDARDS CONCLUSIONS, FINDINGS AND
RECOMMENDATIONS
The report, TSRC’s Sustainability Report of 2021, is adequately in line with the GRI Standards in accordance with
Core Option. The material topics and their boundaries within and outside of the organization are properly definedin accordance with GRI’s Reporting Principles for Defining Report Content. Disclosures of identified material
topics and boundaries, and stakeholder engagement, GRI 102-40 to GRI 102-47, are correctly located in content
index and report. For future reporting, it is recommended to have more descriptions of TSRC’s involvement with
the impacts for each material topic (103-1), and how efforts were given to mitigate the impacts. When reportingon goals and targets for each material topic, the expected results are suggested to be set and reference previous
year results, if applicable, with quantitative objectives.
SASB CONCLUSIONS, FINDINGS AND RECOMMENDATIONSTSRC has referenced with SASB’s Standard, CHEMICALS, VERSION 2018-10 to disclose information of material
topics that are vital for enterprise value creation. The reporting boundaries of the disclosed information correspondto the financial data reported in TSRC’s audited consolidated financial statements. TSRC used SASB accounting
and activity metrics to assess and manage the topic-related risks and opportunities, where relevant quantitative
information was assessed for its accuracy and completeness to support the comparability of the data reported.
Process to identify, assess, and manage topic-related risks and opportunities were integrated into TSRC’s overallmanagement process. It is recommended to identify the risk related to chemical safety and process safety toenhance continuous improvement.

Signed:For and on behalf of SGS Taiwan Ltd.

David Huang
Senior Director
Taipei, Taiwan
20 June, 2022
WWW.SGS.COM

TWLPP5008 Issue 2201

2021
Sustainability ReportAbout this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
Appendix

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Sustainability ReportAbout this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
Appendix

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Sustainability ReportAbout this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
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Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
Appendix

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Letter from the CEO
Stories for Sustainability
ESG Strategy

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2. Governance
3. Environmental
4. Social
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Sustainability ReportAbout this Report
Letter from the CEO
Stories for Sustainability
ESG Strategy

1. About TSRC
2. Governance
3. Environmental
4. Social
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