2022 HTC ESG Report

ESG Report
2 0 2 2 Environment, Social, GovernancePublication Date: August, 2023

Editorial Principle
Thank you for reading the 11th ESG Report issued by the HTC Corporation (HTC). HTC has an open and honest approach to
the review and disclosure of our executive performance related to all Sustainability matters and offers our stakeholdersa clear picture of all the related topics. Our aim is to use our brand’s influence to integrate our ESG strategies into theorganization, and we start off with a comprehensive response to all these issues.
As a global virtual reality and smart phone brand, we are ready to confront all the challenges that might present
themselves. For each major Sustainability topics that relates to our future development, we make it clear at the beginningof each section which challenge we are facing, our current achievements, and our goals for future development.
By understanding and commitment to these topics, HTC will define and confirm our direction toward sustainable
development, and also let our stakeholders know everything about our performance and the results with respect to ESG
in 2022.
This report has been prepared in Chinese and English. Both versions are posted on our official
website and are available for download (www.esg.htc.com)

Report Scope and Boundary
The organizational boundary, as mentioned in this annual report, mainly covers the company office buildings andplants in Taiwan: the headquarters in Taoyuan and two office buildings in Taipei. All HTC business operations in Taiwan
are within the boundary. The scope of financial information is consolidated financial disclosure; the scope of humanresources information covers employees worldwide. The scope of Non-staff worker information is the same as thisreport.

2022 HTC ESG Report Organization Coverage Information
Boundary

AddressTel

HQ & Plants

No 23, Xinghua Rd., Taoyuan Dist., Taoyuan City 330,
Taiwan+886-3-3753252

Taipei Office 1

No 88, Sec 3, Zhongxing Rd, Xindian Dist, New Taipei
City, Taiwan+886-2-89124138

Taipei Office 2

1F, No 6-3, Baoqiang Rd, Xindian Dist, New Taipei City,
Taiwan+886-2-89124138

HQ & Plants

Taipei Office 1
Taipei Office 2

Time Coverage of Disclosure
We plan to issue the HTC ESG Report annually. This report generally covers the year 2022 from January 1 to December
31.
However, in order to provide a more complete picture of all our ESG achievements in various aspects to date, the content
and information about some issues refers to work carried out in 2021 to 2023 May, as well as the HTC ESG management
policies, key issues, and performance, responses and activities for previous years.

Process of Reporting Quality Management
Compile• The report information is provided by each department, which is responsible for confirming thecompleteness and correctness of the data. The confirmed information is submitted to the ESG
Office for compilation.

Edit• The ESG Office coordinates with related departments to discuss the progress of planned goals
and future directions and compiles the ESG Report.

Internal
Reveiw• The information required for the Report is gathered by each unit contact, confirmed by therelevant supervisor, then processed and handed over by the Sustainability Office to the Chief
Sustainability Officer for final review.

External
Review• SGS Taiwan verified this report in accordance with AA1000 AS Assurance Standards and GRI
Standards. This report is in compliance with the core options of the GRI Standards and AA1000
Type II High Assurance.

Forward-Looking Statements & Statistical Calculations
In this report, HTC makes some forward-looking statements about future ESG challenges and developments. However,
because some of these issues are uncertain and subject to variable factors (such as policies, laws, and international
regulations), it should be noted that they have been made after discussions on current HTC status and are made as
forecasts, the purpose being to give our stakeholders a picture of the HTC understanding and realization of ESG issues.
The forecasts are not promises by HTC of guaranteed financial, operational, and business performance.
The figures shown in this report are in the metric system and are statistical and calculated results generated according
to the related international standards and bases of calculation. In the event that any special calculation methods are
implemented for particular indicators, notes are provided below the corresponding tables or graphics.
• Financial data was checked and confirmed by Deloitte & Touche, and was calculated in NT$. The report periodof this year's financial report is the year 2022 from January 1 to December 31.
• ISO 14064:2018 Greenhouse Gas Emissions and ISO 50001:2018 Energy Management Systems were verified by
AFNOR Asia.
• ISO 14001: 2015 Environment Management System, ISO 45001: 2018 Occupational Health and Safety
Management, IECQ QC080000: 2017 Hazardous Substance Process Management System, ISO 27001: 2013
Information Security Management Systems, ISO 27701: 2019 Privacy Information Management System and ISO
27799: 2016 Information security management in health were verified by SGS Taiwan.
• The AA1000AS Standard was assured by SGS Taiwan.
• TCFD report was passed by SGS's TCFD performance evaluation.

Report Basis

Feedback

Contact Us

This report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards: 2021 and AA1000
standards and has been confirmed by SGS-Taiwan to be in compliance with AA1000AS Type II high-level assurance andreference to the GRI Standards.

If you have any questions
about this 2022 HTC
ESG Report please let us
know to help us makecontinuous progress.

ESG Office, HTC Corporation
Contact: Yunyu Chen +886-3-3753252 ext. 36312
E-mail：esg@htc.com
Address: No 23, Xinghua Rd, Taoyuan Dist., Taoyuan City, Taiwan
ESG Website: www.esg.htc.com

001

Editorial Principle

HTC Sustainability
Questionnaire2022 HTC ESG Report002

Statement of the Management
Thank you for taking the time to peruse the 2022 "ESG Report" issued by HTC. We continue to follow the latest "Global Reporting Initiative Standards" and AA1000
standards Type II High Level of Assurance to report information disclosure to the general public and all stakeholders. The relationship communicates with HTC's
commitment and achievements in reflecting social responsibility and moving towards sustainable development.
Since the founding of HTC, our vision has been to combine technology with humanity to unleash the imagination. VIVERSE, HTC’s version of the metaverse, represents theculmination of that vision: an immersive, boundless universe of fantastic new experiences, and a seamless gateway to other online universes.
As the world gradually eased pandemic restrictions over 2022, HTC doubled down on this vision, leveraging the corporate restructure to become a holistic VIVERSE
company, with all business areas working towards enabling, expanding, or enhancing the metaverse. With premium products brought to market throughout the year
across hardware, software, platforms and content, and new services such as our VIVERSE for Business custom build and support service starting to gain momentum inthe market, HTC remains well-positioned to take full advantage of the global trend towards a truly immersive internet.
HTC’s pioneering work on the metaverse, from the soundness of our investments in the fundamental building block technologies of VR, AR, AI, 5G and blockchain to theability of our more autonomous and focused businesses to execute our strategy, has placed us firmly on the map of key metaverse players, as recognised by global analyst
firms as well as within the industry and media, with HTC earning Fast Company acclaim as one of the most innovative augmented and virtual reality companies of 2022.
To ensure the metaverse meets its full potential, HTC is strongly promoting open standards and privacy by design, as well as closer collaboration with partners – including
thousands of content developers – to support interoperability, and in 2022 joined the Metaverse Standards Forum to further promulgate our vision, as well as the VRM
Consortium for formulating avatar standards.
Across the spectrum of HTC’s portfolio, HTC’s premium products continue to garner high acclaim across media, the industry and customers, with the VIVE Pro 2 gaining
a CES innovation award amongst many others in 2022, while the VIVE XR Elite launched in early 2023 earned considerable consumer acclaim and multiple ‘best in show’awards at Mobile World Congress. Ensuring our businesses maintain such high standards for quality, design and functionality remains a key focus for HTC as the parent
company, as well as continuing to drive process optimization, targeted investment, and e cient resource allocation.
HTC is committed to the highest standard of social care, environmental protection, and ethical integrity. We fully respect human rights and workplace rights. HTC iscommitted to cultivating talent as a corporate responsibility priority, and creating a workplace that is diverse, challenging, dynamic and positive.
In 2022, HTC focused on key sustainability projects such as “Pathway to Net-Zero”, the “Task Force on Climate-Related Financial Disclosures (TCFD)”, and the “Sustainability
Accounting Standards Board (SASB)”, and continued to participate in major worldwide ESG initiatives and ratings such as EcoVadis, the FTSE ESG Index, TCFD, and the
Taiwan Corporate Sustainability Awards.
HTC’s sustainability efforts are being recognized globally. In 2022, HTC was honored to become a constituent of the FTSE4Good Index Series, a subset of the renowned
FTSE ESG Index. Moreover, HTC improved its EcoVadis rating in 2022 from bronze to silver, demonstrating our improvement in the four key sustainability themes ofEnvironment, Labor and Human Rights, Ethics, and Sustainable Procurement.
In addition, HTC continues to participate in the annual CDP rating. In the 2022 Supplier Engagement Rating (SER) report, HTC received leadership level (A-), while in the2022 Climate Change report released earlier by CDP, HTC continued to achieve management level (B). HTC is also committed to implementing a sustainable value chain
and became a CDP Supply Chain Member at the beginning of 2023, joining the ranks of over 200 major purchasing organizations to drive environmental action throughvalue chains. At the same time, HTC became a TCFD supporter at the end of the year, and published a TCFD independent report for the first time in 2023.
With all the outstanding innovation emerging from HTC’s business divisions as our vision of VIVERSE becomes a global reality, the Company is well placed to again play aleading role in the future of technology, and we would like to express our sincere appreciation to our shareholders for their faith in our vision.
Looking ahead, HTC will continue to innovate and focus on technology, optimize organizational resources and create value, uphold the right strategies, world-class talent,innovation and a heritage of innovation that will drive our next stage of growth. Throughout all of our operations and partnerships, HTC seeks to ensure the highest
standards of environmental protection and R&D innovation, with a view to creating a better life for people. HTC strives to become a world’s leading brand, and you arewelcome to give us support, encouragement and suggestions on HTC’s road to a sustainable future.

HTC Corporation
Chairwoman and CEO

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Editorial Principle

2022 HTC ESG Report004

Letter from Chief Sustainability Officer
Time flies. In a blink of an eye, HTC's ESG report has once again come around. In the previous year we launched "Path to Net-Zero, TCFD, SASB" and othersustainability programs, and implemented energy-saving and carbon-reduction actions (e.g., Earth Day and monthly lights off activities). In 2022, we took further
steps towards sustainable development. It was the second year since the establishment of the ESG Committee. We expect to gradually combine the expanded
achievements of HTC in sustainability with our future goals. More importantly, we will continue to disclose and communicate our progress internally andexternally so that every stakeholder and organization with an interest in HTC clearly understands HTC's direction and actions regarding sustainability.
In 2022, the ESG Office keeps promoting sustainability actions by sharing ESG information through internal newsletters, highlighting the key points of ESG reports
for colleagues, organizing various sustainability activities, advocating for sustainability measures and policies, and continuously improving colleagues' awarenessof sustainability. We received a lot of feedback, which facilitated a better understanding of our colleagues' concerns and needs regarding sustainability topics. We
also participated in local and international initiatives and ESG ratings, e.g. EcoVadis, FTSE, TCFD, TCSA (Taiwan Corporate Sustainability Awards), etc., all of which
achieved good results. In addition, we are certified as a constituent of FTSE4Good Index Series. All these achievements were attributable to our colleagues who
exerted great efforts and contributions to the promotion of sustainable development.
In 2022 HTC continued to promote energy-saving and carbon reduction related actions as part of our year-by-year goals. In addition to our achievements, we also
realized gaps in sustainable development. One of our major goals for 2023 is to implement "fully paperless, digitalized, and optimized organization workflows". We
hope to digitalize the internal workflows of the company to greatest extent possible in 2023, which is not only an environmental-friendly policy to reduce paper
consumption, but also an approach to optimize workflows and improve efficiency. We also plan to initiate a "Carbon Management Platform" project in which
the carbon emission information system will be modularized through cloud architecture to construct a data model that complies with the scope and categories
of relevant carbon inventory (CHG Protocol, ISO-14064, and ISO-14067), and accelerate carbon management through automatic and digital services to build up
a foundation for digitalized organization level GHG emission and product carbon footprint inventory. And carbon emission data generated during operations ofglobal sites will be calculated and disclosed on the management platform in real-time; at the same time, relevant management indicators (via a dashboard) willbe established based on historical data and carbon reduction pathways to effectively understand changes and adopt response measures. The implementation ofthis project will enable HTC to comprehensively execute the management of corporate carbon emissions and carbon reduction to realize the goal of "Net-Zero".
We will also assure our corporate social responsibility and the influence of the industry, as well as join hands with our upstream and downstream supply chains
and stakeholders to implement sustainable actions together. In the future, HTC plans to establish an internal carbon pricing mechanism based on the carbon
management platform. All the above are important topics and directions for accomplishing long-term net-zero and sustainability goals.
The year 2023 will be a year that brings many changes to HTC in sustainable development practice. In addition to sustainable development in the environment,
we also expect more efforts in social and governance. We know sustainability is a very long journey, and therefore we look forward to working together with allcolleagues to change mindsets, awaken our passion, practice sustainability in our everyday lives, and influence everyone around us.

HTC Corporation
Chief Sustainability Officer

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Editorial Principle

2022 HTC ESG Report006

Contents
Editorial Principle 001
Statement of the Management 003
Letter from Chief Sustainability Officer 005

061

137

Corporate Governance 063

Human Rights Management and Commitment 139

Integrity Management 066

Talent Attraction and Retention 149

Tax Mangement 069

Talent Cultivation and Development 152

Information Security Management 070

Salary and Benefits 157

Innovative Management 075

Occupational Health and Safety 163

Responsibility Mangement

Friendly Workplace

Customer Management 080

009

083

173

Global Operation Locations 012

Governance 086

HTC Foundation 175

Industry Overview 013

Risk Management 087

Promoting Art and Culture with Technology 177

Product Overview 019

Strategy 089

Other Social Engagement Activities 178

Overview of Financial Performance 025

Metrics & Targets 097

About HTC

Climate Change Management

Social Investment and Contribution

The Pursuit of Brilliance 027
HTC 2022 SDGs Performance 031

045

105

179

Our Sustainability Commitment 047

Sustainable Environment 108

2022 ESG Performance 048

Sustainable Design 113

Appendix 1: Participation in Industry Associations and
Non-Profit Organizations 180

ESG Achievements 049

Sustainable Manufacturing Process 119

Appendix 2: Major Topics Management Approach
Assessment 181

ESG Committee 051

Sustainable Product 126

Appendix 3: GRI Content Index 186

ESG Management Procedures and Systems 052

Sustainable Supply Chain 130

Appendix 4: SASB Index 191

ESG Management

HTC 2022 Material Topics and Boundary 055
Risk Management 059

Sustainable Agenda

Appendix

Appendix 5: Sustainability Disclosure MetricTelecommunication & Internet Services 198
Appendix 6: Climate-related Information of Listed for
IPO Companies 198
Appendix 7: Information Reorganization List 199
Assurance Statement 201

About HTC –Name
HTC Corporation (TWSE stock symbol 2498)

Address
No 23, Xinghua Rd, Taoyuan Dist.,
Taoyuan City, Taiwan

EstablishedMay 15, 1997

SectorTelecommunications network Industry

Main business
Virtual reality device/Smartphone

Consolidated revenue
NT$8,295,153,000(2022/12/31)

The global leader in innovative Virtual reality &Smartphone design – HTC

Global Operation Locations

The HTC Corporation (HTC) was established in 1997. HTC brings brilliance to life through leading innovation in smart
mobile device and experience design. Beginning with a vision to put a personal computer in the palm of our customers'
hands, we have led the way in the evolution from palm PC to smartphone, and are now applying that same innovative
approach to connected devices and virtual reality. To date, our Company has been through four major transformations
that have helped us reinvent ourselves and achieve new growth. Starting from the beginning of the company's
professional PDA design, HTC has continued to deepen innovation in R&D technology. HTC's first major turning pointcame in 1999, when the Company moved into the telecommunications arena. HTC was the first to integrate Internet,
entertainment, video and personal assistant functions into a mobile phone with a large dimension onto high resolution
and full-color display panel. Since 2007, the launch of the HTC brand globally has committed the Company to longterm
global brand development. In 2014, HTC began to seek new fields to apply our distinguished heritage in design,
engineering and manufacturing excellence as well as innovative thinking. In 2015, we began to enter the virtual reality
industry, and explore and create a new real experience with HTC VIVE.
In 2018, HTC set a new vision: VIVE Reality, cutting-edge technology such as virtual reality (VR), augmented reality (AR),artificial intelligence (AI), 5G high-speed connection and blockchain. Integrate humanity, humanities and imagination toachieve a richer enjoyment of a better life. Today, we call it VIVERSE.
Through our leading virtual reality line, HTC VIVE, our rich history of experience in mobile internet devices, andfocused investment in key technology areas, HTC is now helping to drive this new computing paradigm and the society
transformation that will ensue. This remarkable new world will be all-embracing, generating a far larger virtual
economy, a much broader range of fantastic experiences, and far more meaningful social interaction, which will bringpeople closer together and foster greater empathy for each other.
At the same time, HTC continued to develop and refine our industry-leading mobile technology expertise. The
smartphone division continues to integrate the latest technologies such as 5G and advanced photographic capabilities
into some of the most beautifully crafted devices on the market. At the same time, HTC created a new division focusing
solely on applying our world-class 5G networking expertise to consumer, enterprise and municipal sectors, supporting
the drive to expedite 5G adoption and solve challenges for business and society.

Denmark: Heisler
United Kingdom: Slough*Poland：Warsaw
Ireland：Dublin*
Belgium: Brussels
France: Paris
Germany: Frankfurt

China: Beijing*

Europe, Middle East, Africa

Asia-PacificJapan: Tokyo

China: Shanghai*
Dubai

Canada: Vancouver

Hong Kong
India: Gurgaon

Taiwan:Taipei*, Taoyuan*,Kaohsiung

Singapore ＊United States: Seattle*
United States: San Francisco

America
MexicoAustralia: Sydney

Human health is fundamental to improving people’s lives, and the HTC DeepQ business embeds advanced artificial
intelligence and VR technologies into a range of hardware and software solutions aimed at raising awareness of healthissues, enabling eective remote healthcare, and supporting the medical profession and government in a variety of ways.
The restructuring of HTC over 2021 saw the creation of separate business units out of VIVE Systems, VIVERSE (formerly
Content and Platforms, including VIVERSE, VIVEPORT and VIVE Wave), G REIGNS (formerly 5G Networking Solutions),
HTC Smart Devices, VIVE Arts, VIVE Originals and DeepQ. This new structure gives each business leader greater
autonomy and clear focus on their own portfolio and resources, while obtaining operational support, and guidance on
strategy and financing from the HTC mother company.
The advent of the metaverse sees the Company focused around VIVERSE, whereby the strategic direction of all business
units is to enable, enhance or expand the remarkable wealth of experiences available in the metaverse, which can beaccessed from virtually any connected device.
The pursuit of VIVE Reality has seen HTC transition into a complete VIVERSE solution company, creating not only leading
hardware in strategic markets, but also building industry-leading platforms, software, content and services to create newrevenue streams and lay the foundation for our future growth.

011

About HTCHTC is headquartered in Taiwan. Driven by effective branding, HTC now has
operations, sales, and services covering most areas in the world, including
Europe, the Americas and Asia. With the coordination and integration of
our operational HQ, HTC provides customers with a network of professional
services. Offices have been established in all the major markets of the world,
including the USA, Canada, the UK, Germany, France, India, Australia, China,
Japan, Hong Kong, Singapore, Ireland, Poland and UAE.
Note: The * is main operating base of HTC.

2022 HTC ESG Report012Industry Overview
HTC was founded with the goal of bringing the power of computing and communication into the hands of people aroundthe world. On this quest, HTC has pioneered new technologies, devices, and designs, and repeatedly set new standards ininnovation. And as technology changes at an ever-faster rate, so HTC has reinvented itself several times to maintain our
industry leading position.

013

About HTC

2022 HTC ESG Report014

Virtual Reality
Virtual reality comes from the human pursuit of immersion. VR is also the technology development direction that has
been encouraged by the smartphone industry through the advancement of various display technologies, processors,
controllers and other key components over the past 10 years. While consumers are satisfied with visual effects, they also
hope to experience “new virtual worlds”.
According to IDC’s public release of the 2020 VR industry research white paper, the VR industry chain can be subdivided
into five parts: hardware equipment, software, network, content, and distribution. Each part is linked and inseparable.

Upstream
HardwareFinished
Product
OutputComputer,Smartphone,All-in-one

Interactive
DeviceComponents

Chipsets

Mindstream
Software

Network

Content

System &Platform

Network
Service &Equipment

Content
Product &Application

Distribution
Platform

VR Content

Content
Distribution

OS

Operators&Network

Displays

Cloud
Platform

OpticsSDK/API

GestureRecognition,
Tracking Position,
Somatosensory
Interaction

Sensors

OEM/ODM

Battery

Downstream

Infrastructure

Production &Applications invarious Industries

Applications in
Related Industries

Distribution

Professional,
Integrated

Service

DesignProject
Application
Operation

Profuct
Distribution
ChannelOff-line
On-line

The hardware and software sessions can be regarded as the upstream of the VR industry. The hardware includes
component parts like chipsets, displays, optical modules, and sensors, as well as various types of integration with handrecognition, tracking and positioning, and somatosensory interaction; Software includes various development platforms
and tools including OS, cloud platforms, SDKs. The network and content can be regarded as the midstream of the VR
industry, where the network includes operators and various levels of network infrastructure; the content includes
content production related to the VR applications in various industries. Distribution can be regarded as the downstreamof the VR industry, including content distribution platforms, product distribution channels.
Ever since the so-called “first year of VR” in 2016, when VR products began to enter the consumer market, first attracted
the public with gaming applications. Playing games with VR not only provides advanced visual stimulation, but alsodelivers a more immersive content experience.
In the past, VR headsets were mainly connected to a computer. A gaming PC with strong graphics capabilities was
required to have a better visual experience. Recently, standalone VR headsets have overtaken the market to become themainstream form factor, as they have matured to include vital features of wireless connectivity, better mobility, accurate
6DoF spatial positioning, and powerful processing performance. Standalone VR headsets allow users to enjoy more
freedom of movement, reducing interference from tethered cables, to provide an overall friendlier user experience. To
accelerate userbase growth for VR in the consumer segment, Meta (previously Facebook) rolled out Oculus Quest 2 byadopting an aggressively subsidized pricing strategy coupled with upgraded performance in devices. Thus, the overall
standalone VR devices market for consumers also experienced growth after Oculus Quest 2 launched. Applications for
VR is also quickly expanding with the introduction of various features like Passthrough, hand gesture recognition, andvirtual keyboard mapping.

015

About HTC

The development of VR hardware depends on the continuous cooperation of software developers. For example,
game applications are represented by the well-known game platform Steam, and HTC cooperates with developers to
independently develop for the VIVEPORT platform so that developers can offer their application services, allowing for
the use of VR not only in games, but also in movies, social media, and other visual mediums. As for VR, we believe thatabundant content and application support is the key to attract consumers and stimulate VR market growth. That’s why
we are building a VR ecosystem that can integrate software and hardware to expand our penetration into the consumer
market.
Another major development direction of VR is to develop useful applications for professional use. From the perspectiveof the currently known application industries, medical and architectural professional fields are especially quick toadopt and apply VR, especially for use cases which require heavy 3D visualization. HTC aims to use VR to make medical
training more efficient and effective. By using VR for surgery simulation and medical equipment operation training, forexample, students and surgeons have significantly increased their surgery success rate and their confidence in how todeal with high-pressure scenarios. With the emergence of the 5G era and the acceleration of network speeds, VR medical
treatment can transmit high-resolution images and data in real time, facilitating real-time multi-party consultations, andeven enable remote surgery.
Entering the new 5G era, 5G technologies and technical demands have contributed to the advancement and popularityof high refresh rate displays and other low-latency components critical for VR. The development of AI and big datatechnology has also accelerated the development of VR from consumer-level to large-scale commercial-level applications.
The metaverse has become the focal point of conversations within the tech industry and investors in 2021. Development
roadmaps were planned and announced by top global tech firms. Facebook also changed its name to Meta as a showof determination for their efforts to build their metaverse. The VR / AR industry quickly became the highlight ofmany metaverse market discussions, as this new direction fueled the market and triggered the development of more
immersive applications and the growth of device shipment volume. Gartner projected that 25% of people will spend at
least 1 hour per day for work, shopping, education, social, or entertainment in the Metaverse in 2026.
Since more tech firms and hardware manufacturers are also actively entering (or reentering) the VR industry, headsets
and platforms have more market competitions. To make VR headsets more lightweight, comfortable, and stylish, more
VR brand are adopting pancake lenses in their latest products, such as Quest Pro from Meta and the new HTC product —VIVE XR Elite.
The on-going experience of the global pandemic since 2020 has greatly accelerated the digitization of almost all activities,
which is also simultaneously enriching the Metaverse concept and realizing different use cases for a digital virtualworld. Thus, people see 2021 as the first year of the Metaverse. The Metaverse is widely regarded as an “always-live” andpersistent virtual ecosystem where people can meet, interact, socialize, work, learn, and play games. These systems will
also have to meet the data demands of millions, billions of people. And that’s where blockchain and cryptocurrencies
come in. The Metaverse will be built on the foundation of blockchain technologies, and cryptocurrencies will enable its
economy. This means that Blockchain and NFTs will play a vital role in the Metaverse, providing verifiable, undisputed
ownership of characters, in-game items, or even virtual real estate.
To realize social, gaming, shopping, office, and educational scenes in virtual space, immersion, low latency, and being
unbound by space are three essential elements. Advanced high-performance communication networks will play animportant role. In fact, since the development of 5G, all sectors have regarded immersive and virtual-reality technologies
and services as key applications that complement 5G communication technologies. Therefore, the continuous
development and improvement of 5G wireless communication technologies will lay a solid foundation for realizing theMetaverse.
With the rise of the Metaverse topic, telecommunication operators have found new hope. According to research by
Ericsson AB’s Consumer & Industry Lab, if telecommunications operators can successfully launch innovative applications
and services that support the Metaverse on 5G communication infrastructure, their revenues have the potential toincrease by one-third. By 2030, global telecommunications operators could obtain revenue of up to $712 billion, truly
realizing the monetization of 5G investments. Although it is not possible to accurately estimate how many Metaverse
applications will occur, it is expected that early Metaverse applications such as advanced augmented and immersive
media services will account for 40% of the 5G application service market by 2030.

2022 HTC ESG Report016

5G and Smart Devices
There are now many examples of Metaverse applications, which are spreading and being used in many fields by
combining 3D/XR, blockchain, Digital Twin, 5G, and other technologies. These applications can be divided into two parts:
those aimed at the general public and those aimed at institutions.
In the section aimed at the general public, the main areas include entertainment, cities, and retail applications. In theentertainment field, it is mainly based on the large audience base of game socialization. From the direction of adding
activities and creating worlds, it opens up the appearance of the Metaverse, and then attracts industries other thanentertainment, it is highly malleable, and the content generation ecology is also the key to its development. such as
Sandbox to create digital assets, earn while playing P2E as entry points to develop. In the development of twin cities, it
is mainly based on government support or leadership, and the content mainly aims to promote social mobility, promote
tourism and public services and other transformations, and gradually expand various industry services. It also has highmalleability, such as Japan’s promotion of virtual Shibuya, which is a classic city example of the Metaverse. Finally, inthe retail application, it focuses on linking consumer attention through NFT, 3D/XR, and other technologies, and creating
innovative services such as post-epidemic digital transformation, experience economy, innovative marketing, andOMO. For example, Isetan Mitsukoshi’s twin department store, which provides social, pet care, salesperson services,and product guidance. Metaverse applications in the field of general public have high malleability, and its development
depends on the content generation ecology and user-facing it is based on, with different development directions
according to demand.
On the other hand, in the institutional sector, the prototype of the metaverse is mainly used for educational, office
and industrial applications. In the field of education, the popularity of educational metaverse applications is gradually
increasing due to the impact of the pandemic. Many people hope to have a more immersive, deeper experience andto break away from traditional educational models, such as Labster’s scenario-based science, which allows students
to experience safe experiments and realistic learning in a metaverse environment. In the field of office, in order tomeet the needs of different stages and situations of enterprises, the ability to integrate virtual and physical tools as wellas the “virtual + physical” hybrid working mode will become an important option for future work. Such as Gather’svirtual office service, which uses office scenarios to provide video conferencing, whiteboard collaboration, and spaceadjustments. Finally, in industrial applications, digital twins are an important trend in industrial transformation, which
has entered the stage of market deployment in recent years and can be considered as the foundation of the futureindustrial metaverse. For example, Siemens’ introduction of industrial twins mechanisms helps production ends tocollect, simulate and optimize various devices and production efficiency. These institutional applications will help
improve work, learning, and production efficiency and bring more innovation and immersive experiences to people.
The metaverse as it is being described today is what HTC has continuously built and heralded as VIVERSE since a few
years ago, the future that’s enabled by the integration of VR, AR, AI, 5G, and Blockchain technologies. HTC has long since
been leading the industry in paving the way to build and enable the metaverse.
HTC has always been committed to making the future life better and actively promoting the VIVE Reality vision throughthe integration of technology and humanity, to create a better metaverse experience.

017

About HTCOver the past few years, smartphones have been constantly and continuously updated with new and innovative
functionality. Smartphones have fully transitioned from traditional feature phones into the touchscreen-enabledcommunication products with independent operating systems we all know today. Consumer demand has led to thedevelopment of components including high-performance miniature camera lenses and powerful batteries, and this has
also greatly accelerated and stimulated the vigorous development of all communications-related hardware industries.
At present, the smartphone industry is already a mature industrial chain with professional divisions of labor. Eachspecialized component integrated into smartphones comes from a different specialized supplier. After being assembled
by the manufacturer, it is then sold by a dealer or a telecommunications company.
Recently the sales growth of the smartphone sector has slowed, partly due to the maturation and standardization of the
hardware functions found on mobile phones, and partly due to developed markets including Europe and the UnitedStates have reached a saturation point, leading to longer life cycles and slower replacement rates for all mobile phone
products.
The smartphone industry welcome new technologies to enter the 5G era in 2020. The global smartphone market was
expected to embrace the new business opportunities with a wave of new 5G smartphone purchases after 5G wascommercially deployed globally in 2020. However, due to COVID-19 since the beginning of 2020, the global smartphone
supply and demand declined, and it also partially delayed the launch of 5G in some regional market. Therefore, global
smartphone shipments continued to decline in 2020. Due to the incentive by the implementation of 5G use cases in
Chinese market, the 2020 global 5G smartphone market still shared a 19% of penetration rate. Especially Chinese
smartphone brands have around 60% of market share.
Smartphone market continued paying attention on 5G topic in 2021, while countries recovering back to 5G infrastructure,mobile processor manufacturers roll out low-end and middle-end processors, global 5G smartphone penetrate rate
rapidly raised to around 40%. It was estimated that 5G smartphone will have larger scope than 4G smartphone to be themainstream of the market in 2022.
In 2022, 5G communication continued to become a market trend, prompting the continuous roll out of 5G network
construction in various countries and resulting in a 5G mobile phone penetration rate of over 50%. Looking forward to2023, the penetration rate of 5G mobile phones is expected to exceed 60%. Among them, mobile phones supporting Sub6 GHz 5G are still the mainstream. It is worth noting that the growth rate of 5G users is higher than the growth rate of
5G mobile phone sales, indicating that the killer application of 5G mobile phones has not yet appeared, coupled with the
reduction in the number of major innovations in mobile phone specifications and the longer average replacement cycle
for consumers.

Re-investment & Affiliated Companies
HTC's reinvestment policy is to provide different solutions for enterprise clients, personal consumers, and telecom
operators, the company continues to deepen the enhancement of virtual reality and augmented reality related newtechnology, application software, and content expansion through strategic investment, to deepen the enterprise market
and mass consumer market. 2022 HTC affiliated companies please referred 2022 annual report - 7.1 Affiliates.

2022 HTC ESG Report018

Product Overview
HTC has been tapping into the possibilities of smartphones through brand new technology in the telecommunications
area. Extensive and innovative VR, AR, AI, blockchain, and high-speed 5G networks are amalgamated to create HTC’stechnological vision of VIVERSE.

HTC VIVE™
VR (Virtual Reality) is an exciting feature of next-generation computing and entertainment. HTC VIVE allows users to browse through the VR world and use uniquehand-simulation controllers to interact with objects.

VIVE XR Elite
VIVE Wrist Tracker
The new VIVE Wrist Tracker, a new lightweight and versatile VR Tracker from VIVE,
designed for our award-winning VIVE Focus 3– an industry leading All-in-One headset
which uses inside-out tracking. Lightweight, accurate, versatile, VIVE Wrist Tracker caneasily be worn on the wrist or attached to objects so they can be tracked in 3D space.
It’s 85% smaller than a VIVE Focus 3 controller, and 50% lighter at just 63g. VIVE Wrist
Tracker is also intuitive to use, with a simple one-button pairing feature to connect
wirelessly to VIVE Focus 3. The strap can be removed and cleaned easily, or evenswitched out for a different one. VIVE Wrist Tracker delivers up to four hours of constantuse, with an LED indicator to show you the battery status, and is charged via USB-C
connector.

VIVE Focus 3 Facial Tracker

The headset combines Mixed Reality (MR) and Virtual Reality (VR) capabilities into one compact, lightweight, powerfuland highly versatile device – perfect for gaming, fitness, productivity and more. VIVE XR Elite includes a full color
RGB passthrough camera, and hand-tracking, which enables a whole new dimension of MR scenarios. VIVE XR Elite
can be connected easily to a PC via USB-C to access PCVR content from VIVEPORT and Steam and supports wireless PC
streaming over WiFi or the latest generation - WiFi 6E with low latency and great graphics.
VIVE XR Elite takes versatility to the next level. It has a sleek modular design that can easily be transformed into a
glasses form factor - simply remove the battery and fit the VIVE XR Elite temple pads. Change the physical configuration
so it works best for whichever situation you’re in, whether that’s at home, in the office, or traveling on a plane. With
four wide FOV cameras, exceptional 6DoF spatial accuracy, a depth sensor and hand-tracking developers have lots ofoptions to incorporate in VR and MR content for accurate movement to enhance your overall experience.
VIVE Wrist Tracker is also compatible to deliver enhanced hand tracking, or it can be attached to objects you want totrack in XR. The visual impact is sharp with a wide 110 FOV, 4K resolution which results in a crisp image all running ona smooth 90Hz refresh rate. VIVE XR Elite has adjustable lenses so you can take off your glasses and still enjoy a clear
picture with greater comfort.
Find the perfect balance of comfort and performance with VIVE XR Elite’s beautifully compact design. The full headset
weighs just 625g including the battery, which is placed at the back for balance and is curved for optimal comfort, anddelivers up to two hours of full XR use. The battery is removable and hot swappable, so you can keep going whether it’schanging to another power source or changing to another battery. It has 30-watt fast charging and is charged via USB-C
power delivery.

019

About HTCThe new VIVE Focus 3 Facial Tracker makes it easy for users to naturally convey theiremotions – and read others’ intentions – in real time. Its mono tracking camera captures
expressions through 38 blend shapes across the lips, jaw, cheeks, chin, teeth, andtongue to precisely capture true-to-life facial expressions and mouth movements onavatars. With a 60Hz tracking rate and optimized runtime for facial tracking, users cansynchronize lips to voice with minimal latency and enjoy lifelike interactions in highfidelity. The benefits of facial tracking are vast, improving soft skills in presentationcoaching, customer service management, training, and more. Users can track andimprove their emotional preparedness, helping to achieve better real-life outcomes
across many applications, from education and healthcare to human resources andcreative industries.

VIVE Focus 3 Eye Tracker
The VIVE Focus 3 Eye Tracker opens new avenues for research, gaze control, and morenatural interactions. The dual camera setup with supporting IR illuminators is capable ofcapturing data for gaze origin and direction, pupil size and position, and eye openness.
The lightweight module easily attaches magnetically to VIVE Focus 3 without impacting
the headset’s balanced ergonomics, and the existing VIVE Focus 3 adjustable IPD works
uninterrupted to help users find their viewing sweet spot. VIVE Focus 3 Eye Tracker
allows you to see what users see to understand intentions and improve feedback, perfectfor training and education scenarios.

2022 HTC ESG Report020

VIVERSE
VIVERSEVIVEPORTAs the global VR application store and content subscription service platform of HTC, VIVEPORT provides more than 1,000 types of experience content
in over 70 countries. It supports various major VR head-mounted displays, including computer driven head-mounted displays, all-in-one devices, andmobile devices.
Launched in 2019, VIVEPORT Infinity is the first unlimited VR subscription service in the world, bringing a brand-new content commercial model to the
VR industry. This service not only creates more VR application demands, but also benefits developers to get closer to consumers. After experiencing thechallenges of the epidemic, VIVEPORT will continue to grow its content, and occupy a dominant position in the virtual field.
Besides the benefits of being eco-friendly by transforming physical to virtual platforms which can effectively decrease consumption of resources,
VIVEPORT also emphasizes equality and mental health in the sustainable field. All content needs to be confirmed with the “Content Guidelines” of
VIVEPORT before being released. If there is any discriminatory content related to race, ethnicity, social class, or language, etc., it will not be fit for themarket. After content is released, it is still under surveillance for any violations of the guidelines. HTC exists to collaborate with all developers to createa high-quality virtual content environment.

VIVE ORIGINALSHTC VIVE ORIGINALS is a content brand owned by HTC VIVE. It is devoted to original IP development and original content production. It also engages inthe distribution and exploration of VR in film, art, animation, music, cultural collections, as well as the cultural creativity and entertainment industries.
VR is an embodiment of people's pursuit for an immersive experience. The development of
this technology is also the foundation for the continuous advancement of the smartphoneindustry after the accumulation of key technologies, including display technology,
processors, and controllers in the past decade. Through VR technology, consumers are able
to admire visual effects and experience the virtual world personally.
As a leading enterprise in the VR industry, HTC has established "VIVERSE", an ecosystemthat provides an immersive, highly interactive, and profoundly explorative open experiencethrough the use of the latest technologies like VR, AR, AI, Blockchain and 5G. At the MWC
2022, HTC unveiled the vision of the VIVERSE metaverse platform for the first time where
people can utilize various devices and platforms to connect with VIVERSE at any time. In
2023, HTC has launched VIVERSE for Business, a modular and customizable platform-as-aservice (PaaS) solution which enables enterprises to engage in more realistic and efficient
remote virtual collaboration.
In VIVERSE, everyone can have a unique virtual avatar to freely access the contents ofdifferent platforms, and interact and socialize with other virtual avatars, as well as explore
the virtual worlds established by others. In addition to an entertainment experience,
VIVERSE can also be applied in education and other industries, e.g., in high-danger or
high-risk professional scenarios such as surgery where users can train and improve inthe VIVERSE, enabling professionals and enterprises to accelerate the accumulation ofexperience and realize the vision of the VIVERSE without the restrictions of time and space.

To provide an extended variety of VR solutions, VIVE ORIGINALS is also actively building a cross-domain team to create content and VR technicalspecifications standardization. Moreover, it aims to create a content production SOP. Profit comes from various channels, such as licensing for publicbroadcasting, organizing exhibitions, and trading for art collections with cross-domain content. We also actively strive for government collaborations
to garner film and television investments. Additionally, we want to expand the scale of content and build up a VIVE Reality ecosystem by content
clustering to fulfill the ultimate goal of enriching people's cultural life through new technologies and creativity.
The vision of VIVE ORIGINALS is to create an entertaining experience with cultural values in the virtual world. To deepen the connection between thevirtual and real world, VR technology can be applied in culture and art collections, as well as video and audio recordings through our four pillars ofdevelopment. The four pillars are content production, business channels, solution provision, and platform services.

VIVE Arts
HTC launched VIVE Arts in 2017, marking the beginning of the Global Virtual Reality Art Program. Since its establishment, VIVE Arts has been dedicatedto exploring art and culture. Virtual reality is a promising new medium that offers people a unique perspective on appreciating artistic treasures
worldwide. The transformative technology of VIVE has revolutionized the creation and experience of art. For instance, VIVE collaborates with museums
and content developers to pioneer new ways of showcasing their work.
VIVE Arts considers it our mission to bridge art with state-of-the-art technology, removing geographical barriers to ensure that art reaches every cornerof the globe and is appreciated through innovative channels. Thanks to advancing technology, we have achieved the realization of immersive virtual
galleries, bringing together the efforts of numerous esteemed artists and over 50 museums and cultural institutions. This impressive list includes
London's Tate Museum, the V&A Museum, Musée du Louvre, Musée de l'Orangerie, Musée d'Orsay, the Museum of Natural Science in the US, theNational Palace Museum of Taipei, the ArtScience Museum of Singapore, and the Venice Biennale, among others.
VIVE Arts continues to evolve and collaborate with the world's leading museums, cultural institutions, and artists to enhance the enjoyment of art andculture through new experiences. By displaying HTC's capacity and influence to the world through emerging technologies, we strive to connect people
on an international level.

021

About HTC

2022 HTC ESG Report022

Healthcare
DeepQ

HTC DeepQ is comprised of cross-domain experts and engineers in areas such as computer science, software
engineering, medicine, regulations, user experience, design, through digital technology, big data and artificial
intelligence technology, all with the goal of developing and providing precision personalized medical products
and services to reduce costs and improve the effectiveness of healthcare. This is a platform that has integrated
technologies including deep learning, machine learning, and natural language processing. Through the applicationsof these technologies, we can provide customers with multiple intelligent solutions.
Multiple AI models are built in the DeepQ AI platform. Through the optimization of training environments, fully
automated parameter adjustments, and the simple user interface, this platform has greatly reduced the learning
threshold and the training cost of AI models. Doctors can quickly train AI models and easily step into the field of
medical imaging AI.
The application of medical AI is reflected in the level of convenience of intelligent medicine. Through AI chatbots
and public health assistance systems, DeepQ helps the general public acquire real-time epidemic information anddeal with medical-related issues, reminds them to see a doctor, publicizes health information and education, andoffers concepts on medication, thus making healthcare smarter and more convenient.

HTC Medical VR
The HTC Medical VR team is dedicated to applying VR technology in medical education and clinical applications
with the objective of improving learning, bettering doctor-patient communication and medical quality, andpromoting the development of global medical VR ecology. The team cooperates with developers to implement
medical innovation technology VR in the actual fields. The team has already established world-class benchmarks
with multiple hospitals and universities to create a world-class VR medical teaching center to improve medical
education and training levels. In addition to applications in medical education and clinical applications, VR-based
applications including anatomy and physiology teaching, development of customized VR teaching materials,
clinical skills training, drug development, pain management, and rehabilitation can benefit student internships,
teacher training, personnel training, and doctor-patient communication, and significantly enhance learning andmedical quality.
Main Medical VR products currently include the Virti platform, which can assist with the development of VR
teaching materials, and 3D Organon, which provides internships on human anatomy, VR training, and importplans.

023

About HTCG REIGNS、HTC Smart Devices
Announced June 2022, HTC Desire 20 pro
is designed for immersive experiences ina world where the physical, digital, andvirtual interconnect. With the capacity
to run or obtain 2D and 3D content on
extended reality (XR) devices, HTC Desire
22 pro is the easiest route to VIVERSE
while offering an outstanding smartphone
experience with an impressive cinematic
display, excellent performance, andAIassisted cameras. Unlock endlesspossibilities with optimized performanceand connectivity to 5G, Wi-Fi, andBluetooth, which make virtual navigation
fast and easy. Visit metaverse communities
in VIVERSE using a browser or pair HTC
Desire 22 pro with VIVE Flow to explore
them in VR. With screen casting, you can access your mobile apps while immersed and stream media in a private
cinema experience.
Desire 22 pro’s crisp 1080 x 2412 resolution and smooth 120 Hz refresh rate present images, videos, and games instunning clarity. Enjoy a rich view of the metaverse without a VR headset using VIVERSE, your gateway to crossplatform collaborations, virtual events, entertainment, and more. The 4520 mAh battery powers a wide range of
VIVERSE experience and more, offering fast charging, wireless charging, and even reverse charging for your VIVE
Flow or other connected devices, so the switch between realities can be seamless.
G REIGNS continues to invest efforts to the 5G private network industry with the O-RAN architecture; with leadingindustry technology. It is committed to the optimization and integration of 5G private networks, and at the sametime strengthens and innovates the connection between the virtual and thereal world.
G REIGNS launched the Reign Core portable 5G private network, it can covera radius of 40m, and has low latency and high data transmitting speed, thepurpose is to quickly and painlessly allow enterprises to import 5G private
networks, and it only takes 30 minutes to deploy a private 5G network.
The 5G RAN Solutions have high-power outdoor stations (above 5W) andlow-power indoor stations (250mW), to satisfy wide range of application
scenarios. High-reliability transmission enables 5G network to be appliedin diverse fields and scenarios. Its advantage is to lower the threshold for
digital transformation for enterprises. With the simplest structure and themost efficient cost, with 5G private network the enterprises can conduct fielddemonstrations.
Not only the portable series, depends on different customization, G
REIGNS is more focused on the project, with the design capabilities ofcommunication software for more than 20 years. This capability let the 5G
private network optimize the software and hardware network and integrate
the test with high reliability, retain the scalability of expansion, so that after
the demonstration, enterprises can carry out expansion planning according
to long-term needs, so as to promote the ecological development of the 5G
private network industry.

2022 HTC ESG Report024

Overview of Financial Performance
HTC's consolidated revenue for the whole year of 2022 was NT$ 4.41 billion, the consolidated gross profit was NT$
1.73 billion, the consolidated gross profit margin was 39%, the operating income margin was -100%, the net profit
after tax was NT$ -3.4 billion, and the earnings per share (LPS) was NT$ -4.13. 2022 revenue decreased mainly due tofewer shipments. Nonetheless, changes in product mix helped improvements in gross profit and gross profit margin.
Furthermore, the pandemic easing in 2022 had led to the increase in marketing and advertising activity expenses,
resulting in an increase in net losses before income tax in 2022 compared with the previous period.
Unit

2020

2021

2022

Operating Revenue

NT$ Million

5,806

5,253

4,409

Operating Costs

NT$ Million

4,241

3,617

2,679

Operating Expenses

NT$ Million

7,956

5,752

6,134

Income Tax

NT$ Million

(4)

(3)

(2)

Employee Wages

NT$ Million

5,267

3,777

3,700

NT$

0

0

0

NT$ Million

0

0

0

Dividends
Social Investment /Donation

Note:
1. The related figures are those listed in the consolidated statement.
2. Final decision after annual shareholders' meeting.

Production: Virtual Reality, 5G, Smartphones and Connected Devices (accessories)
Year

Production Capacity(Thousands)

Production Quantity (Thousands)

Value (Millions)

2020

7,300

478

3,413

2021

7,470

438

3,112

2022

7,130

336

1,813

Note: Production capacity represents the normal capacity of current production equipment after making adjustments for necessary production stoppages, non-workholidays, etc.

Sales: Virtual Reality, 5G, Smartphones and Connected Devices (accessories)
Domestic Sales

Export Sales

Year

Quantity (Thousands)

Value (Millions)

Quantity (Thousands)

Value (Millions)）

2020

168

978

1,559

4,436

2021

90

631

940

4,344

2022

37

260

400

3,753

Note: Main product item data not inclusive of income from maintenance / repairs or product development work.

025

About HTC

2022 HTC ESG Report026

The Pursuit of Brilliance
HTC is an innovation company, creating powerful new products, solutions, and platforms in mobile and immersive
technologies. Beginning with a vision to put a personal computer in the palm of our customers’ hands, we have led theway in the evolution of smartphones, and are now applying that same innovative approach to connected devices andvirtual reality as we enter the era of VIVERSE, our version of the metaverse.
At the heart of this is a bold innovative spirit of pushing new boundaries, while leveraging our industryleading
capabilities. The notion of Dare to Dream is at the heart of our daily ambitions. We ask fundamental questions at theintersection of customer aspirations and our capability to delight and surprise with innovative solutions. We challenge
ourselves and our customers to achieve their full human potential. What’s your dream? Can you visualize it? Will it shift
our perspective? Will we feel it? The future belongs to the dreamers to power creation and innovation. Because our
dreams power the future. Dare to Dream.
As we live this philosophy, we employ powerful technologies and combine them in creative new ways in order to deliver
this. At this time in history, building block technologies like VR, AR, 5G, AI, and blockchain are evolving and coming
together in new ways with the potential to deliver utility and experiences previously unavailable. We called this VIVE
Reality in 2018, and today we see our vision as VIVERSE.

Future Goal
Integrate products and services tostrengthen brand-added value.
Create professional images of
products with strong technologicalcompetency to increase market
shares.
Strengthen marketing resources toelevate the brand's image.

VIVERSE is the future that we strive to enable. That means understanding people’s needs and desires, their hopes
and aspirations, and embedding them into the building block technologies of today and tomorrow. Through creating
wonderful devices, platforms, content and solutions, we can unleash imagination from the bounds of reality and realize
the true potential of technology for the benefit of humankind. Our future is enhanced in a world where HTC innovation
and VIVERSE experiences blend to create a new and better world. These three pillars are central to that mission:

Humanity

For HTC, our innovation is human-centered in the broadest sense. We endeavor to anticipate theneeds of people, businesses and society as a whole, and expand our vision to impact people’s lives
in ways never before considered.

Technology

Our heritage of and commitment to technology excellence is the great enabler of our pursuit. We
strive for a world in which customers, large and small, have access to the most powerful hardware,
platforms, tools, and services, a world where the technology becomes secondary to the experiencesthat it creates.

Current Achievement
Creating a global smartphone with excellent designs
The most valuable international brand from Taiwan
The world's first virtual reality system VIVE brings real-world interaction andexperience through space-based positioning technology
Through virtual reality and augmented reality, big data, and artificial intelligence
technology, with the goal of developing and providing precision personalized
medical products and services to reduce costs and improve the effectiveness ofhealthcare

HTC's
Challenge
How to enhancebrand loyalty

027

About HTC

Imagination is one of the most powerful tools we know, and one we seek to unlock. A world where acontinuum of immersive realities is possible, and experience is unbounded.

Imagination

Imagination that invents new ways to make life better for people and enable them to be the best
they can be, help businesses achieve their vision, and solve the greater challenges faced by society.

This philosophy and approach are reflected in a steady stream of world-class innovation, as we continue to advancenew products in VR, mobile, and 5G with greater capability and convenience. We also continue to advance our societal,
environmental and cultural initiatives, and our support of education. From our people to our products, Dare to Dream
represents a guiding philosophy that energizes HTC as a global organization.

2022 HTC ESG Report028

“Quietly Brilliant” is deeply rooted within HTC’s corporate culture. HTC strives to unlock the full human potential of ourcustomers, employees, partners, and other stakeholders, and to achieve that, we must strive for our core values of truth,
goodness and beauty in all that we do.

Truth

Truth means being real and authentic. The fields of science and technology are constantly
pursuing truth to solve society’s problems through innovation. This is the most importantessence of HTC.

Goodness

Goodness means turning heartfelt ideas into actions that improve people’s lives. Such as,
high-quality content that can inspire empathy and compassion, products that can help people
with disabilities, that serve the elderly or educate young people, and that solve problems fororganizations.

BeautyBeauty is simplicity and elegance. The simplest structure can hide complex details that eachhave a purpose. We design simple and intuitive user interfaces for high quality products thatevoke a beautiful reaction in our customers.

Authenticity: Being authentically true to the nature of our mission, and the belief that we can improve human lives
and experience while creating value.
Entrepreneurial approach: We are agile, attentive to costs, and aim to achieve maximum effectiveness through an
obsessive and energetic approach to building our brand.
Innovative products: For many customers, our products and services are the most concrete expression of our brand.
By delivering a steady stream of innovation in mobile, virtual reality, 5G, blockchain, and more, we create proof
through action.
Integrated solutions: Far more than just a hardware company, we deliver true solutions through platforms, software,and services to create positive experiences and net promoter scores with our customers.
Broader audiences: By continuing to improve and simplify our products and user experience, and support a broader
range of software, we aim to access new customer segments and solve the challenges they face.
Developing the ecosystem: HTC works closely with partners at each stage of innovation to build the ecosystem
necessary to promote adoption, and actively participates in industry alliances to advance our industry thought
leadership. Through the VIVE X accelerator program, we are supporting the development of the ecosystem foradvancing the key and emerging technologies such as VR, AR, 5G, AI, and Blockchain. We create opportunities to work
closely with our portfolio companies to explore mutually beneficial ways to advance entrepreneurial innovation.
VIVEPORT is helping to build an ecosystem of content developers by providing a dedicated VR app store for consumers
and enterprise while VIVE Wave is enabling other hardware companies to deliver immersive devices to broaden themarket and fuel innovation. At every stage of product development, HTC considers the requirements of the ecosystem
in order to drive innovation.
Smarter communications: We develop the types of products that people love and want to learn more about, thatspark their curiosity and tap into their imagination. These make for great stories and social engagement, which areamong the most effective ways to build a brand, and are a focus of our efforts on that front.

Only when we launch excellent products instilled with truth, goodness and beauty can we implement our mission of“combining technology with humanity to unleash the imagination” and achieve our vision of VIVERSE.
Our vision can best be understood through the VIVERSE triangle logo mark, which represents the unity of three key
elements – humanity, technology, and imagination – while the center symbolizes a portal to a new world of experiencesthat VIVERSE delivers. VIVERSE was born from a faith in humanity and forged by a respect for technology, paving
the way for bringing people closer together, and closer to their imagination, than ever before. VIVERSE is stimulating
innovation in entertainment, education, training, design, healthcare, art, shopping and social networking, and manyother industries, positively impacting the world, affecting the way we live, learn, and believe.

Building communities, forging customer relationships, and offering services that increase lifetime value:
We have moved well beyond the transactional nature of selling consumer electronics to developing an ongoing
relationship with our customers. Through our platform, software, and service offerings, we can continue to engage
with them, as well as increase customer lifetime value.

While we expanded from creating world-class smartphones into the fields of connected devices, virtual reality, 5G
networking, blockchain, and now the metaverse, we are re-energizing the HTC brand story through the notion of an
innovative parent company that will dare to dream, while expanding our brands to new audiences and segments. HTC’s
approach to brand building is both pragmatic and effective, and is based on principles including:029

About HTC

2022 HTC ESG Report030

HTC 2022 SDGs Performance
The United Nation's Sustainable Development Goals
In 2015, the United Nations passed the 17 Sustainable Development Goals. These goals not only ensure peace andprosperity, but also provide a blueprint for specific goals for the next 15 years, guiding the direction for achieving
sustainable development. This is a global call for medium- to long-term action, aimed at promoting the responsibility andpower of businesses, governments, and society to achieve a more sustainable future.
As global citizens, we spare no effort to implement the goals of the United Nations. We are committed to integrating
SDGs into corporate operations and business development planning. In addition to establishing gender equality inpractice and empowering female employees and providing them with benefits, we also focus on green sustainability
in the manufacturing process, achieving responsible consumption and production. Moreover, the HTC team has
also collaborated with external institutions on the research and development of products and services that enhance
healthcare quality, making full use of innovative technologies to promote sound health and well-being of people of allages. We have established multiple partnerships with teams from different fields to accelerate the implementation of thegoals, working together to promote a better life for humanity and achieve the vision of a sustainable world.

HTC Focus Goals
HTC has always focused on the United States SDGs, and is dedicated to promoting and realizing goals including SDG
5 (Gender Equality), SDG 6 (Clean Water and Sanitation), SDG 7 (Affordable and Clean Energy), SDG 12 (Responsible
Consumption and Production), and SDG 13 (Climate Action) internally within operations as the starting point. HTC also
continues to exert efforts to realize diversified group equality, and pays particular attention to the promotion of SDG 5
Gender Equality. For further detail, please refer to the relevant section of the report.
HTC promotes SDGs through its business divisions externally based on its technologies and positioning. It mainly focuseson SDG 3 (Good Health and Well-Being), SDG 4 (Quality Education), SDG 8 (Decent Work and Economic Growth), SDG 9(Industry, Innovation and Infrastructure), SDG 12 (Responsible Consumption and Production), and SDG 17 (Partnerships
for the Goals). In addition, HTC has been a long-term supporter and sponsor of HTC's Culture and Education Foundationand Social Welfare Foundation, and is committed to realizing SDG 1 (No Poverty) and SDG 4 (Quality Education) goals.
All of these efforts have demonstrated HTC's focus and commitments to SDGs, as well as continuous progress anduninterrupted growth.

Ensure healthy lives and promote well-being
for all at all ages 福祉
In today's rapidly changing medical technology environment, continuous innovation anddevelopment of convenient medical services have become an indispensable part. HTC uses
technology to benefit the public and brings more complete solutions for human health andmedical care. Linebot, jointly developed by HTC DeepQ and the CDC, ChangHua Christian
Hospital, and Chi Mei Medical Center, is based on AI technology and provides diversified medical
services, aiming to improve people's quality of life and happiness.

Developing Medical Services with CDC
HTC DeepQ cooperated with the CDC to develop Disease Control Butler (DCB) to provide related
information of COVID-19, and pandemic prevention information, decrees and health education
propaganda, etc. As of the end of December 2022, the user number of DCB has reached 10.43 million,
effectively assisting the National Health Command Center (NHCC)’s policy to deliver to the public.
“Taiwan V-Watch Vaccination Report System” helps track people’s health status after being vaccinatedagainst COVID-19. The released a new feature of filling in vaccine doses and labels for minors, andallowing parents to fill in their children's vaccination records and health status. In addition, the teamalso cooperated with the CDC to develop “Campus Influenza Vaccination System” (CIVS) and has been
went on a trial run in 22 counties, 381 schools in Taiwan, helping students and parents track thevaccination schedule and information.

Hi! 我 是 疾 管 家， 有 任 何傳染病問題都可以問我喔！

我想問什麼是流感！

沒問題！流感是…

031

About HTC

2022 HTC ESG Report032

Ensure healthy lives and promote well-being
for all at all ages
HTC DeepQ providing the public with a choice of multiple health services with ChiMei Hospital and Changhua Christian Hospital
HTC DeepQ Healthcare cooperated Changhua Christian Hospital to launch the Linebot of “Dr. Lan”, the first
AI and blockchain healthcare chatbot across 10 hospitals in Taiwan, providing the public with a choice ofmultiple consultation methods providing thorough healthcare by on-site, video or telephone consultation. Asof the end of December 2022, the user number of Dr. Lan has reached 33 thousand.
In June 2022, HTC DeepQ cooperated with Chi-Mei Hospital to launch "Chi-Yi Butlert" healthcare linebot,
which provides the public with more convenient quick access to medical services in various branches of
Chi Mei Hospital, including appointment registration, consultation progress query, consultation reminder,
COVID-19 vaccine appointment and self-paid PCR test, medication delivery progress, medication refilling
appointment, appointment for visiting a sick, emergency messages, etc. The user number has reached 7.5
thousands as of the end of 2022.

Classify images

Detect object

Split object

Identify image categories
based on image
characteristics

Detect the position of
the target object in the
image

Segment the target
object in the image

DeepQ AI Platform
Future medical education needs to rely on modern science and technology. To accelerate the introductionof medical-related AI, HTC's DeepQ healthcare business division launched the "DeepQ AI Platform" medical
application in September 2019. This platform enables doctors to train AI to make judgments on medical
images. This platform also makes it possible to develop AI models on the cloud without investing in hardware
at tremendous costs. In 2022, functions including model implementation, backstage management, model
optimization, and re-training were added to the new version of thisapplication. Furthermore, DeepQ has collaborated with Shin Kong Wu
Ho-Su Memorial Hospital's AI research center to research and develop
medical image discrimination applications to improve service quality.

033

About HTC

2022 HTC ESG Report034

Ensure inclusive and equitable quality education andpromote lifelong learning opportunities for all
In the digital age, education tends to be more diverse, interactive and integrated. The Digital Twins
Science Popularization Laboratory Project of the Hsinchu City Cultural Bureau and artist Zeng Wu's
"Of Whales" work demonstrate technology, culture and sustainability through virtual-real integrationand UIUX design. These ideas bring more possibilities for future education and society.

VIVE Arts work with educative value of sustainable environment
American filmmaker and artist Wu Tsang presented Of Whales, inspired by Herman Melville’s Moby Dick, exploring the
topic of ocean from the modern perspective. Wu Tsang collaborated with the French Studio Albyon with game engine
Unity. The work is staged on a 16-meter LED screen and played continuously. The design echoes a day-to-night cycle andthe deep dive of a sperm whale, offering a poetic reinterpretation of the whale’s story ‘from below’ the surface of the ocean.
Audience can reflect on the theme of the racial and labor inequality and human’s invention to nature in the novel.

The Digital Twin Science Laboratory Project of Hsinchu City's Cultural Affairs
BureauThe Digital Twin Science Laboratory is designed for students aged 6 to 12. It combines interactive
experiences in both virtual and physical environments, as well as the participation of children,
youth, and online communities. The project also utilizes software and hardware integration and
UI/UX design, allowing audiences to use, share, and create together. The laboratory showcases thetechnology, culture, and sustainability of Hsinchu City, and brings together the new generation toconvey a better future.

035

About HTC

2022 HTC ESG Report036

Goal 8: Promoting Sustained, Inclusive and Sustainable
Economic Growth 祉"Promoting inclusive and sustainable economic growth" has always been the common goal of theworld, and the development of innovative technology has brought us solutions. BEATDAY, the brandunder VIVE ORIGINALS, has successfully brought a new entertainment experience to the audience,
and at the same time promoted the development of Taiwan's virtual reality entertainment industry.
Through cross-border cooperation with other brands in different fields, it demonstrates the possibilityof multiple applications and creates a brand new social entertainment ecology. BEATDAY is not only amajor breakthrough for the entertainment industry, but also an important contribution to the goal ofinclusive and sustainable economic growth.

The New BEATDAY Metaverse Experience Creates Brand Value
In order to disrupt people's understanding of culture, VIVE ORIGINALS used innovative technologies
to create the world's first music Metaverse brand, BEATDAY, which not only provides audienceswith new entertainment experiences, but also promotes the development of Taiwan's virtual reality
entertainment industry. In addition, VIVE ORIGINALS has elevated BEATDAY to the level of Metaverse,
allowing audiences to experience the wonders and richness of the Metaverse through BEATDAY.
By watching the Metaverse concerts, the risk of gathering during the pandemic can be reduced forthe audience, while also reducing the energy consumption and transportation carbon emissions ofphysical events. This can help promote environmental benefits, while providing entertainment. In
2022, BEATDAY collaborated with a fashion magazine and the NFT "ZombieClub" by Shawn Yue. This
collaboration not only crossed boundaries in terms of content co-creation but also demonstrated theversatile application of volumetric photography technology. The production team specially createdan exclusive zombie-themed scene. BEATDAY upgraded its platform social function by adding amatchmaking feature for Shi Shi’s “Jagi” concert with a Qixi Festival theme. It is the first to combine
high-quality entertainment content and free social functions in the Metaverse, creating a new ecology
of Metaverse community entertainment. Lala Hsu's Metaverse concert featured triple A quality
visuals and incorporated surreal performance effects, breaking the traditional framework of online
concerts.

037

About HTC

2022 HTC ESG Report038

Build resilient infrastructure, promote inclusive andsustainable industrialization and foster 祉
In the era of globalization and digitalization, innovation is one of the goals pursued by enterprises.
The Ministry of Economic Affairs' A+ Enterprise Innovation R&D Quenching Plan takes advantageof the opportunities in the metaverse market and integrates technologies such as 5G, AIoT, and XR
to promote demonstration services with the concept of metaverse Virtual Township, hoping to drive
new business opportunities and values. HTC VIVE presented the first virtual production system suite
VIVE Mars CamTrack, bringing convenience, affordability and professional features, making virtual
production easier and becoming an important part of Taiwan metaverse's innovation ecosystem.

Participation in the Ministry of Economic Affairs' A+ Enterprise Innovation
and R&D Program
The Metaverse market offers an opportunity to address
issues in the Taiwanese software industry, such as
small market size and lack of brand recognition. The"Kaohsiung Metaverse Innovation Service Application
Program" combines technologies such as 5G, AIoT, and
XR, and promotes demonstration services based on theconcept of virtual town-building in the Metaverse. The
aim is to create a Metaverse ecosystem that integrates
technological innovation and sustainable business
operations, and expand the emerging Metaverse industry
value from Kaohsiung to the world.
Based on the seven-layered structure of the Metaverse,
we have proposed multiple development and integration
projects for key technology R&D and integration. These
projects include cash flow integration technology, open
platforms, image capture technology, panoramic live broadcasting technology, motion and expression
capture, and infrastructure integration, which will allow people from all walks of life to enter the
Metaverse and create new business opportunities.

VIVE Mars CamTrack: Virtual Production Solutions
In the traditional film industry, whether it is Hollywood or independent production, it is often
high budget and high cost to construct shooting scenes for virtual images. Production crews andequipment have to be moved to locations around the world, and sets and electricity are expensive.
HTC VIVE launched VIVE Mars CamTrack, a solution that makes virtual production easier. The
plug-and-play compatibility, with no additional software required, and portability make it easy toshoot in many different scenarios. In addition, VIVE Mars CamTrack is affordable and comes withprofessional-grade features. VIVE Mars CamTrack includes multi-cam tracking, with support for
up to three cameras, and automated calibration for camera offset and lens distortion. Genlock andTimecode offers synchronized output between real and virtual actors, and the robust wiring helps
reduce latency. VIVE Mars CamTrack is a powerful solution that makes virtual production efficientand affordable. For VIVE Mars achievements in 2022, please see our highlight video: https://www.
facebook.com/watch/?v=1617243872063829

039

About HTC

2022 HTC ESG Report040

Strength the means of implementation and revitalize
the global partnership for sustainable development
As a company dedicated to promoting the application of VR technology in medical education, HTC
Medical VR actively cooperates with top hospitals, schools and enterprises in Taiwan to cultivate
medical talents and promote sustainable development through innovative VR teaching methods.
For example, we have cooperated with the Asia University College of Nursing to promote the SDGs
metaverse project, and cooperated with Shin Kong Hospital to establish a medical metaverse,
showing the positive contributions made by HTC Medical VR in promoting multiple partnerships andpromoting sustainable vision.

HTC Medical VR Trains Professional Medical Personnel Around the WorldHTC Medical VR has collaborated with top hospitals and schools in Taiwan to develop a customized
Virti VR teaching platform. In 2022, we held 70 workshops and trained more than 2,000 healthcare
professionals and student users, producing 160 high-quality teaching cases. We have also partneredwith 7 medical centers to use VR teaching materials in clinical skill, cross-team integrated care, anddoctor-patient communication training, improving patient safety and healthcare quality. The Virti
platform can enhance students' learning and confidence, and can objectively evaluate learning
outcomes and guide intervention methods, expanding the capabilities of teachers.

College of Nutrition, Taipei Medical University and HTC Medical VR jointly held a nutrition metaverse workshop to make breakthroughs in
the nutrition education and industry applications, and learn and cultivate self-made professional metaverse teaching materials.

Reducecarbon emission

33％

Reducetraining costs

40％

Save
training time

75％

Improvetraining efficiency

230％
ProlongmemoryTeachers can make VR interactive teachingmaterials easily using the Virti VR teaching material
development platform to improve students' learning
efficiency.

041

About HTC

Taichung Veterans General Hospital and HTC Medical VR jointly held a nutrition metaverse workshop to improve learning memory andassist with the enhancement of medical quality through Virti's AI and game-oriented technology.

2022 HTC ESG Report042

Strength the means of implementation and revitalize the global partnership for sustainable development
Metaverse Project to Promote SDGs with the College of Nursing of Asia
University
HTC Medical VR partnered with the College of Nursing of Asia University to promote the sustainable
development SDGs Metaverse project, cultivating VR and Metaverse related talent together andorganizing teaching events and industry-academia cooperation. We established the “Nursing
Metaverse Base” together, organizing Metaverse teaching materials workshops and using Virti
VR teaching plan production platform. This innovative VR learning method allows students tocultivate skills and empathy in advance, and passes on the experience of teachers forever. HTC
has also extended this to other institutions, offering sustainable development Metaverse microcourses and organizing the "Exploring a New Era of Nursing Education: Metaverse Innovation
and Application Symposium” at the end of the year. 230 people participated in the "Metaverse ∞Sustainable Development Goals (SDGs)" seminar and workshop, sharing their practical experiencesand expanding the effectiveness of sustainable development.

043

About HTCHTC Medical VR Collaborated with Shin Kong Hospital to Establish the Medical Metaverse
Shin Kong Hospital collaborated with HTC Medical VR to create a VR medical Metaverse, addressing the challenges ofcross-team training during the COVID-19 pandemic. Through various VR teaching materials, a 360-degree virtual training
environment is provided to help respiratory therapists and nurses understand their roles and key care processes. VR
technology can save resources and improve the quality of medical care in intensive care units. More than 50 medical staff
who received VR medical training reported a significant increase in satisfaction, up to 95% satisfaction. Moreover, theirtest scores also showed an average improvement of more than 10 points, indicating that VR technology has resulted insignificant changes and improvements in medical training.

2022 HTC ESG Report044

ESG Management –Our Sustainability Commitment

2022 ESG Performance
ESG

2022 Performance$ 4.41 Billion
The HTC Environment, Social, and Governance (ESG) Policy
HTC is committed to observing all the International and Regional laws in the countries where it operates and to
do business with honesty and integrity. We will continue to provide innovative and quality products, protect theenvironment, care for the health, safety and human rights of our employees, and positively maintain our stakeholders’rights and interests.
This ESG policy helps HTC maintain social responsibility and realize the vision of sustainable development. All our
related business partners advocate and share this policy with us and in this way, we all protect and enhance the rights
and interests of our internal and external stakeholders.

Governance

Annual revenue of NT$ 4.41 billion while operating costs and expenses decreased

Using Responsible Business Alliance Code of Conduct as a reference for code of conduct, developing HTC as a good
corporate citizen and participating in international Initiatives$ 2.36 Billion

R&D investment accounted for 54% of HTC revenue

21-35%The evaluation result was 21%-35% in the 8th (2021) and the 9th (2022) Corporate
Governance Evaluation.

ISO 27001
ISO 27701
ISO 27799

DeepQ acquired recommended certification, and the head office of HTC expanded the scopeof verification of ISO 27001 and ISO 27701 and acquired relevant certificates.

Promotion of energy efficiency, carbon-reduction practices and various environmental protection activities

100％

Sustainable innovation from creation to development

Be a responsible corporate citizen, with the highest ethical standards

Approved by Chairwoman andChief Sustainability Officer

Responsible Units of the ESG Committee
Human
RightsEnvironmental andOccupational Safety
and Health

Human
Resources

BU R&D

GlobalManagement

GlobalManagement

Integrity
Management$ 494,933

recycled in 2022, boosting the recycling rate to 84.22%

158,102 KWhof Solar energy generation continued in 2022 with 798,505 kWh generated to date.

164,884 KWhof electricity conserved with 2022 power conservation measures, achieving 1% power
conservation and the goal for the year.

3,863 metric tonsof rainwater recycled in 2022 by the Taipei office showing a great effort in water conservation.

EthicalManagement
Team

Strategic
Procurement
Data
Protection
Offices

Note: please refer to P51 for the organizational structure of the HTC ESG Committee.

3.9 point

SocialHTC ESG Policy

Environment

ISO 14001 factory area coverage rate, the company's overall coverage rate reaches 40%

Sustainable supply chain management

HTC investigates the satisfaction of manufacturing employees through questionnaires every
year. In 2022, the investigation results was 3.9 points, an improvement from 3.77 points in
2021.

5 Major Core Functions

Construct a systematic learning and development blueprint and integrate internal andexternal training resources so colleagues can acquire the professional knowledge and skills
required to cope with future challenges.

Zeroviolations against customer privacy and loss of customer data in 2022.

047

ESG Management

2022 HTC ESG Report048

ESG Achievements
Corporate Governance Evaluation
HTC is a constituent of the
FTSE4Good Index Series
There are three major global ESG indexes that canbe reference indicators for investors regarding
ESG performance by enterprises. The FTSE
ESG Index covers the three major ESG pillars(Environment, Social, and Governance), 14
themes, and more than 300 individual indicators.

HTC won the 2022 EcoVadis Sustainability Silver Medal
EcoVadis, an international sustainability rating platform, awarded HTC the Silver Award
for Sustainability, ranks top 15% among more than 90,000 evaluated companies around theworld. In Manufacture of communication equipment industry, HTC ranks among the top
11%. In the four key themes, HTC ranks among the top 5% in "Sustainable Procurement"
and among the top 13% in "Environment", demonstrating our improvement in the four key
sustainability themes of Environment, Labor and Human Rights, Ethics, and Sustainable
Procurement.

HTC attaches great importance to corporate governance and operational transparency. We haveformulated a corporate governance structure in accordance with relevant laws and regulations,
including the Company Act and Securities and Exchange Act, to secure stakeholders' interests.
We have also continued to improve our management performance to ensure that the company
can effectively achieve its business objectives. HTC participated in the 8th (2021) and the 9th(2022) Corporate Governance Evaluation organized by the Taiwan Stock Exchange, and obtained
results in the range of 21%-35%. In addition, to better realize our business objectives, we haveestablished a comprehensive and systematic ESG implementation system to safeguard theinterests of our investors and other stakeholders.

CDP –Climate Change : Management Level

HTC has won the Taiwan Corporate Sustainability Award

In the 2022 CDP Climate Change score, among the approximately 14,000 rated companies aroundthe world, HTC continued to achieve the management level (B) (the Global average grade is C).

HTC won the "Silver Grade of ESG Report - Information and Communication Industry - Second
Category" in the 2022 Taiwan Corporate Sustainability Award (TCSA). The Taiwan Institute for
Sustainable Energy (TAISE) aims at encouraging companies to tackle corporate sustainability issues
and disclose corporate governance information, so as to strengthen its emphasis on maintaining
sustainable development, a friendly environment and a public prosperous society. The number ofparticipants in the "15th TCSA Taiwan Corporate Sustainability Award" has reached 424, an increaseof 29% over last year. The number of companies that have applied for the award over the years hasreached 581, accounting for 76% of the market value of listed companies in Taiwan. The total annual
revenue and government budget is as high as 36.13 trillion, which is about 167% of 2021 Taiwan GDP.

CDP –SER : Leadership Level
In the 2022 Supplier Engagement Rating (SER) score, among approximately 17,000 evaluatedcompanies around the world, HTC received the leadership level (A-) (the Global average level is C).

HTC VIVERSE Green LifeHTC is committed to promoting a net-zero green life and actively responding to one of the 12 key strategies adopted by Taiwan for Net-Zero Emissions by 2050. To achieve this goal, HTC has promoted "green living"across five major areas, including green dining, green consumption, green office, green home, and green Travel. HTC also makes good use of VR technology to reduce carbon footprint from everyday life, and encourages
users to practice green concepts, for example, by promoting green work externally, using remote video conferencing as a priority, and promoting the use of tools like the virtual training platform Virti, virtual conference
system VIVE Sync, etc. in the hope that more enterprises are influenced to drive sustainable development.
To reduce carbon emissions and promote green transportation, HTC provides charging stations for electric vehicles, has set up parking areas for zero-carbon bicycles, and offers convenient shuttle buses for commuting.
Through the combination of VR technology with culture, arts, and other related content, the company strives to create a green lifestyle that integrates virtual reality, and provides global audiences with a brand-new
sustainable experience. HTC also participated in the first "Let's Go Green" net-zero green life competition and won the finalist award. By exerting these efforts, HTC has not only promoted a net-zero green life, but also
made contributions to the creation of the green life industry chain.

049

ESG Management

2022 HTC ESG Report050

ESG Committee

ESG Management Procedures and Systems

In early 2022, HTC escalated the original CSR Committee to ESG Committee with Chairwoman Cher Wang as the Chair ofCommittee, SVP Madeline Chen as Chief Sustainability Officer, and members of executives as ESG committee members.
The committee is responsible for decision-making on economic, environmental and social topics, and founded the ESG
Office to assist in formulating sustainable strategies, connect sustainable development issues from various departments,
and continue to promote sustainable development responsibilities. The ESG office is responsible for connecting HTC andexternal stakeholders, including the communication and feedbacks from important supply chain partners. Also regularly
report to the ESG Committee on the trends, impacts and performance of relevant sustainability topics. There are several
task forces under the committee to deal with various ESG issues and link up the sustainable development goals of various
departments. Through a clear organization and division of labor, taking into account the economic, environmental andsocial aspects, and implementing the sustainable management of enterprises in daily operations with practical actions.

HTC’s ESG topics management uses materiality analysis as an important guideline for formulating long-term sustainable
goals and communicating with stakeholders. In materiality analysis, GRI guidelines and AA1000 AP 2018 responsibility
principle standards are adopted, and the four principles of inclusiveness, materiality, responsiveness, and impact areused to respond to the needs of stakeholders and focus on the disclosure of major topics, and these are further used forthe judgment of disclosure of relevant actions, performance and results.

Step

1

The overall management process of ESG topics in current year was same as that of previous year withchanges made to the details to comply with the output principle of the material topics of GRI 2021: Based on
industry and operating activities, as well as indicators such as interaction with the company, dependence,
responsibility, attention, and influence, HTC evaluates stakeholders from multiple perspectives and identifies
eight key stakeholders in 2022, including (1) employees, (2) suppliers/contractors, (3) consumers/customers, (4)shareholders and investors, (5) academic institutions, (6) local communities, (7) media & NGOs, and (8) rating
agencies.

The Board of Directors is responsible for supervising the overall ESG management policy, strategy and target setting,and major decision-making, as well as overseeing the effective operation of the ESG management mechanism at HTC.
Chief Sustainability Officer reports to the Board of Directors at least once a year. The ESG committee held its firstmeeting in March 2022, during which it decided on the ESG focus planning items for the year and assigned dedicatedrepresentatives from the committee to form an ESG work group responsible for promoting ESG focus work items. The
ESG work group conducts review meetings every two weeks to review the progress of each project.
The ESG Committee reports the significant ESG issues, stakeholder’s engagement, execution performance and strategy
and targets for the previous year to the Audit Committee at least once a year. They key projects for 2022 included netzero pathway planning and strategy, climate change risk assessment and response measures, sustainable accounting
standard and indicator information disclosure, product carbon footprint inventory and verification, and greenhousegas inventory and verification schedule. The key projects in 2023 are gradually being carried out, including "Internal
Operations Processes- Fully Paperless, Digitalized, and Optimized", "Carbon management platform construction", "Theproject of the Industrial Bureau of the Ministry of Economic Affairs- Big to small, low-carbon and smart upgrades," and is
expected to introduce "Internal carbon pricing" in the second half of the year.
To strengthen employees’ awareness and knowledge of ESG, the ESG office publishes two newsletters “ESG Office
Newsletter” and “ESG Office Weekly News.” The former one irregularly publishes the Company’s important informationof ESG such as its awards, highlights in ESG Reports, and etc. to intensify the ESG cognition in the company. The later one
delivers popular ESG news, including Net Zero Emissions, carbon tax, CBAM, green energy and etc. for our colleagues tohave the latest updates of ESG issues. These implements help the Company to promote ESG related strategies and targets.

In addition to stakeholders, we also consider product services and operating activities, business relationships
with the value chain, interested entities related to HTC (including subsidiaries and affiliated companies),
sustainability context and human rights topics and etc. Determine the main framework and disclosure
direction of this report.

Step

2

Chairperson

Chief Sustainability
Officer

GlobalManagement051

5G System
Solution

ESG Management

VIVE R&D

HR

GIT

Step

3

Legal

Strategic
Procurement

Software Product &Commercialization

Identify actual and potential impacts
Based on GRI, SASB indicators, domestic and foreign corporate trends, peer ESG reports and other indicators,
screen the issues of concern, focus on 19 sustainable topics that are highly relevant to the company covering
economic, environmental, and social aspects, and distribute questionnaires to each stakeholder. Design
and make a HTC Sustainable Topics Questionnaire according to the new version of GRI 3. The content of thequestionnaire involves positive/negative impacts (the degree of significance of negative impacts is evaluatedaccording to severity, possibility, and human rights; the degree of significance of positive impacts is evaluatedaccording to scale, scope, and possibility). All the items in the questionnaire use the two major indicators of
impact and possibility, and is provided to stakeholders in a five-point manner to identify possible or existing
impacts. HTC distributed questionnaires to its stakeholders extensively and recovered a total of 168. The
company later gathered statistics on the number of various kinds of stakeholders as the cornerstone forweight adjustment so the principle that the ratio of each stakeholder does not exceed one third is adopted toprevent bias due to a relatively high ratio occupied by a certain group of stakeholder.

Structure of the HTC ESG Committee

ESG office

Understand the organization's context

Assess the significance of the impacts
After the 8 candidate major topics of positive and negative impacts were generated, a major topics discussion
meeting was held internally, and the Chief Sustainability Officer also attended the discussion. The meeting
discussed according to the company’s development strategy, industry status, value chain practice and expert
advice to confirm the degree of impact and positive/ negative/ potential impact of topics on the economy,
environment, society and human rights, identified and ranked major topics of the year.

2022 HTC ESG Report

052

Step

4

Prioritize the most significant impacts for reporting
After screening and sorting by the ESG Office, HTC acquired eight material topics in total: "Circular
Economies and Product Life Cycle", "Ethical Management", "Information Security and Privacy Protection","Energy Management", "Customer Privacy and Health and Safety Management", "Regulatory Compliance","Corporate Governance", and "Innovative Management", and strengthened the disclosure of "human rights,
diversity and inclusion", one of the core spirits of GRI 2021, resulting in nine major topics this year. The ESG
Office reports the results to the Audit Committee before presenting to the Board of Directors, and serves as
the main line of information disclosure in this year's ESG Report.
At the same time, HTC attaches great importance to communication and interaction with its stakeholders. In
addition to setting up various communication channels, we respond to important suggestions or opinionsfrom stakeholders based on their concerns and impact on HTC's operational impact. The feedback is
submitted to the relevant departments for response and processing, than regularly disclosed in the ESG
report. We will gradually invite and encourage internal and external entities to join the ESG disclosure
process in the future.

In addition, to ensure that the policies and decisions of the ESG Committee can be put into practice, we have divided
ESG activities into four areas, “green products, environmental protection, occupational safety & health, and social
responsibility,” and have set up a dedicated management system for each. These have been verified as aligned withthe applicable international regulations and standards, and help integrate company policy for sustainability and social
responsibility into our daily operations. ESG annual performance and next year's operational targets will be reported tothe board of directors at least once a year.

The Environment
Management System

We strive to minimize the impact of our operation on the environment. HTC hasestablished the ISO 14001 environment management system, and ensures that all of ourmanufacturing sites around the world obtain and maintain ISO 14001:2015 certificates.
There is no penalty record in 2022.
The Taoyuan factory has established an ISO 14001 Environmental Management Systemwith a factory coverage rate of 100% and overall coverage rate across the company of
40%. Following the principle of the PDCA management cycle, the company complies withthe requirements of environmental protection regulations, realizes environmental goals,
and improves environmental performance.

The Occupational
Safety & HealthManagement System

The Energy
Management System

To lower hazardous risks in the workplace and prevent occupational accidents, we haveestablished an ISO 45001 Occupational Health and Safety Management System in the
Taiwan factory with a factory coverage rate of 100% and overall coverage rate of 40%
with the objective of preventing occupational accidents and protecting workers' healthand safety. After the implementation of the ISO 45001 import and version conversion
in 2021, no occupational accident has occurred in the factory for 475 consecutive
days, demonstrating the measures in place prevent occupational accidents and ensure
workers' health and safety.
We introduced the ISO 50001 Energy Management System to promote and plan energy
management. We also successfully obtained the ISO 50001: 2018 certification, helping
realize the enterprise's sustainable management goal, protect energy resources, andcope with the issue of climate change.

ESG related management system and initiative
The Green ProductsManagement System

Green ProductVerification

Product Carbon
Footprint Inventory
and Verification

053

ESG Management

HTC's HQ and factories have acquired and sustained the IECQ QC080000 Certificate ofConformity to Hazardous Substance Process Management (HSPM). Suppliers are also
required to abide by HSPM to decrease the risk of hazardous substances.

Information Security
and Privacy Information
Management System

To comply with the EU Restriction of Hazardous Substances (RoHS), HTC products aresent to third-party international verification institutions for chemical analysis. The
verification on products' energy consumption in compliance with the US Departmentof Energy's battery charging and energy consumption requirements is performed.
Verification on power supply's energy efficiency is conducted to ensure that the energy
conversion efficiency of products is higher than the standards in various countries.
In 2022, HTC introduced a product carbon footprint inventory flow, and conducted fulllifecycle product carbon footprint inventory with VIVE Flow, a VR product, as the goal. It
also passed ISO 14067 verification and obtained a certificate.

HTC has introduced the Information Security Management System (ISMS) and Privacy
Information Management System (PIMS), and established 46 management policies
and guidelines, including personal information protection and information security
risk evaluation. These policies and guidelines have already been implemented acrossareas such as employee training, product development, manufacturer management,
and information security incident management. HTC has already passed BS 10012, ISO
27001, and ISO 27701 verification. In 2021, HTC passed the ISO/IEC 27001:2013 and ISO/IEC 27701:2019 verification. In 2022, the company expanded the scope ISO 27001 and ISO
27701 and became re-certified. The validity period of all the latest certificates runs from
August 29, 2022 to August 13, 2024.
DeepQ, a subsidiary of HTC, has long been an investor in medical and AI development,
and closely monitors information security and privacy information protection within
the medical industry. DeepQ has received ISO/IEC 27001:2013, ISO/IEC 27701:2019 andISO/IEC 27799:2016 certificates in 2022.

Supplier Management

HTC has established the HTC Supplier Code of Conduct in alignment with the code of
conduct of the Responsible Business Alliance (RBA). Suppliers are required to sign the
Supplier Code of Conduct. Furthermore, management measures include new supplieraudits, quarterly evaluations of key suppliers, annual ESG projects, and annual audits ofhigh-risk suppliers. In 2022, the company selected 30% of high-risk suppliers, i.e., nine, tobe audited, five of which submitted RBA VAP reports, while the remaining four received
on-the-spot audits in April 2023.

2022 HTC ESG Report054

HTC 2022 Material Topics and Boundary

2022 HTC Material Topics and Boundary Identification
Within theorganization

Supplier Environmental and Social
Management

Water Resource Management

Waste Management

Climate Change

Training and Career Development

Low

Level of Economic/ Environmental / Social Impact
Note:means Material Topics of the year

SocialEconomic Environmental Social

High2022 HTC Material Topics Matrix (Negative Impacts)
High

Customer Privacy, Safety and HealthManagement

Economic Performance

P.070-074

V

Regulation Compliance 2-27

P.068

V

V

V

Corporate Governance

Custom theme

P.063-065

V

V

V

Innovation
Management

Custom theme

P.075-079

V

V

Circular Economy andProduct Lifecycle

306-1
306-2
306-3

P.113-118

V

V

Energy Management

302-1
302-4

P.098-100

V

V

Customer Privacy,
Safety and HealthManagement

416-1
416-2
418-1

P.080

V

V

Human Right, Diversity
and Inclusiveness405-1、405-2、406-1、
P.139-144
407-1、408-1、4091、410-1

V

V

V

V

V

V

V

V

V

V

V

V
V

V

V

V
V

V

V

Local
Community

Enivronmental

Human Right, Diversity and Inclusiveness

Custom theme

V

Governmental
Agencies

Economic Performance

Information Security
and Privacy Protection

V

Contractor

Energy Management

V

Supplier

Innovation Management

Salary and Benefits

P.066-068

Employee

Likelihood

Corporate Governance

205-2
205-3

Consumers

Circular Economy and Product Lifecycle

Economic

Integrity Management

Social Contribution and Digital Inclusion

Integrity Management

Corporate
Customer

Customer Privacy, Safety and HealthManagement

Investor

Occupational Safety and Health

R&D
CenterRegulation Compliance

HQ

Information Security and Privacy
Protection

GRI

High

Employment/ Labor Relationship

Page

Material Topics

2022 HTC Material Topics Matrix (Positive Impacts)

Outside the organization

V

V

V

V

V

V

V

V

V

V

Changes to HTC's Material Topics in 2022

Water Resource Management
Supplier Environmental and Social
Management

Likelihood

Waste Management

Integrity Management

Occupational Safety and Health

Salary and Benefits

Circular Economy and Product Lifecycle

Employment/ Labor Relationship
Energy Management

Corporate Governance

Human Right, Diversity and InclusivenessClimate Change

Training and Career Development

Innovation Management

Social Contribution and Digital Inclusion

Regulation Compliance

Low

Level of Economic/ Environmental / Social Impact
Economic Environmental Social

055

Information Security and Privacy Protection

ESG Management

Note:means Material Topics of the year

High

2021 Major Topic

2022 Major Topic

Description of changes

Information Security
Economic Performance
COVID-19 Prevention
Management
Environmental Compliance
Supplier Environmental
Assessment
Waste
Emissions
EnergyCustomer Privacy
Employment
Labor Management
Relations
Socioeconomic ComplianceOccupational Health and
SafetyTraining and Education

Circular Economy and Product
Lifecycle
Integrity Management
Information Security and Privacy
Protection
Energy Management
Customer Privacy, Safety and
Health Management
Regulation ComplianceCorporate Governance
Innovation Management
Human Right, Diversity andInclusivenessIn 2022, the original 35 candidate themes in 2021 wereconsolidated to become 19 thematic questions in this year'squestionnaire. As some questions have been merged, thetopics of the current year are sorted out in the form ofquestionnaires by stakeholders.
After the major theme was established, the sustainable officealso reached the following consensus: HTC would uphold the
maximum disclosure of the theme that is not selected as the
major theme of this year, so as to demonstrate the company's
core value of sustainable development.

2022 HTC ESG Report056

Stakeholders Engagement

Investors

Enterprisecustomers

GeneralConsumers

Employees

Suppliers

Contractors

Significancefor HTC
Concerned Topics

Shareholders andinvestors’ support havepositive impact to thesustainability of HTC

Improving company’svalue and the pursueof growth, and further
completing corporate
sustainability gradually
through cooperation andbusiness developmentwith enterprise customers

Strengthen customer
relations by delivering
exceptional customer
experiences

HTC upholds thepeople-oriented belief.
Employees are the mostvaluable asset and the
key to innovation

Suppliers areindispensable partners
for corporates to realize
continuing operating
growths

Providing a safe
working environment
helping build up asense of cohesivenessand improve corporate
image

Finance & businessinformation
disclosure

Product quality

Pre-sales consulting

Learning & growth

Raw material quality

Service quality

After-service

Price competitivenessConstruction safety &healthPrice competitivenessProduct quality

Working environment/labor conditions

On-time delivery

Service quality

Compliance with laws
and regulations
Operation Status

Green products

Corporate
governance

Carbon footprint/
carbon disclosure

Risk management

Restricted substancemanagement

Wage/welfare
Health & safety
Career development
Work-life balanceContinuously stable supply
Supply chain management

Governmental
Agencies

Local
Communities

The foundation of theCompany is to build
an excellent external
environment for the
corporation, by following
the legal guidelines,
cooperating withgovernment policies, andearning trust, support,
and collaboration withthe government

Improving corporate
image throughmaintaining positive
relationship with local
communities

Corporate
governanceRegulation
Compliance

Regulation Compliance

Innovative products
and services

Technical capability

Human Rights

Cooperation with logistics/
transportation

Energy and climatechangeCorporate responsibility

Working environment &healthHuman rights

Machine/equipment safety

Environmental impact
Shaping the
Corporate image
Economic
contribution
Social concerns
Public welfare
Cultivation of talent

Carbon management

1. Shareholder
conference YearlyCommunication Channels

2. Annual report
Yearly3. Monthly revenue
statement.
Monthly
4. Visiting investors
Irregular
5. Market Observation
Post System
Irregular
6. Investor RelationshipWebsiteStanding
7. Spokesperson
Standing

1.. Reply to customer
inquiries.
From time to time
2. Customer audit andreplies to customer’squestionnaires.
By customer request
3. Meeting the customer
requirements about
environmental andESG.
By customer request

Daily ongoing 1. Local service contact
channels in 10
languages to provide
customers with timely
communication andassistance.
2. Websites in different
languages for customers
to give feedback and toaccess information in areal-time manner (60websites).
3. Dedicated email boxes
for different functions(Support, Copyright,
Security, etc.) to provide
convenient customer
contact with HTC.
4. Automated support
survey invitations
to collect customer
satisfaction feedback.

1. Department quarterly
meeting.
Irregular

1. Supplier communication
conference.
Irregular

2. One-on-one interview
with supervisors.
Irregular

2. Guidance and audit for
suppliers
Yearly3. Annual performanceappraisal/ interview.
2/ Yearly

3. Cooperation project with
suppliers for addressing ESG
and greenhouse gas issues.
Yearly4. New employee
orientation
2/Monthly

1. Induction training.
Weekly2. Patrol inspection in
the facility- Irregular
Coordinative
organization
meetings- Quarterly

1. Official document,
E-mail, Visit, Act andregulations database.
Irregular

1. Positive employee
engagement in public
interest activities.
Irregular

2. Meeting such as
Forums, Seminars etc.
Irregular

2. HTC cooperation
with governmental
agencies and nonprofit organizationsin eco, environmental
and other publicwelfare activities.
Monthly

5. Employee assistance
hotline and mailbox,
Health Center,
Employee Aid Scheme.
From time to time
6. Labor-management
meeting.
Quarterly

5. Immediate corrective
actions in place basedon custome's insights.

057

ESG Management

2022 HTC ESG Report058

Risk Management
HTC manages corporate risk with a focus on sustaining value for the shareholders and stakeholders. Based on theprinciple of materiality, we conduct risk assessments on environmental, social and corporate governance issues
related to company operations, and establish appropriate control mechanisms after careful consideration of all thevarious operational uncertainties that ensures a rapid response to uncertainty, as well as to any attendant risks andopportunities. Such careful risk management enhances our ability to create value.
We integrate ESG policy commitments (including RBA) such as integrity management, occupational safety and health,environmental and climate change risks, and human rights-related risks into relevant risk management strategies toensure that these risks can be effectively implemented.

Note: For information regarding human rights related risks and due diligence, please refer to section "Annual Human Rights Issues" in this report.

Main Risk TypeManagement Strategy
Reference059

Occupationalsafetyrisk

Information
Securityand Privacy
Information
risk

Integrity
management
risk

Climatechangerisk

Each company in the Groupappoints local, sizable accounting
firms and provides them withannual financial data for tax
declaration.

HTC conducts risk evaluations
annually, including categories ofimpacts related to ethics. The
legal affairs department and key
competent departments are
responsible for further analyzing
data related to anti-corruption
and ethics. In recent years, therisk levels authenticated were nothigh.

In 2022, HTC launched aprocess for identifying risks andopportunities of climate change,
completed risk and opportunity
identification, and evaluated thefinancial impact in accordancewith the risk evaluation
mechanism recommended
by the TCFD. Types of climate
risks include transition risks andphysical risks which are further
distinguished into policies andregulations, technology, market,
reputation, as well as those withimmediate or long-term impact.
After identifying potential risks,
HTC establishes appropriate
measurement approaches basedon different risk types as the basis
for risk management.

HTC has established a Supplier
Code of Conduct in alignment
with the code of conduct of RBA
and the contents of the United
Nations Universal Declaration of
Human Rights to clearly specify
the responsibilities and norms
regarding workers, health andsafety, and ethics. HTC expects
that any suppliers with businesscontact comply with andpractically execute this code.
HTC also regularly evaluates
whether suppliers comply andimplement this code as the basis
for appraisal and selection ofbusiness partners.

HTC has established an
automatic health and safety
inspection plan in accordancewith the Occupational Health and
Safety Act and the Regulations
Governing Occupational
Health and Safety to stress theprevention of occupational
accidents. We monitor healthand safety issues, eliminate
and control risks, and improve
unsafe work environments
and machinery equipment
periodically. Relevant systems forinspection and maintenance ofmachinery equipment have also
been established.

HTC has established andpromoted various information
security management systems inaccordance with the information
security standards specified
in ISO 27001. The company
conducts risk evaluations andinternal audits annually to ensure
the effective implementation ofthese management systems.

"Tax Management""Ethical Management""Climate Change Management""Sustainable Supply Chain""Enhancing Occupational
Accident Prevention""Information Security Management"

Financial
risk

Tax
risk

In recent years, the Company has
mainly utilized its internal capital
to satisfy operating capital needs
in response to business scale.
Therefore, fluctuations in interest
rates did not have a significant
impact on the company's
liabilities. In 2022, inflation in
Taiwan was approximately 2.95%.
Inflation in North America wasapproximately 8.1%, while that of
the Eurozone was approximately
8.3%. Despite the substantial risein inflation, the impact on HTC's
profits was minimal.

Please refer to section 6.7 "Risk
Issues" in the company's annual
report for the current year.

ESG Management

Supplychain
managementrisk

2022 HTC ESG Report060

Responsibility Management –Corporate Governance
HTC attaches great importance to corporate governance and operational transparency, so we have formulated a
corporate governance structure in accordance with relevant laws and regulations, such as "Company Law" and "Taiwan's
Securities Exchange Act" to protect the rights and interests of stakeholders. At the same time, we also continue to improve
management performance to ensure that the company can effectively achieve its operational goals. The results of ourparticipation in the 8th (2021) and 9th (2022) corporate governance evaluation of the Taiwan Stock Exchange were 21% to35%. In addition, in order to better achieve operational goals, we have established a comprehensive and systematic ESG
implementation system to protect the rights and interests of investors and other stakeholders.

Organization Strcture

Board of Directors
The Board of Directors are elected by stakeholders and aims to monitor
the management of the Company to ensure the long-term benefits of the
stakeholders. Additionally, it is committed to taking care of various relatedparties including employees, customers, suppliers, government, and thegeneral public.

The compostition of HTC
Management(Directors) by Age& GenderAge

Male

Female

Total

<30

0

0

0

30~50
0
0
0
The board of directors of HTC consists of seven directors. Among the three
>50
6
1
7
independent directors of the board, one is a female director. The board's
Total
6
1
7
responsibilities include setting and monitoring management goals andlong-term business strategy. They are also responsible for maintaining aninternal financial and accounting inspection system, assessing operating risks, and proposing strategies for the reductionof such risks. The "Regulations Governing Procedure for Board of Directors Meetings of Public Companies" legally
stipulate the Strict Mechanisms for Avoiding Conflicts of Interest to ensure the compliance of the board's operations.

AGM
Board of Direcors
Chairwoman
Audit Committee
Compensation
Committee
Internal Audit
Chief Executive
OfficerBusinesses

Corporate Functions

VIVE Systems

Human Resources

VIVERSELegal

G Reigns

Finance & Accounting

HTC Smart Devices

IT

VIVE Arts

Marketing

For detailed information regarding board members and their terms of office, please refer to the Section "3.1: Informationon the Company’s Directors, Supervisors General Manager, Assistant General Managers, Deputy Assistant General
Managers, and Managers of All the Company’s Divisions and Branch Units" and Section "3.3: The State of the Company's
Implementation of Corporate Governance" in the annual report.
In the year 2022, the board of directors of HTC convened a total of 5 meetings, with an average frequency of once every
3 months and an overall attendance rate of directors reaching 97.14%. The board meetings primarily focused on setting
and monitoring the company's management goals and long-term business strategy, maintaining an internal financial
and accounting inspection system, evaluating operational risks, and addressing key significant events. Additionally, theboard also assigned responsibilities to relevant units and continued to track, supervise, and follow up on the progress insubsequent meetings. For detailed information, please refer to the Section "3.3.1: Directors" in the annual report.

Nomination and Selection of Board of Directors
The composition of HTC's board of directors adheres to the regulations outlined in the company's "Articles ofIncorporation". We follow a candidate nomination system and strictly adhere to our Bylaws for the Election of Directors
to ensure a thorough and transparent selection process. Our company places significant emphasis on gender equality
within the board of directors. We also consider a diverse range of qualifications, including educational background,gender, professional expertise, and work experience when selecting our directors so as to strengthen the board's diversity
and professionalism. For further information regarding the board of directors' nomination and selection process, pleaserefer to the Section "3.1.1: Directors" and Section "3.1.3: Board Diversity and Independence" in the annual report.

VIVE ORIGINALS

Avoidance of Conflict of Interest
DeepQ

To achieve this high standard, we formulated the HTC Corporate Governance Framework in 2014, which has been
approved by the Board of Directors and complies with the “Corporate Governance Principles for TWSE/GTSM Listed
Companies” as a basis for establishing an effective corporate governance structure. The objectives being:

1.
Protect therights andinterests ofshareholders

063

Responsibility Management

2.
Strengthen
the powers of
the board of
directors

3.
Fulfill thefunction of
the Audit
Committee

4.
Respect therights andinterests ofstakeholders

5.
Enhance
informationtransparency

Here at HTC, our highest governing body is led by Ms. Cher Wang, who also serves as the Chairperson, and CEO
to enhance operational efficiency and decision-making effectiveness. We adhere to a nomination system for theappointment of our board of directors to ensure a rigorous and transparent selection process. In accordance with the"Regulations Governing Procedure for Board of Directors Meetings of Public Companies," we have established the "Rulesof Procedure for Board of Directors Meetings", which govern the principles of conflict of interest for our directors. We
recognize that potential conflicts of interest exist within our company, including the presence of controlling shareholders
and transactions with related parties that may involve outstanding balances. To safeguard against conflicts of interestand to mitigate any risks that may arise, our board of directors upholds the principles of integrity and accountability
and requires directors to demonstrate a high level of self-discipline and prudence in fulfilling their moral obligations as
stewards of the company. They are also expected to faithfully execute their duties and prioritize the best interests of HTC.
Additionally, our directors are obligated to disclose any significant personal interests that may pose a potential risk to thecompany. Should such an interest be identified, the director in question is prohibited from participating in discussions orvoting on related matters. Furthermore, they are not authorized to vote on behalf of other directors to ensure a fair andunbiased decision-making process.
2022 HTC ESG Report064

Professional Development for Board Members
To stay well-informed of global business trends and enhance our corporate governance and risk management
capabilities, the members of the board are dedicated to continually deepening their industry-specific knowledge andstrengthening their expertise in corporate governance. This commitment is aimed at elevating the collective wisdomof our highest governing body in the pursuit of sustainable development. Detailed information regarding the specificprofessional development endeavors undertaken by our board members can be found in the "Note 3: Continuous
Education/Training of the Board of Directors and Corporate Governance Officer" of the annual report.

Performance Evaluation of Board of Directors
To enhance the operational efficiency of the board, ensure effective corporate governance, and establish performance
objectives, the Board of Directors of our company approved the Director Performance Assessment Guidelines in
November 2019. Detailed information regarding the execution of the performance assessment for that fiscal year can befound in the "3.3.1 Directors" of the annual report, as well as in the financial statements under section "33: Related Party
Transactions".

Remuneration Policy for Directors and Executives
At our company, the reasonableness of our executives' remuneration is thoroughly evaluated by the Remuneration
Committee. The committee's findings are then provided to the Board of Directors, who engage in thoughtful deliberations
to ensure the overall fairness of the remuneration structure. Regular reviews are conducted to align the system with ouractual business performance and in compliance with applicable laws and regulations. In regards to the distribution of
remuneration, performance evaluations, and the decision-making process for remuneration of our senior executives
this year, the remuneration of the Board of Directors is determined in accordance with the provisions outlined in ourcompany's bylaws, as well as their level of participation in the company's operations and the value of their contributions.
We strive to provide remuneration that is in line with industry standards and it is important to note that, currently, ourremuneration practices do not incorporate explicit integration with ESG performance indicators. For further details,
please refer to section "3.2 Remuneration to Directors (Including Independent Directors), President, Vice Presidents,
and Others in the Most Recent Year " in our annual report.

Recovery of Improper Benefits due to Misconduct
To ensure that all employees of our company, including executives and directors, exhibit behavior that aligns with our
expectations for sustainable business practices, HTC has established an "HTC Code of Conduct". Irrespective of theirpositions, job levels, or locations, employees are required to adhere to high ethical standards, thereby minimizing
any potential loss or damage to the company's interests. Any individual found to be in violation of this code will facedisciplinary actions. In addition to reclaiming any improper benefits obtained, the severity of the offense will determine
the appropriate disciplinary measures, which may include but are not limited to the withholding of bonuses, dividends,
termination of employment, demotion, or the pursuit of legal action. It is our goal to ensure that all employees diligently
fulfill their management and oversight responsibilities, thereby safeguarding the company's sustainable development
and growth.

Independent Directors
HTC believes that good corporate governance is critical if a business is to gain the long-term funding that underlies
further investment and growth. We recognize that to achieve good corporate governance, it is necessary to widen thescope of independent viewpoints in order to win the trust of the public and the shareholders. During the re-election of
directors in 2022, three independent directors were elected according to the provisions set forth in the Securities andExchange Act. This action served to solidify our corporate governance, strengthen the independence and functions of thedirectors, and improve the general performance of the Board of Directors.

Compensation Committee
The Board of Directors at HTC has established a Remuneration Committee comprised of three independent members,
including two independent directors and one external independent expert, appointed by the Board. The committee is
responsible for setting performance standards for HTC's directors, supervisors, and senior executives. It also assesses
the achievement of performance targets, evaluates the remuneration policy and system, and ultimately provides
recommendations to the Board of Directors.

065

Responsibility Management

The committee operates independently of the HTC Board of Directors, senior executives, and internal staff. It consists of
one external independent expert who brings extensive industry experience and professional expertise to the table. The
expert also provides professional and objective advice to the committee, specifically in the field of human resources. The
committee conducts regular reviews and puts forth recommendations for improvement to ensure a comprehensive andunbiased evaluation of performance and compensation matters.
The composition, responsibilities, and operations of the Remuneration Committee can be found in the "3.3.4 Formation,scope of duties and operation of the Compensation Committee" of our annual report.

Audit Committee
HTC established the "Audit Committee" to replace the Supervisors, which is composed of all independent directors. The
Audit Committee assists the Board of Directors in fulfilling the quality and integrity requirement while carrying out
the company's supervision work in accounting, auditing, financial reporting process and financial control. The Audit
Committee has the right to conduct any appropriate audits and investigations, and has direct communication channels
with the company's internal auditors and independent accountants. The Audit Committee convenes a meeting at least
once a quarter. The audit supervisor and accountants should report on audit and financial statement review results, andreport important discussions and resolutions to the Board of Directors.

Internal Audit System
HTC has set up our internal audit unit as subordinate to the Board of Directors. The internal unit is responsible forassisting the Board of Directors and management in checking any defects in internal control and in the assessment ofoperational efficiency and performance, as well as the accuracy of the financial statements and compliance with therelated laws. The unit also addresses areas that need improvement in a timely manner to ensure internal control is
continuously and effectively implemented. The audit results are used as a basis for the review and amendment of theinternal control system to advance sound management in HTC.

Integrity Management
Strict Mechanisms for Avoiding Conflicts of Interest
To prevent potential risk of corruption and being unethical, HTC has formulated a series of internal rules anddeclarations, including the "Anti-corruption and Bribery Statement" passed by the chairman of the board, "Rules for
Derivatives Transaction", "Credit Policy & Operational Procedure", and "Regulations for the Appointment of Directors/
Supervisors in Re-investment" and has revised the "Operational Procedures for Transactions of Specific Companies,
Business Conglomerates, and Parties", "Regulations for Budget Management", "Regulations for Management of
Subsidiaries", and "Operational Procedures for Processing Internal Material Information and Preventing Insider Trading"as bases for internal operations. Also, in its Rules of Procedure for Board of Directors Meetings, it has duly set out asystem for recusal and avoidance of conflicts of interest by directors, for compliance in the operations of the board of
directors. And add legal compliance training to the compulsory training courses for new recruits to strengthen the anticorruption awareness of new recruits.
A risk evaluation will be carried out every year, including on the impact related to ethical issues. The Legal and other
responsible divisions will provide an advanced analysis according to information collected about anti-corruption andethics. The risk levels assessed these years are relatively low. Thus, those divisions proceeded to risk management forpossible issues, internal trainings, statements of anti-corruption, and control measures according to the processes.
To facilitate a successful enforcement of policies related to ethical management, the "Ethical Management Team"has been established in accordance with the procedures and guidelines outlined in the "Procedures for EthicalManagement and Guidelines for Conduct," which were approved by the board of directors. The team is entrusted withthe responsibility of overseeing the operational procedures and guidelines, as well as ensuring their execution; actively
supervising and coordinating the promotion of integrity advocacy and training program conducted by the Human
Resources Department; and providing assistance to the board of directors and executives in monitoring the effectivenessof the preventive measures taken to uphold ethical operations. Moreover, the Ethical Management Team plays a pivotal
2022 HTC ESG Report066

role in the creation, documentation, and preservation of the ethical management policy, along with its accompanying
compliance statement and progress record.
We have disclosed the procedures for reporting violations of ethical management policy in the "Procedures for
Ethical Management and Guidelines for Conduct" and "Procedures for Reporting and Handling of Violation of EthicalManagement Policy". The unit responsible for receiving complaints involving personnel of different job levels isdesignated to handle whistleblower cases, with the Human Resources Department being responsible for executing thedisciplinary procedures. Also, HTC set up an email inbox specifically for corruption reporting (anticorruption@htc.
com). Anyone can report via this email with proof, if they are aware of any corruption-related events or infringement of
the Company. The identity of the reporter will remain confidential to prevent inappropriate treatment. There were no
corruption related events in 2022.

HTC Anti-Corruption Mechanism

Employees

Collaborating
Partners

To prevent dishonest behaviors, the Code of Conduct for employees contains specific provisions
that regulate behaviors related to confidentiality, company assets, personal data protection,communication and business etiquette standards among employees, their immediate family
members, customers, and vendors, as well as behaviors concerning business trips, conflicts ofinterest, external employment, insider trading, and other aspects. Additionally, the provisions
explicitly state that engaging in embezzlement, accepting bribes, misappropriation of public funds,
violation of non-competition agreements, and similar actions will result in disciplinary measures,
including dismissal.
For procurement contracts or engineering contracts signed with collaborating partners, it
is required that they comply with the "Integrity Policy Statement" or sign a Vendor Integrity
Commitment Letter. These documents clearly establish the guidelines that collaborating
partners must adhere to, which include compliance with laws and regulations and refraining
from obtaining business or work-related advantages through improper means, such as offering
kickbacks, providing lavish entertainment, or engaging in other forms of undue benefits. The
terms and conditions explicitly state that our company will proactively terminate any collaborating
partner found to be in violation of the "Integrity Policy." In cases where such violations resultin financial losses for the company, we will seek compensations to uphold the integrity of therelationship between both parties.

2022 Anti-corruption training rates for Board of Directors and all levels of the Employees in
TaiwanCompleted Disclosures
We are committed to improving the immediacy and transparency of information disclosure. In addition to the timely
disclosure of important financial and business-related information at the Market Observation Post System in accordancewith regulations, it also actively participates in forums and investor conferences organized by domestic and foreign
securities firms to help investors understand more about HTC's financial and business information.
We disclose our practice of corporate governance and legal compliance on the company website. For more information
about HTC governance policy and other related guidelines, please visit https://investors.htc.com/tw/

Transparent Information Disclosure
Spokesperson & Deputy
Spokesperson

In accordance with the "Corporate Governance Principles for TWSE/GTSM Listed Companies", aspokesperson and acting spokesperson are appointed to ensure that information that may affect thedecisions of shareholders and stakeholders can be promptly disclosed.

Press Release, Press
Conference & MediaInterview

The company's latest developments are also communicated to our investors and the public throughpress releases, press conferences, and media interviews.
HTC has established an Investor Relations Website (in both Chinese and English) through which
the investors can access and download the company’s financial statements, annual reports, otherfinancial news, information about investor conferences, and correspondence with shareholders.
In the “Investor Service” section, contact information and electronic forms are provided forinvestors to make contact with the Investor Relations Division by phone or by email.

Website Platform

The Investor Relations Website is continuously maintained and updated with the latest HTC
Company development information.
Investor Conference

HTC participates irregularly in international and domestic forums held by foreign brokers. Details ofthese are provided to explain company operation, financial profile, strategic development, and business
policies to the investors.

Legal Compliance
Legal compliance serves as the cornerstone of HTC's sustainable development. We consistently adhere to relevantlaws and regulations through anti-corruption measures, ESG practices, information security protocols, human rights
education, and routine management. In 2022, HTC did not encounter the following incidents:
Any penalties related to labor/environmental issues.

General Employees

Middle Supervisors

Senior Supervisor

Highest Governing
Institution

Number of training recipient

173

92

0

1

Products or services that violated consumer health and safety laws.

Number of employees by grade in Taiwan

453

893

43

7

Products or services that violated information or labeling regulations.

Completion rate

38%

10%

0%

14%

Note:
1. The calculation for the training recipient rate at each level is based on the number of person completing the training/ Number of employees by grade in Taiwan.
2. The calculation for the training recipient rate of the highest governing unit is based on the number of Directors completing the training/the total number of Directors.

HTC New Employees Legal Training in Taiwan
2020

2021

2022

2022
Completion rate

Confidentiality and anti-insider trading

35

82

174

265

95.7%

Intellectual property rights

38

82

0

0

0%

Patent litigation

38

82

0

0

0%

HTC Code of Conduct

10

No data

178

267

96.4%

Note:
1. The “Confidentiality and anti-insider trading”Course hours is 36 monutes in 2020 & 2021
2. A total of 277 new employees should be trained in 2022

067

Responsibility Management

Marketing and communication activities that contravened relevant legal requirements.
Incidents involving confirmed infringements of customer privacy or loss of customer data.

HTC's Adjudication Incidents and Financial Penalties in the Past Two Years

Coursehours(Minutes)

CourseSignificant monetary penalties or non-monetary sanctions due to violations of laws and regulations.

Number of trainees

2021

2022

Number of significant adjudication incidents

00

Total number of incidents

40

Total amount of penalties

408,900

0Note:
1.HTC defines significant adjudication incidents as individual penalties exceeding NT$1 million.
2.In 2021, there were a total of three cases that violated the Labor Standards Act, resulting in a total penalty of NT$408,000, all of which have been paid. To improve
management practices, HTC will continue to enhance communication with employees and take relevant management measures.

2022 HTC ESG Report068

Tax Management

Information Security Management
ISO
27001

The Company upholds the spirit of tax compliance and corporate social responsibility. Therefore, we aim to create
corporate value and improve tax risk management. We set out tax management and transfer pricing policies to establish
a sound tax stewardship regulation and culture, as well as an instant management process. The Company has formulated
the following tax governance policies to elevate corporate value and carry out corporate sustainability.

ISO
27701

ISO
27799

GDPR

Results of Privacy and Information Security Management in 2022

Tax Guidelines
Comply with the local tax law and the rule of law. Calculate tax carefully and file it before the deadline.
Ensure that experienced and professional internal and external personnel are involved in the evaluation anddecisionmaking of tax-related issues.

25 Copies

Revisions were made to 25 information security management policies/guidelines/processes(with a total of 59 documents).

PolicyRevisions were made to 12 PIMS (Personal Information Management System) policies/
guidelines (with a total of 16 documents).

Ensure that information on tax reports is transparent, such as reports to tax authorities in different countries, master
files, and transfer pricing reports.

ISO 27001, ISO 27701

Trades between affiliate companies shall follow the principles of transfer pricing of OECD, as well as the Base Erosion
and Profit Shifting (BEPS).
Ensure that the corporate structure and trades are in accordance with the commercial substance. The structuring andtrades are not to be aimed at reducing the tax burden.

Verification

Utilize legitimate and transparent tax incentives without tax deductions that violate the rules of law.

Educational
Campaign

608 Individuals
36 Sessions

6,689 Services

32 Projects

155 Services

A total 36 sessions of internal audits on
personal data protection and information
security were conducted.

RiskManagement

A total 32 projects were put under review for
product/service privacy and security.

16 Outsourcing and business Partners

A total 16 outsourcing and business partners
have received audits for privacy andinformation security assessment.

Exercise of
RightsResponsibility Management

Privacy and Security Newsletters are published on a monthly basis to share key points andcase studies on cybersecurity and data protection.

Education and training are provided to software development personnel, with a 100%
completion rate of the courses and passing the exams.

Stakeholder Engagement069

ISO 27001, ISO 27701, ISO 27799
12 Copies

All companies in the group appoint a large-scale local accounting firm for their tax visas, and the company provides thetax signature accounting firms with annual financial information for tax signature declaration.

The major stakeholders are tax authorities in different countries. The Company files and pays its taxes in accordancewith the legal regulations of each country. Furthermore, the Company consults with any of the four major accounting
firms or contacts the authorities directly if there is anything unclear or a lack of understanding about the regulations. For
any tax audit, the Company prepares the relevant information and cooperates with the tax authority after receiving thenotification.

In addition to obtaining the certificates in 2021, HTC headquarters expanded the scope ofverification in 2022 and successfully obtained the certificates.

DeepQ also obtained the certificates in 2022.

HTC works with tax authorities in different countries in honesty, integrity, respect, and fairness following three pillars:
mutual trust, information transparency, and legal protocol. In addition, HTC provides solutions for major tax issues tohelp improve the tax system and institution on business environment.

Tax and Risk Management

12 Copies

A total 6,687 static code security
testing (white-box scanning) wereconducted in 2022.

A total 155 dynamic code security
testing (black-box scanning) wereconducted in 2022.

78 Services

A total 78 host vulnerability scans wereconducted in 2022.

291 Cases

A total of 7,279 requests were made by the parties involved. After excluding cases ofimpersonation of personal information and cases where customers did not respond, theData Protection Office identified 291 cases that required the initiation of internal processing
procedures. All of these cases have been fully resolved.

2022 HTC ESG Report070

To protect the company's R&D achievements and customer's personal data, HTC emphasizes that protecting information
security and privacy is the responsibility and mission of every employee. HTC has incorporated information security andpersonal data protection policies into its corporate culture and core values, and complies with all relevant information
security and applicable privacy protection regulations in various countries. In 2022, HTC headquarters expanded thescope of validation for ISO 27001 and ISO 27701 and obtained certification through verification once again. Additionally,in the same year, the subsidiary DeepQ successfully obtained certification and received recommendations for ISO 27001,
ISO 27701, and ISO 27799.
HTC adheres to the information security standards of ISO 27001 and establishes various information security measures.
Annual risk assessments and internal audits are conducted to ensure the effective implementation of the management
system. Thanks to the protection provided by a layered defense approach, HTC did not experience any significant
cybersecurity incidents in 2022.

Organizational Structure
To effectively control potential risks associated with personal information and information systems, HTC continuously
optimizes its Privacy Information Management System and Information Security Management System. A dedicated team,comprised of departments such as Legal, Product Security, and Information Security, is responsible for driving privacy
protection and information security initiatives.

Personal Onformation Protection Organization Structure

Privacy Information
Management System

Top Management(Chairperson
authorized person)

Incident Management
Data Protection
Officer
Risk Management
Information Security
Management System
Internal Audit

Structure of HTC Privacy Information Management System (PIMS)
New personal
Informationcollection

Personal
Information
behavior Inventory

Legal basis

Information
protection Impact
analysis

Product Privacy and sercurity (PPNS) design review procedure
Privacy and Information security monthly report
Annual employee privacy and Information security educationand training
Personal Information protection policy and related guidelines
Annual privacy protection and Information security audlt

Product online

Outsourcing
and partner
manageament

Procedures forthe exercise of
Individual rights

Information
security accident
management

HTC's Privacy Information Management System complies with the Personal Data Protection Act and other international
privacy laws and regulations, such as the General Data Protection Regulation (GDPR) of the European Union, theChildren's Online Privacy Protection Act (COPPA) of the United States, and the California Consumer Privacy Act (CCPA).
It also adheres to the relevant specifications of ISO 27701 Privacy Information Management System, ensuring that all
business operations are conducted in a legal and ethical manner.

Product Information Security

Deta Protection Office

Government Management

Privacy Information Management System

Data Protection
Representative

HTC has taken a series of measures to enhance the secure software development framework and management
mechanisms of its software products. The company adopts the BSIMM (Building Security in Maturity Model) and related
security measures to strengthen control over the secure development of its software products. R&D teams are required
to adhere to data security and privacy engineering requirements from the stage of product design. Prior to the releaseof software products, independent reviews, personal data privacy impact analysis, and security risk assessments are
conducted as security controls. Privacy and security auditing workflows (including information security testing, static
code scanning tools, vulnerability scanning, and other automated tools) are also introduced. After the products andservices are launched, the relevant R&D teams use defect tracking management systems to track the remediation process
for software security vulnerabilities. Through continuous integration, the company ensures that the products andservices it provides meet the requirements of privacy protection and information security. In terms of hardware, HTC
adopts fingerprint identification systems to reduce the risk of unauthorized individuals accessing products and sensitive
personal information, thereby enhancing user information protection. Furthermore, HTC continuously promotes
education and training on product development, privacy, and information security. The training content not only
makes reference to laws and regulations of various countries but also incorporates industry best practices and HTC's
internal contributions and experiences. This strengthens the security awareness, professional capabilities, and productdevelopment processes of the R&D teams. By enhancing the employees' knowledge of information security throughtraining, the company reduces security risks as well.

Software Security Control Measures of HTC Products

Privacy and Information Security Risk Management
To mitigate personal data and information security risks, HTC has established guidelines for information security risk
assessment and data privacy impact analysis. Each year, the company conducts regular risk assessments based on theseguidelines and carries out risk controls based on the results of the assessments.
To mitigate the risk of operational disruptions, HTC collaborates with cloud service providers who have obtained
multiple security certifications such as ISO 27001/27701/27017/27018, etc. The company migrates critical core systems
to the cloud and takes various cloud services and cloud security measures to establish a secure and modern cloud
networking environment. This not only enhances work efficiency but also enables quick disaster recovery in the eventof system failures, ensuring system stability and availability. The elasticity and high availability of the cloud computing
facilitate rapid deployment and efficient disaster recovery, effectively improving work efficiency.

Legitimate interests assessment for
personal data collection
Behavior check for personal dataprocessing
Risk analysis of privacy impact

Security check and problem
follow-ups
Vulnerability scanning

Requirement
analysis

Test

Design andpractice

Privacy and security manual
Code review
Product privacy and security design and audit
Contractor privacy and safety assessment

Privacy and information
security protection audit
Management & audit
committee

Operation

Internet security
Log and supervision
Post-disaster recovery plan

Security breach patch management
Incident response management071

Responsibility Management

Supervision andmanagement

Release product/service2022 HTC ESG Report072

HTC requires that all data collection, utilization, processing, and preservation for its products and services undergo
privacy and security review. This ensures compliance not only with international information security standards in theindustry but also with applicable laws, regulations, and contractual requirements. To safeguard consumer rights, comply
with the company's privacy and security standards, and protect company information assets, we completed a total of 32
product/service privacy and security reviews in 2022. There were 11 products/services that did not pass the review. If theprivacy and security review is not completed as required before the product/service launches, corrective measures will
be initiated to expedite improvements and the review process.

Structure of Product Information Security

sub-satellite

Product Security

satellite

satellite

satellite

Team1
Team4

HTC Cybersecurity Advocacy and Education
Team2

Team3

Dept B

Dept C

Dept ATo carry out privacy and information security policies, provide secure solutions for engineering processes, and reducerisks associated with HTC products and services, we have established security contact points within each R&D team.
These security contact points are responsible for promoting information and privacy-related policies and regulations
among colleagues within their departments. Due to their deep understanding of the products, they can further enhancethe depth, breadth, and strength of the review process of privacy and security design as mentioned earlier.
In terms of software design and development, HTC has developed privacy protection and secure software development
framework, as well as secure coding guidelines. These require R&D teams to follow the guidelines during productdevelopment and conduct code reviews to identify potential risks such as insecure or malicious code at an early stage.
HTC also performs source code security testing to identify, track, and fix technical and logical security vulnerabilities inthe software source code. Additionally, for different types of products and services, various types of security scans are
conducted to ensure their security.
Our management of privacy and information security goes beyond the launch of products or the sale of devices. HTC
requires suppliers to use encryption technology for the transportation and storage of sensitive data and personal
information from the procurement of source components. During the use of products, we continuously implement
information security controls and track software security vulnerability fixes, before providing them to the R&D teams incharge. In our aftersales service system, we have established information security management procedures that involve
authorized personnel handling related information, for which we regularly back up data to ensure its integrity andaccuracy.
Attaching great importance to information security incident reported by external researchers, HTC provides dedicatedcontact channels and a specialized project team to be in charge of receiving, interpreting, and assessing such incidents
with prompt responses. We also proactively subscribe to receive news on information security and updates fromgovernment agencies, renowned cybersecurity companies, partners, and suppliers in the United States, Taiwan, andother sources. Furthermore, HTC provides internal personnel with appropriate channels to report any observed or
suspicious cybersecurity incidents to the specialized project team promptly, aiming to prevent or minimize potential
information security incidents. In the year 2022, HTC's products and services experience no security incidents.

073

Responsibility Management

To ensure compliance with the policies and guidelines outlined in the "HTC Privacy Information Management System"
and “HTC Information Security Management System”, HTC requires all employees to receive annual privacy protection
and information security training followed by a conclusive assessment. In addition to adhering to ISO 27001 information
security management standards, which ensure the confidentiality, availability, and integrity of information, we also
publish a monthly Privacy and Information Security Newsletter. This newsletter, consisting of 12 issues, serves toenhance employees' awareness of information security and privacy protection with its regulation highlights and casestudies.
To raise colleagues' awareness of personal data protection and information security, we provided new employees withtraining on the regulations and guidelines pertaining to personal data protection and information security. A total of 12
sessions were held, with a training attendance of 263 individuals. Following the completion of the training courses, allparticipants successfully passed the assessments, achieving a 100% pass rate. Additionally, to strengthen the knowledgeof software developers regarding privacy and information security measures during the product development process,we provided educational training and assessments for the software development team, with a pass rate also reaching100%.
In addition to safeguarding the data of enterprise users and consumers, the HTC Privacy Information Management
System is also dedicated to effectively protecting the personal information of employees. For instance, during the
COVID-19 pandemic, HTC took various information security measures and communicated the key security considerations
to all employees to ensure their security and privacy.

Supplier Information Security Management
HTC places a strong emphasis on information security, not only within the company but also in our relationships withexternal suppliers and partners. We require them to adhere to applicable privacy protection regulations and HTC's
privacy protection and information security requirements. This collaborative approach aims to safeguard privacy
rights and ensure data security. When evaluating external suppliers, we conduct comprehensive assessments of various
information security controls, such as information security policies, business continuity management, and access
controls. Furthermore, with the ongoing global pandemic and the rapid acceleration of digital transformation, new IT
technologies continue to emerge, leading to the rapid development of new attack techniques and system vulnerabilities.
Therefore, a supplier's ability to effectively manage publicly disclosed vulnerabilities and stay updated on industry
security events has become one of HTC's evaluation criteria. In the current year, we conducted privacy and security
assessments of a total of 16 partner companies to ensure their compliance with HTC's relevant requirements.

2022 HTC ESG Report074

Innovative Management
Engaging Diversified R&D Talent

Future Goal
People-oriented:
Combining cutting-edge technologies such as VR, AR, AI,
5G, and Blockchain with arts and humanities to unleash
people's imagination.

In 2022, a total of 974 R&D workers joined HTC
globally. In addition to those in Taiwan, we have
many R&D employees coming from, or basedin, other countries, such as Europe, America,and Asia. We expect that the different cultural
backgrounds of our diverse employees will fuse
and fuel innovative thinking, so as to support
HTC in the development and launch of productsthat meet consumer needs in different regions
and with different cultural characteristics.

TaiwanCurrent Achievement
VIVE Cosmos series won “Fast Company Innovation by Design Awards”.

2022

Million(NT)

3,585

2,256

2,356

Total Revenue

Million(NT)

5,806

5,253

4,409

62

43

54

Percentage%

Note: The related figures are those listed in the consolidated statement

Others974

VIVE Flow won the“2021 Esquire Gadget Award- Best Wearable Tech”
VIVE Pro 2 won the “CES 2022 Innovation Awards”.

Responsibility Management

2021(Number of
Persons)

HTC collaborated with Chunghwa Telecom to launch VIVE Sync- the VR virtual
conferences with 5G network featuring high speeds and low latency.

075

2020

R&D Staff

VIVE Pro Eye won the “CES 2020 Innovation Awards”

Expediting patent layout
Strengthening advertisingof product innovation

Unit
Fixed R&D
Investment

Since our establishment, HTC has invested heavily in cultivating R&D talent and developing technical innovation.
Currently, our in-house R&D employees make up 45% of all HTC's global employees, the investment of which is about
54% of the total operating revenue.

Changing the way people interact, and the technology
around the world.

HTC's
Challenge

Investment in Innovative R&Dfrom Taiwan

889

40

1

1

30

1

1人

5

1

1

3

1

2022 HTC ESG Report076

Smart Innovative Products
REIGN CORE - Portable 5G Enterprise Network Solution
REIGN CORE is a convenient and lightweight 5G private network solution that integrates all the necessary equipment
for a 5G network into a compact mobile cabinet. Its appearance resembles a suitcase, allowing users to easily carry thispowerful 5G network solution and quickly deploy a 5G network in limited spaces. Unlike traditional telecommunications
networks that require time-consuming setup, users can empower their networks within just 30 minutes to save bothtime and space. REIGN CORE is suitable for various applications such as events and exhibitions, training and education,
academic research, and concept validation.
REIGN CORE is a 5G network system that complies with the 3GPP and O-RAN specifications and architectures. It utilizes ageneral-purpose x86 server architecture to build the 5G network system. The baseband unit server software is developed
in-house by G REIGNS and can be configured according to customer requirements. Whether it's for basic network setups
or customized networks, REIGN CORE can introduce the seamless adoption of 5G enterprise networks to businesses.

The Taiwan-originated XR works showcase HTC's innovative strength
The SXSW XR Experience section brings together representative XR immersive experiences from various countries,
comparable to the VR section of the Venice Film Festival. Szuming Liu, General Manager of HTC VIVE ORIGINALS,
expressed that the selection for this event demonstrates the international prowess of Taiwan's original content andheralds the advent of the metaverse era. "Variety" magazine further praised HTC VIVE ORIGINALS as the cornerstone of
the Web3.0 era, creating works that pave the way for the new generation of entertainment. Last year, BEATDAY launcheda music metaverse combining volumetric photography, blockchain, XR, and other cutting-edge technologies. Their VR
holographic concert beta version was selected for this year's SXSW, offering a highly interactive experience. The VRstop-motion animation "The Sick Rose," a collaboration between HTC VIVE ORIGINALS and Turn Rhino Original Design
Studio, is the world's first immersive animation that combines VR technology, stop-motion filming techniques, andtraditional Taiwanese dough sculpture artistry. It has already been selected for multiple international film festivals andis further expanding its influence at SXSW.

HTC VIVE Pro 2 won the CES® 2022 Innovation Awards
VIVE Pro 2 was named a CES® 2022 Innovation Awards Honoree in the Virtual & Augmented Reality category. A sharp,
precise, and breathtakingly immersive device, VIVE Pro 2 pushes the boundaries of productivity, creation and play,delivering PCVR experiences like never before.
VIVE Pro 2 enhances the ergonomic design. In addition to the specially designed front and rear balanced weights, theadjustable headband and quick adjustment knobs provide users with a comfortable experience. VIVE Pro 2 features
an adjustable inter pupillary distance (IPD) function, balanced frontrear weight distribution, an adjustable strap and aquickly-scaled knob that allows adjustment to wearing configurations for different users. Aside from supporting thirdparty earphones, VIVE Pro 2 also features a set of headphones that is certified by Hi-Res Audio and capable of delivering
3D spatial audio.
VIVE Pro 2 is compatible not only with the Steam VR system and peripheral accessories, including Tracker 1.0, Tracker 2.0,
VIVE Controller, VIVE Wireless Module, or VIVE Tracker of whatever generation, and the new VIVE Facial Tracker, butalso with other third-party Steam VR motion sensing accessories, e.g., Valve's Index knuckle controller.

077

Responsibility Management

2022 HTC ESG Report078

Customer Management
Protection of IP Rights
HTC regards R&D and innovation as an essential force needed for the company to remain sustainable and competitive.
In particular, the protection of intellectual property rights is a key to maintaining our brand value.
Our company takes proactive measures to defend against the infringement of intellectual property rights. In terms ofpatents, we actively defend against patent infringements while also acquiring patent licenses from international giants.
At the same time, we proactively combat patent infringement to safeguard our company's rights and enhance ourcompetitive advantage. Regarding trademarks, we file trademark registrations and collaborate with customs and law
enforcement agencies worldwide to combat counterfeit products. Additionally, our employee hiring contracts clearlystipulate intellectual property ownership and related regulations, while restricting access to internal data to protect trade
secrets.

Internal

Positive filing of patent applications to protect the results of our various product R&D and technical innovation.
Organize regular training courses for R&D personnel to promote the company’s intellectual property policy toestablish a correct intellectual property concept.
Encouraging our employees to invent and create.
Setting up a dedicated unit under the Legal Affairs Division for the protection and dispute resolution of intangible
assets such as patents, trademarks, copyrights and business secrets.

External

Engaging in technical cooperation with leading domestic and foreign research institutions, providing top talentswith the opportunity to receive practical training in HTC, thereby fueling our R&D with innovative thinking.
Mergers and Acquisitions Company to obtain key technologies and patents to speed up research anddevelopment.

Statistics on the number of patentapplications in the past three years

Cumulative Number of Global Patent
Grants12,597

Number of Taiwan Patent Applications
Number of Global Patent Applications

12,230546

Customer experience is a core value that HTC has always emphasized. We believe that delivering exceptional products
and services can only be achieved by understanding customer needs and expectations, and continuously optimizing
the customer experience. Therefore, our team frequently interacts with customers, collects feedback, and improves
our products and services to ensure that they consistently maintain the highest level of quality and competitiveness.
We also prioritize customer health and safety. HTC's products undergo thorough assessments for consumer safety andhealth during the stage of product design. For example, the materials used in our products and packaging are free fromtoxic substances. For certain products like VR headsets, we provide guidelines indicating recommended usage time
to minimize their impact on human body. In the year 2022, there were no product recalls due to safety issues, and no
related complaints affecting customer health were reported.

Protection of Customer Privacy
HTC is committed to strictly adhering to customer contracts and non-disclosure agreements. We have establishedpolicies and internal control mechanisms to rigorously safeguard the information provided by our customers, including
confidential data related to customer patents, intellectual property, and personal privacy. HTC enters into non-disclosureagreements with customers and suppliers and incorporates customer information and personal privacy protection
courses into new employee training to ensure that every employee understands the importance of confidentiality. HTC
continuously monitors privacy protection laws and regulations in various countries and strives to enhance personalprivacy protection. Since 2018, we have launched a privacy information management system and, in 2020, provided
communication channels for users to exercise their rights and a user cookie management center to protect user privacy
in compliance with the California Consumer Privacy Act (CCPA) (as shown in the figure below). In 2023, we adjusted
internal procedures and privacy statements to comply with the updated CCPA, ensuring that HTC protects customer
privacy in accordance with relevant laws and regulations. In the current year, there have been a total of 7,279 requests
from individuals, out of which 291 requests have been confirmed by the Data Protection Office to initiate internal
processing. The requests include deleting user accounts and usage data, deleting transaction data, understanding thepersonal information collected by HTC, and canceling subscription services. All requests from 2022 have been fully
processed, and there have been no incidents of violating customer privacy rights or compromising customer data thatwould harm customer interests.

11,578
292

232
45

87

2020

2021

127

2022

2020

2021

2022

Note: The number of patents includes inventions, utility models, and industrial designs.

Overview of Patent Performance and Outcome
HTC regularly reviews its patent portfolio and makes adjustment to allocate patent budgets efficiently. As ofthe end of 2022, HTC holds 8,409 valid patents, with 210 patent families related to 5G technology. HTC plays asignificant role in the research and development of 5G-related technologies and patents in Taiwan. Additionally,in the 2022 National Invention and Creation Award competition, HTC received one silver medal in the Invention
category and two gold medals in the Creation category. The awards were given for an invention patent on
traceable optical devices and design patents for wireless controllers and head-mounted displays.

079

Responsibility Management

2022 HTC ESG Report080

Customer Satisfaction Management
HTC has established “Customer Satisfaction Management Procedure” to meet the specific needs of all our customers
and to respond to customer expectations and requests. A Quarterly Business Review is made to determine customer
satisfaction. Each Business Unit proposes corrective action for any nonconforming project and regularly track any action
taken to ensure that the customer has been perfectly satisfied. We have designated a department to regularly collect HTC
ESG information for communication and response.

Customer Warranty Maintenance Service Flow Chart, Locations, and Performance

Consumer Satisfaction

Score

5.0
4.5
4.0
3.5

2018

2019

2020

2022

2021

Note: Calculation Method: The average is calculated by dividing each score with the total number of survey responses.

Customer Service Center：
HTC has established customer service centers in key regions worldwide, including Taiwan, the Americas, Europe, theMiddle East, Africa, China, North Asia, South Asia, and Australia and New Zealand. These centers provide customer
support in multiple languages and employ diverse and region-specific communication methods to bridge thecommunication gap with customers. In response to climate change and the potential impact of natural disasters suchas typhoons on local transportation and network disruptions, HTC's global customer service has the capability to work
remotely through the customer service system using English as the common language for communication. In the eventof an emergency, customers can be smoothly transferred to the service of partners in another region.

Customer Warranty Maintenance Service Flow Chart
HTC has a total of 28 repair centers and 11 collection points worldwide, offering tailored services based on the specificrequirements of different countries. The time required for repair varies depending on the country. In Taiwan, HTC
provides an "on-site pickup and delivery" repair service, which accounted for 37% of the total repair volume in 2022.
Customers can arrange logistics for product collection and delivery through the customer service hotline or online
customer service. In the United States, HTC offers a replacement service, which accounted for 100% of the total repair
volume in 2022. Customers can track the progress of their repairs through an online web page.

Testimony
Hello, VIVE team, I must say that your customer service is the best I have ever encountered. I wish my daughter
had contacted you before ordering the goggles.
This is fantastic, and I am extremely grateful! I want to emphasize once again that your customer service is thebest I have ever experienced.

On December 8, 2022, a customer from the United States sought assistance through an
online chat with the customer service center. The customer's 15-year-old daughter had

Satisfaction survey after receiving customer service
After each customer service, we extend an invitation for our customers to participate in our customer satisfaction
survey and we take the initiative to contact unsatisfied customers and help them resolve their issues. This survey allows
us to assess the level of satisfaction our customers have with their recent interactions with HTC. We strive to achieve asatisfaction key performance indicator of 4.0 or higher.

purchased the VIVE Flow immersive goggles, but was unaware of the compatibility issues

with her Apple phone prior to the purchase, making it impossible to operate the product.
The online customer service representative promptly provided a list of compatible Android

phones and suggested that the customer use the VIVE Flow controller for operation. The
representative also explained in detail the differences in product experience between thetwo options. The customer expressed high praise and gratitude towards the HTC/VIVEcustomer service team!

081

Responsibility Management

2022 HTC ESG Report082

Climate Change Management –Governance

HTC has also developed a Climate Change Management Policy and conducted a full-scoped carbon emissions analysis,
calculation, and assessment based on SBTi methodology, and planned a net-zero carbon pathway, as well as formulated
corresponding short-, medium-, and long-term decarbonization strategies and management indicators.
In addition, HTC officially became a supporter of the TCFD at the end of the year. To date, there are over 4,000
organizations globally supporting the TCFD, and over 110 companies or organizations in Taiwan have joined as TCFD
supporters. HTC, together with many other well-known Taiwanese companies, supports the TCFD initiative with concrete
actions to disclose climate-related financial information, and will publish its first independent TCFD report , which has
been ranked as "Practitioner" by SGS's TCFD performance evaluation in 2023. （For details of the TCFD independent
report, please refer to the HTC ESG website: www.esg.htc.com ）。

“The Board of Directors is responsible for the final
decision-making and deliberation of HTC's climatechange governance and management structure.
HTC has established a Climate Change
An ESG Committee is established under the Board
Management Policy which was submittedof Directors to implement relevant topics andresolutions regarding climate change management.
to the Board of Directors for deliberation
Led by the Chief Sustainability Officer, the ESG
and implementation in May 2023, with theCommittee is responsible for implementing climatechange management policies and major resolutions
objective of realizing the goal of corporate
deliberated by the Board of Directors, integrating
resources and progress of climate actions in different
sustainable management
departments, and comprehensively evaluatingclimate change risks alongside other corporaterisks. Several work groups have been set up under
the committee to respond to ESG topics across multiple areas and collect sustainable development topics from eachdepartment to continually promote corporate social responsibility with the aim of implementing corporate sustainable
management with equal consideration across the economy, environment, and society. Relying on clear organization andlabor division, relevant departments are included in the management actions in cross-departmental meetings to drive
the sustainable development and innovation of HTC as a whole, and to ensure the inclusion of relevant policies andmeasures in daily operations of the company. Designated members of the ESG Committee have established a TCFD risk
management group to participate in the projects together. The ESG Office was set up under the committee to continually
track and review the fulfillment status of each climate change related program, and to regularly review domestic andinternational climate governance policies and industry practices to adjust climate risk assessments accordingly. The ESG
Officer reports these actions to the Board of Directors regularly, and the trends, impacts, and performance on relevant
ESG topics to the ESG Committee.

“

With its advantage in mobile technology and our effort in product innovation, HTC includes the issue of climate change
into our VIVERSE vision, providing a completed solution for corporations and the society, and creates a better life
experiences. To strengthen the HTC climate change governance and mitigate the threats posed by climate change, HTC
has implemented the Task Force on Climate-related Financial Disclosures (TCFD) framework in 2022, in which designatedmembers of the ESG committee participated in the project to identify relevant risk and opportunity factors, analyze thepossible transition and physical risks/ opportunities, and actively respond to the impacts. We build a risk framework
according to four core elements: governance, strategy, risk management, and metrics & targets.

The ESG Office is responsible for the company's overall "Greenhouse Gas Inventory and Verification Scheduling", andreported to the Board of Directors that "the parent company already completed greenhouse gas inventory" in April 2022.
Since the first quarter of 2023, the ESG Office reported the scheduling of parent companies and subsidiaries, and submits
the implementation progress to the Board of Directors for control on a quarterly basis.

085

Climate Change Management

2022．HTC
ESG
Report
HTC
2022
永續報告書

086

Risk Management
Risk Management Process

Scenario Analysis

In order to strengthen corporate governance, promote stable operation and sustainable development, HTC has
formulated relevant "risk management policies" as the criteria for risk management according to various types of risks,and has set up a full-time unit to be responsible for the company's related risk management and risk measurement
execution operations. To establish a sound risk management mechanism. The ESG Office is responsible for the company's
climate change and ESG-related risk management and coordinating the TCFD risk management team to carry out risk
measurement and execution operations. The risk management organizational structure takes the board of directors
as the highest decision-making unit for risk management, and has an ESG committee under it, which is responsible forreviewing risk management policies and reviewing Management report on major risk issues. When identifying risks,
HTC conducts qualitative or quantitative management of various risks by analyzing its operating environment andcovering various businesses and operating activities.

HTC follows the TCFD guidelines and uses climate scenario analyses to effectively identify and evaluate the potential
impact of climate-related risks on business performance. HTC has also established steady responsive strategies based on
analysis results to reinforce its resilience in the face of climate change.

HTC lists different types of risk measurement methods as the basis for risk management, and uses various kinds ofinformation to measure the possibility of risk events and degree of impact on HTC. Through risk analysis, the company
evaluates the risk levels and provides necessary information as the basis for risk evaluation and response. Afterassessing and summarizing the risks, all responsible units formulate appropriate response measures to the risks they
face and control the risks to an acceptable level. Each responsible unit monitors the risks of its business and proposes
countermeasures, and provides the risk assessment form to the risk management team of the ESG committee, and therisk management team submits it to the ESG committee after compilation. The ESG committee measures and monitors
the quality of overall risk management, and regularly submits risk assessment results and work progress to the board of
directors.
HTC formulated the "Climate Change Management Policy" and "Climate Change Risk Management Procedures", and in
2022, according to the risk assessment mechanism recommended by TCFD, started the process of identifying climatechange risk opportunities, completed the risk opportunity identification, and evaluated its financial impact, and thenEstablish response measures and key indicator targets. HTC defines the short, medium, and long-term time intervalsof climate-related risks and opportunities, setting "2022-2025" as the short-term, "2026-2030" as the medium-term, and"2031-2050" as the long-term and based on this Carry out climate risk and opportunity assessment, in principle, reidentify and assess climate risk opportunities every two years. The types of climate risks include transition risks andphysical risks, which are further divided into policies and regulations, technology, market, reputation, and immediateand long-term. Opportunities are grouped into categories such as resource efficiency, energy sources, products andservices, markets, and organizational resilience. And formulate relevant response measures for the top three risks andopportunities with high probability of occurrence and high impact.

Types

Scenarios for HTC
to evaluate coping strategies

Physical Risks
Transition Risks

SBTi 1.5°
C: Pathways to Net-Zero - Science Based
Targets
NDC: Nationally Determined Contribution of the
R.O.C.

Opportunity

Global Warming Scenario RCP 8.5 (or SSP5 8.5) in
the IPPC 6th Assessment Report

Contents of Scenario
Risks resulting from low-carbon transmission facedby enterprises when the global warming is controlled
within a temperature of 1.5℃

Under the scenario of the extremely high greenhousegas emissions (SSP5-8.5), the climate will cause drasticchanges in the future average temperatures, extreme
high temperatures, annual total precipitation, annual
maximum one-day rainfall intensity, annual maximum
number of consecutive days without precipitation,and proportion of strong typhoons. These changes
may have an operational impact on HTC and its value
chain.

Note: For the detailed analysis of the scenario adopted, please refer to the TCFD Independent Report of the company for the current year.

Process for Identifying Risks and Opportunities of Climate Change

1

TCFD workshop

The TCFD risk management group lists risk and opportunity factors of climatechange in connection with the business using methods like scenario simulation
analysis and with reference to internal and external information.

2

Summarize
identification results.

The ESG Office is responsible for summarizing the risks and opportunities ofclimate change in connection with each unit.

3

TCFD Risk/
Opportunity Matrix

Calculate the possibility and impacts of TCFD risks/opportunities, and draw amatrix of the TCFD risks/opportunities accordingly.

4

Establish responsive
measures

Authorities and responsible units write major climate risk and opportunity
response strategies, and calculate the cost of strategy implementation.

5

Calculate thefinancial impact

Calculate the financial impact of risks/opportunities and response costs by the
responsible units.

6

Establish metrics andtargets

The corresponding indicators and targets are recommended by the responsible
units to evaluate the implementation of relevant response measures.

7

Policy Implementation

The ESG Office tracks the implementation status periodically (every quarter),and ESG Committee periodically report to the Board of Directors as a reference
for performance tracking

087

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2022 HTC ESG Report088Strategy
Identifying Risks and Opportunities
Adhering to the corporate vision and sustainability responsibility, HTC includes climate change related risks in thescope of evaluation and tracking, and continues to pay attention to the climate risks that impact operations, includinginternational regulatory norms and extreme weather conditions. Furthermore, based on the climate change risk andopportunity evaluation framework recommended by the TCFD, the setting of climate change scenarios, and the risks andopportunities derived therefrom, HTC evaluates the risks and opportunities of climate change in operations, and further
discusses relevant responsive strategies as well as metrics and targets regarding high-impact risks and opportunities, andspecific measures for climate management.

Three high-risk factors and three high-opportunity factors in HTC have been identified. The climate change risks matrix
and climate change opportunities matrix are shown in the following diagram.
Increased severity of
extreme weather events
like typhoons and floods

Climate Change Risk Matrix
6.0

Rising costs of raw materials

B. Evaluation of Impact on
the Operating Environment

C. Identification of Climate
Risks and Opportunities

Two climate change scenarios:

Evaluate the influence andimpact of climate change on
the operating environment andstakeholders.

Establish matrixes of risks
and opportunities to confirm
the risks and opportunities ofclimate change.

SSP5-8.5: Temperature increaseof 6°
C
SBTi 1.5℃ and NDC:
Temperature increase of 1.5°
C

Climate Change Opportunity Matrix

Change in rainfall(precipitation) andextreme changes in the
climate model

5.0

A. Setting of Climate
Change Scenarios

High

High

Strengthening of emissions
reporting obligations

The specific process for identifying risks and opportunities related to climate change is shown as follows:

7.0

Diversityof businessactivities

R&D and innovation to develop
new products and services

6.0

Development and increaseof low-carbon goods andservices

5.0
4.0

3.0

Impact Level

Impact Level

Increase of averagetemperatures
Extra carbon emissions
derived from waste

Customer behavioral
changes
Increased pricing
on greenhouse gas
emissions

2.0

3.0

Participation in incentive
policies
2.0

Cost of low-carbon
technologicaltransformation

1.0

Use of more
efficient production
management anddistribution processes

4.0

1.0

0.0

Adoption of more efficienttransportation modes
Use of low-carbon energy sources

0.0
0.0

1.0

2.0

3.0

4.0

5.0

Likelihood

Low

6.0

7.0

High

0.0

1.0

Low

2.0

Strengthening supply chain resilience
3.0

4.0

5.0

6.0

Likelihood

High

Physical Risks- Acute risk

Increased severity of extreme weather events like typhoons and floods

Short-Term

Opportunity - Resource Efficiency

Use of more efficient production management and distribution processes

Short-Term

Physical Risks- Chronic risk

Extreme changes in the climate modelLong-Term

Opportunity - Products and Services

Development and increase of low-carbon products and services

Middle-Term

Transition Risks- Policies and Regulations

Strengthening of emissions reporting obligation

Long-Term

Opportunity - Products and Services

Diversity of business activities

Middle-Term

089

Climate Change Management

2022 HTC ESG Report090

Climate Change Financial Impact
For each climate change risk and opportunity, HTC evaluates the impact from five aspects: product or service, supply
chain or value chain, climate adaptation or mitigation activities, new R&D or investment, business operation type or
location of business operation facilities. And carry out climate mitigation and climate adaptation strategies for possible
shocks.

HTC Climate-related Risks and Financial Impact
Physical Risks- Acute: Increased severity of extreme weather events like typhoon and flood
Impact Type

Products orServices

Impact Content

Addition of automatic drainage systemequipment and water level early-warning
systems
Nonlocal backup or partial outsourcing

Depreciation of inventory
products

Contingency plans for production andsupply2023-2025

Reduction of employees’
working efficiency

Long-term preparations for responding
to equipment demand generated due toworking from home
Addition of automated processequipment

2023-2025

Supply chain or
Value chain

New R&D or
Investment

Business
Operation Typeor Locationof Business
Operation
Facilities

091

PeriodEquipment damage inproduction bases
Power interruption of IT
facilities, including theinformation equipment
roomPower failure of cloud
application software

Losses of assets in the
supply chain

Climate
Adaptation
or Mitigation
Activities

Strategy

Evaluate high-risk suppliers, and adopt
strategies like insurance planning anddecentralized procurement to lower
impactRequire suppliers to prepare safe
inventory
Decentralize supply chain areas

2025-2050

Delays in shipments

2023-2025

Restrictions on carbon
emissions in transportation
Collection of carbon
charges or tariffs

Find low-carbon transportation pipelines
and optimize transportation routes

2023-2050

Road and equipment
maintenanceReinforce and renovate flood prevention
facilities annually2022-2023

Delay in productdevelopment time
Design and development
activities involving extra
equipment to facilitate
working from home

Provide the hardware necessary for
employees to work from home
Plan two-week work from home twice
every quarter2023-2025

Changes in marketing plans
due to delays in delivery

Flexibly adjust new product promotion
plans, or match with preferential
accessories• Plan alternative materials to benefit realtime material supplement in production
lines

2023-2025

Impact Type

Impact analysis
1. Operating loss
accounts forapproximately 0.3%
of consolidated
operating revenue
2. Inventory loss
accounts for less than
3% of consolidated
operating revenue
Cost analysis
1. The one-off
expenditure incurred
including cost forpurchasing of awater level earlywarning system,
automatic drainage
system equipment,
and emergency
notification system,
capital expenditureand expenses forpurchasing anduse of emergency
generators, andcost of additionof equipment for
employees to workfrom home, accounts
for less than 0.1%
of consolidated
operating revenue.
2. The annual
expenditure of
insurance expenses
accounts for less than
0.1% of consolidated
operating revenue.

Impact Content

Strategy

PeriodFinancial Impact

Change in rainfall(precipitation) and extremechanges in climate model

Deduce corporate operation plans
every year, and rely on these plans tounderstand the response measures taken
to address the shortage of components,
damages of transportation tools, andrestriction of manpower resulting fromheavy rainfall or long-term droughts

2023-2025

Shortage of waterand electricity affects
production, shipments, anddaily factory operations

Introduce manufacturing procedures or
low energy consumption techniques
Increase alternative materials anddecentralize supply chain areas basedon contingency plans for production andsupplier of suppliers (suppliers involved in
nonlocal production)

2023-2025

Stakeholders graduallyraise their requirements
for climate adaptation or
mitigation activities

Plan and execute the company's NetZero carbon emission pathways andstrategies
Integrate carbon reduction action toincorporate culture with employees'
performance (green seed point gatheringplan)

2023-2050

Water shortages lead toincreased costs

Find new sellers and storage places ofwater sources.

2023-2025

New R&D or
Investment

Progress of new productR&D is delayed
Customer requirements
cannot be satisfied,affecting brand image andreputation

Select material suppliers in Taiwan offering
the same material quality, and researchand develop alternative materials

2025-2050

Business
Operation Typeor Locationof Business
Operation
Facilities

High temperatures resultin increased electricity
utilization
Overheating increases
the probability of thermal
hazards for employees

Include the work hazards resulting fromclimate change in the safety code andnotify everyone of hazards

2023-2025

Products orServices2023-2025

Monitor suppliers, warehousing sites, andlogistics routes under potential impact,
and respond accordingly
Update transport status of raw materials
in real-time and provide customers withthe latest delivery progress

Climate Change Management

Financial Impact

Physical Risks- Chronic: Change in rainfall (precipitation) and extreme changes in climate model

Supply chain or
Value chain

Climate
Adaptation
or Mitigation
Activities

Impact analysis
Evaluate electricity
utilization in 2030
according to theindustry status, andconsider the numberof days of hightemperatures andseverity. Expenditure
increases will accountfor less than 0.1%
of consolidated
operating revenue.
Cost analysis
1. Establish emergency
response plans forwater/electricity
rationing; strengthen
the resilience of
suppliers andcontractors;
introduce an energy
management systemand practice energysaving measures;
formulate NetZero emission
reduction pathways
and strategies. The
aforesaid one-off
expenditure accounts
for approximately
1% of consolidated
operating revenue.
2. Including a lowcarbon designconcept, or selecting
materials with lowcarbon emissions/
recyclable materials
were evaluated, andit was confirmed thatpurchasing costs,
R&D costs, and otherderived expenses
would increase by
4%-15%, accounting
for approximately
11% of consolidated
operating revenue.
The cost of this
response measureis also identified as arisk 3 financial impact
and opportunity 2
realization cost.

2022 HTC ESG Report092

HTC Climate-related Opportunities and Financial Impact
Transition Risks- Policies and Regulations Strengthening of emissions reporting obligations
Impact Type

Products orServices

Supply chain or
Value chain

Climate
Adaptation
or Mitigation
Activities

New R&D or
Investment

Business
Operation Typeor Locationof Business
Operation
Facilities

Impact Content

Strategy

PeriodDevelop green products
and lower carbon emissions
from production.
Improve hardware facilities
and strengthen carbon
emissions performance.
Establish a carbon
management platform.

Emphasize the conformity of production andpackaging of production to emissions
Replace major energy-consuming equipment
including air conditioning, air compressors, andlighting facilities with new ones
Establish a complete greenhouse gas emission
inventory of HTC manufacturing and global
sites

2023-2050

Collection of carbon tariffs
carbon charges

Execute HTC's Net-Zero pathway and apply tojoin the SBTi.

2022-2023

Require upstream suppliers
to reduce costs due tounnecessary packaging
and transportation
Replace equipment withhigh carbon emissions in
the upstream supply chain
to improve the prices ofmaterials
Increase the selling price ofraw materials after carbon
inventory verification

Negotiate with suppliers to promote removalof unnecessary packaging, and select supplierswith carbon reduction plans
Plan transportation routes and effectively use
container space

Conduct product carbon
footprint inventory andproduct energy-saving
designs.

Greenhouse gas emission inventory
Promote the concepts of the life cycle and lowcarbon products, and introduce them to designconcepts

Control the use of energy
inside the company.

Establish a sustainable management platform
Increase the temperature of the air conditioning
to 28℃ , and shut down the system afterworking hours

2023-2025

Monitor risk of failure to
respond to regulatory
uncertainty in real-time

Pay close attention to government regulation,international community, and industry trends,
and establish a corresponding internal response
and adjustment mechanism

2023-2025

Increase online R&D anddesign & development
activities.
Investment in extra R&D
and design manpower.

Establish a remote access mechanism as well as
online collaboration-related systems
Select low-carbon or recyclable materials in thedevelopment stage to improve the recycling
ratio of materials

2025-2050

2025-2050

2023-2025

Invest in low-carbon energy
sources and actively use
more low-carbon energy
sources.

Participate in the green energy industry anddevelop the value chain

2023-2025

Carbon emission
regulations impact
operating revenue, andcause investing institutions
to raise credit risks

Establish a carbon reduction R&D plan andacquire a credit extension from banks for green
energy technology

2025-2030

Satisfy stakeholders'commitments to Net-ZeroPlan and encourage new colleagues to take
ESG actions during induction training in Taiwan

2023-2025

Replace machines with highcarbon emissions, which
may affect the expansionof the production line
Increase of carbon
emissions from employees'
commuting and businesstravelIncrease video visits and product exhibitions
Plan and encourage new colleagues to take
ESG action during induction training in Taiwan

Financial Impact

Impact analysis
1. Including low-carbon designconcepts, or selecting
materials with low-carbon
emissions/recyclable
materials were evaluated,
and it was confirmed thatpurchasing costs, R&D
costs, and other derived
expenses would increaseby 4%-15%, accounting
for approximately 11% ofconsolidated operating
revenue. As a result, thecost of the current year
will increase. The cost of
this financial impact isalso identified as a risk
2 responsive cost andopportunity 2 realizationcost.
2. The establishment costand annual maintenanceexpenses of the carbon
management platform
account for less than 0.2%
of consolidated operating
revenue. This financial
impact is also identified as
an opportunity 3 realization
cost.
Cost analysis
1. The one-off expenditure
incurred to introduce anenergy management
system, establish NetZero emission reduction
pathways and strategies,
and acquire renewableenergy resources accounts
for approximately 1% ofconsolidated operating
revenue.
2. The expenses incurredfor purchasing of green
power every year accountfor approximately 0.5%of consolidated operating
revenue in the absence ofadaptation and mitigation of
impact.
3. The expenses incurredfor purchasing of carbon
rights every year accountfor approximately 0.2% ofconsolidated operating
revenue in the absence ofadaptation and mitigationof impact and based onassumed greenhouse gas
emissions in the current year.

2025-2050

Opportunity - Products and Services: Diversity of business activities
Impact Type

Products orServices

Supply chain or
Value chain

Climate
Adaptation
or Mitigation
Activities

New R&D or
Investment

Business
Operation Typeor Locationof Business
Operation
Facilities

Impact Content

Strategy

PeriodIntroduce automatic
equipment and a cloud
platform to lower demand for
manpower

2023-2025

Improve production processes
in the factory through a
combination of a 5G private
network with AI automatic
recognition and screening

2025-2050

Select suppliers withcarbon reduction plans
to assist the realizationof Net-Zero emissions
in the supply chain.
Flexible allocation ofmaterial supply reduces
the inventories of
surplus materials.

Continue to strengthen the
carbon reduction and energy
conservation of processes withthe supply chain.
Promote supplier sustainability
projects and introduce 3R
design of components.
Reduce the time for shipment
and material preparation in the
supply chain.

2023-2025

Adopt low-carbon
transportation andgreen shipping
to reduce carbon
footprint
Carbon reduction
transformation of thevalue chain

Optimize the packaging ofgoods, combine shipments
as much as possible, changetransportation modes (seatransportation), and conduct
greenhouse gas inventory2023-2025

Rely on the internalenergy control
management platform
to lower greenhousegas emissions

Establish a sustainable
management platform
Transform the energy
consumption structure to lowcarbon

2023-2025

Adopt newtechnologies that
improve production
management efficiency

Establish a carbon
management platform tosimulate the carbon emissionsof low-carbon products.

2023-2025

Simplify productdesigns to improve
production efficiency

Determine the R&D direction
and coordinate the factory's
automatic production
Simplify product designs andreduce the number of partsused2025-2030

Increase the ratio ofrenewable energy
sources

Introduce renewable energy
sources and purchaserenewable energy certificates2023-2025

Stakeholders to pay
attention to information
regarding carbon
emissions of products
and services

Promote the designs andadvantages of low-carbon
products and services
Provide information
concerning stakeholders
through a sustainable
management platform

2023-2050

Establish an overall
virtual platform
Highly efficient
production
management anddistribution processes
can lower carbon
emissions

Financial Impact

Impact analysis
The growth of newcommercial applications
contributes 20%-50% of
operating revenue.
Cost analysis
1. Marketing expenses forpromoting commercial
applications of target
products account for 0%10% of operating revenue
through evaluation.
2. R&D expenses increased
to optimize and develop
applications related to
new businesses and wasevaluated as 0%-5% of
operating revenue.

Note: For more detailed information on each risk item, please refer to the TCFD Independent Report of the company for the current year.

093

Climate Change Management

2022 HTC ESG Report094

Opportunity - Products and Services: Development and increase of low-carbon products and services
Impact Type

Products orServices

Impact Content
Develop low-carbon
products and extend
their service life.
Reduce the use of
paper, printing, andpackaging.

Replace old and highenergy consuming
equipment

Supply chain or
Value chain

Climate
Adaptation
or Mitigation
Activities

New R&D or
Investment

Business
Operation Typeor Locationof Business
Operation
Facilities

Encourage upstream
manufacturers toincorporate green
designs
Build a green energy
supply chain
Execute R&D andproduction of lowcarbon products
through cooperation
with the overall value
chain

Strategy
Build an ecological chain of
low-carbon products andservices
Provide electronic QR codes
for user manuals

Replace the old central airconditioning equipment.

PeriodProducts orServices2023-2025

Encourage suppliers toparticipate in renewableenergy plans.

2025-2050

Improve the internalenergy control
efficiency.

2023-2030

Principle for the
integration of products
into green design
Develop productswith low energy
consumption andexpand the low-carbon
marketEstablish ecological design
guidelines in the product R&D
stage, including R&D andselection of materials, productdesign, product development
evaluation, process R&D
design, and packaging design
following the principle ofenergy conservation andcarbon reduction2022-2050

Electronic internal
documents and forms
Encourage employees
to take public
transportation and walkwhere possible
Hold large meetings
onlineImpact Content

Expand the low-carbon
marketContinue to researchand develop productsthat maintain nonlocal
business operations

2025-2030

Encourage the use of
public transportation andparticipating in sports

2023-2025

Continue to innovate/optimize
VIVERSE related applications,and hold meetings/
collaborative development
online/through VR space.

2023-2025

The percentage of premium thatcan be charged to customers
due to the introduction of lowcarbon design is estimated to beabout 1.1%.
Cost analysis
1. The value chain is negotiatedto reduce relevant carbon
emissions, and the evaluationencourages suppliers toparticipate in renewable energy
projects to increase procurement
costs by 0.25%-0.5% andto promote the conceptof sustainable and green
consumption to customers andsuppliers, accounting for about
0.2%-0.3% of of consolidated
operating revenue.
2. Use low-carbon equipment to
reduce carbon emissions in the
manufacturing and operation
process, and invest in one-time
expenditures, accounting forabout 0.2% of consolidated
operating revenue.
3. Incorporate low-carbon designconcepts or choose low-carbon
emission/recyclable materials.
After evaluation, it is necessary
to increase purchase costs, R&D
costs, and other derivative costs
by 4%-15%, accounting for about
11% of consolidated operating
revenue. This investment cost isalso identified as the responsive
cost of risk 2 and the financial
impact of risk 3 at the same time.

Strategy
Use environmentally and ecologicallyfriendly products that can reducegreenhouse gas emissions

PeriodFinancial Impact

2023-2030

Comply with the demand for market
changes through continual enhancement
and improvement2023-2025

Simplify manufacturers' business
contents and optimize manpower

2022-2050

Continue to develop VIVE Sync remote
work solutions.

2023-2025

Use cloud services with zero carbon
emissions.

2023-2025

Select carriers who have actively
engaged in green energy transportation
by land, sea, and air
Adjust the ratios of sea and airtransportation; lower the ratio of airtransportation, and improve the ratio of
sea transportation.

2022-2050

Public welfare leave feedback system2022-2050

New R&D or
Investment

Diversity of products
Research and draft
working models
for businessand manpower
optimization
Expand commercial
applications of related
products

Expand market competitiveness throughdesign and R&D of innovative products.

2023-2030

Business
Operation Typeor Locationof Business
Operation
Facilities

Adopt diversified
operation modes toimprove brand value
Enhance the marketingof green products andoverall solutions
Adopt cloud solutions
to lower the impact ofregional disasters

Strengthen the publicity of green productdesign and promote MARS and VIVERSE
products.

From 2022~

2022-2025

Continue to strengthencarbon reduction and energy
conservation with the supply
chain
Promote suppliers'
sustainability projects

Strengthen theimplementation of courses andtraining programs related to
products and services.

Impact Type

2023-2025

Use green buildings andrenewable energy sources,
replace old equipment withenergy-saving equipment,
and introduce an energy
management system

Respond to therequirements ofstakeholders for lowcarbon products.
Negotiate withcustomers andpromote the conceptsof sustainability andgreen consumption.

Financial Impact

Opportunity - Resource Efficiency: Use of more efficient production management and distribution processes

Supply chainor Value chain

Climate
Adaptation
or Mitigation
Activities

Suppliers participate
in the development of
low-carbon products
and diversified services
Influence all upstream
and downstream
manufacturers' use of
distance platforms forcommunication
Simplify manufacturers'
business andmanpower

Actively look for green
transportation modes
Encourage employees
to participate in energysaving and carbon
reduction activities
Join external ESG
and "Pure Green
Foundation" initiatives

Impact analysis
1. Due to the increase inoperating efficiency
and cost reduction,
it is estimated thatthe annual reduction
in operating costs
will account for
approximately 5.5% ofconsolidated operating
revenue.
2. To reduce the impact
of carbon tax andcarbon fee on
operations, according
to the greenhousegas emissions
corresponding
to production
management anddistribution, evaluate
the annual reductionof operating expenses,
accounting forless than 0.1% ofconsolidated operating
revenue.
Cost analysis
1. The construction
cost and annual
maintenance costof the carbon
management
platform accountfor less than 0.2%of the consolidated
operating revenue.
This responsive costis also identified as
the financial impact ofrisk 3.
2. Using low-carbon
transportation,assess the cost
increase of 200%
- 300% for air andsea transportation
using low-carbon
transportation,accounting forless than 6% ofconsolidated
operating revenue.

Note: For more detailed information regarding each opportunity, please refer to the TCFD Independent Report of the company for the current year.

095

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2022 HTC ESG Report096

Metrics & Targets

Low-carbon
Operation

HTC introduced SBT, established a net-zero pathway suitable for its own operations, submitted relevant materials forreview, and passed the SBT commitment this year. It also established future reduction targets, linked the targets tothe core business, and constructed a definite carbon reduction pathway from a global and quantified management
perspective. This pathway covers five major carbon reduction strategies and integrates multiple aspects to march
towards the goal of Net Zero by 2050. HTC has established reduction targets in scope 1 and scope 2 in accordance with
the SBT Net-Zero goal, specifically, carbon emissions will be reduced by 42% in 2030 and 90% in 2050 compared with thebase year (2021). For more details on carbon reduction metrics and targets, please refer to the TCFD Independent Reportof the company for the current year.

In addition, the latest climate science of the United Nations IPCC indicates that restricting the increase of global
temperatures by 1.5°C is still possible. Recently, HTC signed a commitment letter with SBTi, and established its targets forgreenhouse emission reduction and net-zero carbon emissions in accordance with the carbon reduction guide tools andmethodology published by SBTi, declaring its commitment to net-zero emissions by 2050.

Low-carbon Products

Overview of HTC's Energy and Climate Change Management

Carbon Information
Disclosure

2008

HTC began to participate in CDP and regularly reported carbon risk and carbon management
planning, systems, and results regarding climate change.

2018-2019

HTC became a member of the CDP Supply Chain Program and invited suppliers to participate
in and respond to a climate change questionnaire. In the first year, HTC invited key supplierswith an annual reply rate of 48%; in 2019, the suppliers' response rate reached 61%.

Greenhouse Gases andEnergy Management

2022

HTC acquired management grade (B) from CDP Climate Change, and leadership grade (A-)
from CDP - SER.

2022

HTC passed the SBTi commitment according to the SBTi methodology.

2023

HTC planned to invite 128 key suppliers to participate in the CDP Climate Change Questionnairethrough the CDP Supply Chain Program.

2008

HTC introduced the ISO 14064-1:2006 Greenhouse Gas Inventory Project, and obtained an
ISO 14064-1:2006 certification to understand the status of energy use, respond to international
greenhouse gases and global warmings, and establish and plan energy-saving strategies andactions.

2009

HTC included all its plants in Taiwan in the organizational scope of inventory. From 2010 to 2015,
HTC included its factories in mainland China to the scope of inventory, and executed external
checks. Emissions mainly derived from the use of electrical power.

2011
2020
2022
2023

HTC began to import the ISO 50001 Energy Management System to promote energy
management, and plan and realize corporate sustainable management goals.
HTC was engaged in the version change work of ISO 50001:2018 to establish energy-saving
strategies and actions needed to manage climate change and extreme climate.

2012

HTC established a complete energy management system in its Taipei office. The total numberof physical monitoring points exceeded 7,000, and the total number of software points
exceeded 20,000.

2013

The Taipei office obtained a Green Building Label from the Ministry of the Interior and LEEDGold certification from the U.S. Green Building Council.

2022

The carbon reduction performance of the company reached 1,892 tCO2e, and the accumulated
carbon reduction reached 19,706 tCO2e.

2010

HTC began product environmental impact inventory and analysis using the life cycle evaluation
method.
HTC participated in the product environmental information disclosure coaching programorganized by the Industrial Development Bureau of the Ministry of Economic Affairs, andcooperated with 19 suppliers to complete the Environmental Product Declaration (EPD).

2011

HTC participated in the product low-carbon design system coaching program organized by theIndustrial Development Bureau of the Ministry of Economic Affairs, and completed coaching ofcarbon footprint analysis and low-carbon design for 15 major suppliers.

2013

HTC cooperated with 11 suppliers to complete the first smartphone (HTC One) in the world withan ISO/TS14067 product carbon footprint inventory certificate.

2014

HTC established carbon reduction targets and action programs by providing major supplierswith detailed life cycle inventory analysis data.

2015

HTC cooperated with eight suppliers to complete carbon footprint checks for two products.

2016

HTC completed the water footprint analysis and products checks.

2022

HTC checked the carbon footprint (ISO 14067-1) of VIVE Flow, a VR product, to understand thecarbon emissions of the product.

Energy and Emissions
The power used by HTC is mainly electricity. To decrease the use of electricity, we persistently promote various energy
efficiency management. We achieve energy savings through the improvement of the lighting and air conditioning
systems, and the installation of renewable energy equipment. In 2022, the design on energy efficiency contributed to164,884.440 kWh (593.584 GJ) of reduction, and the total amount of reduction in carbon emission was 83.926 t-CO2e
which translates into a saving of NT$494,653.

The Electricity Usage in Taiwan
2020

2021

2022

TY3 Building

31,992.480

29,789.280

25,469.280

H Building

9,558.875

8,191.505

8,616.895

Year

GJ

HTC introduced the version of ISO14064:2018 with the aim of reporting the scope of corporate
organization, products, and carbon emissions and effectively understanding them.

HQ & Plants

HTC plans to establish a carbon management platform.

Taipei Office 1

21,295.040

18,732.683

15,791.128

Taipei Office 2

4,437.428

4,021.841

3,585.632

Total

67,283.824

60,735.308

53,462.925

Note: In consideration of the information re-compilation in 2020 and 2021, the power consumption of tenants in the HTC building was not deducted from the calculationsin 2020. The original data was 75,610.74 GJ. This figure was corrected to 9,558.875 GJ in this year's report. Since the original calculation figure was wrongfully input in
2021, there was an error in calculations; this was corrected in this year's report.

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2022 HTC ESG Report098

Electricity Consumption Analysis of HTC Sites in Taiwan

HTC Global Greenhouse Gas Emissions in the Past Two Years

2020

2021

2022

GHG Protocol

Unit

2021

2022

64,06456,93653,463

Scope 1

t-CO2e199.458

153.623

Percentage of grid-connected electric quantity (%)

99.92

99.9

99.91

Scope 2t-CO2e8,124.930

7,559.065

Percentage of renewable energy sources (%)

0.08

0.1

0.09

Scope 3t-CO2e31,979.226

27,301.171

Total Emission

t-CO2e40,303.614

35,013.859

Remark

1. The scope of inventory covers the main global operating sites of HTC below (since some subsidiaries belong
to BVI, they are not included in the scope): Taiwan, mainland China, Japan, the United States, the UK, andPoland.
2. The carbon emission data of overseas subsidiaries is included in scope 3.
3. Power Conversion CO2 equivalent emissions are calculated in accordance with the power emission
coefficient (0.509 kg/CO2e) of the year announced by the Bureau of Energy
4. The carbon emissions of overseas subsidiaries were determined according to the power coefficient of eachcountry.
5. Simple carbon inventory was conducted according to the GHG Protocol.
6. GWP: 2020-2022 based on IPCC 2014 5th Assessment Report.

Total energy consumption (GJ)

In 2022, the total emissions of greenhouse gases of HTC sites in Taiwan reached 9,360.162 tCO2e. Compared with the baseyear of 2021, the variation of greenhouse gases included in greenhouse gas inventory did not exceed the significancethreshold of 3% in 2022. As a whole, CO2 was the major greenhouse gas generated by HTC; CH4, N2O and HFC emissions
accounted for a very minimal ratio. PFC, SF6, and NF3 emissions were maintained at 0.
HTC expanded the scope of greenhouse emission inventory and external verification to scope 3 in 2014. Relying on the
upstream / midstream / downstream greenhouse gas inventory in the complete value chain, HTC accurately identifies
the categories and activities with most intensive greenhouse gas emissions to provide suggestions for carbon emission
reduction and climate transition strategies. HTC does not emit Sox and other waste gas, nor use substances that may
damage the ozone. Environmentally friendly refrigerants extensively applied in the market including R-134a andR-410a are adopted for the refrigerated air conditioning systems in the HTC building. HTC will also continue to plan thereplacement of refrigerants of other models with relatively high global warming potential (GWP) value within a certain
time limit to lower the sharp warning effect on the earth due to damage to the ozone.

The Eco-efficiency Value of HTC

HTC Taiwan Greenhouse Gas Emissions in the Past Three Years
ISO 14064-1
2006 version

2018 Version

Unit

2020

2021

2022

Scope 1Category 1 - Indirect Emissions from imported energy

t-CO2e372.055

199.458

153.623

Scope 2Category 2 - Indirect Emissions from imported energy

t-CO2e9,513.185

8,124.930

7,559.065

Category 3 - Indirect greenhouse gas emissions fromtransport

t-CO2e375.796115.685288.399

t-CO2eN/A

1,613.693

1,359.075

Total Emission

t-CO2e10,261.036

10,013.514

9,360.162

Emission: CO2

t-CO2e9,602.066

9,920.909

9,281.582

Emission: CH4

t-CO2e253.58580.28478.394Emission: N2O

t-CO2e29.245

0.239

0.186

Emission: HFCs

t-CO2e29.24552.3330(Shuttle bus, garbage trucks, overseas travel)

Scope 3Category 4- Products used by the organization(Upstream emission from outsourced electricity, Waste
disposal, and Procurement - tap water, Gasoline and diesel)

Remark

1. Power Conversion CO2 equivalent emissions are calculated in accordance with the power emission coefficient(0.509
kg/CO2e) of the year announced by the Bureau of Energy
2. GHG Emission Coefficient Table, version 6.0.4
3. The scope includes HTC HQ & Plant and Taipei Offices, which passed the ISO14064-1.
4. In 2022, greenhouse gas emissions from transportation and disposal of waste were calculated separately.
5. GWP: 2020-2022 based on IPCC 2014 5th Assessment Report.

In 2022, HTC promoted the Net-Zero project, and adopted GHG Protocol to implement simple carbon inventory of parent
company and subsidiaries of HTC according to SBTi methodology. In 2021, the total greenhouse gas emissions of parent
company and subsidiaries reached 40,303.614 tCO2e. Also, the company conducted carbon emission analysis, calculationand evaluation in all the scopes, planned a Net-Zero pathway and established relevant short-term, medium-term, andlong-term carbon reduction strategies and management indicators with six strategies, i.e., “Carbon Management andPolicy, Low-carbon Operation, Low-carbon Products, Low-carbon Transportation, Value Chain Engagement, and Carbon
Offset”. In 2022, the total greenhouse gas emissions of parent company and subsidiaries reached 35,019.193 tCO2e, downby 13% compared with the carbon emissions in 2021.

099

Climate Change Management

2020

2021

2022

kWh/ Year

18,689.95

16,870.92

14,850.82

GHG Emission [Category1 +Category 2]

tCO2e

9,885.24

8,324.388

7,712.688

Operatiog Revenue

Millions

5,806

5,253

4,409

Revenue generated from each electricity consumption unit Millions/kWh

0.31

0.31

0.30

Millions/tCO2e

0.59

0.63

0.57

Environmental Indicators

Unit

Electricity

Revenue generated from each GHG emission unit

Note:
1.The eco-efficiency value (revenue generated from each electricity consumption unit) = Operating revenue (millions) / electricity consumption.
2.The electricity scope includes HTC HQ & Plant and Taipei Offices
3.The eco-efficiency value (revenue generated from each electricity consumption unit) = Operating revenue (millions) / electricity consumption

Energy-saving and carbon reduction Actions

TargetConserving
electricity
HTC Taoyuan's headquarters and the Taiyuan factory introduced the ISO 50001: 2018 Energy Management
System in2011, and implemented a version change of this system in 2020. The
ISO 50001 framework was also adopted as the internal managementmode of the Taipei office to learn about the status quo of internal
use of energy sources, relevant regulatory requirements, and energy
baseline as HTC's energy performance indicators and the foundation
for setting short-term, medium-term, and long-term improvementtargets. The company has also established and promoted energysaving action programs aimed at saving electricity and reducing
carbon emissions

Reducing carbon
emissions

Achievement Rate

In order to achieve the goal of saving 1% of electricity consumption, energy management has become our key energy
saving direction. Since the manufacturing center and the factory facilities and computer rooms are the places where
equipment energy consumption is concentrated, different energy-saving strategies and measures are adopted according
to the conditions of each plant.
HTC utilizes a real-time information monitoring system in its head office and factories to understand existing energyconsuming equipment in buildings to continually save energy. A building energy management system has also been
introduced to the Taipei office to cover energy-saving and water-saving application systems involving total power
resources, air-conditioning, lighting, solar panels, variable frequency control, tap water supply, and reclaimed water
recovery. Furthermore, through big data analysis and comparison, HTC strives to optimize equipment operations,improve power consumption efficiency, and effectively lower scope 2 greenhouse gas emissions.

2022 HTC ESG Report1002022 Energy Saving and Carbon Reduction Results

GJ

Amount ofMoney Saved(NT$)

Carbon Emission
Reduction(Kg-CO2e)30,138.880

108.490

90,416.640

15,340.690

95,864.960

345.100

287,594.880

48,795.264

Energy Savings(kWh)

Exhaust System
Energy-saving
ProgramLighting Fixtures
Energy-saving
Program

Program

Air Conditioning
Energy-saving
Program

HTC's Taipei office, The Golden LEED Certified Green Building

29,550.600

106.380

88,651.800

15,041.255

HTC is committed to reducing its environmental impact.
Therefore, when planning the headquarters in Taipei,
the company considered sustainability and the useof low energy resources in the design, construction,and operations. Accumulated carbon emissions of thebuilding were reduced by 19,706 tCO2e from beginningof use of the building to 2022. In 2022, carbon emissions
were reduced by 1,892 tCO2e, and EUI was 106kWh/
m2/year. Our efforts are shown in the "Sustainable
Development" section on our official website.（https://www.htc.com/tw/esg/sustainability-agenda/sustainableenvironment/ ）。

HTC obtained a LEED Gold certification and Green Building
Label certified from 2013 to 2016. In the future, HTC will
operate the headquarters in Taipei according to the LEED
certification.

2022 Earth Day – Turn off the lights for an hour
Taipei Office

Air Conditioning
Energy-saving
Program

2,100

Equipment
adjustment andenergy-saving
Program

Total

7.56

6,300

1,068.900

7,230

26.03

21,6903,680.070

164,884.440

593.560

494,653.320

83,926.179

Note:
1.The money saved through energy conservation is calculated on a basis of the industrial electricity price announced by the Taiwan Power Company in 2020: NT$3/kWh.
2.The CO2 carbon emission coefficient is calculated on a basis of the 0.509 kg/kWh standard announced by the Bureau of Energy in 2021
3.Calculation method of estimated value: machine operating power * operating time = actual value

101

Climate Change Management

HTC is committed to promoting global sustainable development internally. To
implement its ESG plan and celebrate 2022 Earth Day, HTC held a lights-off activity
for one hour in all its core representative offices in Taiwan. At 12:15, all lights andunnecessary equipment in the offices were turned off to reduce approximately
150kgCO2e of carbon emissions.
Feedback and suggestions were received from colleagues after the light-off activity
on Earth Day. HTC expected to make this a regular activity once every month. At
the end of the week, all employees are reminded to save energy by turning off
the computers, lights, and unnecessary equipment on their way out to help instillenergy-saving habits in everyday life. In addition to the response to energy-saving
initiatives, we can live a green life, and leave a beautiful and sustainable earth
for future generations. It is expected that approximately 1,800kgCO2e' carbon
emissions can be reduced annually.

2022 HTC ESG Report

102The Use of Green Energy
To create a low carbon life, we use only green energy, which includes the use of solar panels, eco-cooler air conditioners,
and other low carbon emission sources like electric cars.

Energy-saving program

Descriptions

Energy-saving program

Descriptions

Solar panels

Self-generated and self-used：Self-generated and self-used：Taipei Office has solar
panels that generate electricity used for lighting the staircases and basement in 2012; thetotal capacity is 13.8 kW. The cumulative total number of solar panels since it was built
has reached 142,905 kWh, including 14,963 kWh in 2020, 15,156 kWh in 2021 and 12,670
in 2022.

Electric vehicles
and bicycles

Four Tesla superchargers were installed, and bicycle parking is provided in our Taipei
offices. This encourages our staff to use transportation vehicles with low emissions andhigh energy efficiency. Plan to continually increase special charging piles for electricvehicles to improve the convenience of charging.

Bulk sale to Taipower：Taoyuan plant has solar energy system on the roofs; the total
capacity is 180kW. By means of internal line parallel series, the power was sold in bulk
and included in Taipower supply system to solve the power shortage problem in Taiwan.
The cumulative total number of solar panels since it was built has reached 655,600 kWh,including 164,584 kWh in 2020, 163,760 kWh in 2021 and 145,432 in 2022.

Electric vehicle charging area
Taoyuan-Solar Power Generation System

Taipei-Solar Power Generation System

Heat pumps
for air
conditioning

We installed a heat pump system in the Taipei offices to provide hot water for showeringin the staff gymnasium and hot water for cleaning in the kitchen. Besides providing
heat, it can also provide partial cooling energy. The iced water produced during the heatexchange can be used for air conditioning. This system provides hot water and cold air at
the same time.

Phase-out of
air-conditioning
refrigerant to
R410A

Traditional R22 refrigeration includes chlorofluorocarbons (CFCs), the culprit of ozone
layer destruction. We gradually replaced the current R22 refrigeration split-system
air conditioners with R5410A refrigeration to save the ozone layer that protects theearth against most ultraviolet (UV). We replaced two 10 kW one to one split-system air
conditioners in 2022.

103

Climate Change Management

Free bicycles for rides

2022 HTC ESG Report104Sustainable Agenda –HTC
Sustainable
AgendaAs a global leader in the innovative design ofvirtual reality, HTC is committed to controlling
and reducing the impact of its operations on thenatural environment. We recognize that reducing
the environmental impact of the manufacturing
process is an important part of achieving
sustainable developments for the company. To
this end, HTC has set up a "Sustainable Agenda"
from five aspects: "a sustainable environment,
design, processes, product and supply chain."
HTC promotes the concept of environmental
sustainability and integrates it into all aspects ofcorporate operations, demonstrating HTC's active
pursuit of corporate responsibility for sustainable
development.

Sustainable
SupplyChain

Sustainable
Environment

Energy and Climate Change
Green Workplace
Water Resource Management
Education and Promotion

Sustainable
DesignHTC Supplier Social
Responsibility Assessment andAudit
Responsible Procurement ofMineralsSustainable
Manufacturing
Process

Enhancement of Energy Efficiency

Hazardous Waste Management

Product Recyclability Design

Green Production Process andSmart Factory

Hazardous Substance Management
Active in Compliance withStandards

Sustainable
Product

The Green Supply Chain
Management System
Taking circular economy
as the direction fordevelopment
Environmentally friendly
with sustainable
packagingSustainable Environment
Occupational Safety Department has been established as a legally compliant, dedicated unit responsible for theorganization of occupational health and safety, and the execution of the energy management system. Every year, we also
formulate an occupational safety and health management plan based on the state of safety and health management. The
implementation focuses include: compliance with safety and health regulations; hazard identification to reduce risks;
standardization of hazardous chemical labeling and general rules; the promotion of occupational safety and healthinformation; and the establishment of a system to manage contractors. All these measures are aimed at reducing risks.

HTC is committed to protect environment, integrate the concept into our corporate culture, enhance employees'
awareness of environmental protection and caring, improve energy, water and waste management, and reduce theimpact to biodiversity. In addition, HTC organizes environmental protection activities for our employees and further
improve their environmental awareness. We believe that only through working together can we create more value forthe environment and the society. Energy and climate change related action, please refer “Climate Change Management”
section.

Currently, we are emphasizing various work priorities, such as occupational safety and health management, educationand training, standard operating procedures, automated inspections, emergency response, health management, andsafety and health activities. We encourage the participation of all our members to reduce safety and health-related risks.

Sustainable Environmental Management Vision

Additionally, we have also developed a health service plan to prioritize the protection of safety, health, and well-being
for all our members. This plan effectively prevents occupational and environmental hazards, avoiding the occurrence ofvarious injuries and illnesses among colleagues, and ensuring that all HTC employees work in a safe environment.
In line with international standards such as ISO 45001, ISO 14001, ISO 14064-1, and ISO 50001, we establish
comprehensive standards for occupational safety & health, environmental protection, greenhouse gas inventory, andenergy management, all of which are validated and verified through external third-party audits. We develop relevant
policies and objectives that mandate the execution of corresponding management practices and advocacy within theorganization. We also systematize our management efforts and integrate them into daily operations, aiming to enhance
our overall capacity for occupational safety & health management and environmental protection practices.
We have emergency response plans that will be implemented in the event of an emergency caused by human error or
natural disasters. As identification of the nature of the emergency, taking the necessary measures and examination ofstandard operating procedures. In addition, personnel evacuation drills are held regularly. In 2022, the Taipei Office
and Taoyuan Factory will hold self-defense fire-fighting group training and building evacuation drills in accordancewith laws and regulations, in order to minimize the impact on the health and safety of relevantpersonnel and company
property.

2022 Short-Term Goal
Annual Achievement (Reached)

Reduce power consumption (carbon emissions) 1%
Sewage recycling rate reaches 30%
Waste recycling rate reaches 85%

1.25%
50.52%
84.22%

Based Year: 2021

2026 - 2030
Medium-term Goal

2031 - 2050
Long-term Goal

Carbon emissions
reduced by 42%
compared with the baseyear

Carbon emissions
reduced by 90%
compared with thebase year

Resource consumption of recent 3 years
2020
Environmental Indicator

2022

2021

Unit

HQ & Plants Taipei Office HQ & Plants Taipei Office HQ & Plants Taipei Office
City water consumption
Wastewater

degree63,13367,77836,00348,144

41,59743,663

HQ & Plants- Dongmen Creek
Taipei Office- City Dedicated Sewer

River

HTC Environment Protection, Occupational Safety, Health, andEnergy Policy

Total city water discharge

Metric Tons

78,211

54,222.4

42,01938,515.2

16,630.2

34,930.40

The amount of rainwater recycled

Metric Tons

N/A

2,673.68

N/A

2,965

N/A

3,863

Total amount of sewage recycled/reused

Metric Tons

23,741

N/A

8,843

N/A

8,401

N/A

HTC strives to provide a safe and healthy working atmosphere for all of our employees while

The ratio of sweage recycled/ reused tototal amount of sweage consumed

%

30.36

N/A

21.05

N/A

50.52

N/A

The ratio of water recycled/ reused to total
amount of water consumed

%

37.6

3.94

24.56

6.16

20.2

8.85

Weight of end-of-life products and e-waste
recovered

Metric Tons

3.58994.85432.5864Weight of end-of-life products and e-waste

adhering to sustainability best practices which protect our environment. HTC follows theguidelines below to achieve sustainable development and to ensure a better quality-working
environment for our employees, customers, suppliers and contractors.
We regard environment, safety, health, productivity, quality, and effective energy management

Metric Tons

11.87177.86985.7046End-of-life products and e-waste
percentage recycled%30.24%

61.68%

45.34%

Total amount of waste incinerated Information productKg

13,944

8,455

2,980

environmental protection, hygiene, health and energy management.

Total amount of waste incinerated - GeneralKg504,306

N/A

426,202

N/A

311,108.9

N/A

We are committed to preventing foreseeable dangers and loss control.

Total amount of waste reused

Kg

N/A

N/A

N/A

N/A

N/A

N/A

We are committed to ensuring the organization establishes and implement a process for

Total amount of waste incinerated

Kg

135,700

48,32065,55052,40058,28049,600Waste disposal expenseNT$828,240

302,400

619,448308,700

664,860

377,700

Environmental management and recycling
amount - Information productNT$

Environmental management and recycling
amount - GeneralNT$with equal importance.
We regard the safety and health of employees, customers, suppliers, and contractors withequal importance.
We require our employees to observe all guideline regarding safety, operating procedures,consultation and participation of workers.
We follow required laws and regulations.
We are committed to give priority to the purchase of green products.
We will continue to practice and improve on our environment, safety, health and energy
management systems.

837,591
454,160

N/A

454,602461,922

N/A

201,548494,933

N/A

Note：
1. The total discharge of sewage in the Taipei office is estimated at 80% of the water consumption.
2. Domestic garbage at Taipei Office consists partly of recycled cartons that are unquantifiable. A recycling company has been commissioned for handling.
3. Waste materials, as put into statistical data, are divided into categories ranging from plastic, paper, scrap iron, scrap aluminum, scrap galvanized iron, waste edgeboard, scrap computer products, waste wood (pallets), miscellaneous types of plastic, scrap parts, disused desktop computers, disused screens, disused laptops,kitchen refuse, recycled domestic material and general rubbish.
4. Parts of the data for the years 2020 and 2021 have been recompiled.
5. In 2021, due to the impact of the pandemic, a longer time was taken for the operation of recycling logistics in Taiwan. As a result, the recycling percentage for 2021 washigher compared to previous years.

107

Sustainable Agenda

2022 HTC ESG Report108Green Workplace

Green Procurement

The factories and offices disclosed in the boundary organization report this year have been established in industrial andcommercial areas after environmental consideration and evaluation. The relevant environmental protection has been
implemented in compliance with local regulations and internal environmental policies and specifications that have nosignificant impact on the local ecosystem and animal and plant species. We still encourage all our plants and offices to go
on with their efforts to beautify the environment. As for the new buildings, we aim to improve the employee’s working
environment through the introduction of green building design.

Green Landscaping
Aligned with our commitment to sustainable environmental practices, we consider the impact and changes to thesurrounding environmental landscape and ecosystems when constructing office spaces, factories, and other facilities.
Consequently, we have incorporated indoor and outdoor green spaces in our Taipei office, headquarters, and factories,
demonstrating our emphasis on environmental protection and biodiversity conservation. To minimize our impact on
the surrounding environment, we have planted a total of 131 native Taiwanese tree species, such as Camphor trees
and Taiwan Acacia, as well as a variety of green plants at our headquarters and factories. the Taipei Office building
horticulture planning adhered to the concept of environmental protection and open parks. The planting area on the firstfloor reached 41% of the total base area. According to the topographic planning, large trees totaling 260 were planted,
including camphor trees, Liquidambar, Podocarpus, Taxodium distichum, and cherry trees. Additionally, the plan
designated eight shrub planting areas and one ecological pool area to plant about 3,200 plants. These tree species anddiverse vegetation provide a wide range of ecosystem conservations, including mitigating soil erosion, regulating climate,providing habitats for various organisms, and contributing to better air quality. We carefully considered the growth
conditions and characteristics of different tree species to maintain ecological balance and biodiversity while ensuring
their successful integration within the local ecosystem.
To enhance the quality of the work environment for our employees and promote green ecology, we have incorporated
potted plants within the office building that possess air-purifying qualities and help reduce carbon dioxide levels. These
plants include species such as Dracaena, Dragon's Blood, Sansevieria, Peace Lily, Rubber Plant, and Phalaenopsis orchids.
Additionally, we add different plants according to various festive occasions, aiming to create a vibrant atmosphere andprovide a refreshing office environment for our employees.
In 2022, a total of approximately 1.579 million NTD was allocated towards the management, maintenance, and provisionof a refreshing and green office environment for HTC employees. Regular pest control measures, including antidengue fever treatments and the control of other insects and rodents, are carried out on a quarterly basis. Additionally,
environmental pesticides are sprayed in stagnant water areas near the factory premises to reduce the density of diseasecarrying mosquitoes.

Environmental Expenditures
Year

2020

2021

2022

Environmental expenses (NT$ Thousand)

34,752

30,112

28,970

Our strategy is to buy environmentally friendly products to substantiate our environmental protection concept of“recyclable, low pollution, and resource-saving”. We express the purchase of environmentally friendly products as apriority in our procurement specifications to firmly integrate the concept into our daily operations. We further integrate
this principle into our corporate culture with the aim of reducing our environmental footprint and protecting the planet.
In 2022, the amount of green procurement reached NT$ 761 thousand. From 2012 to 2022, the accumulated expenditure
for products with green-product stamp was about NT$ 32.68 million. Through our green procurement initiatives, we
aspire to contribute our part in environmental conservation and drive sustainable development within the industry. We
aim to make a positive impact and play a role in safeguarding the environment for future generations.

Water Resource Management
As global warming intensifies and climate change becomes a pressing issue, water resource management has become
increasingly important. While our processes require minimal water usage and have low environmental impact on thesurrounding areas, we still strive to reduce water consumption and promote water resource management and recycling.
Our water supply comes from Taiwan Water Corporation, and our production processes are dry processes that do not
generate wastewater. The wastewater generated is solely from the general office and daily activities of our employees. To
ensure that we do not exert any adverse impacts on the water source areas, we refer to the World Resources Institute's"Aqueduct Water Risk Atlas," which indicates that Taiwan as a whole fall into the Low to Medium (1-2) category, posing
no immediate threat to water resource. We also conduct wastewater testing to ensure that our discharged wastewater
does not pose any negative impact on the water source and the environment.

Sewage Treatment
To ensure the legal compliance of wastewater management at our headquarters and factories, we have implemented
daily maintenance and inspection in accordance with the “Procedures for Sewage System Operation, Repair, andMaintenance.” We abide by all the laws and regulations and the sewage is tested every six months by an institution
authorized by the Environmental Protection Administration. The results of the discharged effluent and recycledwater samples comply with the standards set forth in the Water Pollution Control Act. We also fulfill the reporting
requirements as specified in the "Water Pollution Control Measures and Test Reporting Management Regulations" bysubmitting the necessary information online. In 2022, the total cost for wastewater treatment at our headquarters andfactories amounted to approximately NT$2,018,246. This includes expenses related to operations (including electricity
usage and the addition of chemicals and agents), maintenance, water quality testing, and instrument calibration, among
other items.
Domestic sewage is discharged into the sewage sewer. Based on the average concentration of effluent BOD and COD
from 2016 to 2022, there will be no adverse effects on the nearby water bodies. Since 2017, we have been conducting
independent sampling and testing of heavy metal levels in our discharged wastewater. The test results have consistently
shown non-detectable levels or values below the detection thresholds, indicating that our operations do not pose apollution risk to the environment. By optimizing the water quality of our wastewater discharge, we aim to contributeto the overall government-led restoration and ecological conservation efforts for Nankan River (an upstream tributaryof Dongmen Creek) and its associated biodiversity. Starting January 2013, the average daily treatment capacity of the
sewage treatment plant reached 604 metric tons, sufficient to replace the use of tap water for park landscape irrigationand for toilet water use.

The Amount of Water Discharge and Recycled Water, and the Average Concentration of BOD
Year

Amount of
Water Discharge(Metric Tons)

Amount of
Recycled Water(Metric Tons)

Average
Concentration of
BOD (mg/l)

Average
Concentration of
COD (mg/l)

The Suspended
Solids(mg/l)

Test of Effluent
Heavy Metals

2020

78,211

23,741

5.15

24.28

6.00

N/A

2021

42,019

8,843

7.9

36.9

7.18

N/A

2022

16,630

8,401

8.08

26.5

8.5

N/A

Note:
1. Tested items of heavy metals: Cd. Cr. Cr+6. Cu. Zn. Ni.
2. The scope of statistical data is HQ & Plants

109

Sustainable Agenda

2022 HTC ESG Report110Water Resource Recycling

Drinking Water Quality Control

In order to reduce our reliance on tap water, we direct our domestic wastewater to sewage treatment plants for proper
treatment. After undergoing treatment, the treated wastewater is discharged into Dongmen Creek, which eventuallyflows into Nankan River. The green fields and planted areas inside the factories are irrigated with recycled sewage water
without increasing the total amount of water consumed. The Taipei building selected water-saving water equipment.
When making purchases, HTC prioritizes water-saving features or water conservation marks. We have installed faucets
with sensors that dispense less water. In 2022, we successfully replaced 120 traditional faucets with sensor-activatedfaucets, resulting in a water-saving rate of 70% compared to the previous faucets. Additionally, we utilize recycled air
conditioning condensate water and rainwater for toilet flushing and plant irrigation.
HTC Taipei office has established a rainwater storage and recycling system to collect rainwater for flushing toilets andwatering plants. In 2022, total of 3,863 metric tons of rainwater was recycled from the Taipei office Building. Compared
to 2021, we achieved a significant improvement of 30.3% in rainwater harvesting, indicating an effective water resource
conservation.

2022 Water Resource Management Effectiveness

HTC has set up a comprehensive water fountain inspection plan to ensure the standard of purity of drinking water.
Regular maintenance, water sample testing, and records disclosure are done according to the Drinking Water
Management Act. A professional company carries out the maintenance and care of the drinking fountains and testing ofwater purity is carried out by an environmental testing agency that is authorized by the EPA to take regular samples andperform the tests every 3 months. The total bacteria count of drinking water and E. coli colonies have passed the test in
2022.

Environmental Protection Education and Promotion
HTC continues to promote and enhance environmental protection consciousness and awareness in employees using
a diversified interface. Through the new employee educational training and the provided training materials, the ideaof environmental protection is promoted within the organization and allowing employees to feel HTC's efforts inenvironmental protection and give their full support through actions as well as everyday life habits.

Total Water Intake
Taipei Office

HQ & Plants

4％

Rainwater
recycling

3,863
Metric Tons

0％0Metric Tons

Amount saved
NT$50,219

43％

City water

41,597
Metric Tons

0％

Sewagerecycling0
Metric Tons

45％

43,663
Metric Tons

9

％

8,401
Metric Tons

Total Water Consumption :Domestic Water
Taipei Office

HQ & Plants

47％

53％

41,597
Metric Tons

43,663
Metric Tons

Total Wastewater Discharge :Domestic Sewage
Taipei Office

HQ & Plants

32％

68％

16,630.2
Metric Tons

34,930.4
Metric Tons

Amount saved
NT109,213
Note：
1. The estimated savings is estimated at NT$13 per degree of water.
2. The denominator for the ratios is the total water intake, total water consumption, and total wastewater discharge, respectively.

111

Sustainable Agenda

2022 HTC ESG Report112Sustainable Design
HTC’s thinking on the development of sustainable products is to starts from the product life cycle, and adopts different
measures at various stages through innovative thinking. It uses the concept of The Precautionary Principle tocarefully select the ones with lower environmental risks. it complies with the internationally Restriction of Hazardous
Substances Directive, reduces the environmental impact of products, and develops sustainable products that are moreenvironmentally friendly.

Level VI
standby power
standard

0.1 W

Green Marks Obtained by HTC
Verified by a third-party verificationcompany (UL) as meeting North
American (US and Canada) PSU
energy efficiency requirements.

Verified by a third-party verificationcompany, through the US Departmentof Energy (DOE) and the Canadian
Department of Natural Resources(NRCan), the energy consumption
requirements for battery products

Applicable Area

VR Power Supply Units

Working with Call2Recyle(RBRC) to properly recycle
used batteries in North
America.

Applicable Area
Applicable Area

HTC Desire 22 pro

VIVE Focus 3

PSU Type A138A-120150U-US4

PSU Type TC NE30W

115V Standby energy consumption 0.027W

115V Standby energy consumption 0.03W

Compared with Level VI standby power ↓ 73%

Compared with Level VI standby power ↓ 70%

Batteries

VR device, including Accessories withrechargeable batteries, etc.

For the energy consumption during battery charging, we follow the regulations of the US Department of Energy (DOE)and Natural Resources Canada (NRCan) as standards to try our best to improve the efficiency of charging and reduce theloss of energy consumption when the battery keeps fully charged to minimize the overall energy consumption. In the
new VIVE products in 2022, the battery life of the wrist tracker can last up to 4 hours. Not only does it have a built-in LED
indicator to show the battery status, but its performance in terms of unit energy consumption (UEC) also significantly
outperforms regulatory standards.
VIVE Wrist Tracker

HTC proactively seeks to reduce the use of environmentally harmful substances, through a design concept that canincrease the recycling rate, increase resource reuse, and reduce its negative impact on the environment. At present,
HTC's actual practice of sustainable design of products mainly focuses on the three major directions of “enhancement
energy efficiency”, “product recyclability design” and “hazardous substance management” to enhance the greencompetitiveness of products.

Enhancement of Energy Efficiency
We concentrate on energy-saving from the early design and research and development phase. All power supplies usedfor HTC products must comply with the relevant international energy consumption specifications, including California
Energy Commission (U.S.), EU Energy-related Products(ErP) Ecodesign Directive and are approved with energy efficiency
verification by third-party verification companies. All of their energy efficiency meets the United States Departmentof Energy criteria of Level VI which is the highest and defines the standby power shall be less than 0.1W. The lowest
consumption of currently use chargers is 0.027W, which is much lower than the standard by 73%. The power adaptersthat HTC uses are already compliant with the new version of the EU Regulation for External Power Supplies (EU2019/1782), which requires the introduction of mandatory labeling and energy efficiency testing result documents.

UEC Regulatory limits (kWh/yr)

3.060

Represented value of UEC (kWh/yr)

0.746

Compared to regulatory standards↓ 75.62%

Note: The unit of energy consumption (Represented value of UEC) is tested and calculated according to the regulations of the
US Department of Energy. It represents the additional energy consumption in addition to the power obtained by the battery
during the charging process. The lower the number represents the charging process; there is Better power conversion efficiency
and lower standby power

Energy efficiency regulations for battery charging products by the US
Department of Energy(DOE) and Natural Resources Canada(NRCan)The US Department of Energy (DOE) issued the energy efficiency regulations for battery charging (BC) products
in 2016, which was implemented in June 2018. All BC products sold in the US market must comply with the DOE
regulations and be registered. Natural Resources Canada (NRCan) enforced the same regulations in June 2019
Prior to this, the California Energy Commission (CEC) began implementing energy efficiency regulations forbattery charging systems in February 2013. These requirements cover almost all electronic products that use
rechargeable batteries, including mobile phones and notebook computers.
Currently, the Department of Energy (DOE) mandates that the unit energy consumption of charging products
should not exceed the limit calculated based on battery capacity. This means that the additional electricity
consumed during the charging process must be controlled within a certain range.

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2022 HTC ESG Report114

Product Recyclability Design

Smartphone- Desire Series

HTC takes waste deduction and resource reuse into consideration from the first stages of product R&D.
We evaluate the product design of recycling thoroughly through product breakdown and material
simulation, and estimate the material composition and relative recycling rate of products. The thirdparty authorities verify the material recycling rate by disassembling and analyzing the products. And therecycling rate of all our products, including VR and smartphones, is largely exceeding to the standard of
the product category set by the EU WEEE regulations (55%). In the future, as a principle, we will continue
to design our new products in the direction of decreasing the weight and increasing the recycling rate.
Considering the circular economy as one of the important directions for sustainable development, we ensure that our
products are properly handled when discarded and successfully enter the recycling system to achieve the recycling andreuse of waste electrical and electronic products. Our electronic products and packaging boxes are labeled with the EU
WEEE symbol (as shown in the image), indicating that our products should not be disposed of arbitrarily after use. We
also encourage consumers to contact local waste management centers or the stores where they purchased the products
to take proper measures through sorting, recycling, and reuse. By doing so, we can reduce the environmental pollution
caused by hazardous substances and increase the utilization of natural resources.
In our new product lineup in 2022, we have demonstrated remarkable commitment and progress towards thedevelopment of a circular economy. In the case of the VIVE wrist tracker, not only have we made improvements inspecifications and functionality, but we have also achieved a significant reduction in weight, reducing it by 78.20%
compared to the VIVE Focus 3 controller. This not only ensures convenient and flexible use for our customers but also
embodies the concept of environmentally sustainable design, promoting lightweight product and enhancing recyclability.

EU WEEE
Standard

55%
The new Desire 22 pro phone product still features a design
with a high recycle rate. In relation to legal compliance,
the product received a 7.5 green label in the most recent
Repairability Index for France (2021 Desire 21 pro is 7.2).
HTC smartphones scored high in the ratings of five criteria:
manufacturing documentation, disassembly, availability ofspare parts, price of spare parts, and repairs. The product has
a longer life span and a highly rated repair service. All these
efforts contribute to reducing product waste and promoting
environmental protection, thereby mitigating the potential
impact on the environment caused by the use of end products.
Note: 3R includes Reuse, Recycling and Recovery ratios, which are defined in the EU
WEEE Directive (2012/19/EU).

Desire 22 Pro
Weight 167.7 g
Recycling rate 75%

EU WEEE Standard 55%

VR related ProductHazardous Substance Management
EU WEEE
Standard

VIVE Wrist Tracker

55%

VIVE Flow

Weight 62.2 g

Weight 188.62 g

Recycling rate 75.5%

Recycling rate 79%

Compared to regulatory standards ↑ 20.5%

Compared to regulatory standards ↑ 24%

Always taking environmental protection and consumer health as integral factors of our consideration, we strictly
adhere to the Restricted Substances List in all our product designs. This list encompasses international environmental
regulations and customer requirements, which not only restricts the ten substances regulated by RoHS along with four
additional plasticizers, but also prohibits the use of toxic substances such as polyvinyl chloride and brominated flame
retardants. We require suppliers to submit testing reports and continuously monitor regulatory changes to ensure apollution-free production that aligns with our environmental goals. We also demand that our suppliers comply with
relevant regulations to safeguard consumer health and the environment.
Furthermore, concerning the REACH regulation, we annually request our suppliers to provide the latest published listof Substances of Very High Concern (SVHC) and relevant information regarding components with SVHC concentrations
exceeding 0.1%. We cross-reference the supplier survey results with our GSM system to assess the SVHC content of
the components. By the end of 2022, a total of 101 suppliers participated in the REACH regulation SVHC survey, witha response rate and compliance rate of 92.8%. In the future, we will strive to achieve the goal of 100% compliancewith regulatory requirements for SCIP reporting of all our products. This ensures that our products not only meetenvironmental requirements but also have no adverse effects on product users.
In accordance with the regulations issued by the Toxic Substances Control Act (TSCA) in 2021, which prohibit or restrict
the use of five persistent, bio-accumulative, and toxic substances (PBTs) in raw materials, products, or finished goods, wehave complied with the regulatory requirements and conducted surveys on our 26 major suppliers, with the response
rate and compliance rate reaching 85%.

115

Sustainable Agenda

2022 HTC ESG Report116Description of the HTC product lifecycle and its different stages

Phone and Battery Recycling
To properly fulfill their responsibilities as a manufacturer, HTC, which is 100% in line with EU WEEE
requirements, has also promoted the US and Canadian related electronic product recycling program. To reduce
the undue disposal or handling of old mobile phones and the impact of this upon the environment.

Raw materials/parts

Production

Green product design and verification

HTC forbids restricted materials.

Chemical inspection laboratory
in the plants.

International third-party companies do the chemical
analysis to ensure products comply with the EU RoHS
regulations; that is, that products do not contain relevant
heavy metals, bromide fire retardants, and plasticizer.

Waste/recycle

Use

Transportation

International third-party companies
verify that our products are subject
to the EU WEEE recycle standard.

In accordance with the requirements of energy loss ofcharging batteries in the USA and Canada, standardsof power efficiency in the EU, and international safety
standard IEC 62368.

Improvement on
packaging design.

HTC Hazardous Substance Control Schedule2022

Complying with the Toxic Substances Control Act (TSCA)

2020

Prepare the EU REACH SCIP database declaration

2015

Beryllium copper alloy was replaced by other safer materials

2012

Declared that new smartphones meet halogen-free requirements

2009

1997

1. HTC began operating its own mail back device recycling program from 2020. Customers can contact HTC’s
customer care team and request a free mailing label to send their phone, tablet, or VR headset to our ISO 14001
certified recycling partner for proper disposal. For more details, see https://www.htc.com/us/recycling/
2. HTC also participates in the industrial management program Call2Recycle in the United States and Canada. The
program provides for the collection and recycling of various types of batteries in electronic devices, including LiIon, Ni-Mh, Ni-Cd, and SSLA batteries. We pay a fee to Call2Recycle for every eligible battery in each device sold in
the United States and Canada. As America’s largest consumer
battery stewardship and collection program, Call2Recycle
collected nearly 3.6 million kg of batteries for recycling in
the U.S. in 2022, including over 1.36 million kg of lithiumion batteries, the highest number of lithium-ion batteries
collected in the program’s history. For more details, please see:
http://www.call2recycle.org/
3. HTC participates in state-run e-waste programs in many states in the US, for responsible recycling of its Nexus-9
tablet computers. Due to successful lobbying by the cell phone industry, only three states (New Jersey, West
Virginia, and Maryland) require cell phones to be recycled under their laws. Other state laws cover computers,
televisions, and various other electronic devices. A few states have begun including VR headsets (with internal
processor) in their definitions of Computer or Video Game Console. Thus far, we have submitted registrations in
New York and Maine with VR hardware included. We are keeping an eye on other states as regulations continue
to evolve and more and more states consider adding video gaming consoles to their programs.
Each state has a different setup for ensuring end-of-life electronics are recycled responsibly. The states use
various mechanisms for determining how much manufacturers must recycle each year – many states determine
a company’s annual obligation of pounds of e-scrap to collect based on its market share. Some states simply bill
manufacturers for the recycling of returned electronics on a per-pound basis. Other states allow HTC to simply
operate a mail back program, and pay an annual registration fee, with no target of pounds to collect. For example,
in Washington state, HTC pays fees based on our market share for tablet computers, with local governments
operating collection locations throughout the state. Washington’s Dept. of Ecology registers recyclers to manage
Washington’s e-scrap, and ensures these recyclers are using responsible practices. Over 206.5 million kg of e-scrap
have been recycled from Washington residences since theprogram began in 2009. For more details, see https://ecology.
wa.gov/Waste-Toxics/Reducing-recycling-waste/Our-recyclingprograms/Electronics-E-Cycle

Banned the use of PVC USB cable, and introduced
halogen-free plastic housing and PCB board

HTC established

2006

Active in Compliance with Standards

Established the green supply chain
management platform

2011

External parts were replaced by alternatives with non-plating process

2013

Banned the use of n-hexane in the process

2017

Strengthen the control measures for plasticizer

2021

All HTC mobile phones are verified by international public certificationcompanies, such as SGS, TUV, and ITS. Chemical analysis is carried out toensure compliance with the EU environmental directives. In addition, HTC
has updated to the latest version of IEC62368 for all products in the market
with CB certificates provided. By adhering to the concept of precautionary
principle, we comprehensively regulate the known hazards of our products
to provide a higher level of safety in their use.

Complete the REACH SCIP database declaration for all products exported to the EU.

117

Sustainable Agenda

2022 HTC ESG Report118

Sustainable Manufacturing Process
The VR devices by HTC combine new forms of operation, life, working, learning and traveling through green productdesign and help users to reach the goal of energy saving and carbon-reduction. For energy consumption during the
production process, we have strengthened our management and introduced operation control center(OCC) to reduceenergy consumption and implement waste management.

HTC Waste Statistics
Offsite Weight (Outsourcing)Type

Hazardous Waste Management
From a holistic value chain perspective, we manage waste by establishing a supplier management system to ensure
proper handling of upstream waste. By incorporating the principles of waste reduction and circular economy startingfrom the stage of our product design, we adhere to our established "Waste Management Procedures" in our operational
activities to ensure that all waste is properly classified, managed, and disposed of in accordance with procedures
and regulatory requirements. We outsource the treatment of the waste generated from our operations by engaging
authorized waste removal and treatment facilities approved by the Environmental Protection Administration forbackend processing. Similarly, qualified vendors are entrusted with the treatment of our recyclable materials forinternal recycling within the company. Our focus is on reducing the environmental impact of waste and improving waste
recycling rates, thereby ensuring the effective resource recovery and proper waste management.

Methods

Set up recycling bins and commission manual sorting ofdomestic waste.

Set up recycling bins and encourage and propagandize staff to sort
domestic waste. The employees recycled 347.164 Metric tons of domestic
waste in 2022.

Used batteries, light tubes and information technology
objects must be recycled

We have recycling stations for used batteries and light tubes available to theemployees

Recovery Operations

Unit:

2020

2021

2022

Preparation for reuse

Metric tons

0

0

0

2022
Density Description

Recycling

Metric tons

518.25405.645299.328

Including Tray plate, foam,
miscellaneous plastic, waste
wood pallets, Recycling ofliving resources and confidential
documents ,Computer
peripherals (host, screen, laptop,
electronic waste)

Other: Incineration

Metric tons

100.6465.55

107.880

Including Domestic garbage

Other: Landfilling

Metric tons

35.06

0

0

Waste Bakelite

Other: Recycling

Metric tons

57.51329.01247.836

Kitchen leftoverNon-hazardouswaste

Our manufacturing processes minimize waste that has a negative impact on the environment. We strictly adhere toenvironmental, safety, and sanitation audit standards to ensure the legality of waste removal and disposal withoutcausing any environmental impact. Overall, we uphold our commitment to the proper handling of waste and engage
authorized waste removal and treatment facilities. We carefully select the most suitable methods for waste treatment
based on its nature and utilize an online reporting system to ensure that waste removal vendors clear and transport
waste properly under supervision. We also conduct regular audits of waste treatment facilities to ensure compliancewith regulations. After the completion of waste treatment, the treatment facility logs into the "Industrial Waste Reportand Management System" platform of the Environmental Protection Administration for reporting, thereby meeting
regulatory requirements and fulfilling our self-expectations for environmental sustainability. For more information on
the impact along the value chain, please refer to the "2022 Activity Flowchart of Significant Waste-Related Impacts."

MeasuresUnit: Metric tons

Subtotal

Hazardous
waste

Metric tons

711.463 500.207 455.044

0.103

Preparation for reuse

Metric tons

0

0

0

Recycling: E-0217

Metric tons

13.752

7.606

8.937

Scrapped electronic parts andcomponents, leftover scrap anddefective goods.

Recycling: E-0221

Metric tons

1.347

0.00001

0.552

Scrapped metal containing PCBs
and scrapped powder

Recycling: E-0222

Metric tons

0.123

0.055

0.083

Scrapped PCBs containing partsand components

Chemical treatment:
C-0110Metric tons

0

0.215

0.2

Chemical treatment:
C-0301

C0110- Harmful waste liquidcontaining copper C0301Harmful waste liquid
The chemical treatment shall be
conducted once every two years
for the treatment according to"Methods and Facilities Standards
for the Storage, Clearance andDisposal of Industrial Waste".

Metric tons

2.17

0.31

0

Metric tons

17.3928.18601

9.772

0.002

728.855 508.393 464.816

0.105

Note: recycling domestic waste includes non-hazardous waste recycling and kitchen waste recycling.

Subtotal
Total

Note:
1. The computer host and screen are estimated based on the weight information obtained from the official website.
2. Preparation for reuse: Checking, cleaning, or repairing operations, by which products or components of products that have become waste are prepared to be put touse for the same purpose for which they were conceived.
3. Recycling: Reprocessing of products or components of products that have become waste, to make new materials.
4. The method of estimating the weight of food waste: It is used as a feed additive by legal livestock farms, and it is calculated as 189 kg per barrel.
5. The formula for intensity is as follows: Waste Weight (in metric tons) / Annual Revenue (in millions of dollars). For the year 2022, the annual revenue is 4,409 million
dollars.

119

Sustainable Agenda

2022 HTC ESG Report120

Waste Reduction, Recycling and Reuse

Flow chart of activities for significant waste-related impacts in 2022
306-1

UPSTREAM INVALUE CHAIN

Materials mining & production
306-1

Product components

Committed to waste reduction strategies, such as sorting, advocacy, reducing waste at the source, and promoting
resource reuse, we sort materials such as plastics, foam trays, plastic bags, containers, and plastic film rolls, which
are commissioned to certified vendors for recycling with an aim to increase the efficiency of resource recovery andreuse. Usable foam trays and sponges are recycled and reused within our production line, while other waste undergoes
physical sorting to increase reusability. Final disposal is only carried out when reuse is not possible, and we comply withlegal requirements by reporting cases of waste disposal online.

OWN
ACTIVITIESFrom 2011 to 2022, a series of measures such as sorting and recycling, the money earned or saved by recycling wasterose year by year to reach NT$ 494,933 in 2022. The recycling rate of non-hazardous waste increased from 56.89% in2011 to 84.22%. By the end of 2022, the total amount of non-hazardous waste recycled is about 347.164 metric tons, theaccumulated recycling income reached NT$91,757,279.

REPORTING ORGANIZATION
HTC

Waste Recycling Effect and Rate
306-3

306-3

Non-hazardous waste

Hazardous waste

306-1

Products & packaging

306-4

306-1

DOWNSTREAM IN VALUE
CHAIN

Recycling(E-0271)

Others

8.937 Metric tons

47.836 Metric tons

Consumption

306-4

Recycling
306-4(E-0221)0.552 Metric tons

Recycling

306-4

Downstream waste

Recycling

299.328 Metric tons

(E-0222)0.083 Metric tons
306-5

Chemicaltreatment
0.2 Metric tons

306-5

90

90%

80

80%

70

70%

60

60%

50

50%

40

40%

30

30%

20

20%

10

10%

0

2018

2019

2020

2021

2022

70,874,331

88,852,523

90,144,274

91,060,798

91,757,279

81.02%

84.53%

78.80%

86.90%

84.22%

1,800

Chemicaltreatment

21,0001,600(C0301)

20,5001,400

0 Metric tons

20,000

1,200
1,000

19,500800

19,000600

Landfilling

Recycling

Preparation for reuse

18,500400

18,000200
0121

Sustainable Agenda

0%21,500

2,000

306-5

Incineration

Other disposal
operations

100%(C0110)0 Metric tons

107.88 Metric tons

100

Cumulative Amount ofRecycling in NT$
Recycling Rate (%)

306-5

Landfilling

million(NTD)

2018

2019

2020

2021

2022

Total Weight of Waste
Recycling (Metric tons)

1,771.481

958.273643.753434.657

314.089

Cumulative Weightof Wastes Recycling(Metric tons)

18,80819,766

20,41020,865

21,1592022 HTC ESG Report

17,500122

Hazardous Substances and Chemical Control

To ensure the safe management of chemicals, we have taken the following measures:

Reduction of Hazardous Substances - Raw Material Management
Mechanism
Always been dedicated to becoming an environmentally friendly enterprise, we place equal emphasis on the
EP features of our products and the establishment of a green supply chain. We continuously strive to improvethe environmental performance of our supply chain by regularly convening supplier conferences. During these
conferences, we integrate our environmental protection policies with the concept of a green supply chain andcollaborate with component suppliers to explore the use of non-toxic materials. We adhere to the principle ofsource management and exercise stringent control over the procurement of raw materials.
In the product development stage, the R&D department will deliver the relevant parts materials to the ISO
17025 qualified laboratories, such as SGS, TUV, to ensure that the materials used in the product comply withinternational environmental protection specifications. In terms of production management, factories regularly
conduct hazardous substance tests on materials according to the “Incoming Toxic Substance Control Work
Instructions”. This is done to ensure that these materials comply with the RoHS 2.0 requirements, are all nontoxic, and are harmless green products.
X-ray fluorescence analyzer testing heavy metals and halogen elements

We have dedicated personnel who regularly check, inspect, and verify the management of chemicals within thefacility, including the types, quantities, storage conditions, completeness of labeling, and adequacy of documentation.
Personnel are required to wear basic safety protective equipment when handling chemicals.
Our gas fire suppression systems use halogenated fire suppression equipment instead of CO2 systems. We have also
replaced lead-acid batteries with environmentally friendly batteries. Any scrapped nickel-cadmium batteries aredelivered to qualified Class E waste treatment facilities for proper disposal.
We have established principles for managing chemicals used in cooling water towers. We select cooling tower cleaning
agents that have relevant safety certifications or comply with specified regulations.
We ensure that our suppliers/contractors manage chemicals properly. We conduct investigations, audits, and risk
assessments on internal management system with a focus on environmental safety and health.

Green Production Process and Smart Factory
2022 Smart Factory Programs
Our process optimization and energy improvement project in the year 2022 has made significant progress in enhancing
production line efficiency. These improvement measures have not only increased efficiency but also resulted in costsavings. Additionally, they have contributed to reducing the environmental impact.

Site Consolidation for Balancing Sustainability and Efficiency
In order to enhance production line efficiency, starting from March 3, 2022, we have introduced Mars IPC along withthree Mars CamTrack systems for simultaneous testing, which not only allows us to increase output within the same
testing timeframe but also significantly improves testing efficiency.
Sample preparation

Sampling analysis

Element data acquired

TD-GC/MS is used to check plasticizer

Furthermore, through site consolidation, we have significantly reduced the number of testing stations and the required
space, which not only save cost but also decrease power consumption and reduce carbon emissions. Additionally, we
have launched various projects such as the integration of the VIVE Focus 3 eye tracking kit with Vive XR Elite roboticarms, consolidation of battery tray stations, integration of Vive XR Elite infrared structured light testing stations with
distance sensors, integration of Vive XR Elite Bluetooth radio and wireless network testing stations, as well as theintegration of testing stations with chassis. These initiatives have collectively resulted in a carbon emissions reduction of
6,367 kgCO2e for the year 2022.

We are committed to actively managing hazardous substances and chemical use in the fiercely competitive global
business environment to ensure compliance with national laws and customer specifications, thereby reducing the riskof product non-compliance. In order to comply with the stringent international regulations regarding chemical use, wehave banned four chemicals: n-hexane, n-heptane, benzene, and toluene. Additionally, we have restricted the use of
527 other chemicals, including beryllium and dichlorobromomethane, to meet the requirements of our customers andrelevant domestic and international regulations.

123

Sustainable Agenda

2022 HTC ESG Report124Sustainable ProductIntegration of Automated Shutdown Program for Computers at the Testing Station
To prevent situations where personnel may inadvertently make mistakes or forget
to revert settings after experiments, approximately 250 computers at the testingstations of PCA Factory and System Factory have been installed with software
programs. These programs automatically restart the computers on weekdays andautomatically shut down the computers at the testing station before the end of theworkday on Fridays, conserving energy and reducing carbon emissions.

Improvement in Outsourced Material IssuancePreviously, during the production of customer work orders at our PCA Factory,
it was necessary to perform material splitting individually for positive, negative,and double-sided shared materials in the PCA Material Management System.
Nonetheless, after the engineering department modified and optimized the material management system, it is now
possible to set material attributes for positive, negative, and double-sided shared materials during the material scanning
process, which resulted in a 50% reduction in labor costs.

The Green Supply Chain Management System
In order to enhance the reliability of green products and comply with international regulations and customer
requirements, we established a Green Supply Chain Management platform in 2006. This platform enables our R&D
engineers to select environmentally friendly materials from the product database during the early stages of productdesign to reduce the subsequent verification time significantly. Furthermore, we require all new suppliers to meet the
HSF rating criteria, with a 100% compliance rate achieved in 2022. To strengthen the ESG standards of our business
partners, we have incorporated ESG performance assessments into our quarterly business review (QBR) starting from2022 with an aim to foster a green and sustainable supply chain.

Taking circular economy as the direction for development
In order to achieve the goal of sustainable development, the thinking of circular economy is adopted to design andmanufacture HTC products. We think about how to use the limited resources of the earth cautiously so that maximum
efficiency can be generated and the effectiveness can be maintained within the industrial system to achieve sustainable
operation. The following are our practices:
Maximal use of single plastic material helps make recycling easier. Exclusion of materials made with hazardous
chemical substances and lightweight products are the future product design.
Extended product lifecycle; use of modular designs for hardware upgradability and for changing spare parts.
Product energy-saving design.
Use recycled materials for manufacturing and packaging.
Reduce the environmental impact of the manufacturing process, use recycled water and renewable energy

Raw material part numbers and quantities are entered according tocustomer work orders, one at a time.

Adjusting work orders, part numbers, quantities, and T/B/A sides
according to customer requirements.

Energy conservation, power saving, paper reduction, and material recycling.
In recent years, paperless operation has become a common goal for businesses, and we are no exception. Since theintroduction of OQC in 2020, we have successfully saved approximately 15,000 pieces of papers, equivalent to 70
kilograms of A4 paper. In 2022, we anticipate a further reduction of approximately 60 kilograms of paper consumption
with an aim to save cost, conserve energy, and reduce carbon emission.
Since 2021, we have adjusted the inspection frequency based on the quality risks of different materials. This adjustment
has effectively reduced the utilization time of equipment and instruments, resulting in a 30% reduction in electricity
consumption equivalent to approximately 1200 kWh. Additionally, we have reduced aluminum tray consumption by
30% and extended the lifespan of X-Ray tubes by 35%, leading to improved equipment efficiency. In 2022, we further
extended the lifespan of X-Ray tubes by 45% with an expectation of bringing more benefits and profits to the company.
In the fiscal year 2022, we continued to consolidate the configuration of our SMT production lines for dual-line
manufacturing, resulting in annual savings of NTD$3,264,328. Additionally, we launched an ongoing recycling program,which allowed us to save NTD$457,170 by reusing solder paste, solder dross, steel plates, and synthetic stone carriers.

125

Sustainable Agenda

2022 HTC ESG Report126

Environmentally friendly with sustainable packaging

VIVE Flow Product Carbon Footprint

HTC taking environmentally friendly and sustainable development as the primary concern when designing lightweightpackaging, ensuring the protection and of the product and aesthetic while at the same time reducing impact of the
packaging to the environment.

34.83 kgCO e
2

1st HTC VR product to complete ISO-14067
carbon footprint verification

As a leading brand in virtual reality industry, HTC has been committed to environmental protection andsustainability. To reduce the impact of products to the environment, HTC conducted a comprehensive carbon
footprint assessment of each stage of VIVE Flow production in 2022, including raw material selection andpackaging methods, and obtained ISO 14067: 2018 verification statement, covering from cradle to grave. Productcarbon footprint is an analysis of greenhouse gas emissions throughout the product life cycle, including theacquisition of raw materials, manufacturing, distribution, use, disposal and other stages. The carbon footprint ofeach VIVE Flow (including packaging) is 34.83 kgCO2e, and the main carbon emission hotspots are concentrated
in the raw material manufacturing and distribution and product manufacturing stage. When developing new
products in the future, we will be committed to sustainable design and sustainable supply chain promotion. In
addition, since the electricity consumption in the manufacturing process is the main carbon hotspot, we can also
improve the efficiency of electricity consumption in the future. HTC is committed to improving carbon emissions
in every process, and providing products to consumers that are more green, environmentally friendly, andhealthy, and integrating the spirit of sustainability into the entire life cycle of each product.

All packaging materials HTC uses for its products fully comply with EC directive on packaging (EU 94/62/EC) and the US
requirement on packaging (Model Toxics in Packaging Legislation of USA), and all printing ink used on HTC productpackaging are low-volatility ink or soy ink certified by the American Soybean Association. We put a lot of effort into
packaging design to ensure all the packaging materials are in line with the principle of environmentally friendly andsustainable development, minimizing impact of the product packaging to the environment.

HTC's Four Major Directions for Sustainable Packaging
Reduction of theamount ofmaterial used.

The use of
biodegradable raw
material.

Printing withenvironmentally friendly
ink (soy ink).

The facilitation of
shipment.

Our latest product, VIVE XR Elite, showcases our continued commitment to corporate social responsibility. All packaging
materials used for VIVE XR Elite are made from 100% recyclable materials, with 99.99% being paper-based. One of themost sustainable features is that 99% of the packaging is made from recycled materials, which is a result of our active
enforcement of a circular economy.

100％
Recyclable
materials

99.99％
Paper-based99％

Complete verification report: https://www.htc.com/tw/esg/certificate-report/

Recycled
materials

VIVE Flow GHG emission of each life cycle stage

History of HTC “Sustainable Packaging”
Material

127

Manufacture Distribution

Use

Disposal

Total

55.10％

33.22％

5.29％

6.03％

0.37％

100％

19.193

11.570

1.841

2.100

0.129

34.833 kgCO2e

Sustainable Agenda

WeightTransportation

Has been reduced, helps toreduce CO2 emission resulting
from transportation.

One pallet can carry more packs
and help reduce freight

Increased Proportionof Recyclable Materials
Enhancing the Package Recycling
Ratio for Mobile Phones and VR
Products

2022 HTC ESG Report128Sustainable Supply Chain
2022 Product Packaging Material Analysis
Suppliers are vital to the continued success of HTC and are also important partners in supporting our sustainable
development. HTC was founded in Taiwan and is a Taiwanese company whose operations and procurement drives
developments of related sectors. Except for certain key parts and components, our general procurement policy is to use
raw materials and equipment originating in Taiwan to the greatest extent possible. The amount of local procurement of
raw materials account for 53.84%. We not only require our suppliers to provide quality services and products, but alsomeasure our supply chain against stringent ethical and environmental standards.
Since 2018, the CDC (Component Data Collection) subsystem has been added to the Supplier Portal System to address
the issues required by the Supplier Code of Conduct, such as conflict minerals, banned and restricted substances,and greenhouse gases Emissions, SVHC etc., set the annual supplier targets, tracked and summarized through thesystem. Joint effort with supply chain members in increasing our ESG performance in the 2022 supplier inclusion andperformance rating.
VIVE XR EliteHTC Desire 22 pro

Weight 777.5 g

Weight 141 g

Recycled Content Weight 772.5 g

Recycled Content Weight 108 g

Recycled Content Rate 99%

Recycled Content Rate 76.5%

As a member of Responsible Business Alliance Code of Conduct , HTC formulated an “HTC Supplier Code of Conduct”,
which aims to protect the environment with our supply chain partners, safeguard the human rights of our workers, theirethics, safety and health, and extend this social responsibility to the supply chain system. And organize irregular suppliermeetings every year to promote relevant topics.

HTC Supplier Code of Conduct HTC
The material of VR packaging- Utilize recyclable packaging materials and lightweight design
Dimensions

Weight(g)The number ofpallets

ECO Features

Use higher recycled materials on theouter box.

2021

Use of corrugated board that is lighter
yetsturdier.

820

Pizza Box
(FOCUS 3)
375x338x126.5mm

54pcs

The HTC Supplier Code of Conduct details the responsibilities and regulations that have to be followed by all
suppliers doing business with HTC. In addition, HTC also conducts a regular assessment of the implementation of
the Code as the basis for our further selection of business partners. At the end of 2021, there were a total of 101
suppliers signed the Supplier Code of Conduct, with the rate of signing reached 100%.
The provisions about labor issues, health and safety, and ethics were framed with reference to Responsible
Business Alliance Code of Conduct and the related documents issued by the United Nations Universal Declarationof Human Rights. For more information about the “HTC Supplier Code of Conduct", please visit ESG Website.

Best pallet pattern to reduce carbon
footprint.

HTC Supplier Code of Conduct HTC
Monotone color print for a minimalist,
sophisticated design.

2021

240

Rigid Box
(VIVE Flow)
184x91x123mm

2022

288x278x130mm

Sustainable Agenda

84pcs

2022

2023

1. First-tier suppliers signthe "Supplier Code of
Conduct", with a signing
rate of 100%

1. First-tier suppliers signthe "Supplier Code of
Conduct", with a signing
rate of 100%

We employ a minimalist
monochromatic style in our printing,utilizing simple ink printing techniques
to convey the product's refined andelegant texture.

2. First-tier suppliers
response rate for the GHG
Emission Disclosure survey
form -100%

2. First-tier suppliers
response rate for the CDP
survey form 75%

We have replaced certain plastic bag
packaging with paper-based packaging
to maximize the use of paper materials.
Additionally, the main device is now
protected by a fiber bag with superior
quality.

4. First-tier suppliers
response rate for conflictmineral, cobalt -100%

420pcs

777.5

Pizza Box
(VIVE XR Elite )129

Optimized space allocation, lightandcompact outer design to change
perceptions of a heavy VIVE series.

3. 100% no conflict minerals(3TG)

3. 100% no conflict minerals(3TG)
4. First-tier Suppliers
response rate for Extended
Minerals, cobalt & mica100%

2025
1. First-tier suppliers sign
andabide by the "Supplier
Code of Conduct", with asigning rate of 100%
2. Promote first-tier suppliers
to implement powersaving: the response
rate of the supplier CDP
survey form is 100%,and the supplier’s
implementation of powersaving rate accounts for
50%

2022 HTC ESG Report

130

The HTC Supplier Social Responsibility Assessment and Audit
In addition to implementing corporate social responsibility of our own brand, HTC also delivers the concept andrequirements of ESG to the supply chain. This was not only to verify their compliance of the HTC Supplier Code of
Conduct, but also to provide supplier consulting and coaching functions to build and enhance ESG concepts and actions.

Supply Chain Social Responsibility Compliance Audit” has been implemented since2011. Every year, HTC will based on initial risk determination (including geographic,
location, products, news etc.) to execute Audit.

Percentage of Tier 1 supplier facilities audited in the RBA Validated Audit Process (VAP) or
equivalent facilities
Year

2020

2021

2022

Number of suppliers audited by third party/Total Critical Suppliers count

5%

8%

22%

Number of high-risk suppliers audited by third party/ Total high-risk Suppliers count

29%

35%

46%

Non-conformance rate with the RBA Validated Audit Process (VAP) or equivalent

-

-

-

Priority non-conformances count/ Number of suppliers audited by third party

1.89

0.44

0.09

Other non-conformances count/ Number of suppliers audited by third party

19.44

12.78

3.55

Associated corrective action rate for priority non-conformances

18%

75%

100%

Associated corrective action rate for others non-conformances

57%

50%

100%

Annual Onsite
Audit

In 2022, a total of 101 suppliers were assessed for risks, and 9 suppliers with a risk
score of over 30% were selected for on-site audits. Five of them were exemptedfrom the audits for providing the RBA VAP report for the current year. The remaining
four audits were postponed to Q2 2023 due to the COVID-19 pandemic. As of theend of April, all on-site audits have been completed.
In 2023, we plan to introduce the RBA risk assessment tool to further improve therisk assessment of our suppliers and effectively reduce risks.

Note:
1. Total Critical Suppliers count: Direct suppliers accounting for top 80% of the total purchasing expenses.
2. In the current year, the determination of high-risk suppliers is based on factors such as geographical location, product manufacturing processes, news reports, and past
audit performance, instead of the RBA SAQ survey.
3. Our third-party audits include HTC, outsourced third parties, VAP, VAP CMA, and SMETA, and they are assessed according to HTC's internal standards.
4. In the year 2022, four audits were delayed until April 2023 due to the COVID-19 pandemic, and efforts for continuous improvement are currently underway.
5. In response to the above findings, besides requesting the suppliers to respond with improvement measures, HTC also provided management system andimplementation experience to suppliers for reference and put them in the priority list for on-site audit in next year in order to prevent similar incidents from happening.

A Quick Look at the HTC Supply Chain Management

In 2017, an addition was made in the manufacturing process. According to the RoHS
and REACH directives, hazardous substances subject to control are required to beaudited.

On-site Audit Results (Total of 67 Noncompliance Items in 2022)
Labor
Rights16 cases, mainly about wages and benefits and overtime issue.

Health and
Safety31 cases, mainly on insufficient occupational safety measures in the operating environment.

Environment

13 cases, mainly about Inadequate hazardous waste management measures.

Ethics7 cases, mainly for the failing of establishing management procedures for employees to accept

TreatmentandResponse

In response to the above findings, besides requesting the suppliers to respond withimprovement measures, HTC also provided management system and implementation
experience to suppliers for reference and put them in the priority list for on-site audit innext year in order to prevent similar incidents from happening. There were no suppliers
whose audit results failed to meet the standards in the current year.

Definition of HTC Critical Supplier
Owing to differences of industry characteristics and supplier category, HTC identifies critical supplierand major audit for reference by following two principles:
1. Direct suppliers accounting for top 80% of the total purchasing expenses.
2. According to the mechanical components which vary based on technology, markets and purchaseannually, ESG Office and sourcing departments define critical suppliers of current year based on
different situations every year.

Management Mechanism

New SupplierManagement

All supplier candidates are required to fill in a self-assessment questionnaire, andthe contents of the questionnaire are designed based on HTC's five major supplier
behavior criteria of labor, environment, health and safety, ethics, and management
systems. For high-risk suppliers, actual audits are also conducted. Since 2016, theweight of social responsibility-related issues in the new supplier self-assessment
questionnaire has been increased. In 2022, a total of 4 new suppliers have passed theself-assessment, accounting for 100% of all new suppliers.

Quarterly
Evaluations

In the quarterly supplier business review meetings, the performance of key supplierson ESG-related issues is confirmed and included in the screening considerations.

131

Sustainable Agenda

inappropriate payments and gifts.

2022 HTC ESG Report132

No conflictminerals productused at HTC in

2022

Responsible Procurement of Minerals

Distribution map of countries where smelters mainly use minerals

Since 2012, HTC has included conflict minerals issues in its procurement contracts, supplier code of conduct, purchaseorder terms, supplier social responsibility management procedures, and supplier social responsibility audits, requiring
suppliers to comply with the "HTC Conflict Free Mineral Statement" to ensure that conflict minerals are not used. Each
year, we use the Conflict Minerals Reporting Template (CMRT) of the Responsible Minerals Initiative (RMI) to investigate
the sources of metal mines of our suppliers, effectively managing the supply chain and reducing default risks. In 2022,
all minerals used in HTC products were sourced from qualified smelters. HTC has also included "cobalt" and "mica" in
its metal mine source investigations since 2020 and 2022, using the Responsible Minerals Initiative's Extended Minerals
Reporting Template (EMRT). The response rate for this year's survey was 100%.

GERMANY 5.2%
KOREA 6.4%

INDIA 8.7%

The intended use of conflict minerals

Au

Point of use:
Contact in the circuit boards
Intended use:
As circuit board contacts toensure proper connection

W

JAPAN

Sn

Intended use:
Solder to mount circuit board
electronic components

Point of use:
Tungsten Alloy used in Vibrator

Ta

Intended use:
An element used intantalum capacitors

133

Sustainable Agenda

OTHER

43.6%

VIET NAM 7.1%
BRAZIL 11.8%

INDONESIA

34.1%

Point of use:
Used on lithium batteries

21.2%

Tin

Intended use:
As electrode material for
lithium battery

OTHER

Ｍica

12.8%

Intended use:
Tungsten alloy used in the phone vibration motor

Co

15.7%

Gold

Point of use:
Soldering in the circuit boards

CHINA
Point of use:
Tantalum-Capacitor

CHINA

UNITED STATESOF AMERICA 7.6%

25.8%

Point of use:
Used in connectors and memory modules
Intended use:
Assist in electrical insulation and thermal insulation

2022 HTC ESG Report134BRAZIL 5.8%

UNITED STATESOF AMERICA

7.7%

RUSSIAN FEDERATION

15.4%

OTHERS

Tungsten

CHINA

50.0%

CHINA

38.5%

OTHERS

17.9%

21.1%

GERMANY

7.7%

BRAZIL

7.7%

JAPAN

12.8%
Tantalum

UNITED STATESOF AMERICA

15.4%

Note:
In the smelter country display graph, the others category is countries with a percentage value of less than 5%. The countries of conflict mineral smelters in this category
are as follows:
1. Smelter countries of Gold include: Russian Federation, Switzerland, United Arab Emirates, Italy, Brazil, Canada, Kazakhstan, South Africa, Turkey, Belgium, Colombia,
Mexico, Taiwan, Uzbekistan, Uganda, Zimbabwe, Andorra, Australia, Austria, Chile, Czechia, Indonesia, Kyrgyzstan, Lithuania, Malaysia, Mauritania, Netherlands, New
Zealand, Norway, France, Ghana, Philippines, Poland, Saudi Arabia, Singapore, Spain, Sudan, Sweden, Thailand
2. Smelter countries of Tantalum include: Estonia , India , Kazakhstan , Mexico , North Macedonia, Russian Federation , Thailand
3. Smelter countries of Tin include: United States Of America, Bolivia, Japan, Malaysia, Spain, Thailand, Belgium, India, Myanmar, Peru, Philippines, Poland, RussianFederation, Rwanda, Taiwan
4. Smelter countries of Tungsten include: Germany, Japan, Korea, Austria, Viet Nam, Philippines, Taiwan

135

Sustainable Agenda

2022 HTC ESG Report

Friendly Workplace –Human Rights Management and Commitment
Promoting respect for human rights is a core focus of HTC. We support the objectives disclosed in international humanrights conventions such as the “Universal Declaration of Human Rights”, the “ILO Declaration”, the “Responsible Business
Alliance”, and other international standards and guidelines to ensure human rights protection.
In HTC's commitment, special attention is paid to interested parties in vulnerable groups, such as children, women,
indigenous peoples, people with disabilities, and other vulnerable groups. We promise not to participate in any formof human rights violations, including forced labor, child labor, discrimination, harassment, and infringement of theright to freedom of association and assembly. We also regularly review and update our policy to ensure effective
implementation, including identifying and addressing potential human rights issues through due diligence by applying
early warning principles.
With regard to the protection of human rights and other related policies, HTC has posted on its official website its
declaration and policy commitments.
We promise to integrate policies into daily economic activities and business relations, striving to protect and respecthuman rights, for example, we require all suppliers to fulfill their corporate responsibilities to the same standard, andpublicly announce compliance with the latest version of the Modern Slavery Act together with suppliers to demonstrate
protection of labor rights. We believe that through our commitments and actions, we can make positive contributions to
global human rights and sustainable development.

Due diligence on human rights-related risks
Human Rights Topics/
Impacts

Annual performance

Employees
Labor-capital Relation
Labor consultations andappeals

HTC holds labor meetings to discuss employees' work rights and benefits on a quarterly basis, and produces
meeting minutes to continuously track and improve issues. We also provide various channels for employees
to express their opinions, including an appeal hotline, appeal opinion box, email, etc. In 2022, the company did
not have any cases violating the Labor Standards Act.

Salaries comply with
relevant regulations

HTC strictly adheres to the labor laws and regulations of each location, prohibiting discrimination against
employees based on gender, race, nationality, age, religion, or party affiliation. It is committed to creating a fairand equal work environment, allowing employees to enjoy fair wages and benefits. The company also adopts
a systematic performance evaluation system, taking into account factors such as employee performance,
market level, and future development potential to adjust salaries, motivate employees, retain outstanding
talent, and continuously promote innovative development to improve the company's competitiveness.

Diversified equal rights

Human Rights Topics

Anti-discrimination

At HTC, we uphold the principle of equal opportunity and ensure that there is no discriminatory behavior
in the recruitment, hiring, promotion, and management of employees. We have always been committed tocreating an open, diverse, and inclusive work environment to unleash the maximum potential of the company.
We also provide education, training, and other measures to protect employees while performing their duties.
In addition, our EAP program provides professional psychological counseling and life assistance resources totake care of employees' physical and mental health, increase job satisfaction, and strengthen self-esteem.

Respect for women

HTC values the importance of female employees in the workplace and believes that gender equality is very
important. Therefore, in addition to strictly complying with relevant labor laws, it also considers adjusting
service items and environmental equipment for female employees to diverse needs, and is committed toestablishing a true corporate culture of gender equality. Since 2016, HTC has implemented a comprehensive
Protecting and Managing Maternal Health policy, to include female employees who are pregnant, arebreastfeeding for the first year after giving birth, or are still breastfeeding, to ensure that they receive thenecessary protection and support. Through the above measures, we believe that we can improve the work
efficiency and morale of our employees, while also attracting outstanding female talent.

HTC places great importance on human rights issues and is committed to ensuring that our business activities do not
negatively impact the human rights of any interested party. We believe that identifying and developing annual humanrights issues is an important step to ensuring the fulfillment of our commitment. Therefore, we use the following
methods to identify and develop annual human rights issues:
1. Identifying human rights risks: We clarify and identify potential human rights risks and hazards through parties
interested in our business, and list potential risk items.
2. Conduct due diligence: Internal departments conduct investigations on potential human rights risks to determine
whether our policies and practices comply with relevant laws, guidelines, and standards.
3. External participation: We regularly publish risks and performance as part of our annual EGS report, sharing ourprogress and performance with interested parties.
Based on these methods, we identified and formulated human rights issues for the current year: labor relations, diversity
and equality, a good working environment, conflict minerals, and personal information security and privacy, etc.

139

Friendly Workplace

Good Workplace

Provide a safe working
environment and training
for workers

We inspect the workplace, vehicles, equipment, facilities, and fire-fighting equipment on a regular and adhoc basis to ensure the safety of the working environment. We also conduct audits of safety requirements
such as protective measures, personnel safety, and health education records, and pre-, during, and postuse inspections of machinery and equipment, including organic solvents, ionizing radiation, and infrared
detection. To enhance employees' awareness of health and safety and regulatory requirements, we provide
basic training on general health and safety and use of hazardous and harmful materials, and education andtraining for employees engaged in hazardous or special operations.

Employee healthcare

To provide a comfortable and healthy working environment for all employees, we are committed to providing
healthcare services across three major areas: "health management", "health promotion", and "healthcare", toensure the physical and mental health of employees and to ensure a work-life balance.

No forced labor

HTC strictly prohibits any form of forced labor and ensures that employees have the freedom to terminate
their labor contracts. As of 2022, no operating site has experienced any form of forced labor.

Unemployed child laborand illegal labor

HTC strictly prohibits all operating sites and global suppliers from illegally hiring children and engaging inillegal labor. We require employees to provide age certificates when hiring them, and ensure that students
in cooperative education also comply with the law. We also ensure that all operating sites comply with local
labor laws and regulations to protect labor rights.

Free association

HTC respects employees' right of free association and is committed to providing channels and an
environment for free expression of opinions. We encourage employees to effectively express their opinions
and ideas through diverse labor negotiation and appeal channels, such as unions, labor meetings, and appeal
procedures.

Provide accessible
facilities for individuals
with physical and mental
disabilities

The accessibility facilities of the building include ramps, escalators, and elevators. We have set up blind spot
signs on the disabled elevators in our Taipei office so that people with limited vision can use these facilities.

2022 HTC ESG Report140

Valuing Female Employees

Suppliers
Conflict Minerals

No use of conflict minerals

We conduct responsible investigations and management of conflict minerals, conduct annual investigations
on the sources of raw materials from suppliers, and incorporate them into the supplier's social responsibility
management program. No products were found to have used conflict minerals in 2022.
See the 'EGS Supply Chains' section for further details.

Labour human rights
Free choice of profession
Unemployed child laborand illegal labor
No Forced Labor
Salary and Benefits
Human Treatment
Anti-discrimination

HTC places great importance on suppliers' protection of human rights, and followed the Code of Conductof the Responsible Business Alliance and the United Nations Declaration of Human Rights to develop
the HTC Supplier Code of Conduct, which clearly outlines the responsibilities and norms related to labor,
health and safety, ethics, and other key areas. It is implemented through multiple measures, including
on-site audits, confirmation of improvement actions for faults found, training on human rights issues forcolleagues working in procurement, and participation in the Responsible Business Alliance (RBA) so we canunderstand the trends of international enterprises and member experience and practice. We hold suppliermeetings every year to promote and demand human rights issues such as prohibitions on child labor,
forced labor, and conflict minerals to expand the social responsibility of the supply chain system. We expect
any supplier who has business dealings with HTC to comply with and implement this standard. As of theend of 2022, a total of 101 suppliers signed the code of conduct; a 100% return signing rate.
See the 'EGS Supply Chains' section for more details.

Freedom of Association

Corporate Customers
Personal Information Security and Privacy
No personal informationor other information leaks

HTC has imported a personal data management system and an information security management system,and has taken various management measures to ensure the security of personal data and other information.
There have been no incidents of personal data or other information leaks to date.

HTC places great emphasis on the value of female
employees in the workplace, and has established a
corporate culture of gender equality by adjusting
our service offerings and improving environmental
equipment. We also promote physical and mental
healthcare measures for female employees, including
the following:
1. A female free cancer-screening program is part of theannual health check. This includes the choice of a Pap
smear, a breast ultrasound exam, or a mammogram.

3. Car/scooter parking spaces near the parking lot entrance/exit for pregnant women.
4. Seven breastfeeding rooms in the offices in Taiwan, each equipped with ultraviolet milk bottle boxes, a microcomputerwater boiler, comfortable couch, refrigerator to store breast milk, and relaxing music. These facilities were used 7,814
times in 2022.
5. The Mother Health Protection Plan kicked off in 2016 and covers pregnant women, mothers within the first year ofgiving birth, and mothers who are breastfeeding. The Plan made an inventory, underwent risk identification, andoffers individual medical consultations, work adjustments and a reinstatement program following pregnancy. In
2022, a total of 19 female employees completed risk classification and protection measures, all of which are currently
considered a low risk level and are being monitored.

Work-life Balance Support

A Workplace that values Human Rights
As an international enterprise, HTC values labor human rights and upholds the basic principles of equality, inclusiveness,
and anti-discrimination. We adhere to providing fair and open employment opportunities for every candidate, andrespect the human rights and workplace equality of every employee. We are committed to the highest environmental,social, and moral integrity standards to create a healthy, just, and fair work environment.

No Child Labor
HTC strictly prohibits all operating sites and global suppliers from employing children. We require that an age certificate
be provided when hiring employees, and that students in cooperative education meet the age threshold of 16 or above as
stipulated by local laws to ensure that the welfare of children and adolescents is fully protected. We also ensure that all
operating sites comply with the requirements of local labor laws to safeguard the labor rights of workers.

141

Friendly Workplace

Accessible parking spaces for pregnant women and people with adisability.
2. Consideration for the physiological needs of female
workers, providing a comfortable environment for
rest, the loan of free hot pads, menstrual pain assessment, health knowledge and education, physician consultation orreferrals and so on.

In addition, in order to encourage and support employees to raise the next generation with confidence, HTC has a perfectapplication system for family care leave and parental leave to protect employees' work rights so that parents can takecare of their newborns with ease.

Employees applying for Family care leave
Year

Male

Female

Total

2020

26

54

80

2021

15

31

46

2022

18

59

77

2022 HTC ESG Report142Employee Satisfaction Survey

Employees Applying for Unpaid Parental Leave and Resuming Duty after Leave in 2022
Male

Female

Total

104

65

169

3

11

14

2.88%

16.92%

8.28%

The Number of Reinstatement-to-be in 2022

2

14

16

The Number of Application for Reinstatement in (Note 4)

1

9

10

50.0%

64.29%

62.50%The number of application for reinstatement in 2021 (Note 3)

2

26

28

The Number of Retention Over 1 Year After Reinstatement in
2021

0

9

9

0.0%

34.62%

32.15%The Number of Qualified for UPL for Raising Children in 2022
(Note1)The Number of Person Actual Applied UPL in 2022
UPL Application Rate in 2022 (Note 2)

Reinstatement Rate in 2022 (Note 5)

Retention Rate in 2022 (Note 6)

Note:
1. The number of employees eligible to apply for maternity leave and paternity leave in 2022 is calculated based on the number of employees who have taken maternity
leave and paternity leave in the past three years (2020-2022)
2. The '2022 application rate for parental leave = the actual number of people applying for parental leave in 2022/the number of people eligible for parental leave
application × 100%
3. The number of people who have been reinstated in 2021 includes those who applied in 2019, 2020 and 2021, and were reinstated in 2021.
4. The number of people who have been reinstated in 2022 includes those who applied in 2020, 2021 and 2022, and were reinstated in 2022
5. The 2022 Reinstated Rate = Number of reinstated people in 2022 / Number of reinstated people expected in 2022 × 100%
6. The 2022 retention rate = Number of people who continued working for one year after resuming employment in 2021 / Number of people who resumed employment
in 2021 × 100%

Listening to the Voice of the Employee
HTC has over 2,000 employees worldwide, and the improvement of internal communication mechanisms has
a significant impact on the company's operational growth. Therefore, HTC places great emphasis on internal
communication and is committed to establishing a harmonious atmosphere of mutual trust between labor andmanagement.
To achieve this goal, HTC holds quarterly labor meetings consisting of seven representatives selected by employees andseven representatives designated by the company. At least four regular meetings are held every year and minutes arerecording to track issues and improve results. Before each meeting, we discuss previously unresolved and newly added
issues. In addition to inviting relevant responsible unit supervisors to participate, the meeting minutes are also posted on
the company's internal website for employees to review. According to internal statistics, the most commonly discussed
topics in labor meetings include "the work environment", "employee welfare", and "catering management".
HTC conducted an employee engagement survey to promote smooth communication channels with colleagues and gauge
job satisfaction. The survey included a total of 429 manufacturing colleagues, of which 86 were sampled (accounting for
20% of the total). The questionnaire response rate was 98.84%, and the target score for 2022 was 3.8 out of 5. The actual
survey scored 3.90.
To ensure the rights and freedom of expression of employees, HTC has established a fair system for handling employee
complaints, and provides instant access to colleagues' opinions, such as via the appeal hotline, the appeal opinion box,
appeal email, and a sexual harassment appeal email. We also regularly hold labor meetings and employee opinion
surveys as important references for improving various practical aspects.
HTC places great importance on labor management harmony. If there are any labor disputes, we conduct labor
management negotiations in accordance with the law, and handle the dispute promptly and properly. When there are
significant operational changes, we also comply with the norms of the Labor Standards Act. No cases of violations of theLabor Standards Act occurred in HTC in 2022.

HTC values employee satisfaction as an important indicator of job performance and turnover rate. An annual survey of
employee satisfaction is conducted through a questionnaire to understand their feelings towards the company's services
so we can strengthen and improve specific measures accordingly. In 2022, HTC conducted a satisfaction survey for
manufacturing colleagues, sampling 86 people, with a response rate of 98.84%. The actual survey scored 3.9, which is
3.8 points higher than the target. The satisfaction survey mainly covers six aspects: job content, the work environment,salary and benefits, internal communication, gender equality, and company identity. Among them, our colleagues
highly recognized HTC's performance in good and desirable job content, the implementation of gender equality laws,
and consider the salary and benefits good. However, projects with low company identification were still worth paying
attention to. HTC will evaluate refined practices and communicate the analysis results and improvement plans to Senior
Supervisor for review.

The manufacturing employee's questionnaire survey conducted in 2022
4.00

3.92

3.93

3.85

3.90

3.91

3.99

3.90
3.72

3.80
3.70
3.60
3.50
3.40
3.30

Job Content

Work
Environment

Salary& Benefits

Internal
Communication

GenderEquality

Organizational
Commitment

Average
Score

HTC Employee Code of Conduct
We place great importance on the professional ethics of each employee, and have therefore formulated the HTC
Employee Code of Conduct as the highest guideline for all employees in the execution of operational business. All
positions, ranks, and locations of employees must comply with the code. Unless it violates the legal orders of the local
government, the priority of this code of conduct must be higher than any local regulations. If there are any violationsof the code, HTC will require the relevant human resources unit to refer to the local government's legal provisions forreview and confirmation. Otherwise, any employee who violates the HTC Employee Code of Conduct will be dealt withaccordingly, and in severe cases, their employment contract may be terminated.
In 2018, we specifically used third-party compliance verification to ensure the implementation and degree of complianceof the code. We passed the verification and obtained certificates to motivate all employees to continue to work hard andimprove. To ensure that new employees fully understand and comply with the code, we start relevant training on the day
new employees start with the company, explaining HTC's corporate policies, employee code of conduct, environmental
and health policies, and ESG concepts. We also include anti-corruption, sexual harassment, and human rights related
illegal infringement issues in the training scope, and provide specific examples through e-courses to improve theeffectiveness of the training sessions.
2020
Items
Preventing illegal
infringement in
the execution ofduties

2022

2021

Hours

PeriodUnit

PersonTotal hours

PersonTotal hours

PersonTotal hours

0.5

Annual/in-service

MFG

973

486.5

494

247

640

362.5

Note: The number of participants in the course on preventing illegal infringement in the execution of duties accounts for 19.79% of the total number of employees in
Taiwan.

Note: HTC has established the corporate labor union since 2015. We keep communication with members of the labor union and respect their opinions, and discuss
employee feedbacks at labor-management meetings every quarter. As of the end of 2022, the corporate labor union has not proposed any demand for collective
agreement.

143

Friendly Workplace

2022 HTC ESG Report144Overview of Human Resource Structure2022 HTC Employee Rank Distribution by Age
Male

At the end of 2022, HTC global employee workforce totaled 2,173. Of these, 29.14% were foreign supervisors, accounting
for the total number of global executives above manager level; foreign supervisors and professionals accounted for17.97% of the total number of global executives and professionals, and 25.48% of the supervisors were women.

Manufacturing
Employee

HTC’s turnover rate of direct workers in 2022 was 12.35*, with the statistical frontier encompassing the Taiwan region(including manufacturing employees and contracted personnel). The indirect workers turnover rate was 16.65%, withthe statistical frontier covering the world (including General Employees, interns, and contracted personnel).
*Note: Turnover rate= the number of employees leaving the company/ the total average number of employees per year. The figure does not include employees who wereinvoluntary resigned employee.

General Employee

Middle Supervisor

Senior Supervisor

Total

Age

Person%Person%Person%Person%Person

%

≦ 29

11

0.51

161

7.41

27

1.24

0

0.00

199

9.16

30~50

120

5.52

126

5.80

691

31.80

28

1.29

965

44.41

≧ 51

16

0.74

3

0.14

90

4.14

17

0.78

126

5.80

Total

147

6.76

290

13.35

808

37.18

45

2.07

1,290

59.36

2022 HTC Human Resource Structure Overview

FemaleMale

FemaleManufacturing
Employee

Total

General Employee

Middle Supervisor

Senior Supervisor

Total

Person%Person%Person%Age

Person%Person%PersonAge

Person%Person%Manufacturing Employees

147

6.76%

325

14.96%

472

21.72%

≦ 29

11

0.51

96

4.42

13

0.60

0

0.00

120

5.52

General Employees

290

13.35%

210

9.66%

500

23.01%

30~50

235

10.81

107

4.92

299

13.76

6

0.28

647

29.77

Middle Supervisor

808

37.18%

336

15.46%

1,144

52.65%

≧ 51

79

3.64

7

0.32

24

1.10

6

0.28

116

5.34

Senior Supervisor

45

2.07%

12

0.55%

57

2.62%

Total

325

14.96

210

9.66

336

15.46

12

0.55

883

40.64

Full-time employees

1,276

58.72%

866

39.85%

2,142

98.57%

Part-time employee

14

0.64%

17

0.78%

31

1.43%

Employees without set hours

0

0.00%

0

0.00%

0

0.00%

Dispatched employees

0

0.00%

0

0.00%

0

0.00%

Indefinite contract/
Permanent employees

1,264

58.17%

862

39.67%

2,126

97.84%

Fixed-term contracts/
Temporary employees

26

1.20%

21

0.97%

47

2.16%

Employees with physical and mental
disabilities

5

0.23%

4

0.18%

9

0.41%

Total
number of Global employees
employees

1,290

59.36%

883

40.64%

2,173

100%

Employee
category

Type ofemployment

Employment
contract

Note:
1 . Manufacturing Employees: foremen, team leaders, operators, technicians, etc.
2. General Employees: engineers, team leaders, foremen, specialists, etc.
3. Middle Supervisor: Director, Managers, Assistant Manager, Supervisor and Special Assistant etc.
4. Senior Supervisor: CEO, CMO, CFO and other executive positions above Vice GM.
5. The job nature of dispatched personnel is as support assistant; there were no dispatched employees in 2022.
6. Fixed-term contracts includes 47 contracted personnel.
7. The definition of employment type is as follows:
Permanent employees: full-time or part-time employees who sign open-ended (i.e. indefinite) contracts.
Temporary employees: employees who sign fixed-term (i.e. with fixed term) contracts. The contract expires at a specified time, or ends when a specific task or eventwith an evaluation schedule is completed (such as the end of a project or upon the return of an employee to whom the role belongs).
Employees without set hours: employees who are not guaranteed a minimum amount or fixed working hours per day, week, or month, but may be required to beready to work according to requirements.
Full-time employees: the number of working hours per week, month, or year as defined by national laws and practices regarding working hours.
Part-time employees: employees who work fewer hours per week, month, or year than full-time employees.

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Note: The calculation method of the proportion is the number of persons in this category / the total number of employees at the end of the period

HTC's total employees by job title in the past 3 years
Manufacturing
Employee
Year

2020

2021

2022

General Employee

Middle Supervisor

Senior Supervisor

Total

Person%Person%Person%%Person%Person

Male

209

8.02

401

15.39

901

34.59

46

1.77

1,557

59.77

Female

417

16.01

256

9.83

362

13.90

13

0.50

1,048

40.23

Subtotal

626

24.03

657

25.22

1,263

48.48

59

2.26

2,605

100.00

Male

169

7.76

294

13.50

784

36.00

43

1.97

1,290

59.23

Female

346

15.89

198

9.09

332

15.24

12

0.55

888

40.77

Subtotal

515

23.65

492

22.59

1,116

51.24

55

2.53

2,178

100.00

Male

147

6.76

290

13.35

808

37.18

45

2.07

1,290

59.36

Female

325

14.96

210

9.66

336

15.46

12

0.55

883

40.64

Subtotal

472

21.72

500

23.01

1,144

52.65

57

2.62

2,173

100.002022 HTC ESG Report

146

HTC Global Site Employee Structure Distribution
Percentage of gender group representation of global employees in HTC 2022 (%)
FemaleMale

Senior Supervisor

21

79

Middle Supervisor

29

71Technical staff

32

68

Others

67

33

Total

41

59

2022 HTC global new and resigned employee statistics
APAC
TaiwanMale
PersonFull-time
employeePart-time
employeeTemporaryemployees

Employees without
set hours

Taiwan

1,812

1,830

22

40

0

Others

143

143

2

2

0

90

92

2

4

0

APAC

77

5

1

0

The total number of employees in HTC by country in the past three years
Domestic Employees

Foreign Employees

MaleFemaleMale

FemaleMale

FemaleMale

FemaleMale

FemaleYear

Person%Person%Person%Person

%

2020

1,312

50.4

888

34.1

245

9.4

160

6.1

2021

1,097

50.4

756

34.7

193

8.8

132

6.1

2022

1,087

50.0

752

34.6

203

9.3

131

6.0

% Person% Person% Person% Person% Person% Person% Person

%

≦ 29

92

4.61

67

3.36

3

0.15

5

0.25

5

5.32

4

4.26

1

1.22

1

1.22

30~50

86

4.31

47

2.35

11

0.55

3

0.15

12

12.77

4

4.26

8

9.76

6

7.32

≧ 51

1

0.05

2

0.10

1

0.05

0

0.00

1

1.06

1

1.06

3

3.66

0

0.00

179

8.96

116

5.81

15

0.75

8

0.40

18

19.15

9

9.57

12

14.63

7

8.54

Subtotal

Permanent
employees

81

FemaleAge

Total number of employees in HTC by region

EMEA

EMEA

New Recruits of Employees

Note:
1. Technical staff includes employees categorized in the 15-0000 group (Computer and Mathematical Occupations) or 17-0000 group (Architecture and Engineering
Occupations) of the U.S. Bureau of Labor Statistics' 2018 Standard Occupational Classification System.
2. More than 90% of HTC's employees are in the operating headquarters and Asian operating strongholds, with Asians being the main ethnic group.
3. HTC's US operating base has a total of 94 employees, with approximately 20% of employees being Asian and 80% being non-Asian.

America

America

Others

Total
%

318

27

19

15.92

28.72

23.17

Turnover of Employees
MaleFemaleMale

FemaleMale

FemaleMale

FemaleAge
Person% Person% Person% Person% Person% Person% Person% Person

%

≦ 29

61

3.05

38

1.90

1

0.05

4

0.20

3

3.19

0

0.00

0

0.00

2

2.44

30~50

128

6.41

85

4.26

12

0.60

4

0.20

15

15.96

5

5.32

4

4.88

8

9.76

≧ 51

2

0.10

4

0.20

0

0.00

1

0.05

2

2.13

2

2.13

2

2.44

0

0.00

Subtotal

191

9.56

127

6.36

13

0.65

9

0.45

20

21.28

7

7.45

6

7.32

10

12.20

Total

340

27

16

%

17.03

28.72

19.51

Note:
1 . Proportion calculation method = Number of new or resigned employees / total number of employees in the region at the end of the period
2. Total number of employees at the period end of each region: 1,997 from Asia; 94 people from the Americas; and 82 people from Europe and the Middle East

The total number of employees in HTC by region in the past three years
APAC

EMEA

Total

OthersYear

PersonPersonPerson%Person%Person%Person

2020

2,205

213

2,418

92.8%

103

4.0%

84

3.2%

2,605

2021

1,862

143

2,005

92.1%

94

4.3%

79

3.6%

2,178

2022

1,852

145

1,997

91.9%

94

4.3%

82

3.8%

2,173

147

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Subtotal

America

Taiwan2022 HTC ESG Report148

Talent Attraction and Retention
HTC understands that the driving force of enterprise innovation comes from talent. Therefore, in addition to
encouraging employees to explore unknown fields and bring innovative design into their lives, it is also committed tobuilding a diverse, dynamic, and enthusiastic work environment, adhering to an open and inclusive policy, and giving
employees sufficient authorization and room to grow to attract outstanding talent from around the world. In addition
to jointly focusing on environmental protection, social welfare, and other issues with general enterprises, HTC has a
deeper understanding that investment in talent is the primary responsibility of enterprises, and continues to expand
the influence of HTC's employer brand through diverse recruitment channels, such as social media, and participating
in external talent sustainable alliances. To this end, we continuously strive to build a diverse and motivating work
environment where employees can unleash their strength and creativity, and achieve common growth of personalvalues and corporate goals.

Attracting Talent – Frontline Supervisors are the Best Brand
Ambassadors

Diverse Recruitment Approaches to Put the Spotlight on Brand
Value
In recent years, HTC has adopted a themed business approach combined with technological trends to plan meaningful
and developmental job responsibilities, and provide comprehensive employee care, emphasizing a work-life balance forcolleagues. HTC also actively promotes and broadcasts through internet platforms such as IG, LinkedIn, and YouTube,
focusing on its own advantages, expanding its reach, strengthening its brand image, and laying the foundation forrecruitment. In 2022, HTC was nominated for the LinkedIn 2022 Best Talent Acquisition Team Award.
In addition to actively participating in campus recruitment activities, HTC also extends the recruitment activities tovarious innovative and technological talent matchmaking events organized by the government and the public. For
example, in 2022, HTC went to the Kaohsiung City Government to participate in the "5G AIoT Talent Matchmaking
Conference", and cooperated with the Kaohsiung Municipal Government to build an XR professional talent training
center to actively cultivate soft power talent related to development and creativity of application services, content
production, and digital platforms, etc.

Faced with the challenges of attracting talent due to dynamic market changes, we believe that frontline supervisors are
the best spokespersons for our brands. When recruiting, we invite business, R&D, and other department supervisors toparticipate, not only allowing potential employees to better understand HTC's transformation direction and innovation
momentum through personal experience, but also enabling supervisors to become effective promoters when recruiting
talent. In 2022, we invited our supervisors to do magazine interviews. In addition to introducing HTC's VIVERSE
Metaverse ecosystem, we also promoted our talent needs to the outside world through with the aim of encouraging
jobseekers potential candidates to understand the advantages, characteristics, and values of HTC Metaverse talent.
HTC's employees are frequent visitors to international information digital, mobile communication, and creative
content exhibitions, and our business scope and partners are global. We also offer cross-border and cross-regional job
opportunities. Global collaborations and cross regional work experiences can help HTC employees have a broader andforward-looking, international perspective, and such opportunities can also attract more talent to join HTC.
We recruit partners to observe interviews held with supervisors and provide one-on-one exclusive feedback after toimprove the talent selection skills of supervisors. The choice of supervisor has a significant impact on talent density
and corporate competitiveness. In addition, embracing members with diverse backgrounds and expertise can stimulate
more creativity and generate innovation momentum. We believe that such innovation can shape the corporate charm of"bringing people together".

Youth Empowerment Around the GlobeTo recruit the best talent worldwide, HTC adheres to the concept of "all talent is useful", and actively recruit local elites in
the fields of AR/VR, 5G, blockchain, artificial intelligence, and others. We release recruitment information on our official
website and social media, regularly participate in campus recruitment activities, symposiums, and technical seminars so
students can have deeper communication and interaction with us. We also use remote video tools for online interviews,
helping our recruitment efforts break through geographical limitations so we can expand our talent pool to global level
and attract talent from new fields.
In addition, HTC provides fixed internship opportunities every year, allowing students to apply their knowledge andtechnology to industrial practice, gain a deeper learning experience, and adapt to the workplace culture more quickly
so they can establish their competitiveness in the workplace. HTC also uses this opportunity to explore potential future
talent, prioritize training and provide job opportunities, and directly recruite regular employees for HTC.

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2022 HTC ESG Report150

Talent Cultivation and Development

As the world enters the era of restructuring post-pandemic,
faced with the challenge of a new generation of values and a skill
reshuffle in the digital wave, how to recruit, retain, and cultivate
outstanding talent has become the focus of global businesses.
With technological progress, the demand for highly-skilled labor
continues to increase, and foreign businesses and technology
companies are competing for talent, leading to an imbalance inthe supply and demand of high-level talent in Taiwan's industries.
HTC supported the "TALENT, In Taiwan, Talent EGS Action Alliance"
through actions in 2022, collaborating with "Commonwealth
Learning", "Cheers Happy Workers", and more than 100 companies
in Taiwan to promote and advocate for this plan. HTC also sharedin the first Taiwan Talent White Paper on how to promote internaltransformation from manufacturing hardware to providing
software, content, platforms, and services, and worked with global
partners to create a strategic approach to open the metaverse
ecosystem. HTC also disclosed the international perspectives andcross-border mobility opportunities that diverse talent can gain
after joining the company, hoping to attract people to join us as we
explore and continuously innovate together.

Goals
Execution of
85% of annual
Training
coursesResult88%

of annual training courses carried out

Five Core Competencies
To assist our employees in coping with ever-changing challenges and understand the pulse of the industry, five corefunctions serve as the main axis, and a systematic learning development blueprint is constructed with integrated
internal and external training resources and a diverse learning platform to improve employee training plans and expand
learning benefits so employees are provided with sufficient professional knowledge and skills to meet future challenges.

n
io
t
ica g
un ncinm
m flue
o
C In
&

Dr
iv
Re ingsu for
lts

ork
mw
Tea

HTC Core
CompetenciesPl& O annin
g
rga
niz
ing

Supporting Taiwan's talent through practical actions

HTC not only pursues self-improvement and profitability, but also places great importance on the personal growthof each employee. We are committed to establishing a high-quality learning environment and culture, and actively
integrate industry needs with employee career development to encourage them to strengthen their professional abilities.
In addition, talent development is listed as an important management indicator, and it is expected that employees andenterprises complement each other.

Customer Focus

Talent is HTC's most precious asset and key to achieving outstanding innovation and sustainable operations. According
to the company's business development strategy, we have established a complete talent development system, formulated
learning priorities for different levels, and provide corresponding training courses to expand human capital, createcompetitive advantages, and assist employees in continuous learning and improvement.

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2022 HTC ESG Report152Cultivating Key Leaders
Faced with rapid changes in the global industry and the new state of competition, HTC is committed to cultivating
management talent who can quickly adapt to highly changing environments and have an international perspective. Suchtalent is expected to become the main driving force for enterprise development, and continue to promote HTC's growthand development even when faced with difficulties and challenges.
To this end, we customized a series of leadership courses tailored to different levels of supervisors, focusing onstrengthening the three major functional aspects of HTC leadership management:
Leading People
Leading Change
Strategic Thinking & Decision Making

Meticulous talent cultivation and development system

Leading People

Leading Change

Strategic Thinking &Decision Making

To cultivate key talent in the company and enable them to smoothly take overimportant operational positions, we have designed a high-level leader cultivation
plan, which combines various forums, such as the GLS+ global leadership forum,
operational themed training, and book sharing, to assist senior supervisors togain deeper learning and inspiration in their thinking of 'leading others, leading（Learn、Engage、Accelerate、Develop） the company, and leading ourselves'.
BU and Function head
VP and above

The design of the internal training courses is centered on the five core occupational functions and the learning effect issubstantiated through a series of diversified channels.
There are physical and online courses for learning skills and drills.
We work closely with various R&D business teams to assist them in effectively utilizing external professional training institution
resources and allocating training budgets appropriately.

LEAD

Director and AVP

HILL Program（High-Impact Leaders Learning
Program）

In the second half of 2022, we arranged the Situational Leadership HILL
Program, aiming to strengthen human resource leadership and influence theabilities of middle supervisor to cultivate future succession talent. The course isdivided into three levels and over one hundred supervisors have participated.
The overall satisfaction of this course was 4.8 out of 5.

Manager level

PMR Program（People Manager Ready）

General
Employees

The
Management

Diversified
Learning
Channel
New Employees

To cultivate an excellent leadership team, HTC has developed a systematic
Leadership Development Framework, which covers the company's corevalues and organizational development strategies, and designs suitable
leadership and management courses for supervisors at different levels. To
ensure that learning outcomes are effectively applied to daily duties, we also
provide a series of action plans, such as pre-class assessments, post-classassessment analysis, supervisor coaching records, and post-class learning
publications, etc., to assist our employees in transforming what they havelearned into practical performance.

In the second half of 2022, HTC started planning comprehensive
supervisor training, which it expects to implement in 2023 toenhance the management ability of new supervisors. The plan
includes courses on different topics, such as problem analysis andresolution, labor relations, leadership, communication, and interview
selection to assist employees who are new to supervisory positions insuccessfully adapting to management and strengthening interpersonalcommunication and team management skills.

Individual Contributors
Classroom training & On-line learning

All orientation and new employee training are finished within one month, during which new hires receive a weekly newsletter
introducing them to HTC's culture, Company vision, and products of different business groups. Various resources are available tosupport employees and help them work on their professional development.
Newly hired executives receive a customized one-on-one orientation program to onboard them quickly.

HILL Program

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2022 HTC ESG Report154External Training Subsidy and English Leadership Resource
As an international enterprise, HTC encourages its employees to continuously enrich their professional knowledge andshowcase their personal growth potential. To facilitate employees' effective enhancement of professional knowledge
and skills required for business, we encourage team members to continuously improve their professional skills throughexternal professional training institutions or academic institutions, and combine them with work practice to achieve
continuous growth. Our training course fees are based on a complete reimbursement system to pay for the fees atthe end of the course. In 2022, our subsidies for training costs reached approximately NT$ 2.08 million. Due to HTC'spresence in the global market, we also encourage employees to continuously improve their English proficiency according
to their job needs, including for writing business emails, business negotiations, customer complaint handling, andbusiness meetings, etc..

Training and Performance Integration

Training Result

As the HTC organization continues to grow, we are committed to accelerating innovation and development, and expect
every employee to maintain consistent consensus and goals with the organization. This is also the core purpose of HTC's
performance management system: to help employees clarify their job objectives and performance standards througha systematic performance management system, and help them think and plan annual work priorities through relevant
indicators. HTC's performance management system is closely related to its training and development system, where
employees can review their progress at any time by implementing the personal performance goals set at the beginningof the year, while clarifying which skills they should improve upon, and participate in planned company courses orexternal training when needed.
In HTC's Performance Development Program, supervisors and employees hold in-depth meetings from February to
March at the beginning of the year to jointly set personal annual goals and performance standards, clarify the abilities
that employees should strengthen and learn in their personal development, and participate in planned company courses
or external training as needed annually. During the period from June to July each year, supervisors and employees
jointly review the achievement of goals and adjust work priorities and schedule based on the company's development
needs. At the end of the year from December to January, employees conduct self-assessments to review achievements ofannual goals, and incorporate feedback from cross-unit supervisors and peers, allowing supervisors to comprehensively
evaluate employees' overall performance and team achievements, making performance management a core tool forconnecting employee development, compensation design, and training plans. In 2022, the overall employee performance
evaluation rate reached 100%.
Our employees conduct selfassessments to reflect on their goal
achievement, incorporate feedback
from cross-unit supervisors andpeers, and then have an in-depth
meeting with their supervisor tocomprehensively evaluate theemployee's performance and teamachievements.

At the end of theyear(December toJanuary)
Performance
evaluations a
nd feedback

Beginning of
the year(February to
March)
Goal setting

Interim(June to July)
Performance reviews

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The supervisor and employee
clarifies the work priorities andjointly sets annual goals andperformance standards. Personal
development needs are also
discussed, and a plan for learning ismapped out based on needs.

In today's ever-changing world, continuous learning is compulsory for everyone. Even though HTC employees were stillaffected by the pandemic in 2022, resulting in a decrease in the average number of training hours per person, it was evenmore important over the pandemic to consider how to continue improving their professional abilities while ensuring
health. The company will continue to develop more courses to enable employees to continue learning and growing.

HTC Taiwan Employees Training Hours in the Past 3 Years
Year

Course (Hours)

Average Training Hours

2020

39,054

17.71

2021

21,269

11.42

General Courses

2022

Maximum
completion rate of asingle course (%)

Professional Courses

Course (Hours)

Average Training
Hours

Course (Hours)

Average Training
Hours

4,012.38

2.17

15,768.26

8.51

100%

Note:
1. Total number of training hours of the year/total number of Taiwan employees of the year end of period = average number of training hours per person of the year
2. From 2020 to 2021, only the total number of training hours were recorded, without separating general courses and professional courses

Employees Training Hours and Sex Ratios at Taiwan All Levels in 2022
Total Course (Hours)
Level/ Gender

Average Training Hours

Male

FemaleMale

Female3,406.58

9,258.68

23.82

28.93

General Employees

1,462.8

1,236.6

5.46

6.68

Middle Supervisor

2,386.3

1,825.9

3.67

7.55

Senior Supervisor

155.2

48.5

4.56

5.39

Manufacturing Employees

Note: Total number of training hours of the year/total number of Taiwan employees of the year end of period = average number of training hours per person of the year

A review is conducted with thedirect supervisor and the work
priorities and schedule are adjusted
accordingly.

2022 HTC ESG Report156

Salary and Benefits
HTC is grateful for the hard work of all employees so we provide excellent salary and benefits, and comprehensive
welfare policies to share profits with our employees. In terms of salary and welfare policies, we strictly comply with local
labor laws and regulations, and do not discriminate based on gender, race, nationality, age, religion, or political position.
We also implement a systematic performance evaluation system that considers market level and future development
prospects, adjust salaries, and provide bonuses to align employee salaries with organizational performance, effectively
retain and motivate talent, and promote continuous innovation.

Competitive Compensation
HTC is committed to creating a high-talent density environment and has therefore developed a comprehensive salarysystem. It participates in international salary surveys every year to understand market standards and provide employeeswith salaries higher than the market average guaranteed. At present, the average base salary of employees is higher thanthe median of international salary surveys, and colleagues of many units have a guaranteed base salary that is higher
than the market average.
To retain outstanding talent, we also consider the annual performance of employees and market salary adjustment
forecasts, and provide appropriate salary adjustments. In addition, key technology colleagues working on key products
are provided with retention bonuses and long-term incentives ranging from 1 to 3 years. Non-managerial employees
are offered share subscriptions so they can partake in the substantial benefits of team performance on the company's
economic growth, stimulating the potential of employees and uniting them in a common goal.

HTC Average Compensation Ratio for Men and Women in Taiwan
Average Compensation Ratio (Male : Female)
Employee Type

Manufacturing Employee

General Employee

Middle Supervisor

Senior Supervisor

2020

1.01：1

1.18：1

1.24：1

1.44：12021

1：1

1.24：1

1.24：1

1.26：12022

1：1

1.12：1

1.2：1

1.46：1Note:
1 . The base average salary includes recurring salary (including basic salary and food allowance) and non-recurring salary (such as year-end bonus, performance bonus,
overtime pay, and allotment gains).
2. The data in this table is calculated based on the monthly salary of employees still in service as of December 2022.
3. In 2020, the data for general employees changed from 1.15:1 to 1.18:1, Middle Supervisor from 1.17:1 to 1.24:1, and Senior Supervisor from 1.06:1 to 1.44:1, so the information
requires revision.

Diversified Employee Welfare
To protect the rights and interests of employees and enhance the company's cohesiveness, we provide a sound welfare
system to all principal employees. In addition to the basic rights and interests of statutory labor insurance, healthinsurance, special leave, maternity leave, and parental leave, we also provide annual leave, flexible leave, and birthday
leave that is superior to the regulations, as well as travel subsidies, meal subsidies, birthday and other gifts for thethree important traditional festivals, weddings, funerals, celebrations, and hospitalization subsidies, as well as family
emergency subsidies. We are committed to improving employee wellbeing and creating a happy workplace environment.

2021

2022

2022 v.s. 2021

Full-time employees

2,481

1,786

1,093

61%

Average salary (NT$)

1,125,000

1,175,000

1,139,000

97%

Median salary (NT$)

886,000

949,000

897,000

95%

3,485,698,000

2,518,708,000

1,575,030,000

63%

Total employee salary and benefits expenses (NT$)

Insurance

Emergency
assistance funds

When employees suffer from illness, injury, disability, or death due to occupational disasters, HTC willcompensate them in accordance with the Labor Insurance Regulations or other laws and regulations

Pension systems

For those to whom the old system of the Labor Standards Act apply: a monthly pension of 2% of thetotal wages of workers shall be allocated, and shall be deposited and disbursed in a special account of
the Labor Retirement Reserve Supervision Committee.
For those to whom the new pension system of the Labor Pension Act applies: a labor pension
contribution rate of 6% of the monthly salary of the worker and the monthly salary classification tableapproved by the Executive Yuan shall be the contributed and deposited in the individual labor pension
account.

Encouragement fromsenior employees

HTC places great importance on employees who have made long-term contributions, and presents longterm service commemorative prizes and thank-you cards to employees who have been in service for 5,
10, 15, 20, and 25 years to thank their long-term contributions to HTC.

Employee
Association

We offer a variety of clubs, such as the badminton club, childcare club, senior club, and basketball club,encouraging employees to enjoy a healthy, balanced lifestyle, and have the opportunity to interact andcommunicate with colleagues from different units, building a healthy and extensive interpersonal network.

Improve facilities

2020

Stadium

The 17th floor of the Taipei office is a sports floor with a height of 10 meters, and can be used as an indoor
basketball or badminton court; employees can register for free to use the facilities.

Gym

HTC has set up a professional fitness space, including free weight training equipment and a heavy training
mat area. It also cooperates with professional fitness management consultants and entrusts professional
brands to manage facilities. Six coaches with first aid certificates or sports injury protection certificates are
stationed to provide on-site fitness guidance, course planning, sports injury protection, and other services.
In 2022, a total of 13,204 users availed of the facility.

Healthy Catering

HTC collaborates with professional catering suppliers to set up diverse food supply cabinets based on
overall dietary habits, and selects seasonal dishes that meet the needs of a balanced diet and nutritional
intake. Catering suppliers also need to pass CAS, TQF, ISO, HACCP, and other standards certification.
Pork products are strongly required not to contain ractopamine to ensure the dietary and health needs of
employees.
In response to environmental protection laws and regulations, the canteen provides reusable andrecyclable environmentally-friendly tableware, and counter and convenience store drinks also encourage
employees to bring their own cups and offer discount to those who do.

Basic benefits

Item

Since the date of commencement of employment, group insurance is purchased for employees,
providing substantial financial support in case of injury, illness, or hospitalization during employment.
As Covid-19 continued to impact Taiwan, HTC provided additional personal epidemic prevention
insurance for each colleague from 2021, and provided additional insurance for new employees until
epidemic prevention insurance products were taken off the shelves in the second quarter of 2022.

Rewards andbenefits

The average and median salaries of full-time employees not holding executive positions, andemployee salaries and benefits

Note: The data in this table is audited by accountants, and the total employee salary and welfare expenses refer to individual financial reports.

2022 HTC Regular Earnings Ratio for Men and Women in Taiwan
New Recruits Basic Pay / Taiwan Minimum Wage Rate
Five-day workweek scheme

100%

Monthly rotating shift scheme

100%

Note:
1 . Regular earnings include a base salary with additional benefits.
2. The 2022 Taiwan minimum wage is NT$25,250.

Benefits andsubsidies

157

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2022 HTC ESG Report158Benefits and subsidies

Meal allowance

General employees receive a full day subsidy of NT$ 130 for meals on weekdays, and a maximum subsidy
of 100 yuan for lunch and dinner on holidays. Clock-in-and-out employees and manufacturing employees
who work during regular working hours receive subsidies ranging from NT$ 35-50 per shift schedule, as
well as daily afternoon tea.

Transportation

HTC provides transportation shuttle services; the waiting area for the shuttle bus is equipped with a GPS
monitoring system, allowing employees to keep track of vehicles at all times so they can conveniently
plan their schedule. Starting from 2022, vehicles are equipped with card-swiping machines to record thenumber of passengers at each time slot so we can optimize the number of vehicles required at given
times of day and reduce carbon emissions.

Employee travelsubsidies

HTC's travel subsidy increases with annual salary, not only rewarding employees for their long-term
contributions to HTC, but also hoping that employees can enhance interpersonal relationships andphysical and mental health through tourism.

Children's
Scholarship

The HTC Welfare Commission provides scholarships of different amounts for employees' children fromprimary school through to junior college. Those who meet the standards can apply for scholarships,
which are NT$ 800 for elementary school, NT$ 1,600 for junior high school, NT$ 2,000 for high school(including first grade, second grade, and third grade in a five-year junior college), and NT$ 3,000 forjunior college (including fourth grade and fifth grade in a five-year junior college). The total number ofapplicants in the first semester of 2022 was 338, and 318 in the second semester.

Epidemic care

In early 2022, as the pandemic escalated, HTC provided free rapid screening reagents and a wellventilated and disinfected screening area at the health center to ensure that employees entering theoffice were not at risk of infection.
The company welfare committee quickly purchased and sent 9,500 doses of fast screening reagents(five doses per person) to all employees during the nationwide rush to purchase fast screening reagentsin May, providing the most efficient and timely care to employees during the most severe period of theepidemic, comprehensively ensuring their health.

2022 Solo Exhibition of Mr. Hung Tak Chung's [One Flower, One World]2022 Rev. Fung Kwan-lan of the Church of Christ and metal weaving artist Lin Sham-pin jointly exhibited "He
who is in me, I am in Him"

Artist Hsu Ming-fung's creation, "Wire Memory"

Happy Workplace
The most important asset of the HTC brand is the creativity of its employees. To stimulate innovative thinking, we place
great importance on frequent communication across departments and incorporate multiple employee interaction areasin the spatial design of the Taipei office, such as staggered sky bridges, channels connecting departmental offices, andtransparent communication spaces. We hope that these areas can enhance cooperation between departments and allow
creativity to be unleashed.
HTC emphasizes that sharing is the best way of interaction so we have set up the HTC Gallery in our Taipei office toprovide an art exhibition venue, not only helping young local artists showcase their creativity and work, but also
provide space for local schools and the public to visit, promoting interaction and exchange between HTC and the local
community.

In 2022, AN INA Gallery in South Korea showcased a joint exhibition of four Korean artists' work, including
LED digital images, modern Korean landscape painting creations, photography combined with weaving art,
and unique glass lens image book artwork.

A Working Environment Incorporating Brand Spirit
HTC Gallery
In March 2022, HTC Gallery exhibited Hong Teh-chung's solo creation exhibition "One Flower, One World".
Through microscopic flowers, the audience could see the strong tension of life inside, and the purest vitality
through the use of materials, lines, and colors in a concise and powerful manner. In June, Fung Kwan-lan, a clergy
member of the Church of Christ and a creator of video art, and metal weaving artist Lin Sham-pin jointly exhibited"He who is in me, I am in Him", a life documentary exhibition of nature images and hand weaving. In the severe
environment of the epidemic in Taiwan, HTC Gallery insisted on providing a diverse and creative workplaceenvironment for employees. In September, artist Hsu Ming-fung's creation, "Wire Memory", reflected the cleverinterplay between technological advances in human video recording and memory. While the gallery continued
its display, the pandemic started to ease. In December, we collaborated again with AN INA Gallery in South Korea
to hold a joint exhibition of four Korean artists' work, including LED digital images, modern Korean landscapepainting creations, photography combined with weaving art, and unique glass lens image book artwork. With allof these efforts, employees can wander around and enjoy themselves in an innovative, artistic, and joyful officeenvironment after returning to the workplace.

159

Friendly Workplace

2022 HTC ESG Report160

2022 Online HTC Town Hall
To protect the health of all employees and their families and avoid large-scale gatherings, the 2022 HTC Thanksgiving Yearend Gala was held online. During the event, the chair shared the company's vision and future plans, and awarded commemorative
medals to senior employees with 20 and 25 years of service. In addition, in recognition of our colleagues' hard work and contributions throughout the year, we allocated over NT$ 2 million in cash prizes, 400 mobile phones, and VIVE FLOW products asrewards, as well as an additional eight newly launched VIVE XR Elite units, hoping that employees could celebrate the New Year in style while staying safe.

Employee activities in 2022
To celebrate Mother's Day in May, we presented all our employeeswith a renowned German brand fragrant shower gel and cards. We
also specially arranged an online stress relief course called "Beautiful
Noontime, Healing Yourself" to help employees alleviate work stressand enjoy a beautiful afternoon.
Participation

99 people registered, 91 actual participants (92%
participation rate), satisfaction score of 4.63

Participation

161

206 people registered, 141 actual participants (participation rate68%), satisfaction rate of 4.67

Friendly Workplace

The Christmas Love Without Borders Event has aseating area and surrounding viewing area, withapproximately 230 participants.

Christmas
Love
Without
Borders

Father's
Day
Engineers'
Day

Participation

Participation

103 people registered, 99 actual participants (96%participation rate), satisfaction score of 4.8

Mother's
Day

The core spirit of the Engineer's Day is to face difficulties and solve problems,
which has always been HTC's core values. To celebrate the Engineer's Day in June,
we held a special online event featuring handmade cold light neon lights. The
event not only helped engineers relieve work stress, but also cultivated creativity
and manual skills.

In 2022, we innovated and broke through barriers. We got throughthe year and supported each other. We were grateful for theencouragement and support of every colleague and your family. We
want to pass on our love and share it with more people this Christmas
season.
On the day of the Christmas Concert, we invited performers, including
the creative talent Chen Weiquan, rocker Huang Mei Zhen, innovative
rapper Jin Yang, and new generation street dance group 94D, toperform, bringing more warmth and joy this Christmas.

With the gradual easing of the epidemic in Taiwan, many colleagues
with children experienced a new normal of working from homewhile taking care of their children. On Father's Day in August, HR
specially invited Dr. Huang Yining to hold a lecture on the themeof "Being a Parent with Peace of Mind, and Fearless Love", sharing
coping strategies and cases from the perspective of pediatricians,
helping everyone take better care of their children even under
exceptional circumstances such as the pandemic and working fromhome. We hope to assist our colleagues in building happier family
relationships through events such as this.

Thanksgiving

November is a time of harvest celebrations around the world, and also marked the first festive
event for HTC staff since returning to work. To show our gratitude to our staff, we expanded ourThanksgiving Day by giving each staff member a custom-made Kobayashi pancake and teriyaki giftbox, so that they can share their blessings with their family members. A Thanksgiving wall was also
set up on the ground floor for staff to express their gratitude to their families, colleagues, and friends.
We invited Dr. Ng York Kuen to hold an online seminar on the theme of "Love Every Moment, Make
Yourself Happier" to help colleagues face and manage emotional stress and enhance their senseof wellbeing. We believe that these three activities will bring our colleagues a lot of happiness thisThanksgiving!

End of year
celebration

At the end of the year as the epidemic eased, we specially planned a grand event to invite
colleagues and friends to come to Hsinchuang Sports Park, which covers an area of 66,000
m2, to relax and enjoy the competition. At the end of December, there was also a PLG
basketball game for the New Taipei Kings' 'Happy New Year Pre-Party' home game foreveryone. This activity was well-received by our colleagues, allowing everyone to enjoy an
unforgettable time.
Participation

Participation

121 people registered for the lecture and 152 people participated

Chairman Wang purchased over 1,200 tickets in advance for six PLG basketballmatches at his own expense as a gift to our colleagues.

2022 HTC ESG Report162

Occupational Health and Safety
Valuing Employee Health
HTC promotes various health programs with the three main directions of "Health Management", "Health Promotion","Healthcare " to help employees achieve a balance between work and life. Maintaining physical and mental health andensuring the health of every employee.

HealthManagement

HealthPromotion

Healthcare

Four major plans for labor health protection
Health checks for general employees and senior supervisors
Health checks for special operation employees
Analyses and evaluations of labor physical (health) examination results,
health management, and data preservation
Health examination anomaly tracking management and health guidancePrevention and treatment of occupational injuries and diseases, andmanagement of labor allocation and resumption of work
Epidemic prevention work matters
Health webpages and communications
Handle various health lectures and related health education activities basedon health examination analysis and seasons
Influenza vaccine injections, cancer screening, blood drives, infectious
disease prevention and control
Ophthalmic instrument setup and testing
Provide health webpages and communications
Set up a health center to coordinate and plan employees' physical andmental health related affairs
Evaluation and case management of occupational injury and illness andhigh-risk work related to occupational health
Employee Assistance Program
Breastfeeding room
General and emergency injury treatment
Physician on-site health services
Emergency response plan and training of emergency personnel

Annual Health Check Subsidies and abnormal tracking
After the employee undergoes a health examination, the caregiver and appointed on-site health service physician at
the health center classifies the employee into high-, medium-, and low-risk levels based on the examination results, andprovides on-site health service hours that are better than those specified by laws and regulations. Physicians provide
health guidance and education tailored to the individual needs of each employee, while caregivers are responsible forindividual health management and monitoring to understand health status. In addition, employees can also accessrelevant resources and referrals to receive comprehensive and appropriate healthcare.

HTC's General Health Examination Regulations and Implementation Status in 2022
Manufacturing Employees

General employees

Regulations

Article 20 and 46 of the “Occupational Safety and Health Act” (OSHA) and Articles 13-15 of the “Labor HealthProtection Regulations “Way

The health center will contact the hospital to offer healthcheck service

Staff can have a health check in numerous hospitals
cooperated with HTC

Frequency

Once every two years after arrival

With one-year seniority and once every two years% of people withabnormalhealth check

The total number of people is 82, with 36 people withabnormal results, accounting for 43.9%

The total number of people is 618, with 247 people
with abnormal results, accounting for 40%

Top 3 abnormal
itemsHigh triglycerides, high liver function index, and high bloodpressure

Excessive total sterols, overweight, and high-density
cholesterol

Follow-up

Based on health diagnosis and hierarchical management, it provides consulting services, health education, etc., to help
employees manage health-related matters.

Specific Health Check
In 2022, the work environment at the HTC Taoyuan Plant was carefully tested and monitored. Special health hazardous
operations, such as those involving ionizing radiation, dust and MDI, must receive a thorough health sweep. Employees
engaged in night work must undergo relevant special health examinations with an inspection rate of 100%.
Subsequently, seven employees with abnormal special health results in second-level management were arranged to go
to the health center for a consultation. Physicians provided personal health guidance for employees, and strengthened
disease-related health education and promotion. Currently, all environmental testing and cause analyses and monitoring
have been completed, confirming that the examination results are normal, and regular tracking and management of
employees' physical health will continue.

Health Management and Promotion
The HTC Health Center subsidizes employee health examinations in accordance with company regulations, provides
health protection services for all workers, and offers comprehensive healthcare for employees through cooperation with
Linkou Chang Gung Hospital's resident physician health services, including employee dependents in the preferential
range. In 2022, the number of people who should undergo physical examinations was 868, and the number of people
who completed physical examinations was 618; a completion rate of 71.2%. In 2022, a total of 82 manufacturing
employees completed physical examinations, of which 14 also completed special homework physical examinations; acompletion rate of 100%. There were no incidents of injury caused by overwork in 2022.

163

Friendly Workplace

2022 HTC Specific Health Check Implementation

Employees engaged in special health hazardous operations

No. of people requiring aSpecific Health Check

Inspection completion rate

14

100%

2022 HTC Specific Health Check Results
Employees under Grade 1 Control: all categories normal,
or no abnormal results as declared by a physician

7 peopleContinue with regular examinations

Employees under Grade 2 Control: part or all categories
declared abnormal and not related to work

7 people

Arrange a professional consultation with a physician according toLabor Health Protection Rules so employees receive specific healthinstructions and reinforced their health education.

2022 HTC ESG Report164Employee Assistance Program (EAP)Four major plans for labor health protection
Topic

Description

Annual performance

1.
AbnormalWorkloadtriggered
Disorders

To ensure the physical and mental health of employees,
measures have been established to prevent diseases caused byabnormal workloads, including identification and evaluation ofhigh-risk work such as shifts, night work, and long hours, as well
as physician interviews and health guidance, such as measures
to adjust or shorten work hours, and adjust work content.
Regular health checks, management, and promotion have also
been conducted, and the effectiveness evaluated and improved.
In addition, other relevant health and safety matters are also
being noted.

In 2022, 28 medium- to highrisk employees were screened
and notified, and interviews
with physicians were conductedto confirm that there were no
injuries caused by abnormal work
conditions.

2.
Maternal
HealthProtection Plan

Female employees subject to maternal health protection, i.e.,from the date of pregnancy to one year after delivery, and whenbreastfeeding, are included in the scope of protection. The
health center developed a "Protecting and Managing Maternal
Health" plan for such employees, and implemented measures
such as hazard assessment and control, physician interview
guidance, risk grading management, and work suitability
arrangements to ensure the physical and mental health offemale employees.

As of the end of 2022, a total of
23 employees completed risk
classification and protection
measures, and the results show thatthe working environment and job
responsibilities of female employees
are deemed to be at a safe level.

3.
Preventing
and Managing
Musculoskeletal
HealthTo maintain the physical and mental health of employees
engaged in repetitive operations, we have formulated a "Prevent
Musculoskeletal Disorders Triggered by Repeated Operations"plan to ensure the safety and physical and mental health of
employees, including taking the following measures:

Evaluate employees with abnormal
pain symptoms to prevent andpromote musculoskeletal diseases,
and investigate potential work
hazards such as repetitive work.
In 2021 and 2022, 916 and 405
questionnaires were collected,
and 105 employees who may
have work hazards were analyzed.
These employees were arranged
to have interviews and hazard
assessments with doctors at Chang
Gung Hospital, and suggestions
were made to adjust office chairs
and posture. Health guidance onbone and muscle health was also
provided. All employees with a highpain index underwent a consultationand follow-up with a physician.

4.
Execution
Infringement
Prevention

165

Friendly Workplace

1. During the biennial physical examination of manufacturing
department employees, a musculoskeletal symptom
questionnaire is distributed.
2. General employees conduct musculoskeletal symptom
surveys via email every two years.

To prevent employees from being infringed upon in theworkplace, we promote the Directions for the Prevention andManagement of Unlawful Infringement in the Execution of
Duties, and allocate relevant measures. In addition to providing
labor health services for medical staff, education and training
on preventing illegal infringement is also provided to makeemployees aware of the notification procedures.

Education and training wasprovided for employees in the
manufacturing department on theprevention of illegal infringement of
their positions, with a total of 640
employees trained in 2022.

HTC has been working with the Hsinchu Lifeline Association since February 2009 to provide employees withpsychological counseling and guidance with respect to working career, relationships, family and parenting, gendersentiments, mental illness, and physical and mental stress. Each year, employees can enjoy unlimited telephone
consultations and 6 free face-to-face consultation services, which are paid in full by the company. The analysis andrecommendation on employee consultation topics are reported regularly to the Occupational Safety and HealthCommittee. In 2022, a total of 466 employees used over-the-phone and in-person psychological counseling services; from2009 to 2022, 4,869 employees benefited from telephone and face-to-face consultations.
In addition, to take care of the physical and mental health of employees and relieve stress, each factory area has an
employee care room. We cooperate with professional units to provide comprehensive consulting services for employees.
Since 2022, the company has planned to provide online consultation channels to expand the scope and frequency of
employee assistance programs. In the 2022 employee consultation questions, 24% were related to career and work, 12%were related to relationships, and 10% were related to family issues. We will continue to pay attention to inter-personalcommunication and relationships within the company, and inject greater cohesiveness into the team through care andsupport.
With the ongoing impact of the Covid-19 pandemic, HTC is committed to employee health, work pressures, and reduced
efficiency caused by the pandemic, so we provided more appropriate consultation and assistance programs to stabilize
the physical and mental health of employees, and further improve productivity and competitiveness. This plan isapplicable to employees who work from home or have undergone home isolation or quarantine to assist them inresolving related issues that may affect work efficiency so they can devote themselves to their work and focus on their
physical and mental health.

Advisory and Assistance Channels
Manufacturing employees: dial extension 38585
General employees: dial extension 28585
Employee Help hotline E-mail: HelpMe_8585@htc.com

Achievements in the use of EAP
2020

2021

2022

Number of free phone inquiries

116

109

173

Number of Interviews

124

118

175

Hours of Interviews

674,625

623,700

720,462

Invested expense (NT$)

674,625

623,700

720,462

Year

COVID-19 Prevention Management
In 2022, due to new variants of the Covid-19 virus, the pandemic rapidly escalated, causing many changes in employees'
daily work and lifestyles. HTC, in accordance with the instructions of the Central Epidemic Command Center andcontinued epidemic prevention from 2020 to 2021, added and revised epidemic prevention related management
measures and purchased necessary epidemic prevention materials. It also required company employees, visitors,
contractors, etc. to cooperate with relevant epidemic prevention measures to ensure that epidemic prevention is
implemented in every office, catering, and fitness areas of the building. If a confirmed case is reported, the working areaand laboratory will be cleaned by professional cleaning personnel to ensure the safety of the working environment.

2022 HTC ESG Report166Occupational Safety and Health Committee
The Occupational Safety and Health Committee has 15 members and regular meetings are held every quarter. Amongthem, there are 6 labor representatives, which accounted for 1/3 of the total number, 1 healthcare professional, 2 labor
safety related engineer technician and 6 department managers,
supervisors and directors.
The HTC headquarters and factory have passed the ISO 45001
standard certification, and the management scope includes all
personnel engaged in labor activities within the factory, including
contractors. The construction management methods of relevant
contractors are made public to ensure that everyone is fully awareof them. All new employees receive complete occupational healthand safety training before commencing work with the company,
and implement worker protection measures.
We develop an occupational health and safety management planannually based on the status of health and safety management toprevent the occurrence of occupational incidents and to ensure thehealth and safety of workers. We regularly conduct fire drills andevacuation drills to respond to emergencies that may be caused byhuman negligence or natural disasters.

Emergency
response
plan
Post event
review
feedback

Emergency
identification

Emergency
measures in theevent

AspectMeasureManagement of Safety
and HealthIf there is any change in the organization or addition of new business units, this has to be reported to theauthorities concerned. Such information ranges from hazard statistics, hazard investigation analysis, meetings
convened by the company occupational safety and health committee, preventive inspections, and the
management of the entry of contractors into plants.

Education and Training for
Safety and Health

Provide occupational safety and health-related courses on a regular basis.

Standard Operating
Procedures and Job Safety
Analysis

Operational norms, maintain norms, and safety work procedures have been established.
Health and safety work guidelines have been updated, and hazard substance communication and risk
assessments are conducted.
Work safety work procedures, including operational and maintenance standards, have been developed,
health and safety work guidelines updates, and general hazardous substance studies and risk assessments
conducted.

Inspections for Safety and
HealthWe conduct regular and irregular inspections of various work environments, vehicles, equipment, facilities, andfire protection systems to ensure the safety of the work environment. It is also necessary to inspect protective
measures, personnel health and safety education records, and safety requirements for tools and equipment
before, during, and after use, and conduct on-site inspections and audits. These inspections include operating
environments such as organic solvent operations, ionizing radiation doses, and infrared detection.

Emergency Response

Implement an emergency response plan for the year and launch emergency response drills.
A 24-hour emergency rescue Hot Line has been set up as part of a fully comprehensive emergency
notification system.
Sufficient first aid personnel have been put in place according to regulations and handle training courses forfirst aid personnel.
16 Automated External Defibrillators (AED) are available at specific places within the company.
Annual fire emergency evacuation drills and personnel training are arranged.
Regular CPR lectures are held internally.

Positively Preventing Occupational
Accidents

Emergency Rescue
Measures

HTC has developed an automatic health and safety inspection plan in accordance with the Occupational Health and
Safety Act and occupational health and safety management measures to prevent the occurrence of occupational
disasters. We regularly take the initiative to inspect health and safety issues, eliminate or control hazards, and improve
unsafe working environments and mechanical equipment, and have established a system for inspecting and maintaining
mechanical equipment.

Health Management andEnhancing

We purchase medical consumables, conduct physical examinations for new employees, as well as healthexaminations and special hazard health examinations for in-service employees, and monitor abnormal results.
We also provide screening due to the pandemic.

Safety and HealthCampaign

We cooperate with the government to implement regulations and actively participate in various symposiums
to promote the importance of work safety. We also often obtain opinions on job security through internal
discussions and communications to improve work efficiency.

Our work covered seven aspects: “Management of Safety and Health”, “Education and Training for Safety and Health”,“Standard Operating Procedures and Job Safety Analysis”, “Inspections for Safety and Health”, “Emergency Response”,“Health Management and Enhancing” and “Safety and Health Campaign” for the comprehensive prevention ofoccupational accidents.
In the event of an occupational injury, our notification procedure is as follows

Education and training statistics for new and in-service colleagues in the past three years

Traffic accidents outside the factory area

NotifyImmediately notify
the supervisor or theforemanCall the police
Call the police to filethe case

2020

Go to a hospital
Injury treatment
Proof of diagnosis

Triplicate form of casereportRecordPrepare theoccupational injury
investigation andanalysis report

Accidents in the factory area

NotifyImmediately notify
the supervisor or theforeman

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Go to a hospital
Injury treatment
Proof of diagnosis

CourseHours Frequency

Responsible
Unit

Person

2021

2022

Total
Hour Person

Total
Hour Person

Total
Hour

General Training
Environmental protection andsafety and health education
training

3

On board

OES Dept.

120

360

208

624

233

699

Operational equipment hazard
notifications

3

After arriving at thedept. of work

Equipment

21

63

0

0

0

0

General labor safety and health inservice education training

1

Annual/ On-job
training

MFG
OES Dept.

988

988

1,138

1,138

1,117

1,117

Hazardous chemical use notice1

Annual/ On-job
training

MFG

458

458

222

222

165

165

2022 HTC ESG Report

168

RecordPrepare the occupational injury investigation andanalysis report
Carry out improvement based on the hazard factor

2020
CourseHours Frequency

Responsible
Unit

Person2021
Total
Hour Person

2022
Total
Hour Person

Total
Hour

Professional Training
Health and Safety Education andTraining For Class-1 Managers ofOccupational Health and Safety –Preliminary Training

42

pre-employment education training, three-day symposiums (36 hours), and Party A hazard notification course must becompleted before being allowed to be stationed. The professional skills training course content includes security guard
duty principles and special response methods, such as the pregnant women screening procedure requiring pregnant
women's label to be checked while refraining from contacting or holding a security bar during the inspection.
All security supervisors completed a one-hour training on the SOP of their job duties and on-duty conversation manners
in 2022. A daily 15-minute pre-work briefing was given before going on duty to review recent deficiencies.

Preliminary Training

External
training

4

12

5

15

4

12

0

0

2

84

0

0

Contractor Management

Health and Safety Education andTraining For Class-1 Managers ofOccupational Health and Safety –Retraining

6

Retraining/ 2 years

External
training

Occupational safety and healthmanager – Retraining

12

Retraining/ 2 years

External
training

4

24

3

18

3

18

Occupational safety and healthmanager – Retraining

12

Retraining/ 2 years

External
training

3

18

3

18

3

18

0

0

1

6

0

0

HTC places great importance on the safety of its contractors and partners, and regularly formulates a complete
occupational health and safety management plans to ensure the prevention of occupational disasters, and evaluate
contractors' health and safety management. Engineering personnel monitor contractors' work sites, and if any
unexpected event occurs, they may call 831919 at any time to request medical staff on the site or directly take personnel
to the health center. A notification form also needs to be filled out, and public injury incidents recorded.
If an injury occurs, we conduct an investigation and analysis to understand the cause of the incident and request
immediate on-site improvement. HTC also conducts health and safety hazard education and training for new
construction company personnel through the ISO 45001:2018 occupational health and safety system to promote theirunderstanding of the working environment, process safety regulations, and the use of firefighting equipment to improvesafety awareness.

Scaffolds assembly works supervisor –Retraining

6

Retraining/ 2 years

External
training

Scaffolds assembly works supervisor–
Preliminary Training

18

Preliminary Training

External
training

0

0

1

18

1

18

Hypoxia operations Supervisor –Preliminary Training

18

Preliminary Training

External
training

0

0

1

18

1

6

Organic solvent operation manager –Retraining

6

Retraining/ 3 years

External
training

3

6

7

21

2

6

Radiation workers receive continuous –Retraining

3

Retraining/ years

External
training

12

36

12

36

11

33

Supervisors in charge of roofing
operations – Retraining

6

Retraining/ 3 years

External
training

1

3

1

3

1

6

Initial training for dust operation
supervisors

18

Preliminary Training

External
training

0

0

0

0

0

0

The provision of site safety induction
sessions at construction sites.

Dust operation supervisor – Retraining

6

Retraining/ 3 years

External
training

2

12

0

0

0

0

Verifying the information about construction
workers and vendors.

Specific chemical substance operation
supervisor – Retraining

6

Retraining/ 3 years

External
training

2

12

0

0

0

0

Measure of Contractor
Construction
Management

Monitoring high-risk operations.
Personnel access control.
Ensuring construction site safety.

Stacker operator (>1 ton) – Retraining

3

Retraining/ 3 years

External
training

0

0

1

3

1

3

Fire prevention management personnel–
Retraining

6

Retraining/ 3 years

External
training

Conducting safety and health management
for new facility construction.

2

12

1

6

2

12

Obtaining the required insurance forcontractor employees.

Waste disposal personnel – Retraining

6

Retraining/ 2 years

External
training

0

0

0

0

2

12

Note: For the "Operational equipment hazard notifications", in 2021 and 2022, since there are no new direct colleagues, the number of people and the total number oftraining hours is 0.

Professional Security Service TeamAt HTC, the mission of security guards is not only to maintain security, but also to uphold a service-oriented work
attitude. With regard to the handling of and responses to all matters, they need to maintain HTC's assets and equipment
as if they were family property, while all employees and visiting VIPs and manufacturers should be seen as relatives andfriends in order to demonstrate that it is a trustworthy and professional security service team.
The salary of security guards must not be deducted for any cause other than their due labor insurance and National
Health Insurance (family members included). For labor insurance and National Health Insurance, employees should
be insured according to the salary level. In addition, according to the provisions of Article 8-2 Security Service Contract,

169

Friendly Workplace

Contractors Healthand Safety Audit
Incorporating requirements for safety & health managementin the written agreements with all contractors according to theapplicable regulations to clearly define contractor obligation
and responsibility, and evaluate all the risks in the working
environment including that from dangerous machines, so as tohave proactive control and eliminate potential hazards.
Formulating a system for on-site patrols and inspections according
to the applicable regulations and contractual requirements
about labor safety & health. On-site inspections and audits are
conducted on a regular/irregular basis., working precaution,
records of the safety & health education of the workers, and allsafety requirements to be met before, during and after the use ofmachines, tools and equipment.

2022 Occupational injury in Taiwan
Falls were the most common cause of occupational incidents in 2022. There was one such incident occurring in thefactory this year. There have been no occupational incidents in the Taipei office. This fall resulted in a loss of six working
days.
In 2022, HTC's average Injury Frequency Rate (FR) was 0.70 person times per million working hours, which includes
both the headquarters and the factory. In the Taipei office, this number is 0. In addition, the average Severity Rate (SR) of
disability injuries is 4.21 days per million working hours for the headquarters and factories, and 0 in the Taipei office.
In terms of occupational diseases, as HTC Company's working environment is not a heavily polluted environment nor a
toxic working environment, there have been no occupational diseases caused by the nature of the work or the workplacein 2022.

2022 HTC ESG Report170Types of non-employee workers and their job responsibilities at HTC
Type

Count

Cleaning personnel

55

Horticultural personnel

4

Security andReceptionist Clerk

20.8

Catering staff

59

Engineering
construction personnel

2,897

Dispatched personnel (0

Disability injury frequency and Disability Severity Rate of HTC and non-HTC workers in thepast three years

Work content:
Year

Cleaning and disinfection of public areas

Injuries that
resulted indisability

Days away from work due
to injury that resulted indisability

FR

SR

FSI

Staff

2,416,264.25

5

117

1.24

48

0.25

2020

Non-staff
worker

Untraceable

0

0

0

0

0

Staff

1,966,666.85

2

8

1.02

4

0.06

2021

Non-staff
worker132,927

0

0

0

0

0

Staff

1,425,178

1

6

0.7

4

0.05

293,086.5

0

0

0

0

0

-

-

0.3

1.8

-

Catering suppliers (serving counters, tea shops, coffee bars)
Contractors entering the factory for construction
No dispatched personnel in 2022

2022

2022 Main types and statistics of occupational injuries(Unit: person)

TargetInjury resulting in disability
Clamping

Falling over

CollidingCutting

Staff

0

1

0

0

Non-staff worker

0

0

0

0

Description

Improvement

While picking up testing machine, employees should not step firmly on thestep as it could result in accidental falls or someone hurting their knee on theedge of the step and causing injury.

1. Post safety notices on the stairs
2. Personnel safety promotion

Non-staff
workerNote:
1. Occupational accidents, as any diseases, injuries, disabilities, or deaths of workers caused by buildings, machinery, equipment, raw material, material, chemical, gas,
vapor, dust or other at the place of duty, or as a result of work activities, or due to other occupational causes, should be included in the calculation of the disability
injury rate/ Disability Severity Rate. Injuries caused by personal factors, such an injury during the commute to work, is not included in occupational disaster statistics.
2. Employee working hours are calculated as the sum of working hours of a year = no. of employees by the end of every month x monthly working days x daily working
hours (subject to employee type)
3. Working hours of non-HTC workers: provided by contractors and punch cards of short-term workers
4. Days away from work: days unable to work (rest days): includes occupational disaster rest days and excludes sick leave and menstrual leave
5. FR (Disabling Injury Frequency Rate): (Injury Frequency Rate per Million Hours Worked) = Incidence of Lost-Time Injury×1,000,000/total hours worked. FR is counted
to the second decimal place, excluding the following.
6. SR (Disabling Injury Severity Rate): (Lost Day Injury Frequency Rate per Million Hours Worked) =Days Lost for Lost-Time Injury ×1,000,000 /Total Hours Worked. SR
is taken as an integer, excluding decimal places.
7. Frequency-Severity Indicator (FSI) √ (FR × SR) ÷ 1,000
8. 1,000,000 work hours rate indicates the occupational injuries of every 500 full time workers in one year, based on 2,000 working hours per full time worker.

HTC Description of Occupational Injury Types and Improvement Falls, electric shocks, fire,clamping and confined work space

Falling overTotal working
Hours(Unit: Hours)

Gardening and greening maintenance of factory and office buildings
Personnel entering and exiting the factory and office building areas (including employees, visitors,
manufacturers), and vehicle management

Note: The scope of disclosure for non-employee workers of HTC is consistent with the scope of this report, mainly in the Taiwan region of HTC.

Type of injury
that resulted indisability

ObjectRecordable injuries and the severity of injuries that resulted in disability of HTC and non-HTC
workers in the past three years

Year
2020
2021

2022

ObjectTotal working
Hours(Unit: Hours)

Recordable
Occupational
Injury Count

Recordable
Occupational
InjuryRate

Staff

2,416,264.25

5

1.24

Non-staff worker

Untraceable

0

0

0

0

0

Staff

1,966,666.85

3

1.53

0

0

0

132,927

0

0

0

0

0

1,424,303.19

1

0.7

0

0

0

293,086.5

0

0

0

0

0

Non-staff worker
Staff
Non-staff worker

Deaths countSeverity
Occupational
Injury Count

Severity
Occupational
Injury Rate

0

0

0

Note:
1. Employee working hours are calculated as the sum of working hours of a year = no. of employees by the end of every month x monthly working days x daily working
hours (subject to employee type)
2. Working hours of non-HTC workers: provided by contractors and punch cards of short-term workers
3. Recordable injury rate: (recordable cases x 1,000,000) / total working hours
4. The Disability Severity Rate is the frequency of severe injuries per Million Hours Worked(exclude death) = Disability Severity Injuries ×1,000,000/Total Hours Worked;
severe occupational injury refers to a disability caused by an occupational injury or injury that continues to affect the employee for longer than six months.
5. 1,000,000 work hours rate indicates the occupational injuries of every 500 full time workers in one year, based on 2,000 working hours per full time worker.

171

Friendly Workplace

2022 HTC ESG Report172Social Investment and Contribution –HTC has long been committed to the social
care and public welfare, and supports andsponsors the "HTC Foundation". HTC advocateshumanitarianism and we have developed ourcompany character culture at a local level. While
we continue to pursue business growth andtechnical innovation, we care very much about
disadvantaged families, and give their children
opportunities to receive the education. This isa distinctive corporate culture of which HTC is
rightfully proud.
In the meanwhile, HTC also utilizes the industry
characteristics and helps society create more
opportunities through R&D and innovation. We
are committed to inventing novel products, notonly to achieve the Sustainable Development
Goals (SDGs) issued by the UN in 2015, but also
to meet various needs of society and implementsocial care to actively practice Corporate
Sustainability.

HTC Foundation
The HTC Foundation focuses on promoting character education by working to help children and youngsters develop
good character by supporting both schools and teachers. We place great importance upon building up moral characterand culture for communities and towns in cooperation with local government, care for disadvantaged families, providing
their children with opportunities to receive education, and raising funds for environmental and ecological preservation.
We engage in public interest activities to espouse humanitarianism and contribute to a peaceful and harmonious society.
The Foundation plays an important part in community engagement and social services to instill the core values ofintegrity, honesty, care, love, positive thinking, and respect for natural resources. The HTC Education Foundation invested
NT$ 42 million on education in 2022, while HTC Social Welfare and Charity Foundation spent NT$ 58 million on charity
business.

VisionEveryone has a good personality. People respect and support each other. Let
us make the planet lovely together.
Our mission is to instill core values of integrity, honesty, care, love, positive
thinking, and respect for natural resources by untiring efforts to educate.

Many Blessings Courses
The HTC Education Foundation is committed to the development of character education for young people. It
hopes to shape character through joint efforts by schools, parents, and society. Following the principle of “lighting
a candle rather than cursing the darkness,” the foundation has established the “Many Blessings Course” for juniorand senior high school students. These free courses each last for five weeks. They include three hours of training
and activity per week. In 2022, a total of 10 classes of five schools will be implemented, and a total of 227 students
will be benefited. The students get the energy to move forward and make changes inspired by their instructors
and volunteers, They are encouraged to become leaders who can actively serve the public and use their own
power to change the world.

Character Town
HTC foundation not only launches character education in schools but also signs “Character Town” with various
towns in Taiwan. Character Learning Course is launched monthly or quarterly with a way of character andsetting a good example with our own conduct. Group discussion and experience sharing with different themes
and related to work will be arranged timely. Training targets include directly-affiliated units such as the Township
Village Office, Police Station, Public Hospital, Fire Brigade, Land Office, and Household Registration Office, etc.
Parts of institutes turn into membership in the character association. Leaders in the institutes encourage gooddeed via communication and integration of thoughts, which becomes the internal operating mechanism.

Award Scheme for Schools of Character-Building Education in Practice
Conduct character-building education seminars, advocate core education that emphasizes the cultivation ofpeople as a whole and lifelong learning and development, implement national and regional publicity of studies,and invite schools to organize character-building education leading teams through character-building educational
plans and sessions for school teams to build consensus and formulate practice guidelines.
After the above activities, schools below senior high school level that are interested in practicing comprehensive
and extensive character-building education to shape people's characters and the campus culture can apply to
our Association for relevant plans. Internal staff of the Association will conduct a preliminary review, and thenexternal experts, scholars, retired principals, or teachers with expertise in character-building education will be
invited to form an audit team for a second review. The final selected schools will receive an annual award of
NT$ 200,000-300,000 from the Association. Each term lasts for three years and will be used to promote characterbuilding education in the school. Schools must give a public presentation of the results of the program at theend of the three-year term. In 2022, the first 42 school awards were distributed, and the second session of school
selection will continue in 2023.

175

Social Investment and Contribution

2022 HTC ESG Report176

Promote art and culture through technology

Other Social Engagement Activities

VIVE Arts took the lead in using immersive technologies including VR, XR and metaverse in the field of art and culture,creating ground-breaking digital artwork and experiences, stimulating artists and creators' unlimited creativity,
protecting the world's heritage and culture, providing new ways of participation and expansion for more audiences, andlifting art to a new level.

The HTC Child Support ClubVIVE Arts has collaborated with more than 50 art institutions worldwide, including esteemed establishments such as
the American Museum of Natural History, the Louvre, and the Victoria and Albert Museum. In 2022, VIVE Arts not only
partnered with the Triennale Di Milano, renowned as a benchmark of design, but also collaborated with Art Basel,
showcasing the new VR works of Albert Oehlen and Wu Tsang. Alongside the showcased artwork, VIVE Arts has engaged
in commercial activities through a digital art platform. This platform enables individuals and creators to experience,collect, and share digital artwork. For instance, VIVE Arts partnered with the Mucha Foundation to launch NFT sales.

The HTC Child Support Club was founded in 2006 as a spontaneous association formed by HTC employees. The members
raise money that is donated to the Taiwan Fund for Children and Families (TFCF) to support the sponsorship of children
in need. In 2022, a total of 43 children were adopted, including 35 in China and 8 in foreign countries (including
Guatemala, Jordan, the Philippines, Senegal, Sri Lanka, Kyrgyzstan, and Paraguay etc.).

VIVE Arts collaborates with Icelandic artist Kristjana S. Williams to launch the artist's first NFT artwork

Triennale Di Milano made its first foray into a new VR
experience at the 23rd International Exhibition

VIVE Arts once again collaborates with Dominique Gonzalez-Foerster
to present new VR artwork at the Serpentine Gallery, London, UK

VIVE Arts presents "Of Whales", a new artwork by Wu Tsang, at Art Basel in Switzerland

177

Social Investment and Contribution

2022 HTC ESG Report178

Appendix –Appendix 1: Participation in Industry Associations and
Non-Profit Organizations
Organization Name

Membership

SDA (Secure Digital Card Association)

General member

Wi-Fi ( WECA Wireless Ethernet Compatibility Alliance)

General member

GSM Association

MemberTAICS (Taiwan Association of Information and Communication Standards )Khronos Group-OpenGL(Open Standards for media Authoring and Acceleration)(The Industry's Foundation for High Performance Graphics)

General member

MemberNMEA (New Media Entertainment Association)

Group member

JBRC (Japan Battery Recycling Collection)

General member

Taoyuan importers & exporters chamber of commerce

General member

CCSA (China Communications Standards Association)

General member

Bluetooth SIG (Bluetooth Special Interest Group)

General member

CTIA (Cellular Telecommunications Industry Association)
IARC (Taiwan Industry-Academia–Research for Collaboration-Integaration-Development
Assocation)

Operators and industry memberGroup member

Participation in 2023
TCFD
Responsible Business Alliance

Affiliate member

CDP Supplier chain Member

Stardand Member

Metaverse Application Alliance

179

Appendix

Supporter

Founding Member and President

2022 HTC ESG Report180

Appendix 2: Major Topics Management Approach Assessment
Material topics

Integrity Management

Material topics

Regulatory Compliance

GRI Standard

GRI 205-2 、GRI 205-3

GRI Standard

GRI 2-27

Chapter

Integrity Management

Chapter

Regulatory CompliancePositive impact (potential):

Positive impact (actual):

The implementation of an Ethical Management policy is conducive to building corporate credibility and brand value, andenhancing consumer trust in the corporation. It also cultivates corporate responsibility for environmental issues, helping to
reduce the negative impact on the environment. It also helps to establish strong employee relations and a good corporate
culture, enhance employee satisfaction and loyalty, thus boosting work efficiency and productivity.
Impact Description

Impact Description

Negative impact (potential):
Poor ethical management, such as fraudulent behavior or false advertising, may damage consumers' trust in thecorporation, leading to a decrease in revenue and negative impact on the corporate image. Violating environmental
regulations may affect the sustainability of local communities and natural resources. Infringement of labor regulations
or unfair salary treatment may lead to employee dissatisfaction and damage morale. In addition, dishonest competitive
behavior may also have an undesired impact on other companies and consumers, and even lead to the loss of partners anddamage to the company's reputation.

Policy or
Commitment

To implement the ethical management policy and prevent dishonest behavior, the Procedures for Ethical Management
and Guidelines for Conduct have been approved by the board of directors.
A separate Employee Code of Conduct will be established to disclose the guidelines for our employees during company
operations. The audit department will strictly supervise the formulation and implementation of ethical management
policies and regularly report to the board of directors.

Metrics and Targets

Improve the completion rate of new employee Anti-Corruption Training and Employee Code of Conduct training by ≥80%.

Mechanism of
Evaluation

Establish an Ethical Management Promotion Group to supervise the effective operation of the preventive measuresestablished for ethical management.
The rules of procedure of the board of directors include a system for avoiding conflicts of interest of directors.
Internal department heads, the human resources department, and the auditing unit all accept appeals, and the humanresources department is responsible for implementing disciplinary procedures.

Communication
Channel

HTC has a dedicated mailbox for reporting corruption (anti-corruption@htc.com). Anyone who discovers that HTC
employees are involved in corrupt or other illegal activities can file a report to this email address.

Annual Actions andMeasures

The board of directors has passed the Procedures for Ethical Management and Guidelines for Conduct.
No corruption-related incidents occurred in 2022.

Material topics

Information Security and Privacy Protection

GRI Standard

Custom theme

Chapter

Information Security Management

Policy or
Commitment

ESG Policy

Metrics and Targets

No major illegal incidents with fines exceeding NT $1 million have occurred.

Mechanism of
Evaluation

Domestic related environmental, social and economic
regulations
Responsible Business Alliance (RBA)EU WEEE- Waste Electrical & Electronic Equipment
France Repairability Index
EU RoHS / EAC RoHS / China RoHS

Communication
ChannelInternal channel: e-mail, announcements, improvement proposals, discussions during Health and Safety Committee
meetings.
External stakeholders can use esg@htc.com to file an appeal, and the case will be handled by the responsible unit
internally.

Annual Actions andMeasures

No major illegal incidents occurred in 2022.

Material topics

Corporate Governance

GRI Standard

Custom theme

Chapter

Corporate Governance

HTC is a member of the software and hardware information industry, and maintaining good information security measures
can effectively protect commercial interests and intellectual property rights.

Negative impact (potential):

Without sufficient implementation of security measures, sensitive information may be leaked, which not only directly affects
commercial interests, but also the reputation and the business.
HTC adheres to the ISO 27001 Information Security Standard, establishes and promotes various information security
measures, and conducts annual risk assessments and internal audits on privacy and information security.
HTC actively establishes and promotes information security and personal data protection policies to protect company
information and ensure compliance with relevant information security and privacy protection regulations in various
countries.

Policy or
Commitment

Metrics and Targets

The completion rate of the annual HTC Privacy and Security Awareness training for all staff is ≥ 90%.
The completion rate of the annual HTC Product Security training for all engineering functional department employees is ≥90%.

Mechanism of
Evaluation

ISO 27001 Information security management systems
ISO 27701 Privacy Information Management System

Communication
ChannelInternal: e-mail, announcements
Outside channel (info-security): global-privacy@htc.com, security@htc.com
Outside channels (intellectual property rights): Global-Copyright@htc.com

Annual Actions andMeasures

Publish monthly privacy and information security newsletters, and 100% of software development related personnel tocomplete and pass product security training.
Conduct 36 internal audits on personal data protection and information security.
Complete 32 product and service privacy and security reviews, and 16 partner privacy and security assessments.
No personal data or information leakage incidents in 2022.

181

Appendix

ISO 50001 Energy Management System
ISO 14001 Environmental Management
ISO 14064-1 Greenhouse Gas Emissions
CDP
Supplier assessment and management mechanism.

Negative impact (potential):
Impact Description

Positive impact (actual):
Impact Description

Compliance with regulations is fundamental to an enterprise. Adhering to economic and social regulations can have a positive
impact on HTC's organizational activities and business relationships, not only increasing the trust of customers and partners,
but also maintaining the integrity of the ecological environment at environmental sustainability level. The biggest benefit ofcomplying with regulations is preventing the enterprise from being exposed to legal risks, thereby reducing litigation, fines,
and other penalties that may affect its reputation.

Improper corporate governance may lead to conflicts of interest, and loss of trust among investors resulting in investor loss
and affecting the overall interests of HTC and shareholders.

Policy or
Commitment

Emphasize corporate governance and operational transparency, formulate and implement a corporate governancestructure in accordance with relevant laws and regulations, such as the Company Law and the Securities and Exchange
Law, and continuously improve management performance.
Appropriately and effectively allocate the powers and responsibilities of the board of directors, managers, and shareholders
to establish and maintain a management team accountable to shareholders.
Protect the rights and interests of investors and other stakeholders through a systematic ESG execution system

Metrics and Targets

Improve corporate governance evaluations

Mechanism of
Evaluation

Independent director
Audit committee

Communication
ChannelIssue annual reports publicly every year, and hold regular shareholder meetings to communicate with shareholders.
Maintain smooth communication channels with stakeholders by providing ESG information on the company's official
website.
Contact for Investors:
Tel: +886-2-8912-4138
E-mail: ir@htc.com
Company Spokesman and Investment Relations
Shen Daobang / spokesman@htc.com

ISO 27799 Information Security Management in HealthInternal Audit System
Evaluations by the relevant authorities (Corporate GovernanceEvaluation of TWSE)

2022 HTC ESG Report

182

Material topics

Material topics

Corporate Governance

Annual Actions andMeasures

The Corporate Governance Best Practice Principles have been formulated as the basis for establishing an effective
corporate governance structure.
The results of the 8th (2021) and 9th (2022) corporate governance evaluations ranged from 21% to 35%.
Evaluate the annual performance of directors in accordance with the director performance evaluation method.

Material topics

Innovation Management

GRI Standard

Custom theme

ChapterInnovation Management

Positive impact (potential):
Impact Description

Innovation can help HTC create value, stimulate employee creativity, respond to market changes, generate new products
and processes, and achieve sustainable goals.

Combining cutting-edge technologies such as VR, AR, AI, 5G, and Blockchain with arts and humanities to unleash
people's imagination..
Invest in innovative resources and open the door to the metaverse with a high interaction and immersive experience

Policy or
Commitment

Metrics and Targets

N/A

Mechanism of
Evaluation

Patent management

Communication
ChannelInternal R&D innovation strategy specification
Reward employees for invention and creation

Annual Actions andMeasures

Since our establishment, HTC has invested heavily in cultivating R&D talent and developing technical innovation. Currently,
our in-house R&D employees make up 45% of all HTC's global employees, the investment of which is about 54% of thetotal operating revenue.
In 2022, a total of 546 global patent applications were filed, with a total of 12,597 global patents have been approved asof the end of 2022.
HTC has launched innovative smart products such as VIVE Flow and mobile 5G enterprise private network REIGN CORE,
which led to the metaverse.

Circular Economy and Product Lifecycle

Communication
ChannelGlobal sales locations, recycling systems, and mechanisms

Annual Actions andMeasures

The WEEE recovery rate of products is higher than 75% (regulatory standard 55%).
In 2022, new products such as the VIVE wrist tracker and Desire 22 Pro have higher recycling rates than regulatory
standards; HTC phones have earned a green label of 7.5 points on the French repair index.

Material topics

Energy Management

GRI Standard

GRI 302-1、GRI 302-4

Chapter

Energy and Emissions

Positive impact (potential):
Impact Description

Effective energy management can help HTC improve energy efficiency, reduce the negative impact on theenvironment, and also reduce HTC's operating costs and energy regulatory risks.

Negative impact (potential):
Poor energy management policies may continue to cause energy waste and increase operating costs, or may
generate regulatory risks due to increasingly strict energy policies.

Policy or
Commitment

HTC uses electricity as its main energy source, and we reduce electricity usage through various energy-saving
improvement plans.
Use green energy, including low-polluting energy sources such as solar panels, heat pump systems, and electricvehicles.

Metrics and Targets

he goal for 2022 is to achieve an energy-saving ratio of >1%.
The power-saving ratio has been set based on the HTC's net zero path and starts from 2023.

Mechanism of
Evaluation

ISO 50001 Energy Management System
ISO 14064-1 Greenhouse Gas Emissions

Communication
ChannelInternal channel: e-mail, announcements, improvement proposals, discussions during Health and Safety
Committee meetings.
External stakeholders may file an appeal through esg@htc.com

Annual Actions andMeasures

Promote the net zero project and use the climate related financial disclosure framework to assess the risks andopportunities of climate change. Use the GHG Protocol to conduct a simple carbon inventory of HTC parent andsubsidiary companies, plan the net zero carbon path, and develop corresponding short-, medium-, and longterm carbon reduction strategies and management indicators based on the SBTi methodology.
Conduct a complete annual inventory of greenhouse gases in categories 1 to 3 of the value chain upstream,
midstream, and downstream.
A total of 19 energy-saving plans were promoted in the year, and a total of 164,884.440 kilowatt hours ofelectricity were saved, equivalent to 593.584 GJ. The total reduction in carbon emissions reached 83.926 tCO2e,
saving a total of NT$ 494, 653.
Add dedicated charging stations for electric vehicles to encourage employees to use green-energy vehicles.

Material topics

Circular Economy and Product Lifecycle

GRI Standard

GRI 306-1、GRI 306-2、GRI 306-3

Chapter

Sustainable Design

Material topics

Customer Privacy, Safety and Health Management

Positive impact (potential):：GRI Standard

GRI 416-1、GRI 416-2、GRI 418-1

The circular economy is one of the means to achieve sustainability, which can promote HTC to enhance climate-related
resilience and energy-saving and carbon reduction processes, in line with net zero goals.

Chapter

Customer Management

Impact Description

Negative impact (potential):
If HTC does not follow the circular economy policy, it not only wastes a lot of resources, but it will be difficult to achieve net
zero goals.

Policy or
Commitment

Consider reducing waste and reusing resources in the early stages of product development, and ensure a good material
recovery rate.
Properly implement recycling measures through collection, recycling, and reuse to reduce environmental pollution causedby harmful substances and improve the utilization rate of natural resources.

Metrics and Targets

Product's WEEE recycling rate is higher than that stipulated in the regulations (55%).

Mechanism of
Evaluation

183

EU WEEE- Waste Electrical & Electronic Equipment
France Repairability Index

Appendix

CDP

Positive impact (potential):
Impact Description

Good customer privacy and health and safety management policies can establish customer trust, promotecustomer satisfaction, and bring stable business benefits to HTC.

Policy or
Commitment

HTC promises to strictly abide by customer contracts and confidentiality commitments, and establish policies
and internal control mechanisms to strictly control relevant information provided by customers, including
information related to customer patents and intellectual property rights.
HTC pays close attention to consumer health, and products and packaging materials do not contain toxic
substances. VR products are labeled with continuous use time in the manual to reduce the impact on the body.

Metrics and Targets

Customer satisfaction ≥ 4.0 (out of 5 points)
No violation of customer privacy rights or leakage of customer information damaging to customer rights
occurred.

Mechanism of
Evaluation

Personal Information Management System
Customer satisfaction questionnaire
Privacy protection regulations in various countries

EU RoHS / EAC RoHS / China RoHS

2022 HTC ESG Report184

Appendix 3: GRI Content Index

Material topics

Customer Privacy, Safety and Health Management

Communication
ChannelCustomer Satisfaction Survey
Customer service hotline: 0809-090-166, please call: 02-2162-6788
Set up local customer service hotlines in 11 countries around the world and build more than 59 websites indifferent countries.
Provide PR, Service, Copyright, Security and other different types of e-mail.

Annual Actions andMeasures

Sign confidentiality agreements with customers and suppliers, and include customer privacy protection courses
in new employee training.
No safety issues causing product recalls occurred in 2022, nor were there any appeals related to customer healthissues.

Material topics

Human Right, Diversity and Inclusiveness

GRI Standard

GRI 405-1、GRI 405-2、GRI 406-1、GRI 407-1、GRI 408-1、GRI 409-1、GRI 410-1

Chapter

Human Rights Management and Commitment

Positive impact (potential):
Impact Description

As a company that values human rights, HTC makes its colleagues feel valued and cultivates a harmonious andunited company culture, promoting the overall growth of the company's interests.

Negative impact (potential):
Neglecting human rights and diversity may lead to disharmony in company culture, talent loss, and tension in labor
relations.

Policy or
Commitment

Metrics and Targets

Mechanism of
Evaluation

HTC values labor human rights, upholds the basic principles of equality, inclusiveness, and opposition todiscrimination, and follows the Code of Conduct for Responsible Business Alliances (RBA).
HTC is committed to adhering to the highest standards of environmental, social, and ethical integrity, respecting
human rights and the workplace equality of every employee.
Require all suppliers to fulfill their corporate responsibilities to the same standard.
Maternal protection rate is 100%.
Direct employee satisfaction ≥ 3.8.
Annual turnover rate of direct personnel ≤ 11%.
No use of conflict minerals.
Responsible Business Alliance (RBA)The Universal Declaration of Human Rights (UDHR)
Modern Slavery Act Transparency Statement

Communication
ChannelThe grievance mechanism includes employee complaint hotline, complaint suggestion box, grievance e-mail,and sexual harassment grievance mail box－ Manufacturing employees company extension 38585－ Other general employees company extension 28585－ Employee helpline e-mail HelpMe_8585@htc.com

Annual Actions andMeasures

Annual human rights related risk due diligence
Announce the latest version of the Modern Slavery Act Transparency Statement and jointly comply with it with
suppliers.
Respect human rights and workplace equality of every employee, prohibit child labor, prioritize gender equality,
provide a good work environment, and implement a friendly workplace.

185

Appendix

Statement Of Use

HTC Corporation has reported in accordance with the GRI Standards for the period 1 January 2022
to 31 December 2022.
HTC Corporation has reported the information cited in this GRI content index for the period 1
January 2022 to 31 December 2022 with reference to the GRI Standards.

GRI 1 Used

GRI 1: Foundation 2021

Applicable GRI Sector Standard(s)NoneDisclosed

Location [Referring Page]

RemarkGRI 2: General Disclosures 2021

P.009 About HTC

2-1

Organizational details

2-2

Entities included in the organization’s sustainability
reporting

2-3

Reporting period, frequency and contact point

2-4

Restatements of information

2-5

External assurance

2-6

Activities, value chain and other business relationships

2-7

Employees

P.145-147 Overview of Human Resource Structure

2-8Workers who are not employees

P.171 Table 'Types of Workers and Their Job
Responsibilities for HTC Non-Employees'

2-9

Governance structure and composition

P.001 Report Scope and Boundary
P.001 Report Scope and Boundary
P.001 Time Coverage of Disclosure
P.002 Contact Us
P.199-200 Attached Table: Information Reorganization
List
P.002 Process of Reporting Quality Management
P.201 Assurance Statement
P.012 Global Operation Locations
P.013-014 Industry Overview

P.063 Organization Structure
P.064 Board of Directors
P.051 ESG Committee
P.064 Board of Directors

2-10

Nomination and selection of the highest governance
body

2-11

Chair of the highest governance body

2-12

Role of the highest governance body in overseeing
the management of impacts

P.051 ESG Committee

2-13

Delegation of responsibility for managing impacts

P.051 ESG Committee

2-14Role of the highest governance body in sustainability
reportingP.051 ESG Committee

2-15

Conflicts of interest

2-16

Communication of critical concerns

2-17Collective knowledge of the highest governancebody

P.064 Nomination and Selection of the Board of
Directors
P.064 Board of Directors
P.064 Benefit Avoidance

P.052-053 ESG Management Procedures and Systems
P.064 Board of Directors
P.064 Benefit Avoidance
P.064 Board of Directors
P.051 ESG Committee
P.065 Board of Directors Continuing Education

2022 HTC ESG Report

186

Disclosed

Location [Referring Page]

RemarkDisclosed

Location [Referring Page]

Performance Evaluation of the Board of Directors:

201-2

The Board of Directors' Performance Evaluation
Report issued by the Taiwan Corporate Governance
Association

Financial implications and other risks andopportunities due to climate change

201-3

Defined benefit plan obligations and other retirement
P.158-159 Diversified Employee Welfare
plans

2-18

Evaluation of the performance of the highest
governance body

2-19

Remuneration policies

P.065 Compensation Policy for Employees andManagers

2-20

Process to determine remuneration

P.065 Compensation Committee

2-22

Statement on sustainable development strategy

P.005-006 Letter from Chief Sustainability Officer
P.047 Our Sustainability Commitment

2-23

202-1

Ratios of standard entry level wage by gendercompared to local minimum wage

P.157-158 Competitive Compensation

GRI 204: Procurement Practices 2016
204-1

P.130 Sustainable Supply Chain

Proportion of spending on local suppliers

GRI 205: Anti-Corruption 2016
205-2

Communication and training about anti-corruption
policies and procedures

P.066-067 Strict Mechanisms for Avoiding Conflictsof Interest

205-3

Confirmed incidents of corruption and actions taken

P.066-067 Strict Mechanisms for Avoiding Conflictsof Interest

P.108 Sustainable Environment

Policy commitments

P.091-096 Climate Change Management

GRI 202: Market-Presence 2016

P.139 Human Rights Management and Commitment
P.047 ESG Management
P.139 Human Rights Management and Commitment
P.066 Integrity Management

None

P.066 Integrity Management
2-24

P.047 Our Sustainability Commitment
P.059-060 Risk Management
P.057-058 Stakeholder Engagement
P.066-067 Strict Mechanisms for Avoiding Conflictsof Interest

2-25

P.059-060 Risk Management

Approach to tax

P.069 Tax Guidelines

207-2

Tax governance, control, and risk management

P.069 Tax and Risk Management

207-3

Stakeholder engagement and management ofconcerns related to tax

P.069 Stakeholder Engagement
GRI 302: Energy 2016

302-1

Energy consumption within the organization

302-4

Reduction of energy consumption

P.066-067 Strict Mechanisms for Avoiding Conflictsof Interest

Processes to remediate negative impacts

P.068 Regulatory Compliance
2-27

207-1

P.143-144 Listening to the Voice of the Employee

Processes to remediate negative impacts

P.181-185 Major Topics Management Approach
Assessment

2-26

GRI 207: Tax 2019P.139 Human Rights Management and Commitment

Embedding policy commitments

P.143-144 Listening to the Voice of the Employee

Compliance with laws and regulations

P.139-141 Human Rights Topics

P.098-099 Energy and Emission
P.103-104 The Use of Green Energy
P.100-101 Energy-saving and carbon reduction Actions

GRI 303: Water and Effluents 2018
303-1

Interactions with water as a shared resource

P.110-111 Water Resource Management

303-2

Management of water discharge-related impacts

P.110 Sewage Treatment

303-4

Water withdrawal

P.110 Sewage Treatment

2-28

Membership associations

P.180 Participation in Industry Associations and NonProfit Organizations

2-29

Approach to stakeholder engagement

P.052-053 ESG Management Procedures and Systems

305-1

Direct (Scope 1) GHG emissions

P.100 Energy and Emission

2-30

Collective bargaining agreements

P.143-144 Listening to the Voice of the Employee

305-2

Energy indirect (Scope 2) GHG emissions

P.100 Energy and Emission

305-3

Other indirect (Scope 3) GHG emissions

P.100 Energy and Emission

305-5

Reduction of GHG emissions

P.100-101 Energy-saving and carbon reduction Actions

GRI 3: Material Topics 2021

3-1

3-2

List of material topics

P.055-056 HTC 2022 Material Topics and Boundary

3-3Management of material topics

P.181-185 Major Topics Management Approach
Assessment

Topic-Specific Disclosures: GRI 200 (Economic topics)
GRI 201: Economic-Performance 2016
201-1

187

Direct economic value generated and distributed

Appendix

GRI 305: Emissions 2016

P.052-053 ESG Management Procedures and Systems

Process to determine material topics

RemarkGRI 306: Waste 2020
306-1

Waste generation and significant waste-related
impacts

P.119 Hazardous Waste Management

306-2

Management of significant waste-related impacts

P.115 Product Recyclability Design

306-3

Waste generated

P.119 Hazardous Waste Management

306-4

Waste diverted from disposal

P.120 Hazardous Waste Management
P.122 Waste Reduction, Recycling and Reuse
GRI 308: Supplier Environmental Assessment 2016

P.025 Overview of Financial Performance

2022 HTC ESG Report188Disclosed

Location [Referring Page]

308-1

New suppliers that were screened using
environmental criteria

P.131-132 The HTC Supplier social responsibility
Assessment and Audit

308-2

Negative environmental impacts in the supply chain
and actions taken

P.131-132 The HTC Supplier social responsibility
Assessment and Audit

GRI 401: Employment 2016
401-1

New employee hires and employee turnoverP.148 The Global Distribution of HTC Personnel

401-2

Benefits provided to full-time employees that are notprovided to temporary or part-time employees

P.157 Salary and Benefits

Parental leave

P.142-143 Work-life Balance Support

401-3

P.158-159 Diversified Employee Welfare

RemarkDisclosed

406-1

402-1

P.143 Listening to the Voice of the Employee

Incidents of discrimination and corrective actions
taken

407-1

Occupational health and safety management system

P.167 Occupational Safety and Health Committee

403-2

Hazard identification, risk assessment, and incident
investigation

P.167-168 Positively Preventing Occupational
Accidents

403-3

Occupational health services

P.163-165 Health Management and Promotion

403-4

Worker participation, consultation, andcommunication on occupational health and safety

P.167 Occupational Safety and Health Committee

403-5

Worker training on occupational health and safety

P.168-169 Positively Preventing Occupational
Accidents

403-6

Promotion of worker healthP.163 Health Promotion
P.123-124 Hazardous Substances and Chemical Control

403-7

Prevention and mitigation of occupational healthand safety impacts directly linked by business
relationships

P.131-132 The HTC Supplier social responsibility
Assessment and Audit
P.168-169 Positively Preventing Occupational
Accidents
P170 Contractor Management

403-9

Work-related injuries

P.170-172 2022 Occupational injury in Taiwan

403-10Work-related ill healthP.170-172 2022 Occupational injury in Taiwan

P.140-141 Human Rights Due Diligence (HRDD) Form
None

Operations and suppliers in which the right toP.140-141 Human Rights Due Diligence (HRDD) Form
freedom of association and collective bargaining may
None
be at risk
GRI 408: Child Labor 2016

408-1

Operations and suppliers at significant risk forincidents of child labor

P.140-141 Human Rights Due Diligence (HRDD) Form
None

GRI 409: Forced or Compulsory Labor 2016409-1

Operations and suppliers at significant risk forincidents of forced or compulsory labor

P.140-141 Human Rights Due Diligence (HRDD) Form
None

GRI 410: Security Practices 2016

GRI 403: Occupational Health and Safety 2018
403-1

RemarkGRI 407: Freedom of Association and Collective Bargaining

GRI 402: Labor Management Relations 2016
Minimum notice periods regarding operationalchanges

Location [Referring Page]

410-1

Security personnel trained in human rights policies orprocedures

P.159 Professional Security Service TeamGRI 414: Supplier Social Assessment 2016414-1

New suppliers that were screened using social criteria

P.131 The HTC Supplier social responsibility
Assessment and Audit

414-2

Negative social impacts in the supply chain andactions taken

P.132 The HTC Supplier social responsibility
Assessment and Audit

GRI 416: Customer Health and Safety 2016
416-1

Assessment of the health and safety impacts ofproduct and service categories

416-2

Incidents of non-compliance concerning the healthand safety impacts of products and services

P.080 Customer Management
P.080 Customer Management
P.068 Regulatory Compliance: No related situation

GRI 417: Marketing and Labeling 2016
417-1
417-2
417-3

Requirements for product and service informationand labeling
Incidents of non-compliance concerning prod-uct
and service information and labeling
Incidents of non-compliance concerning mar-keting
communications

P.115-116 Product Recyclability Design
P.068 Regulatory Compliance: No related situation
P.068 Regulatory Compliance: No related situation

GRI 418: Customer Privacy 2016

GRI 404: Training and Education 2016404-1

New employee hires and employee turnoverP.156 Training Result

404-2

Programs for upgrading employee skills andtransition assistance programs

P.152-156 Talent Cultivation and Development

Percentage of employees receiving regularperformance and career development reviews

P.155 Training and Performance Integration

404-3

418-1

Note:

Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data

P.068 Regulatory Compliance: No related situationmeans material topics

GRI 405: Diversity and Equal Opportunity 2016405-1

Diversity of governance bodies and employees

405-2

Ratio of basic salary and remuneration of women tomen

P.064 The composition of HTC Management(Directors) by Age & GenderP.145-146 Overview of Human Resource Structure
P.147 The Global Distribution of HTC Personnel
P.158 Competitive Compensation

GRI 406: Non-discrimination 2016

189

Appendix2022 HTC ESG Report190

Appendix 4: SASB Index
HTC selects applicable indicators from the 11 sectors and 77 industries in the SASB Material Map of the SASB Guidelines,
taking into account the company's own operational activities and referring to the recommendations of the regulatory
authority to disclose:
Sector: Technology & Communications
Industry: Hardware and Software & IT Services

TC-HW-410a.1 Percentage of products by revenue that contain IEC 62474 declarable
substancesStandard

2020

2021

2022

RoHS

100%

100%

100%

REACH

100%

100%

100%

HTC hardware products include VR devices and mobile phones. Currently, due to the lack of requirements for IEC 62474
in sales regions, this disclosure data adopts RoHS and REACH standards. According to statistics, the revenue proportionof hardware products sold in the current year under these two standards is 100%, and materials with SVHC>0.1% havebeen declared in REACH's SCIP database in accordance with regulatory requirements.

SASB Index：Hardware
Scope: The organizational boundary mainly covers the company office buildings and plants in Taiwan. All HTC business
operations in Taiwan are within the boundary. The scope of financial information is consolidated financial disclosure;the scope of human resources information covers employees worldwide.

TC-HW-410a.2 Percentage of eligible products, by revenue, meeting the requirements for
EPEAT registration or equivalen

TOPIC

SASB CodeACCOUNTING METRIC

Location

Product
Security

TC-HW-230a.1

Description of approach to identifying and addressing
data security risks in products

P.070 Information Security
Management

Among existing HTC products, mobile phones meet EPEAT registered requirements. Currently, no EPEAT certification
has been applied for mobile phone products, and no evaluation has been conducted on whether they meet EPEAT
certification standards.

Employee
Diversity &Inclusion

TC-HW-330a.1

Percentage of gender and racial/ethnic grouprepresentation for (1) management, (2) technical staff,and (3) all other employees

P.139 Human Rights Management
and Commitment

TC-HW-410a.1

Percentage of products by revenue that contain IEC
62474 declarable substances

P.192 SASB Index：Hardware

TC-HW-410a.2

Percentage of eligible products, by revenue, meeting therequirements for EPEAT registration or equivalent

P.192 SASB Index：Hardware

TC-HW-410a.3

Percentage of eligible products, by revenue, meeting
ENERGY STAR® criteria

P.192 SASB Index：Hardware

TC-HW-410a.4

Weight of end-of-life products and e-waste recovered,percentage recycled

P.108 Sustainable Environment

TC-HW-430a.1

Percentage of Tier 1 supplier facilities audited in the RBA
Validated Audit Process (VAP) or equivalent, by (a) all
facilities and (b) high-risk facilities

P.130-132 Sustainable Supply Chain

TC-HW-430a.2

Tier 1 suppliers’ (1) non-conformance ratewith the RBA Validated Audit Process (VAP) or
equivalent, and (2) associated corrective action
rate for (a) priority non-conformances and (b)other non-conformances

P.130-132 Sustainable Supply Chain

TC-HW-440a.1

Description of the management of risks associated withthe use of critical materials

P.192 SASB Index：Hardware

Product
Lifecycle
Management

Supply Chain
Management

Materials
Sourcing
SASB CodeACTIVITY METRIC

Location

TC-HW-000.A

Number of units produced
by product category

P.025 Overview of Financial Performance

TC-HW-000.B

Area of manufacturing
facilities

From 2020 to 2022, HTC had a factory area of 30,391.13 m2.

TC-HW-000.C

Percentage of production
from owned facilities

TC-HW-410a.3 Percentage of eligible products, by revenue, meeting ENERGY STAR® criteria
HTC products are not suitable for the type of product registered by Energy Stars. HTC's existing external power supply
meets energy efficiency standard Level VI required by the US Department of Energy, and the sales of products that meet
Level VI standard account for 100% of revenue.

TC-HW-440a.1 Description of the management of risks associated with the use of criticalmaterials
Regarding the risk assessment of key substances, in each project development stage early material preparation/
replacement is required based on the raw material cycle and recent acquisition difficulty/supply and demand status toassess whether there are risks. In the current bill of materials, graphite is commonly used. The supply of graphite has
been evaluated and there is no shortage of supply in the coming years. We will continue to observe and update it asrequired.

SASB Index：Software & IT Services- Voluntary disclosure
In addition to the hardware industry in which HTC operates, we independently disclose indicators related to significant
themes in the same industry category.
Scope: The organizational boundary mainly covers the company office buildings and plants in Taiwan. All HTC business
operations in Taiwan are within the boundary. The scope of financial information is consolidated financial disclosure;the scope of human resources information covers employees worldwide.
TOPIC

Appendix

ACCOUNTING METRIC

Location

TC-SI-130a.1(1) Total energy consumed,(2) percentage grid electricity,(3) percentage renewable

P.098-099 Energy and Emission

TC-SI-130a.2(1) Total water withdrawn,(2) total water consumed,
percentage of each in regions with High orExtremely High Baseline Water StressP.193 SASB Index: Software & IT Services
P.110-111 Water Rescoure Management

TC-SI-130a.3

Discussion of the integration ofenvironmental considerations into strategicplanning for data center needs

P.193 SASB Index: Software & IT Services

Not disclosing sensitive information
Environmental
Footprint ofHardware
Infrastructure

191

SASB Code2022 HTC ESG Report

192

TOPIC

Data Privacy& Freedom ofExpression

ACCOUNTING METRIC

Location

TC-SI-220a.1

Description of policies and practices
relating to behavioral advertising and user
privacy

P.194-195 SASB Index: Software & IT Services

TC-SI-220a.2

Number of users whose information isused for secondary purposes

P.196 SASB Index: Software & IT Services

TC-SI-220a.3

Total amount of monetary losses as aresult of legal proceedings associated withuser privacy

P.196 SASB Index: Software & IT Services

TC-SI-220a.4(1) Number of law enforcement requests
for user information, (2) number of users
whose information was requested, (3)percentage resulting in disclosure

TC-SI-130a.3 Discussion of the integration of environmental considerations into strategicplanning for data center needs

P.196 SASB Index: Software & IT Services

The main considerations for the data center environment are as follows:

TC-SI-220a.5

List of countries where core products
or services are subject to governmentrequired monitoring, blocking, content
filtering, or censoring

P.196 SASB Index: Software & IT Services

TC-SI-230a.1(1) Number of data breaches, (2)percentage involving personallyidentifiable information (PII), (3) number ofusers affected

P.196 SASB Index: Software & IT Services

TC-SI-230a.2

Description of approach to identifying andaddressing data security risks, including
use of third-party cybersecurity standards

P.197 SASB Index: Software & IT Services

TC-SI-330a.1

Percentage of employees that are (1)foreign nationals and (2) located offshore

P.197 SASB Index: Software & IT Services

TC-SI-330a.2

Employee engagement as a percentage

P.139 Human Rights Management and Commitment

TC-SI-330a.3

Percentage of gender and racial/ethnic
group representation for (1) management,(2) technical staff, and (3) all other
employees

P.147 HTC Global Site Employee Structure Distribution

Total amount of monetary losses as aresult of legal proceedings associated with
anticompetitive behavior regulations

P.197 SASB Index: Software & IT Services

TC-SI-550a.1

Number of (1) performance issues and(2) service disruptions; (3) total customer
downtime

P.197 SASB Index: Software & IT Services

TC-SI-550a.2

Description of business continuity risks
relatedto disruptions of operations

P.071 Information Security Management

Data Security

Recruiting &Managing a
Global, Diverse& Skilled
WorkforceIntellectual
Property
Protection &Competitive
Behavior
Managing
Systemic
Risks fromTechnology
Disruptions

According to the World Resources Institute (WRI) water pressure assessment, Taoyuan and Xindian do not belong to highor extremely high-risk areas, so the proportion is 0%.

SASB Code

TC-SI-520a.1

HTC uses KPIs different from those recommended by SASB to address water conservation issues in water scarce areas.
HTC's water-saving goal is to reduce water intake each year by improving sewage recovery. Please refer to the "Water
Resource Management" section for details.

1. Continuous operation of power: Environmental factors may cause long-term power outages, resulting in the inabilityof computer room system services and facilities to affect operations.
2. Energy efficiency of information center facilities: The data center and operational information hardware are outdated
and have high maintenance risks, which are more energy-intensive in terms of energy saving and carbon reduction
Incorporate into policy implementation:
1. The data center adopts three types of configurations to reduce the impact of environmental factors, including the new
self-built computer room (Taoyuan Factory Computer Room Consolidation Plan), cloud services (Azure, AWS, GCP),
and rented IDC computer rooms (Chunghwa Telecom), which are set up according to the needs and applicability of theoperating system and services.
2. The data center is included in the performance improvement plan, including updating information equipment,
prioritizing the procurement and use of energy-saving products, and removing or reducing service systems with low
resource usage (Virtual Service System, transforming traditional architecture into hyper-converged infrastructure).

TC-SI-220a.1 Description of policies and practices relating to behavioral advertising and user
privacy1.
(1) ISMS (Information Security Management System) and PIMS (Personal Information Management System):

TC-SI-130a.2 1) Total water withdrawn, (2) total water consumed, percentage of each inregions with High or Extremely High Baseline Water Stress
2020

2021

2022

2,673.68

2,965

3,863

Tap water

130,911

84,147

85,260Subtotal

133,584.68

87,112

89,123---45,021.69

38,018.32

37,966---

SourceRainwater recycling
Total water
withdrawn (m³)

At locations with high or extremely high baseline water
scarcity
Water intake as a percentage of total water intake
Total water consumed (m³)

Domestic water

At locations with high or extremely high baseline waterpressure
Water consumption as a percentage of total water
consumption

Note:
1. Total water intake = head office and factory (tap water usage) + Taipei office (tap water usage) + rainwater recovery
2. Total water consumption = 282 liters of daily water consumption per person - 200 liters of daily sewage per person = 82 liters of daily water consumption per person *working days * number of people in the year / 1000

193

Appendix

Our company has established an internal ISMS and PIMS in accordance with ISO/IEC 27001:2013, ISO/IEC 27701:2019,and major national personal information regulations. The ISMS reflects the goal of our company's information security
policy, which is to protect the confidentiality, integrity, availability, and compliance of our company's information assets.
It is applicable to all personnel of our company, and all personnel of our company should fulfill their duty of care toprevent illegal access, damage, modification, or leakage of information. The security of all information held by ourcompany (including third-party information) is strictly controlled and properly handled according to our company's
information classification standards, based on its confidentiality, sensitivity, and importance. Sensitive personal
information and general personal information both fall into the category of confidential information of the company,
and the processing of such confidential information is subject to strict process standards, including the approval levelof information disclosure, mandatory signing of nondisclosure agreements, confidentiality labeling, mechanisms toprevent unauthorized access/inspection/disclosure, limitations on data storage vehicles and methods, storage period,transmission encryption, and destruction processes. In addition, the PIMS is a management policy and guideline
developed to standardize the collection, processing, and use of personal information, promote the reasonable use of
personal information, and prevent personal information from being stolen, tampered with, damaged, lost, or leaked.
Content includes the commitment and support of high-level management to personal data protection, investment
in human and resources, training and promotion of privacy information management systems, management ofcompliance with personal data protection regulations and updating of regulations inventory, operating process
for exercising data subject rights and managing appeals or complaints, prevention/ response/ handling of security
accidents in response to security accidents, and inventory of departmental behavior processes and risk assessment,etc.

(2) Internal and external audits:
According to the requirements of our company's ISMS, our dedicated unit conducts an annual audit of ISMS and PIMS
operations to confirm whether the systems are effective. Our company has also obtained ISO/IEC 27001:2013 andISO/IEC 27701:2019 certifications within the certification scope. During the certification period, the certification unit
verifies operations within our company's certification scope annually.

2022 HTC ESG Report

194

6.
2.
(1) Data collection: The Company collects and processes personal information only in the following circumstances: a.
complying with the Company’s legal obligations; b. when the Company has to meet contractual obligations enteredinto with the data subject; c. when protecting vital interests of data subject; d. when the personal data subject gives
explicit consent or if the processing is necessary; e. when it is in the Company's legitimate interests and the collection
and processing is confirmed after a legitimate interests assessment; or f. when it is in the public interest or exercise of
authority vested in the Company. Where applicable law requires the right to opt out of data collection and processing,
the Company will also design and develop mechanisms to comply with the requirements of the law.

(2) Use/processing/disclosure of personal information: The Company uses/processes personal information with theconsent of the personal data subject in the following circumstances: (1) to provide required services or to fulfill
contracts with the personal data subject, (2) with explicit consent of the data subject, (3) when the Company has alegitimate interest in improving customer experience and service quality, and (4) to fulfill legal obligations. We may
share personal information with service providers, wireless network operators, advertising network providers,co-branding partners, and third parties who undertake the sale or transfer of our business or assets to the extent
permitted by law.

(3) Data retention: The Company has a standard document on the retention period of personal data, which varies
depending on the type of personal data (personal information provided by the data subject when creating a user
account, customer file information, transaction information, etc.) and the specific service content.

(1) Transparency: The Company has a privacy policy regarding personal information collected/used/shared by Group
companies in connection with users' use of the Group's websites, devices, applications, and services, which explicitly
states that the Company may use third-party advertising service providers to place advertisements on Company
services. To provide such advertising, third parties may automatically collect specific information about users, theirdevices, and their use of services, including information about visits to our and other companies' websites andapplications, the user's IP address, the user's internet service provider, and the browser used to access our websites.

(2) Consumer control: Users of some of our applications and services may choose to accept our privacy policy (including
cookie policy) before providing personal information to determine whether or not we may collect their personal
information or transfer their personal information to third parties.

(3) Data security: The Company discloses in its Privacy Policy that it endeavors to protect personal information bytaking appropriate physical, technical, and organizational measures to prevent unauthorized or unlawful access to,or use, processing, or alteration of, personal information obtained by the Company from users through its services
and to prevent the breach or loss of such personal information, such as anonymization, attempted anonymization,
encryption (e.g., encryption via (HTTPS) during transmission), and restricted access, etc.

(4) Material changes: When the privacy policy of our company changes, users will be informed in an appropriatemanner.

TC-SI-220a.2 Number of users whose information is used for secondary purposes(4) Data destruction: Our company has standard documents for the destruction of personal data, which include thedeletion of personal data files within a certain period of time after completion of the specific purpose for which thedata was collected, the principle of data destruction that it cannot be restored to the original appearance of the data,
the request for appropriate destruction processes and evidence from outsourcing manufacturers, and the recordingof the method/time/location/proof of destruction when destroying personal data files.

3. Our company has established risk assessment and management guidelines to ensure that all individual asset related
processing procedures comply with laws and regulations. Each department of our company conducts internal
personal information risk assessment and handling operations every year or when there are new or significant
business changes. Each department first conducts a regular inventory of personal information collection andprocessing operations, and then conducts a data protection impact assessment on the individual asset collection
and processing operations. The analysis includes privacy self-assessment items (mainly focusing on whether
each department follows the PIMS), control maturity and instructions, and identification of the affected personal
information groups/weaknesses/threats, etc. Through a risk assessment model, the level of risk of personal data canbe determined and quantified as the basis for selecting control measures. Corresponding control measures are taken
based on the level of risk, including the proposal of risk improvement plans.

4. In our privacy policy applicable to the US market, we disclose that we do not intentionally collect or request personal
information of minors under the age of 14, nor do we intentionally allow such minors to register accounts with our
products or services, and our products and content are not directly aimed at minors under the age of 14 or children
recognized under relevant child privacy laws. If discovering that a minor under the age of 14 has provided personal
information to our company without the consent of parents, we will destroy the personal information as soon as
possible.

Our company did not use user information for secondary purposes during the reporting period.

TC-SI-220a.3 Total amount of monetary losses as a result of legal proceedings associated withuser privacy
During the reporting period, our company did not experience any legal proceedings or economic losses caused by events
related to user privacy.

TC-SI-220a.4 (1) Number of law enforcement requests for user information, (2) number ofusers whose information was requested, (3) percentage resulting in disclosure
During the reporting period, our company has not received any requests from the government or law enforcement
agencies for providing user information.

TC-SI-220a.5 List of countries where core products or services are subject to governmentrequired monitoring, blocking, content filtering, or censoring
During the reporting period, our company has not been required by any government/judicial unit/investigative unit tomonitor, block, or review the content of our products or services.

TC-SI-230a.1 (1) Number of data breaches, (2) percentage involving personally identifiable
information (PII), (3) number of users affected
During the reporting period, no incidents of personal information infringement occurred in our company.

5. The Company uses/processes personal information with the consent of the personal data subject in the following
circumstances: (1) to provide required services or to fulfill contracts with the personal data subject, (2) to obtainconsent of the personal data subject, (3) when the Company has a legitimate interest in improving customer
experience and service quality, and (4) to fulfill legal obligations. We may share personal information with service
providers, wireless network operators, advertising network providers, co-branding partners, and third parties who
undertake the sale or transfer of our business or assets to the extent permitted by law.

195

Appendix

TC-SI-230a.2 Description of approach to identifying and addressing data security risks,
including use of third-party cybersecurity standards
1. Information Security Policy: To effectively manage the potential risks of privacy protection and information security,
HTC has continuously optimized the PIMS and ISMS, and continued to promote privacy protection and information
security through a dedicated team of legal, product security, and information security departments to implement
employee education and training, product development and design, manufacturer management, and information
2022 HTC ESG Report196

security incident management. We also conduct annual risk assessments and internal privacy and information
security audits with the aim of ensuring the effective implementation of management systems and reducing risks
through audits. Additionally, the BS10012 certification was passed in December 2018, and ISO 27001 and ISO 27701
certifications were passed in August 2021 and August 2022.

2. Information security risk identification process: HTC adheres to the requirements of data privacy from productdesign stage, requiring the development team to develop products in accordance with HTC's Privacy Protectionand Security Software Development Manual. From software design stage, it conducts threat analysis modelingand security design review, as well as security controls such as code review, personal privacy impact analysis, andsecurity risk assessment, as well as import privacy and security audit workflow (including automated tools suchas information security detection, static code scanning tools, vulnerability scanning, etc.). After the product andservice are launched, in addition to tracking software security vulnerability fixes and providing them to relevant
development teams to ensure that the product and service comply with privacy protection and information
security requirements, a dedicated contact method and team are provided to external personnel for reporting andinterpreting the event, and to respond to external notifications in a timely manner.
In addition to following ISO 27001 information security management and implementing daily management operations
to ensure the confidentiality, availability, and integrity of information, HTC also establishes mechanisms such as
firewalls, intrusion detection, and antivirus systems. All HTC employees must complete privacy and information security
awareness training and test every year, which includes the importance of data protection, company data handlingprecautions, key information security controls, personal data processing precautions, supplier privacy and security
assessment social media and marketing activities precautions, information security and personal information protection
reminders, asset security threat introductions, and providing information on the company's personal information
protection and information security related resources. Personnel involved in product planning, development, testing,system management, operations, and supplier management are required to complete additional courses and sit the"Annual Product Security Process" and "Personal Information Protection Guide". Personnel responsible for productdevelopment are also required to complete training courses and tests on threat model analysis and security coding
standards for key coding languages. HTC also sends monthly privacy and information security reports to all employees,
providing latest news and policy release information related to privacy protection and information security.
HTC's emphasis on information security is not only focused on internal companies, but also on external suppliers. During
the evaluation phase, various aspects of information security control review are implemented, and we require external
suppliers to comply with applicable privacy protection regulations and HTC's privacy protection and information
security requirements with the aim of jointly reducing the risk of information security and ransomware. The
information security assessment of external suppliers includes information security policies of suppliers, information
security organization, human resource management, communication and operation security, information security
incident/incident management, business continuous management, physical environment management, access control,
vulnerability management, etc.

TC-SI-330a.1 Percentage of employees that are (1) foreign nationals and (2) located offshore
Number of foreign employees

2020

2021

2022

405

325

334

Number of foreign employees/
total number of employees (%)

16%

15%

15%

Foreign employees

400

316

321

Foreign employees/ total numberof employees (%)

15%

15%

15%

TC-SI-520a.1 Total amount of monetary losses as a result of legal proceedings associated with
anticompetitive behavior regulations
During the reporting period, our company did not experience any economic losses caused by legal actions related to anticompetitive behavior.

TC-SI-550a.1 Number of (1) performance issues and (2) service disruptions; (3) total customer
downtime
During the reporting period, our company did not experience any technical interruptions.

197

Appendix

Appendix 5: Sustainability Disclosure MetricTelecommunication & Internet Services
NO.

METRICCATEGORY

Annual Disclosure (Referring Page)

UNIT OF MEASURE

1

Total energy consumed, percentage
grid electricity, percentage renewable

Quantitative

P.098-099 Energy and Emissions

Gigajoules (GJ)、
Percentage (%)

2

Total water withdrawn, total water
consumed

QuantitativeP.110-111 Water Resource Management

Thousand cubic meters(m³)

3

Amount of hazardous waste frommanufacturing, percentage recycled

Quantitative

P.120 Hazardous Waste Management

Metric tons (t),Percentage (%)

4

Explain the type, number and rate ofoccupational hazards

QuantitativeP.170-172 2022 Occupational injury in Taiwan

5

Product Lifecycle Management：
Weight of end-of-life products ande-waste recovered, percentage
recycled

Quantitative

P.108 Sustainable Design

6

Description of the managementof risks associated with the use ofcritical materials

Discussion
P.192 SASB Index：Hardware TC-HW-440a.1
and Analysis

7

Total amount of monetary losses as aresult of legal proceedings associatedwith anticompetitive behavior
regulations

Quantitative

None

Reporting currency

8

Number of units produced byproduct category

Quantitative

P.025 Overview of Financial Performance

Various, by productcategory

Percentage (%),Quantity
Metric tons (t),Percentage (%)

n/aAppendix 6: Climate-related information of listed for IPO
companies
The risks and opportunities caused by climate change to the company and the relevant
response measures taken by the company
No. Item
1

Describe the boards and management's role in assessing and managing climaterelated risks and opportunities

2

Describe the climate-related risks and opportunities the organization has
identified over the short, medium, and long term

3

Describe the financial impact on the organization from extreme climate change
and relevant corporate transformation

4

Explain how the identification, assessment, and management of climate risk areincorporated into the overall risk management system.

5

Provide details of the scenarios, parameters, assumptions, analytical factors, andmajor financial impacts if scenario analysis is used to assess resilience to climatechange risks.

6

Describe the content of the plan, as well as the indicators and targets used to
identify and manage physical and transition risks if there is a transition plan for
managing climate-related risks.

7

Explain the basis for price determination if internal carbon pricing is used as aplanning tool.

8

Provide information on the activities covered, the scope of greenhouse gas
emissions, planning timeline, annual progress, and other relevant details if climaterelated targets are determined. Explain the sources and quantities of carbon
offsets or the number of renewable energy certificates (RECs) used for carbon
reduction if carbon offsets or RECs are used to achieve these targets.

9

Greenhouse Gas Inventory and Assurance Engagements

Execution Status

Disclosed information can be found in the"Climate Change Management" chapterof this report and the independent TCFD
report.

Though no internal carbon pricing has
been established so far, we are planning
to introduce it in the second half of 2023.

Disclosed information can be found in the"Climate Change Management" chapterof this report and the independent TCFD
report.

2022 HTC ESG Report198

Appendix 7: Attached Table: Information Reorganization List
In this annual report, due to some changes in the statistical methodology of previous information, there have been instances of
information rewriting. Please refer to the attached table for details. The changes are all changes in the presentation of calculation
methods and therefore have no significant impact.

The Electricity Usage in Taiwan
The situation of information re-compilation in 2020 and 2021 shows that the electricity consumption of tenants was not deductedduring the calculation of Building H in 2020. The original data was 75610.74 GJ, which was corrected to 9558.875 GJ in the current
year's report. Additionally, due to incorrect original calculation figures in 2021, the calculation results were corrected in the current
report.
2020(Original)

2020(New Data)

2021(Original)

2021(New Data)

TY3 Building

31,992.48

Only the number of decimal places was changed.

27,32029,789.280

H Building

75,610.74

9,558.875

8,192

Only the number of decimal
places was changed.

Taipei Office 1

21,295.04

Only the number of decimal places was changed.

30,692

18,732.683

Taipei Office 2

4,437.43

Only the number of decimal places was changed.

9,878

4,021.841

133,335.69

67,283.824

76,08260,735.308

YEAR

GJ
HQ & Plants

Total

The calculation formula for the amount of tap water used in the Taipei office in 2021 was incorrect, so it was changed from 45,203
degrees to 48,144 degrees. In addition, the total amount of incineration waste (household waste) in the Taipei office in 2020 was
mistakenly set to 48.32 metric tons, so this has been corrected to 48,320 kilograms.
2020 (Original)
Taipei
Office67,7782020 (New Data)

2021 (Original)

2021 (New Data)

Environmental Indicator

Unit

HQ &
PlantsCity water consumption

degree63,133

WastewaterRiver

Total city water discharge

MetricTons

78,211 54,222.4

No Change No Change

42,01938,515.2

No Change No Change

The amount of rainwater recycled

MetricTons

N/A 2,673.68

No Change No Change

N/A

2,965

No Change No Change

Total amount of sewage recycled/reusedMetricTons

23,741

N/A

No Change No Change

8,843

N/A

No Change No Change

The ratio of sweage recycled/ reused tototal amount of sweage consumed

%

30.36

N/A

No Change No Change

21.05

N/A

No Change No Change

The ratio of water recycled/ reused tototal amount of water consumed

%

37.6

3.94

No Change No Change

24.56

6.16

No Change No Change

Total amount of waste incinerated Information productKg

13,944

No Change

8,455

No
ChangeTotal amount of waste incinerated GeneralKg504,306

N/A

No ChangeNo426,202
ChangeN/A

No Change

No
ChangeTotal amount of waste reused

Kg

N/A

N/A

No Change

No
ChangeN/A

N/A

No Change

No
ChangeTotal amount of waste incinerated

Kg

135,700

48.32

No Change

48,32065,55052,400No Change No Change

Waste disposal expenseNT$828,240 302,400

No Change

No619,448 308,700
ChangeNo Change No Change

Environmental management andrecycling amount - Information productNT$837,591

454,602

No
ChangeTotal amount of waste incinerated Information product

NT$

NA

No Change No Change

Appendix

In 2020, the calculation of H building did not deduct the electricity consumption of tenants, resulting in errors in thecalculation and a low ecological benefit value for electricity. In addition, in 2021, due to calculation errors, the ecologicalbenefit value for greenhouse gases was mistakenly set to 0.69, which was corrected to 0.63 this year.
Environmental Indicator

Unit

Electricity

2020 (Original)

kWh/ Year

GHG Emission [Category1 +Category 2]

tCO2eOperatiog Revenue

Millions

19,996

Revenue generated from each electricity
Millions/kWhconsumption unit
Revenue generated from each GHG
Millions/tCO2eemission unit

2020 (New Data)

2021 (Original)

2021 (New Data)

18,689.95

No disclosure

16,870.92

The number of
9,885.2403 decimal places waschanged.

8324.388

No Change

5,806

No Change

5,253

No Change

0.29

0.31

No disclosure

0.31

0.59

No Change

0.69

0.63

HTC Average Compensation Ratio for Men and Women in Taiwan
Due to the fact that the data disclosed in the 2020 CSR report is recurring salaries and does not include salaries, to comply
with GRI 405-2 "Ratio of Women to Men's Basic Salary Plus Salary", the ratio has been recalculated from 1.15:1 to 1.18 forGeneral Employees, from 1.17:1 to 1.24:1 for Middle Supervisor, and from 1.06:1 to 1.44:1 for Senior Supervisor.

Resource consumption of recent 3 years

199

The Eco-efficiency Value of HTC

HQ & Plants Taipei Office

HQ &PlantsTaipeiHQ & Plants Taipei Office
OfficeNo Change No Change

36,00345,203

No Change

Average Compensation Ratio (Men: Women)
Employee Type

Manufacturing Employees General Employees

Middle Supervisor

Senior Supervisor

2020 (Original)

1.01：1

1.15：1

1.17：1

1.06：12020 (New)No Change

1.18：1

1.24：1

1.44：1

48,144

HQ & Plants- Dongmen Creek
Taipei Office- City Dedicated Sewer

454,160

NA

No Change No Change

461,9222022 HTC ESG Report200

Assurance Statement

ASSURANCE STATEMENTSGS TAIWAN LTD.’S REPORT ON SUSTAINABILITY ACTIVITIES IN THE HTCCORPORATION’s ESG REPORT FOR 2022
NATURE AND SCOPE OF THE ASSURANCE/VERIFICATIONSGS Taiwan Ltd. (hereinafter referred to as SGS) was commissioned by HTC Corporation (hereinafter referred
to as HTC) to conduct an independent assurance of the ESG Report for 2022 (hereinafter referred to as theReport). The scope of assurance, based on the SGS Sustainability Report Assurance methodology and AA1000
Assurance Standard v3, include the text and data in accompanying tables and their level of disclosures against
the GRI Universal Standard (2021) and SASB Disclosures and Metrics (Hardware) contained in the reportassessed during on-site verification (2023/04/20-2023/05/30) at HTC headquarter. The boundary of this report
includes HTC Taiwan’s specific performance data related to the identified material topics. The assurance processexcludes the evaluation of Task Force on Climate-related Financial Disclosures (TCFD).
SGS reserves the right to update the assurance statement from time to time depending on the level of reportcontent 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 HTC’s Stakeholders.
RESPONSIBILITIESThe information in the HTC’s ESG Report of 2022 and its presentation are the responsibility of the directors or
governing body and management of HTC. 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 report content within the scope of verification with the intention
to inform all HTC’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 and standards including the principles of reporting processcontained within the Global Reporting Initiative Sustainability Reporting Standards (GRI Standards) GRI 1:
Foundation 2021 for report quality, and the guidance on levels of assurance contained within the AA1000 seriesof standards.
The assurance of this report has been conducted according to the following Assurance Standards:

Assurance
Standard
Options

Level of Assurance

Appendix

Reporting Criteria Options
1

GRI Universal Standard (2021) (Reference)2

AA1000 Accountability Principles (2018)

3

SASB (Hardware)
•

•
•

•

evaluation of content veracity of the sustainability performance information in relation to the determinedmaterial topics at a high level of scrutiny for HTC, 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); andevaluation of the report against the requirements of Global Reporting Initiative Universal Standards(2021) listed in the GRI content index where the organization has referenced for the preparation of thereported information.
evaluate of the report against the SASB Disclosures and Metrics included in the Hardware 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, ESG committee members and the senior management in Taiwan; documentation and record
review and validation with external bodies and/or stakeholders where relevant.
LIMITATIONS AND MITIGATION
Financial data drawn directly from independently audited financial accounts, and Task Force on Climate-related
Financial Disclosures (TCFD) has not been checked back to source as 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 HTC, 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, RBA, QMS, EMS, SMS,
GPMS, CFP, WFP, GHG Verification and GHG Validation Lead Auditors and experience on the SRA Assurance
service provisions.
VERIFICATION/ 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.

A

SGS ESG & SRA Assurance Protocols (based on GRI Principles and guidance inAA1000)B

AA1000ASv3 Type 2 High
(AA1000AP Evaluation plus evaluation of Specified Performance Information)

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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:

AA1000 ACCOUNTABILITY PRINCIPLES (2018) CONCLUSIONS, FINDINGS AND RECOMMENDATIONS
Inclusivity
HTC has demonstrated its commitment to stakeholder inclusivity and stakeholder engagement. A variety ofengagement efforts such as survey and communication to employees, customers, investors, suppliers,
sustainability experts, and other stakeholders are implemented to underpin the organization's understanding ofstakeholder concerns. For future reporting, HTC may consider having direct two-ways engagements withstakeholders in the future.

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2022 HTC ESG Report202

Assurance Statement

Materiality
HTC has established 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. Considerations of a broader
sustainability context, such as commitments and internal policies are to be taken into account when evaluating
the significance of each topic.
ResponsivenessThe report includes coverage given to stakeholder engagement and channels for stakeholder feedback.
Impact
HTC 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. How the organisation has integrated identified impacts into key management processes, forexample, the organisational strategy, governance, and operations, may be further described in the future.
GLOBAL REPORTING INITIATIVE REPORTING STANDARDS CONCLUSIONS, FINDINGS AND
RECOMMENDATIONS
The report, HTC’s ESG Report of 2022, is reporting with reference to the GRI Universal Standards 2021 andcomplies with the requirements set out in section 3 of GRI 1 Foundation 2021. The significant impacts wereassessed and disclosed with reference to the guidance defined in GRI 3: Material Topic 2021 and the relevant
200/300/400 series Topic Standard related to Material Topic have been disclosed. The report has properly
disclosed information related to HTC’s contributions to sustainability development. For future reporting, HTC is
encouraged to prepare for the transition to reporting in accordance with the GRI Standards.
SASB CONCLUSIONS, FINDINGS AND RECOMMENDATIONSHTC has referenced with SASB’s Standard, Hardware, VERSION 2018-10 to disclose information of material
topics that are vital for enterprise value creation. The reporting boundaries of the disclosed information correspondto HTC’s ESG Report of 2022. HTC used SASB accounting and activity metrics to assess and manage the topicrelated risks and opportunities, where relevant quantitative information was assessed for its accuracy andcompleteness to support the comparability of the data reported. For continuous improvement, process to identify,
assess, and manage topic-related risks and opportunities were recommended to be integrated into HTCs overallmanagement process with more thorough disclosures for monitoring and benchmarking the respective
performances.

Signed:For and on behalf of SGS Taiwan Ltd.

Stephen Pao
Knowledge Deputy General Manager
Taipei, Taiwan
12 June, 2023
WWW.SGS.COM

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Appendix2022 HTC ESG Report204