Stakeholder Engagement

In accordance with the Global Sustainability Reporting Initiative (GRI Standards) and AA1000 Stakeholder Engagement Standards, we have established a systematic stakeholder identification and management mechanism based on the principles of honest and transparent communication and the spirit of responsible corporate governance. Simplo Technology has defined five core categories of stakeholders, including customers, suppliers, shareholders/investors, employees, and government agencies, to serve as the basis for sustainable communication and strategic response. 2024 implementation status is as follows:

Stakeholder Communication Channels

Stakeholders	Significance to the Company	Issues of concern	Communication frequency and method	Implementations in 2024
Customers	Earn the trust of customers through innovative technology, high-quality products, and services. Customer feedback is invaluable to us as it guides our continuous improvement efforts	Supply chain sustainability management Product quality and service Green products, product carbon footprint Green production Climate change response Customer privacy and information security	[Regularly] Technical/business meetings (QTR/QBR/MBR) [Occasionally] Email Company website Customer audit	Daily emails and customer visits Participated in 45 QBR/QTR/MBR meetings Responded to 36 customer questionnaires (7 online questionnaires) Occasional customer sustainability issue exchange
Suppliers	Collaborating with the supply chain to enhance supply chain resilience and build a coprosperity ecosystem	Responsible procurement Hazardous substance management Conflict mineral management Supplier sustainability rating/audit	[Regularly] Supplier Evaluation [Occasionally] Supplier RBA audit Supplier conference Supplier questionnaire	One sustainable supply chain communication conference, attended by 85 suppliers online 17 suppliers received ESG evaluations RBA audited 19 companies Signature of " Supplier Code of Conduct Commitment"
Shareholders/ Investors	To protect shareholders' rights and interests by upholding the integrity of management and the transparency of operating information	Operational performance Dividend policy and payment Management policy Information transparency Investment plan Ethical management	[Regularly] Annual shareholders meeting report and financial statements Investor conference [Occasionally] Company website Email	One shareholders' meeting held One investor conferences held Publication of the Annual Report for the 2024 Shareholders' Meeting 5 questionnaires for investors
Employees	A well-established welfare system and a safe working environment, as well as the cultivation of excellent talents to enhance the company's operational performance and efficiency	Occupational health and safety Employee benefits Professional skills education and training Labor-management communication Green life	[Regularly] Employee health checkup Labor-management meetings Internal mailbox Welfare Committee meeting [Occasionally] Internal email, website bulletin board Education and training Company website	One annual employee health checkup, four labor-management meetings, and twelve Welfare Committee meetings. 3 employee activity registration forms and 2 group meal satisfaction survey Portal Announcements 29 issues of CSR e-newsletter, 45 issues of ESG e-newsletter, 2 issues of Group e-newsletter Simplo Technology green week activity
Government agencies	Compliance with laws and regulations to build a good corporate reputation	Corporate governance Risk management Occupational health and safety Legal compliance Energy management	[Occasionally] Official documents Email Briefings MOPS	MOPS reporting Participate in government briefing sessions Regular checking of regulations Announcement of monthly revenue to the MOPS and the Company's official website

Identify Material Topics

Materiality is identified based on the GRI Standards (2021). Questionnaire surveys are used to understand the stakeholder concern about various sustainability topics of Simplo and to rank the material topics. The selected material topics are assessed by the representatives of the CSR Committee for their impact on “Simplo's operations” and “on the economy, environment, and people (including human rights)”. They are then ranked according to the significance of the impact, as the basis for the information disclosure in the report.

Identify Materiality Process

Step 1: Collect and summarize sustainability issues

The task force of Simplo Technology’s CSR Sustainability Committee refers to the Global Reporting Initiative Standards (GRI Standards), the Responsible Business Alliance’s (RBA) Code of Conduct, the Task Force on Climate-Related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB), the Corporate Governance Indicators of the Taiwan Stock Exchange, and the Company's sustainability goals to aggregate 24 sustainability issues.

Step 2: Investigation of material issues

The questionnaire was used to quantify the significance of impacts. The survey content are as follows:
1. 2022 Material Issues Level of Concern Questionnaire
A survey was conducted to assess the level of concern of 5 key stakeholders on 24 sustainability issues, receiving a total of 158 valid feedbacks.
2. Impact Assessment Questionnaire
Through the impact assessment questionnaire, the CSR Sustainability Committee further evaluated the degree and probability of "actual", "potential", "positive" and "negative" impacts on the external economy, environment, human rights, Simplo Technology's own operations, as well as the individuals or groups that will (or may) be affected if each topic has a positive or negative impact.

Step 3: AIdentification of material topics

After consolidating the survey results, impact assessments were ranked, utilizing the dual materiality principles from the Draft European Sustainability Reporting Standards (ESRS). The X-axis measured the positive impact on company operations, while the Y-axis assessed the positive impact on the economy, environment, and society. A materiality matrix was then plotted to identify 10 material issues, reviewed by the internal sustainability team in alignment with international trends.

Step 4: Material issue target setting and management

Based on the results identification results, material issue management guidelines and objectives are established and reported to the CSR Sustainability Committee and the Board of Directors. The management policies and objectives for future material issues will undergo annual review. The identification process for material issues will assess execution frequency based on circumstances, to evaluate the extent of positive and negative impacts of these issues. This approach allows the management team to allocate resources effectively and provides stakeholders with a review of operational effectiveness.

Material Topics Matrix

Value chain impact description

○Indirect impact ●Direct impact

Material topics	Impact on the value chain	Corresponding to GRI	Impact on the value chain
			Upstream	Operation		Downstream
			Supplier	Headqualter	Factory	Client
Economic
Business Integrity	Simplo complies with ESG and product-related laws and regulations to reduce the risk of penalties or impact on reputation.	205-2	●	●	●	●
Risk Management	Simplo has established risk management mechanism to minimize the risks that may affect the company's operations.	Custom Theme	○	●	●	○
Supply Chain Management	Simplo commits integrity management and implements relevant education, training and management mechanisms.	204-1, 308-1, 308-2, 414-1, 414-2	●	●	●	●
Product Quality and Responsibility	Simplo establishes a sustainable supply chain management system, and integrates the ESG assessment of suppliers into the procurement decisionmaking process to reduce impacts	416-1, 416-2	●	●	●	●
Information Security	Simplo strengthens the functions of the board of directors, and enhances sustainable governance responsibilities.	418-1	●	●	●	●
Enviroment
Product Carbon Footprint	Simplo identifies climate change risks and opportunities, and implements energy-saving and emission-reduction actions.	Custom Theme	●	●	●	●
Circular Economy	Simplo creates opportunities to enter new markets.	301-2	●	●	●	○
GHG	Simplo has introduced a recycling mechanism for raw materials and package to increase the recycling rate of waste.	305-1~305-5, 302-1, 302-3	○	●	●	●
Climate Action	Simplo integrates product life cycle thinking into product design and implements product carbon footprint projects.	201-2	●	●	●	○
Society
Training and Development	Simplo strengthens OSH management to reduce occupational accidents, occupational diseases, and industrial safety accidents.	404-1, 404-3	○	●	●	○

Stakeholder Engagement