Governance and Strategy | Biodiversity | Innovation and Value Creation | ASUS ESG website, ASUS ESG goal

Governance

Board of Directors

ASUS’ sustainable governance is directly overseen by the Board of Directors, with the Chairman appointing the CEO to lead sustainable management efforts. The Sustainability & Green Quality Management Center is under the responsibility of the CEO. The CEO established a Sustainable & Green Quality Management Center, in collaboration with the Procurement and Outsourcing Management Department, is responsible for overseeing the supply chain management process. This includes implementing new supplier approvals, ongoing collaborative supplier risk management, and conducting quarterly performance evaluations.

Sustainability and Green Quality Management Center

The “Sustainability and Green Quality Management Center” is a specialized unit with a Chief Sustainability Officer who is responsible for analyzing global sustainability trends and implementing sustainable projects. The Sustainability and Green Quality Management Center is responsible for promoting strategic sustainability through the integration of “Using Digitized Data and Scientific Management Practices to Support Sustainable Value Creation through Core Competencies.”. It leverages ASUS’ core capabilities and focuses on four main areas: climate action, circular economy, responsible manufacturing, and value creation. The center aims to establish a long-term vision, strategy, and goals for sustainability and integrate various action plans into the Company's operations. Responsible manufacturing focuses on sustainable supply chain management, establishing supply chain codes of conduct, promoting labor rights, responsible mineral sourcing and reducing the environmental footprint of manufacturing. Starting this year, we will conduct an inventory of our operations and suppliers to assess their dependence on and impact on nature, with a particular focus on issues related to natural and biological diversity. We will also include biodiversity as a key criterion in our supplier evaluation process and integrate it into our supply chain management.

ESG Management Committee

To enhance the sustainable procurement capabilities of the supply chain management, ASUS regularly holds quarterly ESG committee meetings. These meetings encompass various business units, including the design center, certification, marketing, sales, supply chain, and procurement. The goal is to cultivate the internal procurement team's ability to identify and assess environmental, social, and governance (ESG) risks and opportunities. With respect to procurement and the supply chain, we prioritize the implementation of sustainable sourcing strategies. Our goal is to ensure that every aspect of the supply chain complies with current international laws, regulations and emerging trends. Through these quarterly ESG committee meetings, we not only strengthen the internal team's understanding and commitment to the core values of sustainable development but also encourage active participation in sustainability practices throughout the supply chain.

GreenASUS & SERASUS Committee

ASUS has established the GreenASUS and SERASUS Management Committee to implement ISO management system standards, focusing on energy and environmental aspects. The committee, appointed by senior management, oversees the Company's ISO 9000 quality management system, QC 080000 hazardous substance process management system, ISO 14001 environmental management system, and others. Regular communication of environmental, safety, health, and management system information is conducted with all colleagues.

Strategy

ASUS Natural Capital Strategy Roadmap

According to the Intergovernmental Panel on Climate Change (IPCC), the value of global ecosystem services is estimated at 150 trillion USD, with biodiversity contributing approximately 47% of national gross domestic product. However, several authoritative international reports and research articles have highlighted a wealth of evidence that human activities are having an impact on biodiversity. Sources of these impacts include land-use change, overdevelopment, climate change, pollution, and the introduction of invasive species. These impacts have an economic impact of approximately $5 trillion (BCG, 2021)¹. The World Economic Forum (WEF) has released The Global Risks Report for 2024, which states that the risk to biodiversity has emerged as the third largest risk expected to occur in the next decade.

²According to statistics, more than 80% of Fortune 500 companies have set carbon reduction or net-zero goals, while only 6% have set goals to reduce impacts on biodiversity and promote restoration. In response to growing environmental concerns in the external capital market, ASUS has taken steps to address biodiversity issues. This includes the formulation of the ASUS Biodiversity Policy and the development of the ASUS Natural Capital Strategy Map. These initiatives are in line with the United Nations Sustainable Development Goals (SDGs) and the Kunming-Montreal Biodiversity Framework (GBF). ASUS has identified two approaches: internal management within the value chain and external actions. Internally, ASUS focuses on assessing the dependence on and impact on nature of its operations and supply chains. It incorporates management measures to reduce environmental impact. Externally, ASUS is committed to preserving and creating habitats for biodiversity, exploring innovative technologies, and participating in natural carbon credit to enhance natural resilience. The ultimate goal is to achieve harmonious coexistence with nature as outlined in the Biodiversity Policy.

Defining Dimensions of Natural Capital Impacts

ASUS recognizes two areas within its operations and supply chain that impact natural capital: natural capital depletion and raw material sourcing. Natural capital depletion refers to the significant environmental damage caused by the extraction of minerals (e.g. copper, manganese, tin, gold and tungsten) and the use of forests (e.g. for packaging materials). Mineral extraction alters the landscape, disrupts the natural environment, and has a profound impact on local biodiversity. Environmental quality impairment refers to the adverse effects on the environment resulting from ASUS' business operations. As defined by the Directorate-General of Budget, Accounting and Statistics, environmental quality impairment includes air pollution, water pollution, and solid waste.

Methodology for Natural Capital Impact Assessment

According to research conducted by MSCI (Morgan Stanley Capital International), the information technology industry has a relatively low reliance on natural capital when assessing the dependency and impact of business activities. In addition, based on the analysis of its business operations using the ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) database, ASUS also has a relatively low dependence on natural capital. As a result, ASUS will prioritize environmental impact analysis and management activities in accordance with resource allocation principles.

In accordance with the materiality of the issue and the analytical methodology used, ASUS continues to use the ISO 14040 Life Cycle Assessment standard, PwC’s methodology for monetizing corporate environmental impacts, and the Natural Capital Protocol previously used in environmental profit and loss assessments. This approach monetizes environmental profit and loss and natural capital dependency across the entire value chain of products representing 90% of revenue: notebook computers, desktops, motherboards, monitors, and mobile phones. The calculation of environmental profit and loss will contribute to a deeper understanding of external costs of four environmental indicators: greenhouse gas emissions, water resource, water pollution, and solid waste.

In response to the environmental profit and loss assessment analysis results that water pollution is the largest factor causing environmental impact, ASUS implemented the TNFD reporting framework methodology called “LEAP” in the second phase. This methodology focuses on positioning, evaluating, assessing, and preparing operational activities to determine whether ASUS' operational sites and global supply chain are located in biodiversity hotspots or internationally/nationally defined important habitats. By analyzing the factors of environmental dependency and the impacts caused by its industrial activities in a database, as well as identifying the scale and scope of the impacts, the company can assess natural risks and opportunities. Finally, these risks and opportunities are integrated into the operational management process to increase ASUS' resilience to environmental changes.

1 The Biodiversity Crisis Is a Business Crisis, By Torsten Kurth, Gerd Wübbels, Adrien Portafaix, Alexander Meyer zum Felde, and Sophie Zielcke, March 2021
2 Where the world's largest companies stand on nature, McKinsey Sustainability