Climate Change

Climate Management Strategy

Science-Based Targets initiative (SBTi)

AES is subsidiary of Simplo Technology Group. Simplo Technology Group had signed the “SBTi Commitment” in 2021 and submitted the carbon reduction target in 2022. The Group sets emissions reduction targets in line with a 1.5°C future, and Group’s near-term emissions reduction targets are approved by the SBTi in May 2023 (note1). Simplo Technology Group is the first company in the global battery module manufacturing industry to pass the review. In the future, we will actively take carbon reduction actions, including: installing solar PV systems, signing renewable energy power purchase agreements, designing green products, using recycled materials, etc. At the same time, key suppliers will be included in the emission inventory and emission reduction actions, implement carbon reduction goals, and built a sustainable partner co-prosperity ecosystem.

Note：1.The data coverage of Simplo Technology Group includes the headquarters and subsidiaries of the consolidated financial statements.
2.*Purchasing goods and services classified according to the GHG protocol.

Task Force on Climate-related Financial Disclosures (TCFD)

The Company discloses information such as climate governance, strategies, risk management and indicator targets by referring to the core elements of TCFD to assess climate-related risks and opportunities to the corporate operations. Meanwhile, a section of corporate risk identification is incorporated as a reference for formulating climate strategies to improve the transparency of organizational behavior, strategies and climate-related financial disclosure.

Aspect	Description
Governance	For the identification and management of climate change-related risks and opportunities, the board of directors was authorized to establish the Sustainability Office as the dedicated unit for the promotion and implementation of corporate sustainability, as well as the unit in charge of climate management strategy assessment and management. In 2023, the Sustainability Office identifies climate change-related risk and opportunity topics by following the TCFD standards, and report on the performance of ESG and climate change-related issues, impact assessment and progress of sustainability target achievements annually to the board of directors, so that the board can understand and monitor the risks faced by the Company.
Strategy	The financial impact of the risks and opportunities related to climate change are identified, with response strategies formulated according to the items, while seeking opportunities for transformation or various investments of enterprises under climate change in the process.
Risk management	Pursuant to the framework recommended by the TCFD, the influence of climate change-related impacts and opportunities are identified, and response strategies are formulated to continuously promote climate mitigation programs.
Indicators and targets	Response plans and targets have been established for implementation, including: 1. Since 2020, AES has carried out ISO 14064-1 carbon inventory and verification for the organization every year 2. Passed the SBTi carbon reduction target (1.5 °C near-term) in May 2023, the data coverage of Simplo Technology Group includes the headquarters and subsidiaries of the consolidated financial statements.

Identify Climate Change-related Risks and Opportunities

Greenhouse Gas Inventory

Based on the environmental concept of sustainable development and fulfilling corporate obligations, AES is actively committed to the inventory and control of greenhouse gas emissions, thereby slowing down global warming. We expect to maintain the sustainable development of the global environment through management and conservation of energy resources. AES is currently not subject to the mandatory declaration of greenhouse gas emissions. In order to comply with international trends and customer requirements, the Group has introduced the ISO 14064-1:2018 greenhouse gas inventory system since 2021. Every year, we conduct an inventory of the previous year's greenhouse gas emissions to monitor the carbon emissions of the group's important operating bases, and it has been verified by a third-party.

Direct emissions and energy indirect emissions (Scope 1 and Scope 2)

Year	2020	2021	2022
Direct emissions (Scope 1) (ton CO2e)	66.30	147.75	122.01
Energy indirect emissions (Scope 2) (tonCO2e)	7,092.65	8,943.34	3,537.59
Emission intensity (ton CO2e / NTD million in revenue)	1.46	0.96	0.38

Note:

1. The data includes Trend Energy, Trend Power, Trend Power (Changshu).
2. The inventory is done with the operation control. The figures of the GHG inventory are certificated by third-party.

Other indirect emissions (Scope 3)

AES has established a GHG inventory and assesses the significance of the items in the C1-C15 categories by GHG protocol. Based on the significance of the analysis results, seven categories were included in the inventory items, and verified by a third party in accordance with ISO 14064-1. The item with the highest emissions is the purchased goods and services in 2022, accounting for 93.46%, which is a key item for the subsequent reduction.

Unit: ton CO2e

Year	2020	2021	2022
(C1) Purchased Goods and Services	2,944.64	101,828.37	796,585.12
(C3) Fuel- and Energy-Related Activities (Not Included in Scope 1 or Scope 2)	1,068.57	2,254.41	1,220.02
(C4) Upstream Transportation and Distribution	3.49	582.31	2,057.22
(C5) Waste Generated in Operations	14.77	25.79	0
(C6) Business Travel	13.80	32.17	182.16
(C7) Employee Commuting	225.88	246.15	338.30
(C9) Downstream Transportation and Distribution	677.07	742.46	1,779.37
(C11) Use of Sold Products	380.05	Non-significant	Non-significant