Faraday has imported the frameworks of TCFD (Task Force on Climate-related Financial Disclosures) and TNFD (Taskforce on Nature-related Financial Disclosures), and set up a Corporate Sustainability Committee under the Board of Directors to incorporate climate risks into corporate and financial planning.

One of the top 30 companies in Taiwan and the first ASIC design service company listed on the official TCFD supporter website

Among 320 global companies, 14 in Taiwan, and the first ASIC design service company to adopt the TNFD framework

Faraday's Net-Zero Pathway

Based on the Science-Based Targets initiative (SBTi) methodology, Faraday has established a clear carbon reduction pathway and specific targets for Scope 1 and Scope 2 emissions, demonstrating its commitment to environmental responsibility.

Faraday's Detailed Carbon Reduction Strategies

Category	Management Scope	Strategy Description	Implementation Status
Greenhouse Gas Inventory	Scope 1~ Scope 3	Conduct annual greenhouse gas inventories and perform external verification. The inventory boundary includes the parent company and all consolidated subsidiaries. Monitor international regulatory trends and evaluate the transition to the GHG Protocol for verification (current standard: ISO 14064-1)	The greenhouse gas inventory and verification for the parent company and consolidated financial statement subsidiaries have been completed.
Energy efficiency and carbon reduction activities	Scope 2	Conduct annual audits of energy consumption hotspots. Implement energy efficiency optimization or equipment replacement projects.	Implemented 3 energy-saving projects, expected to achieve a carbon reduction of 72.9 metric tons CO₂ₑ
Use of renewable energy	Scope 2	Install rooftop solar PV panels for on-site generation and self-consumption. Sign Power Purchase Agreements (PPAs) with green electricity retailers to secure bundled green electricity. Gradually increase the green electricity usage ratio, targeting 40% by 2030.	Rooftop solar PV installed capacity reaches 129.74 kW. Partnered with two electricity retailers for green electricity supply. Renewable energy usage share reaches 20%
Carbon pricing	Scope 1 Scope 3	Calculate internal carbon pricing annually. Integrate external carbon costs into procurement strategies through shadow pricing.	Carbon pricing has been successfully implemented
Carbon credits	Scope 1 Scope 3	Continuously assess internal carbon credit opportunities and monitor external carbon credit procurement trends. Prioritize the procurement of removal-based or naturebased carbon credits.	Carbon credits are not currently used as a primary carbon reduction tool Carbon credits will be utilized to achieve net-zero emissions in the final stage, after 95% reduction is reached by 2045
Innovative carbon reduction tools	Scope 1~ Scope 3	Continuously evaluate emerging carbon reduction methods, such as carbon negative technologies (CCUS) and low-carbon energy sources (e.g., hydrogen).	Assessment of future implementation feasibility

Overview of Faraday's TCFD Management Framework

Governance

Highest governance body: Board of Directors

For Faraday's climate change response and risk and opportunity management, the Board of Directors and the Corporate Sustainability Committee serve as the highest governance and oversight bodies. At the execution level, the ESG Committee drives practical project implementation and information consolidation. The Chairperson (the President) reports climate change response strategies and the progress of related projects to the Board of Directors on a quarterly basis.
Reporting frequency: 4 times per year
Reporting agenda: Progress on greenhouse gas inventories, formulation and review of carbon reduction strategies, and green electricity procurement plans.

Dedicated Unit: ESG Committee

The President serves as the chairman of Corporate Sustainability Committee, holds meeting quarterly, to lead the working group members in developing sustainability strategies and executing targets (including overseeing issues related to climate change and the company's impacts).

Strategy

Risk & Opportunity Management and Scenario Analysis
Based on scenario analysis simulation results, the Company assesses the extent of exposure under various scenarios, analyzing how parameters such as carbon taxes and renewable energy costs impact operations. Finally, practical management measures are implemented for identified material risks and opportunities, taking into account their locations along the value chain and time horizons (short-, medium-, and long-term).
Mitigation and Adaptation
Develop feasible mitigation and adaptation measures in response to material risks and opportunities.

Risk Management

Risk and Opportunity Identification Process
Internal and external climate-related risks and opportunities are collected and assessed based on two dimensions: likelihood and impact. Material climate risks and opportunities are then identified and prioritized accordingly.
Integration of Climate Risks
Faraday has established the “Risk Management Policy” as the highest guiding principle for internal risk management. The policy is regularly overseen and reviewed by the Company's Audit Committee and senior management. Climate change risks have been incorporated as a mandatory item in the risk identification process. Through regular risk assessment processes, the company conducts risk identification, assessment, and impact analysis. A risk matrix is used to assess the frequency of risk events and their impact on business operations, thereby defining the priority and level of each risk. Based on the risk level, corresponding risk management strategies are implemented.
Continual Improvement
The ESG Committee regularly tracks the achievement status of climate targets, while the Risk Committee consistently monitors the implementation effectiveness of climate mitigation and adaptation strategies.

Metric and Target

Greenhouse Gas Inventory
Conduct a greenhouse gas emissions inventory in accordance with the ISO14064-1 standard, using the parent company and consolidated financial statement subsidiaries as the boundary, and perform annual third-party verification to enhance the credibility of decarbonization target implementation outcomes.
Management Target
Faraday establishes achieving net-zero emissions by 2050 as the core driving direction for climate risk response and the transition plan. Based on this, the Company implements relevant action plans and sets targets, which are incorporated into the regular tracking of implementation effectiveness conducted by the ESG Committee:

Annual carbon reduction target setting
Annual green electricity target setting
Supply chain carbon reduction target setting
Energy-saving and carbon-reduction projects are implemented annually.

Risk Scenario Analysis

Risk type	External scenario selection	External scenario description	Parameter setting and reference tool	Analysis result
Transition risk	National net zero pathway	Referring to the net zero pathway by 2050 plan announced by government, will meet net zero by 2050.	Carbon tax: 300NTD/tCO₂ₑ Renewable energy cost: 6NTD/kWh	Faraday's future carbon emissions may continuously rise due to business expansion, under the trend of increasingly strict net-zero, need to import aggressive strategy and target for carbon reduction (including carbo reduction for business operations and low-carbon product development), to reduce the material financial impact from climate risk.
Transition risk	SSP1-1.9	Referring to “IPCC Sixth Assessment Report”, the allowed emissions of SSP1-1.9 will meet net zero by 2055.	Carbon tax: SSP1-1.9 worldwide Renewable energy cost: 6NTD/kWh
Physical risk	SSP1-8.5	Referring to the SSP5-8.5 scenario in “IPCC Sixth Assessment Report”, the global carbon emissions will be doubled by 2050.	Flood: Climate change disaster risk system Mudslide/Landslide: National Science & Technology Center for Disaster Reduction	The location of Faraday headquarters is not directly located at the site of disaster potentials, the occurrence possibility of the flood, mudslide or landslide is extremely low.

Identification of Risks and Opportunities, Financial Impact Analysis

Referring to the TCFD and TNFD frameworks, Faraday integrates the risk and opportunity assessment into a single workflow to ensure comprehensive consideration of environmental financial impacts. Once risks and opportunities are identified, we will conduct an overall review to establish a robust management framework and develop appropriate response measures for effectively safeguarding the corporate's long-term value.

Greenhouse Gas Inventory

Faraday adopts the operational control approach to conduct the greenhouse gas emissions inventory for Scope 1 and Scope 2 at the Hsinchu headquarters and the Taipei and Tainan offices. Scope 2 emissions were identified as the primary source, accounting for over 90% of total emissions.

Faraday's GHG Emissions

ISO 14064-1 Category	GHG Protocol Category	2022	2023	2024	2025
Direct GHG emissions and removals	Scope 1	239	237	219	215
Category 2 Indirect GHG emissions from energy imported	Scope 2 (Market base)	3,192	3,229	3,090	2,754
Scope 2 (Location base)	3,192	3,229	3,287	3,380
Category 3 Businiss travial	Scope 3 Category 6: Business travel	Non-significant	39.808	33.740	27.686
Category 3 Employee commuting	Scope 3 Category: Employee ommuting	Non-significant	485	292	256
Category 4 Purchased goods	Category 3: Fuel and Energy Activities	637	646	645	668
Category 4 Waste Disposal And Transport	Category 5: Waste generated in operations	5.878	5.874	5.728	6.271
Category 4 Other outsourced business	Category 1: Purchased goods or services	Not inventoried	70,321	35,571	25,181

Energy Management

Faraday adopts a systematic mechanism to record electricity usage and identify key energy consumption hotspots regularly through power analysis tools. Annual projects are implemented to enhance energy efficiency and promote energy-saving and carbon reduction. Renewable energy is also applied to minimize environmental impacts. In 2022, the first phase of solar panel installation was completed at the Hsinchu headquarters, with the second phase scheduled for 2024.

Procurement of Externally Supplied Green Electricity

By the end of 2025, Faraday reached a total renewable energy consumption of 1.469 million kWh. With 1.32 million kWh sourced from purchased renewable energy (1,320 T-RECs), we successfully achieved a 20% renewable energy usage rate and cut carbon emissions by 696 tons.

Electricity consumption analysis 2021~2024（Unit：kWh）

Item	2023	2024	2025
Purchased electricity consumption	6,536,616	6,934,325	7,130,738
Renewable energy consumption	108,000	113,000	149,288
Total electricity consumption	6,644,616	7,047,325	7,280,027
Renewable energy usage ratio	1.63%	7.5%	20.2%

Energy Usage Overview

Item	2022	2023	2024	2025
Energy usage status(Unit: GJ)	Purchased Electricity	Purchased electricity consumption (Including green electricity procurement)	23,212.67	23,531.82	24,963.57	25,670.66
Purchased renewable energy usage	0	388.8	1,494.00	4,752.00
Self-generated Electricity	Self-generated renewable energy usage	0	0	406.80	537.44
Fossil Fuels	Diesel fuel	18.78	21.12	22.88	22.88
Gasoline	17.60	15.28	18.20	14.19
Gas	301.96	285.19	380.11	386.08
Energy usage analysis (Unit: GJ)	Usage Analysis	Total energy consumption	23,551.01	24,242.21	25,791.56	26,631.55
Total electricity consumption	23,212.67	23,920.62	25,370.37	26,208.110
Total renewable energy consumption	0	388.80	1,900.80	5,289.44
Total non-renewable energy consumption	23,551.01	23,853.41	25,384.76	26,094.11
Proportion Analysis	Renewable energy usage ratio(%)	0.0%	1.6%	7.49%	20.18%
Percentage of purchased electricity in total electricity consumption(%)	100.0%	98.4%	98.4%	97.9%
Percentage of purchased electricity in total energy consumption(%)	98.56%	97.07%	96.79%	96.39%

Energy efficiency and carbon reduction

Faraday updates energy-saving equipment annually, identify energy-saving opportunities and implement specific projects according to significance and feasibility. Additionally, the concept of energy efficiency and carbon reduction is integrated into daily operations through automated energy-saving settings and awareness campaigns to ensure effectiveness.

Energy Reduction and Results in 2025

Electricity-saving solution (2025)	Estimated annual electricity savings(kWh)	Estimated carbon reduction(Metric tons CO₂e)
Ongoing replacement of fluorescent lighting with LEDs: 292 fixtures targeted (6F)	46,056	21.8
Installed a Variable Frequency Drive (VFD) for the CH-1 Chiller (200RT) to optimize operational efficiency and achieve energy savings	107,604	51.0
Replaced existing refrigerator with an energy-efficient Level 1 model (8F-1)	312	0.15

Internal Carbon Pricing Mechanism

Faraday Technology has officially implemented an Internal Carbon Pricing (ICP) mechanism starting in 2025. The internal carbon price for 2025 has been set at NT$2,200 per metric ton, based on a comprehensive evaluation of key factors including (1) the implicit carbon reduction costs of facility equipment, (2) green power procurement premiums (environmental benefit price differentials), and (3) Taiwan’s official carbon pricing regulations. The company adopts a "Shadow Pricing" model, integrating carbon emission costs into the Benefit-Cost Ratio (B/C Ratio) evaluations for facility equipment procurement. By internalizing external costs within our management processes, we aim to refine the quality of procurement decisions and further strengthen the company’s resilience against the financial impacts of future climate change.