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 a greenhouse gas inventory annually in accordance with ISO 14064-1 and perform external verification.	Complete 100% consolidated financial statement boundary greenhouse gas inventory starting from 2023. Since 2022, Faraday's parent company has completed external verification, and subsidiaries will implement verification by 2026.
Energy efficiency and carbon reduction activities	Scope 2	Conduct annual energy consumption hotspots inventory, implement energy efficiency improvement or energy-saving projects through equipment replacement and upgrades	In 2024, energy-saving projects such as the installation of variable frequency air compressors and replacement of lighting fixtures were implemented, with an estimated annual electricity savings of 101,845 kWh.
Use of renewable energy	Scope 2	Gradually increase the proportion of green electricity usage, aiming to reach 55% by 2030. Install rooftop solar panels for self-generation and selfconsumption Sign PPAs (Power Purchase Agreements) with green electricity suppliers to procure verified green electricity with power and certificate integration.	The installed capacity of rooftop solar panels reaches 129.74 kWh. Green electricity transfer agreements have been signed with two electricity suppliers. In 2024, the proportion of renewable energy usage reached 7.49%.
Innovative carbon reduction tools	Scope 1/Scope 3	Continuously evaluate new energy efficiency and carbon reduction methods, such as: negative emissions (CCUS), lowcarbon energy (hydrogen)	Evaluate the feasibility of future adoption
Carbon credit application/ usage	Scope 1/Scope 3	Continuously evaluate internal opportunities for carbon credit applications, and monitor external carbon credit procurement trends. Use carbon credit tools to achieve the final mile to net-zero emissions	Evaluate the feasibility of future adoption

Overview of Faraday's TCFD Management Framework

Governance

The Board of Directors regularly reviews the sustainability management performance and outcomes, including climate change-related issues.
The Corporate Sustainability Committee, chaired by the president, leads the strategic direction for corporate sustainability and sets up the target, including supervising climate change-related issues and corporate impact, regularly reports the performance and result of corporate sustainable management to the Board of Directors at least once every year.

Strategy

Analyze the impacts from short, medium, and long-term climate change risks and opportunities, following the TCFD framework.
Conduct scenario analysis simulation to evaluate possible impacts, such as the operational impacts from carbon taxes and renewable energy costs.
Continuously monitor greenhouse gas emissions and implement energy-saving initiatives.
Focus on the development of low-power consumption technology, adopt green and non-hazardous production processes and packaging materials, and enhance customer service and competitive advantages.

Risk Management

Identify climate risks and opportunities according to the scenario analysis results.
Identify feasible management measures for key risks and opportunities
To elevate the consideration of climate change risks, incorporate the risk factors into the risk guideline and analyzed alongside other operational risks.

Metrics and Targets

Develop climate-related environmental metrics, including the goals for reducing greenhouse gas emissions, resource usage, and waste.
Audit greenhouse gas emissions according to ISO 14064-1 standard.

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	2021	2022	2023	2024
Direct GHG emissions and removals	Scope 1	255	239	237	219
Category 2 Indirect GHG emissions from energy imported	Scope 2 (Market base)	3,333	3,192	3,229	3,090
Scope 2 (Location base)	3,333	3,192	3,229	3,287
Category 3 Businiss travial	Scope 3 Category 6: Business travel	Not inventoried	Non-significant	40	34
Category 3 Employee commuting	Scope 3 Category: Employee ommuting	Not inventoried	Non-significant	485	292
Category 4 Purchased goods	Category 3: Fuel and Energy Activities	Not inventoried	637	646	645
Category 4 Waste Disposal And Transport	Category 5: Waste generated in operations	Not inventoried	5.88	6	6
Category 4 Other outsourced business	Category 1: Purchased goods or services	Not inventoried	Not inventoried	70,321	35,571

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	2022	2023	2024
Purchased electricity consumption	6,447,964	6,536,616	6,934,325
Renewable energy consumption	No use	108,000	113,000
Total electricity consumption	6,447,964	6,644,616	7,047,325
Renewable energy usage ratio	0.00%	1.63%	7.5%

Energy Usage Overview

Item	2021	2022	2023	2024
Energy usage status(Unit: GJ)	Purchased electricity consumption (Including green electricity procurement)	23,900.14	23,212.67	23,531.82	24,963.57
Self-generated renewable energy usage	0	0	0	406.80
Purchased renewable energy usage	0	0	388.8	1,494.00
Diesel fuel	35.20	18.78	21.12	22.88
Gasoline	10.76	17.60	15.28	18.20
Gas	216.73	301.96	285.19	380.11
Energy usage analysis (Unit: GJ)	Total energy consumption	24,162.83	23,551.01	24,242.21	25,791.56
Total electricity consumption	23,900.14	23,212.67	23,920.62	25,370.37
Total renewable energy consumption	0	0	388.80	1,900.80
Renewable energy usage ratio(%)	0.0%	0.0%	1.6%	7.49%
Total non-renewable energy consumption	24,162.83	23,551.01	23,853.41	25,384.76
Percentage of purchased electricity in total electricity consumption(%)	100.0%	100.0%	98.4%	98.4%
Percentage of purchased electricity in total energy consumption(%)	98.91%	98.56%	97.07%	96.79%

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.