Materiality Analysis Process

Each year, Shihlin Electric reviews and adjusts its materiality analysis framework in alignment with the latest GRI Standards, identifying key sustainability topics that not only inform this report but also serve as a foundation for the company’s long-term sustainability goals and strategies. The company adheres to the GRI 3: Material Topics 2021 disclosure principles and evaluates each topic based on: The actual or potential positive and negative impacts of Shihlin Electric on the external environment, economy, and people (including human rights), and The actual or potential impact of sustainability issues on Shihlin Electric’s business continuity. This approach reflects the principle of Double Materiality, enabling the company to better understand the significance of its internal and external impacts. To identify relevant sustainability issues, the company compiles a comprehensive list of topics that may affect business continuity (including risks and opportunities) and are of concern to stakeholders (including regulatory expectations). References include: - International sustainability frameworks and standards (GRI, SASB, TCFD) - The United Nations Sustainable Development Goals (SDGs) - ESG rating agencies (e.g., MSCI) - Taiwan’s regulations on sustainability report preparation and disclosure - Stakeholder concerns - Industry-specific guidelines and best practices - Recommendations from external ESG consultants and experts After consolidating issues relevant to Shihlin Electric, each topic is assessed for its actual and potential impact both externally and internally. In parallel, the company actively conducted a stakeholder engagement survey to understand their level of concern regarding Shihlin Electric’s sustainability issues. Over 60 questionnaires were collected, and the survey results were incorporated as part of the materiality evaluation parameters. In 2024, nine topics exceeded the materiality threshold and were identified as key material topics: 1.Corporate Governance and Integrity 2.Sustainable Supply Chain Management 3.Operational and Financial Performance 4.Product Quality and Safety 5.Opportunities in Clean Technology 6.Information Security and Management 7.Climate Change Risk Response 8.Employee Rights and Benefits 9.Occupational Health and Safety For each material topic, the company has established corresponding management approaches based on the level of impact on both business operations and stakeholder interests. These approaches serve as the core basis for developing related strategies and action plans. By implementing these management measures, Shihlin Electric aims to: Standardize internal operational processes Proactively respond to external expectations through concrete actions Continuously track, evaluate, and improve the effectiveness of its sustainability efforts Ensure alignment with stakeholder interests and long-term sustainable development goals