Chairman & Vice Chairman Message
In 2023, the wave of Generative AI has rapidly swept across the globe, becoming an unprecedented force driving industry transformation and economic recovery in postpandemic countries. 22fun is thriving and seizing the opportunity to reap abundant rewards, achieving record-breaking profits for the year, and the Company's market value has soared by over three times. 22fun adhere to the engineers' original intention of seeking truth and pragmatism and the concept of corporate sustainability. We have long been dedicated to researching and developing high-performance computing design solutions and providing various "Tools for SMART X" intelligent tools. After years of accumulation and hard work, we have finally ushered in a new era of diversified computing.
The global business operations have been significantly affected by high interest rates, high inflation, and extreme climate change. Quanta's employees are diligent and dedicated, committed to improving efficiency, reducing costs, conserving energy, and innovating technology to enhance the company's competitiveness in response to market changes. We have achieved impressive results despite facing adversity, whether it be in AI servers, smart mobility, or other products. By implementing valueadded enhancements, optimizing our business portfolio, and controlling costs, we have not only expanded our profit margins but also consistently increased the value of our company. Furthermore, we have strengthened customer trust through continuous innovation and improvement.
In this era, which is filled with challenges and opportunities, it is imperative that we constantly consider the sustainable development of businesses, as well as new market opportunities and future trends. To mitigate risks such as economic impact, environmental impact, geopolitical factors, and talent demand, we have considered stakeholder feedback, consulted representative international sustainability guidelines and global sustainability trends, and further developed our six sustainability strategies:
To accomplish the above tasks, we aim to combine the advantages of new AI technologies with sustainable development to establish sustainable models, a sustainable management platform, and systematic analysis of sustainability data, thereby enhancing the quality of sustainability information disclosure and related management performance.
Despite the global economy remaining full of uncertainties in 2024, people's pursuit and exploration of happiness through new value propositions, lifestyles, and work patterns have never stopped. This has also infused the market with a constant flow of vitality and business opportunities. 22fun is positioned at the heart of the AI revolution, with a profound understanding of the growing demand for computational power in the future. We are poised to witness a new era propelled by deep learning and generative AI, where AI will enhance productivity, efficiency, and creativity across all industries. Our objective is to incorporate this force into our products, services, and corporate value, empowering 22fun to sustain its leadership and foster growth through innovation and sustainable development during this transformative period.
In response to international industry toward sustainable development and to promote Quanta's sustainable-related initiatives more effectively, in December 2021, Quanta Computer restructured its “ Corporate Sustainable Development Committee ” and officially renamed it to “ ESG Sustainable Development Committee ”. In December 2022, with the approval of the Board of Directors, it was renamed again to “Sustainability Steering Committee” and became a direct subordinate to the Board of Directors. The Chairman, Barry Lam, Director C.C. Leung, and Director C. T. Huang were chosen to serve as guidance committee members, leveraging their expertise in business strategy, innovation and R&D, and manufacturing management to provide guidance for Quanta's sustainable development. And to effectively promote and implement sustainability work, enhance ESG performance and execution efficiency, the dedicated sustainability unit, the “Sustainability Development Center”, integrates the sustainability efforts of various plants and business units, reporting directly to the General Manager's Office, actively promoting comprehensive ESG affairs.
Quanta's Sustainable Development Organization consists of the Climate Change Management Committee, Environmental Protection Committee, Social Participation Committee, Corporate Governance and Ethics Committee, and Green Product and Supplier Sustainability Management Committee. In addition to the existing committees, in response to stakeholders' concerns about Quanta's green products and sustainable supply chain management, Quanta integrated the functions of the Green Product Committee in December 2023, and established the “Green Product and Supplier Sustainability Management Committee.” With the support and consent of the General Manager, representatives from various businesses, units, and plants, as well as various functional units, jointly form this committee, establishing a complete green product and supply chain management system, reflecting Quanta's emphasis on green products and sustainable supply chain management.
The highest decision-making executives of the Chairman's Office and General Manager's Office appointed the management team as representatives and agents for sustainable management of the company in accordance with the "Social Responsibility Management Manual". The Quanta Sustainability Development Guidance Committee meets to discuss and develop policies for assessing and managing the organization's economic, environmental, and social sustainability. After approval by the highest decision-makers in the general manager's and chairman's offices, the proposals are submitted to the Board of Directors for deliberation and reporting. After being approved by the Board of Directors, the various promotion plans are implemented, and the results of their execution are regularly reported to the Committee. Under the Quanta Corporate Sustainability Steering Committee, there were originally four sub-committees: the Corporate Governance and Ethical Standards Committee, the Environmental Protection Committee, the Green Product Committee, and the Social Participation Committee, with senior management representatives from relevant units serving as management representatives.
To ensure a consistent direction for sustainable development among all employees and to unite everyone in a common understanding of sustainable development, the sustainable development vision and mission have been formulated and approved by the board of directors after discussions in the sustainable development guidance committee. They are as follows:
Quanta firmly believes in technology as the driving force behind the advancement of human society and is committed to technological innovation with the goal of improving the lives of people. In addition to returning the success of our work to society, shareholders, and employees, we actively communicate and interact with all stakeholders to create a better society and fulfill our corporate citizenship obligations in sustainable development.
| Mission | UN SDGs | Corresponding Goals from Quanta | Achievements in 2023 |
|---|---|---|---|
Being people focused
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Ensure healthy lives and promote well-being for all at all ages |
Establishing a fair and equal working environment and creating a nondiscriminatory and harassment-free work culture. Adhering to international human rights conventions and standards, establishing risk management, and taking preventive measures. Prioritizing the health and safety of employees and enhancing their wellbeing. |
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Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all |
Providing a high-quality working environment, developing employee potential, attracting talents, and creating competitive advantages for the company. |
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Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all |
Actively engaging in technological innovation research and development, and continuously providing profits to shareholders and employees. Providing a high-quality working environment, developing employee potential, attracting talents, and creating competitive advantages for the company. Ensuring that all employees participate in controlling risks to ensure the effective operation of information security systems and protect the normal operation of the company. |
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Reduce inequality within and among countries |
Adhering to the employee code of ethics and establishing a culture of honest and trustworthy operation. Establishing a fair and equal working environment and creating a nondiscriminatory and harassment-free work culture. |
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Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels |
Implementing corporate governance and improving supervisory functions. |
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Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development |
Implementing supplier management and assisting suppliers in improving their ESG performance. Continuing to improve the management system and quality of responsible mineral procurement projects. |
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Environmental
protection
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Ensure healthy lives and promote well-being for all at all ages |
Enhancing the awareness of environmental changes among all employees and taking collective action to protect the environment. |
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Ensure access to affordable, reliable, sustainable and modern energy for all |
Adhering to local environmental protection laws and regulations at each operating location. Responding to global warming control of 1.5 °C by setting and achieving scientific carbon reduction goals. |
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Promote Green Economy and ensure sustainable consumption and production patterns |
Responding to global warming control of 1.5 °C by setting and achieving scientific carbon reduction goals. Enhancing the awareness of environmental changes among all employees and taking collective action to protect the environment. Aiming to achieve the goal of 50% renewable energy by 2030. |
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Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development |
Committed to reducing waste and minimizing the impact on the environment. Adhering to local environmental protection laws and regulations at each operating location. Responding to global warming control of 1.5 °C by setting and achieving scientific carbon reduction goals. |
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Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development |
Identifying climate change risks, formulating response strategies, and turning risks into opportunities. Responding to global warming control of 1.5 °C by setting and achieving scientific carbon reduction goals. |
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Being green and sustainable
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Ensure access to affordable, reliable, sustainable and modern energy for all |
Continuously paying attention to green policies and research and development guidelines for products, and innovating to meet customer expectations for green products. |
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Promote Green Economy and ensure sustainable consumption and production patterns |
Continuously paying attention to green policies and research and development guidelines for products, and innovating to meet customer expectations for green products. Continuously adhering to international regulations and standards, ensuring 100% compliance with global environmental laws and regulations. |
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Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development |
Using renewable energy and recyclable materials to produce environmentally friendly products. Establishing and maintaining a comprehensive risk management system. |
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Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development |
Increasing the proportion of local raw materials and promoting the use of renewable energy in the supply chain. |
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Caring for Society
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Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all |
Combining resources to promote education, art, and technology and to enrich cultural diversity. Focusing on stakeholders and working together to create a better society. |
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Reduce inequality within and among countries |
Combining resources to promote education, art, and technology and to enrich cultural diversity. Focusing on stakeholders and working together to create a better society. |
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Promote Green Economy and ensure sustainable consumption and production patterns |
Focusing on stakeholders and working together to create a better society. |
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Comprehensive mitigation and adaptation actions to address climate change and its impacts. |
Focusing on stakeholders and working together to create a better society. |
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Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels |
Combining resources to promote education, art, and technology and to enrich cultural diversity. Focusing on stakeholders and working together to create a better society. |
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Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development |
Focusing on stakeholders and working together to create a better society. |
In December 2023, the board of directors of Quanta agreed to update its sustainable development commitments and publicly disclose them on its official website, to provide stakeholders with an understanding of Quanta's sustainable development goals and the rules it adheres to. The details are explained below:
In addition, to verify the progress of sustainable development and meet the expectations of international standards and stakeholders, Quanta has selected the following initiatives to explain its considerations for specific standards:
Other participating associations and activities
- Taiwan Electrical and Electronic Manufacturers' Association(TEE MA)
- Cloud Computing and IoT Association in Taiwan (CIAT)
- Taiwan AI System Alliance
- Taoyuan City Human Resource Management Association
- Institute for Biotechnology and Medicine Industry (IBMI)
- Member of Taiwan Huaya Technology Park Environmental Quality Supervision Committee
- Participated in the Environmental Quality Supervision Committee of Huaya Science and Technology Park and was hired as a member. The committee meeting was held quarterly. The meeting content included the report on the income and expenditure of the committee's expenses, and various implementation matters of the park's environmental audit. The total payment for 2022 was NT$397,099
- Shanghai Fire Protection Association (SFPA)
- Participate in Shanghai Songjiang Fire Protection Association, as a member of the association, participate in annual routine meetings and fire professional guidance, and pay a membership fee of RMB 6,000 per year
- Standing director unit of Shanghai Songjiang Safety Production Association
- Participate in the Shanghai Songjiang Safety Production Association, as the vice president unit of the association, participate in annual routine meetings, participate in safety research, study and other activities organized by the association according to the arrangement of the association, and pay an annual membership fee of RMB 6,000
Stakeholder identification was performed by the 5 main principles of AA1000 Stakeholder Engagement Standards (2015), namely responsibility, influence, tension/attention, dependency and diverse perspective. Using the above principles, members of the CSR Committee Evaluation Panel and representatives had identified shareholders and investors, customers, suppliers, employees, local communities and Governance as Quanta's key stakeholders.
To strengthen the communication and negotiation with various stakeholders, the Corporate Governance and Ethics Committee mainly assists in the implementation of various communication matters, and all relevant units are included in the work plan according to the items of concern to stakeholders, and contacted through various communication channels and methods response, prevention and further planning.
| Stakeholders | Important ESG topics and aspects | Primary responsibilities from Quanta Computer | Communication means and channels |
|---|---|---|---|
Shareholders and
investors
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Customers
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Suppliers
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Employees
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Government
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| Note: All communication channels are responsibilities and planned activities for each unit; except for questionnaires targeted to major issues of discussion, no specific items are conducted for the purpose of report preparation. | |||
Materiality Analysis and Scopes
We aim to present a comprehensive overview of the company's sustainability impact in the report. This will include Quanta's Environmental, Social, and Governance (ESG) strategies, action plans, implementation progress, and management performance. The report is intended for stakeholders who have an interest in Quanta, such as investors, customers, colleagues, suppliers, local communities, and government authorities. By providing this information, we ensure that stakeholders have access to a more comprehensive understanding of the company.
The main thematic process of Quanta is as follows:
Identification of Sustainability Issues
Quanta conducts a comprehensive analysis annually, with a specific focus on the pillars of sustainability: Environmental Protection, Social Responsibility, and Corporate Governance. This analysis considers international sustainability trends and standards, such as GRI Standards, SDGs, SASB, TCFD, DJSI, MSCI, CDP, and other disclosure frameworks. It integrates the company's sustainable development strategies and objectives, along with the outcomes of stakeholder engagement over the past two years to identify initial key issues. A total of 23 potential significant sustainability issues have been compiled. Based on the compilation of 23 potentially significant sustainability issues, questionnaires were designed and distributed to stakeholders and internal expert teams to gather their input on these issues and assess the positive and negative impacts.
Stakeholders' Level of Concern
The questionnaire was distributed to five identified categories of stakeholders: shareholders and investors, customers, suppliers, employees, and government agencies, for a comprehensive survey. A total of 323 questionnaires were collected to assess the level of concern among each stakeholder group regarding various issues.
Assessment of the Levels of Positive and Negative Impact and Ranking of Issues
Quanta has developed questionnaires to assess the positive and negative impacts of 23 identified sustainability issues. These questionnaires were evaluated by an internal team of experts, including members of the sustainability development committees and colleagues involved in sustainable business operations. The evaluation focused on three aspects: financial impact, severity of company assistance, and likelihood of occurrence.
When assessing the positive impact, it is important to consider the establishment of various systems related to the issues at hand. By meeting regulatory requirements and surpassing regulatory management practices, Quanta can exert corporate influence and create market opportunities. These efforts will have a positive effect on Quanta and allow it to continue exerting corporate influence.
In assessing negative impacts, considerations include whether the lack of established systems or measures related to various issues could lead to potential or actual losses and legal risks. This assessment aims to evaluate the negative impacts on Quanta, in order to plan responses in advance.
After analyzing the results of the internal expert team, we have identified the positive and negative impacts of each issue separately. The overall impact level of each issue is determined by the sum of these impacts. The figure below displays the impact level results in ascending order:
Decision on material topics
Based on the principle of dual importance, the average impact of positive and negative issues is combined with the average level of external influence and internal operations. This determination considers the external environment and the level of stakeholder concern regarding the different issues. The results after averaging the sum of the two are as follows:
| Impact Level on Organization (Rating by Internal Expert Group) |
Level of Stakeholders concern Stakeholders concern (Questionnaire Rating) |
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|---|---|---|---|
| Content | Average | Average | Total Average |
| Human Rights | 3.71 | 4.23 | 3.97 |
| Economic Performance (The company's expenditure includes income, operating costs, employee salaries and benefits, government expenditures, and investments in the community) | 4.36 | 4.38 | 4.37 |
| Climate Change (Financial impacts and other risks and opportunities arising from climate change) | 3.76 | 3.75 | 3.75 |
| Market Presence | 3.45 | 4.22 | 3.83 |
| Anti-corruption (Communication and training about anti-corruption policies and procedures) | 3.90 | 4.17 | 4.03 |
| Legal actions for anti-competitive behavior, anti-trust, and monopoly practices | 3.77 | 3.88 | 3.82 |
| Materials (Use of renewable or non-renewable materials, recycling of products or packaging materials, etc.) | 3.68 | 3.96 | 3.82 |
| Energy (Data on the use of renewable or non-renewable energy, measures to reduce energy consumption, and performance records, etc.) | 3.90 | 4.01 | 3.96 |
| Water (Data on water usage, emissions of wastewater, etc.) | 2.95 | 3.73 | 3.34 |
| Emissions (Data on greenhouse gas emissions, assessment, measures, and performance records, etc.) | 3.82 | 3.83 | 3.82 |
| Waste (Data on hazardous/non-hazardous waste, measures to reduce waste, and performance records, etc.) | 3.38 | 3.78 | 3.58 |
| Supplier Environment Assessment (New suppliers that were screened using environmental criteria; Negative environmental impacts in the supply chain and actions taken) | 3.64 | 4.23 | 3.94 |
| Employment (Total number and ratio of new hires and departures of employees in each plant, standard benefits, maternity leave, etc.) | 3.76 | 3.99 | 3.87 |
| Labor/Management Relations (Minimum notice period for operational changes) | 3.31 | 4.24 | 3.77 |
| Occupational Health and Safety (management system; Hazard identification, risk assessment, and incident investigation ) | 3.94 | 4.36 | 4.15 |
| Training and Education | 3.73 | 4.46 | 4.10 |
| Diversity and Equal Opportunity (Ratio of basic salary and remuneration of women to men; Diversity of governance bodies and employees) | 3.44 | 4.16 | 3.80 |
| Non-discrimination | 3.47 | 4.26 | 3.86 |
| Freedom of Association and Collective Bargaining | 3.08 | 3.85 | 3.46 |
| Child Labor | 3.21 | 3.99 | 3.60 |
| Forced or Compulsory Labor | 3.38 | 3.89 | 3.64 |
| Supplier Socail Assessment | 3.56 | 4.33 | 3.95 |
| Customer Privacy | 4.06 | 4.26 | 4.16 |
| 3.62 | 4.08 | 3.85 |
Based on their scores, the top 50% of topics (with an average score of 3.85 or above) were selected as significant themes. Ultimately, 11 topics were identified as Quanta's material topics for 2023, including economic performance, anti-corruption, energy management, supplier environmental assessment, labor-management relations, occupational health and safety, training and education, human rights (child labor, forced or compulsory labor related), non-discrimination, customer privacy, and supplier social assessment. Considering the company's sustainability strategy and focus, as well as the needs of the operational process, self-disclosed issues include water, employee diversity and equal opportunities, materials, waste management, emissions, climate change, labor relations, freedom of association, and collective bargaining. The analysis result was reported during the Q1 2024 board meeting, which material topics were presented and approved as further disclosure information.
Specific Criteria for Disclosure of Material Considerations
| Category | Measurements | Significant Reasons | Boundary (within the organization) | Boundary | |||
|---|---|---|---|---|---|---|---|
| 22fun | QSMC | QCMC | QMB | Outside of Organization | |||
| Economics | Economic Performance | The main responsibility of the enterprise is to continue meeting stakeholder expectations | |||||
| Anti-corruption | Integrity is the foundation of business operations, and it is important to ensure that all employees can comply with the company's code of ethics. To achieve sustainable growth for the company, customers and suppliers should also be committed to the principle of integrity, and working together for the development of the industry | ||||||
| Environmental | Energy Management | Energy control and management has become an international concern, which supporting it, the corporate is achieving sustainable development in environmental protection | |||||
| Supplier Environmental Assessment | Quanta's major organizational policy is to comply with environmental regulations while establishing partnerships with suppliers | ||||||
| Social | Human Rights Assessment | Upholding labor rights is an important labor policy of the RBA | |||||
| Socio-economic Compliance | Compliance with laws and regulations is an important basis for corporate governance | ||||||
| Occupational Health and Safety | Important regulations and foundations for labor, echoing the company's zero occupational disaster policy | ||||||
| Customer Privacy | The company's commitment to its customers preserves its financial performance. Causing harm to customer privacy can lead to substantial financial losses and reputational damage | ||||||
| Forced or Compulsory Labor | Upholding labor rights is an important labor policy of the RBA | ||||||
| Labor/Management Relations | The relationship between labor and company is one of the foundations of Quanta's sustainable development | ||||||
| Employment | We are giving access to information on the legal relationship between the company and employees in terms of rights and obligations and on how we recruit local talent inclusively, such as by age and gender | ||||||
| Non-discrimination | The company's recruitment and employment practices shall not treat individuals differently based on factors such as race, color, gender, religion, political views, ethnicity, social background, age, physical or mental disabilities, immigration status, illness, or sex. This is the basic expectation of the law and all stakeholders, who require the company to effectively execute responsible business practices | ||||||
| Training and Education | Assist employees in enhancing their abilities during their career development and ensure that their development is treated fairly based on the conclusions of individual performance evaluations | ||||||
| Diversity and Equal Opportunity | The company shall assist employees in their career development to enhance their abilities and ensure that colleagues' development is treated fairly in performance evaluations | ||||||
| Child Labor | Respecting employees and providing equal employment opportunities is one of the foundations of Quanta's sustainable development. RBA and international standards focus on issues that child labor should not be involved in all the company's manufacturing processes | ||||||
Reporting Changes: Change of Material Issues from the Previous Year
| Category | 2022 Significant Considerations | 2023 Significant Considerations | Explanation |
|---|---|---|---|
| Economics | Economic Performance (201) | Economic Performance (201) | |
| Anti-corruption (205) | Anti-corruption (205) | ||
| Environmental | Energy (302) | Energy (302) | |
| Emissions (305) | |||
| Supplier Environmental Assessment (308) | Supplier Environmental Assessment (308) | ||
| Social | Employment (401) | Employment (401) | |
| Labor/Management Relations (402) | |||
| Occupational Health and Safety (403) | New | ||
| Training and Education (404) | Training and Education (404) | ||
| Diversity and Equal Opportunity (405) | |||
| Non-discrimination (406) | Non-discrimination (406) | ||
| Supplier Social Assessment (414) | New | ||
| Customer Privacy (418) | Customer Privacy (418) |