Stakeholder Engagement｜Analysis of Material Topics
Analysis of Material Topics and Stakeholder Communication
Analysis of Material Topics
Nuvoton pursues corporate sustainability by referencing the 2021 version of the Global Reporting Initiative (GRI) Standards and the AA1000 Accountability Principles Standard issued by the Global Reporting Initiative (GRI). It identifies material topic based on the principles of inclusivity, materiality, responsiveness, and impact. Following the GRI 3: Material Topics 2021 framework, it constructs a process for analyzing material topic to assess the positive and negative impacts of these issues on the environment, economy, and people (including human rights).To align with the IFRS Sustainability Disclosure Standards S1 and S2, the boundaries for sustainability reporting are consistent with the financial statements, adopting the consolidated financial reporting scope. Therefore, Nuvoton's sustainability report is developed in collaboration with the parent company, Winbond Electronics Corporation, to conduct a material topic survey, ensuring consistency within the group. This approach enhances the completeness and comparability of the report.This approach aligns with the international trend in sustainability reporting and aids the Group in integrating and coordinating efforts on sustainability topics. Nuvoton has progressively collaborated with the disclosure framework of its parent company, Winbond, to advance the integration of sustainability information at the group level and to adjust relevant processes and system construction as necessary. Concurrently, it has actively developed a cross-departmental cooperation mechanism to improve employees' overall understanding and application of sustainability disclosure standards through education and training. Given that Nuvoton's paid-in capital is classified within the ''capital amounts ranging from NT$ 2 billion to less than NT$5 billion'' category, it is expected that the IFRS S1 and S2 standards will be adopted by 2028. In the process of promoting corporate sustainability, Nuvoton regards the United Nations Sustainable Development Goals (SDGs) as the core of material topics and aligns with 13 targets of the SDGs. From this point forward, the Company can develop more comprehensive strategies, set specific goals, and achieve significant results through continuous effort and innovation. This not only assists the Company in achieving a balance across environmental, economic, and social dimensions, but also fosters a unified vision for global sustainability.
Analysis Process of Material Topic
01 Establishing Sustainability Issues Database
Drawing upon past sustainability issue databases, we examine industry sustainability practices in alignment with international trends to establish this year's sustainability issue repository. This repository encompasses sustainability issues across four dimensions: economic, governance, environmental, and social.
02 Surveying Issues of Concern by Stakeholders
To gauge the level of stakeholder concern regarding sustainability topics, we distributed stakeholder concern surveys to various stakeholders to ascertain the significance of various stakeholders to the Company. Finally, stakeholder concern regarding sustainability topics were calculated based on the results of both surveys.
03 Evaluating Sustainability Impacts
Representatives from Senior Management of Nuvoton, as well as representatives from task forces under the Sustainability Development Committee, evaluated the positive and negative impacts and likelihood of occurrence of sustainability topics on the environment, economy, and population (including human rights) using sustainability impact assessment questionnaires.
04 Ranking and Confirming Material Topic
Building upon the significance of impacts determined from the results of Phases 02 and 03 of the questionnaire by the Group Senior Management, issues from governance, economic and social dimensions were selected, considering adjustments to the Group's sustainable development priorities, to form the final 9 material topics.
05 Approval of Material Topic
The Sustainability Development Committee reviewed the analysis results of the material topic and task forces formulated management policies for each material topic. Finally, these were presented to the Board of Directors for approval.
Matric on Material Topics
Economic and Governance Aspect
Environmental Aspect
Social Aspect
List of Material Topics and Their Impact
| Material Topics 1 | Corresponding GRI Themes and Standards | Corresponding SASB-specific Topics | Significance for Nuvoton | Aspects of Impact (Positive/Negative) | Impact Description (Economic, Environmental, Population Risks and Opportunities) | Lead Divisions |
|---|---|---|---|---|---|---|
| Innovation in research and development | Customized Topic | - | Innovation in research and development is crucial to Nuvoton's sustained growth, boosting product competitiveness, expanding market opportunities, and addressing the diverse needs of customers. By technological advancements and differential products, the Company enhances brand value and operational efficiency, cuts costs, and sustains a competitive advantage in a swiftly evolving industry landscape. | Positive Continuously enhancing enterprise innovation and growth momentum by providing novel products and services and increasing market share
Negative Failure to retain advanced technologies may result in the inability to provide innovative services or products in response to market changes, reducing market competitiveness | Economic Practicing innovation, creativity, and entrepreneurship annually to promote the idea of industry digital prosperity through innovation
Environmental Integrating environmental and intelligent technologies to expand applications can accelerate data integration and monitoring, reducing environmental impacts People Encouraging employees to contribute innovative ideas and rewarding selected proposals, actively promoting innovation through strategic and concrete actions | Green Product task force of the Sustainability Development Committee |
| Green products | 417 Marketing and Labeling | - | Green products can boost Nuvoton's competitiveness and brand image, and are in line with environmental regulations and market demands. Energy-saving and low-carbon design reduces the Company's environmental impact and meets customers' sustainability requirements. At the same time, resource efficiency is improved and operational risks are reduced to secure long-term developmental benefits. | Positive Developing green products contributes to enhanced brand image, attraction to customers with environmental awareness, satisfaction of market and regulatory requirements, promotion of sustainability, and improvement of competitiveness and market share Negative Developing green products raises R&D and production costs and necessitates supply chain adjustments, while the uncertainty of market demand may impact investment returns, thereby increasing operational risks | Economic Enhance corporate competitiveness, fulfill market and regulatory requirements, attract consumers with environmental awareness and generate new business opportunities Environment Reduce carbon emissions and resource consumption, minimize pollution, and promote a circular economy and sustainable development People Improve consumer health and quality of life, foster environmental awareness, and encourage green consumption patterns | Green Product task force of the Sustainability Development Committee |
| Integrity operation and corporate governance |
| TC-SC-520a.1 | Corporate governance assessment of material topics is critically significant for Nuvoton, as it helps ensure the Company's sustainable development, meet stakeholder expectations, comply with relevant regulations, effectively manage risks, maintain long-term competitiveness, and establish credibility. These elements are crucial for the Company's long-term prosperity. | Positive Sound corporate governance and integrity operation, and the formulation and implementation of relevant rules and guidelines help establish standards of conduct for operational activities and positively influence the Company, society, and the environment Negative Failure to execute comprehensive corporate governance and integrity operation may lead to the misuse of company resources for activities detrimental to the Company, society, and the environment, negatively impacting stakeholders, and even resulting in additional costs related to legal proceedings and lawsuits due to violations. | Economic Integrity operation and good corporate governance principles are fundamental to business operations, instilling confidence of stakeholders towards Nuvoton, encouraging investment in Nuvoton and commercial transactions with Nuvoton, thereby positively affecting revenue and the economy. Environment Embracing the concept of integrity operation and having robust governance systems can prevent the Company from engaging in environmentally harmful practices and reduce the occurrence of cost shifting to the environment due to economic considerations. People Effective corporate governance systems and integrity operation practices can prevent the Company from facing legal penalties or even closure due to violations, as well as prevent the misuse of company resources, thereby safeguarding employees' rights and ensuring equal treatment. | Green Product task force of the Sustainability Development Committee, Nuvoton Japan Internal Control Office, Nuvoton Japan Corporate Strategy Office |
| Productivity and business performance | 201 Economic Performance |
| Management strategy and business performance are key to Nuvoton's sustainable development. Developing comprehensive management strategies can maximize cost utilization and increase revenue, thereby improving corporate profits and operational efficiency. | Positive Develop comprehensive short-, mid-, and long-term management strategies and goals to effectively enhance operational performance and maintain market competitiveness Negative Failure to anticipate market changes may result in missed business opportunities, leading to loss of customers and orders | Economic Collaborate with academia for early-stage research and implementation to maintain AI development momentum and increase long-term revenue opportunities Environment Introduce digital technology into energy-saving applications and facility management to enhance operational efficiency and generate a positive impact on the environment People Develop applications for smart manufacturing to enhance efficiency, process quality, and product yield in work and production. | Corporate Governance task force of the Sustainability Development Committee |
| Regulatory compliance | Customized Topic | TC-SC-520a.1 | Nuvoton upholds the spirit of sustainability and the principles of being a responsible enterprise, and places the utmost importance on regulatory compliance throughout its overall operations. | Positive Enhancing trust, reducing legal risks, and promoting sustainability contribute to market expansion and long-term competitiveness Negative Increased compliance costs, including resource investment, manpower and process adjustments; failure to adapt to new regulations in real-time may impact operational flexibility and short-term benefits | Economic Ensure legal operations of the Company, reduce fines and legal risks, enhance investor confidence and market competitiveness Environment Encourage the Company to adopt more environmentally friendly technologies and processes to reduce pollution and resource consumption and contribute to sustainability People Safeguard employee rights and consumer safety, enhance social well-being and fairness | Corporate Governance task force of the Sustainability Development Committee |
| Risk 2 management | Customized Topic | - | Ensure the Company's long-term stability and customer satisfaction, and protect the assets and reputation of both the Company and its clients | Positive Strengthen prevention capacity, decision-making quality and stakeholder confidence through risk management, minimize the effects of unforeseen events, protect assets and ensure operational stability and support long-term growth Negative Establishing and maintaining a risk management system requires investment in funds and manpower, which may increase short-term operational costs, and overly conservative strategies may limit innovation and growth opportunities | Economic Reduce financial and operational risks to ensure stable development of the Company and enhance investor confidence and market competitiveness Environment Effectively address environmental risks, such as climate change and resource scarcity, and encourage the Company to adopt more sustainable business models People Ensure employee safety and well-being, reduce occupational accidents, and enhance internal stability and trust | Corporate Governance task force of the Sustainability Development Committee |
| Supply chain management |
| TC-SC-440a.1 | Suppliers provide Nuvoton with the raw materials necessary for its operations and production. Nuvoton is committed to pursuing mutual growth with its suppliers. | Positive Establish a sound supplier management mechanism and collaborate with suppliers to build a sustainable supply chain. Monitor suppliers' implementation of human rights protection and achieve energy-saving, carbon-reduction, and cost-reduction objectives together Negative Failure to implement supplier sustainability management may result in the inability to monitor suppliers' human rights and environmental management practices, potentially leading to adverse impacts on the Company, society, and the environment | Economic Establish a comprehensive supply chain management system to stabilize the supply of goods and improve operational efficiency, leading to increased revenue Environmental Collaborate with suppliers to enhance sustainability performance, including developing energy-saving and carbon-reduction plans. Neglecting environmental management in the supply chain may increase the risk of regulatory violations People Incidents of human rights disputes in the supply chain may decrease customer trust and order quantity | Sustainable Supply Chain task force of the Sustainability Development Committee |
| Energy and greenhouse gas management 3 |
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| Nuvoton recognizes the impact of climate change on corporate sustainability and follows the TCFD framework to identify relevant risks and opportunities and integrate them into risk management and sustainability strategies. The Company is committed to reducing the environmental impact during product design, services, activities, and production processes, and commits to comply with environmental laws and regulations, addressing the needs of stakeholders, and continuously promote energy management systems to achieve an energy-efficient environment. | Positive Enhance the Company's energy efficiency and implement energy conservation and carbon reduction measures Negative Failure to properly manage energy resource consumption increases the risk and expenditure of future carbon tax and fee levies | Economic Establishing an environmental management system to plan, implement, and inspect energy resource management, thereby improving energy resource utilization efficiency Environmental Improve energy efficiency, use renewable energy, and reduce carbon emissions to lessen environmental burden, contributing to the mitigation of climate change People Strengthen employee awareness of environmental protection and energy conservation | Responsibilities related to climate-related information lie with the finance unit and are jointly supervised by the Sustainability Development Committee and Environmental Sustainability task force of the Sustainability Development Committee |
| Talent management 4 |
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| In the pursuit of sustainability, the professional quality and management ability of human resources are the cornerstone of the Company. Nuvoton is well aware that attracting, retaining, cultivating and developing outstanding talents is not only the core mission of itself, but also the key driving force to ensure a leading position in the fierce market competition. At the same time, Nuvoton recognizes that the practice of occupational safety and health is not only a legal responsibility of the Company, but also the foundation for building a healthy, safe and sustainable corporate culture. Through continuous investment in talent and active promotion of occupational safety and health management, Nuvoton is committed to creating a corporate environment that can both protect the well-being of employees and continue to innovate and pioneer the market. | Positive Effective talent management attracts and retains outstanding talents, enhances employee satisfaction and productivity, strengthens corporate competitiveness and innovation capabilities, and promotes sustainability and stakeholder trust Negative Invest a lot of resources in remuneration and benefits, training, occupational health and safety. Failure in proper management may lead to labor disputes, affecting the Company's image and operational stability. | Economic Effective talent management enhances productivity and innovation capabilities, strengthens corporate competitiveness, and attracts investment and market opportunities Environment Driving sustainable talent development contributes to the establishment of an environmentally symbiotic and social responsibility culture within the Company People Enhance employee well-being and job satisfaction, promote harmonious labor relations, attract outstanding talents, and enhance social employment stability. And implement occupational safety and health management to promote the physical and mental health of employees | Human Rights and Social Inclusion task force of the Sustainability Development Committee |
1Changes in the List of Material Topics: The material topics for Nuvoton in 2024 are aligned with its parent company, Winbond, and have been adjusted in three directions. 1. Change of names: such names adopted in 2023 as "Management strategy and business performance," "Innovation and R&D management," "Corporate governance and business integrity," "Supplier sustainability management" and "Information security and privacy protection" were changed to "Productivity and business performance," "Innovation in research and development," "Integrity operation and corporate governance," "Supply chain management" and "Risk management," respectively. 2. Consolidation of multiple topics: such topics adopted in 2023 as "Occupational safety and health," "Talent appreciation and cultivation" were consolidated to "Talent management;" while "Greenhouse gas emissions," "Energy resource use and consumption" and "Climate change" to "Energy and greenhouse gas management." 3. Added topics: Regulatory compliance and green products. A total of 9 material topics were selected for the year 2024.
2Risk management includes the content of "Risk management" and "Information system security and personal data protection."
3Energy and Greenhouse Gas Management includes the contents of ''Energy and Greenhouse Gas Management'' and ''Climate-related Risks and Opportunities.''
4Talent management includes "Remuneration and benefits and employee care," "Talent recruitment and cultivation," "Human rights and equality," "Labor relations" and "Occupational safety and health."