To all King Yuan Fu staff members: 2022 was a year of unprecedented global turmoil and upheaval. In the face of these arduous challenges, we managed to minimize the impact of the macroenvironment on our corporate operations and deliver performance superior to our competitors as a result of your concerted efforts. I’d like to avail myself of this opportunity to express my sincere gratitude to you for your valuable contributions and adaptability over the past year.

The biggest black swan event in the first half of 2022 was the outbreak of the Russia–Ukraine War, a major geopolitical conflict. This war directly resulted in soaring raw material and energy prices. In addition, the lingering global economic impact of COVID–19 prolonged container shortages and sky–high shipping costs. The accompanying bullwhip effect coupled with constant interest hikes in response to inflationary pressures sent the economy into a tailspin in the second half of the year and brought about a situation of an unprecedented disparity between surging global inventories and rapidly stagnating demand.

However, despite this global turmoil, discussions on ESG and climate change– related issues have continued unabated. COP 27, which was successfully held in Egypt, not only perpetuated the spirit of the Paris Agreement but also prioritized the conversion of verbal commitments of participating nations into concrete action. This clearly indicates that the severe impacts of climate change humanity is currently facing demand immediate action. I’m sure you’ve all noticed the mild winter temperatures in Taiwan in 2022, which are an inevitable consequence of climate change.

In the face of this global storm of volatility, we haven’t slowed down our pace in the field of ESG and sustainability. As a result, we were able to maintain our excellent record of 2021 (our first year of sustainability reporting) in 2022. Through the concerted efforts of our employees, we have earned numerous awards and recognitions including a TCSA Corporate Sustainability Report Award and a TCSA Growth Through Innovation Leadership Award, a SEAL Environmental Initiatives Award, and nominations for a Global Views Monthly CSR Award and a Circular Economy Award presented by the Chung-Hua Institution for Economic Research.

The circular economy concept represents the ideal solution for plastic materials. On the foundation of the goal of increased rPET usage that we set for ourselves in 2021 (the first year of sustainability reporting), we continue to forge ahead on our path toward sustainability. In addition to the impetus provided by the global market, legal regulations in Taiwan have also caught up with global trends. At the end of 2022, the use of rPET for food contact applications was finally approved by the Taiwanese Food and Drug Administration. King Yuan Fu became the first enterprise in Taiwan to provide rPET food containers to local retail sales channels.

In the first year of ESG, we mainly focused on the formulation of environmental policies. However, we also fully understand that the environmental and social dimensions are of equal importance and that employee care is a key link in the latter dimension. We have therefore implemented the following initiatives in this field:
▪ Sustainable Talent Development Program ” which aim s to improve t alent retention and external talent recruitment.
▪ Adoption of a “flextime scheme” for indirect labor to offer employees a certain degree of flexibility in terms of attendance without affecting work output.
▪ Implementation of an industry –leading initiative to “return brokerage fees to migrant workers” which is in line with global trends in the field of human rights development.

We will persist in our efforts to create more friendly workplace environments through the adoption of other feasible practices.

In early 2023, Taiwan passed the Climate Change Response Act, which represents a new milestone in the country’s efforts to codify energy conservation & carbon reduction goals into law. Following the completion of the ISO 14064–1 GHG Inventory in 2021, we initiated the planning process for our energy conservation & carbon reduction pathway with a focus on power consumption–our primary carbon emission source. In 2022, we gradually perfected our power management framework based on the adopted ISO 50001 system under guidance of the Taiwan Green Productivity Foundation and the Foundation of Taiwan Industry Service. The utilization of this optimized energy management system to ensure maximum energy efficiency marks the next step prior to adoption of green power. After realizing the goal of energy conservation, we will pursue our ultimate objective of carbon neutrality by relying on green power.

Global economic volatility affecting business operations all over the world is predicted to persist in the foreseeable future. On the other hand, the pace of global progress in the field of climate issues is projected to accelerate. I expect all staff members to maintain their unwavering commitment to strengthening the links between industry development and ESG–related activities in pursuit of ongoing progress and maximization of our influence in the field of sustainability. Let’s jointly forge ahead on the path toward becoming one of the “Best for the World.”