Acer Incorporated : Impact Valuation

Sustainability Value Creation

Sustainability means long-term development at economic, social, and environmental levels. In addition to creating revenue, the company's operations will also have a certain degree of external impact, including in environmental and social aspects. Quantifying or monetizing the environmental and social external impacts of a company's operations can help them better understand their impact, respond to problems, and achieve the goals of sustainable development.

To strengthen corporate social responsibility (CSR) governance and achieve Acer's vision for sustainability, we have been evaluating the external economic, environmental, and social impacts of operations and translating them into specific numerical and monetary values since 2018. This not only helps us review the impact of our operations, but also helps us better manage and reduce the environmental and social impacts of our operations, providing a better reference for future sustainability and business decisions and increasing transparency of our external communications.

The quantification process is divided into four steps, the first of which is identifying the impact boundary of Acer's operating activities, the scope of the quantification, and external issues with significant impacts from the material topics identified this year. Next, taking into account the positive and negative impact of various activities in Acer's value chain and operations on stakeholders, the external issues that have significant impact are expanded upon each part of the value chain. Then, based on the materiality of each external issue (materiality matrix, industry specific issues, Acer's own situation), representative topics are selected for external quantification. After the initial calculation results are discussed internally and coefficients corrected, the value of Acer's external impact is obtained.

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Boundary	Value Chain	Key	Calculation
and Scope	and Impact	Externalities	Discussion
Definition	Path	Selection	and
	Drawing		Calibration
•Identify the	•Considering the	•Select	•Data
boundaries and	inputs and	representative	Calculation,
value chains	outputs of the	external	Discussion, and
impacted by	process, clarify	influences to	Revision
Acer's	the positive	quantify based
operational	and negative	on external
activities	impacts of	materiality
various	(materiality
•Identify
activities in the	matrix,
significant	value chain on	industry
externalities	stakeholders	specific issues,
from Acer's	Acer's own
•Expand
material topics	circumstances),
	significant	data
	externalities to	availability, and
	all aspects	the degree of
	parts of the	association
	value chain	with Acer

Figure 1: The Quantification Process

Acer is one of the world's leading ICT companies and brands, providing consumer and commercial PCs, digital displays, and electronic service solutions. First tier suppliers in the value chain are mainly ODM assembly plants, material and component manufacturers, while second tier suppliers and onward are upstream raw materials and parts manufacturing. In terms of downstream customers, products can be sold to commercial customers, general consumers, government departments, or schools through distributors or system integrators.

Figure 2: Acer's Value Chain

According to our 2022 materiality analysis, Acer has listed activities at various parts of the value chain. To clarify the impact of activities in the value chain on stakeholders, we have mapped out the impact pathway of each activity's inputs and outputs. After considering the

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inputs and outputs of value chain activities, we list the potential environmental or social impact of those activities and the relevant stakeholders. Finally, we select 12 externally influential indicators to quantify based on the materiality of the topic and Acer's own situation, data quality, and availability.

Figure 3: Impact Pathway Diagram

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We uses the externality assessment tool to monetize the environmental, social, and economic externalities of ourselves so as to examine the value created by the us. Based on the impact pathway, the materiality of each topic, and each topic's materiality, data quality, and availability, the following 12 impact indicators were selected as the basis for the subsequent valuation of Acer's value. The indicators, explanations, quantitative methods, and data sources are listed below:

Table 1: Analysis of Acer's impact indicators

		Impact			Quality of	Positive/
No	Aspects	valuation	Description	Calculating methods	Reference
data	Negative
		items
		EBITDA		Measuring with EBITDA, the impact of
		(Earnings before
		Economic value created by the	corporate financing models or accounting			Acer Consolidated
		interest, taxes,
1	Economy	company's core business	policies can be eliminated and present the real	Primary Data	+	Financial
depreciation
		capabilities	economic value created by the company's			Statements (2021)
		and
			operations.
		amortization)
				Based on Input-Output analysis, after			Directorate-
				calculating the salaries of employees in each			General of Budget,
				region, one unit of investment can be calculated	Primary		Accounting, and
		Remuneration	Economic Added Value Driven	through the Input-Output table of each		Statistics. Input-
2	Economy	Data/Secondary	+
and Benefits	by Employee Salaries	country/region to create the overall indirect	Output Table
		Data
				economic benefits of the region (considering		(2020), OECD
				value added and industry backward linkage			(2015), Internal
				effects).			Statistics
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		Impact			Quality of	Positive/
No	Aspects	valuation	Description	Calculating methods	Reference
data	Negative
		items
				Based on Input-Output analysis, after
				calculating the public expenditure in each
			Economic Added Value Driven	region, one unit of investment can be calculated	Primary
		Public	through the Input-Output table of each
3	Economy	by Public Expenditure (tax,	Data/Secondary	+
Expenditure	country/region to create the overall indirect
		etc.)	Data
			economic benefits of the region (considering
				value added and industry backward linkage
				effects).
				Based on Input-Output analysis, the
				procurement amount of each region is
		Procurement	Economic Added Value Driven	calculated through the Input-Output table of	Primary
4	Economy	each country/region to create the total indirect	Data/Secondary	+
Activities	by Procurement
		economic benefits of the region (considering	Data
				value added and industry backward linkage
				effects).
			The company's own	Based on the Environmental Profit and Loss			Gundlach, J., &
		Greenhouse	operations and its upstream
5	Environment	(EP&L) Accounting, we quantify Acer's	Primary Data	-	Paul, I. (2022),
Gases	and downstream greenhouse
		greenhouse gas emissions (Scopes 1, 2, and 3)			internal statistics
			gas emissions can contribute
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