2021

Sustainability Report

Sustainability Report

LuGao Cafe

T A B L E O F

About the Report ���������������������������������������������� 04 Guidelines and Assurance������������������������������������ 04 Reporting Period and Scope��������������������������������� 04 Reporting Cycle ������������������������������������������������� 04 Message from Chairman�������������������������������������� 05

CH1 Sustainable Governance����������������������������� 06 1.1 About Taiwan Tea Corporation�������������������������� 07 1.1.1 Location of operations ��������������������������������� 07 1.1.2 The Scope of Operations������������������������������ 09 1.1.3 Outlook����������������������������������������������������� 10 1.1.4 Financial performance ��������������������������������� 10 1.2 Corporation Social Responsibility ��������������������� 12 1.2.1 Implementation of Corporation Social Responsibili� ty �������������������������������������������������������������������� 13 1.2.2 Corporate Structure and Management ������������ 13 1.2.3 Communication with Stakeholders and Analysis of Material Topics Issues ����������������������������������������� 14 1.3 Corporate Governance ����������������������������������� 18

1.3.1 Governance Framework������������������������������� 18 1.3.2 Ethical Management and Legal Compliance ����� 21 1.3.3 Risk Management��������������������������������������� 24 1.3.4 Internal audit���������������������������������������������� 27

CH2 Products and Services ������������������������������� 29

2.1 Technical Tea Farm���������������������������������������� 30

2.2 Food Safety ������������������������������������������������� 33

2.3 Supplier Management ������������������������������������ 35 2.3.1 Supplier Selection Criteria ���������������������������� 36 2.3.2 Traceability management ����������������������������� 36 2.4 Local Procurement ���������������������������������������� 37 2.5 Customer and Consumer Service ��������������������� 39 2.5.1 Consumer protection ����������������������������������� 39 2.5.2 Customer Service ��������������������������������������� 39 2.6 Awards and Certifications�������������������������������� 41 2.7 Product Innovation ���������������������������������������� 43 2.7.1 Collaboration with channels �������������������������� 43 2.7.2 TTC Shop ������������������������������������������������� 46

02 2021 Sustainability Report

CH1

CH2

CH3

CH4

CH5

About the Report Sustainable Governance

Products and Services

Happy Workplace

Green Environment

Social Welfare

Appendix

LuGao Cafe

C

O

N

T

E

N

T

S

CH3 Happy Workplace���������������������������������������

48

4.2.1 Sustainable Circularity and Waste Management 69

3.1 Current Status of Human Resources �����������������

49

4.2.2 Ecological Conservation�������������������������������

69

3.1.1 Staff structure ��������������������������������������������

49

4.3 Energy and Resource Management ������������������

70

3.1.2 Overview of employee turnover ���������������������

49

4.3.1 Energy management �����������������������������������

71

3.2 Building a Happy Workplace ����������������������������

50

4.3.2 Greenhouse gas management ����������������������

71

3.2.1 Care for employees�������������������������������������

51

4.3.3 Water resource management ������������������������

72

3.2.2 Occupational safety and health����������������������

52

CH5 Social Welfare

73

3.2.3 Employee Welfare and Communication �����������

56

�������������������������������������������

3.2.4 Talent development �������������������������������������

58

5.1 Community Care

�������������������������������������������

74

5.2 Social Welfare Activities

76

CH4 Green Environment������������������������������������

63

Appendix���������������������������������������������������������

78

4.1 Climate Change Risks and Opportunities �����������

64

Sustainability Accounting Standards Board (SASB) In�

4.1.1 Organizations regarding the governance of climate

dex Table����������������������������������������������������������

79

change risks and opportunities������������������������������

64

GRI Index Table �������������������������������������������������

81

4.1.2 Governance of climate change risks and opportu�

ESG Assurance Report

84

nities

���������������������������������������������������������������

64

4.1.3 Climate Change Risk Assessment������������������

65

4.1.4 Concrete actions67 �������������������������������������

67

4.2 Green Environmental Actions

���������������������������

67

2021 Sustainability Report

03

About the Report

Editorial Principles

Since our foundation on June 15, 1950, Taiwan Tea Corporation (hereinafter referred to as the Company) has established and maintained a close relationship with the tea from the very beginning of the business. Over the century, Taiwan Tea Corporation has upheld its tradition and dedication in producing tea, demonstrating constant growth and devel� opment. Now, it has been transformed from a humble tea producer with proprietary tea plantation and factory into a distinguished TWSE-listed tea corporation. From tea plantation to sales channels, the company has upheld consistent quality management and attention to detail to ensure the utmost quality.

The Company is one of the listed companies and is well aware of the importance of sustainable corporate operation. We have the respon� sibility to take care of our employees, assure the human rights of our personnel, and protect the health of consumers. In addition to pursuing profits by devoting ourselves to the operation of the Company, we also value the rights and interests of consumers. We are committed to acting as a pioneer in tea production and creating more values and contribu� tions for society, shareholders and employees.

Guidelines and Assurance

The Report was written in accordance with the GRI Standards issued by Global Reporting Initiatives (GRI) and the ISO 26000 Guid� ance on social responsibility as the basis for disclosing the information. The issues that stakeholders were concerned about were identified via substantive analysis and used as the framework of the chapters in the Report for the disclosure of the sustainability-related information.

The GRI core options (Core) were adopted in the Report to identify, implement and disclose the information on fulfilling the Company's social responsibilities. A GRI index is provided in the appendix for quick retriev� al and query.

The financial data disclosed in the Report were audited by CPAs and made available to the public. The New Taiwan Dollar was used as the unit for the calculation. Other data come from the statistics of the Company and the internal and external investigation results. The Company commissioned EY Taiwan to conduct limited assurance in accordance with the Statement of Standard on Assurance Engagements NO. 1 "Assurance Engagements other than Audits or Reviews of Histor� ical Financial Information" for our 2021 Corporate Social Responsibility Report compiled pursuant to the Core of the GRI Standards. After the limited assurance is conducted, the Company communicates with the governance authority on the result of the assurance. For more informa� tion on the scope and result of the assurance, refer to the independent assurance report in the appendix of the Report.

Reporting Period and Scope

The Board of Directors adopted the "Taiwan Tea Corporation Guid� ing Principles of Corporate Social Responsibility" on August 26, 2010 and established the "Public Affairs Office" in 2013 as a designated de� partment for the public welfare activities of the Company. The 21st Board of Directors adopted the "Taiwan Tea Corporation CSR Policy" at its 12th meeting and reported it to the shareholders' meeting in 2016. Since the Company's first CSR report published in 2015, we have been reviewing our efforts and contributions to the society as well as the stakeholders and communicating with the stakeholders to know more about the Com� pany's situation.

The Report covers all the business operations of the head office, branches, leisure business units and tea factories of Taiwan Tea Corpo� ration (hereinafter referred to as the Company) in the Taiwan Area from January 1, 2021 to December 31, 2021. Where the Report refers to any important operating locations, the Taiwan area is included. The data and information contained in the Report were provided by the head office and individual departments and factories. They were sorted by the CSR report team and reviewed in the administrative procedure to confirm their compliance with the purpose of the Report. The costs and accounting data in the financial report were audited by CPA. The CSR report team compiled the first draft of the Report and distributed it to the departments so that they could check and modify the draft respectively based on their authority. The modified version was submitted to the head of the depart� ment for review and the reviewed version was then submitted to General Manager in accordance with the administrative procedure. The final ver� sion was published after the General Manager gave their approval.

The financial report contained in the Report was compiled for the period from January 1, 2021 to December 31, 2021. The Company will disclose the concrete actions that we take in the aspects of finance, corporate governance, employee welfare, and social responsibility on an ongoing basis to help the public understand more about the Company by reading the Report.

Reporting Cycle

This is the corporate social responsibility report issued in the 8th year. The reporting cycle is one year. The electronic version of the Re� port is available for download on the Company's official website.

Previous issue: September 2021

Current issue: September 2022

Next issue: September 2023 (scheduled)

Feedback

If you have any questions about Taiwan Tea Corporation's 2021 Corporate Social Responsibility Report, please feel free to tell us and help us make continue to improve. If you have any advice, opinion or suggestion relevant to the Report, please contact:

Taiwan Tea Corporation

Secretariat Office of the Board of Directors and

Human Resources Department

Address: 15F., No. 3, Yuanqu St., Nangang Dist.,

Taipei City (Bldg. F)

Telephone: 02-26557799

Fax: 02-26557728

Website: www.ttch.com.tw

04 2021 Sustainability Report

CH1

CH2

CH3

CH4

CH5

About the Report Sustainable Governance

Products and Services

Happy Workplace

Green Environment

Social Welfare

Appendix

Message from Chairman

Taiwan Tea Corporation was originally established in 1899. "Mitsui & Co., Ltd.," the predecessor of Taiwan Tea Corporation and a century-old tea producer, had already started to stand out during the Japanese Occupation Period, building a very close and inseparable relationship with tea since it started the tea business. By following the tradi� tion and being dedicated to the production of tea over the century, Taiwan Tea Corpora� tion has demonstrated constant growth and development, and become the only leading tea making company that goes public and has tea plantations and factories in Taiwan. From tea planting to sales channels, the Company has upheld consistent quality man� agement and attention to detail to ensure the utmost quality.

The "Root" of Taiwan Tea Corporation

The tea business is the root of the Company. There will be no direction of devel� opment without the root. Hence, the primary operating strategy of the Company is to go all out in the development of the tea business and recover the value of the "TTC" brand. TTC's Laopi Tea Factory in Pingtung is planned to be the largest tea plantation base in Taiwan that produces high-quality Taiwanese local tea leaves for replacing the imported tea leaves, with advanced precision irrigation technology (Israeli drip irrigation) adopted and the software platform (Smart Agri-management Platform) developed for production/ sales traceability. This year(2021), the TAP certification has even been acquired for the 462.2175-hectare tea plantation. With the tea-making philosophy of "professionalism, safety and integrity," the Company keeps the information complete and transparent so that the consumers can enjoy our tea products with no worries!

Development of Leisure Business in Combination with Tea Making Techniques over the Century

Taiwan Tea Corporation can be called the second largest landowner in Taiwan. However, most of the lots are located on the slope or for agricultural and grazing use. Taiwan is a small and densely populated island. To meet the increasing needs of the people for recreational activities nowadays, the Company has developed tourism and leisure spaces of culture and care in recent years by combining the traditional tea making techniques with the buildings, creativities of the cultural industries as well as historical and local ecological elements in consideration of the characteristic landscapes and ecological recourses in different areas. A leisure tour on which the knowledge of tea is shared is available and a new recreational lifestyle is created, in order to provide visitors with the recreational places where they can come closer to nature and relax. The endeavor of the Company has been highly praised by the tourists. We currently op� erate recreational tea factories and the brand new LuGao Cafe, which is surrounded by mountains and provides a magnificent landscape. The disadvantages of the unease uti� lization of land have been successfully reversed to an advantageous development trend that, thanks to the tourism, facilitates the operating revenue and significantly increases the value of the land in the surrounding areas.

Full Utilization of the Land Assets

The Company's management team plans the use of the land deliberately based on the principles of "assessing the land assets of the Company comprehensively and optimizing the utilization of the land" and "creating the greatest benefit for sharehold� ers". With the concept of industry innovation in mind and by supporting the policy of the government that encourages the establishment of factories in the hometown, we plan the utilization of the land in the mode of an industry innovation park and ensure long- term stable earnings for the Company by leasing the land with selling as a secondary approach to lay a solid foundation for the sustainable development of the Company.

Dedication to Environmental Protection

As for environmental protection, we always persist in the philosophy of "health, leisure, environment" and commit ourselves to achieve the goal of "co-existence with the land". There are many forest forms and natural ecological areas of native plants in lots of over 3,000 hectares. In recent years, the Company spares no effort in the restoration of tea plantations and operation of organic tea farms, and files applications for afforestation as planned. Up to the end of 2021, the total area of the Company's afforestation has reached 475 hectares. We are the only company in the industry that improves the natural eco-envi� ronment and enhances the conservation of water and soil with such achievements.

LuGao Cafe

Planning of Green Energy Economy

Taiwan Tea Corporation has more than 3,000 hectares of land, which implies that a vast area is available for trees to be planted. The land has a variety of forest land� forms and natural ecological areas composed of native species; it is thus expected that a number of forest carbon sinks can be formed and, in conjunction with the planning of under-forest economy, the goal of achieving a win-win between the Company and the environment can be attained for the green energy economy.

Fulfillment of Corporate Social Responsibility

In terms of corporate social responsibility, as a listed company, we understand our great social responsibility with respect to the sustainable development, care of employ� ees, assure of their human rights, and protect the health of the consumers. Facing the overwhelming COVID-19, the enhancement of pandemic prevention and protection of the employees and tourists' health are our top priorities. In addition to cleaning and ster� ilizing the business premises with alcohol every day, we provide masks and protective devices for the frontline personnel, implement the pandemic prevention principles, stick to the pandemic prevention policies of the government, and take out the pandemic pre� vention and vaccination insurance for all the employees, in order to mitigate the impact of the COVID-19 on the industry, minimize its effect, and overcome this crisis jointly. We will continuously implement corporate governance, develop a sustainable environment, protect social welfare, assure the rights and interests of the employees, and enhance the disclosure of CSR information. We will also extend our efforts to social care and make contributions to a better world in the future.

Taiwan Tea Corporation Chairman

2021 Sustainability Report

05

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TTC - Taiwan Tea Corporation published this content on 30 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 December 2022 02:19:10 UTC.