Recognizing the finite nature of Earth's resources and the urgency of sustainable development, Arcadyan has implemented the ISO 14001 Environmental Management System across all major operational sites since 2005. The company has also established the Environmental, Occupational Safety, Energy, and Eco-Design Policy to enforce comprehensive measures in environmental protection and eco-design. Committed to the highest standards of environmental management, Arcadyan continuously optimizes systems and processes to enhance environmental performance, advance green transformation, and realize its sustainability vision.
Arcadyan Environmental Sustainability Policy
- Comply with domestic environmental, safety and health, and energy regulations and effectively implement the environmental, safety and health management system.
- All staff participate in product ecological design, environmental protection and energy
management, and promote continuous improvement for sustainability. - Improve resource recycling and energy efficiency, and reduce the impact of carbon
emissions in supply chain. - Promote education and publicity on environmental safety, energy and product eco-design.
- Implement employee health management, proactively prevent occupational disasters, and create a safe workplace with zero disasters.
Climate Risk Management
Arcadyan aligns its climate governance with the Task Force on Climaterelated Financial Disclosures (TCFD) framework, addressing four key pillars: governance, strategy, risk management, and metrics and targets. Based on climate risk assessments, Arcadyan formulates response strategies for material risks and uses scenario analysis to quantify the potential financial impacts of climate-related risks and opportunities. These insights support the development of appropriate mitigation and adaptation measures to strengthen organizational resilience and climate preparedness. The company also regularly discloses its climate risk management progress through public platforms, including the Carbon Disclosure Project (CDP), the TCFD-aligned climate disclosure report, and its annual sustainability report.
Arcadyan continuously refines its response strategies to ensure long-term sustainable
development and competitiveness.
Establishing Climate Governance Strategy
To align with the global target of limiting temperature rise to 1.5℃ and to achieve longterm
net-zero emissions, Arcadyan obtained Science Based Targets initiative (SBTi) approval for its reduction targets in 2024, committing to achieving net-zero emissions at its major operational sites by 2040–2050.
To enhance climate governance, Arcadyan established a Sustainability Development Committee under the Board of Directors as the highest decision-making and supervisory body for sustainability. The committee reviews and oversees climate strategies, targets, and progress, allocating annual budgets for greenhouse gas (GHG) reduction. Executive performance and compensation are directly linked to GHG reduction goals to strengthen accountability. Chaired by President and Director Mr. Chao-Peng Tseng, the committee appoints cross-functional senior executives as task force leaders for areas such as corporate governance, green products, and sustainable procurement, ensuring sustainability is integrated into business strategy. The Environmental Sustainability Task Force serves as the core unit for climate action, managing carbon inventories, energy use, renewable energy deployment, and climate risk assessments. It prepares annual GHG reduction budgets and reports progress regularly to the committee and the Board, ensuring effective climate governance and achievement of climate targets.
To ensure the effective implementation of sustainability goals, Arcadyan integrated key performance indicators (KPIs) related to sustainability into the performance evaluation of senior executives in 2024. Through an incentive and assessment mechanism, the company strengthened ESG (Environmental, Social, and Governance) strategy execution at the governance level. Executive compensation is determined based on individual contributions to sustainability objectives—including GHG reduction, renewable energy usage, and international certifications—subject to CEO review and submitted to the Chairperson, Compensation Committee, and Board of Directors for deliberation. This mechanism ensures that senior leadership balances economic outcomes with environmental and social responsibility, facilitating Arcadyan's long-term sustainable transformation.
Climate Strategy
Arcadyan has established a comprehensive climate governance framework, placing ultimate accountability for climate action at the Board level. The Sustainability Development Committee is tasked with reviewing and supervising climate-related strategies and actions. At the operational level, a cross-functional Environmental Sustainability Task Force—comprising representatives from business, operations, R&D, procurement, and IT—coordinates the implementation of carbon management initiatives to ensure climate risks and opportunities are incorporated into decision-making processes. Based on the 2024 climate risk assessment, Arcadyan consolidated input from relevant departments and formulated four key environmental strategies, each with defined performance targets, to drive climate adaptation initiatives and enhance organizational resilience.
Climate Risk Identi cation
Arcadyan's Environmental Sustainability Task Force conducts annual information gathering and systematic assessments to evaluate risks and opportunities arising from climate change. Through effective identification and management, Arcadyan aims to mitigate risks, capture green transition opportunities, and enhance long-term competitiveness. In 2024, Arcadyan identified 6 transition risks, 3 physical risks, and 3 climate opportunities across shortterm
(1–3 years), medium-term (3–5 years), and long-term (5–10 years) timeframes. Key transition risks are translated as follows:
The Environmental Sustainability Task Force developed a climate risk and opportunity matrix based on the likelihood of occurrence and potential severity of impact. Based on the assessed risk levels, prioritized response measures were formulated to mitigate potential impacts on financial performance and business operations.
To analyze the impact of major climate-related risks and opportunities on operational strategies, Arcadyan adopts climate scenarios published by the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) to evaluate energy-related net-zero transition pathways. In 2024, Arcadyan conducted a scenario-based financial impact assessment using the IPCC's high-emission scenario (SSP5-8.5) and low-emission scenario (SSP1- 2.6). These scenarios model various trajectories of climate change development to understand the potential risks and opportunities under different climate futures and ensure the company's continued competitiveness despite future uncertainties.
Climate Management Metrics and Targets
Science Based Targets initiative (SBTi)
In July 2024, Arcadyan’s greenhouse gas (GHG) reduction targets were approved by the Science Based Targets initiative (SBTi). Aligned with the Paris Agreement's goal of limiting global temperature rise to 1.5℃ , the company evaluated the potential impacts of climate change and set corresponding emission reduction targets. These targets cover Scope 1 (direct emissions), Scope 2 (energy indirect emissions), and Scope 3 (other indirect emissions), and include specific near-term and long-term decarbonization plans. The year 2022 is defined as the baseline year:
Scope 1 & 2 (direct & energy indirect emissions):
- Near-term target: 50% absolute reduction by 2030
- Long-term target: 90% absolute reduction by 2040 to reach net-zero
Scope 3 (other indirect emissions):
- Near-term target: 66% intensity* reduction by 2030
- Long-term target: 98% intensity* reduction by 2050 to reach net-zero
Arcadyan actively adheres to risk management processes, comprehensively assessing the probability and impact of various climate-related risks and opportunities. Based on the risk grading, Arcadyan has established short-, medium-, and long-term climate management indicators for 2024 as follows:
Science Based Targets initiative (SBTi) Pathway and Achievements
In 2024, Arcadyan's global operations reported combined Scope 1 direct emissions and market-based Scope 2 indirect emissions of 15,368.72 metric tons of CO2e, representing a 50.95% reduction compared to the 2022 base year. This achievement was driven by continued energy efficiency projects and a significant increase in renewable energy use at the Vietnam Manufacturing Center. In addition to expanding its solar photovoltaic installations, Arcadyan procured approximately 12.24 million kWh of International Renewable Energy Certificates (I-RECs), raising the share of renewable energy use at the manufacturing center to 40% and advancing its decarbonization goals.
Within the value chain, other indirect emissions (Scope 3) decreased by approximately 12.44% compared with the baseline year, while carbon intensity dropped by 22.24%. The primary drivers of this reduction were adjustments in the product mix and optimization of shipping allocation within the “Purchased Goods and Services” category, reflecting the growing client demand for low-carbon products, which in turn positively influenced procurement patterns.
While advancing its own decarbonization efforts, Arcadyan works closely with customers and suppliers—ranging from knowledge exchange and carbon footprint surveys to joint reduction projects— to accelerate net-zero progress across the value chain. Although the company has not yet implemented an internal carbon pricing mechanism, it continues to monitor climate-related trends and regulatory developments, as well as mitigation initiatives beyond the value chain. Arcadyan plans to invest in forest carbon sink projects and acquire carbon credits, either through direct investment or market purchases, that are recognized under the SBTi framework as valid offsets for residual emissions. These measures form a key part of the company's strategy to achieve its net-zero target.
Greenhouse Gas Emissions
To effectively manage and reduce greenhouse gas (GHG) emissions, Arcadyan conducted its 2024 emissions inventory in accordance with the Greenhouse Gas Protocol (GHG Protocol). Scope 1 and Scope 2 emissions from key operational sites were accounted for using the control approach. All emission data were third-party verified annually based on the ISO 14064-1:2018 standard, and disclosed transparently on Arcadyan's sustainability website (https://csr.arcadyan.com) and in the Carbon Disclosure Project (CDP) climate report. To raise internal awareness, Arcadyan incorporates updates on emission reduction progress in its annual ESG training sessions for all employees, enhancing organizational understanding of climate issues and driving action toward energy efficiency and emission reduction measures.
In addition to direct emissions from its operations, Arcadyan also conducted a Scope 3 emissions inventory. Following the GHG Protocol Scope 3 Standard, 15 emission categories were identified, with major sources of emissions monitored. The three largest categories— Category 1: Purchased goods and services, Category 3: Fuel- and energy-related activities not included in Scope 1 or 2, and Category 11: Use of sold products—accounted for over 90% of the company's total emissions. These key categories are verified and monitored by third-party assurance providers, and associated reduction targets have been established. Other Scope 3 categories, which are not considered major emission sources for Arcadyan Group, are not externally verified at this stage.
Arcadyan's headquarters and Vietnam manufacturing center are ISO 50001-certified for energy management. Since 2022, rooftop solar photovoltaic systems have been installed at the Vietnam site, and International Renewable Energy Certificates (I-REC) have been procured to offset electricity usage at facilities in China and Vietnam. In 2024, Arcadyan's total Scope 1 and Scope 2 GHG emissions amounted to 15,368.72 metric tons of CO2e, representing a 50.95% reduction compared to the 2022 base year—exceeding the Science Based Targets initiative (SBTi) nearterm absolute reduction target of 6.25%. The company's Scope 1 and 2 carbon intensity in 2024 was 0.314 tons per million revenue, a 35.87% decrease from 2023.
In 2024, total Scope 3 greenhouse gas (GHG) emissions amounted to 3,036,318.05 metric tons. The major emission sources were Category 1: Purchased goods and services, Category 3: Fuel- and energy-related activities not included in Scope 1 or 2, and Category 11: Use of sold products. The emissions intensity was 409.43 metric tons per million in gross profit, reflecting a 22.24% decrease from the 2022 level of 526.5 metric tons per million in gross profit. This reduction meets the Science Based Targets initiative (SBTi) target of a 21.51% decrease in emissions intensity.
Carbon Reduction Actions and Effectiveness
To strengthen energy governance mechanisms, Arcadyan has established energy management teams at each site. These teams are composed of facility management personnel and relevant specialized departments, jointly responsible for monitoring current energy usage and implementing energy-saving initiatives. Through a structured meeting mechanism, the teams regularly track the progress and effectiveness of each energy project. Updates on carbon reduction target achievements at each site are reported quarterly during the meetings of the Sustainability Executive Task Force. In addition, Arcadyan promotes internal knowledge sharing by facilitating cross-site exchange of project outcomes and best practices. This has helped to embed energy-saving awareness across the organization and has supported the deployment of high-efficiency operational equipment and office energy conservation measures, thereby reinforcing the company's energy management objectives.
Energy Transition
Driven by the dual forces of global net-zero commitments and the rising demand for green supply chains, energy transition has become a core strategy for sustainable business development. As climate-related risks intensify and energy cost volatility increases, industries around the world are accelerating the deployment of renewable energy solutions and joining initiatives such as RE100, pledging to power their operations with 100% renewable energy to reduce environmental impact. Although Arcadyan is not classified as a high energy-consuming enterprise and does not meet the minimum energy usage threshold required to apply for RE100 membership, the company actively aligns with Compal Group's sustainability policies and net-zero commitments as a key member of the Group. In 2024, Compal Group announced a unified commitment across all its subsidiaries to transition toward 100% renewable energy use. In response, Arcadyan has formulated a practical and actionable energy transition roadmap to demonstrate its dedication to sustainability. To support the RE100 objective, Arcadyan has developed a diversified renewable energy adoption strategy, which includes:
- Installing on-site solar photovoltaic (PV) systems to enhance energy autonomy.
- Gradually increasing the share of International Renewable Energy Certificates (I-RECs) purchased each year, aligning its renewable energy footprint with international standards.
- Evaluating the feasibility and investment benefits of signing Power Purchase Agreements (PPAs) to secure stable and cost-effective long-term sources of renewable electricity, advancing toward a low-carbon operational model.
In 2024, Arcadyan completed the Phase II installation of solar PV systems at its Vietnam manufacturing center. Together with Phase I, the systems now supply approximately 15% of the site's annual electricity demand, serving as a key measure for decarbonizing operational electricity use. To accelerate the pace of renewable energy adoption, Arcadyan also significantly increased its procurement of I-RECs, resulting in renewable electricity accounting for 40% of total electricity use in 2024. Starting in 2024, Arcadyan is committed to increasing its renewable energy usage share by 10% annually, with the medium- to long-term goal of achieving 100% renewable energy usage at all operational sites by 2030. This reflects Arcadyan's proactive efforts toward renewable energy adoption and lays a solid foundation for the Group's net-zero emissions vision.
Energy Management and Green Manufacturing
To address climate change and support sustainable operations, Arcadyan has implemented the ISO 50001 Energy Management System at both its Taiwan headquarters and Vietnam manufacturing center. Annual energy audits and equipment assessments are conducted to establish performance indicators, define baselines, and collect data for monitoring and verification. Through systematic energy management and targeted energy-saving projects, Arcadyan continues to improve electricity efficiency in its processes and production. The company has adopted an energy-efficient procurement policy that prioritizes certified highefficiency equipment to ensure immediate energy-saving impact. Infrastructure upgrades are ongoing, including the replacement of outdated systems and installation of variable-frequency drives (VFDs) to boost energy performance, along with regular maintenance of heating, ventilation, and air conditioning (HVAC) ductwork and filters to maintain system efficiency. A real-time energy monitoring system is also in place to track energy usage and emissions as a basis for continuous improvement. Moving forward, Arcadyan will continue optimizing both hardware and software configurations to enhance resource efficiency and build a smarter, greener manufacturing model.
Waste Heat Recovery
To enhance energy efficiency at its manufacturing sites, Arcadyan began implementing waste heat recovery systems at its Vietnam manufacturing center in 2022, actively promoting high-efficiency energy management and reuse technologies. The system utilizes heat recovery units installed on chillers to capture the thermal energy from high-temperature, high-pressure refrigerant vapor that would otherwise be discharged. Cooling water at ambient temperature is circulated through the heat recovery unit, where it undergoes heat exchange with the refrigerant vapor, resulting in a temperature rise. The heated water is then delivered to the terminal units of the HVAC system, serving as a thermal source for air dehumidification. This design not only stabilizes the temperature and humidity required for the production environment but also reduces the additional energy otherwise needed for dehumidification, thereby improving process energy efficiency and overall system performance.
In 2024, Arcadyan expanded the application of this technology by capturing waste heat generated during the operation of air compressors. Through a heat exchange system, this heat is converted into hot water and used in product aging test environments, replacing part of the original heating energy demand. This innovative application achieves dual benefits: energy reuse and energy savings in test equipment. It results in annual energy savings of approximately 2,502 MWh, significantly reducing operational carbon footprint while ensuring the environmental precision required for product testing—demonstrating Arcadyan's commitment to combining environmental responsibility with sustainable manufacturing management.
High-Ef ciency and Low-Carbon IT Operations
Arcadyan is committed to promoting energy-efficient digital operations. At its headquarters data center, the company has deployed 12 high-efficiency physical servers and integrated approximately 118 virtual machines using virtualization technology. This approach significantly enhances hardware computing efficiency while reducing overall energy consumption. To further optimize energy use, the server room adopts a hot and cold aisle containment design, which improves airflow circulation and thermal dissipation direction, thereby enhancing the performance of the cooling system and minimizing energy waste. Through this integrated energy-saving infrastructure, the combined operation of servers and cooling systems achieves annual electricity savings of approximately 552 MWh, equivalent to a carbon emissions reduction of around 273 metric tons of CO2e.
IT Equipment Refurbishment and Reuse
To reduce electronic waste and extend equipment lifespan, Arcadyan has implemented an IT refurbishment and reuse program. In 2024, the MIS department consolidated a total of 179 decommissioned computers from various departments. These units underwent disassembly, reassembly, component reconfiguration, and performance testing. As a result, 29 refurbished computers were successfully restored, passing all functional tests and system clean-ups to ensure reliable and continued use of both hardware and software. Based on an estimated average laptop lifespan of four years, this refurbishment effort not only reduced the need for new equipment procurement but also lowered the associated life cycle carbon footprint. The program is projected to achieve a carbon reduction of approximately 240 kgCO2e. Through this resource circularity initiative, Arcadyan demonstrates its proactive approach to electronic asset management efficiency, while embodying the principles of reduce, extend, and reuse as part of its commitment to environmental sustainability.
Low-Carbon Commuting and Transportation
In response to global trends in transport decarbonization and increasing demands for net-zero commitments, Arcadyan is promoting a dual transition in both employee commuting and raw material transportation. By integrating environmentally friendly low-carbon technologies and solutions, the company aims to mitigate climate impact and enhance environmental performance across its value chain.
- Electri cation of Employee Commuting
To facilitate the shift toward low-carbon commuting, Arcadyan has installed four dedicated electric vehicle (EV) charging stations at its headquarters, providing convenient access to charging infrastructure and actively encouraging employees to adopt low-emission transportation options. The company plans to conduct ongoing assessments based on utilization rates to expand charging infrastructure in the future, further promoting electrified and decarbonized internal mobility. - Low-Carbon Transformation of Raw Material Transportation
In its logistics operations, Arcadyan has introduced biofuel-powered transportation to replace conventional fossil-fuel vehicles. As a form of renewable energy, biofuels offer carbon-neutral properties and can reduce carbon emissions by up to 80% compared to traditional diesel, while also mitigating the negative air quality impacts associated with transport activities. This fuel transition, combined with circular reuse strategies, improves the carbon efficiency of logistics processes and strengthens the sustainable use of resources. Looking ahead, Arcadyan will continue to explore the potential of sustainable alternative energy technologies in the transportation sector, integrating innovative low-carbon solutions with operational energy-saving strategies to advance transportation decarbonization and significantly enhance supply chain carbon management performance.
Environmental Investments and Outcomes
In 2024, Arcadyan actively invested in a variety of environmental initiatives to advance its climate action and resource sustainability goals. These efforts spanned areas such as renewable energy adoption, water conservation, energy management, and participation in international sustainability platforms. Through energy-saving, carbon reduction, and resource efficiency projects, Arcadyan has improved operational energy and water efficiency, reduced longterm costs, and contributed to green transformation and circular economy development. The table below summarizes the major environmental investment projects in 2024 and their estimated environmental outcomes, demonstrating Arcadyan's tangible commitments to sustainability.
