To strengthen its environmental governance framework and sustainability management approach, Arcadyan began developing a revised Environmental Policy in 2025. Building on its existing ISO 14001 environmental management policy, the revised policy expands both the scope and depth of management by clearly defining implementation principles, key environmental issues, management indicators, and monitoring mechanisms. The revised policy covers Arcadyan’s operational activities and product life cycles, while extending its scope to suppliers and business partners. Through compliance with applicable environmental and energy-related laws, regulations, and other requirements, Arcadyan systematically manages environmental impacts, prevents pollution, improves energy and resource efficiency, and continuously reduces adverse impacts associated with greenhouse gas emissions, resource consumption, and waste generation.
Arcadyan Environmental Policy – Five Implementation Pillars
Environmental Risk Management
Guided by the TCFD framework, Arcadyan manages and discloses climate-related risks and opportunities across four pillars: governance, strategy, risk management, and metrics and targets. Based on climate risk assessment results, the company develops response strategies for material risks and conducts scenario analyses to evaluate the potential impacts of climate-related risks and opportunities on business operations, strategic planning, and financial performance. The results are used to formulate appropriate adaptation and mitigation measures and strengthen organizational resilience.
Arcadyan also discloses its climate risk management progress annually through the Carbon Disclosure Project (CDP), TCFD disclosures, and the Sustainability Report. Through continuous review and refinement of its response strategies, the company seeks to enhance climate resilience, adaptability, and long-term competitiveness.
Climate Governance
Arcadyan supports the global 1.5 °C goal and is committed to long-term netzero transformation. The Board of Directors has established the Sustainability Development Committee to oversee climate strategies, targets, and performance, including greenhouse gas reduction, energy management, renewable energy, and climate risk management.
Chaired by General Manager and Director Edward Tseng, the Committee oversees working groups for corporate governance, green products, sustainable procurement, and environmental sustainability, integrating climate priorities into Arcadyan's business strategy. The Environmental Sustainability Working Group leads GHG inventory, energy management, renewable energy, climate risk assessment, and decarbonization, reporting progress regularly to the Sustainability Development Committee and the Board.
Since 2024, Arcadyan has formally incorporated sustainability-related indicators into the performance objectives of senior executives, thereby strengthening management accountability for climate action and sustainability performance. The performance evaluation of senior executives includes nonfinancial sustainability indicators covering green products and environmentally conscious product design, circular economy and resource efficiency, energy and resource management, climate change management, and greenhouse gas reduction. Executive remuneration is comprehensively assessed by the President based on performance achievement, submitted to the Chairman for review, and subsequently deliberated and approved by the Remuneration Committee and the Board of Directors. This mechanism strengthens the linkage between sustainability performance and corporate governance, while enhancing management's motivation and governance effectiveness in advancing climate action.
Climate Strategy
Arcadyan recognizes the risks and opportunities associated with climate change and integrates them into its business strategy, product design, energy management, supply chain collaboration, and investment decisions. In response to rising energy costs, tightening carbon regulations, customer expectations for low-carbon supply chains, and growing demand for low-carbon products, Arcadyan conducts cross-functional assessments of potential impacts on operations, supply chains, product development, and financial performance to guide its adaptation and decarbonization strategies and strengthen long-term resilience. To achieve its climate strategy and carbon reduction targets, Arcadyan has established four strategic pillars: climate action and low-carbon transition, energy transformation, low-carbon product innovation, and sustainable supply chain management. Together, these pillars drive the low-carbon transition across the company's operations and value chain.
Climate Risk and Opportunity Identi cation
Arcadyan's Environmental Sustainability Task Force annually evaluates climate-related risks and opportunities. In 2025, the company assessed potential impacts on its operations, strategy, and financial performance across the short (1–3 years), medium (3–5 years), and long term (5–10 years), identifying 7 transition risks, 3 physical risks, and 3 climate opportunities. These cover policy and regulation, technology, markets, reputation, extreme weather, energy and water supply, and demand for low-carbon products. The assessment supports risk mitigation and helps capture opportunities in low-carbon transition, green products, energy efficiency, and supply chain decarbonization.
Arcadyan assesses operational, strategic, climate, and emerging risks based on its business, industry, and sustainability priorities. The Risk Management Promotion and Execution Task Force defines risk categories and works with business units to identify, assess, and develop mitigation measures. Risk management results are reported annually to the Audit Committee and the Board of Directors. For climate-related issues, the Environmental Sustainability Task Force evaluates risks and opportunities by likelihood and severity to prioritize response measures and support strategic planning, resource allocation, and climate resilience.
Climate Scenario Analysis and Financial Impact
Using climate scenarios from the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA), Arcadyan evaluates the impacts of different climate and energy transition pathways on its operations and financial performance. In 2025, the company used both high- and low-emissions scenarios to model different climate futures, assessing the potential impacts of carbon pricing, raw material costs, extreme weather, energy supply, and renewable energy adoption on its operations, supply chain, product development, and financial performance. The results support climate adaptation, strategic planning, and resource allocation.
Physical Risk Adaptation Frameworks
Arcadyan integrates physical climate risks into its business continuity and supply chain management to address the increasing frequency and severity of extreme weather events. The company implements short-, medium-, and long-term adaptation strategies to mitigate flooding, drought, energy supply, and water availability risks. Through risk assessment, emergency response, infrastructure improvements, resource backup, and supply chain monitoring, Arcadyan strengthens operational resilience while minimizing impacts on employee safety, operations, and customer delivery.
Physical climate risks affecting critical suppliers are integrated into Arcadyan's supply chain risk assessments. Through supplier risk evaluations, business continuity management, alternative sourcing, and optimized inventory and logistics planning, supply chain resilience against extreme weather is strengthened. Going forward, climate risk monitoring and business continuity will continue to be enhanced across the value chain.
Climate Management Indicators
Science Based Targets initiative (SBTi) and Progress
In July 2024, Arcadyan received approval from the Science Based Targets initiative (SBTi). Aligned with the Paris Agreement's 1.5 °C goal, the Company has set near-term and long-term greenhouse gas reduction targets covering Scope 1, Scope 2, and Scope 3 emissions. Using 2022 as the base year, Arcadyan commits to the following:
- Scope 1 and Scope 2: Achieve an absolute reduction of 50% by 2030 and 90% by 2040, reaching net-zero.
- Scope 3: Achieve a 66% reduction in carbon emission intensity by 2030 and 98% by 2050, reaching net-zero.
Note: The intensity reduction target is measured as greenhouse gas emissions per million gross profit.
Science-Based Carbon Reduction Pathway and Performance
Short-, Medium-, and Long-Term Climate Management Metrics and Action Pathways
Arcadyan formulates structured short-, medium-, and long-term climate metrics and action pathways based on rigorous risk and opportunity assessments, driving a phased acceleration in internal decarbonization, energy transition, low-carbon product engineering, and value chain collaboration to fortify climate resilience and adaptive capacity.
Carbon Management Tools and Beyond-Value-Chain Mitigation
Arcadyan advances its decarbonization strategy in alignment with the 1.5°C pathway by increasing renewable energy use, improving energy efficiency, developing low-carbon products, and engaging suppliers in carbon reduction. Despite continued business growth and expanded global manufacturing capacity, Arcadyan remains committed to reducing its greenhouse gas (GHG) emissions intensity.
Arcadyan has not yet implemented an internal carbon pricing (ICP) mechanism, but continues to monitor climate regulations, carbon markets, and net-zero trends to evaluate its future adoption. Beyond operational and value chain decarbonization, Arcadyan also supports climate mitigation through sustainable investments. In January 2026, the company invested NT$10 million in the TPEx-accredited Sustainability Bond "Amundi P14-1" (Bond Code: G14008), which finances offshore wind, solar power, and other renewable energy projects in Taiwan. Arcadyan will continue evaluating external mitigation initiatives, including forest carbon sinks, renewable energy projects, and high-quality carbon credits, to address residual emissions and support the global net-zero transition.
Greenhouse Gas Inventory and Management
Arcadyan follows its SBTi-validated science-based targets to manage greenhouse gas emissions, using Scope 1, Scope 2, and Scope 3 emissions data as the basis for carbon reduction strategies and performance tracking. To improve the completeness, comparability, and international alignment of its GHG inventory, Arcadyan previously conducted inventory and verification in accordance with ISO 14064. Since 2025, the company has adopted the Greenhouse Gas Protocol (GHG Protocol) as the primary basis for its GHG inventory and third-party verification, while referring to ISO 14064-1:2018 for organizational boundary setting and quality management requirements. The inventory boundary follows the operational control approach under the control method, covering major operating sites over which Arcadyan has operational control. The inventory scope is progressively expanded based on data availability and materiality.
In 2025, Arcadyan’s GHG inventory covered its major operating sites in Taiwan, China, and Vietnam, representing 98.98% of the Company’s total workforce. To understand emissions from its own operations, Arcadyan conducts Scope 1 and Scope 2 GHG inventories at major operating sites and engages independent third-party verification bodies to perform external assurance. Scope 1 and Scope 2 emissions are verified at a reasonable assurance level to enhance the accuracy and reliability of emissions data. Going forward, Arcadyan will continue to expand its carbon management boundary, enhance the transparency and credibility of emissions information, and promote the low-carbon transition of its operations and supply chain through energy efficiency improvements, increased use of renewable energy, and value chain decarbonization initiatives.
2025 Scope 1 and Scope 2 GHG Emissions and Historical Emission
Arcadyan's global Scope 1 and market-based Scope 2 greenhouse gas (GHG) emissions totaled 10,139.13 metric tons of CO2e in 2025, a 67.64% reduction from the 2022 baseline, significantly exceeding its 2025 SBTi target of an 18.75% absolute reduction. Emissions intensity also decreased to 0.191 metric tons of CO2e per million in revenue, down 39% from 2024. Arcadyan will continue advancing operational decarbonization through energy management, efficiency improvements, and renewable energy adoption.
Note 1: Other operating sites include Tatung Technology Inc., Compal Networking (KunShan) Co., Ltd., and Arcadyan Technology Corporation (Shanghai).
Note 2: Electricity emission factors for Scope 2 by operational site: Taiwan 0.466 kgCO2e/kWh, Shanghai (China) 0.5849 kgCO2e/kWh, Kunshan (China) 0.5978 kgCO2e/kWh, Guangzhou (China) 0.4403 kgCO2e/kWh, Vietnam 0.6592 kgCO2e/kWh.
2025 Scope 3 GHG Emissions and Historical Emission
Arcadyan inventories Scope 3 emissions in accordance with the Greenhouse Gas Protocol Scope 3 Standard. Among the 15 Scope 3 categories, Category 1 (Purchased Goods and Services), Category 3 (Fuel- and Energy-Related Activities Not Included in Scope 1 or Scope 2), and Category 11 (Use of Sold Products) were identified as the primary emission sources, accounting for more than 95% of the company's total carbon footprint. These three categories are independently verified by a third party and used for target setting, while the remaining Scope 3 categories are managed internally without external verification due to their limited materiality.
In 2025, Arcadyan's Scope 3 emissions totaled 2,855,924.54 metric tons of CO2e, a 17.6% reduction from the 2022 baseline. Scope 3 emissions intensity decreased to 353.17 metric tons of CO2e per million in gross profit, down 32.9% from the 2022 baseline of 526.5 metric tons of CO2e, exceeding the SBTi target of a 31.54% intensity reduction. The reduction was primarily driven by Category 1 (Purchased Goods and Services) through product miniaturization and lightweight eco-design, which reduced raw material use and upstream manufacturing emissions. Arcadyan will continue strengthening Scope 3 management through product optimization and supply chain decarbonization.
Decarbonization Initiatives and Performance
To strengthen energy governance, Arcadyan has established Energy Management Teams at each operating site, led by facility management and relevant functional units, to oversee energy monitoring and energy efficiency projects. Progress is reviewed regularly, with cross-site experience sharing and quarterly reporting to the Sustainability Task Force on carbon reduction performance to ensure effective implementation.
Arcadyan also promotes energy conservation through internal awareness programs and implements measures such as high-efficiency equipment, smart energy monitoring, renewable energy, waste heat recovery, low-carbon commuting, and green procurement to improve energy efficiency, reduce emissions, and support low-carbon operations and sustainability goals.
Renewable Energy and Energy Transition
In 2024, the Compal Group announced a commitment for all affiliated companies to achieve 100% renewable electricity. In support of this commitment, Arcadyan established its energy transition roadmap, targeting a 10% annual increase in renewable energy use starting in 2024 and 100% renewable electricity across all operating sites by 2030. To achieve these targets, Arcadyan has adopted a diversified renewable energy strategy that includes:
- Installing on-site solar photovoltaic (PV) systems to increase energy self-generation.
- Expanding the procurement of International Renewable Energy Certificates (I-REC).
- Evaluating Power Purchase Agreements (PPAs) to secure stable and cost-effective long-term renewable electricity supplies.
In 2025, solar power at Arcadyan's Vietnam Manufacturing Center accounted for 14% of site electricity use. The company also procured 16.349 million kWh of I-RECs, raising the Group's renewable electricity share to 50.3%. Arcadyan continues to track energy intensity to manage energy use and carbon emissions while advancing electricity decarbonization.
Renewable Energy Transition Roadmap
Ef cient Low-Carbon IT Digital Operations
Arcadyan improves energy efficiency in its digital operations through server virtualization and a cold and hot aisle separation design that optimizes airflow circulation and heat exhaust direction at its headquarters data center. The deployment of 16 high-efficiency physical servers supporting approximately 128 virtual machines optimizes computing and cooling efficiency, saving approximately 1,570 MWh of electricity and reducing carbon emissions by 744 tCO2e annually.
IT Equipment Refurbishment
To reduce electronic waste and extend equipment life, Arcadyan implements an IT equipment refurbishment program. In 2025, the MIS Department collected 255 retired computers and refurbished 15 units through component recovery, reassembly, testing, and system cleaning for continued use. Based on an average laptop service life of four years, the program is estimated to reduce carbon emissions by approximately 2.6 tCO2e while lowering demand for new equipment and supporting the circular use of IT resources.
Low-Carbon Commuting and Transportation
In response to global transportation decarbonization trends and net-zero commitments, Arcadyan is advancing low-carbon initiatives in both employee commuting and logistics transportation. We introduce environmentally friendly lowcarbon technologies and solutions to reduce climate impacts and improve the environmental performance of our value chain.
- Decarbonizing Employee Commuting: Arcadyan promotes low-carbon commuting by installing 4 dedicated EV charging stations at its headquarters to encourage employees to adopt low-carbon transportation and reduce commuting-related GHG emissions. The company plans to add more charging stations during the 2026 headquarters expansion to strengthen charging infrastructure. Moving forward, Arcadyan will evaluate based on charging station utilization rates and employee needs to progressively expand support measures and advance electrification and decarbonization of employee commuting.
- Decarbonizing Logistics and Transportation: Arcadyan advances supply chain decarbonization by adopting biofuel for transportation to replace conventional fossil fuels. Biofuel can reduce carbon emissions by up to 80% compared with traditional fuels while lowering air pollutant emissions.
Environmental Investments and Bene ts
In 2025, Arcadyan continued advancing its climate and resource sustainability commitments through investments in renewable energy, water conservation, energy management, and international sustainability initiatives. These efforts improved energy and water efficiency, reduced operating costs, and supported the transition to low-carbon, circular operations. The table below summarizes Arcadyan's major environmental investment projects in 2025 and their estimated environmental benefits, highlighting the company's concrete actions and outcomes in environmental management.
Decarbonization Progress and Internal Communication
Arcadyan incorporates carbon reduction updates into its annual employee awareness training to strengthen understanding of climate action and sustainability goals. In 2025, the program covered low-carbon sustainability, carbon risk management, climate action, the company's net-zero roadmap, Science Based Targets initiative (SBTi) commitments, and the latest greenhouse gas inventory results and progress toward carbon reduction targets. Arcadyan delivers climate and carbon reduction training through multiple communication channels. In 2025, 3,921 employees completed the training, representing a 95% participation rate. The company will continue strengthening employee awareness of climate change, energy efficiency, and greenhouse gas reduction.
Arcadyan also promotes energy conservation through internal awareness programs and implements measures such as high-efficiency equipment, smart energy monitoring, renewable energy, waste heat recovery, low-carbon commuting, and green procurement to improve energy efficiency, reduce emissions, and support low-carbon operations and sustainability goals.