Stakeholder Identification and Communication

With reference to the stakeholder identification of the companies in the same industry, KTB identifies the possible stakeholder groups. Then through the discussion on ESG Team meetings, we identify 6 types of stakeholders, taking into consideration the impact of the functions of each business on the operation of KTB, or the internal or external organizations, or individuals who are affected by KTB's operation, which are customer, employee, investor/shareholder, governmental agency, supplier, general public/social welfare organization, respectively, and report the communication condition with the stakeholders to the Sustainable Development Committee and the Board of Directors once half a year.

Material Topics Analysis

The Company has collected 24 issues as follows: sustainability issues can be categorized into positive and negative aspects, with 8 positive issues and 16 negative issues. The topic "sustainable finance" has been reclassified from "social" to "environmental" due to its relevance to financial products, energy transition or energy conservation and carbon reduction. Additionally, the issue from the previous year, “Labor Rights," has been renamed to "Workplace Human Rights, Diversity and Inclusion" to clarify the aspects discussed within that topic.

Positive and Negative Impact Matrix

KTB conducts materiality assessments of impacts based on two factors: the degree of impact and the likelihood of occurrence. This assessment aims to understand the scale and scope, severity, and likelihood of occurrence of various sustainability issues. We define the impact with scape and range above 3.72 as significantly positive impact; and defines the impact with severity above 3.52 as significantly negative impact based on the stakeholders questionnaire. After discussion by the ESG Team, negative issues related to sustainable finance were incorporated. There are total 4 significantly positive impact and 6 significantly negative impact, belonging to 8 sustainability issues, which are actual impacts, while the others represent potential impacts.

Note: The original numerical values of positive and negative impacts have been converted into low, medium, and high categories for easier understanding by stakeholders. The corresponding values are as follows:
1.Positive Impact
Scale and Scope: Low (3.20 - 3.59), Medium (3.60 - 3.79), High (3.80 - 4.10)
Likelihood of Occurrence: Low (3.30 - 3.49), Medium (3.50 - 3.79), High (3.80 - 3.90)
2.Negative Impact
Severity: Low (3.10 - 3.35), Medium (3.36 - 3.59), High (3.60 - 3.80)
Likelihood of Occurrence: Low (3 - 3.15), Medium (3.16 - 3.29), High (3.30 - 3.60)

Explanation of Management Policies and Impacts for Material Topics

Explanation of Management Policies and Impacts for Material Topics

Note: The boundaries of impact of GRI specific topics and the relation between the boundaries of impact and KTB are in accordance with the
GRI Standard. The key stakeholders of the value chain are taken into consideration for the boundaries of impact. The connection of the
boundaries of impact is divided into three levels of involvement: If the impact is directly caused by KTB, caused jointly by KTB and other units, or caused via business relations.

Explanation of Sustainable Issues and Changes in Material Topic

Explanation of Sustainable Issues and Changes in Material Topic

Double Materiality Analysis

The Company, after considering the impacts of material topics on external economy, environment, and population, further implements a double materiality analysis. Intermediate and senior managerial officers evaluate the potential impacts of the aforementioned material topics on the Company in terms of costs, revenues, goodwill, and risk, assigning a "financial materiality" score. By integrating the results of the "degree of external impact," the Company identifies double materiality topics that have significant impacts both internally and externally, producing a double materiality matrix.

Strategies, Goals, and Achievements of Material Issue

Strategies, Goals, and Achievements of Material Issue

For each material topic, we identify its impacts on KTB, and establish corresponding management strategies and mitigation measures for each material topic to review the effectiveness of these actions. We set short-,medium-, and long-term goals, and track the execution results quarterly through the ESG team to continue to implement KTB's sustainable plans. Please refer to the following table for relevant achievements or refer to the operational approach to sustainable development strategies.

Targets and indicators for each material topics: Completed targets are denoted by √ , whereas incomplete targets are denoted by.