Materiality and Stakeholder Communication

Materiality and Stakeholder Communication

Procedure of Materiality Analysis

CTCI regularly conducts a materiality survey and systematic analysis on a yearly basis. In accordance with the framework of GRI 3: Material Topics 2021 in the GRI Universal Standards 2021 and incorporating the concept of double materiality set forth in the European Sustainability Reporting Standards (ESRS), CTCI has established an integrated assessment process covering both "impact materiality" and "financial materiality". With respect to impact materiality, CTCI has adopted international methodologies such as Value Balancing Alliance (VBA), Harvard Business School's Impact-Weighted Accounts Initiative, and Business for Societal Impact Framework (B4SI) and identified positive and negative external impacts in economic, environmental and human (human rights) dimensions in consideration of its business model and operational characteristics. Furthermore, through monetized and non-monetized assessments, CTCI has established a systematic assessment process. With respect to financial materiality, CTCI focuses on the level of impact of ESG topics on corporate operations and financial performance, integrates the results of IFRS S1 and IFRS S2 analyses, and conducts comprehensive assessments on diverse dimensions such as revenue, costs, capital expenditure, and risk exposure, to strengthen the financial relevance of material topics and enhance their value in supporting decision-making.
　
The materiality assessment process and results were reviewed by internal and external experts, approved by the senior management, and then submitted to the Group's Sustainability and Net Zero Improvement Meeting. The Chairman of the Group confirmed a total of 11 material topics, which were deliberated and approved by the Board of Directors. CTCI has adopted these material topics as the foundation for preparing its Sustainability Report and continues to refine its disclosures, action plans, and long-term development strategies in response to stakeholder concerns and expectations. Additionally, CTCI has integrated material topics into its Enterprise Risk Management (ERM) framework to assess the risk characteristics under different scenarios and then formulate corresponding risk management strategies (see "3.2 Risk Management" for details). The materiality analysis process and results for 2025 were verified by SGS Taiwan in accordance with the AA1000 Assurance Standards v3 under Type 2, High Assurance Level.
　

Phase 1: Identification of Stakeholders and Topics

In accordance with the five core principles of the AA1000 Stakeholder Engagement Standard, CTCI has prioritized stakeholders based on their dependency, accountability, level of concern, influence, and diversity of perspectives and other relevant aspects, and identified six stakeholder groups, including shareholders/investors, suppliers/contractors/partners, customers, employees, media, and communities/government/experts/academic and professional associations as the basis for material topic assessment and stakeholder engagement. In response to evolving global and local sustainability trends, CTCI has established a dynamic topic identification process. The Company refers to international frameworks and assessment standards annually, including GRI Standards, SDGs, SASB, TCFD, and TNFD, as well as key topics identified by investment institutions and ESG rating agencies (including S&P Global ESG, MSCI ESG Ratings, and CDP), and continues to review and optimize its sustainability topics. In 2025, CTCI identified a total of 19 ESG topics as the basis for the materiality survey.
　

　

Phase 2: Materiality Survey and Analysis

CTCI takes into account "Stakeholder Concern Level," "Organizational Operation Impact," "Assessment of the IFRS Sustainability Disclosure Standards," and "Sustainable Development Impact" and lays a foundation for the analysis of material topics based on the results of the materiality assessment survey.
　

Financial Materiality

Impact Materiality

Phase 3: Screening and Confirmation of Material Topics

Based on the survey results in Phase 2, in comprehensive consideration of the long-term sustainability goals as well as ESG topics linked to senior management remuneration and through discussions with internal and external experts, relevant topics were submitted to the Group's Sustainability and Net Zero Improvement Meeting, and The Chairman of the Group finally confirmed a total of 11 material topics, which were deliberated and approved by the Board of Directors. Compared to the previous year, "Risk and Crisis Management" was newly added, and "Talent Recruitment and Retention" and "Career Development and Training" were combined into "Talent Attraction, Development, Engagement, and Retention"; the material topics were ranked as follows: "Net-Zero EPC and Green Engineering," "Innovative Technologies and Services," "Corporate Governance and Integrity Management," "Talent Attraction, Development, Engagement, and Retention," "Safe and Healthy Workplace," "Climate Strategies and Net-Zero Performance," "Customer Service and Management," "Sustainable Supply Chain Management," "Risk and Crisis Management," "Social Influence Enhancement," and "Brand Management."
　

Phase 4: Boundary of Material Topics

After confirming the 11 material topics, CTCI identified a total of 16 topics, among which 13 were GRI Topic Standards and 3 were CTCI's self-defined topics. In accordance with the reporting requirements of the applicable standards, the Company collects and discloses internal information, data and management approaches, and reviews the scope of impact of material topics in CTCI's value chain one by one, including the impact on boundaries such as upstream procurement phase, the planning, design, construction and operation of CTCI, use by downstream customers, and society. The material topics identified by CTCI are included in the risk assessment work launched by the Risk Control Office every six months. Through risk identification, analysis and assessment as well as subsequent risk mitigation, control and monitoring, the Company implements the Enterprise Risk Management (ERM). For relevant information, please refer to sections "3.2 Risk Management" and "4.5 Management Apporach".
　

Sustainability Impact

Creating long-term corporate value is CTCI's core task in practicing sustainable　management.
By employing the methodology of "Impact Measurement and Valuation (IMV)", CTCI has
comprehensively reviewed the changes brought to human well-being by its corporate operation process from an "Outside In" perspective. Furthermore, by applying the causality-oriented Sustainability Impact Pathway, the Company analyzes cross-domain intersections covering economic, environmental and social issues. Additionally, based on the management idea of P&L (Profit and Loss), CTCI has included the externalities of costs (negative) and benefits (positive), converted them to a consistent monetary language, and establishes a sustainability management framework based on Triple Bottom Line (TBL), so that stakeholders can better understand the substantial influence of CTCI and the Company can drive its management decision-making in a more effective manner. 
　
CTCI adopts an in-depth identification model called "Biennial Cycle" to systematically check and comprehensively evaluate the environmental and social externalities arising from each link in the value chain. At the same time, the Company utilizes the "Annual Dynamic Review" mechanism to continually follow up international trends, regulatory developments, operational changes and highlights concerned by stakeholders on a yearly basis. Then, the Company will make necessary updates and adjustments concerning the boundary and scope of impact assessment based on the actual circumstances to ensure the integrity and timeliness of the information disclosed and manage the resource allocation efficiency. Additionally, CTCI has aligned with the principle of the international sustainability disclosure standards (GRI and ESRS) that the impact materiality should be continuously reviewed and updated as appropriate.
　
Based on the analysis results in 2024, the sustainability impact derived from CTCI's value chain activities generated NT$223.4 billion of positive benefits and NT$1.7 billion of negative costs. Among them, the impact is the most significant concerning management performance of topics such as net-zero EPC and green engineering, sustainable supply chain management, climate strategies and net-zero performance, career development and training, and safe and healthy workplace.
　
With respect to corporate operations, CTCI generated operating revenue of NT$61.6 billion in 2024, and a total of NT$7.8 billion was allocated to cover new technology R&D, tax payments, dividend distribution, employee compensation, research and development investment, interest payment, depreciation and amortization. The Company not only assisted customers and suppliers in achieving success, supported the government to promote welfare policies and provided investors with high-quality remuneration, but also drove social and economic growth. When continually focusing on its main business, CTCI caused a social cost of NT$120 million from its environment footprint arising from energy and resource consumption and pollutant generation. To mitigate the environmental impact generated from operations, CTCI has planned short-, medium-, and long-term carbon reduction targets and continually implemented energy-saving plans and renewable energy applications, creating NT$3.06 million of environment benefits. As a result, CTCI strives to practice the commitment to net-zero emissions by 2050 in a progressive manner and will take more active measures in the hope that the commitment can be achieved by 2045 in advance. Additionally, the complete training plans have driven the improvement of colleagues' skills and the growth of their employability, bringing NT$29.77 million of future career benefits; through diverse health education activities and long-term follow-ups, we aim to eliminate the potential risks of cardiovascular diseases to properly control colleagues' health. As a result, NT$4.09 million of health management benefits was acquired; colleagues engaged in various social care and volunteering activities, creating NT$2.73 million of social value. With respect to construction site safety, disabling injuries and death incidents were caused due to the occupational disasters of vendors, causing a total of NT$13.55 million of social cost. With respect to supply chain management, CTCI's procurement activities generated NT$107.6 billion in economic output across its supply chain, creating 23,000 employment opportunities and NT$6.9 billion in labor income. However, the environment footprint derived from raw materials and service supply process and resource consumption resulted in an estimated NT$1.5 billion in social cost.
　
During the plant construction and operation phases, projects undertaken by CTCI generated NT$89.1 billion in economic output for client industries. Through the three pillars of Green Engineering―green technology, green contracting, and green investment―CTCI helps clients improve energy efficiency, conserve water resources, and reduce resource consumption through innovative solutions, creating NT$12.1 billion in environmental benefits.
　
With an impact-oriented mindset, CTCI knows deeply that the pursuit of business growth would not only bring financial income and improve the quality of life, but also cause negative impact to the society and environment. As a result, the Company will comprehensively consider more profound impact in decision-making process so as to identify risks and opportunities contained in the sustainability topic management.
　
In the future, CTCI will expand the application of innovative technologies of green engineering and strengthen the sustainable supply chain management and more effective engineering service models. Through the application of core technologies and the cooperation with stakeholders, the Company aims to promote the mutual benefit and coexistence between the enterprise and society, thereby realizing the net positive benefits of corporate sustainable management.