Stakeholders Engagement

Being the best partner for our stakeholders is one of LITE-ON's commitments. Listening to and communicating effectively with the stakeholders is one of the corners on which LITE-ON builds corporate sustainability.

Stakeholder Identification and Communication

LITE-ON has stakeholders from a wide variety of backgrounds. To present stakeholders sufficiently representative of their categories, we refer to the five attributes in AA1000 Stakeholder Engagement Standard 2015: dependency, influence, proximity, responsibility, and representation. 9 stakeholder categories have been identified by the degree of importance.

The process is conducted in a three-year cycle. In 2017, we summoned representatives from all departments and identified the following stakeholders through open discussions. Correlation tests are also performed every year to examine the survey results returned by stakeholders. .

The nine stakeholder categories are employees, customers, suppliers, investors/shareholders, governments and competent authorities, nonprofit organizations, research institutions, communities, and media.

In 2018, LITE-ON continued to engage stakeholders in the nine categories through regular and ad hoc communication channels, and achieved various results and created values for the society as a whole. We will continue to address issues important to our stakeholders via various channels as well as p15-17 of CSR report.

Identification of Material Issues

The LITE-ON Corporate Social Responsibility Report complies with the Global Reporting Initiative (GRI) Standards. Material issues are analyzed by following the process of identification, prioritization, validation, and review in order to validate the scope of disclosure in the report as well as major internal/external sustainability challenges faced by the company. The process serves also as a comprehensive review of business performance.

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Identification
A list of 20 sustainability issues was compiled through the channels below to provide the scope of material issue identification in the report.
 ● LITE-ON employees based identification of stakeholders on experience from everyday business activities and previous assignments, and listed sustainability issues that would be of interest to different stakeholders.
 ● Key concerns of leading competitors around the world and international trends in sustainability.
 ● To maintain the objectivity, integrity, and inclusiveness of material issues, the company also looked back on the material issue matrix in the previous report.

Prioritization
The process of sustainability issue prioritization by materiality is described as follows.
 ● The issues are assessed by "the degree of impact of a company on the economy, the environment, and society" and "the degree of influence over stakeholders' assessment and decision making processes".
 ● We used external questionnaires again this year to collect opinions from key stakeholders in order to make the data more representative. The company received 2,091 valid replies, including opinions from employees (1,798) and from external stakeholders in the other eight categories (293).
 ● Statistical techniques and quantitative analysis were applied to analyze the influence and degree of impact of individual issues and generate the preliminary material issue matrix.

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Validation
The process of sustainability issue prioritization by materiality is described as follows.
 ● To ensure compliance with the GRI integrity and stakeholder inclusiveness principles, results of the preliminary identification of material issues are reviewed by the LITE-ON CSR Committee, and the degree of materiality is increased for the four issues, "green product design", "corporate governance", "climate change and energy management", and "development and application of innovations", based on results of international benchmarking analysis, trends in sustainability, and LITE-ON's business development strategies.
 ● The adjusted results were reviewed by the CEO, and the material issue matrix was discussed and validated.

Compared to the results from last year (2017), 2 issues, which are "information security and personal information protection" and "talent recruitment and retention", out of the 20 issues are new additions to the significant impact issues, and make a total of 8 issues in the category. There are 8 secondary impact issues and 4 negligible impact issues. Following examples of benchmark firms in and outside Taiwan and for consistency of terms in and outside the company, LITE-ON changed "product or service life cycles" to "green design"; merged "climate change strategies" and "energy efficiency" into "climate change and energy management"; merged "privacy and data security" and "data security and client privacy" into "information security and personal information protection"; merged "labor relations and fair treatment of employees" and "diversity and inclusion" into "labor relations and friendly workplace"; and added "development and application of innovations".

11 LITE-ON specific issues were summarized from "significant impact issues" and "secondary impact issues" to provide the scope of material disclosure in the report. The negligible impact issues were deemed nonmaterial issues, and would not be disclosed in the report, except where non-material issues would affect the presentation of material issues. Such non-material issues would be described and disclosed in the report as appropriate.

Furthermore, we identified the GRI topics corresponding to the material issues and provided answers in the CSR report.

Review
In the next report, we will review the material issue matrix, and engage stakeholders in further communication to determine if the material issue matrix for the coming year is reasonable or in need of adjustment.

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