Material Topics

CSC started the “Five-year Energy Saving Action Plan” in 2005, and has successively promoted three phases and every phase has reached the targets of the action plan. 1,104 energy-saving projects were completed in 2021-2024, contributing to 259% of the “Energy Saving Action Plan-Phase IV” target, which is equivalent to a reduction in carbon emissions of 660,000 tonnes CO₂e. At the same time, CSC adheres to the government's energy saving targets and regulations “The average annual power-saving rate of energy user shall reach 1% or more from 2015 to 2024”. Currently, CSC has achieved a power-saving rate of 2.14% from 2015 to 2024.

In 2024, CSC completed a total of 193 energy saving projects, which saved a total of 1.408 million GJ, reduced carbon emissions by 118,000 tonnes CO₂e, and saved energy cost by 487 million TWD, main projects include Rolling Mill Department III " The development of Intelligent combustion monitoring system " and so on.

Considering the increasing diversity and complexity of risk issues, such as policy and regulatory changes, shifts in the natural environment, and geopolitical influences, these might pose significant threats to the Company's operational strategies, supply chain stability, and market competitiveness. Any failure to identify, manage, and develop appropriate response measures for these risks may result in adverse impacts such as reduced revenues or increased operating costs for the Company.

Competitive remuneration and comprehensive welfare not only enhance the company's appeal top talents but also decrease employee turnover, resulting in cost savings on recruitment and training. An equitable remuneration framework and welfare initiatives can foster a cohesive commitment between the organization and its workforce, thereby cultivating a stable and unified corporate culture.

Within the scope of available resources, CSC provided appropriate welfare measures for employees. A satisfaction survey on welfare facilities and services is conducted at the end of each year to continuously improve and enhance various welfare-related services. The average score in 2024 was 85.1, .and the three-year average score is 85.1.

To ensure stable operations and sustainable development, the Board of Directors of China Steel Corporation has approved the "Risk Management Policies and Procedures" as the highest guiding principle. Each business unit is responsible for identifying, assessing, and proposing risk response measures, while the Risk Management Executive Team formulates corresponding strategies annually and compiles information on the implementation status of risk response measures semi-annually. These reports are submitted to the Board of Directors and the Corporate Governance and Sustainability Committee to ensure proper risk control.

The scope of risk management covers economic, environmental, and social aspects, including operational, financial, information security, environmental, legal, and emerging risks. Risks are classified into five levels to clearly define management priorities and strategies.

Enhance and refine remuneration system and welfare policies to surpass those of industry competitors, thereby attracting and retaining exceptional talents.

The Welfare Committee offers a range of services to employees covering dining, sports, fitness, clubs, retail and online shopping, accommodation, commuting and children's education allowances, and group Insurance, meeting employees' fundamental needs across all aspects of daily life, so that they can work at CSC with a sense of happiness and fulfillment.

Furthermore, flexible welfare points are provided to cater to the various needs of our employees.

In order to improve energy efficiency and achieve continuous improvement, CSC sets the energy intensity target for 2025 is≦5,466 Mcal/tCS (22.89 GJ/tCS ) for the annual production plan and energy saving goals as the energy performance indicator.

1. Incorporate sustainability-related risk topics into the risk assessment framework to align with the IFRS Sustainability Disclosure Standards
   To comply with the IFRS Sustainability Disclosure Standards, the Company plans to conduct a systematic review and consolidation of its existing risk items in 2025, categorizing the corporate risk register into four groups. In addition to existing corporate risks, the Company will revise current risk items to align with sustainability-related risk themes, while simultaneously adjusting the grading of financial impacts and the likelihood of occurrence.
2. Strengthen internal audit mechanisms
   To enhance operational control over current risk management practices, the internal audit function serves as the third line of defense. It reviews and validates deficiencies identified in the first and second lines of defense and monitors the progress of corrective actions.

1. Remuneration：
   Increase the shareholding percentage of the employee shareholding trust to 2.7%, 2.85%, 3%, 4%, and 5% in 2024, 2025, 2027, 2030, and 2034 respectively.
2. Welfare：
   Singles networking events are held with a total of 204 participants each year in 2024, 2025, 2030 and 2031.
3. Satisfaction survey
   In line with the policies of CSC and the Administration Division, the General Affairs Department has set four key benchmarks for 2025： enhancing service quality, promoting low-carbon lifestyles, developing digital services, and improving administrative efficiency. Each year-end, we regularly execute an employee welfare satisfaction survey to evaluate the effectiveness of welfare measures, and we have set a target average score of 80 points as a key indicator. Both the target and the annual survey results are disclosed on the company's official ESG website, demonstrating CSC's ongoing efforts and performance in employee care.

1. Incorporate sustainability-related risk topics into the risk assessment framework to align with the IFRS Sustainability Disclosure Standards
   In the first half of 2025, the Risk Management Task Force consolidated risk items, reducing the corporate risk register from 60 to 40. In light of increased earthquake frequency over the past year and heightened foreign exchange volatility in the first half of 2025, two new operational risks were added: the risk of collapse of aging buildings from earthquakes and demand slowdown from rapid currency appreciation, totaling 42 identified risks.
2. Strengthen internal audit mechanisms
   In the first half of 2025, Internal Audit engaged in discussions with the Risk Management Task Force and conducted a preliminary review Going forward, Internal Audit will act as the third line of defense, providing improvement recommendations and reporting regularly to the Board to ensure the effective and appropriate functioning of the internal control system.

1. Remuneration: The shareholding percentage of the employee shareholding trust was increased to 2.7% in 2024.
2. Welfare:
   Singles networking events are held with a total of 204 participants in 2024. CSC published the results on its official ESG website. The results of the year-end employee welfare satisfaction survey that, including the average score and year-over-year comparisons, are presented to demonstrate performance against the established target of 80 points. CSC conducted a satisfaction survey of the welfare center. The average score for satisfaction survey in 2024 was 85.1.

The KPIs for executive committee members' performance evaluation include the accomplishment of water resource management and energy management. The fixed and variable salaries given out in accordance with the findings of executive committee members' performance appraisal.

The KPIs for executive committee members' performance evaluation include the awareness and strategies execution regarding significant risk events. The fixed and variable salaries given out in accordance with the findings of executive committee members' performance appraisal.

The KPIs for executive committee members' performance evaluation include the accomplishment of raising the employee ownership trust's shareholding percentage, the satisfaction of employee welfare, as well as the implementation of singles networking events. The fixed and variable salaries given out in accordance with the findings of executive committee members' performance appraisal.