Creating Positive Environmental Impact

MERRY aims to achieve group-wide carbon neutrality by 2040 and RE100 (renewable energy) by 2030, advancing its sustainability strategies in line with the regulations announced by the Ministry of Environment. Internally, MERRY has revised its environmental protection policies to strengthen its governance framework. Externally, it promotes green investment: NT$10 million in E. Sun Bank's sustainability bond (P14 E. Sun Bank 3; code: G102BK) in 2025, and, by the end of 2026, NT$20.48 million in a domestic innovative start-up (Taiwan Innovation Board – Foxtron Vehicle Technologies, code: 2258).
01
Advanced its RE100 target from 2040 to 2030
02
The Nearterm target was approved by the Science Based Targets initiative (SBTi)
03
Energy intensity increased by 9.73% compared with the 2023 base year.
04
Utilized 61.83% renewable energy, totaling 28,132 MWh.
05
Scope 1 and Scope 2 emissions intensity dropped 22.93% from the 2023.
06
Water intensity decreased by 12.72% compared to the 2023 baseline year.
 
Key Goals：2040 carbon neutrality
As a global leader in electroacoustic manufacturing,
Merry actively addresses the environmental and resource issues brought about by climate change.
 
Pic
TCFD
Environmental Policy
TCFD
GHG & Energy
Water & Waste
Biodiversity
Climate Change-Related Financial Disclosures(TCFD)
MERRY's governance level comprehends the potential impacts of climate change on operations and long-term development. Since 2020, it has implemented climate change-related management mechanisms, progressively expanding the scope of climate-related risk and opportunity assessments each year.
Climate Governance
Board Oversight

The Board of Directors:

  • MERRYʼs highest decision-making authority for climate change risk management. It is responsible for approving relevant risk management policies, monitoring the implementation of climate-related risk management, guiding decision-making on response strategies, supervising the execution of these strategies, and evaluating the achievement of objectives.

Sustainable Development and Nomination Committee:

  • Chaired by Independent Director Chen Ting-Ru as convener, with Corporate Representative Director Huang Chao-Feng concurrently serving as Chief Sustainability Officer, the committee convenes regularly to conduct sustainability development planning, implementation, and performance review. It also functions as the supervisory body for the assessment and execution of climate change risk and opportunity management.
Management Authority and Responsibility

Risk Management Team：

  • Led by the department specialized in risk management, a crossdepartmental working group is established to identify climate change risks and implement response plans, coordinating the planning of risk and opportunity identification and response plan development within the risk management process. The climate change risk assessment operations are integrated with existing risk management processes through the ISO 31000 management system framework, with risk management activities conducted annually. The Risk Management Team regularly reviews execution outcomes, consolidates climate change risk management reports, and reports at least annually to the Board of Directors on the assessment results of climate change risks and opportunities, providing guidance on the management and implementation of climate risks and opportunities.
  • The results are incorporated into the operational promotion plans of relevant units and are regularly reported to the Sustainability Promotion Committee and the Board of Directors as references for governance decision-making.

Climate Change Task Force:

  • Composed of cross-departmental supervisors, responsible for advancing the management of climate change risks and opportunities, convening colleagues from relevant units to assess risks and opportunities, and planning response measures.

Functional/Business Units:

  • Regularly conduct assessments and analyses of climate change risks and opportunities, plan and implement response measures, and periodically report on execution outcomes and performance.
Performance Linkage
Senior Executive Sustainability-Related Linkages Weighting
CEO Climate Strategy
  • Scope 1 and 2 emissions reduced by  8.4%; Scope 3 emissions reduced by 3.5%
 10%
Chief Human Resources Officer Talent Attraction and Retention
  • Professional track talent pipeline completeness ≥ 76%
  • Management track talent pipeline completeness ≥ 47.5%
 5%
Chief Operating Officer Climate Strategy
  • Scope 1 and 2 carbon reduction: 8.4%
 5%
Chief Technology Officer Climate Strategy
  • CDP Score A- (Climate Change), Development of Group Scope 1 and 2 Carbon Reduction Strategy
 5%
Chief Procurement Officer Supply Chain Environmental Management
  • S3 Carbon Reduction 3.5%
 5%
Product Group Head

Sustainable Products

  • S3 Carbon Reduction 3.5%
 5%

 

 

Climate Scenario
MERRY is not an industry with high carbon emission intensity; however, global warming and the resulting climate change affect our key stakeholders. To promptly respond to market trends and potential customer demands, climate change risks and opportunities are identified through scenario analysis. The assessment results are thoroughly reviewed by business units and functional departments to serve as reference guidelines for daily operational adjustments. Additionally, regular progress and outcome reports are submitted to the Sustainability Development and Nomination Committee and the Board of Directors, serving as reference factors for group operational decision-making.
 
Under this consideration, the physical risk scenario selected is SSP5-8.5, and the transition risk scenario is based on national target scenarios and in response to our SBTi commitment, near-term emissions reduction targets were established with reference to the IEAʼs Net Zero Emissions by 2050 (NZE) scenario. Furthermore, policy changes, physical environment, social, and technological external information are evaluated as the basis for the annual climate change risk assessment.
Risk Management
In accordance with the climate change risk management process, climate-related risks and opportunities are identified, response strategies are evaluated, and internal and external reports are regularly prepared. Climate-related risk factors have been integrated into the existing risk management mechanism and are regularly advanced by the Risk Management Team.
 
Risk Inventory
  • Identify risk and opportunity items relevant to MERRY based on domestic and international regulations and external stakeholder expectations, and include them in the assessment list.
Key Risk Analysis
  • Implementation method: Invite relevant departments to conduct evaluation and discussion; the Risk Management Team assesses, analyzes, and confirms the results.
  • Assessment dimensions: Risk occurrence timeframe (short term 1-3 years, medium term 5-10 years, long term more than 10 years), risk likelihood, risk occurrence location (direct operations, upstream supply chain, downstream customers), risk impact severity.
  • Assessment Items: Transition Risks (Policy and Regulation, Technology, Market, Reputation) and Physical Risks (Immediate and Long-term)
  • The analysis results are quantitatively ranked, with the top three risks and opportunities identified as key risks.
Financial Impact Assessment of Risks and Opportunities
  • Taking into account the likelihood of risk or opportunity occurrence and the degree of operational impact, assess the potential financial impact items and their extent.
Response Planning and Reporting
  • For key risks and opportunities, considering the extent of financial impact, assess response strategies (mitigation, transfer, acceptance, control) and develop corresponding action plans.
  • Reporting is conducted in accordance with internal management procedures and disclosed regularly in the sustainability report.

 

Indicators and Targets
MERRY commits to achieving group-wide carbon neutrality by 2040, in response to international trends and the national 2050 net-zero target, identifying climate change risks and opportunities, integrating existing sustainability objectives, and establishing related indicators and targets.
 
  Indicator 2025 Target and Achievement 2026 Target 2030 Target
Governance Group Risk Management and Continuous Operation Plan

 

  • Promotion of Relevant Systems at China Operating Site

 
  • Promotion of Relevant Systems at Thailand Site
  • Promotion of Relevant Systems at All Operating Sites
Strategy Revenue from
Sustainable
Design Products

Sustainable Materials Application 

  • The proportion of eco-friendly materials used in plastic components of headsets reached 41.78%
  • The proportion of eco-friendly materials used in packaging for over-ear and true wireless earbuds exceeds 45%

Circular Design 

  • 38% of designated development projects implemented optimized PCB designs
  • Power consumption optimization for true wireless earbuds >4%
  • Power savings for headsets ≥ 2.5%

 

Sustainable Materials Application

  • The proportion of eco-friendly materials used in plastic components of headsets reaches 45%
  • The proportion of eco-friendly materials used in packaging for over-ear and true wireless earbuds reaches 50%
Circular Design
  • Number of projects in which optimized PCB dimensions were implemented: 30% (total PCB volume reduced by 1.5%)
  • Headsets ― Energy savings per development project ≥ 2.6%
  • True Wireless earbuds ― Product power consumption optimization rate ≥ 4.1%
  • ESG Smart Analytics Platform (Carbon Vision)

Use of sustainable materials

  • 50% of plastic components in headset mechanisms use eco-friendly materials
  • FSC certification implemented across the entire product line for packaging paper materials.

Circular Design

  • 25% of designated development projects implemented PCB size optimization (total PCB volume reduced by 2.5%)
  • Product Power Consumption Optimization:
  • Headsets ― Energy savings per development project ≥2.8%; True Wireless earbuds ― Power consumption optimization rate
    ≥ 4.3%
  • ESG Smart Analytics Platform (Establishment of a comprehensive product sustainability database)
Risk Management Renewable Energy Usage Ratio (RE100)
  • Group uses 60% renewable energy
  • Group uses 65% renewable energy
  • Group uses 100% renewable energy
Risk Management

Carbon Emissions
and Energy Intensity

(Base year 2023)

 

  • Aligned with Science-Based Targets
  • According to the SBTi, S1/S2 emissions reduced by 8.4%, and a strategy has been formulated
  • Energy management, with a 2% reduction relative to the 2023 baseline
  • Implementation plan for the groupʼs 2040 carbon neutrality goal

 

 

  • Science-Based Targets
  • In accordance with SBTi, achieve a 17% reduction in scope 1/2 emissions, and formulate strategies
  • Energy management: 2% reduction relative to the 2023 baseline
  • Implementation plan for the groupʼs 2040 carbon neutrality goal

 

 

  • Science-Based Targets
  • Implementation plan for the groupʼs 2040 carbon neutrality goal

 

 

Climate Risks and Opportunities
MERRY based on climate scenarios, risk management mechanisms, indicators, and targets, utilizes a comprehensive governance system to annually assess the transition and physical risks recommended by the TCFD framework, referencing political regulations, economic activities, physical environment, society, technology, and other factors, as well as the impacts on the value chain when affected. In 2024, MECL further advanced the TCFD risk assessment to enhance the intensity and scope of climate risk management, consolidating significant physical and transition risks as detailed in the table below. From 2024 onward, the quantification of risks' potential financial impact will be progressively explored, with mechanisms established for cost or revenue estimation, and these quantified results will be reported to the Sustainability Development and Nomination Committee. Thereafter, the TCFD assessment framework will be progressively introduced at manufacturing sites in Thailand and Vietnam.Other locations, such as offices in Singapore, Malaysia, or India, will not be assessed in the short term due to minimal exposure to climate-related impacts.
Taiwan Headquarters
MECL
  Significant Risk
Factors		 Period Impact
Scope		 Potential Financial Impact Response Strategies and
Plans		 Corresponding
Opportunities		 Strategies for Potential Financial Impact and Realization of Opportunities
Entity Risks Short-term Entity: Operational
disruption or employee
commuting
obstruction
caused by extreme
climate

Short Term

1-3 Years

 Direct operations Increased capital expenditures and higher asset losses, coupled with the impact of extreme heat hazards, result in an average annual labor cost of approximately NT$1,743 for the Company. Additionally, the investment in a VPN server to enable remote work for employees amounts to approximately NT$160,000, and the monthly rental fee for Zoom online meeting rooms to support remote work is approximately NT$52,790.

 

  • Continuously enhance internal emergency response capabilities
  • Regularly evaluate the locations of asset and equipment placement
  • Mitigate potential property losses through insurance

 
  • Resource
    efficiency:
    employ more
    efficient production and
    distribution processes

 

  • Implement automated production systems to improve product efficiency and reduce on-site labor requirements
  • Incorporate supply chain disruption risks caused by climate change into production and sales planning
     

Reduce direct and indirect costs 

 
Short-term
entity:
Supply chain
transportation
disruptions caused
by extreme climate		 Upstream
suppliers		 Increased indirect operating costs, with estimated penalties for failure to deliver to customers on schedule or costs for alternative faster transportation methods, resulting in an approximate cost increase of USD 3,000 to 100,000.
  • Continuously deepen supplier management
  • Mitigate potential losses through commercial insurance
Short-term
entity:
Production disruption
caused by
extreme climate		 Direct operations Increased capital costs; estimated premiums for comprehensive property insurance covering assets including production equipment and inventory (Taiwan region) amount to NT$72,989, and premiums for transportation liability insurance covering shipped products (Group-wide) amount to NT$751,083; Additionally, it is estimated that if the companyʼs revenue loss due to production disruption persists for one quarter, the resulting
additional bank interest expenses would amount to approximately NT$791,700.
  • Continuously promoting
    ESG-related initiatives and
    securing sustainability-linked
    loan benefits to mitigate the
    pressure of increased capital
    costs.
Transition Risk – Technology Failure in the
development
and application
of sustainable
materials

Short Term

1-3 Years

 Direct operations

Capital investment loss and revenue decline due to reduced demand; it is estimated that failure in the development and application of sustainable materials will result in unrecoverable investments exceeding NT$6,000,000. It is further estimated that the payment for low-carbon process technology licensing fees will exceed NT$888,000.

 

  • Develop industry-academia collaborations
  • Continue investing in green material research and development
  • Seek cooperation with suppliers

 
  • Products and services:
    Research and innovation
    in the development of new products and services
 
  • Apply environmentally friendly and sustainable materials to enhance product competitiveness
  • Continuously promote low-carbon design by utilizing superior, lighter, and lower-carbon materials
  • Continue developing products in response to customer demands, communicate MERRYʼslow-carbon product information, and pursue strategic partnership opportunities
     

Increased demand for products and services resulting in revenue growth 

 
Transition Risk – Market Consumers
opting for lower-carbon products
or services

Short Term

1-3 Years

 Direct operations Revenue decline due to decreased demand,with an estimated impact reducing revenue by approximately USD 30,000 to 3,000,000.
  • Continuously monitoring
    international low-carbon
    trends, industry developments,
    and customer expectations, with related
    outcomes regularly reported internally
  • Market:
    Entry into new markets
  • Continuously promoting the development of proprietary brands and expanding application areas
  • Lightweight, thin, short, and small products enabled by low-carbon design allow MERRY to enter new existing markets

 

Increased demand for products and services resulting in revenue growth 
Increased costs
for acquiring
low-carbon raw
materials		 Direct cost increase, with an estimated approximately3%.

 

  • Continuously deepen supplier management
  • Continued investment in process research and development

 
  • Market:
    Patent portfolio
  • Actively utilizing internal patent proposal mechanisms to facilitate patent acquisition
  • Continuously promoting trade secret protection to prevent leakage of carbon reduction technologies and processes

 

Reducing indirect costs and increased revenue resulting from higher demand for products and services
  Significant Risk Factors Period Impact
Scope		 Potential Financial Impacts Response Strategies and Plans Corresponding Opportunities Strategies for Mitigating Financial Impacts and Realizing Opportunities
Entity Risks Short-term entity:
Impact of extreme weather events on own operations		 Short Term(1-3 years) Direct Operations Capacity reduction resulting in
decreased revenue
  • Continuously strengthen daily disaster preparedness and insurance planning.
  • Implement flexible production scheduling mechanisms to enhance emergency response capabilities.
  • Resilience:
    sustainable supply chain
    management,adoption of renewable energy, and focus on the carbon trading market.
  • Short term:
    promote sustainable supply chain management to mitigate raw material supply risks and continuously develop alternative materials.
  • Medium term:
    progressively increase the proportion of renewable energy adoption to mitigate risks arising from policies and regulations ( e.g., power rationing ); this may also reduce production costs in the future ( for example, electricity
    fees ).
  • Long term:
    Continuously monitor the carbon trading market and participate in carbon allowance trading as appropriate.

 

Reduce indirect costs 
Short-term entity:
Extreme weather
events impact supply chain transportation		 Direct operations,
upstream suppliers		 Capacity reduction resulting in
decreased revenue
  • Continuously enhance supply chain management to avoid reliance on a single supplier.
  • Continuously diversify production plants to avoid impact on a single operating site.
Transition Risk ― Market Customers impose stricter requirements
on products or manufacturing
processes		 Short Term (1-3 years) Direct Operations Reduced demand for products and
services leads to revenue decline.
  • Promote green production.
  • Plan the establishment of related equipment and tools.
  • Products and services:
    develop or expand low-carbon products and services.
  • Short term:
    continuously advance low-carbon design by using less,lighter, and recycled materials in product design.
  • Medium to long term:
    assess the development of new markets, such as the automotive market.

 

Revenue increase driven by growing demand for products and services
 
 
 
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