Sustainable Material Issue

Strengthen waste management and gradually achieve the zero-waste goal

• Implementation of UL 2799 Zero Waste to Landfill Certification
• Continuously adhere to the principles of source reduction, reuse, recycling, and proper disposal to actively support the Groupʼs waste reduction goals

• Collect waste management data on a monthly basis
• Conduct quarterly reviews of waste management data
• Conduct annual Zero Waste to Landfill certification
• Conduct annual internal audit meetings, management review meetings, and annual external review meetings

•  Institutionalizing Sustainable R&D: Integrating R&D innovation processes into modular product design and systematizing sustainable design; establishing phased checkpoints in the product development process; incorporating sustainable design criteria as mandatory indicators in product development; and reducing the environmental impact across the product lifecycle
• Open Ecosystem Co-creation: Actively collaborate with startups, academic and research institutions, and industry partners to rapidly integrate AI multimodal sensing, new sustainable materials, and high-efficiency recycling technologies through a co-creation framework. This approach diversifies R&D risks, accelerates the acquisition of technical capabilities required to realize a circular economy and next-generation product experiences, and builds a circular and service ecosystem. Establish collaborative mechanisms and new open innovation management processes, while simultaneously considering the SDGs, to leverage a“Technology for Goodˮstrategy. This will evolve the co-creation ecosystem into a “Nature-Tech for NPIˮ strategy to create shared value
• Establishment of a Sustainable Materials Database: Continuously refine the content of the sustainable materials database year by year, expand the application of these materials to more product lines, and increase the proportion of recycled and low-carbon materials used
• Centered on the product lifecycle, establish circular design standards, increase the proportion of recycled materials used in new products, and gradually extend this approach to the entire product line

• Regularly track“Recycled Material Usage Ratioˮ data during departmental monthly meetings
•  Monthly progress reports and reviews are conducted during the Groupʼs General Planning Meetings, and progress toward targets is submitted to the Sustainable Development Promotion Team
• Report and review progress to the Sustainable Development and Nomination Committee every six months
• Annual reporting to the Board of Directors

• Based on domestic and international environmental regulations and standards, we further ensure that the eco-friendly materials, processes, and energy used, as well as the products provided, are low-carbon, environmentally friendly, and sustainable. The materials,processes, and products used fully comply with relevant environmental regulations and standards
• MERRY will continue to strengthen our sustainable marketing governance framework, centering on integrity, transparency, and innovation, and integrate ESG principles into market operations and brand development. In the future, through data-driven management and cross-departmental collaboration, we will reduce the environmental and social impacts of marketing activities on operations. With the goal of “Sustainovate—Practicing Sustainability Through Innovation,ˮ we aim to build a brand ecosystem that combines commercial competitiveness with sustainable value

• Monitor the timeliness of anomaly resolution to prevent production line stoppages caused by delayed responses
• Continuously improve items that fail to meet quality standards on a monthly basis and propose preventive measures
• Chemical Monitoring to Ensure Products Are Free of Harmful Substances
• Continuous quarterly monitoring of product compliance to ensure products meet requirements
• Sustainable Marketing Policy:
  - All marketing and external communications must be truthful and transparent, avoiding any misleading information.
  - Prioritize the use of eco-friendly materials and low-carbon packaging, and incorporate marketing activities into the product lifecycle assessment to reduce resource waste
  - has implemented a product carbon footprint (raw material stage) calculation system.Through multi-dimensional analysis, we identify carbon emission hotspots to assist R&D teams in optimizing material selection and provide customers with precise recommendations for carbon reduction trends
• Operational Synergy Management:
  - The marketing, sales, and supply chain departments jointly review promotional and new product plans to ensure they align with sustainability principles
• Brand Integrity and Transparency:
  - Regularly disclose sustainability marketing performance metrics, such as the proportion of low-carbon products and customer trust levels
• Social Responsibility:
  - Promote sustainable consumption through product labeling and digital communications,encouraging customers to extend product lifecycles and participate in recycling programs
• Cultivating a Sustainability Culture
• Conduct regular training on sustainable marketing and compliance to enhance employeesʼ professional expertise and risk awareness.

• MERRY utilizes a Product Management System (GPMS) to control materials from their  source, ensuring that prohibited and restricted substances in our products comply with international regulations and customer requirements.
• Report and review results to the Sustainable Development and Nomination Committee every six months
• Monthly reports and reviews on sustainable product marketing outcomes, quality management,and customer satisfaction are presented at the Group General Management Meeting,and progress toward sustainability goals is submitted to the Sustainability Promotion Task Force.
• Annual reports are submitted to the Board of Directors

• Ensuring that every employee has the opportunity to enhance their skills and advance their career

• Sustainable Talent Development
  – Professional/Management Blueprint Establishing the Foundation for Talent Development
  – Establish succession planning for key positions, complete talent assessments, and cultivate talent pipelines
  – Implement an annual Individual Development Plan (IDP) system, utilizing coaches and mentors to enhance development efficiency.

• Training and Empowerment Initiatives:
  – Implement the "MERRY A Talk" AI knowledge-sharing series to drive digital transformation and AI application capabilities
  – Provide diverse learning resources (internal and external training, online platforms, cross-functional training)

• Regularly track "talent pipeline readiness" during departmental monthly meetings
• Monthly performance reports and reviews are conducted during the Group Overall Planning Meeting; submit progress reports on target implementation to the Sustainable Development Promotion Team
• Report and review progress to the Sustainable Development and Nomination Committee every six months
• Annual reporting to the Board of Directors

• Implementation of ISO 27001:2022: Continuously expand the scope of the information security management system to cover the entire group
• Annual Information Security Survey for Stakeholders: Conduct regular surveys of internal mid-to-senior level managers (Assistant Manager and above) to assess information security management needs, thereby understanding external clientsʼ expectations and audit requirements regarding supply chain information security. Use this as a basis for optimizing information security policies and training initiatives
• Annual Supplier Cybersecurity Assessment: Conduct cybersecurity risk assessments of suppliers to ensure third-party partners comply with the companyʼs cybersecurity standards and to strengthen supply chain security management
• Annual external vulnerability scanning of public-facing servers by third-party security firms: Utilize compliant external platforms to proactively detect potential security vulnerabilities in public-facing servers, and promptly patch them to prevent the risk of malicious intrusion or data breaches
• Implementation of MFA for VPN and RDS connections: Add a second layer of security for logging into the companyʼs internal network to ensure the safety of employees when accessing internal systems via remote work (VPN) or Remote Desktop Services (RDS).
• Email social engineering drills: Conduct regular phishing email tests for all employees to enhance their ability to identify fraudulent and malicious emails

• Monthly Cybersecurity Meetings
• Semi-annual Information Security Team Meetings Annual Information Security Management Review Meeting
• Year-End Report by the Information Security Promotion Group to the Sustainable Development and Nomination Committee/Board of Directors

• In line with the Science Based Targets initiative (SBTi),we commit to near-term targets of reducing Scope 1/Scope 2 emissions by 50.4% and Scope 3 emissions by 30% by 2032
• Commitment to 100% renewable energy by 2030 (RE100)
• Achieve carbon neutrality across Scopes 1, 2, and 3 by 2040

• Establishing renewable energy systems, utilizing renewable energy, and purchasing renewable energy certificates
• Implement an energy management system, replace high-energy-consumption equipment, improve energy efficiency, and promptly identify abnormal electricity usage
• Implement a greenhouse gas inventory system to improve inventory efficiency and enhance data integration
• Regularly assess climate-related risks and opportunities, and continuously disclose climate-related financial information

• Establish annual energy-saving and carbon-reduction measures, and regularly monitor the implementation of these measures and carbon reduction progress across the facility
• Conduct monthly reviews of greenhouse gas reduction efforts during general planning meetings
• Assess climate-related risks and opportunities in the second quarter of each year; track related operations in the third quarter; and report operational results to the Sustainable Development and Nomination Committee/Board of Directors in the fourth quarter

• Conducting training on Ethical Corporate Management
• Implement the signing of integrity pledges by employees and suppliers to ensure consistent ethical standards
• Establish a whistleblowing email address and hotline to handle reports and protect whistleblowers
• Launch the "Integrity Ambassadors" program to strengthen the culture of integrity among employees
• Conduct internal audits to ensure all departments comply with company policies and regulations

• Report confirmed whistleblowing cases to the Board of Directors.
• Submit a report to the Sustainable Development and Nomination Committee every six months to review the results of integrity management
  and improvement plans.
• Conduct annual internal audits to regularly inspect the implementation status of each unit and report to the Board of Directors.