Corporate Social Responsibility

CSR Committee and Promotion Organization
Innolux’s CSR Committee leads the CSR organizations and is responsible for formulating the Company’s short, medium, and long-term CSR policies. The Innolux chair appointed Chih-Ming Chen (vice president of the Tainan TFT Manufacturing Center) to represent management and top manufacturing center executives in Taiwan and China as committee members. The management representative and committee members are asked to host quarterly committee meetings and annual management review meetings to review any risks involving corporate governance and CSR issues (environmental and social aspects) in the Company and devise adaptive measures accordingly. Action is subsequently taken by the responsible departments, who report their implementation results at the aforementioned meetings, achieving the goals of CSR.
 
Innolux introduced a total of 14 CSR objectives in 2018 which included energy and water conservation, reductions in greenhouse gas emissions, RBA working hour management, and social welfare. The CSR objectives contain 44 sub-objectives, 29 of which were fulfilled and 15 not fulfilled. Innolux will continue to work hard to engage in cross-department communication and resource integration to fulfill its objectives and sub-objectives.
 
Main duties Convene quarterly CSR committee meetings
Review the risks involving corporate governance and CSR issues (environmental and social aspects) at the Company and devise adaptive measures accordingly
Annual management review meetings
The chair reports the implementation results of the current year and the plans for the following year to the Board of Directors

Innolux Corporate Code of Conduct
Innolux Corporate Code of Conduct (the “Code”) lays the foundation of its corporate social responsibility. The Code requires all innolux’s employees to adhere to a higher level of moral standard,create more value for society, and refrain from engaging in unethical or unlawful business conduct to derive frowth or profit of Innolux when facing various challenged in business competitions.

 
 Code1 Integrity Integrity is the most important core value of Innolux. It consolidates Innolux’s leading position in the display panel industry. Innolux pursues to acquire trust and respect from its customers, shareholders, employees, suppliers and the society.
Code2 Compliance Innolux respects and upholds democracy and the rule of law. It abides by the related law and the standards which are agreed by the industry. Furthermore, it pursues the higher standards of operational excellence.
Code3 Respect for
human rights
It is a universal value to respect for human rights. When facing up to the employees, customers, suppliers around the world, Innolux based on the Global Compact implements the principle of fairness and respect for the individual differences.
Code4 Environmentally
friendly
Deterioration of the living environment is human beings’ common challenges. Innolux should use its capacity to reduce the environmental impact of the production process and product to attain the sustainable development of the global environment.
Code5 Community and
social involvement
Innolux is not satisfied with its own growth and robustness. Innolux is willing to facilitate the development of nearby communities with the way of sharing its profits and public achievement.
Code6 Be the influential leader in supply chain As the panel and display manufacturing leader, Innolux has a decisive influence on the client or supplier side; by clustering the supply chain strength, it has a greater impact on the improvement of the social and the global environment.
Code7 Balancing and continual improvement of financial, social and environmental performance Innolux concentrates on the company operation, creating profits for shareholders and employees. It then contributes to the improvement of the society and the environment. 
Innolux Code of Conduct Specifications
General Provisions
1.       Basis
The following provisions have been specifically instated to enact the Code (specified in the CSR Management Manual; Doc. No. II1QM-0002) and fulfill the responsibility of sustainable corporate operation.
 
2.       Scope
The Code is applicable to all Company factory, service, and business locations worldwide, including all management and general staff. Additionally, it is expected that the subsidiaries, joint ventures, and suppliers of the Company, as well as all dependent entities, abide by the Code.
 
Integrity
3.       Anti-Corruption Policy
The Company adheres to utmost integrity and impartiality in its business practices and mandates that all members of the board, executives, and employees abide by its anti-corruption policy, which prohibits dishonest behaviors and the provision, request, or acceptance of illegitimate interests. If such violations are identified, any and all employees are obligated to report such misdemeanors, along with tangible evidence, through the Company’s reporting system (Corruption Reporting E-Mail: speak-up @innolux.com). The Company will protect informers against any potential retaliation owing to the report.
 
4.       Prohibition of Illegal Political Contribution and Improper Donations to Charity
The Company shall not make political contributions in order to gain commercial interest or trading advantage. In addition, The Company shall not donate to charity, which may constitute to bribery.
 
5.       Disclosure of Information
To achieve information transparency, important information is published on the Company website, as well as in its annual reports and prospectuses. The Company’s external provision of labor, health and safety, environmental activities, commercial activities, organization structure, financial situation, and corporate performance are recorded and presented in a complete, appropriate, correct, promote, and understandable manner. The Company has also appointed a designated spokesperson and responsible unit to represent the company externally to ensure the consistency and correctness of the information released to the public.
 
6.       Confidentiality
The Company values the information of all its business relations (including suppliers, customers, consumers, and employees), and instates rigorous standards to protect such information.
 
Compliance
7.     Compliance with Laws and Regulations
The Company abides by local laws and regulations when engaging in business practices and follows a legitimate corporate governance framework and relevant ethical standards. In addition, the Company reinforces the compliance awareness of its employees through education, training, and internal communication.
In the instance that employees are in violation of the law, labor safety regulations or legislation, labor contract, or the Company’s ethical code of conduct, correctional action shall be enforced in accordance with relevant laws and disciplinary measures. The employee’s compliance will consistently influence his/her performance appraisal.
 
8.       Fair Competition (Antitrust)
To maintain market order and ensure fair competition, the Company requests its employees to strictly abide by all applicable laws in relation to fair trade or antitrust laws.
 
9.       Insider Trading
The Company requests that its employees strictly abide by relevant insider trading regulations, prohibiting the unauthorized disclosure of crucial insider information and any behaviors that violate insider-trading laws.
 
10.     Compliance with Health and Safety Standards and Regulations
Innolux ensures that its occupational safety, emergency preparedness, occupational injury and illness, physical demanding work, machine safeguarding, sanitation, food, and housing, and health and safety standards comply with local regulations and Electronic Industry Code of Conduct (EICC) provisions.
 
Respect for Human Rights
11.     Compliance with International Labor Standards
The Company has created a corporate culture centered on the equality of opportunity based on the United Nations (UN) Universal Declaration of Human Rights, UN Guiding Principles on Business and Human Rights, International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work, EICC labor human rights, and local labor laws.
 
12.     Equal Employment Opportunity and Non-Discrimination
The Company supports diversity and equal opportunity, and shall not tolerate any form of discrimination in the workplace, including but not limited to race, complexion, age, gender, sexual orientation, ethnicity, disability, pregnancy, religion, political affiliation, union membership, and marital status.
 
13.     Anti-Immorality and Anti-Harassment
The Company prohibits harsh and inhumane treatment of employees, including but not limited to sexual harassment, sexual assault, corporal punishment, mental or physical coercion, and verbal abuse. Additionally, threatening others to engage in the aforementioned behaviors shall not be tolerated.
The Company has established a complaints system (Employee Care E-Mail: 67885.HQ@innolux.com) for employees to report human rights, labor, and sexual harassment issues. Complaints are handled by the Employee Relationship Department, which also supervises responsible unit to promptly process the issue and submit improvement proposals. In the case of sexual harassment, complaints are first verified by the Sexual Harassment Review Board, and disciplinary action is enforced based on the severity of the incident.
 
Environmentally Friendly
14.     Compliance with Environmental Protection Standards and Regulations
The Company endeavors to uphold their environmental responsibilities in all production and operation processes, complying with international standards, local laws and regulations, and the EICC Code. The Company’s environmental management system operations are simultaneously maintained in the attempt to promote environmental protection measures, reduce the negative impact on the surrounding communities, environment, and natural resources, and ensure public health and safety.
 
15. Energy and Resource Management
The company’s use of resources and generation of waste of all types, including water and energy, are to be reduced or eliminated at the source or by practices. The company also has to look for the best creative chance in its value chain to reduce the environmental impacts and to enhance the resource efficiency.
 
16. Pollution Prevention and Reduction of Environmental Impact
The company should efficiently deal with the air emission, waste water, wastes and noises, constructing the comprehensive equipment of pollution prevention to achieve the goal of environmental friendly.
 
17.     Prohibiting the Use of Conflict Materials
The Company and its suppliers prohibit the use of “conflict materials.” The Company ensures that the tantalum, tin, tungsten, and gold used in its products do not directly or indirectly finance or benefit armed groups that are perpetrators of serious human rights abuses in the Democratic Republic of the Congo or an adjoining country. The Company shall exercise due diligence one the source and chain of custody of these minerals.
 
Community and Charity Involvement
18.     Corporate Citizenship
The Company fully understands the social responsibilities of a corporate citizen. Additionally, the Company endeavors to promote community participation, public environmental awareness, and social welfare in its various countries and regions of operation in order to prosper concurrently with the community. The Company also takes into account relevant community assessment models to quantify social welfare, which is used as a reference when formulating social welfare-related decisions.
 
Be the influential leader in supply chain
19.     Supplier Management
The Company delivers CSR requirements to lead suppliers in assuming mutual responsibility. Additionally, the Company reinforces the environmental/social/governance (ESG) management and monitor the CSR performance of it supplies through management procedures, and requests suppliers’ commitment of relevant undertakings to mutually fulfill CSR.
 
Balancing and Continuing improvement of Performance Friendly, Socially and Environmentally
20.     Corporate Social Responsibility Management
Based on relevant management systems, such as the CSR Management System, the Company sequentially follows the PDCA procedure, which respectively present “plan,” “do,” “check,” and “act,” to carry out economic, social, and environmental management. Additionally, the Company reviews performance and results through quarterly CSR committee meetings and annual management review meetings.
CSR Training
In accordance with the regulations characterized in RBA Code of Conduct 6.0, the Company created the RBA Audit Training Course for those responsible for the implementation of the RBA Code. This served to strengthen their knowledge of the RBA audit mechanisms, focal management items, and ensure that the relevant principles are implemented.

 
Target Course Attendees Hours
General employees RBA Audit Training Course 164 984
New employees Innolux Code of Conduct Course 27,054 14,175
Production line supervisors Executive RBA Training Course 101 374
Suppliers (security) Human Rights Policy and Procedures 490 490
CSR Internal Audits
To comply with the RBA and customer demands, internal audits are conducted every year to ensure the effective operation of the CSR management system.
 
In 2018, RBA internal audits were conducted in six sites, including the Zhunan and Tainan sites in Taiwan and the Ningbo, Foshan, Nanjing, and Shanghai sites in China. The audit percentage was 100%. Fifteen risk factors were detected. In terms of labor rights, the most prominent flaws were the work hours and consecutive work days at Chinese sites. For environmental protection and health & safety, all sites have adopted the ISO14001 and OHSAS18001 management systems. Relevant issues are handled in accordance with these management systems. Therefore, the focus of the audits was on the day-to-day operations of the sites. The prominent nonconformities were escape routes, fire equipment inspection, and hazardous waste labeling. Responsible departments have proposed short- and long-term measures to address and minimize the various risk factors.
 
RBA Topics Concerning Customers
Innolux has established and implemented relevant measures based on the latest version of the Responsible Business Alliance (RBA) Code of Conduct.
In terms of supplier management, in both Taiwan and China we assess the RBA compliance of labor brokers and on-site service providers, such as catering, security, and cleaning staff; we also require that they perform self-assessments.
 
In 2018, a total of 57 customer questionnaires were responded. Work hours and the number of consecutive work days remained the topics that customers were most concerned about in relation to labor rights. Environmentally, many customers were concerned about our greenhouse gas (GHG) emissions and management. Innolux began the GHG inventory and emissions reduction program several years ago and discloses its carbon management performance in the Carbon Disclosure Plan (CDP) and CSR report.
 
In addition, a total of 16 on-site audits of the Company's CSR performance were collectively conducted over 44 days. Five of the 16 examinations were RBA VAP audits. A total of 101 nonconformities were highlighted, 13 of which were priority nonconformities mainly in the work hour management, foreign labor expenses, and fire prevention, and safety categories. The aforementioned nonconformities have been addressed. They are also actively monitored, and customers are constantly updated on management progress.