Shengda Group Sustainable Development Committee

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Identification of Major Topics

Billion introduced materiality analysis in the preparation of the sustainability report, and followed the standards set by the Sustainability Accounting Standards Board (SASB) for the hardware (HARDWARE) industry, taking into account industry peers. After integration, a total of 35 topics were selected by external experts based on their actual or potential negative impacts and positive contributions to the economy, environment, and population (including human rights). The analysis also considered the requirements and concerns of international sustainability organizations and potential investors regarding corporate sustainability. Each topic was scored based on actual negative impacts, potential negative impacts, actual positive contributions, and potential positive contributions to the economy, environment, and population (including human rights), and discussed with on-site colleagues. Based on the economic, environmental, and social topics that have a significant impact on the company's sustainable operations. They will be used as the reference basis for major topics and information disclosure in the 2022 annual report.

ESG Topics Materiality Analysis Steps

1. Identification of Stakeholders	2. Summarizing ESG Issues	3. Surveying Issues of Concern	4. Identification of Material Topics	5. Review and Discussion
Principle of Stakeholder Inclusion	Principle of Sustainability Context	Materiality Principle	Materiality Principle	Integrity Principle
Through internal discussions and feedback from external experts with the heads of various departments and colleagues, and with reference to the stakeholder groups identified in the peer sustainability reports, inclusive stakeholders are identified as the communication material objects. In 2022, 6 categories of stakeholders, including employees and other workers, shareholders and other investors, customers, suppliers/contractors, banking institutions, and media, were identified as the Company's main stakeholders.	Topic collection considers the context of sustainability, mainly based on the topics of the GRI Standards published by the Global Reporting Initiative (GRI) and the standards of the Sustainability Accounting Standards Board (SASB) preparation, and with reference to industry topics, a total of 35 topics related to corporate governance, economy, and environment, were summarized as positive and negative impact scoring items.	In 2022, the impact of each issue on Billion's sustainable operation was identified through the evaluation of external experts and discussed internally with Billion's supervisors and colleagues, which was used as a reference for the ranking of topics.	The scores of each topic and the opinions of Billion's management are analyzed based on the evaluation results, and the materiality of the topics is sorted according to the analysis results to identify the major topics. In 2022, a total of 13 major topics were identified, for which effective management policies were formulated for each topic.	After identifying the material topic boundaries, Billion Electric has prioritized them into annual work or Goal. In the future, it will continue to strengthen management, review the need for any adjustments to the material topics, and disclose relevant information in the sustainability report.

Material Topics Identification Results

According to the evaluation results from external experts, 12 issues were selected, including economic performance, information security/customer privacy, customer health and safety, supplier social assessment, employee diversity and equal opportunities, supplier environmental assessment, innovation products and technology, occupational safety and health, risk management, waste, customer service management, and energy. After discussing with the company's colleagues, it was confirmed that the major topics for 2022 were economic performance, information security/customer privacy, customer health and safety, supplier social assessment, employee diversity and equal opportunities, supplier environmental assessment, innovation products and technology, occupational safety and health, risk management, waste, customer service management, energy, and renewable energy. These topics are listed as the areas of continuous focus and promotion, and will serve as the basis for disclosure in future sustainability reports. The content of these material topics will be compiled by the Sustainable Development Committee and submitted to the Board of Directors for confirmation and subsequently published. For the assessed risks and relevant risk management policies or strategies, please refer to the policies/strategies in the major topics before each chapter in the 2022 Sustainability Report.

Significant Topics Quantitative Impact

Billion Group 2022 External Experts' Identification and Evaluation Results for Material Topics