CHENG LOONG

To all partners who care about CLC's sustainable development:

In 2025, the global political and economic landscape remained characterized by heightened volatility. Rising geopolitical risks, shifts in inflation and interest rate cycles, and the uncertainties surrounding "Trump 2.0" policies—specifically their impact on international trade, energy strategy, and sustainable development—are accelerating the reshaping of the global industrial map and corporate long-term decision-making. Facing the dual challenges of a new tariff landscape and supply chain restructuring, we firmly believe that only by integrating sustainability deeply into our business strategy and risk governance through a macroscopic and systemic lens can we move forward steadily amidst change.

At this critical juncture of transformation, CLC has adopted a dual-axis strategy of "Low-carbon Intelligence" and "Green Energy Generation," continuing to drive our sustainability roadmap from "Papermaking" to "S.M.A.R.T. Papermaking". Therefore, we are actively looking beyond our core papermaking business to integrate digital technology, energy transition, and circular innovation to shape new competitive advantages. By cooperating with diverse sustainability partners, we advance green production, responsible manufacturing, and inclusive growth, internalizing sustainability as the core momentum for the company's continuous progress. Key milestones in 2025 include:

• Centered on our "3R PLUS Low-carbon Manufacturing Value Chain," we integrated climate governance with Science Based Targets (SBTi) to drive decarbonization across our operations and value chain. These efforts earned us the prestigious "Double A" recognition from CDP for both Climate Change and Supplier Engagement Assessment.
• Accelerated Phase 3 of the Binh Duong Paper Mill in Vietnam and expanded corrugated containers’ capacity across North and South Vietnam. By building a "Million-ton, Low carbon & Green Energy, and Total Circular" next-generation paper production hub, we have deepened our localized presence to effectively respond to global tariff challenges.
• In collaboration with Valmet (Finland), we commissioned Taiwan's largest biomass cogeneration system at our flagship Houli Mill. This project upgrades our circular value of "Waste Reduction, Energy Creation, and Green Empowerment," generating an annual 48,000 tCO₂e emission reduction for Taiwan.
• Launched a digital operational transformation to interconnect our entire value system through digital applications. Data governance and intelligent systems have been utilized to enhance decision-making precision and resource efficiency.
• From recycling solutions for waste food paper containers to the Ministry of Agriculture certified 100% recovered weed control paper and low-carbon eco-friendly tissue, extending sustainable innovation to everyday product applications, deepening the practice of the circular economy.
• As a TNFD (Taskforce on Nature-related Financial Disclosures) Early Adopter, strengthened our nature-related risk governance. Furthermore, partnered with National Chung Hsing University on a forest restoration project for fire-damaged lands, implementing long term ecological monitoring and native species reforestation to achieve a "triple-win" for the environment, society, and the enterprise.

Looking ahead, we remain convinced that sustainability is the key to long-term strategic positioning and competitiveness. Consequently, while continuing to promote low-carbon transition and information transparency, CLC has systematically incorporated the disparities between international and local environmental regulations, AI energy management, supply chain resilience, and labor human rights into our core decision-making and risk management frameworks, further strengthening the depth of our ESG governance.

Simultaneously, CLC has always regarded "Talent" as the heart of sustainability. In response to an aging society and rapidly changing labor structures, we adhere to a people-centric philosophy, striving to create a cross-generational, equitable, and inclusive workplace. By listening to employee feedback, refining institutional frameworks, and cultivating specialized talent, we ensure that professionals of different generations and backgrounds can contribute with peace of mind, realize their potential, and grow alongside the company, laying a solid foundation for organizational resilience.

Looking forward to 2026, by adopting "Smart Capacity, Sales Breakthrough; Resilient Risk Control, Secure Sustainability." Through intelligence-led and data-driven innovation, we will continue to enhance production efficiency and market competitiveness while steadily advancing toward our 2050 Carbon Neutrality. At this pivotal moment of global paper industry transition and supply chain reshaping, we will continue to play a leadership role through institutionalized governance and cross-sector collaboration, to create multi-win value for our industrial partners and society.