REXON ZERO BLUEPRINT PATHWAYS
AND ACTIONS (TCFD)
Rexon's Net Zero Blueprints and Actions (TCFD) (Material Topic) _
According to the statistics from the World Meteorological Organization, 2024 was the warmest year on record, marking the first time the global average temperature exceeded 1.5°C above pre-industrial levels. Throughout 2024, the world experienced numerous natural disasters such as high temperatures, droughts, heavy rainfall, and storms around the world. Shortly after the beginning of 2025, Los Angeles, California, suffered a severe wildfire that became the worst in the U.S. history. These extreme weather events remind us of the urgency and necessity of climate change adaptation. On December 31, 2024, the Taiwan Ministry of Environment proposed the third-phase greenhouse gas stage control targets, aiming to update and strengthen Taiwan’s NDC targets by 2030. The reduction target was raised from the original 24% ± 1% reduction to 28% ± 2% reduction compared to 2005 levels. According to the draft of “New National Carbon Reduction Targets” announced by President Lai during the “National Climate Change Committee” on January 23, 2025, the reduction targets for 2032 and 2035 were set at 32 ± 2% and 38 ± 2%, respectively, compared with the baseline year (2005). Facing both domestic and international climate-related risks and opportunities, the Company identifies and analyzes significant climate-related risks and opportunities in the value chain in line with the governance and strategies adopted to address the climate change issues. We follow up on the management implementation status by setting indicators and goals.
Climate Change Management
Material Topics
Climate Change Management (Energy Management)
Description of positive benefits
Actual positive:
The aims are to increase the proportion of green energy usage, further reduce electricity consumption and carbon footprint, promote energy self-sufficiency, improve corporate energy efficiency, reduce electricity consumption, and reduce carbon emissions, thereby contributing to global environmental protection and sustainable use of resources.
Description of negative benefits
Potential negative :
As a company operating in the traditional manufacturing industry, Rexon can not effectively reduce electricity consumption and carbon emissions, and thereby mitigate the impact on the environment, without increasing the use of green energy in the factory area and adopting smart power consumption solutions.
Management mechanisms / measures
By formulating green energy and smart power consumption management strategies, optimizing equipment performance, and reducing the use of traditional energy sources, Rexon ensures sustainable energy use and enables continuous monitoring and improvements of energy management performance.
Complaint / communication channels
Contact : Biotechnology Section
Email : marco.chou@rexon.com.tw
2024 Action Plan Implementation Results
Action Plan
- Introduction of solar panels and green energy management.
- Upgrade of air conditioning equipment and smart power management strategy.
- Traditional lighting equipment was replaced with energy-saving LED lamps
Implementation results
- The installed green energy generation capacity accounts for 19.57% of the factory's total electricity consumption
- Replacement rate of air conditioners using R22 refrigerant in the building: 67%
Electricity savings: 5,400 kWh; reduction in carbon emissions : 2.67 kgCO2e(ton)
Replacement rate of air conditioners using R22 refrigerant in the factory area : 35%
Electricity savings : 27,960 kWh; reduction in carbon emissions : 13.81kgCO2e(ton) - 3. Replacement rate of lighting in the building : 22%
Electricity savings : 25,792 kWh; reduction in carbon emissions12,741.25kgCO2e(ton)
Replacement rate of lighting in the factory area:70%
Electricity savings : 281,684 kWh;
reduction in carbon : 139,151.90kgCO2e(ton)
Achievement status of 2024 goals
Goals
5% reduction in energy consumption in processing and manufacturing processes.
Achievement status
The processing and manufacturing processes saved a total of 309,644 kWh of electricity, accounting for 5% of total electricity consumption in 2024. The breakdown is as follows :
- Replacement of air conditioning in the factory area, electricity savings : 27,960 kWh.
- Replacement of lighting in the factory area, electricity savings : 281,684 kWh.
Short / Medium / Long-term Goals
Short-term Goals(2025-2026)
- Pilot implementation of the phase 1 intelligent energy management system.
- Increase the overall coverage rate of LED lighting equipment to 70%. Increase it to 100% by 2026.
- Achieve a 20% replacement rate of high-energy consumption air conditioning equipment on production lines.
- Reduce the energy consumption of compressed air systems by 30% through leak prevention in the compressed air pipeline and through usage management.
Medium-term and Long-term Goals(2027~2031)
Mid-term goals (3-5 years) expected to be achieved by 2028
- Full implementation of an intelligent energy management system
- Achieve a 50% replacement rate of high-energy consumption air conditioning equipment on production lines.
- Reduce the energy consumption of compressed air systems by 50%.
- Achieve energy savings of 10% in processing and manufacturing processes
Long-term Goals (5-10 years)
- Achieve 15% green energy usage across the entire factory site by 2030.
- Replace 100% of high-energy-consuming air conditioning equipment on production lines by 2035.
Material Topics
Climate Change Management (Greenhouse Gases)
Description of positive benefits
Actual positive :
- We increase the proportion of green energy usage, reduce carbon footprint, promote energy self-sufficiency, improve corporate energy efficiency, reduce electricity consumption, and reduce carbon emissions. These initiatives support our commitment to ESG (environmental, social, and governance) sustainability and contribute to global environmental protection and sustainable use of resources.
- When actively implementing carbon reduction measures, the Company can directly reduce the carbon footprint of products, but needs to make capital investment accordingly.
Description of negative benefits
Actual negative impacts :
In 2024, the total greenhouse gas emissions of Rexon amounted to 49,497.759 metric tons of CO₂e per year, contributing to climate change and impacting the local community's environment.
Potential negative : Rexon can not effectively reduce electricity consumption, carbon emissions, and environmental impacts, without increasing the use of green energy in the factory area and adopting smart power consumption solutions.
Management mechanisms / measures
Rexon has established a complaint channel where residents from the surrounding community can express their concerns and engage in discussions with our Sustainability Department. They can utilize various channels such as face-to-face meetings, phone calls, and emails to lodge their complaints and initiate dialogue with us.
Complaint / communication channels
Contact person: Sustainability Office.
Email:esg@rexon.com.tw
2024 Action Plan Implementation Results
Action Plan
- To comply with the disclosure schedule of greenhouse gas inventory information for TWSE/TPEx listed companies set forth under the “Sustainable Development Roadmap for TWSE/TPEx Listed Company” of the Financial Supervisory Commission, Rexon Industrial will complete the greenhouse gas inventory task within the specified schedule for the subsidiaries in the consolidated financial statements based on their operational style and significance.
- In response to the energy saving and carbon reduction trend, Rexon has gradually promoted the replacement of high energy-consuming equipment. In 2024, the Company replaced 8 air conditioners that had been in use for more than 20 years and scheduled the replacement of 6 units in 2025 and 4 more in 2027. These efforts are expected to reduce the annual electricity consumption by 140,000 kWh, continuously improving the energy efficiency of the factory, reducing the operational carbon footprint, and fulfilling our commitment of saving energy and carbon reduction.
Implementation results
- 1. Rexon Industrial completed the greenhouse gas inventory for its Taiwan production site and obtained the ISO 14064-1 certification.
- n 2024, energy-saving measures reduced Scope 2 emissions to 2,980.3594 tCO2e, representing a 2% decrease compared to 2023.
Achievement status of 2024 goals
Goals
- By July 2025, we will complete the greenhouse gas inventory and verification scope for Rexon Industrial and Rexon Technology, based on the year 2024
- Implement various energy reduction projects (Scope 1 and Scope 2).
Achievement status
Goals achieved
- The 2024 greenhouse gas inventory and verification for Rexon Industrial and Rexon Technology will be completed in June 2025, and the SGS statement is expected to be obtained in August of the same year.
- Scope 1 and Scope 2 emissions in 2024 totaled 3,446.9972 tCO2e, representing a decrease of 0.6% compared to 2023
Short / Medium / Long-term Goals
Short-term Goals(2025-2026)
- By May 2025, we will complete the greenhouse gas inventory and verification scope for subsidiary Rexon Technology, based on the year 2024
- We will increase the proportion of greenhouse gas inventory for transportation and product-related emissions in categories 3.1 and 4.1 at Rexon Industrial Dali Plant in 2025. Increase from 80% (baseline year) to 90%.
- Subsidiary PTS Industrial aims to complete the greenhouse gas inventory and verification for the year 2025 by December 2026.
- Subsidiary Tongxiang Rexon Industrial (China) aims to complete the greenhouse gas inventory and verification for the year 2026 by December 2027.
Rexon’s voluntary Scope 2 emissions reduction targets (baseline year: 2023): 4.19% reduction by 2025; 6.76% reduction by 2026
Medium-term and Long-term Goals(2027~2031)
- The plan is to increase the proportion of greenhouse gas inventory for transportation and product-related emissions in categories 3.1 and 4.1 at Rexon Industrial Dali Plant from 90% (baseline year) to 100% by the year 2027.
- By the year 2030, Rexon Industrial Dali Plant aims to use 15% green energy
- In accordance with government policies and regulations, the plan is to achieve zero greenhouse gas emissions from all operational sites by 2050.
SUSTAINABLE INITIATIVES
Sustainable Initiatives _
Energy management - energy conservation
Achieving sustainable growth through the replacement of air conditioners and electricity management :
By upgrading air conditioning systems and implementing intelligent energy management strategies, we improved corporate energy efficiency and achieved energy conservation and carbon reduction
Factory area
Supporting building
Replacement of air conditioners using R22 refrigerant
6 units
2 units
Replacement rate
35%
67%
Electricity savings
27,960 kWh
5,400 kWh
Improving energy efficiency by replacing traditional lighting with LED lamps :
By replacing traditional lighting equipment with energy-saving LED lamps, we improved energy efficiency and reduced power consumption.
Factory area
Supporting building
Number of LED lamps installed
5,417
496
Replacement rate
70%
22%
Electricity savings
281,684 kWh
25,792 kWh
Energy management - energy generation
The introduction of solar panels and green energy management enhanced the utilization of green energy.
In 2024, a total of 1,222,938 kWh of electricity was generated from solar energy. The distribution is detailed as follows :
Building B of the Dali Plant generated 760,800 kWh of solar power
Building E of the Dali Plant generated 458,658 kWh of solar power
Tucheng Plant generated 3,480 kWh of solar power
Process improvement and optimization of the working environment
Downward dust collectors were adopted to improve the working environment for the grinding process.
Ten downdraft dust collectors were installed to effectively address the issue of metal dust dispersion during the production process. These units boast a dust collection efficiency of 85.1%, significantly reducing the concentration of airborne particulate matter in the work area. As a result, workplace air quality was improved, further safeguarding employee health and environmental safety.
Dust collection rooms and air pollution protection facilities were implemented to improve the effectiveness of air quality management
Negative pressure systems, pad filtration, and dust collection rooms equipped with pneumatic roller blinds were installed to improve air quality within the factory and reduce the impact of outdoor air pollution. Air quality index (AQI) before improvements < 114 μg/m³; 2024 air quality index (AQI) < 90μg/m³ (target: air quality index (AQI) < 80μg/m3); achievement rate: 70%.
The adoption of plant-based cutting fluid reduced waste and carbon emissions, and protected health.
To improve workplace safety and environmental protection performance, the Company has fully replaced its previously used mineral-based cutting fluid with a non-toxic, plant-based alternative, and introduced chip filtration equipment to effectively prolong the life of the cutting fluid. Since adopting plant-based cutting fluid in 2024, the Company has achieved a 70% reduction in the use of mineral-based fluid, resulting in approximately 1,600 liters of waste fluid saved per year, significantly reducing environmental impact. Our plant-based cutting fluid complies with REACH/RoHS regulations and the German TRGS 611 standard, ensuring that it is non-hazardous to human health, further enhancing employee health protection
Re-use process wastes and reduce process waste.
The Company is committed to resource recycling and reuse. Glue waste generated during the production is classified, centrally processed, and then sold to the waste recycling contractors. After processing, it is used as a recycled material for wire coating/jacket insulation, recycling circular resource use and effectively reducing production waste. These efforts support sustainable corporate development and help minimize environmental pollution.
Before improvement - glue waste
After improvement - recycled and reprocessed into insulating jackets for electrical wires
The use of an energy-saving negative pressure system and large fans improves indoor ventilation and temperature regulation.
The Company has implemented improvements to address high indoor temperatures in its plants during summer. The reasons are poor ventilation and heat radiation from the roof, resulting in average indoor temperatures reaching 33°C during summers. To enhance workplace comfort, the Company uses rooftop negative pressure fans to remove hot air, and has installed large circulation fans to improve indoor airflow and create a natural cooling effect. After implementing improvement measures, the average indoor summer temperature has been effectively reduced to 29°C, significantly enhancing employees’ work environment quality and energy efficiency.
We have fully implemented an electronic document system to improve operational efficiency, reduce paper consumption, and realize environmental protection and carbon reduction
The electronic document approval system was fully implemented in September 2024 to replace traditional paper-based operations. Additionally, a double-sided printing mechanism was introduced to further reduce paper waste, resulting in an estimated reduction of 24,882 sheets of paper per year, equivalent to approximately 159 kg CO2e. The electronic document system not only enhances the efficiency of internal processes but also reduces paper consumption and contributes to environmental protection.
REXON ZERO CARBON EMISSIONS BLUEPRINT
Rexon's Net-Zero Carbon Blueprint _
As climate change imposes an increasing threat to the environment, human existence, and national security, more than 130 countries are committed to achieving the net-zero emissions by 2050. This reflects a collective commitment to addressing pressing challenges and the urgent need for global cooperation to address the challenges brought about by climate change. The net-zero blueprint strategy of Rexon comprehensively takes into account the international trends and “Taiwan's Pathway to Net-Zero Emissions in 2050 and Strategy Overview”, including carbon emission inventory, clean energy utilization, and supply chain greening. We focus on setting specific and quantifiable goals and establish corresponding strategies and action plans. At the same time, we will establish a monitoring and reporting mechanism, collaborate with stakeholders, foster continuous improvement and learning, and promote various carbon reduction initiatives, moving towards achieving the Company's net zero goal.
2023 (Low Carbon)
2030
2050 (Net Zero Emissions)
Process Improvement
Replacement of outdated equipment and automation
Inventory and hotspot analysis of high-energy-consuming equipment by plant area
High-energy-consuming equipment replacement
Intelligent energy management
Evaluation of intelligent energy monitoring system + ISO5001
Implementation of ISO5001
Establishment of an intelligent energy
monitoring system by plant area
Enhancement of production efficiency
PDCA improvement activities to enhance production efficiency
Waste reduction
Reduce scrap materials by 5% annually by Model
Energy Transition
Installation of solar energy systems
Installation of solar panels on rooftops
Integration into the internal power grid
Utilization of green energy
Use of green electricity by 15% of the factories in Taiwan
Evaluation of purchasing
green energy certificates
Promotion of green energy usage
to 15% of the Group
Circular Economy
Research and Development (R&D) and innovation
25% proportion of the sustainable product revenue
75% proportion of the sustainable product revenue
Improvement of design by switching to materials of low environmental impact and systematizing product carbon footprints
Sustainable supply chain
Establishment of a sustainable supply chain management policy
Promotion to the suppliers that account for 95% of the transaction amount in the previous year
CLIMATE-RELATED
FINANCIAL DISCLOSURES (TCFD) GOVERNANCE
Climate-Related Financial Disclosures (TCFD) Governance _
With regard to the risk management related to climate change, the Board of Directors is the highest governance body and conducts supervision. The ESG Operations Committee subordinate to the Board of Directors is responsible for promotion under the supervision of the Board and reports to the Board on a regular basis. In 2024, the Sustainability Office took the responsibility for promotion, checked the operational aspects and issues affected by climate disasters, formulated action plans, and clarified the impact of the climate disasters on material operational aspects (such as assets and production) in accordance with the Task Force on Climate-related Financial Disclosures (TCFD). The Sustainability Office further checked the issues affected under each operational aspect and the reasons of the impact in order to reflect the impact of the climate disasters on the finance of the Company.
Climate Change Governance and Management Framework
Board of Directors
- The Board of Directors is the highest decision-making body in the management of the Company's climate change risks. Its responsibilities include reviewing the policies and making important decisions related to climate change management, and supervising the effective operation of the management mechanism.
- The Board of Directors reviews the climate change risks and opportunities of the Company and incorporates them in the discussion scope of the annual budget, business plan and major capital expenditures.
Sustainability Committee
- Report the assessment results and work progress of climate risks and opportunities to the Board of Directors every year;
- Take the responsibility for implementing the climate change management policy and major resolutions reviewed by the Board of Directors.
ESG Operations Committee
- Periodically follow up the information on the development trend of international climate change in order to improve the understanding of global risk trends and climate change among the employees;
- Take the responsibility for the identification and assessment of climate change risks and opportunities and periodical arrangement of climate change discussion meetings. It gathers the Risk Management Group to identify the physical risks, transition risks, and opportunities of climate change, proposes corresponding improvement measures, periodically follows up implementation status and goals, and continue to enhance the management of climate risks and opportunities.
MANAGEMENT OF CLIMATE CHANGE RELATEDRISKS AND OPPORTUNITIES
Management of Climate Change Related Risks and Opportunities _
Identification Process of Climate Change Related Risks and Opportunities
To effectively manage climate-related risks and opportunities, the external advisor convened a meeting of top executives on December 7, 2023 to discuss and assess the sources of the transformation risks (policy and law, technology, market, reputation), physical risks (acute, long-term), and opportunities (resource efficiency, energy source, product/service, market, resilience) in the TCFD, and select the items that have greater impact for further discussion of related countermeasures, risk assessment of the impact on the finance, and establishment of a management mechanism for the financial impact of the climate change risks and opportunities to improve the operational resilience of the Company.
TCFD education and training
The Sustainability Office refers to internal and external information and lists business-related climate change risk and opportunity factors.
Summarization identification results
The Sustainability Office summarizes the climate change risk and opportunity factors of each department and calculates the likelihood of occurrence and impact of climate change risks/opportunities
Establishment of response strategies
The responsible unit writes down response strategies for major climate risks and opportunities
Calculation of potential financial impact
The responsible unit calculates financial impact of risks/opportunities
Establishment of goals
The responsible unit establishes corresponding indicators and goals for evaluating the implementation status of relevant response strategies
Implementation of policies
The Sustainability Office follows up the implementation status on a regular basis. The Sustainability Committee report to the Board of Directors periodically as a reference for follow-up of performance.
Identification Results of Climate Change Risks and Opportunities
Climate Change Related Risk Type
In terms of risks, Rexon Industrial has identified the top three risks, based on the materiality of risk factors, in the areas of policy and law, market, technology, reputation, and physical risks. The top three risks are as follows :
Risk prioritization
Risk type
Risk factor
Time of occurrence evaluation
1
Physical risk - policy and regulation
Increased greenhouse gas emissions cost due to extreme temperature
Short Term
2
Transition risk - market
Needs for transformation to low-carbon products and services
Medium Term
3
Transition risk - technology
Transformation to improvement and innovation of low-carbon and high-performance technologies
Medium Term
Climate Change Related Opportunity Type
As for the opportunities, Rexon Industrial identifies has identified the two top opportunities of the Company based on the opportunity items of resource efficiency, energy source, product and service, market, and resilience and the materiality of the opportunity factors. The top two opportunities are as follows :
Opportunity prioritization
Opportunity type
Opportunity factor
Time of occurrence evaluation
1
Opportunity - energy resource efficiency
Adoption of more efficient energy and production processes
Short-term, medium-term and long-term
2
Opportunity - sustainable products and services
Establishment of a low-carbon material database and exploration of business opportunities for sustainable products
Short-term, medium-term and long-term
3. Management of Climate Change Related Risks and Opportunities
Climate-related risk types and response strategies.The risk impacts, scenarios, financial impacts, and response strategies related to risk items are as follows :
Risk prioritization 1: Increased greenhouse gas emissions cost due to extreme temperature
Impact description
Due to increasingly stringent greenhouse gas reduction regulations, emissions generated during the operation process are subject to carbon fees, which in turn raise overall operating expenses.
Scenario description
Amid the global push for net zero, countries around the world have initiated net-zero emission strategies and required players across the value chain to reduce carbon emissions, which may result in financial impacts.
Financial impact assessment
Based on the GHG emissions in Taiwan, the Company evaluates the potential increase in operating expenses resulting from current and estimated carbon fees.
Aspect of risk impact
Increased greenhouse gas emission costs and operating expenses :
Under the Taiwan Climate Change Response Act, carbon fees will initially be imposed on specific industries, leading to increased operating expenses for Rexon Industrial.
Countermeasures
Enhancement of production efficiency :
Maintain higher energy efficiency of production equipment through schedule adjustment
Improvement of energy efficiency:
The Energy Management Committee reviews energy efficiency and energy-saving measures on a weekly basis and tracks their effectiveness monthly at ESG Operations Committee meetings
Installation of renewable energy equipment
Continue installing solar energy equipment at the factory area to increase the use of renewable energy year by year
Supply chain management:
The Low-Carbon and Smart Upgrading and Transformation of the Manufacturing Industry under the “Big Leads Small Project”, guiding suppliers to implement a carbon reduction plan
Risk prioritization 2 : Needs for transformation to low-carbon products and services
Impact description
To promote low-carbon transition, the Company has built a low-carbon material database, which has led to an increase in R&D costs
Scenario description
Amid the global push for net zero, countries around the world have initiated net-zero emission strategies, mandated carbon footprint inventories for all products, and required emissions reductions during material evaluation processes, which may result in financial impacts.
Financial impact assessment
According to the assessment on impacts on operating revenue from the tool and fitness machine business groups, carbon tax policies in various regions such as the E.U. and the U.S. may lead to a decline in operating revenue. In addition, establishing a low-carbon material database may increase R&D and production costs.
Aspect of risk impact
Revenue decline due to not offering low-carbon products :
As demand for sustainable products increases in the market and among consumers, not offering low-carbon material solutions may result in eroded market share and decreased operating revenue. In addition, the Company faces the risk of being surpassed by competitors and losing its appeal among environmentally conscious consumers.
Increase in R&D and production costs due to the establishment of a low-carbon material database :
Innovating and developing a low-carbon material database requires additional research and development efforts, including research on new technologies and costs associated with improving existing products to reduce carbon emissions. As new technologies progress from concept to market transformation, the risk of technological challenges and cost overruns may arise during R&D and production processes.
Countermeasures
Promotion of products using low-carbon materials :
We arrange quarterly updates on low-carbon material information, continuously propose solutions to customers, and gather their feedback on market information to build a two-way, diversified knowledge base of low-carbon materials.
Research on and technological investment in a low-carbon material database :
We continuously conduct research on the most promising low-carbon materials to maximize cost-effectiveness, including investing innovative technologies that enhance operational efficiency, improve processes, and utilize renewable energy
Risk prioritization 3: Transformation to improvement and innovation of low-carbon and high-performance technologies :
Impact description
To promote low-carbon transition, it is necessary to replace existing traditional energy-intensive, high-carbon equipment and processes with high-efficiency, low-carbon alternatives, which may lead to higher capital expenditure and production costs.
Scenario description
Amid the global push for net zero, countries around the world have initiated net-zero emission strategies and required players across the value chain to reduce carbon emissions, which may result in financial impacts.
Financial impact assessment
Calculate investments in low-carbon process technologies and energy-saving equipment, and evaluate related capital expenditures and R&D expenses for low-carbon process.
Aspect of risk impact
Increase in R&D expenses and capital expenditures due to introduction of low-carbon process technologies and energy-saving equipment :
To promote low-carbon and high-performance technologies, it is necessary to update equipment and invest in energy-saving equipment, resulting in an increase in capital expenditures. In the early stage of transformation, certain low-carbon process technologies are still under development, which may result in technical immaturity or instability. Furthermore, higher operating costs of these technologies contribute to an overall increase in operating costs.
Countermeasures
Research on low-carbon processes and continuous improvement :
By utilizing data analysis and optimizing production processes, we accelerate process improvement, minimize waste, and reduce costs through lean production. At the same time, we share resources and knowledge with both upstream and downstream manufacturers to jointly develop low-carbon processes and energy-saving solutions, and share R&D costs.
Climate-related opportunity types and response strategies
For the opportunities, Rexon Industrial assesses the solutions that can be used in the future in the hope to maximize the benefits brought by potential opportunities. We review the resources needed for implementation of the solutions, analyze the possible financial costs, and enhance the assessment of the resourced needed for the Company to implement the opportunities.
Opportunity prioritization 1: Adoption of more efficient energy and production processes :
Impact description
Establish a high-efficiency, energy-saving factory, optimize manufacturing processes, enhance per capita output, and introduce energy-saving equipment and smart energy management systems, aiming to control costs, improve production efficiency, and reduce operating costs.
Aspect of opportunity impact
Reduced operating costs due to the establishment of a lean production culture :
Ongoing education and training on lean production can help optimize production processes to enhance both efficiency and quality while reducing unnecessary waste through ECRS. Only by continuously improving and precisely adjusting the production process can we reduce energy consumption and raw material waste, thereby significantly reducing operating costs.
Reduced operating cost due to enhanced energy efficiency :
Investing in equipment with higher energy efficiency and adopting energy-saving technologies can significantly reduce the energy consumption of the enterprise. For example, using energy-saving lighting systems, ventilation, and air conditioning systems, as well as improving air leakage of air compressors can reduce both energy consumption and energy costs. In addition, adopting renewable energy, such as solar energy or wind energy, not only reduces reliance on conventional energy sources but also further lowers operating costs.
Increase in operating revenue due to the calculation of product carbon footprint :
Through precise calculation of product carbon footprint and the adoption of emission-reducing measures, we realize that carbon reduction not only contributes to achieving environmental targets but also attracts more sustainability-conscious customers.
Countermeasures
Each organization continues to promote lean production through four main approaches :
- Eliminate eight major wastes by applying ECRE
- Optimize production process to ensure efficient operations
- Standardize operations, reduce variance, and improve production consistency
- Introduce new technologies and new materials to reduce costs and improve efficiency 以降低成本提升效率
Installation of on-site solar energy facilities to increase capacity :
The installation of solar panels helps reduce reliance on conventional energy sources, lower the cost of energy purchase, enhance energy self-sufficiency, and reduce carbon emissions
Increase in diversified energy conservation and energy generation :
We implement diversified energy-savings and energy generation solutions, such as integrating solar energy with high-performance battery storage systems, conducting light source assessments, and reducing air leakage in air compressors. We aim to ensure the stability of energy supply across various operating environments, mitigate risks associated with energy price fluctuations or supply interruptions, and optimize the energy cost structure
Opportunity prioritization 2 : Establishment of a low-carbon material database and exploration of business opportunities for sustainable products
Impact description
We venture into sustainable products that transition from fossil fuels to electricity and use low-carbon materials, such as drones, e-bikes, and gardening tools, aiming to expand our market reach and customer base and boost operating revenue.
Aspect of opportunity impact
We work with customers to develop market applications that shift from fossil fuels to electricity, increase market reach, and support entry into new markets :
We offer technical expertise in key components associated with the transition from fossil fuels to electricity, collaborate with customers to develop new industrial applications, assist in expanding their business, and strengthen customer loyalty. These measures can significantly reduce operating costs.
Countermeasures
We provide key technical support to help customers drive industrial transformation and venture into the market shifting from fossil fuels to electricity :
In our current supply chain, we work with our customers to provide end-user trials and technical support in the form of projects to enhance the end-use users’ trust in the Company’s professional technology and seek opportunities for alternative materials.
Marketing and promotion of the oil-to-electricity market development :
The marketing team conducts industry research, outlines the value system of potential supply chains, and drives ongoing development. Meanwhile, we utilize various domestic and international promotional activities and exhibitions to secure customer recognition of Rexon Industrial’s technical advantages.
ENVIRONMENTAL PROTECTION
Environmental protection _
Rexon’s environmental policy covers: energy innovation, benchmark learning, performance evaluation, quantitative review, water and electricity consumption, smart management, carbon footprint verification, and environmental sustainability, with the aim of establishing specific environmental sustainability goals.
In terms of internal environmental management, we have integrated the risk assessment method combined with the safety and health management system for implementation. While considering the safety and health aspects of the operational procedures, we also evaluate their potential external environmental impacts. This approach aims to achieve a relationship of mutual complementarity and maximizes the benefits of risk assessment. As for external environmental management, we regularly monitor the environmental impact of waste generated from the production process, realize the idea of sustainability in the design management at the very beginning, and make improvements step by step to reduce unnecessary waste of energy, resources, and consumables. In the aspect of education and training, Rexon continues to promote sharing of environmental knowledge, the philosophy of sustainable culture, and updates to ensure that employees can adapt themselves to the requirements of the Company and the change of the environment. The operation of the ISO 14001 environmental management system and the implementation of related education and training have positive impacts on Rexon.The system not only systematically promotes environmental protection and resource conservation but also effectively reduces operating costs and improves the company’s corporate image and competitiveness. Rexon upholds the spirit of the ISO 14001 environmental management system and continues to develop and operate accordingly.
The EHS Management System and its operational process
- Ensure the implementation and continuous improvement through the cycle of “planning,” “implementation,” “checking,” and “action” and maintain the suitability, accuracy, effectiveness, and integrity of the management system.
- The processes of the ESH management system established and implemented by the company and their interactions shall ensure continuous improvement and achievement of the expected results, including increase of the ESH performance.
Monitoring and Inventory of Energy Consumption
Based on the original 2023 inventory boundary, the Company added Rexon Technology in the 2024 inventory (the factory is located at Rexon Renhua Plant, which shares the same inventory boundary as 2023). The inventory includes five direct energy sources used in 2024: natural gas, gasoline for company vehicles, liquefied petroleum gas for restaurant use, diesel for company and on-site vehicles (mobile sources), and diesel generators for emergency use. In addition, indirect energy sources, such as purchased electricity, were included in the overall internal energy consumption inventory. The results of the 2024 inventory showed a total consumption of 23,711.57 gigajoules (GJ). Compared to the results of 2023, there was an increase of 524.40 GJ, primarily due to reduced operational activities and the fixed consumption of each energy source, resulting in a slight increase in energy consumption across various sources. The energy usage compared to the same period is summarized in the table below. The 2024 inventory results are shown in the figure below. The largest energy source consumed in 2024 was purchased electricity, accounting for 6,287 kilowatt-hours, equivalent to 22,635.64 GJ, which accounted for approximately 95.46% of the total energy consumption. Gasoline usage was the second largest, with 24,991.92 liters consumed, equivalent to 815.62 GJ, accounting for approximately 3.44% of the total energy consumption.
Energy Intensity
The energy sales intensity in 2024 was 3.8878 GJ/million, which was higher than the 2023 value of 3.4566 GJ/million by 0.4311 GJ/million. This was mainly due to the slowdown in customer demands and the decrease of orders in the circumstance where the energy consumption remained unchanged. Based on these findings, more proactive measures will be taken in 2025 to conduct comprehensive assessments and propose action plans.
Year
2023
Item
Energy Consumption (GJ)
Percentage
Purchased Electricity
22,177.87
95.65%
Diesel Fuel (Fluctuating)
258.56
1.12%
Liquefied Petroleum Gas
0.35
0.00%
Gasoline
748.28
3.23%
Diesel Fuel (Stationary)
2.11
0.01%
Natural Gas
0.00
0.00%
Total
23,187.17
100.00%
Revenue(million NT dollars)
6,708
Energy Intensity(GJ/million of revenue)
3.4566
Year
2024
Item
Energy Consumption (GJ)
Percentage
Purchased Electricity
22,635.64
95.46%
Diesel Fuel (Fluctuating)
258.54
1.09%
Liquefied Petroleum Gas
0.36
0.00%
Gasoline
815.62
3.44%
Diesel Fuel (Stationary)
1.41
0.01%
Natural Gas
0.00
0.00%
Total
23,711.57
100.00%
Revenue(million NT dollars)
6,099
Energy Intensity(GJ/million of revenue)
3.8878
Note:
- The source of the coefficient for purchased electricity, gasoline, and diesel fuel is the Energy Bureau of the Ministry of Economic Affairs, Energy Product Unit Heat Value Table.
- The source of the coefficient for liquefied petroleum gas is the Environmental Protection Administration's Greenhouse Gas Emission Coefficient Management Table version 6.0.4
- The conversion formula for heat value is: Original Usage Amount * Unit Conversion Coefficient * Heat Value Conversion Coefficient.
- Only Tucheng Plant used natural gas in 2023.
Electricity
95.46%
Gasoline 3.44%
Others
Percentage of Energy Data Use in 2024
Diesel Fuel (Fluctuating) 1.09%
Diesel Fuel (Stationary) 0.01%
Liquefied Petroleum Gas 0.00%
Natural Gas 0.00%
The Company is committed to reducing energy consumption and achieving more efficient energy use. The goal is to fully support the transformation of the building’s lighting system by 2028, achieving 100% LED coverage and carbon reduction.
To ensure the successful achievement of this goal, we have established the following implementation framework:
- Implementation in phases: Gradually replace the lighting facilities in the Company’s building area in phases by 2028.
- Specialized management team: A dedicated energy management team has been established to oversee, execute, and evaluate performance of the plan.
- Resource allocation: Allocate budget annually to support LED transformation, ensuring the adequacy of environment, equipment, and human resources.
Year
Main tasks and goals
Expected results
Year
2024
Main tasks and goals
Initiate phase 1 transformation (1st and 2nd floors
Expected results
Achieve a 100% LED coverage rate (1st and 2nd floors)
Year
2025
Main tasks and goals
Initiate phase 2 transformation (3rd and 4th floors)
Expected results
Achieve a 100% LED coverage rate (3rd and 4th floors)
Year
2026
Main tasks and goals
Initiate phase 3 transformation (5th and 6th floors)
Expected results
Achieve a 100% LED coverage rate (5th and 6th floors)
Year
2027
Main tasks and goals
Initiate phase 4 transformation (7th and 8th floors)
Expected results
Achieve a 100% LED coverage rate (7th and 8th floors)
Year
2028
Main tasks and goals
Initiate phase 5 transformation (9th and 10th floors)
Final review and acceptance
Expected results
Achieve a 100% LED coverage rate (9th and 10th floors)
Achieve a 100% LED coverage throughout the building and meet the energy-saving target
Energy Saving Improvement Activities of the Manufacturing Department :
Plant area
Energy Conservation Measures
Power Saving
Cost Saving
Emission Reduction
Plant area
Supporting building
Energy Conservation Measures
Replaced air conditioning on the B1 level with two split-type units using R22 refrigerant.
496 LED lamps were installed
Power Saving
Energy consumption reduced from 12.35kWh to 11kWh, saving approximately 5,400 kWh (1.35kwh x 2 x 8 x 250)
The energy consumption of a conventional light tube is 40W, while the energy consumption of an LED light tube is 14W, resulting in an energy saving of about 25,792 kWh(0.026kwh x 496 x 8 x 250)
Cost Saving
Electricity bill savings: $27,324(5,400 kWh x $5.06)
Electricity bill savings: $130,507.52 (25,792 kWh x $5.06)
Emission Reduction
Carbon emissions reduction: 2.67 ton CO2e(5,400 kWh x 0.494 CO2e)
Carbon emissions reduction: 12.74 ton CO2e(25,792 kWh x 0.494 CO2e)
Plant area
Factory area
Energy Conservation Measures
1 air conditioner on the A1 level / 2 air conditioners on the B1 level / 3 air conditioners on the B2 level were replaced with 6 water tank-type units using R22 refrigerant.
5,417 LED lamps were installed
Power Saving
Energy consumption reduced from 19.8kWh to 17.47kWh, saving approximately 27,960 kWh (2.33kWh x 6 x 8 x 250)
The energy consumption of a conventional light tube is 40W, while the energy consumption of an LED light tube is 14W, resulting in an energy saving of about 281,684 kWh (0.026kWh x 5,417 x 8 x 250)
Cost Saving
Electricity bill savings: $141,477.6 (27,960 kWh x $5.06)
Electricity bill savings: $1,425,321.04 (281,684 kWh x $5.06)
Emission Reduction
Carbon emissions reduction: 13.81 ton CO2e(27,960 kWh x 0.494 CO2e)
Carbon emissions reduction: 139.15 ton CO2e(281,684 kWh x 0.494 CO2e)
Energy Saving Improvement Activities of the Factory :
The solar energy in Building E was launched in November 2023 and power generation began, Annual power generation is 458,658 kW as estimated.
Annual reduction of carbon emissions (CO2e) 458,658 x 0.494kg = 266,577kg (226.58 tons)
The solar energy in Building B was launched in August 2019 and power generation began, Annual power generation is 760, 800 kW as estimated.
Annual reduction of carbon emissions (CO2e) 760, 800 x 0.494kg = 375,835kg (375.83 tons)
The solar energy in Tucheng Plant was launched in December 2024 and power generation began. Annual power generation is 3,480 kW as estimated .
Annual reduction of carbon emissions(CO2e) 3,480 x 0.494kg = 1,719.12kg (1.72 tons)
Climate Change Management :
Green energy is projected to account for 19.56% of total power generation by 2030 (1,221,946/6,248,294=19.56%)
Reduction of carbon emissions: 603.6413 kgCO2(ton) (1,221,946*0.494=603.6413)
Significant solar power generation performance
- The solar power system is scheduled to be newly installed in Buildings C and D in 2025, with an estimated capacity of 977.01kW
- The plant’s total installed capacity is estimated to reach 2,184.87KW (1,207.86kw+977.01KW).
The number of R22-refrigerant air conditioners to be replaced in 2025: 14 units in the factory area and 1 unit in the building
GREENHOUSE GASES
Greenhouse Gas _
Rexon Industrial is committed to sustainable business practices and aims to contribute to the well-being of the planet. In line with the government's 2050 net-zero policy, the company proactively conducted a greenhouse gas inventory in 2021, ahead of schedule. This initiative aims to accurately understand the company's greenhouse gas emissions and embrace the DNA of continuous improvement through the PDCA cycle. Clear goals have been set in terms of pollution reduction, energy efficiency, and recyclability to enhance the company's product and manufacturing advantages. To measure progress and performance, 2021 has been established as the baseline year, and sustainable key performance indicators (KPIs) are being implemented across departments. For our company's 2024 organizational boundaries, which include the headquarters building, Renhua Plant, and Tucheng Plant, a voluntary greenhouse gas inventory was conducted. This inventory adheres to the ISO 14064-1:2018 standard, covering seven greenhouse gas categories: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3). Based on the internal inventory results, the total emissions were calculated to be 49,497.759 metric tons of CO₂e per year. This data is scheduled for third-party greenhouse gas verification in May 2025.If comparing the results of this voluntary greenhouse gas inventory with the total emissions of 74,843.982 metric tons of CO₂e per year in 2023, there's an decrease of 25,346.223 metric tons of CO₂e per year. When comparing the annual greenhouse gas emission intensity, 2024's figure of 8.1157 metric tons of CO₂e per million NTD is lower than 2023's 11.1574 metric tons of CO₂e per million NTD. In addition to the impact of declining revenue in 2024, the greenhouse gas emissions in Scope 3 and Scope 4 decreased compared to the previous year due to different product items included in the inventory in 2024 and the diversified trend in product portfolio, which resulted in significant differences in manufacturing process characteristics, raw material usage, and supply chain structure across various products.
Year
2023
2024
Revenue(million NT dollars)
6,708
6,099
Type
Total Emissions
(tCO2e)
Percentage
(%)
Greenhouse Gas Emissions Intensity
(tCO2e/NTD million)
Total Emissions
(tCO2e)
Percentage
(%)
Greenhouse Gas Emissions Intensity
(tCO2e/NTD million)
Direct Greenhouse Gas Emissions
Category 1(Direct Emission)
426.1051
0.57%
0.0635
466.6378
0.94%
0.0765
Indirect Greenhouse Gas Emissions
Category 2(Energy)
3,043.2969
4.07%
0.4537
2,980.3594
6.02%
0.4887
Category 3(Transportation)
925.9911
1.24%
0.1380
643.2330
1.30%
0.1055
Category 4(Product Used)
70,448.5887
94.13%
10.5022
45,407.5284
91.74%
7.4451
Category 5(Use of Products)
0.0000
0.00%
0.000
0.0000
0.00%
0.000
Category 5(Other Sources)
0.0000
0.00%
0.000
0.0000
0.00%
0.000
Total emissions
74,843.982
100.00%
11.1574
49,497.759
100.00%
8.1157
- The scope of the inventory in 2023 only included the Taiwan headquarters, Renhua Plant, and Tucheng Plant. Rexon Technology was included in 2024. Subsequently, domestic and international sales locations and production sites will be gradually included according to the future greenhouse gas management schedule.
- The operational control approach is used to define the boundaries, and the calculation method adopts the emission factor approach.
- The emission factors used are referenced from the Environmental Protection Administration's Greenhouse Gas Emission Factors Management Table (Version 6.0.4, June 2019) for different emission sources. Other factors, such as carbon footprint information from the Product Carbon Footprint Information Network, Ecoinvent v3, mass balance calculations, Global Warming Potential (GWP) coefficients from the IPCC Fifth Assessment Report (2021), and carbon emissions from flights based on ICAO data, are used for conversion. In the future, if the government announces new factors, we will comply with the regulations of government agencies and adjust the selection of GWP coefficients accordingly.
- The emission factor for electricity used at the Taiwan headquarters is 0.474 tCO₂e/MWh (announced by the Bureau of Energy, 2024).
- The greenhouse gas emission intensity is calculated as the annual greenhouse gas emissions divided by the net consolidated revenue for the year (in million dollars).
WATER RESOURCES MANAGEMENT
Water resource management _
Rexon Industrial implements water saving strategies, continue to monitor the water consumption at our main production sites, and incorporates water resource management as one of the priorities in our environmental policy. Although our manufacturing process does not need a large amount of water and has a relatively small impact on the surrounding environment, we are dedicated to reducing water consumption and encouraging effective management of water resources within the factory.
Unit : million liters
We have established water pollution prevention and management measures. The water mainly come from Liyutan Reservoir and is supplied by Taiwan Water Corporation. No industrial wastewater is generated from the production line or manufacturing process. The wastewater generated from the factory mainly comes from water for the daily life of the employees. To assess the impact on the water source area, we refer to the “Aqueduct Water Risk Atlas” of the World Resources Institute. It shows that the water risk level of the Dali Industrial Area in Taiwan is low to medium (Level 1-2). Therefore, Rexon did not bring about immediate risk or significant impact on the environment or water resources during the period from 2022 to 2024. We cooperate with third-party environmental monitoring companies that comply with laws and regulations to conduct long-term testing and control of domestic wastewater to ensure that it meets the discharge standard. The treated domestic wastewater is directly discharged into the local surface water body.
The production and service locations of the Company are mainly located in urban and township areas and are not close to environmental protection areas or the areas of high biodiversity value. Thus, the impact of our operating activities on the biodiversity is not significant.
Waste Management
To realize the idea of environmental sustainability and comply with the ISO 14001 environmental policy requirements. As for the in-plant wast management, the Company has established the “Waste Management Regulations”. All the employees of Rexon shall follow and implement these management regulations properly. To ensure that the waste generated from the factory can be controlled from the source, during the transport, at the stage of final disposal, and in the aspect of the impact on pollution of external environment, Rexon selects qualified waste transport and disposal service providers, and records and manages transport and disposal data properly to meet the essential requirements of the ISO 14001 EMS policy. (The waste management process is shown in the figure on the right)
Rexon’s primary production raw materials (such as plastics, metals, and paper packaging materials) used in direct or indirect operating processes will affect the generation of waste. In particular, recyclable wastes, including plastics, metals, and waste paper, are generated during the production processes. The treatment and disposal of these wastes may have an impact on the surrounding environment.
Production activities in the factory, including equipment operation, raw material processing, and packaging, are the main source of waste generation. Especially in packaging material selection, the use of recycled materials can help reduce the amount of waste generated. Waste management, including classification, clearance, and disposal, involves waste sorting and collection, cooperation with qualified waste disposal companies, and the use of GPS tracking technology to monitor the disposal process. These initiatives aim to ensure that the waste disposal complies with environmental protection regulations.
Following in-plant waste sorting, the main outputs include recyclables, such as recyclable metals, waste plastics, and waste cardboard boxes, as well as non-recyclable hazardous and non-hazardous waste. These wastes are then subject to incineration and heat treatment, ensuring that the final disposal process does not result in environmental contamination.
Rexon's main sources of waste are those generated in production process, including plastic composites, mixed waste paper, and other general business waste. Environmental impacts mainly come from the treatment process, where pollution risks may occur if the waste is not handled properly.
In general, Rexon has conducted risk assessments for waste generated during the production process in accordance with the ISO 14001 environmental standard and has established reduction and recycling management measures. In accordance with waste management regulations, the waste disposal process shall comply with environmental control standards. At the same time, the Company has gradually placed greater emphasis on the environmental impact of waste generated by upstream and downstream suppliers. The Company is committed to cooperating with suppliers to jointly implement the environmental impact mitigation and reduction strategies, and to promote the concept of environmental sustainability.
Waste
sorting
Waste
sorting and collection
Waste storage
management
Supplier
recycling
Outsourced
waste
clearance
Waste
quantity
statistics
Retention of records
Hazardous waste
Waste composition
Item
On-site
Generation of waste (ton)
Disposal
Off-site
Generation of waste (ton)
Disposal
Non-hazardous waste
Waste composition
Item
On-site
Generation of waste (ton)
Disposal
Off-site
Generation of waste (ton)
Disposal
Municipal solid waste generated by employees (H-0002)
4.8
Commissioned disposal
4.8
Incineration treatment
Plastic waste (R-0201)
0.66
Waste that does not need to be cleared
0.66
In-plant reuse
Mixed oil waste (D-1799)
0.4
Commissioned disposal
0.4
Physical treatment
Scrap iron (R-1301)
27.66
Commissioned disposal
27.66
General business waste subject to reuse
Aluminum scrap (R-1304)
0.53
Commissioned disposal
0.53
Heat treatment
Resin waste (D-0202)
0.006
Commissioned disposal
0.006
Heat treatment
Mixed plastic waste (D-0299)
0.18
Commissioned disposal
0.18
Incineration treatment
Mixed paper waste (D-0699)
0.5
Commissioned disposal
0.5
Incineration treatment
Note:
Note 1: Please refer to “Waste Cleaning Plan” (classification categories A/B/C/D/E/R, etc.) when completing in the waste composition section.
Note 2: The weight of waste is expressed in metric tons (t).
Note 3: Types of recovery operations: include preparation for reuse, recycling, and other recovery operations.
Note 4: Types of recycling operations: include downcycling, upcycling, composting, or anaerobic digestion.
Note 5: Other recovery operations: include repurposing or refurbishment.
Note 6: Types of disposal operations include incineration (with energy recovery), incineration (without energy recovery), landfilling, and other disposal operations.
Note 7: The organization can specify other disposal operations, such as dumping, open burning, or deep well injection.
Note 8: “Onsite” means within the physical boundary or administrative control of the reporting organization, and “offsite” means outside the physical boundary or administrative control of the reporting organization.
Product Design and Lifecycle Management
Principles for the carbon footprint assessment of Rexon Industrial’s products
Rexon Industrial selects product models for carbon footprint assessment through a data-driven and strategic decision-making approach, ensuring optimal effectiveness of resource allocation. The primary considerations for choosing a model include :
In 2024, a total of 12 models, including spin bikes, treadmills, stonecutters, grooving machines, miter saws, indoor exercise bikes, and recumbent bikes, were selected for carbon footprint assessment following a comprehensive assessment (as shown in the table below).
Scores range from 1 to 5, with 5 being the highest.
Model
Spin bikes
Treadmills
Belt Treadmill
Treadmills Specialized attachments
Stonecutters
Grooving machines
Miter saws
Indoor exercise bikes
Recumbent bikes
Customer request
3
3
3
3
1
1
1
1
1
Regulations of importing country
3
3
3
3
3
3
3
3
3
Mass production for three months
5
5
3
5
5
5
5
5
5
Main product
5
5
5
5
3
3
1
1
1
Market representative
5
4
4
3
2
3
2
1
1
Scale of product sales
5
5
5
5
3
3
2
1
1
Data collection Difficulty level
4
4
4
4
4
4
4
4
4
Supplier’s cooperation
5
5
5
5
2
2
2
2
2
Total score
Scores range from 1 to 5, with 5 being the highest.
Carbon footprint data management and subsequent application :
In order to strengthen the traceability and application value of carbon footprint data, Rexon Industrial will establish a systematic carbon footprint data management process.
- Data collection and standardization: The Company has established a standardized carbon emissions data collection framework based on its models subject to inventory, covering emissions data of parts, materials, manufacturing processes, and supply chain.
- Establishment of the carbon footprint database: Starting from 2025, a product carbon footprint database will be established to accumulate historical data and gradually expand to cover all major product lines.
- Data application in product development: Through database analysis, we support carbon reduction assessments during the product design stage to ensure that carbon reduction considerations are incorporated into each new product at the early development stage.
- Dynamic updates and performance evaluation: The Company regularly reviews carbon footprint data, optimizes carbon reduction strategies, and assesses the impact of new technologies or materials on carbon emissions.
Corporate Sustainability Development Survey
To achieve more effective communication with stakeholders who care about our company,we sincerely invite you to take the time to complete this questionnaire.
Your participation will enable us to gain a better understanding of the issues that stakeholders are concerned about and enable us to respond actively.