The Longchen P&P Group uses recycled waste paper as its raw material during production and is a service-oriented manufacturer featuring vertical integration of low carbon papermaking and eco-packaging. It provides corporate customers with tailored and high value-added overall product packaging solutions applying the environmentally-friendly advanced technology that makes the efficient utilization of resources possible.

In year of 2020, due to the impact of COVID19 pandemic globally, economic activities experienced some temporary stagnation, multiple countries been through city lockdowns and even close of border. So far, the vaccine injection has begun, the relaxation of border controls of countries is expected to be gradually approved, and economic activities will also be back on track gradually. Facing the sustainable development of the Company, we continue to take long-term actions, devoted to the circular economy industry, and respond to the expectations of stakeholders, with a high self-expectation of becoming role model of enterprise as a world citizen. In accordance with the Corporate Social Responsibility Best Practice Principles, the GRI Sustainability Reporting Standards(GRI Standards)issued by Global Sustainability Standards Board(GSSB) and 2030 Sustainable Development Goals(SDGs) of United Nations, the Company issued the Corporate Social Responsibility Report to reveal the Company's performance in governance, environment and society in 2020, the report will contain five aspects: honor management, health and safety, environmental protection, green production, and quality marketing. The brief descriptions are as follows:

I. Awards & Recognitions

Corporate sustainable management needs to rely on environmental protection as its paramount principle. With the requirements higher than the environmental protection indicators of regulatory criteria, the Company’s 2019 Corporate Social Responsibility Report was honored by three awards, namely, the Taiwan Corporate Sustainability Awards (TCSA) “Sustainable Corporations in Taiwan”, the “Corporate Sustainability Report Golden Award”, and the British Standards Institution “Sustainability Excellence Award.” This fully demonstrates the fruitful results accomplished by the Company over its long-term devotion to corporate social responsibility tasks. This is also the best encouragement and recognition for all staff throughout the Company. In terms of operational accomplishments in 2020, the waste paper recycled throughout the year reached 3.34 million tons, accomplishing carbon reduction of 15.50 million tons, which is equivalent to 47 million trees less in deforestation and around the amount of carbon absorbed by 40,000 Da An Forest Parks. Thoughfacing variouschallenges from COVID-19 and climate change, the Company is confident to break through them and make good use of our existing core advantages to fulfill our responsibilities in the implementation of circular economy and sustainable supply chain management.

II. Health and Safety

Each colleague is responsible for his/her own health and safety and fulfills his/her responsibility by taking substantial action. The Company systematically educates its people on how to stay healthy by adopting the correct lifestyle that covers food, clothing, housing, and transportation and trains them under systematic beliefs so that a safe workplace is made possible while fulfilling quality, cost, and efficiency requirements. Healthy employees and safe workplaces are the cornerstone for corporate development.

In the promotion of safe workplace, 866 man-hours were spent on employee occupational safety and health education throughout 2020, the traning hour perperson is 0.87 hour which is the same as 2019. As far as employee treatment is concerned, the average full-time salary for each non-managerial employee was NT$691,000 a year in 2020, adecrease of 2.5% compared to NT$709,000 in 2019.The decrease was mainly caused by the impact of China prohibiting the entry of foreign garbage, which affectedthe profit and lead to reduction of incentive bonuses compared with the same period previous year. Luckily the impact of prohibition toeard the Company had withdrown in 2020, in the future, the Company will strive to improve its operating performance, and staffs throughout the Company are able to share the operational accomplishments.

III. Environmental Protection

We promote renewable resources and protect the environment by adopting an operational model featuring a cyclic use of resources. Raw materials for Longchen P&P’s products came from recycled waste paper and hence can be recycled and reproduced after use; it effectively reduces the emissions of carbon dioxide and deforestation. For each kilogram of reclaimed cartons produced with recycled waste paper, it helps reduce the emissions of carbon dioxide equivalent to 5.3 kg on earth. By 2023, it is estimated by the Group that 4.70 million tons of waste paper may be recycled each year to reduce carbon emissions by 22 million tons on earth, which is equivalent to 66 million trees less in deforestation and the amount of carbon absorbed by around 56 thousand DaAn Forest Parks.

Longchen P&P sponsored and established the Longchen Circular Economy Environmental Protection Fund in 2018 and signed the collaboration agreement with the National Taiwan Ocean University (NTOU) in April 2019. It is expected that up to NT$6 million will be devoted to research projects with collaboration from the NTOU to show the shared concern about and promotion of marine conservation and environmental sustainability. Based on the bilateral collaboration agreement, the focus will be placed on three aspects: the promotion of marine education, fishing boat management and environmental monitoring, and application of research projects. It began with the five major collaborative projects: the Clean Ocean Strategic Alliance, Research on Applying Algae in Papermaking, Application of Environmental DNA Technology in Helping Prevent the Illegal Capturing of Marine Creatures, Spontaneous Environmental Monitoring through Unmanned Rotocraft, and Composition Survey, Incentive, and Re-utilization of Fishing Boat Waste and Large Waste and Damaged Fishing Tools. Taking advantage of the professional research capability of the NTOU, various industry-academia collaboration projects are initiated for the purpose of protecting the marine environment and encouraging sustainable development.

IV. Green Production

Longchen P&P builds its core competitive advantages on the five environmentally-friendly advanced technologies applying resources at high efficiency, namely 1. The advanced reclaimed fiber utilization technology, 2. The advanced energy-saving production technology, 3. the advanced water-conserving production technology, 4. The advanced air pollution, water pollution, and waste reduction treatment technology, and 5. The advanced space utilization technology. Our green production covers each process in the manufacturing of a product that begins with raw materials in order to ensure environment safety, quality, and efficiency. As of 2020, Longchen P&P was elected as High-performance Enterprise of Promoting Recycling of Recycled Materials by the Environmental Protection Administration. The Company was also obtained the British Standards Institute BS 8001 Circular Economy Business Model Maturity Optimization of leve l4 Optimizing in 2020, and became the first the first domestic paper manufacturer certified with BS 8001 by Industrial Development Bureau, which represents Longchen P&P had achieved the international certification standards constructing a sustainable development environment of economically, environmentally and socially able to thrive together.

V. Quality Marketing

Longchen P&P insists on quality marketing with high efficiency and the JIT (Just in Time) production capability as the advantages of the Company to take production orders. The customer purchase order pull-based production management adopted makes it a highly efficient service-oriented manufacturer that is able to satisfy customer demand. In 2020, Longchen P&P developed sustainable strategy blueprint based on core values of the industry and adopted corresponding actions in establishing various short-, intermediate, long-term reduction objectives in green house gas emission, energy use per unit of production volume, total volume of waste, etc. in order to meet the 2030 SDGs of the United Nations. The Company has also made practical contributions towards the sustainable development goals set by the United Nations and has gradually gained approval on the market, attracting customers that pay equal attention to environmental protection, pursue green product packaging and industry sustainability like us to work with us and become our best partners in creating world famous brands.

Longchen P&P already successfully completed its first “Salmon Return to Taiwan” Plan with a total of NT$4.3 billion invested back in Taiwan by the end of 2014, contributing to an increase in the business revenue in the individual financial statement of Longchen Taiwan from NT$6.43 billion in 2014 to NT$9.73 billion in 2019, an increase in the number of Taiwanese employees from 897 to 1,077, and an increase in the taxes paid from NT$170 million in 2014 to NT$570 million in 2019, laying an optimal niche for the future developments of Longchen Taiwan. In 2019, Longchen P&P will further support the “Welcome Taiwanese Entrepreneurs Back to Invest in Taiwan Program” (Homecoming Investment Plan) of the Ministry of Economic Affairs and build new machines and upgrade existing ones at the Erlin Mill over a period of three years, that is, from 2019 to 2021, in order to meet the increased market demand for product packaging as a result of the investments in Taiwan from the returning businesses; and an old production line will be eliminated. After the whole project is completed, the throughput of the Erlin Mill will be over 850 thousand tons. In terms of eco-packaging, the equipments at the carton plant will be renewed and upgraded to smart and automatic onesin stages. It is expected, upon completion of the current “Homecoming Investment Plan” in 2022, the market share for Containerboard will be further increased.

Human pursuits of civilization and enjoys in a convenient life; however, the environment has to pay for the cost of fulling with trash. Longchen P&P is devoted in developing highly efficient resource utilization technologies and recycling waste paper to make packaging cartons for products. To leave more resources and cleaner life environment for the children, we keep increasing recycle technology, and fully decreasing carbon for the Earth. The more than 4,000 employees of Longchen P&P across the Taiwan Strait will look at environmental protection as their mission and continue to promote “Low-Carbon Papermaking, Environmentally-Friendly Technologies, and Eco-Packaging” in an effort to preserve resources and create a cleaner living environment for generations to come.

Longchen P&P utilizes reclaimed paper extensively as its raw materials. Compared to the use of wood pulp in traditional papermaking, for each kilogram of corrugated boxes produced, around 5.3 kg of CO2e may be reduced in the emission. By 2025, it is estimated that up to 4.2 million tons may be produced; that is, 4.7 million tons of waste paper may be recycled to reduce carbon emissions by 22 million tons on earth, which is equivalent to 66 million trees less in deforestation.