Radiant Opto-Electronics Corporation has conducted a sustainable risk assessment for its suppliers, screening out the first-tier key suppliers based on various conditions such as raw materials, transaction volume, important components, and whether they are the sole supplier. The Corporation has distributed self-assessment questionnaires to key suppliers, investigated their potential environmental and social risks, classified risk levels based on the results, conducted on-site audits on high-risk suppliers, and completed audit evaluation reports. Based on the supplier self-assessment and inspection results in 2022, it was found that the compliance rate of the management system is low. The reason for this is that the suppliers have not obtained the ISO 45001 occupational safety and health certification and the ISO 14064-1 greenhouse gas verification.

In 2022, out of 316 existing suppliers, the Group's first-tier key supplier definition selected 27 suppliers from Taiwan and China, which accounted for 56% of total purchases, to conduct sustainable risk self-assessment. After reviewing the documents, 13 suppliers with high risk underwent on-site audits. The audit items were based on the RBA and covered five major aspects: labor, health and safety, environment, business ethics, and management system. Four levels of deficiencies were distinguished: priority, major, minor, and observation. We require suppliers to propose improvement plans to ensure eective control and reduction of risks. The environmental safety and human resources departments conduct field audits, and the results of the 2022 supplier risk audit indicate no immediate or significant risks. Suppliers did not have any priority or major deficiencies, and all final evaluation grades were above a B, resulting in a 100% pass rate. Furthermore, none of the suppliers required counseling or assistance. To enhance the efficacy of supplier auditing in the future, we will implement external inspection procedures and devise inspection protocols for suppliers located outside of Taiwan and China. This will help mitigate sustainability risks in our supply chain.