Chairman's Letter to the Shareholders

According to the World Economic Forum (WEF) Global Risks Report 2020, extreme weather, climate change, and other environmental topics are now the leading cause of risks impacting global economic growth. In addition, other geopolitical risks such as the US-China trade war, pandemic spread of diseases, and international and social awareness on gender equality and human rights, all can potentially impact CPDC and our supply chain. Evidently, environmental, social, and governance (ESG) matters requires a balanced approach to management and should be the core value of all enterprises.

While ESG may seem like three separate issues, it is related to each other. I think that our company must prioritize "corporate governance", before we are able to fulfill our responsibility of environmental protection, and to be able to make a recognizable contribution to society. The following describes my philosophy towards corporate sustainability.

In-line with international ”Ethical Management” standards, develop a two-business strategy in petrochemical and land development towards sustainable management.

In the wake of the 1997 Asian Financial Crisis, sound corporate governance was seen as an important approach for companies to fight the crisis. CPDC, as a member of the listed company community in Taiwan, maintains a spirit of "integrity", and commits itself to implementing a diverse and operational effective Board of Directors by enhancing transparency in providing financial and non-financial information, and implementing corporate social responsibility and safeguarding shareholders' rights and interests.

Concurrently, under the impact of the external environment and international political factors, CPDC choose to pro-actively target land development as a second main axis of our business operations. We aim to carry out related projects at home and abroad, with a view to reducing operational risk by creating new revenue sources.

To become a green petrochemical leader in Taiwan, driving integration of environmental and social developments.

On environmental and social issues, CPDC has always regarded "work safety" and "environmental protection" as its top priority. CPDC established a special command center to obtain real time data in various emission metrics. In the event of excessive emissions, emergency responses are initiated and handled in a timely manner. Simultaneously, the Command Center is also responsible for the monitoring of work safety, including the safety of our plant colleagues and contractors, which is a top priority in our day-to-day operations.

Since 2009, CPDC has been carrying out soil pollution remediation at the Anshun site (Formerly, the Taiwan Alkali Company) and has accumulated fruitful results and experience in the remediation process. Mercury and dioxin are present in the soil at the same time, so we developed a two-pronged approach using heat treatment and wet treatment and obtained an operating permit from the Environmental Protection Bureau to continuously evaluate and upgrade technology and equipment improvements. CPDC is also working with the academic community to study green plant treatment technology. The pilot program uses botany studies and bio-degrade experiments to absorb soils containing dioxin mercury and will continue to move forward to develop the most environmentally friendly green remediation technology.

CPDC is deeply aware of the urgency of climate change and environmental issues, and we continue to invest significant resources to improve energy efficiency, improve waste efficiency and lower waste emissions, and improve water efficiency through recycling. We have also embarked on an assessment of the potential financial impact of key climate factors on operations with a view to enhancing resource allocation and delivery efficiency to achieve the vision of a green petrochemical industry.

Create a friendly and safe workplace environment, promote communication and dialogue with local communities and consumers for social care

In the cultivation of the company's colleagues, the talent development policy is a very important part of CPDC. We are committed to taking care of everyone, providing a safe and harmonious working environment, and through various employee welfare measures, career training and related activities to build our peer's sense of commitment and identity.

In terms of social participation, CPDC takes the two main axes of social care and the promotion of education and culture as its strategy. We promote social participation of colleagues and implement corporate social responsibility through the sponsorship of arts and culture activities and the organization of environmental or public welfare activities, social care, campus education and cultural promotion and cooperation, and stakeholder maintenance. CPDC has for two consecutive years integrated the externalities of the environment and society into its assessment, through the concept of an "integrated income statement", in addition to financial and revenue figures, we consider the positive and negative impacts of externalities, to arrive at the true value of the business reflected in these effects and to fully grasp a ESG business philosophy. I deeply realize that to implement the concept of green petrochemical and enterprise sustainability, it will take a lot of difficult horizontal and vertical communication work throughout our organization. Only when all colleagues understand the true meaning of ESG can everyone in the Company work together towards this goal. CPDC is committed to continuing the values of "excellence, innovation, respect, care, and environmental symbiosis" and "creating the value of sustainable business by the global community", as the fundamental principle of our business. We aim to lead our Company and stakeholders towards international standards, in response to the United Nations Sustainable Development Goals, to become sustainable business enterprises.