Our Focuses｜Nature-based Solutions｜Nature and Biodiversity

1.Locate

1.1 Locate Assessment Methodology and Scope

Winbond Group adopts a dual-track analytical approach integrating "international indicators" and "local geospatial data." By combining Taiwan’s protected area geospatial datasets with the World Database on Protected Areas (WDPA), the group identifies ecologically sensitive areas surrounding operational and supply chain sites based on IUCN protected area management categories, thereby enhancing the comprehensiveness and accuracy of its biodiversity location sensitivity assessments.
The methodology establishes a 2 km radius buffer zone centered on each operational site as the area of potential impact, followed by spatial overlay analysis with local protected area mapping data.
Following the TNFD Locate methodology, Winbond Group integrates natural capital inventories, historical ecological survey results, and protected area spatial data to analyze the proximity and intersection of its Taiwan sites with statutory and non-statutory protected areas, as well as evaluate associated regulatory compliance requirements. Concurrently, spatial analysis was conducted across 30 owned operational sites globally and value chain footprints covering 2,978 supplier operational sites (from suppliers with active commercial transactions over the past three years). This provides visibility into the potential impacts of direct operations and the value chain on natural environments, serving as a critical foundation for nature-related risk management and TNFD strategic planning.
Winbond employs a cross-referenced, dual-track analysis of "international indicators" and "local geospatial data" to comprehensively deepen the accuracy and rigor of its location sensitivity assessments:

1.2 Biodiversity (Protected Area) Analysis of Operations and Supply Chains in Taiwan 

Overall, the ecological sensitivity of Winbond Group's operational sites is relatively low. Analysis indicates that only 1 company-owned site (Winbond Nangang Office) and 522 supplier sites overlap with legally designated protected areas. In response, the Group upholds the precautionary principle to deepen risk identification, increase the frequency of management audits, and plan nature-based solutions, thereby balancing technological advancement with ecological conservation.

1.3 Biodiversity Impact Analysis Results for Direct Operations and Supply Chains Across Global Sites (Protected Area Scope)
 

Following an inventory of its global operational footprint, Winbond Group identified that six overseas company-owned sites (three in Japan, two in the United States, and one in South Korea) intersect with IUCN Protected Areas, the majority of which fall under Category IV (Habitat/Species Management Area). In response to the specific ecological characteristics of each protected area, the Group will intensify management efforts focusing on target species monitoring and landscape ecological balance, while establishing systematic assessment mechanisms to realize nature-positive goals.
Furthermore, spatial analysis revealed that 256 supplier sites globally intersect with IUCN Category I–VI protected areas (predominantly located in Asia with 227 sites).
Going forward, the Group will formulate management policies and operational guidelines to mitigate the impacts of supply chain activities on ecosystems and biodiversity.

1.4 Biodiversity Analysis for Direct Operations and Supply Chains (Threatened and Endangered Species Scope)

Winbond Group deepened its quantitative biodiversity analysis by referencing the IUCN Red List. The inventory revealed that among the organization's own operational sites, China has the highest number of threatened species, while Singapore exhibits the highest proportion of critically endangered species. For the supply chain, Singapore ranks first in the total number of threatened species, while Belgium and Switzerland in Europe show the highest proportions of critically endangered species. These findings serve as the foundation for risk prioritization and resource allocation.

3. Assess

Assessment and Results
Materiality is prioritized by exposure and risk level.
Dependencies are concentrated in water supply, drought and uneven precipitation, climate regulation, and disease control; exposure to water and climate remains high even after accounting for adaptation measures.
Impacts are concentrated in waste, water resource use, indirect energy use, climate change, air pollution, and wastewater discharge.
 

Risks and Opportunities
Three Categories of Risk:

• Operational Physical Risk: Extreme weather, drought, and epidemics impacting water supply and production.
• Environmental Management Risk: Regulatory and cost pressures arising from inadequate management of water, energy, waste, and pollution.
• Transition Risk: Elevated renewable energy and carbon emission requirements impacting competitiveness.
   

Opportunities lie in defining investment priorities for energy/resource efficiency, water risk management, and environmental monitoring, while integrating green manufacturing, renewable energy, and carbon accounting to upgrade existing environmental management practices.
 

Conclusion: The core issues center on water and climate, representing long-term structural challenges. Risks and opportunities are two sides of the same coin; the key lies in upgrading existing environmental management into systematic nature-related management.
 

3.1 Risks and Opportunities from Natural Capital Dependencies in Direct Operations

3.2 Risks and Opportunities from Natural Capital Impacts in Direct Operations

3.3 Supply Chain Risks and Opportunities

The aforementioned dependency and impact analysis indicates that nature-related issues within Winbond’s supply chain are primarily concentrated on water resources, extreme weather regulation, pollutant emissions, and resource use. This demonstrates that nature-related risks are systemic in nature, rather than isolated issues tied to individual suppliers or manufacturing stages. Accordingly, beyond identifying risks, Winbond has translated the analytical results into an actionable and trackable management framework by establishing corresponding management metrics, units of measurement, early-warning mechanisms, and targeted directions to strengthen supply chain management on nature-related issues.

The Company uses the weighted risk score as the criterion for identifying material nature-related dependency and impact issues. When the risk score exceeds 2, it is prioritized as a key management topic, serving as the basis for subsequent risk management, performance tracking, and information disclosure. The evaluation results show that material dependency issues mainly include extreme rainfall, flood defense services, storm and landslide mitigation, and water supply; material impact issues primarily focus on water resource use, climate change, invasive alien species, soil and air pollution, and terrestrial ecosystem use.

Based on the comprehensive analysis, nature-related risks in Winbond’s supply chain can be categorized into three areas:

1. Physical risks, which include the operational and logistical impacts on suppliers caused by extreme weather, droughts, floods, and geological hazards;
2. Transition risks, arising from the cost and investment pressures associated with increasingly stringent environmental regulations, water resource management, and carbon reduction requirements;
3. Reputational and market risks, as supply chain involvement in high water consumption, heavy pollution, or ecological degradation may negatively affect customer trust, investor evaluations, and market competitiveness.

Conversely, these material issues also present clear management opportunities. Winbond can prioritize enhancing the disaster prevention, backup, and water risk management capabilities of high-risk suppliers to improve supply chain resilience. Simultaneously, through measures such as tiered supplier sustainability management, water conservation, carbon reduction, pollution abatement, and environmental performance coaching, Winbond drives supply chain upgrades and transforms nature-related management into a vital foundation for corporate sustainability competitiveness and customer value.