yfy gri report...2016 yfy gri report 45 yfy is a leading paper company in taiwan. its paper products...

42

YFY GRI Report 44

48

50

Company Profile

Reporting Boundaries & Stakeholder Engagement

Corporate Governance

About YFY

53

54

54

55

56

59

59

Energy Plan

Raw Material Usage

Handling of Solid Production Residual Material (PRM)

Air Quality Control and Monitoring

Climate Adaptation and Environmental Sustainability Investments

Water Resource Use

Discharge Water Processing

Environmental Aspects

61

63

65

67

Occupational Safety and Health Management at YFY

Employee Care

Local Community Engagement

YFY Product Responsibility

Social Aspects

64 YFY Market Presence

Economic Aspects

68

69

72

Report Profile

GRI G4 Index

SGS Assurance Statement

Appendix

432016 YFY GRI Report

Taipei Head OfficeTianjin Mill

Suzhou Mill

Xiamen Mill

Pingyang Mill

Longan Mill Pingcheng Mill

Qingdao Mill

Kunshan Mill

Shanghai Mill

Dongguan Mill

Tongnai Mill

Yangzhou Mill

Beijing Mill

Taoyuan Mill

Xinwu Mill

Yangmei Mill

Pek Crown Mill Zhunan Mill

Qingshui Mill

Chenggong Mill

Hualien Mill

Taitung Mill

Changhua Mill

Kaohsiung Mill

Jiutang Mill

Nanjing Mill

Jiashing Mill

Fuzhou Mill

Guangzhou Mill

Guangdong Dingfung Paper

Zhongshan Mill

YFY Inc (herein referred to as YFY) was first established in 1924 by Mr. Ho Chuan (Hsin-yi) as the Yuen Foong Store. At the time, the business operated in the sugar, feed and fertilizer industries. Later, the company shifted into manufacturing, producing, buying and selling paper. Its products extended from artistic paper, containerboard and packaging, as well as consumer paper. Yuen Foong Yu Paper Mfg. Co., Ltd was established on February 21st, 1950, and went public in February 1977. It is one of the pioneers of the Taiwanese paper industry.

In 2012, the Fine Paper and Board Division was merged into the Chung Hwa Pulp Corporation, and YFY modified into its name to YFY Inc. YFY Inc operates a fully integrated production chain covering upstream (forestry, pulp), midstream (paper manufacturing) and downstream (printing) operations, fully harnessing the benefits of vertical integration to create value. YFY is dedicated to developing technology for the reuse and management of resources. It is committed to working towards the vision of a pristine environment by working towards buildings a circular economy.

YFY´s work can be roughly divided into three categories: containerboard and packaging, consumer products, and pulp and fine paper production. This corresponds to the three subsidiaries of YFY: Yuen Foong Yu Packaging Inc, Yuen Foong Yu Consumer Products Co., Ltd, and Chung Hwa Pulp Corp. These subsidiaries together serve a vast market ranging from industries to consumers.

The Head Office provides consultation and advice in fields such as financial, legal, accounting, resource management, human resources, information technology, research, development, strategic integration, public affairs, and land management. In 2016, YFY´s paper businesses accounted for 88% of its operation, while business other than the production and trade of paper accounted for 12%. The YFY Inc headquarters are located in Taipei City, Taiwan.

YFY´s market cap is $NT 16.6 billion. In 2016, thanks to the effort of the management and all of our employees, the combined revenues of the three branches of our Group reached $NT 63.3 billion, for an EPS of $NT 0.08. For more information about management and operations, please refer to the consolidated financial statements from 2016.

Company Profile

YFY Three Main Business Divisions

Yuen Foong Yu Packaging Inc

• 3 paper mills and 22 paper container and coloring mills

• Covers entire Greater China region

• Main supplier for leading companies around the world

Containerboard and Packaging

Yuen Foong Yu Consumer Products Co., Ltd

• 6 Consumer Products Mills

• Leading consumer companies across a variety of brands and products

• Leading brands in Taiwan and China

Consumer Products

Chung Hwa Pulp Corp

• 4 Pulp Mills and 1 Forest Area

• Only company in Taiwan to own a paper research and development center and a pulp mill

• First Taiwanese company to operate a vertically integrated paper production chain

Forest Products and Fine Paper

G4-1~9

About YFY44

About YFY


YFY is a leading paper company in Taiwan. Its paper products can be roughly divided into 5 categories, including cultural paper, white paper, containerboards, packaging, and consumer paper. In addition, YFY also produces paper for the technology, medical and food sectors, as well as consumer products for daily use, such as cleaning products. In the face of rapidly changing global economic trends, YFY builds strong products through a vertically integrated paper production chain, expertise in a wide array of fields, and the combination of a diverse range of products. With these products, YFY builds a solid competitive advantage in the market and strengthens its revenue structure.

• Chemical raw materials

• Printing and writing paper

• Packaging paper and cardboard

• Information paper

• Processing paper

• Environmental paper

• Environmentally certified paper

• Containerboard and cardboard boxes

• Consumer paper

• Food packaging container paper

• Cleaning product category

• RFID

Equality is important to YFY. We do not treat employees, clients, suppliers or any other stakeholders differently on account of their race, religion, skin color, nationality, disabilities, age, gender or sexual orientation. YFY believes in meritocracy. Our hiring process is public and fair. Most of our employees are local residents. Our company and all of our employees strictly follow the Act of Gender Equality. Since our founding, there has been no case of discrimination or sexual harassment in all of Taiwan. Apart from Taiwan, our mills and offices in the United States, China, Vietnam and other locations strictly follow relevant local labor policies and regulations. All hiring conditions and contracts are in accordance with local legal standards.

The majority of YFY employees are full-time employees. Our total number of employees in 2016 was 10,533note, all of whom are full-time employees. 83% of them were male and 17% were female. The average number of years of service is 10.1 years.

(Note: only includes YFY Inc and its subsidiaries, Yuen Foong Yu Consumer Products Co., Ltd, and Chung Hwa Pulp Corp)

Employees G4-10

YFY sees employee protections to be an important priority. 100% of our employees enjoy rights and benefits that exceed the provisions of the Labor Standards Act. 57% of our employees across Taiwan are members of a union. In 2016, there were two labor-related disputes, which we are working to communicate and coordinate to resolve and have not resulted in any losses.

YFY allows for smooth communication between employees and their employers, hosting labor conferences, setting up email accounts and employee satisfaction questionnaires to facilitate communication. We will continue to commit to a smooth employer-employee relationship that is mutually beneficial.

In addition, YFY respects the right of its employees to all locations and employees of its suppliers to free association. Currently, there are a total of six trade unions in the company. Joint meetings are held annually allow representatives from each union to voice the demands, difficulties, needs, and concerns of employees and allow supervisors and managers to deal with them accordingly.

Employee Protections G4-11

The company´s current products include:

• Bleached hardwood pulp

sodium hydroxide, hydrochloric acid, bleach, and sodium chlorite

coated art paper, light-weight coated paper, bit-coated wood-free paper, uncoated wood-free paper, wood-free printing/writing paper, and drawing paper

white coated board, gray coated board, coated ivory board, coated duplex board with gray back, coated duplex board with white back, single-side coated board, book cardboard paper, and grease-proof board

No carbon required (NCR) paper, thermal paper, copier paper

Aluminum laminating base paper, glassine paper, masking paper, laminating Kraft paper, environmental laminating coated art paper, single-side coated art paper, grease-proof paper, and vegetable and fruit bag sets

colored recycled paper

FSC certified coated art paper, FSC certified uncoated wood-free paper, and FSC certified woodfree printing/writing paper

Kraft cardboard, corrugated cardboard, corrugated paper, and corrugated cardboard boxes

Toilet paper, facial tissues, paper napkins, paper towels, paper handkerchiefs, and wet wipes

food paper packaging containers for juices, dairy products, lunch boxes, etc.

Orange House series cleaning products, including laundry series, domestic series, and personal hygiene products

UHF inlay, tags, and tickets

About YFY46

Taiwan is the world´s 20th largest paper producer, ranked 7th in Asia. Every year, total production of paper products amount to more than 4.5 million tons and consumption reaches 4.9 million tons. Taiwan´s paper consumption per capita is also higher than the world average. Not only is the paper industry a key industry for Taiwan, it is also one of the main energy-intensive industries in Taiwan. As the largest paper company In Taiwan, YFY has an important role to play as well.

YFY´s suppliers are diverse and many. They are divided into 14 categories, including fiber raw materials, chemical raw materials, pipes and pipe joints, paper-making supplies, transmission materials, machine accessories, electrical appliance materials, hardware accessories, civil materials, consumables, fuel and petroleum, packaging materials, miscellaneous and fixed assets, etc. In 2016, YFY participated in transactions with 2,115 suppliers.

To ensure the quality of the supply chain and fulfill its corporate social responsibilities, YFY has corresponding policies for both new and current suppliers. All raw material suppliers and suppliers whose average monthly transaction totals amount to more than $NT 250,000 will be subject to periodic supplier audits. The audits focus on product quality, product delivery, product amount, service, compliance, and product prices, to ensure that they comply with YFY standards. If issues are found, suppliers are asked to make improvements within a limited window of time and are tracked and recorded through purchasing channels. Per the aforementioned standards, an average of 745 suppliers is subject to audits per round, with improvement rates of 100%. Every audit is fully documented and its records kept at purchasing departments for reference for future purchases and audits.

Approximately 90 percent of YFY's suppliers are located in Taiwan. For fiber raw materials, due to factors such as the quality of available source material and the lack of domestic production, the local suppliers provide approximately 60 percent of total demand. For paper-making supplies, due to quality concerns, local suppliers provide about 20 percent of local materials. For remaining categories, the local suppliers account for over 90 percent of total purchases. For the hardware accessories, civil engineering supplies, and fuel and petroleum categories, 100% of our need is met by local suppliers. This demonstrates YFY's commitment to supporting local suppliers and reducing the environmental impact arising from the transport of raw materials.

Supply Chain Management G4-12

Chenggong Mill Moves

Amidst its efforts to adapt to a new era, YFY seeks to remain in Taiwan and create more job opportunities, working hard alongside all of YFY´s employees. In 2014, the Containerboard and Packaging Group invested several billion NT into the renovation and expansion of hardware materials, integrating all production capacity and facilities at Xinwu Mill. As Chenggong Mill faces space constraints and is thus unable to expand, its current facilities have seen drops in efficiency. Due to these reasons, we have planned to reduce our reliance on its production output. However, protecting the right to work for our employees is our top priority, and the years of professional expertise of our colleagues will be a key to allowing the newly expanded Xinwu Mill to function smoothly. Thus, YFY has proposed a support program to invite our existing employees at Chenggong Mill to move to Xinwu Mill.

In order to understand and properly address the needs of our colleagues at Chenggong Mill, starting in January 2016, YFY hosted information seminars. We also conducted surveys to understand whether employees would like to move with the company. More than half of the employees agreed to take part in the move, and YFY proposed several policies to help smooth the transition.

• Safe Living: Providing a transition stipend, a transportation stipend, and coordinated busing. Also provided housing, transfer bonuses, and moving bonuses.

• Safe Work: Arranging for professional mentoring to help employees familiarize themselves with the new environment as soon as possible and allow work to proceed as smoothly as possible.

• Safe Choice: As those who choose to move may face other reasons for not being able to continue working at Xinwu Mill, YFY pledged to allow employees to choose to fall back on generous retirement and severance packages, allowing our employees to commit without any reservation.

• Safe Retirement: Providing generous retirement and severance packages to those above the age of retirement and to those who are unable to move to Xinwu Mill due to family or personal career planning. Also provided assistance in helping them seek job opportunities at nearby mills.

• Safe Procedure: The plan proposed by the company was passed by the Chenggong Mill Union, and each of the employees has been briefed individually on the functioning of the plan. Proceedings and support packages are more generous than relevant labor regulations. All information is communicated immediately to relevant authorities.

Major Organizational Changes G4-13

Company Profile

Paper Production(Upstream)

Importedpulp

Recycledpaper and

recycled pulp

Paper Production (Midstream)

Paper Mill

UpstreamIndustries

Fiber MillsPulp Mill and

Paper RecyclingIndustry

PackagingProduction and

Consumers

Wood PulpWoodplanks

Manufacturing and sales of paper, cardboard and other forms of cultural and special paper

Cardboard for industrial use; manufacturing and sales of cardboard boxes

Manufacturing and sales of tissue paper, hand wipes, paper towels, and other paper for family use

Cultural and publishing industry; Special materials for various industries

Manufacturing of cardboard and corrugated paper

Consumers and distributors

Paper Production(Downstream)


YFY Academy: What are SDGs?

In September 2015, at the United Nations Sustainable Development Summit, governments, companies and civil society leaders set forth 17 global Sustainable Development Goals, encompassing economic development, societal progress, and environmental protection. Governments and businesses choose priority goals for sustainable policy planning according to its main operational strengths. It is the goal of the program to achieve the goals in 2030 through global cooperation to achieve a future of sustainable development.

YFY has always been meticulous about acquiring prevailing international certifications. This self-discipline is aimed to not only increase the trust of our clients, employees, and suppliers, but to also fulfill our corporate social responsibility to the environment, the economy, and society, as well our responsibilities as a citizen of this planet. Therefore, we actively seek to lower our carbon emissions to comply with the goals set out by COP21 and have also selected 5 of the 17 Sustainable Development Goals (SDGs), proposed by the United Nations, relevant to our work as our main guide on sustainable planning.

External Participation and Cooperation G4-15

As the leading paper producer in Taiwan, in order to facilitate dialogue with our industry peers and keep in touch with international trends, YFY actively participates in relevant industry-related associations and organizations to discuss and provide policy recommendations. YFY maintains memberships in the following organizations:

• Taiwan Paper Industry Association

• Chinese National Federation of Industries (CNFI)

• Biotechnology and Pharmaceutical Industries Promotion Association of R.O.C

• The Chinese National Association of Industry and Commerce, Taiwan (CNAIC)

• Taiwan Mountain Jade Science and Technology Association

• The Business Council for Sustainable Development of Taiwan (BCSD-Taiwan)

• Chinese International Economic Cooperation Association (CIECA)

• Taiwan Institute of Directors

• The Third Wednesday Club of R.O.C.

• Institute for Biotechnology and Medicine Industry (IBMI)

G4-16 Participation in Industry Associations

End poverty in all its forms everywhere – continue to develop charity projects and provide resources to support these projects on a community level.

Ensure availability and sustainable management of water and sanitation for all – increasing reuse rates of water resources, improving discharged water processing systems and optimizing water processing systems through our water resource platform, with our ultimate goal being eliminating discharge entirely.

Ensure access to affordable, reliable, sustainable and modern energy for all – our energy resource platform completely reexamines our production process, from fuel to raw material. We are also working to build capacity for new energy sources such as hydrogen energy, refuse-derived fuel, biogas energy, and vaporized coal energy, seeking to build YFY into a cycle of energy and resources.

Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation – pushing for nPulp, an environmentally friendly bio-straw product. From packaging to utensils, we lead the paper market with a new mindset. We also harness our expertise on water and energy resources to develop new technologies and products alongside experts from the industry, the government, and academia to build our mills into energy resource demonstration facilities.

Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss – spearheading FSC (Forest Stewardship Council) recognition for Group forestry centers and acting on promises of ecological protection and sustainable logging management.

About YFY48

In regards to all of the entities included in the consolidated financial statements, please refer to the "matters of special note – information related to the affiliated companies" in YFY's 2016 Annual Report.

After comprehensive consideration of practical control and the difficulty of information collection, parts of this corporate social responsibility report unrelated to financial information will mainly comprise of YFY´s core businesses, including the Forest Products and Fine Paper Group, the Packaging Group, and the Consumer Products Group.

Reporting Boundaries

Reporting Boundaries & Stakeholder Engagement

G4-17

YFY´s historical achievements over the past 93 years were only possible with everyone´s input. That is why we welcome diverse opinions and are open to dialog with all interested parties. Through various official and unofficial communicational channels, stakeholders can learn about YFY´s efforts on issues that they feel strongly about through our annual financial statements, corporate social responsibility reports, and our official website. We welcome and humbly listen to the concerns of our stakeholders and are committed to actively addressing them. The following table lists our various stakeholders, their topics of concerns, types of communication, and frequency of communication.

Stakeholder Engagement G4-24~27

Defining Reporting Content G4-18~23

YFY reviews prior operational experiences and domestic and foreign trends, initially sums up three major areas of focus, including the environment, the community and the employees, then concludes with related important topics and concerns. The top managers of all departments are invited, according to their specialized fields and the GRI Aspects list, to identify, classify, analyze, and compare the identified topics and concerns. The Editorial Team will then combine and analyze the above-mentioned information and sort out 24 topics and concerns that could have an influence and impact on the company's operation and stakeholders, and ultimately define the 5 most important stakeholders for the company.

Invite various internal and external stakeholders to fill out the assessment survey and complete the significant topics and concerns matrix, according to the quantitative analysis results of a total of 129 valid survey responses. After the Editorial Team completes the comprehensive evaluation, the Chairman will confirm and finalize the conclusions.

Communication ChannelsTopics of Concern Frequency of CommunicationsStakeholders

Identificatio

nPrio

ritization

Based on the significance analysis results, evaluate the boundaries of consideration, set up the report structure and survey, collect relevant information, and disclose the conclusion, with the final product sent to the Chairman´s Office for confirmation.

Co

nfirmatio

n

This report will be used as the reference to identify the significant topics and concerns in the next reporting cycle and review the significant analysis on all levels and confirm whether adjustments are required.

Review

1. Meetings relevant for investors2. Financial statements3. Shareholder meetings and regular legal briefing sessions4. Information disclosed on company website or the Market

Observation Post System (MOPS)5. Annual reports6. Responses to telephone or email inquiries7. Corporate social responsibility status survey8. Information disclosure site (Foong Garden)

Annual shareholders´ meetings

Quarterly legal briefing sessions

Annual reports

On an irregular basis

• Innovation, research and development

• Product quality• Environmental protection• Corporate governance• Financial performance• Corporate image• Business performance and

profitability status• The extent of information disclosure

ShareholdersInvestors

1. Employees´ Welfare Committee2. Internal publications (Foong Garden)3. Education and training system4. Internal digital platform5. Email and telephone6. Corporate social responsibility status survey7. Information disclosure site (Foong Garden)

Foong Garden Internal Magazine Bimonthly

On an irregular basis

• Corporate governance• Occupational safety and sanitation• Corporate image• Business performance and

profitability status• Salaries and bonuses

EmployeesMills

1. Industrial area council2. Environmental Protection Bureau, Fishermen´s Association3. Coordination and communications with factory affairs unit4. Environmental Protection Activities5. Corporate social responsibility status survey6. Information disclosure site (Foong Garden)

On an irregular basis• Community engagement• Environmental protection• Legal and policy compliance• Salaries and bonuses

Local ResidentsNGOs

1. Press conferences2. Advertisements and sponsorships3. Press releases4. Spokespersons5. Corporate social responsibility surveys

On an irregular basis• Business performance• Product promotion• Social engagement• Extent of information disclosure

Media

1. Coordination and communication with parties involved2. Email and telephone3. Corporate social responsibility status survey

On an irregular basis• Corporate governance• Environmental protection• Occupational safety and sanitation• Business performance and

profitability status• Legal and policy compliance

Business PartnersAffiliated Companies

1. Signing the ″Transactions with ethics and integrity″ commitment letter

2. Participation in meetings and coordination3. Corporate social responsibility status survey

On an irregular basis• Procurement guidelines• Occupational safety and sanitation• Supplier regulations and

evaluation

SuppliersContractors

1. Participation in official events2. Compliance with laws, regulations and policies3. Attendance at relevant seminars and conferences4. Official correspondence5. Response to inquiries of governmental authorities and provision of explanations6. Participation in the evaluation of information disclosure

On an irregular basis• Regulatory and policy compliance• Environmental protection• Occupational safety and sanitation

Relevant Authorities


2016 Annual Material Aspects Matrix

Determination of Boundaries

Scope of Issue Impacts

Significant topics of concern (high impact) GRI-identified material aspects ExternalInternal

Headquarters

√

√

√

√

√

√

√

√

√

√

Subsidiaries and mills

√

√

√

√

√

√

√

√

√

√

Suppliers

√

√

Related companies/subsidiaries

√

√

√

√

Relevant authorities

√

√

√

Local community

√

√

√

√

clients

√

√

√

√

Reference page

54,59

55

59

53

58

54

64

61

63

56

Solid Production Residual Material Reuse/ Effluent

Air Quality Control

Water Resource Use

Energy Planning

Compliance with Environmental Regulations and Leaks

Raw Material Use

YFY Market Presence

Occupational Safety and Health

Employment

Climate Adaptations and Environmental Sustainability Investments

On medium impact issues, this report discloses our management approach (DMA). YFY will continue to track the progress of improvement with regards to relevant policies.

Major Issues (medium impact)

Product and Service Regulatory Compliance

Product and Service Labeling

Labor/Management Relations

Consumer Health and Safety

Compliance

Local Community

Training and Education

Environmental Impacts of Products and Services

Overall Environmental Spending and Investments

Customer Privacy

Reference page

67

67

63

67

52

65

64

67

57

67

Economic Environmental Social

Stakehold

er Imp

act Estimate

Organizational ImpactLow High

High

Economic Performance

Legal Compliance (Environmental)

Effluents and waste

Water

Materials

Energy

Emissions (Gases)

Environmental Impacts of Products and Services

Employee Training and Education

Supplier Environmental Assessment

Environmental Grievance Mechanisms

Labor Practices Grievance Mechanisms

Marketing Communications

Overall (total environmental spending and investments)

Legal Compliance

Product and Service Regulatory Compliance

Customer Privacy


Local Community


Employment Market Presence

Occupational Health and Safety

Customer Health and Safety

Environmental (Effluents and Waste)

Environmental (Emissions)

Environmental (Water)

Environmental (Energy)

Environmental (Compliance)

Environmental (Materials)

Economic (Market Presence)

Social (Occupational Health and Safety)

Social (Employment)

Economic (Economic Performance)

Note: For boundaries of data collection on each issue, please see additional notes on specific issues.

About YFY50

Respecting professional expertise and equality is the cornerstone for any enterprise's growth and development. The organizational structures of all subsidiaries and affiliated companies under the YFY group allow them to operate independently, which enables their employees and other professional to bring out the best of their talents within their own sectors. To share information and integrate all resources, we have established a reporting mechanism and two-way communication channels. With a sound organizational framework and consistent communication, we have the capacity to create more opportunities and confront any impacts and risks arising from the economy, the environment, and the community. Our organization chart is as the following:

YFY regards sustainable growth and development as integral to our corporate mission. We consider the employees, the community, and the environments our three key pillars. Relevant issues are managed by the Chief Sustainability Officer and the Chief Strategy Officer. They report directly to the Chairman. (For information about the exercise of social responsibility by the board, please refer to page 24 of the annual report.) The Chief Sustainability Officer leads the Sustainability and Social Responsibility Office, and the Chief Strategy Officer leads the three professional platforms, while also serving as the champion of sustainability and the bridge for communication within the Group.


G4-34~37

Shareholder

Board of Directors

Chairman

Audit Committee

Chief Financial Officer

Chief Strategy Officer

Auditing & Compliance Office

Head OfficeOccupational Safety and Health Management Platform

Water Recycling Platform

Energy and Resource Recycling Platform

Containerboard and Packaging Division

Consumer Products Division

Forest Products and Fine Division Paper Other Division

Business

• Production, sale and agency of pulp, paper and cardboard

Business

• Production, processing and sale of containerboard and packaging

Business

• Production, sale and agency of consumer paper and detergent

Business

• Production, sale and agency of electronics

• Production and sale of chemicals

http://www.yfy.com/album/en_inv_table07/59279834a17c1.pdf


Sustainability and Social Responsibility Management and Operation

YFY established its Sustainability and Social Responsibility Office on April 1st, 2013, with the mission of committing to achieve YFY´s goals of sustainable development and social responsibility. In addition to continued communication and collaboration to strengthen ties internally and externally, the Office also established several contact persons to coordinate its operations within the Company. The Sustainability and Social Responsibility Office is headed by the Chief Sustainability Officer Ronald Allen, who heads a full-time team of two and seven task forces each working on their respective projects.

1. Management and Control of Goals: To ingrain the vision and goals of social responsibility, with respect to the environment, our society, and human resources, in YFY.

2. Action for Sustainability: Manage and direct all mills to achieve their short term, medium term, and long term energy conservation and emission reduction targets; lead strategic discussions to propose response measures to climate change and assist in acquiring environmental certifications as needed.

3. Employee Education: Promote employee awareness of environmental protection and related issues; share the company´s goals and vision and encourage employees to provide input with regards to sustainability and social responsibility.

4. Community Engagement: Strengthen YFY's environmental image; strengthen the relationships between the mills and the neighboring communities; and encourage employees to participate in local events related to environment protection, culture, charity, and other relevant causes.

5. Communication of Corporate Responsibility: Continue to engage with stakeholders; improve enterprise management; and achieve transparency of social responsibility

6. Supply Chain Management: Monitor and manage all personnel at all production lines (including contractors) to provide employees a healthy and safe workplace, and to establish the minimum standards required for YFY's suppliers, including health and safety, social responsibility, sustainable development, and other relevant causes.

7. Technological Innovation: Integrate the segments of research and development, production, market demand, and other aspects to strengthen the company on a holistic level; ensure that products and production processes are in compliance with international environmental standards, while also taking into account profitability; coordinating internal and external research and development results to facilitate acquisition of certification and support from non-governmental organizations (NGOs)

The Sustainability Officer reports to the Chairman. Annual plans and implementation updates are reported to the Chairman and the CEO by the Office every month. They are included in the Board´s agenda as needed.

Energy Development and Treatment of Production Residual Material

The Energy and Resource Recycling Platform was established with the goal to be the "experience sharing platform for energy development and treatment of production residual material.″ Preparation for the platform was initiated in 2014 by taking inventory and gathering statistics at all mills and establishing a relevant network of contact points, with Director Larry Tsai serving as the senior executive. By 2015, it was in full operation, and quarterly meetings were held for relevant executives to inspect the equipment of the designated mills. During these quarterly meetings, the latest technologies would be presented and relevant practical issues would be discussed to pursue the most ethical and feasible methods for the benefit of the economy, the environment, and the community. The main tasks of the Energy and Resource Recycling Platform are as follows:

1. Energy Review and Inspection: Assist all mills in scheduling and setting up review and inspection plans, as well as establishing review and inspection policies. Standardize the measurement methods and tools, so the data collected from all mills within the group can be compared and analyzed.

2. Development of Renewable Energy: Actively develop renewable energy, coach all mils to consider their own capacities for the construction of renewable energy equipment, and pursue a variety of possibilities for sustainability.

3. Reuse of Resources: Monitor solid manufacturing process residual material and air quality control. Look into cutting-edge technologies from around the world, and evaluate opportunities to reuse residual material from various perspectives.

4. Enhance Manufacturing Process Productivity: Optimize the performance of the details in manufacturing processes from a practical operations standpoint, as well as schedule and establish the maintenance and inspection plans, to not only improve production efficiency and product quality, but also significantly reduce energy consumption.

5. Education and Training: Build online education and training system and Q&A platform. Ensure that employees fully understand the operation and procedures of equipment and tools, while also reducing both the occupational injury and damaged equipment.

Water Reuse and Treatment of Production Drain Water

The Water Recycling Platform was established in 2015 with the aim of building an "experience sharing platform for water recycling and treatment.″ The director, Zheng-Guo Lin, led the team in learning about the diverse possibilities for a water circulation system, by inspecting from pipe-to-pipe and from pool-to-pool, as well as tailoring new technologies to the local community and committing to create an environmentally friendly model for water use.

About YFY52

The main tasks of the Water Recycling Platform are as follows:1. System Water Conservation Plan: Plan the water circulation paths and assess

the feasibility of water recycling and use from all manufacturing processes.

2. Reclaim Fibers on Water Discharge Sites: Take inventory of the quantity and quality of effluents at discharge points of all mills. Plan related recycling program to not only reduce the fiber runoff but to also alleviate the loading on waste water treatment plants.

3. Reinforce Water Treatment Function: Optimize the existing manufacturing process effluent treatment system. Install monitoring and inspection equipment, and standardize sampling and inspection standards.

4. Education and Training: Share water recycling and treatment experience. Discuss cases. Visit designated mills to foster new talent in water resource management.

5. Establish the YFY Water Resource Database: Monitor water quality and levels over long periods of time, collecting and storing data from across the Group to provide first-hand technical information to assist in internal communication.

Occupational Safety and Health Management and PromotionThe Occupational Safety and Health Management Platform was launched in 2016, with the goal of improving the management of occupational safety and health across the entire Group. After tabulating current regulations across mills around Taiwan and several safety inspections, through his philosophy of ´preventing dangerous behavior before disaster strikes´, director Chung-Chi Shen is fostering a company-wide culture of safety and building a working environment in which our employees and their families can feel assured in their safety.

The main tasks of the Occupational Safety and Health Management Platform are as follows:

1. Procurement Management: Clearly outlining occupational safety procedures for raw material procurement and building projects, sent to each mill for publicization and implementation.

2. Training of Safety Personnel: Fostering talent in occupational safety and sanitation; regularly holding YFY occupational safety and sanitation meetings to improve safety across mills in Taiwan.

3. Contractor Management: Revising management policies towards contractors; requiring contractors and groups that issue such contracts to undergo educational training.

4. Employee Health Management and Promotion: Arranging for sanitation education and health-related seminars; placing medical personnel on site at mills for consultation and inspection.

YFY continues to uphold the ideal of ´human first´. In addition to respecting the professional expertise of our employees and providing them with a platform, we emphasize employee behavior and ethics. Our Human Resources Department provides new hires with relevant guidelines upon their hiring. We strictly require our employees to follow them in order to maintain positive interactions and relationships in the workplace.

In addition to specifying employee service guidelines, in order to strengthen protection of trade secrets and maintain its competitive edge, YFY also signs the Integrity, Confidentiality and Intellectual Property Agreement with its employees. Its main contents include: ownership of intellectual property rights, the obligation to cooperate, non-competition, the obligation of non-disclosure, information technology use policies, ethics and integrity, as well as consequences of violations of contracts. As the terms are clearly laid out, employees can fully understand and follow the guidelines. This lays a solid foundation for trust between the employer and the employees, giving rise to the consensus of teamwork.

In addition, through periodic educational training, the Human Resources Department emphasizes the importance of integrity and ethics in the workplace with its course content.

Performance Appraisals

In accordance with laws, regulations and in the interest of career development, YFY arranges training courses for employees. All employees must undergo performance appraisals twice every year, where the supervisors of each department stress the importance of corporate ethics through direct interviews. Employees are given appropriate rewards or punishments according to their compliance with the principles of ethics and integrity.

Moral Values and a Culture of Honesty

The moral values and culture of honesty at YFY is ingrained in the hearts of our employees. Employees must not compromise their commitment to these ideals in the face of unethical benefits. When employees are hired, they are given an employee handbook, which clearly states that employees must not use their positions to extract benefits for themselves or others and that employees must not accept inappropriate gifts, including all gifts, brokerage fees, or other unlawful benefits. If they were to fail to report their attempts to secure unlawful gifts, or if concrete evidence shows their activities are in direct and major conflict with the company´s interests, they are punished severely. In 2016, YFY did not see any incidents of corruption, anti-competition, anti-trust violations, or monopolies. We emphasize a corporate culture of honesty. This not only strengthens our stakeholder´ faith in the company, it also strengthens the values of our company, helping us achieve our goal of building a sustainable business.

Informational Transparency and Disclosure

YFY follows regulations set out by relevant authorities by completing various public notices within the appropriate time frame and actively disclosing information about financial, technical, market and corporate social responsibility aspects of the company on its website. Investors can search for information about our company on the Public Information Observatory. In 2016, we submitted our Corporate Governance Self-Evaluation Report, which stakeholders can download or browse through a link on our website to understand the current state of corporate governance.

We host quarterly investor conferences to publicize and explain consolidate financial information, operations situation, as well as future aspirations for the company. Relevant information is also published on the company´s website and the Public Information Observatory for investors to reference. In addition, the company appoints people to participate in various investment meetings and visit foreign investors, in order to better understand their strategic suggestions for the company´s operations through face to face discussions.

Ethics and Integrity G4-56



Environmental AspectsEnergy Plan

There were as many sunny days in 2016 as there were before. Yet the sky no longer seems as blue. There are now more people on the streets wearing masks. The weather reports now cover the Air Pollution Index. The environment and climate change have become global issues. Citizens around the world and environmental groups have taken to the streets to call for governments to implement reforms and new legislation. Companies in the private sector also propose their own solutions, hoping that everyone can come together to change this ever-worsening situation.

YFY started off in the agricultural industry. We feel a profound connection to the environment and the land. When faced with environmental issues, we know full well our responsibilities and obligations. In order to fulfill our responsibility as a citizen of this planet, YFY have responded to environmental issues with practical and real action, whether it be raw materials, water, air quality, production byproducts, or energy.

YFY has long believed in and promoted the idea of a ″circular economy″. For YFY-ers, production should not lead to ″wastes″. They produce residual materials, which are themselves resources that can be used again. We continue to explore for the best ways to capitalize on these resources. With our colleagues´ years of research, we have discovered the last and most important piece of the circular economy puzzle: an energy revolution. Integrating this piece of the puzzle into our production process was the founding mission of the YFY Energy Recycling Platform.

YFY hopes to consolidate and manage energy and resource use data from each of the mills and audit them based on the three main criteria of production efficiency, regulation and standards, and environmentally-friendly energy consumption. This ensures that all YFY mills are in compliance with environmental regulations, energy regulations and other regulations for the paper industry set forth by authorities in their respective regions (whether Taiwan or Mainland China). In order to comply with the law, we have taken the step of supporting the energy transformation goals of the government, such as the development of low-emissions bioenergy, voluntary energy-saving plans, and contingency procedures for air quality management. ″We must change our conceptions about the environment. Not only do we need to take into account the costs and inspection results in the present, we need to be conscious of our impact for the next generation. Future impacts down the road must weigh heavy in our hearts when we consider impact. This is how we can be more progressive!″ said Energy and Resource Recycling Platform executive Larry Tsai. We will continue to lead the push for a circular economy through research and development as well as collaboration.

Energy and Resource Recycling Platform

Energy Plan 2016 Annual Energy and Fuel Consumption Totals (including Taiwan and Yangzhou mills)

Fuel Oil (MJ)

Natural Gas (MJ)

Gas (MJ)

Coal (MJ)

Diesel (MJ)

Steam (GJ)

Electricity (GJ)

Waste tires (MJ)

Sludge (MJ)

Slag (MJ)

1,851,959,829

140,233,553

1,177

16,473,275,327

32,308,949

1,290,847,159,495,910,000

141,859,465,767,835

930,588,424

262,523,541

205,590,155

G4-EN3

G4-EN6

G4-EN19

Direct Consumption

Indirect Consumption

Solid Production

Residual Material

Prod

uctio

n Ef

ficie

ncy

Energy Savings

Regulations andPolicies

Energy Saving Policies The Energy Recycling Platform has implemented a three-pronged auditing and energy savings plan, with its main components being:

• Planning improvements for mills where motor load rate is lower than 50% across the mill.

• Steam and air compressor system self-auditing plans.

• Evaluating potential energy savings in transformers across mills.

• Evaluation and Updates to Safety at Cogeneration Sites.

• Establishment of Contingency Plans in Events of Major Incidents at Cogeneration Sites.

• Tracking of Switching between Backup Machines and Machines in Operation among Major Equipment in Cogeneration Areas.

• Tracking and Planning Educational Training in Cogeneration Areas.

• Saving 1% of energy and electricity per year at each mill.

• Evaluating plans to incinerate biomass for reducing coal in incineration process.

• Tracking efficacy of voluntary energy-saving plans at each mill.

• Evaluating potential for waste heat recovery.

By comparing past energy use through recording measurements and fuel use on the ground, we can compile statistics on total energy savings at our mills, as is outlined in the following table:

Type of Savings

CoalTons

Steam in Production Tons

Electricity MWh

EnergySavings 10,585 3,316 266,484

26,832 8,406 139,104

Equivalent Reduction of Greenhouse Gas Emissions (t-CO2e)

Energy and Resource

Recycling Platform

Environmental Aspects54

YFY wins 2015 Ministry of Economic Affairs Electricity Saving Enterprise Group Award

We continue to put into action our vision of efficient resource use and sustainable management. By taking concrete actions such as replacing motors with higher efficiency equivalents, lighting equipment with LED equivalents, as well as installing windmill and motor frequency control equipment and improving water pump volume setting and deep water aeration in drain water, YFY saved 18.11 million kWh of electricity, the equivalent of reducing CO2 emissions by 9,433 tons. YFY ranked #1 among the three main paper companies in Taiwan. For these efforts, on August 1st, 2016, we were commended by the Energy Bureau of the Ministry of Economic Affairs for our energy savings.

Hualien Mill Wins 2016 Award for Voluntary Reductions in Greenhouse Gas Emissions

Our Hualien mill has again been recognized by the Industry Bureau of the Ministry of Economic Affairs for its voluntary reductions in greenhouse gas emissions. Per measurements reviewed by third parties, our emissions in 2016 were down 45,833 tons of carbon dioxide equivalents (CO2e) from 2011, a reduction of more than 18.1%.

On November 25th, at the Industrial Development Bureau´s 2016 Showcase of Greenhouse Gas Emissions Reduction in Industry, Green Technologies and Engineering, YFY´s Hualien Mill was awarded the 2016 Award for Voluntary reductions in Greenhouse Gas Emissions by the Director General.

Per measurements reviewed by third parties, our emissions in 2015 were down 45,833 tons of carbon dioxide equivalents (CO2e) from 2011, a reduction of more than 18.1%, far exceeding the previous goal of 5%. In addition, with regards to pulp and paper products, our carbon dioxide emissions reduction reached 23.92% and 19.01% respectively, demonstrating the Hualien Mill´s work on reducing carbon dioxide emissions.

Awards

The biggest feature of a circular economy is that products and raw materials are connected both ways. Through careful selection of raw materials and through product design, we can develop new production mechanisms or even new business models to preserve resources by looping it within the circular economy. YFY´s actions echo the idea of replacing ″throwing away what we have used″ with ″cyclical reuse of resources″.

100% of the main raw materials used for YFY´s paper products are made from reusable raw materials (wood pulp and recyclable paper), and the source of wood pulp is chosen from among legal and carefully planned and monitored sources. 96.5% of the main raw materials used for YFY´s containerboard and packaging products originate from recycled paper! (note) With regards to other materials, our layers of scrutiny continue to push our suppliers to take action to protect the environment. We actively practice green procurement. The amount of green procurement at Jiutang Mill has increased from $NT 300 million in 2011 to $NT 710 million over the years, even winning an award from Kaohsiung City as its No. 1 company in green procurement in 2016.

In order to complete the industrial cycle, we own various machinery to process recycled paper, including BDIP fading and deinking systems, as well as abrasive machines. In the next three years, we also plan to build systems to separate paper and plastic, to build recycled paper into a more robust and more versatile product.

(Note: statistics are from YFY Containerboard and Packaging´s Xinwu, Chenggong and

Yangzhou Mills)

Raw Material Usage G4-EN1 G4-EN2

Starting in 2015, YFY has worked to change its internal communication with regards to the environment. We are sowing the seeds of the concepts of circular economy and energy reuse deep in the hearts of our employees. We believe that any production residual material not thrown away can be considered a raw material, even a product. We continue to believe in the value of cherishing our resources, in the hopes of turning most of our solid production residual material into resources or energy.

Most of the residual material produced by YFY during its production and water processing processes are not toxic. Through experimental research at the Energy Recycling Platform, we turn Production Residual Material in Refuse-Derived Fuels (RDF) and recycle reusable resources and bioenergy. More than 65% of our solid production residual material is reused, with the little remaining being cleaned and processed by legal, professional companies. YFY is not just working to reduce our resource use. We are working to reclaim the value inherent in all resources.

Handling of Solid Production Residual Material (PRM) G4-EN23

Energy Plan

2016 YFY Raw Material Use Overview

Total Weight

784,540

220,225

61,219

1,400,092

827

233,844

Raw Material

Imported raw wood pulp (sheets) (tons/year)

Domestic raw wood pulp (sheets) (tons/year)

Imported recycled paper (tons/year)

Domestic recycled paper (tons/year)

Imported paper (tons/year)

Paper (tons/year)

The data table above covers only Taiwan and the Yangzhou Mill

2016 Reuse of Solid PRMs

Sludge

Slag

Coal ash

146,645

132,590

141,044

102,871

86,319

114,065

70.1%

65.1%

80.9%

The data table above covers only Taiwan and the Yangzhou Mill

Reuse rateItemTotal amount (tons)

Reused amount (tons)


Scope 1 Scope 2 Total Scope 1 Scope 2 Total Scope 1 Scope 2 Total

694,754

458,827

67,215

1,220,796

2014

157,483

91,106

45,504

294,093

852,237

549,933

112,719

1,514,889

665,573

407,620

61,201

1,134,394

2015

156,823

106,511

47,094

310,428

822,396

514,131

108,295

1,444,822

658,330

426,091

74,259

1,158,680

2016

167,963

99,885

55,201

323,048

826,292

525,975

129,459

1,481,727

SOx

NOx

CO2

HCl

Emissions (tons/month)

Average emissions density (ppm)







320

1,085

410

1,269

123,477

-

1.0

6.3

The above data table only includes emissions in Taiwan.

Other Gas Emissions

Air Quality Control and Monitoring

Detailed emissions statistics are recorded below

According to on-site inspections by the Industrial Development Bureau, Ministry of Economic

Affairs (MOEA), the equipment owned by YFY only produces emissions of carbon dioxide (CO2),

methane (CH4) and nitrous oxide (N2O). Hydrofluorocarbons (HFCs), perfluorocarbons (PFCs),

sulfur hexafluoride (SF6) and nitrogen trifluoride (NF3) are not produced. In 2016, due to

increases in the production quantity by the Consumer Products Group and the changes in the

product combinations among the Forest Products and Fine Paper and Packaging Groups,

greenhouse gas emissions increased slightly. Our total emissions amounted to 1,482,464 tons

of carbon dioxide-equivalent of emissions.

G4-EN15 G4-EN16 G4-EN20 G4-EN21

Business Group

Forest Products and Fine Paper

Packaging

Consumer Products

Company Totals

The above data includes only emissions in Taiwan. Relevant emissions coefficients are derived from the Environmental Protection Administration´s greenhouse gas emissions coefficient management table version 5.0.


The UN´s COP 21 and SDGs as well as Taiwan´s ″Greenhouse Gas Reduction and Management Act″ clearly demonstrate that climate change is an issue that everyone must face. Even though we may not be able to effectively reverse the greater trend of climate change in such a short time, but planning adaptations for extreme weather is a pressing issue as we seek to safeguard the safety of our personnel and facilities as well as protect the environment. YFY investigates the potential impacts of climate change on the company through its Sustainability and Social Responsibility Office. Combining the expertise and technology of the three major platforms, we deal with climate events, environmental resource changes and legal compliance through concrete action. We face risk with a positive attitude to bring the possibility for innovation.


G4-EN31 G4-EC2

Item Type of Risk Potential impacts and risk Management policies and concrete actions


In recent years, sudden storms and winds have taken over the news. As typhoons continue to worsen and thunderstorms begin to increase, extreme climate events destroy buildings and facilities and threaten the safety of our personnel and products.

• Renovation and re-painting of wave boards at steam-powered mill• Updating outdoors switchboards and rain-shielding devices• Strengthening lightning rods for mills where thunderstorms pose a

significant threat

Extreme Weather Events Concrete

• Developing of replacement biofuels• Developing new sources of energy such as hydrogen energy• Improving efficiency of electricity plants and production facilities• Saving energy through pipeline insulation• A total of $NT 49.498 million was invested in energy and resource

management facilities in 2016

Production of fossil fuels such as petroleum and coal are plunging, leading to increases in production cost

Shortage of Fossil Fuels Concrete

• Conserving use of water through recycling water• Improving collection of discharge water• Water use and water processing facility audits at mills• Total investments on water resource processing in 2016 reached $NT

278 million

Changes in rain patterns lead to lengthened dry seasons. If our water use is limited, product manufacturing will be affected.

Shortage of Water Resources

Concrete

• Setting our discharge standards more stringent than the law requires• Installing live monitoring systems for careful checks• Actively participating in advocacy events both in Taiwan and abroad;

understanding the trends and strengthening communication

Government regulations continue to grow more and more stringent. The uncertainty around the emissions reduction goals of both central and local governments indirectly affect facility improvement and reuse projects.

Changes in Environmental Regulations and Advocacy

Legal

• Installing waste product reuse facilities to effectively reduce waste• Improve discharge water management facilities to facilitate reuse• Improve energy use efficiency

Fuel taxes as well as waste and discharge water management fees will directly lead to increased production cost.

Energy/Fuel Taxes, Waste and Discharge Water Management Fees

Legal


YFY´s total investments in environmental protection amounted to $333.773 million. 83.36% of that amount was composed of investment in water resource processing facilities. Investment in air quality control and management facilities and solid production residual material reduction facilities accounted for 1.81% and 14.83% respectively.

Relevant environmental protection investments and expenditures composed mainly of the following:

Air quality controland management

facilities investments

1.81%83.36%

Water resourceprocessing


Solid productionresidual material reduction


14.83%

In order to accommodate for the expansion of production and to improve the stability of the operations of the existing pollution prevention facilities, the main investments YFY will make over the next three years with regards to pollution prevention includes the following. The total planned amount of investment is $NT 491.093 million.

1. Improvement of processing systems of biological material in water resources

2. Installation of Fenton Fluidized Beds 12000 CMD

3. Reduction and drying of sludge

4. Filter Electrification Improvement Project

5. Updates to air pollution monitoring system

6. Install automatic water volume and quantity monitoring system

7. De-sulfurization and de-nitrification systems

8. Separation of paper and plastic

YFY regularly collaborates with independent third parties

such as the DNV, SGS, BSI as well as the Bureau of Energy,

Ministry of Economic Affairs to install a variety of

environmental management systems such as the ISO14001

(Environmental Management), ISO 500001 (Energy

Management), ISO 14064 (Greenhouse gases), FSC-CoC

(Forest Stewardship Council – Chain of Custody), PEFC-CoC

(The Programme for the Endorsement of Forest

Certification), ISO50001 and certification for

standardization of carbon footprints in products.

• Coal stove manifold removal and installation works

• Coal boiler ash supply system and ash pipe replacement project

• Bag filter replacements

• Wind-powered system for selection

• Heat-powered system for separation

• Repairs for Incinerator Sludge Transportation Machine

Main capital expenditures in air quality control and management:

Main capital expenditures in solid production residual material processing systems:

Main capital expenditures in water resources system:

• Maintenance and purchase of equipment for water treatment plant

• Works for improving discharge water collection

• Automatic CWMS discharge water monitoring system



Before establishing a collaborative relationship with potential suppliers, YFY´s procurement personnel carefully consider the quality and features of the product. If the transaction amount reaches a certain threshold, both new and old suppliers must sign the ″Honesty in Transactions Promise″, to ensure that products, services, and production mechanisms are in compliance with environmental regulations. Suppliers are also asked to show their material safety data sheet (MSDS), which contains environmental information such as information related to toxicology, biology and waste disposal. YFY also sends products from suppliers to independent labs to carefully check the physical and chemical properties of their products to ensure that everything is in compliance with laws and YFY´s needs.

YFY conducts periodic supplier audits every six months. If products or services are deemed to pose a danger, suppliers are asked to improve in the future, and their scores are marked down during audits and this incident noted. If suppliers do not respond to our requests for improvement, we will consider ceasing our relationship with them depending on its severity.

All machines and pipes at YFY mills must undergo daily audits and inspections as well as yearly checkups to examine the readiness of our facilities. If there are any concerns, repairs are scheduled immediately. Thanks to the efforts of our employees and technicians, there were no oil, fuel, or chemical spills in 2016 under YFY´s watch. We will continue to improve and keep up our strong record.

Environmental Regulation Compliance and Serious Leaks

G4-EN24

In 2016, YFY dedicated itself to protecting the environment through a variety of measures, such as water resource management, air quality control and management, solid production residual material processing and noise pollution control and management. Some production facilities saw unusual numbers that exceeded pollution standards due to force majeure, which we took action quickly to address. In 2016, we were fined a total of 4 times by relevant authorities and paid $NT 1.455 million in fines. Chief amongst these was water pollution prevention. With respect to the issues pointed by relevant authorities, YFY has taken appropriate measures in response. We will continue to actively reduce our impact on the environment and contribute our part in building a clean future.

G4-EN29

Environmental protection is the responsibility of all YFY employees. If anyone discovers any environmental concerns, they may contact the local mill management office by means of telephone, mail or email. They may also contact the YFY Sustainability and Social Responsibility Office.

YFY will appoint personnel to look into the course of events and the complaint through telephone interviews or in-person clarifications and provide a prompt response. Complaints will also be dispatched to relevant supervisors, the Energy Resource Reuse Platform, the Water Resource Reuse Platform, or the Occupational Safety and Sanitation Management Platform, according to the type of event. They will then provide appropriate consultation and assistance with regards to repairs and emergency measures for mills.

Complaints about Major Environmental Issues

@


Contact Information

Address

Tel

Email

Sustainability and Social Responsibility Office, Taipei Head Office, YFY Inc.

No. 51, Sec. 2, Chongqing South Rd. Taipei City 10075, Taiwan

02-23961166

[email protected]


More than 1.7 billion people around the world live near rivers. Water provides agriculture, energy and industry. It brings us a better life. However, over the past decades, with humans´ unfettered use of water, in addition to climate change and extreme weather events, water is no longer an inexhaustible resource. If we do not take action to address our use of water, according to statistics from the United Nations, two-thirds of the global population will live in areas where water is scarce by 2025. Taiwan is home to desolate terrain. Although rain is abundant, it is difficult to preserve and capitalize on this resource, making the imminent water shortage crisis all the more important. We must understand that water resources are finite and irreplaceable. They are the foundation of human activity. It is only by being more conscious of our water usage, that we can transform our future.

This was the motivation behind the foundation of the Water Resource Reuse Platform. Director Cheng-Guo Lin has an incredible amount of production and water management experience down his belt. Through data and estimates from measurements on the ground, continuous monitoring and bucket cell design, we monitor water discharge at each of our mills, promote water savings and reuse, build a water resource database and sludge processing guidelines, as well as facilitate the exchange of technology and experience. Our platform provides water processing consultation for outside companies as well, helping the paper industry reach new heights in water processing technology.

Water Resource Reuse Platform

All of YFY´s mills are located in areas with abundant water and outside protected areas and agricultural areas. Most of our water originates from ground water. We do not compete with local residents for water, and we consciously monitor our water use. We do not take too much of the water. It is only by cherishing every water source, that we can ensure the sustainability of water resources.

YFY reused 2,497,366 m3 of water, of which 2,349,404 m3 was used in bathrooms, cleaning and in lowering temperatures. The other 147,962 m3 was reused in the production process.

Water Resource Use

G4-EN8 G4-EN9 G4-EN10

2016 YFY Water Resource Use Overview

In the past, water processing focused on processing the end products, meaning purifying discharge water. YFY goes beyond that. Through a holistic approach, we start with changes to the production process and the product. By combining this with backend water processing technologies, we can facilitate close communication between the production end and the water processing end, allowing seamless collaboration and ensuring that our discharge water is pristine.

YFY´s water discharge system includes primary chemical precipitation and secondary biological processing, effectively reducing the chemical oxygen demand (COD) and the biochemical oxygen demand and allowing for compliance with government regulations. Some processed discharge water is recycled for use in production. Other water is naturally discharged to water processing plants or rivers. With the exception of the Hualien Mill and Jiutang Mill, which discharge water upstream from wetlands, other mills´ discharge locations do not coincide with protected areas and areas.

Perhaps worth mentioning, Jiutang Mill´s discharge water is the main water source for Old Railroad Bridge Education Wetland Zone, the largest artificial wetland park in Taiwan. The clean discharge water dilutes the waste water from Chuliao Ditch families and agriculture, improving its water quality, reducing the environmental impact on Gaoping River and providing a natural classroom for people to hang out and coexist with birds and insects. Through the bond of water, ecological restoration, and reforestation, YFY is committed to sustainability. (For more information about the Jiutang Wetland, please refer to the 2014 YFY Corporate Social Responsibility Report)

Water savings and reuse of water is complicated. One must ensure the facilities and the quality of the products are not damaged. The Water Resource Reuse Platform investigates the need for water at water use points at each of the mills. We tabulated the locations where it would be feasible to use reused water instead of tap water. In 2016, YFY completed 46 water savings projects, saving 11,121.16 m3 of water. By saving water and reusing water, we can fundamentally minimize our environmental impact.

G4-EN22Discharge Water Processing

Water Source

Tap water

Ground water

Surface water

Reused water

Total water use

Total water discharge

Amount (m3)

979,724.3

30,526,149

3,765,054

2,497,366

37,768,293

38,397,670

% of Total

2.6

80.8

10

6.6

N/A

N/A

Water Resource Use

http://www.yfy.com/album/tw_csr_reportdownload_dla/5677a8c066a4d.pdf

http://www.yfy.com/album/tw_csr_reportdownload_dla/5677a8c066a4d.pdf


YFY Effluents Processing Procedure

Aerobic Biological Treatment

Aeration tank 1Final

Sedimentationtank

Effluents tank

Slow mixing tank Chemicalsedimentation

tank

Storage TankFilter press dehydrator

Fast mixing tankMixing tank

Sludge bar screen

ProductionDrainWater

Effluents

Physical/ Chemical Treatment

Sludge Process Procedure

Sludge

Sludge

Sludge

Anaerobic/Facultative Anaerobic

Process

Anaerobicselector tank

Deep aerationtank

Biological filter

Aeration tank 2

Removal

Reuse

Discharge Water Processing

YFY Discharge standards

Mill

100

160

150

180

180

100

100

100

560

100

100

100

30

30

50

30

30

30

30

30

480

30

30

30

Discharge standards

Note: Discharge water at the Changhua Mill operates in accordance with standards of the local industrial area

Chemical oxygen demand emission standards (mg/L)

Suspended solids discharge standards (mg/L)

Jiutang Mill

Taitung Mill

Hualien Mill

Xinwu Mill

Chenggong Mill

Taoyuan Mill

Zhunan Mill

Pek Crown Mill

Changhua Mill note

Kaohsiung Mill

Yangmei Mill

Qingshui Mill


YFY´s occupational safety and health operations were previously conducted by the Management Department at each mill as well as the Occupational Safety Office. Each mill set its own management policies according to its production procedure and operations. Then, these policies and incident reports were reported back to the head Office. In order to oversee and coordinate occupational safety and health operations and improve experience sharing among mills, plans for the establishment of the Occupational Safety and Health Management Platform began in January of 2016, as YFY took to each of our mills to tabulate existing practices and regulations. We immersed ourselves in the working environment of our employees, repeatedly conducting safety inspections and collecting testimonials from the staff on the ground about the operation procedure. Over the span of several months, combining a large body of research from inside and outside the company, YFY established its guidelines for occupational safety and sanitation management. Its various mills and subsidiaries follow these guidelines in setting their own guidelines, safeguarding the safety of all YFY employees through proper regulation.

In addition to setting management policies and regular and irregular audits, in order to prevent occupational hazards or injuries, the Occupational Safety and Health Platform also added employee safety and health guarantees in the administrative guidelines and educational training.

1. Procurement Management: Clearly outlining occupational safety procedures for raw material procurement and building projects, sent to each mill for publicization and implementation.

2. Training of Safety Personnel: Fostering talent in occupational safety and sanitation; regularly holding YFY occupational safety and sanitation meetings to improve safety across mills in Taiwan.

3. Contractor Management: Revising management policies towards contractors; requiring contractors and groups that issue such contracts to undergo educational training.

4. Employee Health Management and Promotion: Arranging for sanitation education and health-related seminars; placing medical personnel on site at mills for consultation and inspection.

″When it comes to safety, there is no gray area. It is either safe, or it is dangerous! I would rather we are all timid and tirelessly obsessed about details to rid this place of every single small potential hazard. From the start, our goal has always been to completely eliminate these incidents!″ director Chung-Chi Shen of the YFY Occupational Safety and Sanitation Management Platform often says. Through our YES system and the collaboration and implementation through the Occupational Safety and Sanitation Platform, we hope that YFY will reach its goal of completely eliminating occupational safety incidents by 2018.

Social Aspects

YFY´s employees are our most important stakeholders, and occupational safety and health management is the most direct way to safeguard the life and well-being of our employees. In order to minimize injuries and achieve our zero-incident goal, YFY collects and references previous incidents from various other industries as well as itself. It uses this information to look into ways to prevent various types of occupational hazards. Research shows that 98% of occupational safety incidents are caused by staff negligence. In order to reduce this threat and provide a safe working environment for our employees, we must start from the fundamentals: personnel management and education training. Therefore, in September 2016, YFY founded the Occupational Safety and Health Management Platform.


Structure of the Occupational Safety and Health Management Platform

Chairman

Chief Strategy Officer

Occupational Safety and Health Management Platform

Packaging and Containerboard Group

Forest Products and Fine Paper Group

Shin Foo

ng Sp

ecialty and

Ap

plied

Materials

UPC

Paper

Printing B

usiness Gro

up

Bo

ardTek Electro

nics Co

rp.

Jiutang M

ill

Taitung M

ill

Hualien M

ill

Ever Gro

wing

A

griculture B

iotech

Qing

shui Mill

Yangm

ei Mill

Co

ntainerbo

ard M

ill

Industrial Pap

er Mill

Vietnam

China

Consumer Products Group

Overseas Other Businesses

Social Aspects62


Occupational Safety and Health Committees are established under the YFY´s Head Office and all of its mills across Taiwan. These committees are composed of occupational health and safety experts, mill supervisors, as well as labor representatives who are selected by the union or by the employees. Labor representatives constitute between 34% to 45% of the committees. The Committees provide the workforce, the company, as well as the occupational safety and health professionals a means of communication that is both reasonable and equal.

Occupational Safety and Health Committees G4-LA5

YFY sincerely hopes that every employee can work assured that they will go home safely. Therefore, we instituted the ″Health Promotion and Prevention of Unnatural Work Stress and Related Diseases Policy″ and the ″Occupational Safety and Health Guidelines″ that all employees must follow when working. These guidelines were passed by labor representatives.

The ″Occupational Safety and Health Guidelines″ clearly sets out rights and responsibilities for employees and contractors with regards to the safety standards, educational training, health instruction, emergency services and incident reporting. The ″Health Promotion and Prevention of Unnatural Work Stress and Related Diseases Policy″ sets out ways to prevent various occupational hazards and potential points of notes. An excerpt from the health promotion and management policies are included below:

• New hires must undergo physical checkups or turn in reports of previous checkups. Current employees should undergo regular health checkups. For employees working in areas where noise pollution is prevalent, annual special checkups are provided (such as powder-specific health checkups, noise pollution health checkups, ionizing radiation health checkups, etc) to carefully monitor the health status of employees.

• Take precautionary measures to prevent diseases that are easily caused by repetitive processes, shift-based, nighttime work, or working for long hours.

• To prevent diseases in warm areas, take measures to lower the temperature of the workplace as deemed necessary according to the weather conditions, providing places with lower temperatures for rest.

• When employees feel unwell or abnormal, please immediately report to the authorities or other supervisors.

• During regular inspections, full-time employees must undergo evaluation of ten-year risk of cardiovascular disease into low, medium and high risk groups according to the Framingham Cardiac Risk Score.

Incidences of Occupational Safety or Health Hazards

Thanks to our efforts to invest in personnel, facilities, and regulations, the occupational diseases rate (ODR) for YFY was zero. In addition, none of our employees conducted work that exposed them to high risk of disease. In 2016, 22 of our employees were incapacitated by injuries. Relevant statistics are listed as follows:

Injury Frequency Rate

Injury Severity Rate

Injury Rate

Occupational Diseases Rate

Lost Day Rate

Absent Rate

Incidences of Death on the Job

2.42

138.6

0.48

0

27.7

0.22%

0

Frequency Rate = Frequency of Incapacitation × million / total work hoursSeverity Rate = Lost Days × million / total work hoursInjury Rate (IR)= Total number of incidents of injury × 200,000/ total work hours Occupational Diseases Rate (ODR)= Total incidences of occupational diseases × 200,000/ total work hours Lose Day Rate (LDR)= Days lost due to injuries × 200,000/ total work hours Absent Rate (AR)= Days absent due to injuries / total work hours × 100%

Type of incident

Impact

Caught in Rolling Object

Sprains

Cuts and bruises

Slipping

Incidences

8

6

3

3

2

% of Total

36.4%

27.3%

13.6%

13.6%

9.1%

G4-LA7 G4-LA8

The above occupational safety incidents data only covers Taiwan


Employee Care

Our employees are one of the three main pillars of YFY´s corporate social responsibility mission. We provide employees with a safe working environments and strong benefits so that employees would not have to worry as they develop their own professional expertise to contribute to a better future for themselves, the company and society.

In order to take good and comprehensive care of employees, YFY established the ″YFY General Employee Benefits Committee″, which all employees are free to join. Not only do we contribute to employees´ labor and health insurance, as required by the Labor Standards Act, in addition to the national pension, they also enjoy various benefits, such as:

• New Year and holidays welfare merchandise• Birthday present• Wedding present• Maternity leave and gift• Complimentary subscription to Preschool

Education Monthly• Complimentary subscription to Preschool

Children´s magazine• Education scholarship for employees' children • Reward for active employees with excellent

achievements on continuing education at tertiary institutions

• Team building funding support• Association recreational activity funding support• Cultural and recreational activity funding support• Hospital relief fund for the injured• Retirement provision• Employee group accident insurance• Disability funding support• Bereavement pension for employees and

employees' family members• Employee meal allowance• Preferential schemes for participation in the

activities, courses offered by and purchase of products from Hsin-Yi Foundation and Hsinex International Corp

Employment

G4-LA1 G4-LA2 G4-LA3 2016 YFY New Hires Totals and Composition

2016 Total Employees Turnover and Composition

Female

48

20 (41.67%)

1 (2.08%)

19 (90%)

19 (100%)

2016 Employee Parental Leave Numbers and Rates

Number of employees who qualified for parental leave

Number and rate of local employees who applied for parental leave

Number and rate of foreign employees who applied for parental leave

Number and rate of employees reinstated

Number and rate of employees who retained

Male

80

14 (17.5%)

0 (0%)

14 (100%)

14 (100%)

Local employees

Foreign employees

Total

368 (3.49%)

434 (4.12%)

802 (7.61%)

288 (2.73%)

170 (1.61%)

458 (4.35%)

Male

21 (0.20%)

5 (0.05%)

26 (0.25%)

96 (0.91%)

89 (0.84%)

185 (1.76%)

79 (0.75%)

58 (0.55%)

137 (1.30%)

3 (0.03%)

1 (0.01%)

4 (0.04%)

855 (8.12%)

757 (7.19%)

1612 (15.3%)

30 andunder

50 andover

30 – 50years old

Female

30 andunder

50 andover

30 – 50years old

Total

Local employees

Foreign employees

Total

389 (3.69%)

359 (3.41%)

748 (7.10%)

537 (5.10%)

143 (1.36%)

680 (6.46%)

Male

235 (2.23%)

3 (0.03%)

238 (2.26%)

108 (1.03%)

59 (0.56%)

167 (1.59%)

106 (1.01%)

45 (0.43%)

151 (1.43%)

54 (0.51%)

1 (0.01%)

55 (0.52%)

1429 (13.57%)

610 (5.79%)

2039 (19.36%)

30 andunder

50 andover

30 – 50years old

Female

30 andunder

50 andover

30 – 50years old

Total

Note: Local employees refer to employees who hold full citizenship of the relevant locality. Locations refer to YFY mills and offices. Reinstated Rate = Actual reinstated employees after parental leave / number of employees who shall be reinstated after parental leave * 100%. Retention Rate = number of employees who were still on the job 12 months after being reinstated after parental leave / number of employees reinstated after parental leave in the last reporting period * 100%

Social Aspects64

If employees have any questions with regards to rights or benefits, they can communicate with their union or their Human Resources department, such as telephone, email, or letter.

When unions receive complaints from employees, they will step in to look into and respond to the complaint. Unions hold regular meetings in accordance with their charter. If major incidents occur, there will also be emergency meetings, to which mill supervisors and other high-level supervisors participate to communicate the organization´s policies and listen to the needs of employees. It is only through up-to-date communication and discussion that employees and employers can engage in positive discussion, protecting the full rights and benefits for our employees.

The Human Resources Department is always on the lookout for relevant regulations and systems, confirming that benefits, such as the salaries of employees, continue to exceed legal and industry standards. The behavior of all YFY employees are governed by the regulations set forth internally, such as the Behavioral Guidelines, Benefits Handbook, Job Duties, and Severance Guidelines. Each of the policies clearly indicates the obligation to inform, such as the following statements in the Severance Guidelines:

1. Those who have worked more than 3 months but less than a year, must inform YFY ten days prior to leaving.

2. Those who have worked more than one year but less than three, must inform YFY twenty days prior to leaving.

3. Those who have worked more than three years, must inform YFY thirty days prior to leaving.

Communication between Employees and Employer

G4-LA4

The paper industry is an industry that fulfills the basic needs of consumer, one that is at the forefront of our progress. Paper products improve quality of life, and investments in industry create job opportunities that can lead to prosperity for the local economy. Each of YFY´s mills hires a large number of local residents. We are dedicated to nurturing and promoting local experts, sharing our internationally-acclaimed experience with local communities and achieving co-prosperity with them.

In order to allow YFY employees to live without worrying about their financial security, at every single YFY mill, all employees have salaries above the minimum wage of the locality. In addition, YFY´s base wage´s ratio to Taiwan´s legal wage is 1.18 to 1.

YFY Market Presence G4-EC5

Most of YFY´s high-level managers are promoted from within the company. Nurturing human resources and capital can both lead to overall improvements in the company and contribute to the careers of employees. Therefore, YFY highly values educational training and performance appraisal. YFY´s HR department houses experts on educational training and performance appraisal. We arrange various types of training and provide consultation to put the right people at the right positions to allow for the best outcomes.

We break down and define the jobs of each position to discover the core professional competency needed for its operations. We use this as the main focus of our performance appraisals. 100% of our employees undergo performance appraisals, without regard to gender, race or nationality. Held every half a year, our performance appraisals are divided into three phases, employee self-evaluation, supervisor meeting, and supervisor evaluation. After the evaluation is completed, customized feedback and suggestions are provided to each employee, for them to look back at their performance and use as reference for career planning and educational training.

YFY provides a comprehensive array of opportunities and challenges for our employees to strengthen their professional competency. Through educational training, we provide a wide variety of learning resources to provide different training programs for different stages in careers. We provide corporate culture training, management training, and professional competency training. We also continue to strengthen our language learning opportunities and corporate university projects to encourage our employees to engage actively in improving one´s own abilities and knowledge to build a team of professional managers for Taiwan.

Training and Education

% above legal wage

100%

100%

YFY Educational Training Overview

Total training funds

Average training funds per employee

Total training hours

Average training hours per employee

8,480,000

805

122,642

11.6

NT

NT

hr

NT

Employees often get into accidents due to unfamiliarity with the facilities or confusions about the procedure. Therefore, YFY has extended educational training to all places where work is performed, instituting the One Point Lesson (OPL) project in corners. We invited members from each level to document the collective knowledge and experience of YFY employees. Presented in a simple, clear manner, this knowledge is condensed on a piece of A4 paper, which is easily readable in 10 minutes. This allows us to quickly improve the quality of operation and management.

One Point Lesson (OPL)

Employee Care

Local employees

Foreign employees

Male

7077

1697

Female

1194

565

Total

8271

2262

Note: Local employees refer to employees who hold full citizenship of the relevant locality. Locations refer to YFY mills and offices

Economic Aspects


Everywhere in Taiwan, there are YFY locations. We use our existing logistic network to donate goods, such as tissue paper, laundry detergent, and dishwashing liquid to charity organizations. We donate our resources directly to those who need it most and work together to take care of each corner of our community.

Donation of Goods

Since its establishment, YFY is now 90 years old. Having grown to its size today, YFY continues to commit to its vision of using the power of its business to better society. YFY understands that in order to fulfill its corporate social responsibility in full, we cannot simply make charity donations or hold large, one-time charity events. We must capitalize on our resources and expertise to solve problems for society at large and create value for sustainability.

In terms of social engagement, YFY focuses on the concept of community co-prosperity. Each of our mills has designated employees to serve as the point person for communication with the local community. To understand the problems and issues that the local community faces, we also regularly make visits to nearby chief of villages and borough chiefs, as well as schools and local charity organizations. By earnestly listening to their concerns and communicating face-to-face, we can come up with the best solution together. A humanitarian spirit and long-term dedication is our way of building a mutually beneficial relationship with local communities. For example, with regards to the sound and water pollution issues that community residents are often most concerned about, we set up 24-hour discharge water monitoring systems at our main mills to allow community residents to log on at any time to monitor the water quality. In order to alleviate residents´ concerns, some of our mills even set up soundproof walls where it borders a community.

Local Community Engagement G4-SO1

The Taitung Mill, established in 1968, is YFY´s second paper mill. Over the past half a century, we have worked side by side alongside Taitung´s residents. Taiwan´s resources are unequally distributed between the East and the West. Organizations in the East face severe difficulties in gathering personnel and resources. In 2016, Typhoon Nepartak ravaged Taitung, its rainfall and winds toppling houses, trees, hospitals and fields. The county was inflicted with widespread flooding and electricity shortages, causing $NT 4 billion worth of disaster-related damages. After the storm, we immediately visited Taitung to understand the situation and damage done to Taitung and its residents. The Taitung CCF, which has long established a partnership with YFY, informed us that many of the disadvantaged families that the CCF works with have been badly damaged by the storms. These disadvantaged families do not have the capacity to raise funds to alleviate this sudden financial loss and the loss of their house. Now that summer vacation is almost over, when students go back to school, they must pay tuition. This is yet another burden for them.

YFY decided to expand its cooperation with Taitung CCF, launching the ″May Hope Overcome the Storm″ reconstruction project. Starting at the Taitung Mill, we tabulated and took care of our colleagues whose homes were damaged. Then, we expanded our efforts to nearby boroughs and communities, and then the families serviced by the Taitung CCF. The ″May Hope Overcome the Storm″ project included three main elements, including donating goods, rebuilding houses, and providing scholarships. 368 of our colleagues from across 23 companies under YFY participated.

Typhoon Nepartak Reconstruction ProjectG4-EC1

In 2016, YFY Consumer Products Group donated 529,873 units of household products, worth a total of $NT 4,639,779 to 83 non-profit organizations across Taiwan.

→For detailed information about this project, refer to page 33

Scholarship offers:

Our colleagues and the company donated a total of $NT 1.6 million, helping 560 disadvantaged children to go to school.

Charity organization goods donation:

809 paper boxes and cleaning supplies for 16 charity organizations local to Taitung

Repairs for damaged buildings:

1. collecting consumer electronics, mattresses, computers and other consumer goods

2. sponsoring three families who faced severe damages, hiring local builders to help repair damaged buildings.

http://www.yfy.com/album/en_csr_reportdownload_dla/59b8b324da40d.pdf


Social Aspects66



In 2015, YFY launched a three-year service project named ″Taitung Academy″. We bought 563 sets of books, with one copy at the YFY Head Office in Taipei and one at the Taiwan Fund for Children and Families Center in Guanshan, Taitung. We invited our employees as volunteer reading partners. Every Wednesday afternoon, 20 YFY volunteers and 20 children from Guanshan, Taitung read and discuss a book over videochat together. Through the children´s books, the children discuss a wide range of issues with the volunteers, including interpersonal relations, emotions, the body, gender, death, the environment, etc. To date, the Academy has logged more than 640 hours of reading with children, witnessing their growth.

YFY Taitung Academy

Guji-Guji is a piece by Taiwanese picture book author Chi-Yuan Chen, published by the Hsin Yi Foundation. The book describes the story of a baby alligator raised by a duck mother. Through child-friendly illustrations and text, the book discusses issues of parental relations and self identity with children. The picture book Guji-Guji has received widespread acclaim internationally, winning the 2015 Sweden IBBY Peter Pan Prize. It has since been translated into 15 languages, including English, French and Japanese, winning spots in the top 10 bestseller lists among children´s books in the US and in Korea. In 2015, Guji-Guji was adapted by Boulevardteatern as a children´s play, going on tour around the world for more than 100 performances.

Spanish Puppetry Group Guji-Guji´s Charity Performance

The Hsin Yi Foundation, an organization under the YFY corporate family, has promoted pre-K education for more than 40 years, participating in research, publication and activities with the goal of ″protecting the one and only childhood for our children. They provide comprehensive and systematic services that grow alongside tens of thousands of parents, teachers and children. In addition to the Hsin Yi Foundation working on pre-K education, in 2016, YFY continued to involve itself into the cultural education sector, continuing the ″YFY Taitung Academy″ program and working alongside the Hsin Yi Foundation to organize a charity performance by a Spanish puppetry group. We hope to expand the vision of these children to open up infinite possibilities beyond their imagination.

Seizing the rare opportunity of Boulevardteatern´s Guji-Guji being performed in Taiwan, YFY organized a charity performance, inviting children from four elementary schools nearby the Xinwu Mill at YFY, inviting them to come along with their parents to the Ji-Shin Theater downstairs at the YFY Head Office. More than 180 children, parents and teachers attended the event. The understanding and imagination of these children transcended national and linguistic borders. Its plot, rich with meaning, not only accomplished its goal to educate the children; it also gave them an unforgettable childhood memory.

Employee Care






YFY Product Responsibility

Whether it is the touch of the paper, the flagrance of our cleaning products, our packaging, or our prices, every part of YFY´s product development comes from our genuine concern for our customers. In addition to satisfying the needs of consumers, we also aim to protect the health of consumers and reduce their environmental impact.

Transactions between businesses (B2B) conducted by YFY are recorded through electronic barcoding, which documents the specifications, production source, production date and other relevant information about its production. The Quality Assurance Department is responsible for monitoring the quality of and raw materials used in products to best meet customer demands. If clients have any concerns about the products, they can contact each point person of operations or the Head Office so that their concerns can be processed within the shortest possible time. With regards to consumers (B2C), YFY provides a free-of-charge hotline for consumer service, as well as a consumer service email address and a real-time question answering system online. When customer service executives receive the concerns and questions consumers have about our products, they first seek to understand and work out the details of the incident and respond to the inquiry at their first convenience. If this is a major question that cannot be immediately be dealt with, customer service will immediately contact the production or logistics departments to understand potential causes and solutions to the appropriate inquiry and provide an answer within 10 business days. YFY´s products are in compliance of the law, from its research and development to its sale. In 2016, our products and services have no record of violating relevant laws and regulations, and our labeling, advertising, privacy, and data loss prevention practices have not been in violation of the law. YFY will continue to commit to this high standard to allow our products to continue to win the market as well as the hearts of consumers.

Product labeling is the most direct way of communicating with our consumers. All of YFY´s products, including Mayflower, Delight, Tender, Orange House, FreshSense, and other brands, provide clear and transparent labels. To provide customers with a more complete understanding of our products, we do not provide false information or conceal any information. This allows our customers to use our products with the assurance that they are safe.

YFY´s consumer products are produced with recyclable materials. With correct use, we can minimize the negative impacts on the environment. In the hopes of reducing our environmental impact, our supplementary information section, we also include recommendations for consumers with regards to disposing of our products as well as recommended usage.

Product Labeling G4-EN27

YFY Consumer Labeling Information Table:

Labeling Information

Supplier

Composition of Contents

Instructions and Supplementary Information for Product Use

Disposal and its Environmental and Social Impact

Yes

√

√

√

√

No

G4-PR2

G4-PR3

G4-PR4

G4-PR6

G4-PR7

G4-PR8

G4-PR9→For more information, please see our promotion clip on the disposal of toilet paper.

Others: Date of Production, Certification, Free-of-Charge Consumer Service Hotline, Safety Guarantee

The above information uses Mayflower, Delight, Tender, Orange House, and FreshSense as examples.

https://www.facebook.com/yfyshop/videos/1010485595752018/

Contact Information

Address

Tel

Email

Sustainability and Social Responsibility Office, Taipei Head Office, YFY Inc.

No. 51, Sec. 2, Chongqing South Rd. Taipei City 10075, Taiwan

02-23961166

[email protected]

Sustainability is a core vision of YFY. In order to demonstrate its renewed commitment to sustainable management and its determination, since 2012, YFY has composed Corporate Social Responsibility Reports annually. This report was developed according to the Core option of the GRI G4 sustainability report guidelines. By adopting an internationally recognized standard, we can focus on disclosing the most important pieces of information, while also meeting the expectations of stakeholders in fully and systematically disclosing the strides YFY have made in achieving sustainable development. This year´s annual report was certified by SGS, earning its AA1000 certification.

Appendix

Report Profile G4-28~33

The contents of this report indicate YFY´s performance in the areas of economy, quality and service, and social and environmental activities. This includes its main locations of operation in Taiwan and China, including: Yuen Foong Yu Packaging Inc., Yuen Foong Yu Consumer Products Co., Ltd., and Chung Hwa Pulp Corp. Part of the financial performance is drawn from the annual report, and the boundaries are extended to cover all investments and joint ventures included in the consolidated financial statements, as specifically indicated in the report. Additionally, part of the human resources and environmental performance cover data from YFY's mills in China and the explanatory notes follow the relevant statistical data.

The locations of operation covered by this report are summarized as follows:

I. Offices: Taipei Head Office

II. Packaging Groups:

a. Taiwan: Taipei Head Office, Xinwu Mill, Chenggong Mill, Taoyuan Mill, Changhua Mill, Pek Crown Mill, Zhunan Mill, Kaohsiung Mill.

b. China: Tianjin Mill, Qingdao Mill, Yangzhou Mill, Kunshan Mill, Nanjing Mill, Suzhou Mill, Shanghai Mill, Jiashing Mill, Fuzhou Mill, Xiamen Mill, Guangzhou Mill, Zhongshan Mill, Dongguan Mill.

III. Consumer Products Groups:

a. Taiwan: Taipei Office, YFY Store, LiVEBRiCKS, Yungshungpu, Qingshui Mill, Yangmei Mill.

b. China: Beijing Mill, Yangzhou Mill, Kunshan Mill, Dingfung Mill.

IV. Forest Products and Fine Paper Groups:

a. Taiwan: Taipei Head Office, Jiutang Mill, Hualien Mill, Taitung Mill.

b. China: Dingfung Mill.

Report Boundaries and Scope

YFY´s previous corporate social responsibility report was publicly released in September of 2016.

Unless otherwise stated, all activities and data are from January 1st, 2016 to December 31st, 2016. In the future, YFY will continue to issue annual corporate social responsibility reports, with the next one slated to be released by September of 2018.

Reporting Cycle

The business performance figures in this report are compiled according to the International Financial Reporting Standards (extracted from the annual report), and are represented in New Taiwan Dollar (NT$). Relevant internal departments provide the performance figures regarding the society and quality. The environmental performance figures are provided by all mills, respectively, represented in the internationally recognized indicators and units, to be adopted after review by dedicated environmental units.

Data Measurement Techniques

68


GRI G4 Index

G4-19 List all the material Aspects identified in the process for defining report content 48

G4-17

a. List all entities included in the organization´s consolidated financial statements or equivalent documents

b. Report whether any entity included in the organization´s consolidated financial statements or equivalent documents is not covered by the report

48

G4-18a. Explain the process for defining the report content and the Aspect Boundaries.b. Explain how the organization has implemented the Reporting Principles for Defining

Report Content.

48

GENERAL STANDARD DISCLOSURES

Aspect Content Page

G4-1 Provide a statement from the most senior decision-maker of the organization 02

G4-3 Report the name of the organization 44

Aspect Content Page

Stakeholder Engagement

Strategy and Analysis

G4-4 Report the primary brands, products, and services 44

G4-5 Report the location of the organization´s headquarters 44

G4-6Report the number of countries where the organization operates, and names of countries where either the organization has significant operations or that are specifically relevant to the sustainability topics covered in the report.

44

G4-7 Report the nature of ownership and legal form 44

G4-8 Report the markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries).

44

G4-9 Report the scale of the organization 44

G4-10 Report the total workforce by region and gender 45

G4-11 Report the percentage of total employees covered by collective bargaining agreements 45

G4-12 Describe the organization´s supply chain 46

G4-13 Report any significant changes during the reporting period regarding the organization´s size, structure, ownership, or its supply chain

46

G4-22Report the effect of any restatements of information provided in previous reports, and the reasons for such restatements.

N/A

G4-23Report significant changes from previous reporting periods in the Scope and Aspect Boundaries.

N/A

G4-24 Provide a list of stakeholder groups engaged by the organization. 48

G4-25 Report the basis for identification and selection of stakeholders with whom to engage. 48

G4-26Report the organization´s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process.

48

G4-27

Report key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns.

48

G4-14 Report whether and how the precautionary approach or principle is addressed by the organization

51～5359

G4-15List externally developed economic, environmental and social charters, principles, or other initiatives to which the organization subscribes or which it endorses 47

G4-16List memberships of associations (such as industry associations) and national or international advocacy organizations 47

Organizational Profile

G4-20

For each material Aspect, report the Aspect Boundary within the organization, as follows:• Report whether the Aspect is material within the organization• If the Aspect is not material for all entities within the organization (as described in G4-17),

select one of the following two approaches and report either:- The list of entities or groups of entities included in G4-17 for which the Aspect is not

material or- The list of entities or groups of entities included in G4-17 for which the Aspects is material

• Report any specific limitation regarding the Aspect Boundary within the organization

48

G4-21

For each material Aspect, report the Aspect Boundary outside the organization, as follows:• Report whether the Aspect is material outside of the organization• If the Aspect is material outside of the organization, identify the entities, groups of

entities or elements for which the Aspect is material. In addition, describe the geographical location where the Aspect is material for the entities identified

• Report any specific limitation regarding the Aspect Boundary outside the organization

48

Identified Material Aspects and Boundaries

Appendix70

G4-28 Reporting period (such as fiscal or calendar year) for information provided. 68

G4-29 Date of most recent previous report (if any). 68

G4-30 Reporting cycle (such as annual, biennial). 68

G4-56Describe the organization´s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics.

52

G4-31 Provide the contact point for questions regarding the report or its contents. 68

G4-32

a. Report the ´in accordance´ option the organization has chosen.b. Report the GRI Content Index for the chosen option (see tables below).c. Report the reference to the External Assurance Report, if the report has been

externally assured. GRI recommends the use of external assurance but it is not a requirement to be ´in accordance´ with the Guidelines.

6872

G4-33

a. Report the organization´s policy and current practice with regard to seeking external assurance for the report.

b. If not included in the assurance report accompanying the sustainability report, report the scope and basis of any external assurance provided.

c. Report the relationship between the organization and the assurance providers.d. Report whether the highest governance body or senior executives are involved in

seeking assurance for the organization´s sustainability report.

68

Materials

DMA 54

G4-EN1 Materials used by weight or volume 54

G4-EN2 Percentage of materials used that are recycled input materials 54

DMA 53

Energy G4-EN3 Energy consumption within the organization 53

G4-EN6 Reduction of energy consumption 53

Water

DMA 59

G4-EN8 Total water withdrawal by source 59

G4-EN9 Water sources significantly affected by withdrawal of water 59

G4-EN10 Percentage and total volume of water recycled and reused 59

Emissions

DMA 55

G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1) 55

G4-EN16 Energy indirect greenhouse gas (GHG) emissions (Scope 2) 55

G4-EN19 Reduction of greenhouse gas (GHG) emissions 53

G4-EN20 Emissions of ozone-depleting substances (ODS) 55

G4-EN21 NOX, SOX, and other significant air emissions 55

Effluents and Waste

DMA 59

G4-EN22 Total water discharge by quality and destination 59

G4-EN23 Total weight of waste by type and disposal method 54

G4-EN24 Total number and volume of significant spills 58

Products and Services

DMA 67

G4-EN27Extent of impact mitigation of environmental impacts of products and services

67

Compliance

DMA 58

G4-EN29Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

58

Overall

DMA 56

G4-EN31 56Total environmental protection expenditures and investments by type


DMA 58

Environmental Grievance Mechanisms

DMA 58

G4-34Report the governance structure of the organization, including committees of the highest governance body. Identify any committees responsible for decision-making on economic, environmental and social impacts.

50

Aspect Content Page

Report Profile

Governance

Ethics and Integrity

SPECIFIC STANDARD DISCLOSURES

Description Page

Environmental

IndicatorsAspect



DMA 64

G4-LA4Minimum notice periods regarding operational changes, including whether these are Specified in collective agreements

64

Occupational Health and Safety

DMA 61

G4-LA5

Percentage of total workforce represented in formal joint management–worker health and safety committees that help monitor and advise on occupational health and safety programs

62

G4-LA7Workers with high incidence or high risk of diseases related to their occupation

62

G4-LA8Health and safety topics covered in formal agreements with trade unions

62

Human Rights Grievance Mechanisms

DMA 64

Local Communities

DMA 65

G4-SO1Percentage of operations with implemented local community engagement, impact assessments, and development programs

65

Compliance DMA 67

G4-PR2

Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle, by type of outcomes

67Customer Health and Safety

DMA 67

G4-PR8Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

67Customer Privacy

Economic PerformanceG4-EC2

Financial implications and other risks and opportunities for the organization´s activities due to climate change

56

DMA 56

Market PresenceG4-EC5

Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation

64

DMA 64

Compliance

DMA 67

G4-PR9Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

67

DMA 67

G4-PR3

Type of product and service information required by the organization´s procedures for product and service information and labeling, and percentage of significant product and service categories subject to such information requirements

67

G4-PR4Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes

67


Marketing Communications

DMA 67

G4-PR7

Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship, by type of outcomes

67

G4-PR6 Sale of banned or disputed products 67

DMA 63

G4-LA1 63Total number and rates of new employee hires and employee turnover by age group, Gender and region

G4-LA2Benefits provided to full-time employees that are not provided to temporary or parttime employees, by significant locations of operation

63

G4-LA3Return to work and retention rates after parental leave, by gender

63

Employment

DMA 64Training and Education

Description Page

Social

Economic

IndicatorsAspect Description PageIndicatorsAspect

* Material aspects are in red

Appendix72

SGS Assurance Statement

www.yfy.com

yfy gri report...2016 yfy gri report 45 yfy is a leading paper company in taiwan. its paper products...

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