Identification of Materiality

Each year, the stakeholders and material topics are identified by executive managers and the Sustainability Implementation Committee, and every three years, internal and external feedback is assessed through surveys.

During the reporting year, FENC followed the procedures for the identification of material topics in the 2021 version of the Global Reporting Initiative (GRI) Standards, developing the framework for materiality analysis based on the principles of identification, analysis and verification. Surveys were administered to internal and external recipients with a total of 423 valid surveys collected. Expert opinions were consulted regarding the identification procedures and results, which were then presented to the executive managers for confirmation. The approval of the Sustainability Committee members, which consist of regular and independent Board members, was obtained to ensure alignment with corporate management and stakeholder expectations.

FENC applied the principle of double materiality proposed by the European Commission and identified 18 material topics with significant impact regarding corporate operation as well as the economy, environment and people, including impacts on human rights. The result rendered the addition of three new material topics – develop green products; hone product management; enhance sustainable corporate image. In addition, four issues identified as topics of concern last year were elevated as material topics in 2022 – build sustainable community; optimize land resources; shape sustainable supply chain; mold a diverse and inclusive workplace.

Note: To better convey the spirit and meaning behind the materials topics, a few revisions were made to the list of topics in this report. “Respond to climate change” is changed to “march towards net zero;” “prevent and control environmental pollution” to “steer environmental management;” “construct happy workplace” to “mold a diverse and inclusive workplace;” “coordinate sustainable supply chain development” to “shape sustainable supply chain;” “reinforce environmental safety and health management” to “reinforce occupational safety and health management.” The topic, “promote product marketing,” is integrated into “build customer rapport.”

Matrix of FENC Material Topics

Note:
1. The threshold for materiality is 75%.
2. Please refer to "Material Topics" for the significance of each material topic to FENC and management guidelines.
3. Three topics of concern are also identified. They are “Foster employee career planning”, “Fortify digital resilience”, and “Cultivate compassionate bonds”.

FENC Sustainability Survey

Positive and Negative Impact and Scope of Value Chain Impact

Once the 18 material topics were identified, executive managers and the Sustainability Team conducted impact analysis to assess their positive and negative impact as well as the scope of value chain impact. Each material topic was assessed against current corporate strategies and management guidelines to measure the positive impact and likelihood of occurrence regarding the aspects of economy, environment and people, including human rights. The assumption for the assessment of the negative impact, no action, would lead to the inability to prevent or mitigate the negative impact, and was used to assess the likelihood of occurrence and severity regarding the three aspects.

Top Five Issues with Positive Impact

Top Five Issues with Negative Impact

A comprehensive evaluation measuring current corporate strategies and management guidelines against the impact on the above-referenced three aspects identifies “develop green products” as having the greatest positive impact, and further pursuit will augment such impact. The most significant negative impact, however, could result from inaction under “steer environmental management,” indicating the need for FENC to enhance such management efforts for mitigation.

Climate change is an issue that has become front and center in the global dialogue in recent years. The impact analysis also reflects the positive influence FENC may bring by aggressively stepping up GHG management with net zero as the end game. Conversely, the extent of negative consequences from the absence of such action will be second only to that from not steering environmental management.

Value Chain Impact Assessment Posed by Material Topics