In the 2007 Report on Climate Change, the Intergovernmental Panel on Climate Change pointed out that human activity was the main cause of global warming and that national governments should adopt effective measures to solve the problem of GHG emissions. Delta Electronics not only requires all global sites to progressively complete GHG inventories but also includes climate change as one of the key items in the company's risk analysis of sustainable management to be closely monitored and managed. Delta Electronics' climate change efforts have included the promotion of green buildings/plants, introduction of energy management systems, completing GHG emission inventories for business sites as well as the carbon footprints of notebook adaptors, DC fans and PV inverters.

Climate Change Risk Analysis

Delta Electronics has identified 10 environmental risks due to climate change. The importance and frequency of the risks are represented in the environmental risk map below. Among these, the eco-tax (e.g., energy tax, carbon tax) that are currently under discussion in major trading zones, energy cost increases (e.g., electricity costs, fuel surcharges) as well as increased GHG emissions due to increasing production output are the three areas that Delta Electronics is actively managing. Concrete measures taken include continuing to practice energy management at our key sites, improving energy efficiency, and practicing low-carbon purchasing and low-carbon transportation.

The environmental risks and the management dimensions they affect :

Environmental Risk Map

Climate Change Opportunities and Sustainable Business Strategy

Through our long-term monitoring of climate change trends as well as the managing of climate change risks, Delta has now identified the following opportunities and sustainable business strategies

Carbon Disclosure and Emission Reduction

In 2007, Delta Electronics began taking part in the Carbon Disclosure Project (CDP) set up by leading international institutional investors in 2003. In accordance with "Greenhouse Gas Protocol" (GHG Protocol) issued by the World Business Council for Sustainable Development (WBCSD) and the World Resource Institute, Delta began inventorying the direct GHG emissions (scope 1) and indirect GHG emissions (scope 2) of major business sites. Since 2009, Delta's main sites have progressively achieved ISO 14064-1 GHG report verification. In 2010, Delta selected notebook adaptors, DC fans and PV inverter products for product carbon footprint inventory.

To effectively manage GHG emissions at major sites, we defined GHG intensity (tons of carbon dioxide equivalent/US$1 million output value) as our GHG management indicator and set 2009 as the baseline year for energy-saving and carbon reduction. In 2011, the direct GHG emissions from our major sites ⁹ were 16,137 tons CO2e, and the indirect GHG emissions were 300,716 tons CO2e. The GHG intensity was 51.3, a 30.9% reduction compared to 74.2 in 2009.

At the same time, we began cutting back on unnecessary business flights in 2010. The mileage of employee business flights was also recorded to estimate their GHG emissions (scope 3). In Taiwan for example, in 2011 Delta employees' business flights produced 3,500 tons CO2e GHG emissions, a reduction of 6.3% compared to the 3,735 tons CO2e in 2010.

In 2011, the total inputs (materials, energy, water resources) and total outputs (GHG, air pollutants, waste, wastewater) at Delta's major sites ¹⁰ around the world were as shown in the following graph :

Energy Management

Energy used by Delta at our major sites around the world included fossil fuels, externally purchased steam, and externally purchased electricity.

　1.Fossil Fuels:
　In 2011 fossil fuels were mainly used by the plant generators, forklifts, official vehicles and boilers
　in the living areas (including employee dormitories and cafeterias). When sorted by heat value
　(million kcals), natural gas accounted for 58.5%, diesel for 34.1%, gasoline for 7.3% and heavy
　oil for 0.1%. The most significant change compared to 2010 was the conversion of all boilers in
　the living areas from burning LPG to more clean natural gas. The other change was an increase in
　diesel consumption by power generators (24% increase) due to the imposition of power
　restrictions throughout China during the summer months.

　2. Externally Purchased Steam:
　Among the major sites, only the Tianjin plant in China purchases steam to provide hot water to
　the employee dormitory. Starting in 2010, the Tianjin plant collaborated with the local government
　to convert the dormitories to a parallel solar and steam system. Excess rooms were also rented to
　other local workers.

　3.Externally Purchased Electricity:
　The manufacturing process at Delta's major sites consists mainly of system assembly and
　externally purchased electricity formed the largest source of GHG emissions (95%). The main
　energy management indicator was set as electricity intensity (MWh/MUSD output value) to
　facilitate effective energy management. In addition to reaching the shortterm target of reducing the
　overall electricity intensity by 20% in 2011 compared to the baseline year 2009, we have also
　designated a competitive five year goal of lowering electricity intensity by 50%, in the hopes of
　further enhancing efficiency in our use of electricity.

　Starting in 2010, Delta follows the ISO 50001 energy management system as a blueprint to
　gradually introduce the energy management system to our main sites in China, Thailand and
　Taiwan. In 2011, a trans-regional energy management committee was set up to implement a Plan-
　Do-Check-Action (PDCA) management mechanism that integrated energy management with
　routine operations. In July, 2011, Delta's Dongguan plant in China became the first power and
　component electronics enterprise in the world to pass ISO 50001 Conformity Evaluation. The
　Thailand plant passed the same evaluation in September, 2011, as well, making it the first
　company in Thailand to do so.

　We also began introducing the energy management information system developed inhouse by the
　Delta Group and integrated with digital metering technology at our main sites in China, Thailand
　and Taiwan since 2011. The real-time monitoring and analysis functions provided by the system
　helped with identifying more opportunities for energysaving and carbon reduction. Through the
　continued efforts of all sites, in 2011 the electricity intensity was 58.3, a reduction of 29.7%
　compared to 82.9 in 2009. The result also surpassed the target of 20% reduction in electricity
　intensity set for 2011.

ISO 50001 energy management system framework

The significant gains in energy-savings made in 2011 came mainly from the efforts made by the main sites in seven key energy-saving areas: heating, ventilation, and airconditioning  (HVAC)　systems, air compressor systems, injection molding machines, lighting systems, burn-in energy recovery, process improvements and others. More than 135 energy-saving initiatives (see table below) were carried out, resulting in electricity savings of 42,400,000 kWH and a reduction of GHG emissions by 37,908 tons CO2e.

To spread sound energy-saving practices at each plant to all other plants, we also set up an energy-saving technology team in 2011 that worked with external expert consultants, experts from Delta's R&D center and that drew on the practical experience of plantbased energy-saving teams. The team worked to select energy-saving projects with shorter payoff times and better energy-saving results to set up a database of the best energy-saving practices. Over the course of 2011, a total of 27 best energy-saving practices were compiled from various plants.

Material Management

The main materials used by Delta included : 1. Metallic materials (including iron, steel, aluminum, copper and iron cores); 2. Plastic materials (used for casings, insulation and sockets); 3. Chemicals (mainly organic solvents including thinners, cleaners and fluxes); 4. Packaging or transportation materials (including paper/cardboard, cartons, paper palettes, filling materials and timber); and 5. Other materials (epoxy resin used for bonding electronic materials and insulation, and asphalt used in electronic ballasts). No substances harmful to the ozone layer are used during our production processes.

To track trends in material consumption, we used material intensity (tons of material used/MUSD revenues) as an indicator. In 2011, revenues grew by 7.1% compared to 2010 but total materials consumption grew by just 2%. Material intensity of 2011 was therefore slightly lower than 2010 by 4.9%.

Water Resource Management

Most of the water used by Delta's major sites in 2011 was for domestic use (95%). Municipal water was the main source and no ground water was used. Using the Global Water Tool developed by WBCSD, we also checked to see if our main plants were located in water-stressed regions. At the moment, the Tianjin plant in China and the Taoyuan plant 2 in Taiwan are at higher risk of water shortages. These plants have now formulated countermeasures for insufficient water supply, rising water prices, and conflict between stakeholders over water access in potential short-, medium- and longterm water shortage scenarios. In 2011 all major sites adopted various water-saving and process wastewater recovery measures. The measures included upgrading to watersaving taps or water saving devices, using water-saving toilets, reducing water output from taps and the water level of cisterns, managing the excess water of cooling towers as well as reusing the wastewater from water purifiers. Water consumption was reduced by a total of 284,500 m3 over the course of the year, a 5.6% reduction compared to 2010. If water intensity (km3/MUSD output value) is used as an indicator, water intensity in 2011 was 0.78, a reduction of up to 27.4% compared to 1.07 in 2009.

Pollution Prevention

1. Wastewater Management:
　The wastewater at all key Delta sites is processed by appropriate sewage treatment facilities or
　directly channeled to the industrial zones' wastewater treatment plants. Wastewater discharge is
　estimated to be 80 to 90% of total water usage. The quality of all discharges conforms to current
　regulations and wastewater is regularly tested to ensure that it has no significant environmental
　impact on the surrounding water bodies. In 2011, there were no significant leaks or spill incidents
　at any Delta site.

2. Waste Management:
　Delta sites separate waste into three types for waste management: general waste, recyclable
　waste and hazardous waste. Recyclable waste includes metallic wastes, waste plastic, waste
　palettes and waste paper/cartons. These are sorted and delivered to qualified local recycling
　companies for recycling. Hazardous waste includes electronic wastes, waste glass tubes/glass and
　waste solvents. These are sorted and then delivered to qualified local firms for disposal. General
　waste is transported to government-designated incinerators or landfills. In 2011, waste totaled
　36,916 tons with 72.1% being recyclable waste, 22.2% being general waste and 5.7% being
　hazardous waste. The amount of general waste generated in 2011 was 8% lower compared to
　2010. The amount of general waste sent to landfill also dropped from 87.5% in 2009 to 86% in
　2011.

3. Air Pollutant Management:
　Since the Taoyuan plant 2 ceased production of Cold Cathode Fluorescent Lamps (CCFL) in
　2010, the production processes at major Delta sites have all been mainly assembly-based.
　Currently there are no fixed pollution sources that require approval, regular inspection or
　reporting. We continue to monitor the air quality around our plants to ensure that we generate
　minimum environmental impact on the surrounding atmosphere. Air pollutants generated by major
　sites include Volatile Organic Compounds (VOCs), Nitrogen Oxides (NOx) and Sulfur Oxides
　(SOx). VOCs are mainly given off by asphalt (used as the filler in electronic ballasts) during
　heating, and evaporation of organic solvents (e.g. flux, isopropanol). In 2011 the amount of
　VOCs generated was approximately 17.9 tons. NOx and SOx came mainly from the testing or
　emergency use of power generators, hot water boilers in the living areas and cafeteria cooking,
　but the quantities were minute.

Green Buildings/Factories

Ever since Delta built its first green building/factory at the Southern Taiwan Science Park in 2006, Delta has understood that green building can effectively reduce environmental and ecological impact. Delta has promised to adopt green building design concepts and techniques in all future plants and office buildings. We have also taken the next step by referring to the Leadership in Energy and Environmental Design (LEED) system for the energy-saving standard of new future buildings/factories or existing building retrofits.

To date, Delta has progressively commissioned the following green buildings/factories around the world. The Rudrapur plant, in particular, has received the U.S. LEED Gold certification, while the Delta Tainan plant was the first building in Taiwan awarded the certification for all nine indicators of Taiwan Ministry of Interior's Green Building EEWH Rating System.

Foundation is now actively promoting the energy volunteer project as well as working with local environmental groups to promote environmental education and energy-saving ideals with the general public. Examples of classic energy-saving designs in Delta's green building/plants are listed below :

Green Office

In 2011 Delta's major sites continued to practice the following energy-saving measures in the office:

1. Lighting System:
　All plants have progressively upgraded to LED lights, adjusted the lighting in each work area,
　turned off lights after working hours and during breaks, installed independent switches for lights in
　office areas, or added light- or time-control devices for lighting systems. Such measures save
　around 500,000 kWH in electricity consumption a year.

2.Energy-saving Office Products:
　Office and testing computers changed from 180W PCs to 30W low-power PCs (Atom CPUs)
　or desktop machines replaced by notebook computers. In addition, we purchased Energy Star
　qualified office products such as computers, monitors and printers.

3.Water-saving Products:
　All plants have adopted water-saving washing facilities, water-saving toilets, non-flush urinals or
　water-saving taps.

4. Elevator Energy-saving:
　Some plants have installed the elevator energy recovery system developed by Delta to reduce
　heat generation and lower the air-conditioning demand for elevator machine rooms. Up to 50%
　energy savings were achieved.

Reducing Environmental Impact from Our Operations

Delta had no significant violation of environmental regulations in 2011. As all major Delta sites are located in industrial parks, science parks or local industrial zones, this reduced the environmental impact on the local ecology to a minimum during our operations and avoided any significant negative impact on the local biodiversity. The commissioning of green buildings/factories with diverse plantings and eco-ponds has made a positive contribution to biodiversity.

As for reducing impact on local communities, some plants have worked with local environmental groups to promote environmental education and our green building design philosophy. We have also adopted some surrounding green areas (such as the No.3 Wende Park in Taipei, Taiwan) to promote better interaction with the local community.

Green Production

To live up to our business philosophy of "To provide innovative, clean and energyefficient solutions for a better tomorrow", Delta Electronics is continuing to promote green production measures as well as refine our research, development and innovations in manufacturing processes. Our main sites not only carried out over 135 energysaving improvements in 2011 but also achieved great strides in improving production, processes, tooling, logistics and automation :

Energy / Resource Recycling and Renewable Energy

1. Electricity Recycling:
　Burn-in testing for AC motors, power supplies or uninterruptible power supplies (UPSs)
　traditionally converts electricity into waste heat. The power was not only unrecoverable but the
　heat produced often needed to be dissipated using additional equipment, resulting in inefficiency
　and high cost. Delta's major sites have now adopted the selfdeveloped Energy Recycling Systems
　(ERS) that can not only recycle the electricity used during burn-in testing but also reduce the heat
　generated and thus lower the loading of the air conditioner and the personnel and the plant square
　footage needed by traditional burning racks. By using Delta ERSs, (including the ERSs adopted in
　2011 and before 2011), over 62,800,000 kWh of electricity was recycled in 2011, reducing
　GHG emissions by 53,089 tons compared to when the ERS was not in use.

2. Solder Recycling:
　Major Delta sites have solder recovery devices. Approximately 39.3 tons of solder were
　recycled in 2011.

3. Water Recycling:
　The majority of water recycling in 2011 came from recycling process water and rainwater
　recovery. An example of process water recycling was the Chenzhou plant in China where
　1,800m3 of wastewater was recovered from the water purifier in 2011. As for rainwater
　recovery and reuse, the Tainan plant recovered around 2,500m3 of rainwater in 2011.

4. Solar Power Applications
　The main renewable energy applications at Delta are solar PV systems and solar water heating
　systems. In 2011, the solar PV systems at our major sites generated 49,728 kWh of electricity
　while the solar water heating systems (11,376m2 of heat collecting surfaces in total) produced
　nearly 6,826 million kcal. Total energy provided by solar power applications was 57.7MWH,
　reducing GHG emissions by 2,100 tons compared to when solar PV and water heating systems
　were not used.

All Delta products conform to international safety standards. Products or product packaging are also labeled with conformity information in accordance with the environmental regulations of the target market (e.g. the EU RoHS and WEEE directives, China Measures for the Control of Pollution from Electronic Information Products). We also display environmental certification information such as the US Energy Star and 80 PLUS on our products that were required by our customers for green marketing purposes. In 2011, Delta did not violate the laws or regulations concerning the provision and use of products and services.

Green Design

The Life Cycle Assessment (LCA) is a green design approach that systemically analyzes the environmental impact of a product from material extraction, manufacturing, shipping, product use, and disposal. The ISO 14040 international standard divided LCA into several key processes including the definition of the goal and scope, inventory analysis, impact assessment and interpretation. Due to the complex nature of supply chain relationships in the electronics industry, Delta knows that a complete LCA will consume enormous amounts of time and resources. Delta has drawn on research by the Society of Environmental Toxicology and Chemistry (SETAC) on LCA methodology and adopted the Screening, Simplified and Streamlined LCA (SLCA) to focus on the most significant environmental impact (e.g. GHG emissions) and reduce the amount of data that needs to be gathered. Additionally, we also use available LCA databases as supporting tools to further facilitate the SLCA process. By using the SLCA methodology, we can identify design or process areas for improvement.

　1. Product Carbon Footprint:
　Product carbon footprint is the best example of SLCA in action. Delta has now completed the
　carbon footprint inventory and verification of several Business-to-Business (B2B) products based
　on the PAS 2050 Product Carbon Footprint Standards issued by the British Standards Institution
　(BSI) including notebook adaptors, PV inverters and DC fans. The notebook adaptor in
　particular was the first power supply product from Taiwan to complete BSI PAS 2050 carbon
　footprint verification.

　2. Strategies for Reducing Product Environmental Impact:
　We have aggressively utilized the following strategies to reduce the potential environmental impact
　from each phase of the product lifecycle :

　　(1) Reduce use of environment-related substances: Delta has implemented the Green Product
　　Management (GPM) IT system based on the QC 080000 hazardous substance process
　　management system. Apart from inspecting materials testing reports from suppliers, Delta
　　manages parts/components based on their environment-related substance risk level to ensure
　　the proper control of environment-related substances.Delta sites have also introduced lead-free
　　processes and low-halogen materials to help customers develop greener and more eco-friendly
　　products.

　　(2) Reduce carbon emissions from materials transportation: Delta has implemented lowcarbon
　　purchasing principles and for non-critical components preference is given to local suppliers
　　where possible. Take the power supply business group for example, 70% of the suppliers are
　　based in China where our major production sites are located and carbon emissions during
　　materials transportation are greatly reduced.

　　(3) Adopt green packaging: In 2011, the product packaging materials (including corrugated
　　paper/cardboard, cartons) contained over 80% recycled paper fiber and were 100%
　　recyclable.

　　(4) Improve product energy efficiency: The continued improvement to product energy
　　efficiency is a concrete expression of Delta's commitment to "To provide innovative, clean and
　　energy-efficient solutions for a better tomorrow". Most of Delta's power management products
　　have surpassed 90% energy efficiency, such as our PV inverters with a conversion efficiency of
　　over 98%, and telecom power supplies with 97% efficiency.

　　(5) Design for recycle/ disassembly: We always strive to design our products for ease of
　　recycling/disassembly. Apart from actively helping B2B customers improve the reuse rate and
　　recycling rate of waste electronics products to conform to environmental regulations of the
　　target region (e.g. EU's WEEE directive), for our own brand products, we are also working
　　with local recycling organizations to ensure the proper recycling and ultimate disposal of waste
　　products. For example, DelSolar, a Delta affiliate, has joined PV CYCLE
　　(http://www.pvcycle.org/ ) in Europe to participate in the recycling program for waste PV
　　modules.

The experience from several product SLCAs showed us that the environmental impact from the usage phase of Delta's core products is most significant in their lifecycle. We are therefore promoting product environmental information disclosure and integrating this with "ISO 14021 product environmental labels and declarations" and the "ISO 14025 Environmental Product Declaration (EPD)". In 2010, we launched the "EnergE" program for rectifiers. An energy-savings calculator was provided on the product webpage to help customers understand the cost and energy-saving benefits they can achieve by using Delta products under different scenarios based on the type of power source, number of sites, average load per site and energy cost information.

As part of our sustainable business strategy to respond to climate change and to live up
to our business philosophy of "To provide innovative, clean and energy-efficient solutions
for a better tomorrow," Delta has consolidated our core products/services into three main
application groups: Power Electronics, Energy Management and Smart Green Life.

We are progressively introducing innovative green products and solutions through system-level product integration as listed below :

Delta constantly improves the energy efficiency of our products and helps our customers realize energy and cost savings. Based on the quantities of Delta's power supplies, DC fans, UPSs, ballasts, inverters, PV cells and more shipped by Delta in 2011 from its Taiwan, China and Thailand plants ¹¹, customers that used Delta's high-efficiency products saved nearly 3.3 Billion KWH of electricity and reduced carbon emissions by 2.02 Million tons of CO2e.

Occupational Safety and Health Management Organization

"Provide employees with a safe and healthy work environment" is one of Delta's most fundamental responsibilities as a corporate citizen. A dedicated labor safety department reporting directly to the regional top management was set up by Delta in China where our main production sites are located. For the R&D and administration-oriented offices in Taiwan, an environmental safety & health risk management center reporting directly to the COO is responsible for the planning, execution and auditing of plant safety & health management.

Occupational Safety and Health Management System

All of Delta's main plants in Taiwan and China have achieved OHSAS 18001 certification. As environmental protection and workplace safety & health are two sides of the same coin in many management issues, Delta is gradually integrating our plants' environmental management system with the occupational safety & health management system. So far the five main plants in China (Dongguan, Wujiang, Wuhu, Chenzhou, Tianjin) as well as the Taoyuan plants in Taiwan have all achieved both ISO 14001 and OHSAS 18001 certification. Delta has also made Disabling Frequency Rate (F.R.) ¹² and Disabling Severity Rate (S.R.) ¹³ the main safety & health management indicators. Annual plant and regional targets have been set along with safety & health audits, safety & health education, regular work environment inspections and improved information exchange in order to effectively reduce the frequency of safety & health incidents. At the monthly inter-plant safety & health meetings, safety & health representatives from each plant discuss incidents related to employees and contractors, analyze the reasons, propose improvements or engineering changes in order to prevent any further recurrence.

Occupational Safety and Health Audit

Besides internal OSH inspections carried out at each plant in accordance with the law, we also organize cross site audits conducted jointly by OSH committee members and audit personnel. Through complete audit plans, the task force audits ESH documents, the results of risk assessments, ESH control and operations, monitoring and measurement, as well as the work environment, the equipment, and onsite operations to ensure the proper implementation of the OHSAS 18001 management system and identification of potential risks. Targeted accident prevention audits are also implemented at the plants for special or critical equipment. Examples include electrical safety audits using thermal imaging to check for potential electrical hazards, soldering pots, chemical use, surface mount technology (SMT) equipment, specialist equipment, ventilation equipment, contractors' specialist operations such as cranes and fire, EICC - ESH execution, and other specialist checks. The executive directors on each site also convene monthly OSH meetings to review OSH performance.

Safety and Health Education and Emergency Response Training

Delta conducts ESH training at each of our plants to improve employees' knowledge of occupational safety and health issues. In 2011 for example, our major plants in Taiwan, China and Thailand organized occupational safety and health training, emergency response and firefighting training, and external specialist training for new and current employees. Over 188,000 attendances and over 394,000 man-hours of training were achieved to ensure personnel safety and reduce the impact of accidents.

Occupational Safety and Health Information Exchange

In addition to regular OSH meetings, the OSH department uses the company intranet and suggestion boxes to convey OSH messages to employees and boost the exchange of OSH information in a timely manner. Employee feedback on OSH issues are also collected and studied. We hope the creation of a smooth, two-way communication channel will help increase employee safety awareness and involvement, and in turn, help ensure the safety and health of all employees.

Work Environment Inspection

Based on the potential risks at each plant, not only are regular work environment inspections conducted but also the list of material used and exposure to hazardous substances are constantly monitored. The readings are used to correct work practices or make engineering improvements to reduce the risk of occupational illnesses.

Employee Health Promotion

Apart from routine health examinations, Delta also partners with professional medical and health organizations to organize health seminars and consultation at Delta plants. The company also encourages and helps employees with setting up clubs and taking part in healthy sports. Employees can both focus on their work and keep an eye on their current health. Plants continue to promote greening initiatives so employees enjoy "living green" even in their offices. Delta also promises to follow green building principles in all new buildings to maximize employee productivity by providing a healthy and comfortable environment.

The mental health of employees is important to Delta as well. Various facilities and methods are used to help employees relax and unwind. The "Happy Living" initiative at the Wujiang plant for example not only provides a medical clinic but also a library, employee cinema, billiards room, canteen, employee service center and a "Heart-to- Heart Station" staffed by professional psychological counselors. The facilities are aimed at helping employees relax, have fun or improve themselves outside of work.

To realize Delta's corporate mission of "To provide innovative, clean and energy-efficient solutions for a better tomorrow", environmental events are organized frequently by each plant. The Environmental Month Energy-Saving Knowledge campaign at Dongguan plant and the Environmental Protection, Energy-Saving and Safety Slogans Competition at Wuhu plant have all been been enthusiastically received by employees. To celebrate the 40th anniversary of Delta, Delta launched a global tree-planting initiative that employees enthusiastically took part in to do their part to help reduce carbon emissions outside of work.

Occupational Safety and Health Management Accomplishments

In 2011, Delta's F.R for the five main plants in China was 0.53 and S.R was 6 ¹⁴, realizing the target of F.R<0.8 and S.R<10 for the region. The results were also a significant improvement on F.R=0.72 and S.R=14 from 2010. The Wujiang plant was also named the safe production unit of the development zone for 2011. Additionally, no occupational illnesses or work-related deaths were reported among the employees or contractors at the above plants.