Materiality analysis

Identify stakeholders– seven major categories of stakeholders

In alignment with the five principles of the AA1000 Stakeholder Engagement Standard (AA1000SES) as well as the experience of various departments and the industry, the functional teams under the Sustainable Development Committee considered stakeholders’ issues of concern, the frequency of communication, and their important relevance to our company’s sustainable development through multiple meetings, and identified seven major categories of stakeholders: the media, government agencies, shareholders/investors, communities/NGOs, suppliers, employees, and clients.

Understand the context: collect ESG issues – 21 ESG issues

As per the international sustainable principles and standards (GRI standards, SASB, SDGs, ISO26000, TCFD), cases in the construction industry in Taiwan and abroad, and the process of communication with stakeholders, the functional teams collected and listed 21 ESG issues. In addition, to ensure the objectiveness, completeness, and inclusiveness of the material issues, the teams also review the matrix table of the materiality analysis of the ESG issues in the previous report.

Identify the actual and potential impacts:

At the internal meetings the functional teams invited 20 department heads to discuss the 21 issues that are collected and identify the actual or potential negative/positive impacts as well as the influence that the impacts may cause in various aspects including finance, business reputation, environment, and human right.

Evaluate the significance of impacts: 323 external questionnaires and 20 internal questionnaires

Through the “Kedge Construction stakeholders ESG questionnaires,” the functional teams investigated the influence of the seven major categories of stakeholders on 21 ESG issues concerning aspects from individuals, communities, counties and cities, the country, to the globe. The teams also examined the degree of impact (concerning the degree of influence, the arrange, and the reversibility) and the possibility of occurrence. A total of 323 valid responses were collected. Meanwhile, 20 department heads were also received internal questionnaires for an evaluation of various ESG issues about their aspects of influence, the degree of impact, and the possibility of occurrence in relation to the company.

Sort material issues by significance: 11 material issues

After examining the situation of stakeholders and the results of internal questionnaires, and following the materiality standards, we identified 11 highly concerned sustainable issues (with high probability and high impact degree) as the major material issues in this year. 2 mediumly concerned issues (to our continuous attention) were also taken into account. We drew up the materiality matrix and reported on it towards to the Board of Directors and the ESG Committee.

Material issues and the meaning of the value chain

In 2022, through the process of the material analysis, we identified 11 major material issues. After examining the results of identification, “biodiversity” was included in the sustainable issues for the first time and identified as one of the major material issues. In addition, “sustainable supply chain management,” “human rights protection,” “Innovative technology and services,” “Green and energy-saving buildings,” “Communal relations and social welfare,” and “Public construction participation” have also shifted from non-major material issues last year to major material ones, showing that stakeholders are concerned about diverse topics, and it is highly compatible with the ESG management practiced by domestic and foreign enterprises in recent years. Therefore, based on the method of managing major material issues, Kedge also follows the three major aspects of the ESG to integrate the ESG into sustainable development policies and risk management strategies. The meaning of each major material issue, including the positive and negative effects directly created by Kedge or indirectly promoted through upstream and downstream industries, as well as the specific goals and actions for each issue, will be explained in the corresponding chapters of this report. The items disclosed in the GRI Standards corresponding to each major material issue can be referred to from the GRI Standards Content Index attached to this report.