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Letter from the Chairman and CEO
As a sustainable business, Delta believes it is our obligation to place a greater emphasis on corporate social responsibility (CSR), while focusing on revenue and growth.Delta continues to focus on climate change with our company mission: "To provide innovative, clean and energy-efficient solutions for a better tomorrow." Delta has taken the lead in establishing science-based targets by proposing to lower our carbon intensity by 56.6% by 2025 using 2014 as the base year. In December 2017, Delta passed the SBTi (Science Based Targets initiative) evaluation, becoming the first company in Taiwan, as well as one of the first 100 companies in the world, to pass the evaluation. This action also marks Delta’s efforts to control the global temperature rise to within 2°C. Additionally, Delta continues to focus on the trend for internal carbon pricing. Although Delta does not undertake practices that emit large quantities of CO2e, our internal carbon pricing is still set up to strengthen internal carbon management. We internalize the economic costs of carbon emissions from operating activities as a strategic tool to help our decarbonization efforts, as well as to serve as a risk management tool.

Delta embraces our corporate core competencies, practicing energy saving and carbon emissions reduction through three energy conservation dimensions that include products dimensions, which are: factory operations, and green buildings. The 2016 Energy Efficiency Market Report issued by the IEA indicates that improving energy efficiency is one of the most effective methods to mitigate climate change. In regards to conserving energy through our products, Delta continuously invests in innovative R&D, and has vigorously enhanced the energy conversion efficiency of all of our product lines over the years. Delta’s high-efficiency energy-saving products have helped our global customers save nearly 24.3 billion kWh of electricity between 2010 and 2017. This is equivalent to reducing approximately 12.96 million metric tons of emissions, which is a major way Delta contributes to carbon reduction.

Manufacturing accounts for over 90% of Delta's electricity consumption. Delta puts a strong emphasis on energy-saving in manufacturing operations, such as using an energy recycling system designed for the testing of power products and burn-in equipment, which allows up to 95% of power consumption to be recycled. From 2011 to 2017, Delta has cumulatively undertaken 1,582 energy-saving projects. Delta has promised to reduce our overall intensity consumption 30% by the year 2020, a target that has expanded beyond our factories and into our office buildings and data centers as well. Delta brings together the efforts of our entire workforce, which is wholly involved in specific energy-saving actions in response to climate change.

In regards to energy conservation through green buildings, Delta has facilitated the creation of 26 green buildings over the past 12 years, including some of our main operation facilities as well as buildings donated to academic institutions. Our certified green buildings have collectively conserved 14.90 million kWh of electricity in 2017, representing approximately 9,268 metric tons of CO2e reduction. In 2017, Delta’s EMEA (Europe, Middle East & Africa) headquarters, located in the Netherlands, became a renovated green building that was certified as a “Building Research Establishment Environmental Assessment Method” sustainable facility and boasted not only a Dutch "A-class Building" energy label but also a "Very Good" rating by the Dutch Green Building Council. In addition, the solar power system and energy management system adopted at our Americas Headquarters helped us achieve net zero consumption, with the energy generated by our solar power system even exceeding our energy consumption in July 2017.

Delta actively strategizes for smart production and low-carbon smart cities in response to climate change and rapid changes in industry. In terms of smart production, we have integrated industrial automation system software and hardware into our factories, helping us shorten the production cycle and significantly enhance our daily productivity, while reducing our labor needs. Significant growth in external sales has also occurred. The application of Delta's multiple energy-conserving plans in various fields has helped to achieve our vision of low carbon cities. For instance, we have provided a high efficiency PV inverter for a Denmark solar power project aiming to establish solar power stations with a total output of 75.4 MW. Delta's subsidiary Eltek has helped the United Nations Development Programme (UNDP) implement reusable energy solutions for 104 hospitals in Zimbabwe, on top of actively collaborating with auto manufacturers in North America, Europe, and China to develop products such as drive motors, drive inverters, and car chargers that are applicable to a new generation of electric vehicles.

"In addition to practicing corporate social responsibility through daily operations, Delta is paying more attention to international sustainable development as it proactively engages in the 17 Sustainable Development Goals (SDGs) released by the United Nations in 2015. Among them, six goals in particular that are the focus of Delta's efforts, namely: 'Quality Education,' 'Affordable and Clean Energy,' 'Industry, Innovation, and Infrastructure,' 'Responsible Consumption and Production,' 'Climate Action,' and 'Partnerships for the Goals;' the goal of 'Sustainable cities and Communities' added in 2018. This serves as the direction for Delta to follow in promoting sustainable development, while seeking further business opportunities and building a mutually beneficial and sustainable future."

Delta's results in promoting corporate social responsibility have received widespread recognition. In 2017, we were selected for the DJSI World and DJSI Emerging Markets, as well as honored with the rating of “gold class in the Sustainability Yearbook 2017" from Robeco SAM. Our “Carbon Disclosure Project” also achieved Climate Change Leadership level recognition in 2016-2017, while the climate change disclosure of our supply chain was honored with an A- level ranking. At the same time, Delta received CSR awards from Global Views Magazine, CommonWealth Magazine, and the Taiwan Institute for Sustainable Energy in 2017. We also ranked in the Top 5% in a Corporate Governance Evaluation from the TWSE. We also ranked in the Top 5% in a Corporate Governance Evaluation from the TWSE.

As for Delta's plans for the future, we aspire to achieve balanced development in Power Electronics, Automation and Infrastructure, the three business categories that we formed after our organizational restructuring in 2017. The Power Electronics business will achieve organic growth, while growth of the Automation and Infrastructure groups will accelerate and expand market share through M&A and innovation. we will work hand-in-hand with our employees and lead Delta to achieve robust growth, while proposing solutions that solve problems for humanity, are environmentally-friendly, and bring positive benefits to society. We will continue to guide Delta in enhancing our role as an internationally leading socially responsible enterprise.

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