乐鑫科技:Espressif2023

Espressif｜2023 ESG Report｜ Contents
In-house R&D Commitment
IP Management 07
Environmental Governance and Strategy Technological innovation Innovative and comprehensive service
Climate Risks and Opportunities Product and Service Innovation Optimizing Customer Experience Governance
GHG Emissions Management Solution Innovation Products Quality Management
Energy Saving and Emission Reduction Technical Association Participation Customer Feedback Governance Structure
Circular Economy Lifecycle Protection of Shareholder Rights
Biodiversity Protection Compliance & Ethics
Internal Control and Risk Management
Information security
Talent
About Espressif
2023 ESG Highlights C o mmunity Symbiosis Diversity and Inclusivity
ESG Management Employee Rights
Supply Chain
Career Development Management
ESG Governance Sharing Booms Industry Occupational Health and Safety
Materiality Assessments E spressif Developer Conference 2023 Supplier Code of Conduct
Stakeholder Engagement High-Quality Professional Education Control Risks at the Source
ESG Goals Multi-faceted Responsibility
Management
GRI Content Index
About This Report
Report Feedback and Comments
2Espressif｜2023 ESG Report｜Message from Management
Message from Management
In a year of challenges and opportunities Espressif remained power to support complex Multi-IO HMI and AIoT applications Strengthening Governance
committed to our core values of openness sharing and but also meeting the high-performance computing needs of Espressif Technology adheres to high standards of corporate
innovation. These principles have driven our continuous applications that combine cameras displays and AI processing governance. By establishing a transparent efficient management
development in technology market and social responsibility offering a more powerful and flexible solution to the market. system we ensure the healthy and sustainable development of
particularly in our Environment Social and Governance (ESG)
initiatives. Open Source and Ecosystem Prosperity
the company and continue to drive innovation in technology and
management models to adapt to the ever-changing market and
It is worth mentioning that Espressif has always been committed societal needs.to the philosophy of open source and sharing. Our extensive
open technical documents and the vast array of open-source Looking Forward: A New Chapter in Technology
code projects on platforms such as GitHub provide rich learning
M M Espressif will continue to adhere to our values of openness materials and resources for the development of AI models and sharing and innovation collaborating with global partners to
Revenue Net Income various applications. This not only significantly improves the explore new technologies and models. We believe our collective
product development efficiency of downstream developers but efforts will lead to a better world.In 2023 the company reported operating revenues of also promotes the prosperity of our developer ecosystem
RMB 1.43 billion up 12.74% year-on-year and net ultimately bringing more B2B business opportunities to Espressif —— The Espressif Technology Management Team
income of RMB 0.14 billion marking a 39.95% increase Technology realizing a win-win situation for both the company
from the previous year. and the developer community.Besides through collaborations with educational institutions and
contributions to STEM programs we aim to inspire and empower
Driving Innovation Leading with Technology young minds fostering an environment where technology and
In 2023 our technological innovations have achieved remarkable creativity can flourish.results particularly in the field of AIoT. Our ESP32-S3 and ESP32-
P4 chips stand out as milestones on this journey of innovation. Green Technology Shared Future
The ESP32-S3 chip equipped with Edge AI capabilities supports While pursuing technological innovation we have not forgotten
an integrated functionality of voice connection and display our responsibility for environmental protection. By developing
control providing robust support for smart home and industrial low-energy green technologies and sharing these achievements
IoT applications. On the other hand the ESP32-P4 chip takes a with global partners we have collectively promoted the industry's
significant step forward not only offering higher computational green transformation and sustainable development.
3Espressif｜2023 ESG Report｜About Espressif
A World-Leading AIoT Platform
About Espressif
Espressif System (688018.SH) is a global fabless semiconductor company established in 2008 and listed in July 2019. We
have eight R&D centers in five countries including China India the Czech Republic Brazil and Singapore with a team from
almost 30 countries and regions. Espressif has been dedicated to the research and development and design of software
and hardware products in the AIoT field for many years focusing on developing wireless communication SoCs that are
highly integrated low-power high-performance secure stable and cost-effective. We are committed to providing secure
stable and energy-saving AIoT solutions. At the same time we adhere to technological openness empowering
developers to create intelligent products with Espressif's solutions and build a smart world of interconnected things.We uphold the "craftsman" spirit providing customers with outstanding smart hardware and comprehensive software
solutions to help them quickly realize product intelligence and shorten the development cycle. For this reason Espressif's
Wi-Fi MCU global market share chips and modules have become increasingly popular among customers and are widely used in smart home consumer
electronics industrial control health and medical vehicular networking energy management education and other fields.Leading
Espressif’s Worldwide Expansion
China
Shanghai Suzhou Wuxi Hefei
Providing a variety of AIoT
Espressif IoT chips solutions to hundreds of
global shipment volume millions of users worldwide India Brazil
exceeds
Hundreds of Pune Campinas1 Billion Millions
Czech
Republic Singapore
Brno
4Espressif｜2023 ESG Report｜About Espressif
A Complete-Solution Provider Core Values Vision and Mission
Integrity Passion Openness Enabling Intelligent Life for the World
Collaboration Innovation Advancing the intelligent
Espressif provides a wealth of Espressif offers solutions for
The ESP RainMaker ESP-ADF technical documentation and audio face recognition HMI
connection of all things through
shared technology
ESP-WHO Mesh development resources including technical and device connectivity which
framework ESP-MDF etc. specifications technical are widely applied in smart
accelerate the implementation reference manuals user guides home industrial control
of AIoT projects API references test reports etc consumer electronics and
other fields
Open Source
Development Technology AIoT Solutions
Framework Resources
ESP-IDF integrates a real-time High-performance Wi-Fi +
operating system peripheral Classic Bluetooth / Low Power
drivers networking protocols Bluetooth + Thread / Zigbee +
such as Wi-Fi and Bluetooth AI SoCs modules and
libraries and development Operating System Hardware development boards.tools offering a wealth of
documentation and sample
resources
Powered by
ESP SOC
5Espressif｜2023 ESG Report｜Global Ecosystem
Global Ecosystem
Espressif's open-source ecosystem is highly renowned among the global IoT developer community. Numerous
international engineers and tech enthusiasts actively develop new software applications based on Espressif’s
hardware products and foundational software development kits. They freely exchange and share their experiences
with the company's products and technologies online.Development Platforms
Espressif's IoT development framework ESP-IDF Espressif's products are also compatible
has a mature and strict development and with development platforms such as
maintenance process. Adhering to the spirit of Arduino IDE Amazon FreeRTOS
openness Espressif's products also support NodeMCU MicroPython PlatformIO and
operating systems such as NuttX Zephyr Vela and Mongoose OS.OpenHarmony covering a vast global developer
community.
4100K+ 200+
4100 K+ views for the most 200+ books written about
popular videos of ESP32- Espressif’s SoCs in 10+
powered projects on YouTube languages
CSDN 170053The search results for ESP32 and ESP8266
on CSDN technical blog reached 170053
76K+ 102K+
76 K+ members of ESP32 groups 102 K+ open-source Espressif-
on Reddit powered projects on GitHub
6Espressif｜2023 ESG Report｜Corporate Honors
2023 ESG Rating Results
Wind ESG CSI ESG QUANTDATA ESG
Rating A Rating AA Rating A
AA A
Corporate Honors
2023202220212020* China TOP 10 Wireless Connection * Top Ten "Annual Open Source Contribution * The 6th "China IoT Innovation Award” * Tencent Cloud IoT Most Valuable Partner of
Companies AspenCore Enterprise" in the 2022 China Developers Elecfans the Year 2020 Tencent Cloud
* Espressif Technology is among the first Influence List CSDN * Most Valuable STAR Market Listed Company * Forbes China's Most Innovative Companies
globally to support Bluetooth Mesh Protocol * Tech G "Outstanding Technological of 2021 China STAR Market Daily List of 2020 Forbes
1.1 Bluetooth SIG Innovation Award" Shanghai International * Most Investment-Worthy Company of the * The 14th China Listed Company Value
* Best Partner Award of Xiaomi IoT Module Consumer Electronics Show Year 2021 on the Science and Technology Selection IPO New Star Award Securities
Business of the Year 2023 Xiaomi * 2022 National College Students' IoT Design Innovation Board SMDC Times
* 2023 National College Students' IoT Design Competition Best Support Award National * Industry New Star Award Shanghai * Outstanding Supplier of Xiaomi Ecological
Competition Best Support Award National Association of Higher Education Computer Integrated Circuit Industry Association Chain IoT Module in 2020 Xiaomi
Association of Higher Education Computer Education National College Students' IoT
Education National College Students' IoT Design Competition Organizing Committee
* Member of the Sixth Council of Shanghai * Best STAR Market Listed Company of Sci-
Integrated Circuit Industry Association Tech Innovation Star in 2020 Awarded by:
Design Competition Organizing Committee * Most Innovative STAR Market Listed Shanghai Integrated Circuit Industry China STAR Market Daily Cailianpress
* Member of the Fourth Council of Pudong Company China STAR Market Daily Association
New Area R&D Institutions Association in Cailianpress
Shanghai Pudong New Area R&D
Institutions Association in Shanghai
7Espressif｜2023 ESG Report｜Key Financial Data
Key Financial Data
In 2023 Espressif's revenue reached 1433.07 million RMB with a net income of 136.21 million
RMB. The Non-GAAP net income was 154.94 million RMB. For more financial information please 1%
refer to our 2023 Annual Report.
26%
Core Financial Data 38%
Revenue by
CNY 2023 2022 2021 Revenue by RegionProducts
Revenue 1433064911 1271127201 1386371541 61% Chips China's Mainland
Modules Rest of the World
Revenue YoY (%) 12.74 -8.31 66.77 Others 74%
Research and development
expenses 403713557 337121814 271689981
Net income 136204637 97323103 198427708
Non-GAAP net income 154942053 112049122 220215708
Revenue in Million RMB Gross Margin
Total assets 2203800366 2082796825 2129056143 1500
1433
Total shareholders’ equity 1913000228 1826677535 1823017913 1386 48.9% 47.3% 46.9%
Weighted ROE (%) 7.14 5.36 11.52 1271
1250
39.6%40.0%40.6%
Net cash provided by
operating activities 302597343 71321658 31460857
Basic EPS 1.7012 1.2129 2.4775 1000
202120222023
Diluted EPS 1.6929 1.2127 2.4566 2021 2022 2023
Chip Overall
8Espressif｜2023 ESG Report｜2023 ESG Highlights
2023 ESG Highlights
Espressif is committed to enabling developers worldwide to utilize our technology by open-sourcing it facilitating the development of connected smart devices. We integrate the principles of technological
innovation societal contribution environmental responsibility and energy efficiency throughout our business operations. Leveraging our extensive experience in the AIoT field Espressif will continue to
contribute to the creation of a more intelligent secure and sustainable IoT future.
1433 M 57.50% 77.44% 90+
Revenue 250 2023 cash R&D employees Offline trainingdividend Ratio
Accumulative
applications for
patents and
50% software 39.95% 5000+
Copyrights
Female Net income Vedio learning
directors growth rate sessions
ESG
33.60% 161800 KM 3.98 t 0%
Female Dynamic logistics Per capita Work-related
employees planning saves carbon emissions injury rate
9Espressif｜2023 ESG Report｜ESG Management
ESG Management By positioning the results of the assessment of material topics within a matrix we can intuitively see
the most critical issues to internal and external stakeholders. The priority issues to focus on are:
ESG Governance ESG Governance Framework * Innovation Management * Product Quality * Risk Management
Espressif's Environmental Social and Governance (ESG) is * Customer Relations * Career Development * Ethics and Integrity
collaboratively managed by all members covering the board of directors * Economic Performance * Occupational Health and Safety * Anti-Corruption
managers of various departments and all employees. The Strategic Board of Directors * Corporate Governance * Cybersecurity and Data Privacy
Committee of the Board of Directors is a specialized governance body Innovation Management
established by the board according to the company's bylaws. It is
responsible for guiding and supervising ESG matters. Customer Relations Strategic Committee
Corporate Governance
The Strategic Committee of the Board establishes an ESG Working Group Product Quality
Economic Performance
responsible for implementing the committee's directives into company- Cybersecurity and Data Privacy
wide plans. This includes but is not limited to producing the company's Career DevelopmentESG Working Group Occupational Health and Safety
annual Environmental Social and Governance (ESG) report organizing Ethics and IntegrityHuman Rights
assessments to learn about the company's annual ESG performance the Risk Management
Diversity Equity and Inclusion
risks and opportunities faced and formulating corresponding Anti-Corruption
improvement plans. The ESG Working Group reports to the Strategic Employees
Social Welfare
Committee of the Board at least once a year on the company's ESG Sustainable Suppliy ChainBrand Infulence
management policies plans actions and reports.Materiality Assessments Environmental Protection Climate Action
During the reporting period the company conducted an ESG material topics analysis to help identify the most
Energy Use and Efficiency
critical matters to the company and its stakeholders and to provide guidance when developing ESG management Biodiversity
plans and measures. The ESG Working Group identified priority issues through the following procedures:
* Our process prioritized selecting issues that concern stakeholders. We based our selection on standards such
as the CASS-CSR4.0 the GRI Standards the National Standard of China's Guidance for Social Responsibility
Reporting (GB/T36001-2015) and the SDGs Enterprise Action Guide. Governance
* Collecting opinions on the importance of concerned issues from various stakeholders through written
feedback surveys telephone discussions consulting with the company's management and the board Social
committees;
Environment
* Assessing and ranking substantive issues based on the judgments of stakeholders and executives and
reporting them to the Strategic Committee of the Board. IMPACT ON COMPANY
10STAKEHOLDER CONCERNEspressif｜2023 ESG Report｜ESG Management
Stakeholder Engagement Stakeholder Communication Process
Based on the development of its operations and changes in the external environment Espressif has identified seven main types of
stakeholders: customers employees developers suppliers investors governments and the social public/media. We recognize Topics Identification Communication Feedback Disclosure
the focus areas of stakeholders and establish communication channels to respond promptly ensuring that our significant issues
align with stakeholders' expectations market trends and business opportunities.Main
Stakeholders Customers Employees Developers Suppliers Investors Governments Social Public/Media
* High-quality products * Employee rights * Open-source * Supplier Management * Economic growth * Compliance & * Social welfare
* Comprehensive service * Working environment and corporate Community * Fair trading * Corporate governance Ethics * Brand market image
system culture * Accessible * Honoring contracts * Risk management * Product safety and * Biodiversity protection
* Operating capabilities * Training and development green and * Win-win strategy * Information disclosure reliability * Corporate governance
* Communication channels * Opportunity for promotion secure AIoT * Sustainable corporation * Investors relation
technology * Employment * Employment Focus Areas * Competitiveness * Compensation and decent living * Compliance & Ethics * Competitiveness
* Innovation * Health and safety * Communication
* Drive * Drive technological advancement /
between * Information security * Industry and market technological Support industry development
* Cybersecurity and data privacy * Cybersecurity and data privacy developers development advancement / * Environmental protection
* Compliance & Ethics * Personal competitiveness * Innovation * Innovation Support industry
* Corporate governance
development
* Risk management
* Products comply with * Quarterly CEO letter conveying the * Follow the rules * Multidimensional assessment * CEO attends every * Cooperate with * Support education and welfare courses
regulatory compliance company's cultural concepts of the open- for supplier admission shareholders' meeting and government * Continuously introduce AIoT
requirements * Publishing a monthly company source * CSR audits for suppliers regular performance briefing surveys technology and products enabling
* Quarterly business review newsletter to help employees community * Requirements for certification sessions engaging in face-to- * Participate in more people to enjoy the improvement
targeted discussion on understand company developments * Actively in quality safety and face communication with policy seminars of life quality through technology
customer situations * Providing various online and offline participate in environmental management investors and symposiums * Release company news and latest
* Smooth channels for handling training on different topics community systems * holds irregular investor * Respond to public technology information on various
customer complaints / Timely * Annual employee confidentiality open-source * Require suppliers to comply meetings (including online inquiries about domestic and foreign media channels
and efficient complaint business ethics and compliance projects with product regulatory meetings) policies such as the official website's news
Responses resolution training provide compliance * Respond to investor inquiries * Study the latest subscription channel WeChat official
* At least one customer * Biannual performance evaluations solutions and * Require suppliers to adhere to through the online "SSE e- laws regulations account Zhihu Bilibili Twitter etc.satisfaction survey per year with irregular performance feedback code Espressif's code of business Interaction" platform investor and policy * Wildlife conservation programs and
* Regular business visits and * Implementation of health and safety * Open and conduct email and phone changes regular donations
frequent communication of abundant * Providing employees with welfare * Regularly conduct supplier * Publishing company news * Pay taxes in * Advocate for green office practices
customer needs technical * Offering competitive salaries evaluations and through official channels accordance with * Value chain management from an
* Open and abundant technical documentation * Employee satisfaction surveys and communications resources allowing investors to understand
the law environmental protection perspective
documentation resources feedback * On-site quality audits the company's development * Protect ecological resources
* Tipoff email * Timely payment promptly * Release report regularly
1111Espressif｜2023 ESG Report｜ESG Management
ESG Goals
2023 Espressif continued the strategy in 2021 and 2022 integrating the United Nations Sustainable
Development Goals (SDGs) into our ESG management. In line with the company's actual Environmental Social CorporateGovernance
environmental social and corporate governance practices Espressif set short- medium- and
long-term goals and incorporated them into the company's long-term development strategy.Subsequent sections provide details on the progress made in implementing the United Nations
Sustainable Development Goals with each chapter's title page indicating the SDGs addressed by the
disclosed content.Goals
Environmental Social Corporate Governance
* Maintain product innovation and high standards of product quality striving to
improve customer satisfaction;
* 100% use of recyclable green packaging reuse of trays and bulk * Continue to improve the signing rate of supplier codes of conduct and the
* 100% of employees receive annual training on business conduct
and ethical standards;
cartons improving resource utilization efficiency; coverage of ESG-related system certifications;
* Adhere to a gender equality recruitment policy and career
* Advance Espressif's wildlife conservation plan spread knowledge * Perfect the employee rights protection system continue to maintain a 0% rate
about endangered wildlife and call for more people to join the of work-related injuries;
development channels maintaining a female representation of
over 25% on the board of directors;
2030 animal protection program; * Reduce inequality maintain diversity in employee nationalities and backgrounds and firmly eliminate discrimination events; * Continue to execute and constantly improve the existing
Goals * Practice low-carbon concepts advocate for green office life and employee training system instilling awareness of safety integrity improve systems and methods for verifying and tracking the carbon * Improve the construction of open-source documentation on major platforms anti-corruption and green office practices;
footprint of the supply chain; continuously output open-source project codes and technical tutorials giving
* Persist in energy-saving and emission-reduction measures focus back to the developer community;
* Continuously strengthen the company's information security and
data privacy confidentiality mechanisms ensure that employees
on greenhouse gas emissions identify climate change risks and * Persist in high-quality communication methods such as global developer receive 100% of their training and increase outreach to other
opportunities promptly and actively respond. conferences; stakeholders.* Continue to support STEM education provide high-quality professional
educational resources and create more employment opportunities.* Persist in independent research and development of low-power * Ensure that the proportion of women in management positions is maintained at * Strengthen an efficient corporate governance structure and
designs achieving the vision of saving energy through
Long-term over 20%; improve various corporate charters and systems ensuring technological innovation;
Goals * Continuously build a thriving ecosystem based on open documentation and
transparency accountability and fairness;
* Strengthen the influence on the developer community and the open-source code adhere to a win-win hardware-software symbiotic strategy * Optimize supply chain management ensure efficient operation of
upstream and downstream actively empowering the community to and promote the development and progress of the industry. logistics and supply chains and avoid potential risks.undergo green and low-carbon transformation and upgrade.
12Espressif｜2023 ESG Report｜Environmental Protection
Environmental
Protection
SDGs Goals
13Espressif｜2023 ESG Report｜Environmental Protection
01 Environmental Protection Espressif
Recycling Eco-friendly
and Reuse Design
Environmental Governance and Strategy
Environmental Management System Governance Procedures
Espressif's commitment to sustainable development is The Strategic Committee convenes an ESG Working Group Green
demonstrated by our adherence to environmental laws and meeting annually to discuss policies plans and Customers Supplier
regulations including the Environmental Protection Law of performance over the past year. The Chairman submits a Value Chain
the PRC the Energy Conservation Law of the PRC and report of the committee's discussions and execution results Green Green
other national and local standards. In line with the ISO to the Board. Issues discussed include climate change at Delivery Manufacturing
14001 standard we established an environmental the company's operational sites resource use and supply
management system. It introduces various programs chain environmental management.throughout the entire product life cycle to minimize the
environmental impact.Environmental Risk Management Green Transportation
We research potential risks and opportunities and take Warehouse Manufacturer
proactive measures to address climate change. We Future Blueprint
promote sustainable development throughout the value
chain with initiatives such as green product design eco- 2030 Goals development. By 2030 achieve greenhouse Our Vision
friendly manufacturing green transportation energy gas emission intensity (Scope 2) of ≤ 4.87
management waste disposal and recycling. Increase the frequency of carbon emission tons/person. Espressif believes that creating "impact" is
data surveys tracking the monthly usage of the purpose of the products. The
To enhance employees' awareness of environmental resources in operations to control resource Long-term Goals significance we want to create goes beyond
management we conduct mandatory environmental consumption and carbon emissions. technological products improving life; it lies
training annually. We require all new employees to In the long term the company will continue in considering ecological construction and
participate in at least one training session. Improve the tracking of carbon emissions to improve the energy management system low-carbon environmental protection as the
upstream and downstream and establish a strive to keep carbon emission intensity at a responsibility and commitment. We hope to
more comprehensive green database. controllable level and further reduce it. bring more and better changes to the world
52 Meanwhile we will enhance the radiating with our strength.As the company continues to grow we will influence on the industry empowering the 100% strive to control carbon emission intensity community to undergo green and low-carbon
environmental training of employees ensuring the company makes a positive transformation and upgrade.sessions received training contribution while maintaining sustainable 14Espressif｜2023 ESG Report｜Environmental Protection
Climate Risks and Opportunities
We have identified the impacts of climate change-related risks then established response measures and made decisions accordingly.Climate Risks and Response Measures Potential Opportunities
Climate Risks Potential Impacts Response Measures The abundance of paperless open
Increase backup servers and ensure timely data backups to recover documentation and code resources combined
Extreme High It may cause fires equipment damage server malfunctions recent data. Add high-efficiency cooling equipment and fire with AI has lowered the barriers of developers
Temperature data loss and affecting operations. extinguishers. Regularly inspect server rooms to detect potential fire thereby feeding back into the company's
hazards and minimize losses. business development.Extreme More loss or extended transportation time adversely Purchase necessary insurance. Establish an emergency response
Espressif continuously providing global
Precipitation affecting project progress and operating costs. team. Strictly review key suppliers' business continuity plans avoid
developers with a wealth of free open-source
reliance on a single supplier and establish backup supply chains. technical documentation enhancing the
Physical efficiency of IoT project development reducing
Risks They may lead to power outages flooding safety Develop emergency drill plans to enhance employees' evacuation and the likelihood of rework and returns thus
Typhoons accidents or the forced suspension of R&D progress rescue capabilities. Store backup copies in locations far from data achieving the goal of energy saving and emission
thereby affecting operating costs. centers or business locations. reduction. On the other hand the development
of AIGC combined with the company's extensive
Global The company has taken active steps to integrate eco-friendly and low- open resources has attracted more IoT
Warming Some offices have long been faced with the climate threats carbon concepts into our strategy. We adopt sustainable business developers to join our ecosystem promoting the
of global warming and rising sea levels which could have a operations in daily work reducing negative environmental impacts. We
Sea Level development of our business (see Section 02 sustained impact on the company's operations. also encourage employees to participate in and practice environmental
Rise Community Symbiosis for details). actions.Our customers supply chain and regulatory departments
Environmental have significantly increased their focus on the company's Espressif regularly discloses annual ESG reports and plans to continue
User demand for low-carbon drives our R&D
Information environmental information disclosure. Failure to disclose this practice long-term. We compare our current systems with As the IoT market expands and user demands
Disclosure relevant information promptly may lead to a crisis in international and domestic mainstream ESG standards to identify gaps shift to intelligent connectivity with frequent
Transition cooperation or compliance risks. and promptly improve. demands for low power consumption. Espressif
Risks
Low-carbon As a knowledge-intensive industry the semiconductor
focuses on "connectivity + edge computing"
sector advances rapidly in technology development. Espressif insists on independent research and development and expands our connectivity technology from Wi-Fi Technology
Innovation Espressif faces risks in research and development progress
invests in R&D striving to become a leading international chip design 4 to Wi-Fi 6 low-power Bluetooth Thread and
Risk and market promotion failing to meet expectations in
company. The company continuously improves its product matrix Zigbee technologies and continuously increases
developing low-carbon (low-power) chips. avoiding reliance on a single product line. the edge computing capabilities.
15Espressif｜2023 ESG Report｜Environmental Protection
GHG Emissions Management
Direct greenhouse gas emissions arise from sources owned or
1 controlled by the company such as combustion in owned or controlled boilers furnaces vehicles etc. and emissions produced Energy Management
by chemical production in owned or controlled process equipment. The company operates in the IC industry's design segment and does not
involve product manufacturing; therefore our primary energy consumption
comes from office operations employee commuting and other aspects. To
Indirect greenhouse gas emissions from electricity produced by promote low-carbon operations we tracked Espressif's carbon footprint for the 2 power generation facilities. first time in 2021. Further we advanced the implementation of energy-saving
Scope and emission-reduction measures through quantified results.GHG Emissions Accounting
3 Other indirect greenhouse gas emissions considering upstream We are aware of the risks brought about by global climate change. Due to and downstream indirect emissions. Espressif's business characteristics our carbon emissions mainly come from
purchased electricity for office spaces business travel and hotel
accommodations as defined by GHG Protocol Scope 2 and 3. We have
2023 Espressif GHG Emissions collected data on the annual group's purchased electricity employee travel
kilometers upstream transportation and distribution kilometers and factory
Emission Intensity tCO2 2021 2022 2023 production carbon emissions for 2023. As shown in the table we have
Scope I 0.00 0.00 0.00 conducted corporate carbon emission estimates with specific emissions.Scope II 1017.24 1504.83 2394.49 * This report's calculations refer to the "Greenhouse Gas Protocol (GHG Protocol)"
Purchased Electricity 1017.24 1504.83 2394.49 developed by the World Resources Institute (WRI) and the World Business Council for
Sustainable Development (WBCSD) for the corporate carbon emission accounting for
Scope III 198.90 7412.67 9826.26 the year 2023. To facilitate the description of direct and indirect emission sources the
GHG Protocol sets three "scopes" (Scope 1 Scope 2 and Scope 3) for greenhouse
Purchased Goods and Services 8941.04 7229.32 9464.35 gas accounting and reporting.Business Travel 198.90 168.89 320.40
* Starting from 2023 we have expanded the statistical scope of Scope 3 adding
Upstream Transportation 28.41 categories "Purchased Goods and Services" "Upstream Transportation" and
Upstream Leased Assets 14.46 13.10 "Upstream Leased Assets" beyond the "Business Travel" category and covering as
many traceable sources as possible.Total（Scope I & Scope II） 1017.24 1504.83 2394.49
Per Capita（Scope I & Scope II） 1.97 2.75 3.98
16Espressif｜2023 ESG Report｜Environmental Protection
Energy Saving and Emission Reduction
Innovation beats challenges Intelligence across industries the system can automatically release a proper amount of fertilizer or nutritional supplements.We continuously improve our environmental management During the reporting period Espressif's products entered more At the same time this technology can also be applied to warn of
system focusing on the research and development of low- downstream markets such as industrial control education pests and diseases enabling field monitoring and helping
energy-consumption technologies. We aim to save energy healthcare agriculture vehicle networking energy management farmers increase yield and quality while reducing management
through technological innovation. Espressif has made etc. promoting the low-energy chip market. costs.breakthroughs in low-energy products with the latest mass-
produced in 2023 ESP32-C6 ESP32-H2 and several chips to Intelligent Industrial Control
be launched in 2024 all being low-power products. Optimization of logistics
Espressif products have a wide range of industrial control
Low-Power Circuit Design application scenarios. For example they can connect to various Fuel is the most significant cost within the entire transportation sensors and actuators to precisely control the production line. By chain. How the packaging and transportation of raw materials
Espressif incorporates green concepts into chip design process collecting analyzing and interpreting data our products can work-in-progress and finished products are optimized directly
reducing energy consumption. Espressif's research and quickly identify problems thereby improving production impacts Scope 3 carbon emissions.development of low-power design significantly reduces product efficiency and product quality and providing strong support for
power consumption. the sustainable development of enterprises. Espressif globally adjusts storage and transportation planning
dynamically focusing on optimizing efficiency to reduce
Espressif offers various solutions that allow users to select power Additionally Espressif software products (such as ESP Insights) environmental impact. New initiatives during the reporting period
consumption modes. These solutions meet the different allow developers to remotely monitor their devices and all data include:
scenario requirements of IoT applications and assist downstream can be uploaded to the cloud (ESP RainMaker) for remote
device manufacturers in passing strict power consumption maintenance. Using this technology if a device malfunctions or * Increase a foundry in Vietnam for direct shipment to customers
certification tests. For example Espressif's single live wire switch behaves abnormally engineers can quickly locate and fix the and optimizing raw material transportation routes resulted in
solution has created a smart switch with lower power issue reducing downtime and enhancing production benefits. saving a total of 161800 kilometers.consumption and superior Wi-Fi performance. * Improving packaging design to reduce transportation weight
Intelligent Agriculture and increase loading efficiency.High Integration Espressif products can be used to build intelligent agricultural
Espressif's chipsets are highly integrated reducing the need for systems. Based on AI machine learning and the integration of
additional components such as resistors capacitors inductors advanced image recognition technologies data on crop growth
switches baluns and power management chips which reduces can be collected. This data can be transmitted via Wi-Fi to the 161.8 thousand KM 0.49 tCO2
the waste of printed circuit boards. cloud or local servers where it is analyzed. For example when
the level of specific nutrients in the soil falls below the ideal level Saving transportation distance Saving GHG emissions
17Espressif｜2023 ESG Report｜Environmental Protection
Circular Economy Lifecycle
Espressif is a fabless company thus reducing
the environmental impact of transportation Green Packaging
has become an essential task. Improving the environmental impact of 100% 51%
packaging is a crucial element of our green
Green Procurement supply chain. We improve resource utilization Recyclable green packaging label area saved per reusable trays and bulk cartons single box packaging
efficiency by enhancing packaging design
and Manufacturing using eco-friendly materials and increasing
the recyclability of packaging.Since carbon emissions arise at every stage Certification
of the product lifecycle especially in The company's sustainable packaging plan In 2023 Espressif continued to encourage
manufacturing the company has includes: suppliers to pass environmental certifications.implemented a series of measures to Core suppliers have passed the following
minimize environmental pollution as much as * Smaller lighter and more suitable sized
possible including: packaging.certifications:
* Using recyclable materials instead of
* Requiring suppliers to sign "Supplier plastic.Environmental Commitment" "Supplier * Replace plastic films with recyclable
Corporate Social Responsibility and materials.Environmental Protection Agreement"
declarations and collaborating with * Convert plastic trays and foam components
suppliers who have obtained environmental to paper or reduce use through design.certifications. * Increasing the reuse of trays reels and
* Supporting suppliers in the use of bulk cartons.renewable energy. * Reducing the size of unit labels by 20%
* Procuring non-toxic and harmless materials. and reducing label usage saving 51% per
carton packaging.* Minimizing water use and expanding reuse. * Product packaging materials meet the * Reducing land waste and increasing 94/62/EC Directive on Packaging and
resource recycling. Packaging Waste.* Standardizing packaging box sizes.
18Espressif｜2023 ESG Report｜Environmental Protection
Energy Reservation reserved machines and lighting equipment are Waste Disposal Rulesturned off which saves energy. Besides the
Espressif advocates the environmental protection reservation platform clearly shows the status of
Classification Example Disposal Method
that everyone is responsible for environmental instrument usage avoiding conflicts and improving Handled by designated suppliers medical waste
protection. We raise employees' environmental the efficiency of our engineers.Non-reusable
waste Domestic garbage such as masks are sent to specified incineration
awareness through low-carbon advocacy making points for harmless treatment.our office more eco-friendly and energy-saving. Waste Management Kitchen waste Kitchen waste waste Handled harmlessly by professional qualified cooking oil suppliers.We have a series of measures to guide employees We cooperate with professional waste disposal
in low-carbon working. For example we remind companies to handle daily waste reduce waste Solid Packaging cartons Regularly collected by designated suppliers
employees to adjust air conditioners to reduce landfilling and minimize the negative impact on waste Reusable waste hardware parts equipment scrap and hardware parts go through
waste; we call on employees to turn off lights the environment. scrapping.when leaving save water recycle paper and Chemical packaging Stored at designated points disposed by
digitalize office operations; we provide employees The company generates various types of Hazardous waste containers qualified companies.with personal tableware and water cups to reduce electronic waste daily including used servers
storage devices network equipment computers Construction Decorative waste Construction waste is stored at designated the use of disposable tableware; we choose waste materials points dealt with by the contractor.suppliers certified by the FSC for international monitors and electronics used for testing. We
forest management; we adopt "online interviews" collaborate with qualified professional e-waste
suppliers to ensure proper tracking processing Waste
Generated from Directly enter into septic tanks and discharg into
to reduce emissions. water Other wastewater restrooms pantries and the municipal sewer network after meeting and recycling of our electronic waste. cleaning activities standards.In terms of waste management we strictly follow
the classification policy store wet and dry waste at To minimize electronic waste the company has
designated points and handle them according to designed an inventory management program.the prescribed procedures. We also participate in Portable office computers and other electronic
caring for stray animals in the community helping products that meet specific criteria can be
to find adopters for stray animals. transferred to employees for personal use upon
application aiming to extend their lifecycle.Laboratory Management
Espressif has increased the efficiency of lab
instrument use by establishing a laboratory
reservation system. This system prevents conflicts 15
in experiment scheduling enables the tracking of WaterUsa
8ge t H3azard3ousW.as5te kg
instrument usage and controls laboratory energy
consumption.Espressif staff can schedule laboratory instruments 287100liters
via a webpage or app. When the laboratory is not GarbageDisposal
19Espressif｜2023 ESG Report｜Environmental Protection
Biodiversity Protection 198 %
aYomYogurnotwstthorIaUtCeNofdonation (Red List of Species)
Espressif is concerned about the environment and ecology. To further raise
Blue-footed Booby public awareness since 2020 we have initiated an endangered species protection program in reference to the IUCN Red List of Species. Some of
Least Concern Espressif's development boards are named after endangered species and a
The Blue-footed Booby is a seabird that inhabits portion of the income from these development boards is donated continuously
tropical and subtropical islands in the Pacific to IUCN on a quarterly basis. In the same year we released T-shirts with themes
Ocean. They have bright blue feet which are of wildlife protection and started using these animal names as names for
easily identifiable and are a sexually selected trait meeting rooms to call on employees to join together in protecting biodiversity.related to diet.Clemmys Guttata
Endangered
Clemmys guttata is a small semi-aquatic turtle living in the Great Lakes region of North
America. Although Clemmys guttata can currently be seen in multiple conservation areas
its future survival remains a concern due to environmental changes and human poaching.Vaquita
Kaluga Saola
Critically Endangered
Critically Endangered Critically Endangered
The Vaquita is the world's rarest marine mammal discovered
The Kaluga is a critically endangered giant The Saola an endangered mammal known in 1958 and now on the brink of extinction. In recent years
predatory sturgeon living in the Amur River in as the "Asian Unicorn" has been shrouded the population of Vaquitas has rapidly decreased due to
Russia's Far East. Due to its valuable caviar in mystery since its discovery in 1992. To illegal fishing activities with only about 10 individuals
being heavily harvested it continues to face date scientists have only recorded wild remaining in their main habitat area in Mexico.threats to its survival. Saola on four separate occasions.ESP32-S2-kaluga-1 ESP32-Vaquita-DSPG
ESP32-S2-Saola-1
A multimedia development board An audio development board
based on ESP32-S2 A general-purpose development board based on ESP32
based on ESP32-S2
20Espressif｜2023 ESG Report｜Community Symbiosis
Community
Symbiosis
SDGs
21Espressif｜2023 ESG Report｜Community Symbiosis
02 Symbiosis: Sharing Booms Industry
Espressif's thriving ecosystem begins with the company's Diverse platforms prosper our ecosystem More job opportunities
open documentation and open-source code. The development
of AI technology catalyzes the achievement of energy-saving The company adopts a B2D2B (Business to Developer to A thriving open-source ecosystem provides more individuals
and emission reduction while driving industry development Business) business model dedicated to creating a thriving startups and research teams with low-cost opportunities to build
and bringing more job opportunities to the community. developer ecosystem to capture business opportunities. IoT projects promoting industry growth and creating more job
Meanwhile these measures can reduce operating costs and Espressif has held its Global Developer Conference (entirely opportunities. Our impact is not limited to the office location; the
assist in market expansion thereby giving the company online) for two years. The company also maintains the ESP32 internet allows everyone in the e-community to benefit.stronger motivation to continue investing in such an forum and Bug Bounty reward program energizing the
ecosystem ultimately forming a positive and sustainable ecosystem for collaborative development. Giving back
virtuous cycle.Devoted to high-quality education Lower Costs accelerating development
Actions Investment in education is our commitment. We spare no effort Our ecosystem helps spread the company's reputation and
in sharing the latest technologies with students and faculty to spontaneous promotion by developers reduces the company's
Open resources + AI accelerate development enhance students' industry awareness and competitiveness marketing expenses and brings more potential business
helping them secure more job opportunities in the future.Espressif provides many self-service resources including free opportunities to the company. Meanwhile Espressif encourages employees to participate in
documentation and open-source code such as official technical volunteer activities.documentation and GitHub code. These resources are presented Highlight differences more competitiveness
online and easily accessible to developers. Social Impact The company has gained high recognition globally by providing
With the popularity of AI-assisted tools like ChatGPT and Copilot differentiated products and complimentary additional ecological
Espressif's extensive open resources provide nutrition for training Saving more resources services to our customers thereby enhancing our
AI models. More innovators are using AI assistants to develop competitiveness.and optimize code for IoT applications built with Espressif All documentation is available in the cloud and the operations
products accelerating the development of the IoT application are paperless. These materials reduce redo or return products
market. effectively improving user development efficiency. Holding the Actionsdeveloper conference online eliminates the carbon emissions of
Our commitment to open source ensures the symbiosis with global business travel. Moreover it has a broader radiating Positive sustainable
industry partners. Espressif's hardware and software are non- scope impacting developers worldwide. We indirectly achieve virtuous cycle
exclusive and can achieve a win-win situation with other energy-saving and emission-reduction goals by helping clients Giving Positive
companies through software symbiosis (such as Wokwi and reduce the consumption of human and material resources. Back Impact
LVGL) and hardware symbiosis (such as Arduino).
22Espressif｜2023 ESG Report｜Community Symbiosis
Example 1: Espressif and Wokwi's Symbiosis Example 2：Espressif and Arduino's Symbiosis Example 3：ESP32 Bug Bounty Program
Wokwi is an online hardware simulation platform that supports a The Arduino platform includes both hardware and software The Espressif Bug Bounty Reward Program has been in operation
variety of hardware including Espressif's products. The platform components. The hardware is a series of programmable for seven years. The program stipulates that for every valid
allows users to run and test their embedded code in the browser development boards and the software is an Integrated security-related bug identified in our development platform we
without actual hardware devices. Development Environment (IDE). Like Espressif's the Arduino pay $500 with an additional $1729 awarded if the developer
community is open-source allowing users to share projects provides verification testing. The feedback from developers help
This platform is free so Espressif developers can avoid the code and experiences. us improve the software before commercialization providing
transportation carbon emissions associated with purchasing test better software support for customers. Espressif thanks
development boards during the experimental phase and issues As early as 2015 Espressif's products had achieved software developers in the ecosystem for contributing to the company's
with development board wear and tear due to failed experiments. symbiosis with Arduino. In 2023 Arduino officially launched the growth.Through software symbiosis developers on other platforms can Arduino Nano ESP32 development board featuring the main
become familiar with Espressif products improving development control chip ESP32-S3 from Espressif thus tightly integrating the IoT security incidents are a long-term and persistent threat;
efficiency and promoting the company's brand. Arduino hardware and software platform with the ESP ecosystem. Espressif takes such issues seriously. We respond quickly to
Integrating the two ecosystems will further expand the vulnerabilities and propose mitigation solutions. The company
community bringing more development opportunities to each has also won global customer trust and recognition for its severe
other. and open attitude towards handling security incidents.EspressifSecurityIncidentResponseProcess
Report Evaluate Corrective Public
Incident Issue Actions Disclosure
23Espressif｜2023 ESG Report｜Community Symbiosis
Espressif Developer Conference 2023
Since the release of the ESP8266 in 2014 Espressif has established a long-term
cooperative relationship with the developer community achieving fruitful results.The developer community will continue to drive innovation in the AIoT field
alongside us. For example we provide developers with development kits
documentation and manuals that can be accessed without signing a non-
disclosure agreement. We also offer open-source software and tools to help the
developer community create IoT products more effectively.In September 2023 Espressif held its second Global Developer Conference
inviting technical experts from Espressif and its partners to give nearly 30
speeches on topics such as Thread ESP32-C6 and Wi-Fi 6 low-power features
ESP-Mesh-Lite + ESP RainMaker cloud solutions ESP-IDF RUST SquareLine
Studio and AWS IoT. Like the previous year this developer conference was
broadcast from two live centers in Shanghai and Brno and streamed over three
platforms: Espressif's WeChat channel Bilibili and YouTube for 16 hours over two
days attracting approximately 70000 viewers globally.Espressif is committed to sharing the latest products and solutions with global
developers through conferences and building a beneficial two-way instant
communication platform. We hope engineers become more efficient creative Senior Principal Engineer CEO CEO
and innovative by using our solutions and embodying a unique Espressif style. Richard Barry Gábor Kiss-Vámosi Surya Jayaweera
Espressif has initiated the call for presentations for the third Global Developer
Conference. We look forward to the developer community gaining a deeper Refactoring FreeRTOS for Introducing SquareLine From Rockets to Cellos: Real-world
understanding of our products and future directions. Through such events we the Next 20 Years Studio v2 Applications of ESP32 Series
aim to gather feedback from customers developers and the community to Microcontrollers and Development
create products that users love. Board Variants
24Espressif｜2023 ESG Report｜Community Symbiosis
More than books on how to use ESP products can be found
cover over languages
2255Espressif｜2023 ESG Report｜Community Symbiosis
High-Quality Professional Education
Professional education is the cornerstone of writing embedded teaching books which are The National College IoT Competition is a apply classroom knowledge to reality and
the semiconductor industry's future used for teaching and the community large-scale and influential academic gain an in-depth understanding of cutting-
development. Espressif is devoted to benefiting the developers and engineers. competition in the IoT field in China. It was edge AI technologies through Espressif's rich
cultivating talent for the industry. We have jointly initiated by the Computer Science development resources and competition
launched many school-enterprise Internship Program: From Professional Teaching Steering Committee training. Furthermore Espressif offers
cooperation projects with various Internship to Employment and the IoT Engineering Professional internship opportunities to outstanding
universities including collaborative courses Construction and Research Expert Group. students in the competition further opening
experimental courses internships Espressif signs university-enterprise joint Since its first event in 2014 it has been up future employment pathways for students.competitions scholarships etc. training agreements with universities successfully held for ten consecutive
providing students with internship sessions. Overseas STEM Education
IoT-Embedded Courses: From opportunities that can lead to employment.Theory to Practice Students who pass Espressif's preliminary Espressif has sponsored this Competition for
Leveraging the powerful global influence of
evaluation can apply for an internship. the second consecutive year providing the ESP32 series chips Espressif has also
University students must learn about IoT- Students with suitable thesis topics may also teachers and students with the topic established STEM education cooperation with
embedded systems. Universities typically complete them at the company. "Exploring Agricultural Innovation Based on multiple overseas universities. This
offer embedded experimental courses to help ESP32-S3" and providing rich development cooperation includes teaching using
students learn IoT-embedded development During the internship students will participate resources including various AI development Espressif's hardware and software resources
based on hardware development boards and in the company's actual R&D projects boards based on ESP32-S3 the deep conducting IoT workshops and supporting
software programming. working alongside an international team. Due learning library ESP-DL and software IoT competitions.to the nature of the our R&D team students development frameworks such as voice
Espressif cooperates with universities on can directly communicate with and learn from recognition and face recognition. In this
these courses. Not only do we provide a large many technical experts in the industry and competition the company invites students to
number of ESP32 series development boards participate in internal training. focus on smart agriculture and to solve real
as hardware support but we also bring agricultural problems.Espressif's IoT operating system ESP-IDF rich After completing the internship students who
software SDKs and ESP RainMaker into the pass the comprehensive assessment will Espressif supported approximately 200 teams
classroom allowing students to learn IoT receive an offer from Espressif's campus from universities nationwide with 13 teams
project development from scratch. recruitment and become official employees. advancing to the final round.At the same time Espressif also provides College IoT Competition Through this competition students can
technical support for university professors explore experience and learn IoT application
226Espressif｜2023 ESG Report｜Innovation
Innovation
SDGsEspressif｜2023 ESG Report｜Innovation
03 Innovation
The era of rapid development of IoT technology is upon us external cooperation management strategies. We strictly R&D Expense
with AI technology endowing IoT devices with powerful edge implement the above management methods encourage
processing capabilities compatibility of communication research and development personnel to innovate and avoid
28.2%
protocols promising interconnectivity among devices low- intellectual property risks. This management system has 26.5%
power technologies further reducing device energy obtained GB/T29490-2013 intellectual property management 23.2% 40371
consumption and security technologies safeguarding private system certification and continues to pass annual reviews. 19.6%
33712
information. 19.8%
15.8%
IP Achievements 27169 R&D Exp YoY
Espressif has always stuck to the integration of software and
hardware and achieved many exciting breakthroughs in the Since our inception Espressif has been engaged in research 19279
field of cutting-edge IoT including low power consumption and development design work in IoT chips. After years of 11975
audio and video encoding operating systems development accumulation we have accumulated core technologies in chip 28 %
frameworks AI cloud security etc. design AI RF device control processors data transmission
R&D Exp Rate
and other aspects possessing multiple IP rights. These 2019 2020 2021 2022 2023
In-house R&D Commitment technologies enable us to be the industry leader in integration
R&D Expense (M RMB) R&D Expense Rate
product size software applications RF and computing
In the fiscal year 2023 Espressif's investment in research and capabilities. R&D Personnel
development reached 404 million RMB accounting for 28.17%
of our revenue with a YoY growth of 19.75%. The company In 2023 Espressif was awarded the title of "National Intellectual
thinks highly of R&D investment maintaining a high research and Property Advantage Enterprise." By the end of 2023 the
77.4%
75.7%76.1%75.0%
development expense. As of the end of 2023 Espressif's company had obtained 167 patents and software copyrights
71.3%484
research and development personnel numbered 484 including 89 approved domestic invention patents 26 utility 440
approximately 77% of the total group staff. model patents one design patent 28 U.S. patents and 23 388 484
registered software copyrights. 340 R&D Personnel
IP Management 246
The company places great importance on intellectual property 77%
and has designed a complete intellectual property management R&D Personnel
system including intellectual property planning and layout 250 167 over Total Staff
patent training mechanisms patent reward and punishment Applied IP Obtained IP
20192020202120222023
mechanisms patent application and review mechanisms and R&D Personnel R&D Personnel over Total Staff
28Espressif｜2023 ESG Report｜Innovation
Technological innovation
Espressif is continually investing in cutting-edge technology. Based on AI Espressif is building an IoT platform and supporting AI ecosystem developers. Through deep involvement with Matter Espressif has launched
several chips equipped with 802.15.4 (Thread/Zigbee) enabling IoT devices to interconnect across brands and ecosystems. In terms of security Espressif SoCs come with comprehensive security systems providing
users with higher levels of data protection. Meanwhile in power consumption management Espressif has transitioned from Wi-Fi 4 to Wi-Fi 6 and supports a broader range of low-power communication technologies.The positive accumulation of fundamental IoT technology is the cornerstone of Espressif's steady development. The company has formulated a strategy for the collaborative development of software and hardware.Over the years Espressif has made progressive achievements implementing IoT SoC operating systems development frameworks AIoT development platforms and more.In 2023 Espressif achieved the following breakthroughs:
Wireless Communication Protocol transmission power and reception sensitivity RISC-V MCU Cloud
have reached the maximum allowable limits.Espressif's self-developed Wi-Fi 6 and low- Since 2020 the MCU all new released Espressif SoCs support almost all mainstream
power Bluetooth chips have been mass- products by Espressif based on our self- cloud platforms. In addition we have Low Energy
produced and the IEEE 802.15.4 technology developed RISC-V instruction set. During the developed our own lightweight AIoT cloud
product line has been expanded. Espressif SoCs are equipped with outstanding reporting period the newly released ESP32- software ESP RainMaker which is highly
low-energy technologies. For instance when P4 features a RISC-V 32-bit dual-core integrated with AWS and supports the building
For example ESP32-C5 is our first SoC building a smart single-wire solution with processor with a frequency up to 400 MHz. and deployment of customized AIoT solutions
supporting dual-band Wi-Fi 6 it also provides ESP32-C3 or ESP32-C2 the switch maintains with minimal code.Bluetooth 5 and IEEE 802.15.4 connectivity. a Wi-Fi connection with a current as low as Edge AI
Its support for the 5G frequency band 600-800 uA; using ESP32-S ESP32-C Security
reduces interference and provides more ESP32 to run ESP-NOW can achieve ultra-low- ESP32-S3 MCU adds AI vector instructions to Security features are at the core of Espressif
stable lower-latency connectivity. power data transmission. accelerate forming a robust hardware
foundation for AIoT. The ESP32-P4 has higher SoC design. Espressif SoCs integrate
ESP32-C ESP32-H ESP32-S3 and ESP32 essential security components such as IoT Development Framework computing power and meets the high-
now all support the Matter ecosystem. performance computing needs for multiple secure boot flash encryption and so on
ESP-IDF our open-source IoT development IO HMI and AIoT applications. ensuring device security. Digital signature
RF framework has empowered hundreds of peripherals and dedicated critical
millions of IoT devices. ESP-IDF has a clear Espressif's deep learning library ESP-DL management units ensure private keys are
Our RF front-end components are entirely and strict release process with support provides APIs for neural network inference generated inside the SoC. Hardware access
self-developed ensuring that Espressif's strategy ensuring users continue to receive image processing mathematical operations protection can achieve access rights
SoCs have excellent performance. For essential fixes applicable. In 2023 ESP-IDF and deep learning models. Amazon Alexa management and privilege separation.example in the case of the ESP32-C2 under was upgraded to v5.1 with 27 version Built-in devices' Audio Front End has certified
the "802.11b 1 Mbps" mode both the iterations bringing many new features. our high-performance algorithms.
29Espressif｜2023 ESG Report｜Innovation
Product and Service Innovation
In 2023 Espressif released its first SoC without connectivity features the ESP32-P4 and updated ESP-IDF to version 5.1. ESP RainMaker ESP Insights continued to evolve.E S P 32 High-Performance SoC Lightweight AIoT Cloud Software
P4
ESP32-P4 ESP RainMaker
The ESP32-P4 represents Espressif's breakthrough into the multimedia market as the first SoC without ESP RainMaker provides a complete cloud solution for building IoT ecosystems bridging the gap
connectivity features. It is powered by Espressif's self-developed high-performance dual-core RISC-V between underlying hardware (chips and modules) the software ecosystem (ESP-IDF IoT operating
processor featuring AI instruction advanced memory subsystems and integrated high-speed system Matter voice assistants HMI etc.) cloud backend (built on AWS) mobile apps and device
peripherals fully meeting the higher demands of next-generation embedded applications for HMI management dashboards establishing an open flexible and privately deployable cloud infrastructure.support edge computing and IO connection. Customers can quickly build IoT products based on the existing resources of ESP RainMaker exploring
product diversity with lower investment costs less R&D input shorter time and realizing iteration.ESP32-P4 introduces support for MIPI CSI and MIPI DSI interfaces enabling the integration of high-
resolution cameras and display interfaces. ESP32-P4 supports capacitive touch input and voice The flexibility and openness displayed by ESP RainMaker in product architecture and business models
recognition making it an ideal choice for building HMI applications. Additionally it integrates hardware make it suitable for enterprises of different sizes and types.accelerators for media encoding and compression and a PPA suitable for GUI.IoT Development Framework Unified Connectivity Standard
ESP-IDF 5.1 Espressif's Matter Products and Services
In 2023 Espressif released the latest stable version v5.1 of ESP-IDF which adds more features and Espressif offers comprehensive Matter solutions including Matter over Wi-Fi end devices Matter over
optimizes the development experience based on v5.0. Thread end devices Thread border routers and Matter gateway reference designs. To simplify the
development and manufacturing process for customers' products Espressif also provides one-stop
Compared to ESP-IDF v5.0 v5.1 supports ESP32-C6 and ESP32-H2 while ESP32-P4 is currently in service support such as Matter Device Certificate (DAC) generation and the plug-and-play ESP-
preview support status. Additionally ESP-IDF v5.1 introduces several new Thread-related features such ZeroCode modules bringing more convenient and efficient.as Border Router Self-Hosting Services and Border Router Deinitialization and adds support for
numerous BLE controller features for ESP32-C2 ESP32-C6 and ESP32-H2. The company now supports the latest Matter 1.2 standard and its nine new types of home appliance
devices. Based on this Espressif's feature-rich and cost-effective Matter solution platform can provide
This version not only addresses customer issues and demands and refines the entire development corporate customers and developers with broader innovation space and development opportunities.framework.
30Espressif｜2023 ESG Report｜Innovation
Solution Innovation
Based on Espressif's SoCs and software frameworks the company has launched many IoT application solutions to meet the industry's demands.HMI Smart Screen direct rapid and low-power control of smart Regarding audio our ESP-SR integrates processing facilitating richer AWS service devices without a router. It can coexist with components such as AI acoustic front-end connections.Espressif has developed robust HMI smart Wi-Fi and Bluetooth LE supporting multiple algorithms voice wake-up engines and multi-
screen solutions based on the ESP32 SoCs series of SoCs. It is widely used in smart command word recognition models Furthermore Espressif also provides a
capable of achieving data visualization touch appliances remote control and sensors. achieving high-quality and stable sound data complete set of AIoT solutions integrating
and knob controls voice wake-up and ESP-NOW removes the need to pass through collection. Meanwhile its algorithms provide the ESP-EYE development board ESP-WHO
recognition multi-mode gateways and other complex layers and add/depack headers powerful support for voice interaction with AI framework and ESP-IDF software SDK
functions constructing user-friendly HMI during data transmission significantly features like acoustic echo cancellation blind helping to implement AI technology in IoT
applications. Our smart screen solutions are reducing congestion-related stuttering and source separation and noise suppression. In application development successfully.widely applicable in fields such as smart delays and resulting in higher response addition the ESP-Skainet smart voice
home central control screens for appliances speeds. assistant combines ESP32 with AI voice
medical health devices industrial control and recognition supporting a 200+ offline voice
children's education. For example the ESP32-C2-based button command recognition engine and front-end
battery switch addresses wireless switches' acoustic algorithms offering engineers a
The ESP32-S3 is suitable for RGB interface response lag and gateway needs. It can be convenient solution for rapidly developing AI
screens with maximum resolutions of used with ESP-NOW without a gateway and voice interaction applications.
800×480 while the ESP32-C3 supports SPI reacts quickly. Moreover the product
interface screens. Espressif's HMI solutions supports an extended standby time: with ten Espressif's ESP-WHO provides facial detection
support standard GUI development button presses daily a single-button battery and recognition functions. Together with the
frameworks including LVGL and Slint. can last five years. ESP32-S3-EYE AI development board it
allows rapid construction of image recognition
LE Solutions AI Solutions models; ESP-RTC real-time audio and video communication solution enables Wi-Fi
Espressif's low-energy solutions include ESP- Espressif Technology offers a comprehensive connectivity and audio-video processing
NOW and the Wi-Fi single-fire line smart range of AI solutions. The advanced ESP32- offering users clear video call experiences;
switch. S3 AI acceleration feature provides robust the ESP-EYE development board is Amazon
hardware support for intelligent audio and AWS qualified compatible with FreeRTOS
ESP-NOW is a wireless communication image recognition. operating system suitable for real-life
protocol defined by Espressif. It enables scenarios of image recognition and voice
31Espressif｜2023 ESG Report｜Innovation
TechnicalAssociation Participation
Open-source technology and the movement towards a unified IoT ecosystem are the
future development trends. Espressif participates in global technical associations working
with industry partners to promote technological innovation.RISC-V
RISC-V is an open-source instruction set which promotes an open license and collaborative
model. The RISC-V International Foundation is a global non-profit organization headquartered
in Switzerland. Espressif is a founding strategic member of the RISC-V International
Foundation and over the years we have successfully developed RISC-V MCUs and achieved
commercialization.Matter
Matter is a smart home interconnection protocol initiated by Amazon Google Apple and CSA
to achieve interconnectivity among different ecosystems. Espressif joined the Matter program
at the outset of the protocol's launch continuously supporting the development of the Matter
certification project. During the reporting period the company announced entry into the
alliance's board and became a Promoter Member. This means that Espressif will further expand
participation and leadership role within the CSA.Bluetooth SIG
Bluetooth SIG is an international organization aimed at developing Bluetooth specifications
and promoting Bluetooth technology. Espressif as a member of the alliance has always been
actively involved in and promoting the development and implementation of SIG protocols.During the reporting period the company announced self-developed Bluetooth Mesh
protocol stack ESP-BLE-MESH now supports all the features of the latest Bluetooth Mesh
Protocol 1.1 making it one of the first companies globally to support this update prior to its
official release by the Bluetooth SIG. In the process of promoting the Bluetooth Mesh Protocol
1.1 SIG highly recognized Espressif's outstanding contributions in Mesh Profile Enhancement
including multiple enhancement features such as CBP ENH EPA PRB and SBR.
32Espressif｜2023 ESG Report｜Talent
Talent
SDGsEspressif｜2023 ESG Report｜Talent
04 Talent
Employees are Espressif's top priority each employee and fully encourages them to Diversity and Inclusivity
supporting the company's long-term leverage their talents to do things. Our team Espressif values diversity and our inclusive culture and we strictly forbid medical tests or
development. Espressif has established R&D consists of talents from about 30 countries and encourages us to embrace differences and keep examinations with discriminatory intent.centers in Shanghai Suzhou Wuxi and Hefei in regions injecting diverse innovative energy into an open mind to new ideas. We are committed to
China and internationally in Singapore India the Espressif. creating an environment where employees feel As of the end of 2023 Espressif's workforce has
Czech Republic and Brazil. We aim to gather reached 625 employees. Our staff come from
outstanding global talents to promote the The R&D is quite challenging and Espressif hopes
free to express their thoughts.approximately 30 countries and regions with R&D
advancement of underlying IoT technologies and to recruit top talents to join us in tackling difficult We are firmly dedicated to fostering a fair working personnel accounting for 77.44%. The proportion
contribute to the development of IoT. tasks. Relying on Espressif's values our team atmosphere. We strictly prohibit any form of of male employees in the company is 66.40%. In
tirelessly pushes the boundaries of underlying IoT discrimination based on skin color age gender comparison female employees account for
Espressif always insists on development of IoT technology. race or ethnicity disability pregnancy religious 33.60% and female managers comprise 28.13%
technologies meaning that engineers joining
Espressif have the opportunity to engage in core Employee welfare is our top concern. Espressif
beliefs marital status or any other factors in hiring of the management staff. Additionally Espressif
provides employees with competitive or employment practices. All recruitment and recruits and supports individuals with disabilities R&D work with ample space for exploration assessments must be based on personal abilities providing them with the necessary assistance.thereby becoming future technology experts. compensation and benefits adopts a flat and
flexible management system and creates a
Diversity is the source of innovation. Espressif relaxed and vibrant working atmosphere for
respects the different backgrounds and skills of employees.
3%2%1%3033.60%
14%9%
Countries and Regions Female Employees
8%
40% Educational Employee Below 30
Background Age Distribution
48% Between 30 and 40
Distribution Between 40 and 50
PhD
R&D Over 50
Master 56%
Sales 42%
Bachelor
Management
Below Bachelor
77%
34Espressif｜2023 ESG Report｜Talent
overall framework the company sets different The Compensation and Assessment
Employee Rights compensation incentive systems: Committee is responsible for formulating and 1. Compensation incentives should consider assessing the compensation plans and
local market conditions and legal regulations; performance of directors and senior
2. For the management team technical and management. The shareholders' meeting is
Protecting employees' rights is Espressif's New employee care: Espressif assigns business backbone: Comprised of fixed responsible for reviewing the directors'
fundamental commitment. Espressif strictly "mentors" and "buddies" for every new salary project bonuses annual performance compensation standards and annual stock
adheres to labor laws such as the Labor hire. Employees are encouraged to report bonuses and stock incentives; incentive plans. In 2023 the company's 2023
Law Labor Contract Law. In our overseas any work or life issues and the company 3. For other employees: Comprised of fixed Restricted Stock Incentive Plan was approved
R&D centers we respect the laws of will help resolve the problems. salary project and annual performance by over 99.99% of shareholders present at
different countries and have adjusted our bonuses. the shareholders' meeting.employee rights system accordingly. Humane rights: Espressif has zero
tolerance for sexual harassment sexual
Beyond legal requirements we are among abuse physical punishment mental or
the first companies on the STAR Market to physical coercion or verbal abuse and Career Development
initiate stock incentive plans widely has established systems to prevent such
motivating employees. behaviors.Espressif has built a learning system. We Reading Culture
Labor and Human Rights Anti-discrimination: Espressif treats believe continuous learning maintaining
employees equally and protects their thoughtfulness and adhering to originality Books are the ladder of human progress.Employment: Contract signing rate is legal rights. There were no discrimination are essential for long-term development. Espressif encourages employees to cultivate a
100% and we do not employ child labor incidents in 2023. Espressif encourages every employee to love for reading. We suggest they read 6
in any form. embrace knowledge expand the boundaries books each year. We have a library where
Privacy: Espressif protects employee
Work-life balance: Espressif provides paid of their thoughts and skills and reflect this
books can be borrowed for free and
privacy and does not collect private in their work. employees can suggest book purchases to annual leave and employees enjoy information. enrich their collection.statutory holidays. We adopt a flexible
work system and offer team-building Training Compensation Scheme Promotion
funds to each employee. Espressif has established a training system and
Espressif employs staff globally according to designed training courses to help employees Espressif respects every employee's labor. We
Compensation and benefits: Espressif local laws and provides competitive learn and improve. Training categories include have established a promotion system based
offers competitive compensation and compensation incentives to attract the best new employee orientation graduate training on performance and rewards employees
stock incentive projects including five local talent. We implement budget and so on. The company encourages accordingly. In 2023 100% employees were
insurances an additional housing management for compensation benefits departments to conduct various forms of assessed for performance and career
provident fund commercial medical continuously optimize personnel structure knowledge sharing. The company has over 60 development.insurance and others. and compensation incentive systems to offline training courses and nearly 90 courses
enhance employee motivation. Based on the with 5000 video lessons. A 100% training
coverage rate for employees was recorded. 35Espressif｜2023 ESG Report｜Talent
Occupational Health and Safety
Safety Management Caring for Women 关爱?性
Espressif has established the "Safety The company controls potential safety The office is equipped with refrigerators and The office provides exclusive lactation rooms
Management Standard" system adhering to hazards that employees may encounter microwaves; the pantry provides pure water with good privacy to address the difficulties
"safety first prevention as the main approach through design engineering and and hot water for both drinking and female employees encounter during lactation;
participation by all and comprehensive management controls safe work processes disinfecting cups; and we provide various special lactation leave is also available
management." In 2023 we carried out 33 on- and necessary safety training. In 2023 the common medicines such as ibuprofen for avoiding overtime and business trips during
site safety training and periodic online training company lost zero workdays due to relieving menstrual pain and fever. lactation.covering prominent responsible persons and occupational injuries and employee mortality
safety production management personnel rates.training general safety training and laboratory Employee Feed Back
safety training. Occupational Health
Employee feedback is an essential reference for corporate management. Espressif actively listens to
Based on the requirements of the emergency We pay close attention to each employee's employee voices and encourages them to speak their minds openly. We conduct an "Employee
plan we have formulated the "Emergency health status. Espressif guarantees Satisfaction Survey" annually to anonymously collect employee feedback for management
Plan for Production Safety Accidents" and employees' occupational safety and provides optimization. Additionally employees can send emails to a specially designated mailbox or the CEO's
conducted emergency resource surveys preparedness for emergencies work injuries mailbox to report or give feedback on issues within the company.resulting in the "Emergency Resource Survey and diseases. Additionally Espressif focuses
Report" to standardize and guide emergency on employees' mental health offering training
rescue actions within the company. for new graduates to help them identify and
alleviate workplace stress.
3300%0%
Safety Training Lost Workdays Injury Rate Mortality Rate
36Espressif｜2023 ESG Report｜Products and Service
Business
Sustainably
SDGs
37Espressif｜2023 ESG Report｜Products and Service
05 Business Sustainably
"Professional and reliable creating value for customers" is our strategy. Espressif is committed to
working with partners to advance the intelligent connection designing outstanding AIoT chips and Quick Glance of Espressif Chip Family and Software
focusing on self-developed open-source operating systems and comprehensive solutions.Chips modules development boards
As a leading global manufacturer of SoCs Espressif analyzes customers' demands and offers a wide range Include MPN market status basic product
of products solutions and services. In 2023 Espressif established high-quality customer relationships with ESP Product Selector information including cores antennas
numerous clients and received many honors including Best Strategic Partner. packaging storage peripherals etc. as
well as packaging information.Innovative and comprehensive service Application solutions and software
Espressif solution introduction
Espressif has a comprehensive customer service their own product design work and with the help recommended chips supported operating
system providing customers professional support of Espressif's service resources they can quickly system ESP-IDF version.from product design and certification to apply their products to real-world scenarios
manufacturing. Customers only need to focus on thereby achieving long-term mutual development.Our service scope penetrates the entire process:
Innovative Service Professional and Comprehensive Documentation
Product selection sample testing Espressif has innovated its customer service Espressif provides a wide variety of technical Sample testing
and technical support system aiding customers with any business or documentation and resources. The content
technical issues encountered during includes product ordering information certification
development to ensure the best experience. information technical specifications beginner's
guides design guides programming guides
Design In Application development circuit schematic and PCB design review and hardware testing ESP Chip & Module Selector testing guides usage guides technical
Espressif engineers have developed an online references hardware resources.product selector ESP Product Selector to simplify FAQ
Pilot Production Production test support programming support certification product selection. This selector helps customers support quickly compare and understand the key The ESP-FAQ launched by Espressif covers
performance parameters and differences between development environments application solutions
different product series thereby quickly software platforms hardware-related issues and
Mass Production Collect customer demand forecasts satisfy supply ensure stable determining selection and accelerating the whole testing among other common problems. Users mass production and improve after-sales service process. can quickly search and get answers.
38Espressif｜2023 ESG Report｜Products and Service
Optimizing Customer Experience
Communication Multiple Channels for Purchase
Through the CRM system Espressif manages customer inquiries business issues and technical At the same time we aim to make technology products not only cost-effective but also more
service requests. Maintaining communication is crucial for optimizing the customer experience. accessible and closer to the general public. Espressif has joined e-commerce platforms like Taobao
AliExpress and Amazon and added sample purchase links on the official website product pages.We regularly disseminate the latest product introductions and company news through multiple
channels such as the official website WeChat YouTube Twitter Facebook Bilibili and email Information Security
newsletters.We prioritize protecting customer information security. We value every design detail sign
Espressif engineers engage in various platforms like GitHub and the Espressif BBS forum to "Confidentiality Agreements" with customers to protect them and regularly conduct third-party
discuss with the developer community. penetration testing on the company and customer-facing networks to collect and handle customer data
securely and responsibly. As of the end of the reporting period Espressif has not received any
In 2023 in addition to the online communication window on the official website Espressif also confirmed complaints about customer privacy infringement.participated in several renowned industry exchange summits such as the CES Embedded World
in Nuremberg Smart Home Expo in India and the Guangzhou International Lighting Exhibition
maintaining close contact with customers and showcasing a rich product line.The company regularly visits customers and provides on-site support for encountered issues.
39Espressif｜2023 ESG Report｜Products and Service
Products Quality Management
Espressif's products and services are sold worldwide meeting quality issues throughout the product life cycle and analyzes data
international regulations and specific customer requirements. The from various sources to address and resolve issues in a timely The product quality management system includes
company continues to solidify the foundation of its quality manner.management. Espressif continuously launches innovative products * Stating the requirements
and services creating。 more customer value. Espressif's quality policy is "Innovative design perfect quality Design and developmentprocess optimization and rapid response." To enhance the quality *
Management Systems and Certification awareness of all employees Espressif conducts presentations in * Control of externally provided processes
various forms and requires all employees to understand their products and services as well as production
The company has obtained ISO 9001:2015 quality management connotations accurately and implement them in actual work. and service provision
system certification and established a quality management system
strictly controlling product quality focusing on product safety and Release of products and services As of the date of this report the company has not experienced any *
placing high emphasis on quality management. Espressif monitors major product quality incidents. * Control of non-conforming outputs
Market Demands Delivery
Research Products Quality Management Requirement
Product Quality Planning Product Delivery
Confirmation Products
Request Sample
Design Development and
Production Planning
Quality Reliability Contract
Outsourced Testing Provision
Production
Contract
Quotation After-sales service Payment
Customer related process Technical support Customer Wafer Processing 产品的制程监控 Customer feedback Complaint
Post-Review Packaging Testing 不合格品管控
Contract Order Orders Contracts Module Mounting Assembly Feed Back
Reviews
40
Customer Satisfaction
Customer DemandsEspressif｜2023 ESG Report｜Products and Service
Customer Feedback
Customer Evaluation
Espressif values long-term partnerships and has established a customer satisfaction survey mechanism. Espressif conducts periodic visits phone calls or meeting communications with customers to fully understand
customers' suggestions regarding the company's products and services. We carry out annual customer satisfaction surveys at the beginning (or end) of each year. Espressif analyzes and addresses customer feedback
results compiles them into customer satisfaction survey reports and takes timely improvement measures to continually strive to offer customers the most competitive products and services.Customer Satisfaction Survey 2023 Product
Multi-dimensional Assessment The answers to each question in the survey
questionnaire are divided into five levels with Customer Loyalty Business Support
Product: Product quality stability; pricing delivery time packaging. the lowest score being 1 and the highest score
being 5. Overall the results of the 2023 annual
Business Support: Timeliness of service; the problem-solving ability; timeliness of order customer satisfaction survey showed high
delivery; after-sales service; regular visits by the support team and frequency of visits. combined scores across the six evaluation
Technical Support: Customer awareness; response speed; problem-solving ability of the dimensions. Network and Resources Technical Support
support team; satisfaction level with technical resources and documentation.Complaint Mechanism
Customized Services: Customer awareness; customer satisfaction; satisfaction with the price. Customized Services
We value customer complaints and treat each
Network and Resources: Network resources meet customer needs; customer awareness of one seriously. Our team analyzes assesses and
resource access; clarity of technical documentation; which documentation solve problems. improves upon every complaint addressing all
types of complaints in a positive and efficient
Customer Loyalty: Intention to repurchase; recommendation index. manner. Espressif manages the complaint
process according to the internal "Customer
Complaint Handling Management Specification." 100%
For the year 2023 all customer complaint events Complaint Handling
were handled promptly according to corporate Rate
bylaws and the ratio of resolved complaints to
total complaints was 100%.
41Espressif｜2023 ESG Report｜Supply Chain Sustainable Development
Supply Chain
Management
SDGsEspressif｜2023 ESG Report｜
43Espressif｜2023 ESG Report｜
44Espressif｜2023 ESG Report｜
45Espressif｜2023 ESG Report｜Governance
Governance
SDGs
46Espressif｜2023 ESG Report｜Governance
07 Governance
Governance Structure Professional and Diverse Structure
The company has established a complete corporate governance structure consisting of the shareholders' meeting board of of Directors Supervisors and
directors supervisory board and company management. This creates a governance system where the powers and responsibilities of Senior Executives
each body and management are clearly defined and are coordinated and balanced with each other. Espressif's governance framework
is constituted by our code of conduct corporate governance policies company charter and other internal control systems. 43%
The shareholders' meeting is the highest governing body of the company. The board of directors is the routine decision-making body Indepevndence
with four specialized committees: the Strategy Committee Nomination Committee Compensation and Assessment Committee and
Audit Committee. The board of directors is accountable to the shareholders' meeting. The supervisory board is the company's Independent Directors
supervisory body. The general manager appointed by the board of directors is responsible for the company's daily operations. Non-Independent Directors
Governance Structure
Shareholders' Meeting Femvale 50%
Strategy Committee Supervisory Board Proportion
Female
Male
Nomination Committee Board of Directors Board Secretary
Compensation and
Assessment Committee
Securities Affairs Department
CEO Educational
Audit Committee Backgvround
Master 58%
Internal Audit Department Bachelor
Functional Departments
47Espressif｜2023 ESG Report｜Governance
Governance Structure
Board of Directors
Members
There are 7 directors of which 3 are independent directors. The list of directors
can be found in the Espressif 2023 Annual Report.Meetings Frequency
A total of 14 meetings were held in 2023 with an attendance rate of 100%.Responsibilities
Assess and appoint senior management of the company develop the
company's business plan and investment proposals formulate and amend the
company's charter and basic management systems decide on the external
investments asset sales and purchases and among other matters.Compensation
Strategy Committee Audit Committee Nomination Committee and Assessment
Committee
Members Members Members Members
3 directors including 2 independent directors. 3 directors including 2 independent directors. 3 directors including 2 independent directors. 3 directors including 2 independent directors.
Meetings Frequency Meetings Frequency Meetings Frequency Meetings Frequency
2 meetings held in 2023 with an attendance 6 meetings held in 2023 with an attendance rate of 1 meeting held in 2023 with an attendance 6 meetings held in 2023 with an attendance
rate of 100%. 100%. rate of 100%. rate of 100%.Responsibilities Responsibilities Responsibilities Responsibilities
Recommendations on the company's long- Propose external audit firms supervise internal audit Make recommendations search for qualified Conduct evaluations and make
term development strategy and major system be responsible for internal and external audit candidates for directors and managers review recommendations and research and review the
investment decisions etc. communication review the company's financial candidates for directors and managers and compensation policies and schemes for
information and disclosure etc. make recommendations etc. directors and senior management etc. 48Espressif｜2023 ESG Report｜Governance
Protection of Shareholder Rights
Information Disclosure In 2023 the company disclosed four periodic reports and 106 fulfillment to investors through video and text live broadcasts
temporary announcements. graphical presentations and ESG reports. Additionally the newly
Our information disclosure system includes "Espressif Information established WeChat official account "Espressif Board Secretary"
Disclosure Management" "Insider Registration Management" Investors Relation further improves the transparency of company information.and "Significant Internal Information Reporting System"
applicable to all documents and statements disclosed by the Espressif emphasizes investor relations management disclosing
company in various forms. information through designated websites and media. At the same
Shareholder Returns
time the company communicates with investors through various Since June 2022 the company has carried out four phases of
The Securities Affairs Department set for the company's means such as the investor relations section on the official share repurchase programs. As of this report disclosure 2.53
information disclosure affairs. It is responsible for information website investor contact email and hotline investor relations million shares have been repurchased accounting for 3.13% of
disclosure under the leadership of the board secretary. interactive platform and on-site investor research enhancing the the total share capital with payment exceeding RMB 235.74
transparency of company information and protecting interests of million. The company aims to provide long-term investment
During the reporting period our information disclosure is truthful all shareholders especially small and medium shareholders. returns with accumulated RMB 316.53 million in cash dividends
accurate complete and timely while ensuring all shareholders distributed to shareholders. Since its listing in July 2019 the net
have equal opportunities to access information. In 2023 the company held three conferences five shareholder funds raised were RMB 1.13 billion with cash dividends and
meetings and 38 investor research sessions (1195 investment repurchase amounts cumulatively accounting for 48.8% of the
institutions) showcasing performance and social responsibility net funds raised from the IPO.
3538119548.8%
A
Conferences Shareholder meetings Investor research sessions Investment institutions Ratio of cash dividend and Information disclosure rating
repurchase amounts to raised funds
202120222023
64.9%42.1%57.5%
Cash Dividend Ratio Cash Dividend Ratio Cash Dividend Ratio
49Espressif｜2023 ESG Report｜Governance
Compliance & Ethics
Compliance and Legality Supervision and Enforcement
Compliance and legality are the baseline for Espressif's development and growth. The company The Internal Audit Department has developed systems for internal auditing business integrity anti-
addresses environmental and social issues by adhering to laws government and customer fraud whistleblowing and conflicts of interest.requirements.Supervision is divided into regular and special oversight. The Internal Audit Department annually
The Legal Department Internal Audit Department System Reliability Department and Human formulates an internal audit plan. It carries out regular supervision conducting routine and continuous
Resources Department are responsible for the construction and operation of the company's supervision and inspection of company operations and timely correcting identified issues. Special
compliance system. We aim to promote the institutionalization and standardization of company oversight is targeted internal inspection conducted based on changes in the internal environment and
compliance management and create an organizational atmosphere. directives from the leadership. The department will propose corrective actions for issues found during
audits and promptly report them to the company leadership and the audit committee.The Quality Management and Supply Chain teams manage issues such as human rights scrap
recycling hazardous substances and conflict minerals in the supply chain. The legal and human
resources teams regularly receive guidance on bribery ethics employment and labor practices from
legal advisors and industry associations. The Business team oversees customers' environmental social Report Email：tipoff@espressif.comSpecial Complaint Channel
and ethical requirements. We conduct cross-functional work to ensure compliance for all related teams.The company's established compliance system prohibits employees and business partners from Integrity is paramount. We encourage employees to speak up when they see something wrong and a
engaging in illegal or unethical conduct. strict whistleblower protection policy ensures confidentiality. Anyone can use this channel to report
bribery corruption conflicts of interest or other concerns confidentially and anonymously. The Internal
Customers Supply Audit Department is responsible for establishing and maintaining this particular complaint channel
Chain authorized by the Board of Directors treats received whistleblowing seriously promptly addresses and
investigates as necessary and imposes disciplinary actions as appropriate.Employees ……
Business Ethics Training and Consulting 19
In 2023 Espressif continued implementing a new code of conduct training across the Ethics Training
Espressif strives to reach the highest ethical behavior standards. Our Code of Business Conduct guides entire group. During the reporting period the company conducted 19 professional
our professional relationships with customers employees suppliers shareholders regulatory agencies ethics training sessions for new employees promoting the company's values of
and the community. Our long-term Code of Conduct outlines our core values and sets expectations for integrity and specific regulatory requirements. By setting up consultation windows we 100%
business conduct. This code applies to all employees and we expect all third parties involved in answered employees' questions about professional ethics. New Employees
business with us to follow our Code of Business Conduct. Participation
50Espressif｜2023 ESG Report｜Governance
Internal Control and Risk Management
Anti-corruption Policy The Board of Directors is the entity responsible for risk management. It is accountable for the
shareholders' meeting for the effectiveness of the risk management work. Entrusted by the Board the
To regulate the behavior of all employees and prevent fraud the company has issued the "Anti-Fraud CEO is responsible for leadership and deployment of risk management work. The Internal Audit
and Complaint Management Measures". The audit department is designated as the permanent Department and Quality Assurance Department are the lead departments for risk management work.institution for the company's anti-fraud efforts. All employees are prohibited from accepting and paying The Internal Audit Department should submit the annual internal audit work plan and the yearly internal
bribes or kickbacks illegally using company assets embezzlement misappropriation or theft of audit work report to the Audit Committee before and after the end of each fiscal year respectively.company assets to obtain improper economic benefits.The company aims to avoid corruption. The company's anti-corruption practices primarily involve steps Shareholders’ Meetings
taken by employees to conduct business ethically and maintain cooperation with customers and the Audit Committee
government. Employees are not supposed to engage in bribery or insider trading avoid conflicts of Board of Directors Third line of defense
interest compete ethically and comply with international trade regulations. To protect the reputation of Internal Audit
Espressif the company has developed several policies and requires employees to adhere to them. Department
CEO
The company’s anti-corruption risk management includes internal supervision and regular external
third-party reviews. The internal audit team regularly audits the company's anti-corruption policies and
procedures. Espressif hires an independent auditor to audit internal control plans policies and Legal Department Finance Department Quality Management Second line of defense
procedures annually. The results and suggestions for improvement are discussed with the company's Department
Audit Committee and the Board of Directors. The company also expects our partners to comply with all Marketing
Supply Chain
laws and regulations related to anti-corruption. Before cooperating with them we conduct anti- Department Department R&D Department First line of defense
corruption screenings and regular risk-based investigations.Internal Control System Construction Three Defensive Lines of Risk Management
The company has established a robust internal control environment ensuring the safety and integrity of The first line of defense: Core business departments identify and assess strategic risks operational
the company's assets. risks etc. during business operations decide on management strategies or acceptance and develop
or adjust internal systems.Internal Control Organizational Structure The second line of defense is that support function departments assist core business departments in
The company has established an internal control and risk management system building three lines of risk control efforts reducing risks in business activities.defense against ethical risks and ensuring a healthy operation.The third line of defense: Governance function departments oversee the design and execution of
The organizational management system includes the Board of Directors CEO Internal Audit and Quality various company risk management measures identify potential loopholes in the risk management
Assurance Departments business units and various functional departments. process and urge relevant departments to make improvements. 51Espressif｜2023 ESG Report｜Governance
Business Continuity Management (BCM)
Risk Management Model Risk management process Espressif plays a crucial role in chip development causing disruption. Our principles include
The Internal Audit Department annually prepares necessitating extensive collaboration with various meticulous risk management prioritizing
the RCM. It conducts self-assessments covering suppliers in the supply chain. Therefore business preventative measures and building an exceptional
ten cycles including company-level controls continuity is of paramount importance. collaborative team. The execution is widely
financial reporting fund management sales supported by various teams. Each functional In line with Espressif's business characteristics we
revenue procurement inventory management department has a plan for identifying and have established a comprehensive Business
asset management human resources addressing potential risks aimed at reducing the Continuity Plan (BCP) to ensure the rapid restoration
management R&D management and IT controls. impact of unforeseen events thereby ensuring the and ongoing operation in the event of a disaster
The Quality Assurance Department assesses risks safety of our employees and customers.and opportunities including macro and micro
risks and opportunities and their mitigation
measures as well as risks and opportunities.Internal Control Management internal control standards system and relevant
regulations.The company's directors have issued the
internal control evaluation report for the year Regarding the assessment of significant
2023 and an external audit has produced a deficiencies in the internal controls over non-
verification report on the company's internal financial reporting as of the date of the internal
controls. control evaluation report no significant
deficiencies were identified.According to the assessment， there were nosignificant deficiencies identified leading the No factors emerged between the date of the
board of directors to conclude that the internal control evaluation report and the date
company has maintained effective internal the report was issued that affected the
controls over financial reporting in all major effectiveness of the internal control evaluation
aspects in accordance with the corporate conclusion.
52Espressif｜2023 ESG Report｜Governance
Information security
Espressif places great emphasis on corporate * A collection of internal data privacy policies ISO
information security and data privacy confidentiality. including employee and applicant privacy
The company has established an information policies focusing on data retention destruction 27001
security management system aligned with the ISO and encryption.
27001 standard. This ensures that resources Every Year Access control of internal information
technology and management related to We conduct third-party penetration testing of Pass the annual information and multiple security prevention security audit of the audit unit
information security are controlled protecting IT company and customer-facing networks and
and control of core R&D areas
assets from unauthorized access or attacks routinely scan servers applications endpoints and
preventing various security incidents or human network devices for vulnerabilities at least once a
sabotage and maintaining company information's year. All identified critical high or medium-risk
confidentiality integrity and availability. issues are remedied promptly. The IT department Irregularly
checks facility usage monthly and regularly backs Issue reminders from time to time
The company has refined its data compliance up relevant systems and databases to ensure to raise employees' awareness of
efforts according to legal requirements. It is uninterrupted essential processes of business or the risk of phishing emails
committed to responsibly handling personal data timely recovery maintaining information availability.and enhancing its security. Our cybersecurity and Additionally the company periodically releases
data privacy policies align with the principles and reminders to enhance employee awareness of Annually
spirit of China's Personal Information Protection illegal links including phishing emails. In 2023 the Third-party penetration
Law and the GDPR providing information on the company conducted 19 information security-related testing is conducted
collection use processing and transfer of training sessions and 100% of new employees
personal data such as: completed the annual information security
awareness activities. 19
* End-user privacy policies primarily for ESP Information security
RainMaker products designed to protect user related training
privacy; 100%New employees complete
information security
* Potential customer and developer privacy awareness training
policies mainly applicable to personal 乐鑫科技
information collected during marketing activities; 100%
Core suppliers are subject to
information security reviews
53Espressif｜2023 ESG Report｜GRI Content Index
GRI Content Index
IncompilingthisreportEspressifreferredtotheGRIStandards(Coreoption).ThefollowingindexinformationindicateswhichsectionsofthereportrespondtoGRIdisclosurecategories.GRI Standards Description of standards Location of information disclosure in the report
The organization and its reporting practices
2-1 Organizational details About Espressif、About This Report
2-2 Entities included in the organization’s sustainability reporting About This Report
2-3 Reporting period frequency and contact point About This Report
2-4 Restatements of information About This Report
Activities and workers
2-6 Activities value chain and other business relationships About Espressif、Innovation、Supply Chain Sustainable Development
2-7 Employees Talent
2-8 Workers who are not employees There are no workers other than employees during the reporting period.
Governance
2-9 Governance structure and composition About Espressif — ESG Management、Governance
2-10 Nomination and selection of the highest governance body Governance
2-11 Chair of the highest governance body Governance、Espressif 2023 Annual Report
2-12 Role of the highest governance body in overseeing the management of About Espressif — Identifying and responding to stakeholder concerns、Governance、Espressif 2023 Annual Report
impacts
2-13 Delegation of responsibility for managing impacts About Espressif — ESG Management
2-14 Role of the highest governance body in sustainability reporting About Espressif — ESG Management
2-15 Conflicts of interest Espressif 2023 Annual Report
54Espressif｜2023 ESG Report｜GRI Content Index
GRI Standards Description of standards Location of information disclosure in the report
2-16 Communication of critical concerns About Espressif — Identifying and responding to stakeholder concerns、About This Report
2-17 Collective knowledge of the highest governance body About Espressif — ESG Management
2-18 Evaluation of the performance of the highest governance body Governance — Governance Structure、Espressif 2023 Annual Report
2-19 Remuneration policies Talent — Employee Rights、Espressif 2023 Annual Report
2-20 Process to determine remuneration Talent — Employee Rights、Espressif 2023 Annual Report
2-21 Annual total compensation ratio Espressif 2023 Annual Report
Strategy policies and practices
2-22 Statement on sustainable development strategy About Espressif — ESG Goals、Environmental Protection
2-23 Policy commitments Environmental Protection、Innovation、Talent、Products and Service、Supply Chain Sustainable Development、Governance
2-24 Embedding policy commitments Environmental Protection、Innovation、Talent、Products and Service、Supply Chain Sustainable Development、Governance
2-25 Processes to remediate negative impacts Governance — Moral and legal compliance
2-26 Mechanisms for seeking advice and raising concerns Governance — Moral and legal compliance
2-27 Compliance with laws and regulations The Company had no major violations during the reporting period.
2-28 Membership associations Innovation — Association Participation
Stakeholder engagement
2-29 Approach to stakeholder engagement About Espressif — Identifying and responding to stakeholder concerns
2-30 Collective bargaining agreements No collective bargaining incident occurred in the Company during the reporting period.
Biodiversity
101-1 Policies to halt and reverse biodiversity loss Environmental Protection — Protecting Biodiversity
101-2 Management of biodiversity impacts Environmental Protection — Protecting Biodiversity
101-3 Access and benefit-sharing Environmental Protection — Protecting Biodiversity
101-4 Identification of biodiversity impacts Environmental Protection — Protecting Biodiversity
55Espressif｜2023 ESG Report｜GRI Content Index
GRI Standards Description of standards Location of information disclosure in the report
Economic Performance
201-1 Direct economic value generated and distributed About Espressif — Economic Performance、Espressif 2023 Annual Report
201-2 Financial implications and other risks and opportunities due to climate change Environmental Protection — Climate Risks and Opportunities
201-3 Defined benefit plan obligations and other retirement plans Talent — Employee Rights
201-4 Financial assistance received from government Espressif 2023 Annual Report
Market Presence
202-2 Proportion of senior management hired from the local community 100%
Indirect Economic Impacts
203-1 Infrastructure investments and services supported Community Symbiosis
203-2 Significant indirect economic impacts Community Symbiosis
Anti-corruption
205-1 Operations assessed for risks related to corruption Governance — Moral and legal compliance、Governance — Internal Control and Risk Management
205-2 Communication and training about anti-corruption policies and procedures Governance — Moral and legal compliance、Governance — Internal Control and Risk Management
205-3 Confirmed incidents of corruption and actions taken No corruption occurred in the Company during the reporting period.
Anti-competitive Behavior
206-1 Legal actions for anti-competitive behavior anti-trust and monopoly practices There were no legal proceedings against improper competitive conduct antitrust and anti-trust practices during the reporting period.
Tax
207-1 Approach to tax Espressif 2023 Annual Report
207-2 Tax governance control and risk management Espressif 2023 Annual Report
207-3 Stakeholder engagement and management of concerns related to tax About Espressif — Identifying and responding to stakeholder concerns
207-4 Country-by-country reporting Espressif 2023 Annual Report
56Espressif｜2023 ESG Report｜GRI Content Index
GRI Standards Description of standards Location of information disclosure in the report
Materials
301-2 Recycled input materials used Environmental Protection — Circular Economy Throughout the Lifecycle
301-3 Reclaimed products and their packaging materials Environmental Protection — Circular Economy Throughout the Lifecycle
Energy
302-1 Energy consumption within the organization Environmental Protection — GHG Emissions Management
302-2 Energy consumption outside of the organization Environmental Protection — GHG Emissions Management
302-3 Energy intensity Environmental Protection — GHG Emissions Management
302-4 Reduction of energy consumption Environmental Protection — Energy Saving and Emission Reduction
302-5 Reductions in energy requirements of products and services Environmental Protection — Energy Saving and Emission Reduction
Water and Effluents
303-1 Interactions with water as a shared resource Environmental Protection — Circular Economy Throughout the Lifecycle
303-2 Management of water discharge-related impacts The company has no factories and does not involve water discharge.
303-3 Water withdrawal Environmental Protection — Circular Economy Throughout the Lifecycle
303-4 Water discharge The company has no factories and does not involve water discharge.
303-5 Water consumption Environmental Protection — Circular Economy Throughout the Lifecycle
Biodiversity
304-2 Significant impacts of activities products and services on biodiversity Environmental Protection — Protecting Biodiversity
Emissions
305-1 Direct (Scope 1) GHG emissions Environmental Protection — GHG Emissions Management
305-2 Energy indirect (Scope 2) GHG emissions Environmental Protection — GHG Emissions Management
305-3 Other indirect (Scope 3) GHG emissions Environmental Protection — GHG Emissions Management
305-4 GHG emissions intensity Environmental Protection — GHG Emissions Management
57Espressif｜2023 ESG Report｜GRI Content Index
GRI Standards Description of standards Location of information disclosure in the report
305-5 Reduction of GHG emissions Environmental Protection — Energy Saving and Emission Reduction
Waste
306-1 Waste generation and significant waste-related impacts Environmental Protection — Circular Economy Throughout the Lifecycle
306-2 Management of significant waste-related impacts Environmental Protection — Circular Economy Throughout the Lifecycle
306-3 Waste generated Environmental Protection — Circular Economy Throughout the Lifecycle
306-5 Waste directed to disposal Environmental Protection — Circular Economy Throughout the Lifecycle
Supplier Environmental Assessment
308-1 New suppliers that were screened using environmental criteria Supply Chain Sustainable Development
308-2 Negative environmental impacts in the supply chain and actions taken Supply Chain Sustainable Development
Employment
401-1 New employee hires and employee turnover Talent
401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees Talent — Employee Rights
401-3 Parental leave Talent — Employee Rights
Occupational Health and Safety
403-1 Occupational health and safety management system Talent — Occupational Health and Safety
403-2 Hazard identification risk assessment and incident investigation Talent — Occupational Health and Safety
403-3 Occupational health services Talent — Occupational Health and Safety
403-4 Worker participation consultation and communication on occupational health and safety Talent — Occupational Health and Safety
403-5 Worker training on occupational health and safety Talent — Occupational Health and Safety
403-6 Promotion of worker health Talent — Occupational Health and Safety
403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships Talent — Occupational Health and Safety
403-8 Workers covered by an occupational health and safety management system Talent — Occupational Health and Safety
58Espressif｜2023 ESG Report｜GRI Content Index
GRI Standards Description of standards Location of information disclosure in the report
403-9 Work-related injuries Talent — Occupational Health and Safety
403-10 Work-related ill health Talent — Occupational Health and Safety
Training and Education
404-1 Average hours of training per year per employee Talent — Career Development
404-2 Programs for upgrading employee skills and transition assistance programs Talent — Career Development
404-3 Percentage of employees receiving regular performance and career development reviews Talent — Career Development
Diversity and Equal Opportunity
405-1 Diversity of governance bodies and employees Talent、Governance — Governance Structure
Non-discrimination
406-1 Incidents of discrimination and corrective actions taken No discrimination incidents occurred in the Company during the reporting period、Talent
Local Communities
413-1 Operations with local community engagement impact assessments and development Community Symbiosis、Espressif encourages our employees to participate in local community programs volunteer activities.
Supplier Social Assessment
414-1 New suppliers that were screened using social criteria Supply Chain Sustainable Development
Customer Health and Safety
416-1 Assessment of the health and safety impacts of product and service categories Products and Service —Products Quality Management
416-2 Incidents of non-compliance concerning the health and safety impacts of products and There were no violations related to the health and safety impact of products and services during the services reporting period.
Customer Privacy
418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer As of the end of the reporting period the Company had received no confirmed complaints related to data invasion of customer privacy and loss of customer data.
59Espressif｜2023 ESG Report｜About This Report
About This Report
Report Introduction Report Data Source
This report is the third ESG report publicly released by Espressif Systems (Shanghai) Co. Ltd. Based on The information data and cases used in this report come from the company's formal documents
the principles of objectivity standardization transparency and comprehensiveness it discloses statistical reports financial reports or public documents as well as corporate social responsibility
Espressif's ESG philosophy practices and the main progress of the reporting year. practice information compiled and summarized by the company's various functional departments.Report Time Range Form of report release
The time range of this report is from January 1 2023 to December 31 2023. Copyright ? 2024 Espressif Systems (Shanghai) Co. Ltd. All rights reserved. All trade names
trademarks and registered trademarks mentioned in this document are the property of their respective
To enhance the readability of the report some contents or data trace back to previous or subsequent owners and are hereby acknowledged. The term “Espressif” refers to Espressif Systems (Shanghai)
years. Co. Ltd. and/or its subsidiaries. This report is written in both Chinese and English. In case of any
discrepancies between Chinese and foreign interpretations the Chinese version shall prevail.Report Organizational Scope
The organizational scope of this report includes Espressif Systems (Shanghai) Co. Ltd. and its Report Release Cycle
subsidiaries. In the report "Espressif Systems (Shanghai) Co. Ltd." is referred to as "Espressif This report is an annual report.Technology" "Espressif" "the Group" "we" or "the Company" as needed.Contact Information
Report Reference Standard
If you have any questions or suggestions about the content of this report please contact us using the
The Chinese Academy of Social Sciences "Guidelines for Writing Corporate Social Responsibility following details.Reports" (CASS-CSR4.0) Global Sustainability Standards Board "Sustainability Reporting
Standards" (GRI Standards) National Standard of China "Guidelines for Writing Social Responsibility Contact Address: Room 304 Building 2 No. 690 Bibi Road Pudong New District Shanghai
Reports" (GB/T36001-2015) "Sustainable Development Goals (SDGs) Enterprise Action Guide" and
Shanghai Stock Exchange "Notice on Strengthening Listed Companies' Social Responsibility and Contact Phone: 021-61065218
Issuing the Shanghai Stock Exchange Listed Companies Environmental Information Disclosure
Guidelines". Email: ir@espressif.com
60Espressif｜2023 ESG Report｜Report Feedback and Comments
Report Feedback and Comments
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Multiple Choice Questions (Please check the corresponding option)
1. Which of the following stakeholders do you belong to 5. Do you think the information provided in this report is readable
〇Government personnel　〇Regulatory authorities　〇Shareholders and investors　〇Employees　 〇High　〇Fairly high　〇Average　〇Fairly low　〇Low
〇Customers 〇Suppliers and partners　〇Community residents　〇 CSR practitioners　
〇Peer companies 〇Others 6. Which topics in the report are you most interested in
〇Innovation and development 〇Customer communication and satisfaction 〇 Finance
〇 Corporate governance　〇Environmental protection 〇Employee development and training
2. What is your overall assessment of this report 〇 Employee health and safety 〇Risk management 〇Compliance management 〇Anti-corruption
〇Good　〇Fairly good　〇Average　〇Below average　〇Poor 〇Others_______
7. Do you think this report reflects Espressif's significant impact on the economy society and the
3. How do you rate the quality of social responsibility information disclosed in this report environment
〇High　〇Fairly high　〇Average　〇Fairly low　〇Low 〇Yes　 〇Somewhat　 〇No 〇Not sure
Please provide your opinions and suggestions for Espressif Technology's environmental social and
4. How clear accurate and complete do you find the information data and indicators disclosed in corporate governance (ESG) efforts and this report:
this report
〇High　〇Fairly high　〇Average　〇Fairly low　〇Low
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