By adopting the second core element of TCFD framework, which is “strategy”, the Sustainable Development Executive Office, Risk Management Team, together with managers and representatives of each business unit and functional unit held a climate change related risk/opportunity identification and analysis meeting in November 2023. Climate change related risks and opportunities were identified and analyzed based on scenario analysis and PESTLE (Political, Economic, Social, Technical, Legal and Environmental) analysis. The organizational scope and boundry of the assessment included the Taiwan parent company, China/Hong Kong subsidiary and Singapore subsidiary. Other regions may be included in the assessment when deemed crucial.
During the 2023 assessment meeting, 6 physical risks, 12 transitional risks and 8 opportunities were identified. Based on the possibility of occurrence (A) and opportunity benefit/risk impact (B) of the opportunity/risk theme, the opportunity value/risk exposure (A) x (B) was measured for each risk or opportunity, and the timeframe (timeframe <3 yeras is considered as short term; 3~5 years medium term, and >5 years long term) was estimated. After the evaluation, 4 medium risks and 2 high opportunities were identified during the 2023 assessment meeting. Finally, the Sustainable Development Executive Office consolidated the results of risk and opportunity identification, financial impact, and countermeasures, then submitted the results to the Sustainable Development Committee, and reported the implementation status to the board of directors.
A Transitional Risk | B Physical Risk | ||||
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A1 | Carbon Tariffs | A7 | Energy Intensive Users' Requirement (10% Renewable Energy) | B1 | Flooding |
A2 | Transition Demand for Low-Carbon Products and Services | A8 | Energy Intensive Users' Requirement (Declaration Requirements for Chiller Groups and Compressed Air Machines) | B2 | Extreme Temperature Changes |
A3 | Taiwan Carbon Fee | A9 | Water Consumption Fee Levy | B3 | Rising Sea Levels |
A4 | Sustainable Aviation Fuels | A10 | Green Shipping | B4 | Water Scarcity |
A5 | Reputation Risks | A11 | Increased Climate-Related Litigation Risks for Inadequate Emission Reduction | B5 | Increased Contractual or Credit Risk |
A6 | Foreign Carbon Fee | A12 | Change in Customer Preferences | B6 | Climate Change Triggering Insurance Abandonment Trend |
C Opportunity | |||
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C1 | Low-Carbon Product/Service Opportunities | C5 | Opportunity to Enhance Organizational Resilience |
C2 | Opportunities from Changing Customer Preferences | C6 | Adoption of More Efficient Transportation Methods |
C3 | Entry into New Markets | C7 | ncrease Recycling and Reuse Rates |
C4 | Financial Institution Incentives - Sustainable Linked Loans | C8 | Use of Low-Carbon Energy |