| Code | Topic | Timeframe | Exposure level | Description of risk impact scenarios | Potential financial impact caused by the incident | Mitigations | ||||||||||||||
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| A1 | Carbon Tariffs | shorterm (<3 years) |
Medium | Due to the foreseeable implementation of the European Union's Carbon Border Adjustment Mechanism (CBAM) and the U.S. Clean Competition Act (CCA), those clients that sell to such regions may face an increase in costs, which may transfer such cost increase to the Company. | Due to the global net-zero and carbon reduction trend, carbon pricing has become an important approach for countries worldwide to control carbon emissions and to facilitate carbon reduction; common carbon pricing tools used internationally include: (1) total volume control and carbon trading; (2) high carbon tax or carbon fee to curb the consumption volume. Consequently, when using each ton of carbon dioxide equivalent (tCO2e) as the pricing unit to calculate the cost of carbon emissions for carbon pricing, the greater the carbon emissions, the higher the cost will be. |
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| B1 | Flooding | shorterm (<3 years) |
Medium | The company's main warehouses and services are mainly locating in Asia, including Taiwan, Hong Kong, China and Singapore, other regions include El Paso and Texas in the United States which are under planning in 2024. Most of the warehouses are exposed to typhoons or heavy rains and floods. It is crucial to evaluate the frequency of typhoons or heavy rains and floods and severity of impact in the said regions. Serious flooding may cause road closures, power outages, flight delays, airport closures, etc., resulting in delivery delays or even supply interruptions. However, as of the end of 2012, the above situation has not occurred, therefore we reference the NGFS scenario to stimulate possible outcomes1. The analysis shows that the economic losses in China, the United States, and Germany will increase more than those in Taiwan and Hong Kong in 2030. | Losses from business interruptions, resulting in reduced sales revenue and increased operating costs (repair or replacement of operating equipment). We mainly focus on analyzing the Group’s main operating warehouses which are Taipei Neihu Tanmei Warehouse and Taoyuan Housheng Warehouse in Taiwan; Shatin Warehouse and U-Freight Warehouse in Hong Kong; Futian Warehouse in Shenzhen China; and Singapore Warehouse. If the above warehouses face operation interruption due to flooding, delay in shipping may cause losses in sales or assets. Based on the group's average daily shipping business in 2023 (estimated on a 365-day basis), the estimated losses are summarized as follows:
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Short-term:
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| A2 | Transition Demand for Low-Carbon Products and Services | shorterm (<3 years) |
Medium | In response to global decarbonization and to meet low-carbon technology transformation, where low-carbon products and services are preffered, the company may invest additional capital expenditure in research and development on green technology related product line. If the development fails or the agent line does not progress or deliver performance, the Group's operating efficiency will be affected. | In the short term, R&D costs and machinery and equipment purchase costs will increase. If the market demand for the expanded product line rises, the product portfolio and revenue structure will be optimized in the medium and long term; if the product line does not deliver performance, the Company may face less revenue than anticipated. Weikeng's total R&D expenditure reached NT$ 132,443 thousand in 2023, within which 22.29% was dedicated to green product R&D, which meets the target of no less than 20% of total R&D expenditure. |
Short-term:Proactively engage with upstream and downstream partners to evaluate feasibility of joint R&D projects. Medium to long-term:Continuously cultivate talents related to green product solutions, and ensure we offer employee benefits and salary that are pari passu with the Company’s peers, or introduce more attractive compensation packages to retain talents. |
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| B2 | Extreme Temperature Changes | shorterm (<3 years) |
Medium | The Company's operating sites are locating in Taiwan, China, and other countries/regions in Southeast Asia, namely Singapore, Thailand, Philippines, Vietnam, Malaysia; While our vendors are located in the United States (mainly), Germany, the Netherlands, and China. Given the wide range of operating locations, the Company and its upstream vendor will face changes in extreme temperatures, among which heat waves may cause blackout/energy rationing, transportation interruptions, reduced working days, and physical damage to infrastructure. | Losses from business interruptions, resulting in reduced sales revenue and increased operating costs (repair or replacement of operating equipment):
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Short-term:
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Note:
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