The impact of Greenhouse Gas Emissions on the Company and the Extent of its Influence:
(I) Risks Associated with Climate Change-Related Regulations
1.As a non-manufacturing company, we do not face issues related to wastewater or waste disposal. We are not classified as an emission source and required to report greenhouse gas emissions to environmental authorities. Therefore, we do not bear the direct risks associated with regulations such as the Greenhouse Gas Reduction and Management Act.
2.We have implemented ISO 14001 and ISO 45001 environmental and occupational health and safety management systems. We continuously monitor global regulatory developments and conduct quarterly reviews to identify relevant EHS regulations and international conventions, mitigating the risk of non-compliance.
3. We have adopted the four core elements of the Task Force on Climate-related Financial Disclosures (TCFD) framework to effectively manage climate-related risks and opportunities, providing stakeholders with reliable financial information for reference and evaluation.
(II) The Physical Risks of Climate Change to the Company
1. Our physical risk assessment covers the impact on operations from flooding, drought, tropical cyclones, rising temperature, extreme temperature events, and the rise of sea-level. Evaluation by our risk assessment team identified no significant physical risks.
2. In 2023, to enhance our resilience to climate change risks, we conducted further simulations of physical risk impact under a range of different scenarios for our Topco operations in Taiwan, mainland China, and for our major suppliers in Japan. These simulations, based on historical occurrences and climate change projections, focused on flooding (due to rising sea-level) and drought and water scarcity (water stress).
(1) Sea-level rise simulations showed that in a 1.5°C global warming scenario, flooding might affect two locations, Topco in Shanghai and Suzhou (50% of our sites). In a 4°C scenario, this increased to three locations and included Taipei headquarters (75% of our sites).
(2) Water stress risk was simulated using the SSP5-8.5 scenario for the year 2060. The results indicated that two locations in China, Shanghai and Suzhou (50% of our sites) would be in high-stress areas (40%-80%), one supplier in Tokyo, Japan (25%) would be in a medium-high stress area (20%-40%), and Taipei headquarters (25%) would be in a low-medium stress area (10%-20%).
(III) Climate Change Opportunities for the Company
Key climate opportunities identified in 2023:
1. Participation in a Renewable Energy Project: To leverage global renewable energy policy trends, we are expanding into clean energy, environmental assessment, and monitoring through investments in engineering technology. We will continue to integrate our group’s environmental engineering and solar energy activities to expand renewable energy and circular economy operations.
2. We will develop Low-Carbon Products and Services and Enhance Customer Product Efficiency while developing corresponding technologies and maintaining reliable product restoration. We will actively promote filter cartridge recycling and reuse to embed sustainability throughout product lifecycles. We will provide semiconductor wafer box cleaning equipment and services, enabling customers to reduce new product usage through reuse and to decrease energy consumption and waste generation in production processes.
3. Enhancement of Corporate Reputation: We will remain committed to green innovation and improvement of our corporate image through transparent disclosure.
(IV) Corporate Greenhouse Gas Emissions (Direct and Indirect), Specifying Inventory Scope and Period, and External Verification Status
1. Inventory Period: January 1, 2023 to December 31, 2023.
2. Inventory Scope: Operational boundaries include Scopes 1, 2, and 3.
3. Emissions:
Scope 1: 317.9018 metric tons CO2e/year
Scope 2: 789.3551 metric tons CO2e/year
Scope 3: 505,829.4671 metric tons CO2e/year
4. Verification Standard: GHG Protocol
5. Third-party Verification Body: AFNOR
Corporate Strategy: Methods and Targets for Greenhouse Gas Management:
(I) Corporate Strategy: Addressing Climate Change and Greenhouse Gas Management
1. Our Company’s “Mitigation” Strategy includes:
(1) Complete transition to electric vehicles for company cars by 2030.
(2) Asset and equipment allocation oriented towards low-carbon risk, prioritizing energy-efficient, resource-saving, and environmentally friendly products with eco- and water saving labels, energy-saving certification, and green building materials during renovations.
(3) Implementation of green low-carbon strategies, including the use of solar power electricity. In 2023 the company used 70,000 kWh of green electricity and we aim to achieve 25% by 2025, and 100% by 2030.
2. Our Company’s “Adaptation” Strategy includes:
(1) Adoption of “shadow pricing” to establish internal carbon pricing, the incorporation of carbon emission costs and reduction benefits into company operational analysis.
(2) The strengthening of contingency measures for power outages and water risks.
(3) The development of carbon management talent: In 2023, 7 employees received ISO 14064 certification. We conducted SBTi course training, and 20 employees passed the course exam. A sustainable supply chain management course was also offered and 44 employees passed. One employee obtained Corporate Sustainability and Climate Change Response Management certifications.
(II) Corporate Greenhouse Gas Emission Reduction Targets:
Our company has set a target to reduce greenhouse gas emissions to remain in line with the Science Based Targets initiative (SBTi). We hope that our annual emissions reduction of 4.2% will allow us to follow a path towards future net-zero emission.
(III) Budget and Plans for Corporate Greenhouse Gas Emission Reduction
1. Scope 1 and 2 Strategies: Target 95% reduction by 2030 compared to the base year.
(1) Transition to electric vehicles for company cars by 2030.
(2) Reduced energy consumption in IT infrastructure.
(3) Green electricity adoption plan: We used 70,000 kWh of green electricity in 2023, and aim for 10% adoption by 2024, 25% by 2025, and 100% by 2030.
2. Scope 3 Strategies: 4.2% annual linear reduction, targeting carbon neutrality by 2060.
(1) Assist upstream suppliers in the establishment of nearby factories to reduce transportation distances.
(2) Centralize procurement to decrease transportation frequency.
(3) Reduce inventory, prioritizing direct supply where possible.
(4) Gradually transition to electric vehicles for land transportation.
(5) National policy: 50% electrification of heavy-duty trucks.
(6) Enhance transportation mode shifts for three major suppliers: from air to sea freight.
(IV) Carbon Reduction Effects of Company Products or Services for Customers or Consumers
Promoting Green Transformation in the Supply Chain, Supporting Sustainable Development in the Semiconductor Industry:
1. In line with the global electronics industry trend to embrace green manufacturing, our company is introducing green chemistry alternatives to replace harmful organic solvents in semiconductor processes. This creates new opportunities for the transformation to green processes in the electronics industry.
2. Developing a platform for the trading of refurbished equipment, recycling and cleaning services, and factory consulting services to drive a circular economy.
3. The Topco Group has a complete solar energy supply chain, EPC turnkey engineering, operations and maintenance teams, and cloud monitoring systems. We have accumulated nearly 50MW of solar power station construction experience in more than 100 domestic and international sites. We provide green electricity sales services and assist enterprises with environmental assessment and monitoring, sustainable green electricity, and carbon consulting services.