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Climate Strategies and Risk Management |
The company has established a "Risk Management Policy and Procedures" and conducts materiality analysis through a sustainability questionnaire. The identification results indicate that climate change is a significant topic, therefore it is included in the scope of risk management for further risk assessment and management.
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Climate Risk Assessment and Management |
| 1. Climate Risk Assessment and Management Process |
Chipbond's climate risk identification and assessment are conducted by the Sustainability Department, which convenes relevant departments under the Risk Management Team. By collecting information on policy regulations, market trends, internal objectives, and historical records of disasters at the facilities, both internal and external issues are organized to create a list of climate change risk topics.Then,the climate scenarios are established to analyze the potential risks using the risk identification process. The identified risks with moderate to high levels are subject to qualitative or quantitative analysis to assess their potential financial impact. Based on the "impact/dependency level" and "likelihood/time of occurrence," a climate change risk matrix is developed to complete the assessment and analysis of materiality.For climate risks that are deemed significant, after evaluating existing climate adaptation measures, new response actions and adaptation strategies are proposed to address any identified gaps. This process aims to facilitate continuous improvement in managing and mitigating climate risks.
| 2. Climate Scenario Settings and Impact Analysis |
(1) Transition Risk：
In assessing the transition risks, we have referenced the IEA World Energy Outlook (WEO) 2021 report. We have set the baseline scenario for the future as "global temperature increase of 1.5°C" with a time frame of 2030. Based on the attributes of each risk event, we have evaluated the potential risks that the company may face in the future climate scenarios.
(2) Physical Risk：
To address the potential occurrence of severe climate-related disasters in the future, we have based our assessment on the RCP 8.5 high carbon emission scenario from the Fifth Assessment Report (AR5) published by the Intergovernmental Panel on Climate Change (IPCC). By collecting data from the National Science and Technology Center for Disaster Reduction (NCDR) and relevant research materials, we have set up scenarios for three climate-related disasters: "flooding," "drought," and "heatwaves." We have evaluated the potential physical risks the company may face in these climate scenarios based on factors such as the "probability of occurrence," "magnitude of impact," and "potential effects on the factory premises."
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In this assessment, we have narrowed down the focus to four major climate risks out of the 15 identified risks. The transformation risks include "carbon fee imposition," "renewable energy quota requirements," and "low-carbon technology transition." The physical risk is "electricity price increases resulting in higher electricity costs." From these risks, we have identified opportunities stemming from climate change and developed adaptation strategies and goals. The objective is to mitigate the potential negative impacts of climate change on the company's operations.
