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Risk and Opportunity

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Climate change and energy resource management present a host of challenges and opportunities, and developments in climate policy, technology, and decarbonization as well as natural disasters can drastically impact ASEH’s operations. In response to the public’s rising concerns regarding climate change, businesses must put an equal emphasis on adaptation and mitigation. ASEH has set an excellent example for the industry by establishing clear low-carbon strategies, introducing international management standards to strengthen its internal control systems, taking responsible actions to improve current business models and bring positive change to its value chain partners, and assessing implementation outcomes.

Task Force on Climate-Related Financial Disclosures(TCFD)Framework

Governance Strategy Risk Management Metrics and Objectives
  • The CSC is ASEH’s highest-level organization and is comprised of top management executives who also serve as members of the board of directors. The Committee supervises and makes decisions on the implementation of sustainability projects on a quarterly basis, and reports directly to the board of directors. The Environment and Green Innovation Taskforce under the CSC is responsible for environmental protection and climate change-related issues. (Please refer to 2.1 Organization and Structure for details)
  • According to our internal goal management timeline, short-term is defined as less than three years; mid-term three to five years; and long-term more than five years. Short-term risks mainly come from raw material costs, renewable energy regulations and occurence of extreme weather events. Mid-term risks include GHG emissions costs, low-carbon technology transitions and changes in customer preferences. Lastly, sector stigmatization, low-carbon market demands and incremental changes in climate parameters are classified as long-term risks.
  • Impacts on operations include products, services, supply chain, customers, research and development, and adaptation and mitigation measures. Impacts on strategy include using limited resources and searching for strategic sustainability partners to create optimum semiconductor industry value. Financial impacts include revenues, management costs, capital acquisitions, and assets and liabilities.
  • Conducting simulation analyses on climate risks in transition and physical contexts.
  • Formulating climate risk and opportunity assessment forms and documents and conduct regular risk assessments each year.
  • Presenting the results of the assessments on risk and opportunity identification at the CSC meeting for committee and task forces members to work out response measures for major risks.
  • Integrating climate change and various operational risks into the ERM system so as to to identify, evaluate and manage according to standard operating procedures.
  • Calculating greenhouse gas emissions, energy sources used and waste produced per unit of revenue generated to help the company assess risks and impacts, and setting internal carbon prices to evaluate the cost of reduction.
  • Direct energy emission risks come from regulatory fees and taxes imposed on fossil fuels. Indirect energy emission risks come from the cost incurred from the proportional increase in renewable energy usage. For other indirect upstream/ downstream emission risks, existing controls limit the ability to reduce emissions, thus making it difficult to reduce the carbon footprint of products.
  • Formulating reduction targets in greenhouse gas emissions, energy sources, , water resources and waste, increasing renewable energy use and designing higher-efficency products to achieve a low-carbon economy.

Climate Scenario Analysis

ASEH has classified climate scenarios into transition risks and physical risks. Transition scenarios include NDC, SBT well-below 2℃ (WB2D), and SBT 1.5℃(1.5DC)and are based on risk conditions including government regulatory, market and business reputation. In tandem, we also take into consideration net-zero emission targets (SBT_NZ) to estimate financial impacts until 2050. When analyzing physical risks, we use government-published temperature and rainfall forecasts under RCP2.6, RCP4.5, RCP6.0, and RCP8.5 scenarios with data categorized according to the north, central, south regions and all of Taiwan, to simulate how physical changes in weather impact our operations or financial performance.

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Physical Risk Adaptation

As an example, ASE Kaohsiung has a current water storage capacity of 45.6 thousand tons and its average daily consumption is 13-16 thousand tons. In the absence of external water supply, the facility’s water storage tanks can support water demand for about 3 days, and its water recycling system is able to recycle up to 14 thousand tons of water every day. Throught the evaluation of the water recycling system as an adaptation measure and combined with the water storage tanks, ASE Kaohsiung demonstrated an adaptation capability of between 3-9 days during dry seasons (January-June). The current adaptation is sufficient enough to cope with the external impacts from climate change for at least 10 years.

  • Water shortage during standard dry seasons: able to maintain a certain level of normal operation under the Stage 3 Water Restrictions (suspending water supply twice per week).
  • In the case of extreme rainfall: able to extend operating days through water recycling.
  • Under RCP8.5 scenarios: the current water resource carrying capacity is fully capable of adaptation before 2050.