Today’s world is turbulent in such a way that extreme climate change would cause us immense damage in life and property and the edge over the competition shortens due to swift high-tech advancement. All of these have posed a gigantic impact upon and challenge for the corporation. While observing the challenges brought by climate change, we have already implemented series of counter measures such as continue to expand the capacity of solar power systems, develop environmental friendly, energy saving, and high energy efficiency house appliances, establish ISO 50001 energy management system, carry out greenhouse gas emission inventory and product carbon footprint.

The identified risks and measures under climate change

Type Risk descriptions Potential financial impacts Measures
Physical risk Typhoon, flooding
  • Plants, operating bases, and equipment are damaged due to climatic disasters which increasing financial expenses.
  • Climatic factors may affect transportation, causing supply chain disruptions and subsequent production stoppages.
  • Employees are unable to attend work, and productivity is affected, resulting in reduced revenues and increased occupational health and safety costs.
  • Regularly inspect the factory buildings and operating bases for damage, and repair and fix them before natural disasters. Prepare sandbags to prevent flooding; analyze the site climate and flooding potential at the design stage for outdoor equipment (such as solar power stations), and set appropriate support strength and height; take out natural disaster insurance to transfer risks and reduce losses.
  • Pay attention to information on natural disasters, and prepare sufficient materials in advance if traffic disruptions are expected.
  • Refer to the announcement of the Directorate-General of Personnel Administration, if the scale of the natural disaster threatens the safety of employees, the work will be reduced or suspended.
Transition risk Policies and regulations
  • The Renewable Energy Development Act stipulates that power users above a certain contracted capacity should install renewable energy power generation equipment. Tatung’s Taoyuan Wires and Cables Plant is required to install 639.2kWp of obligatory capacity before 2025, which will increase operating costs.
  • The Financial Regulatory Commission requires that listed companies of a certain scale should complete the greenhouse gas inventory in 2023, the external verification in 2024, the greenhouse gas inventory of the consolidated subsidiary in 2025, and the external verification of the consolidated subsidiary in 2027.
  • It may be affected by the potential carbon tax, carbon trading system, and the cost of purchasing raw materials and parts in compliance with regulations to increase operating costs.
  • Taoyuan Wires and Cables Plant has installed solar power generation equipment (selling electricity to Taipower Company), Tatung has strived for early bird discounts in accordance with regulations and reduced the obligatory capacity to 384kWp and reduced the financial impact.
  • Tatung has started a complete GHG inventory (according to ISO 14064-1) at the H.Q. Tayuan Plant and Meter Factory, and will disclose the company's complete GHG emissions no later than June 2023.
  • Continuously track changes in regulations and master first-hand information.
  • The awareness of sustainability is enhanced, and customers may purchase lower-carbon products or services in the market, which will affect revenue.
  • In response to the increase in the number of renewable energy installations, in order to stabilize the power grid, the market demand for energy storage equipment has increased. However, under the pressure of the current shortage of materials, it is difficult to reduce the investment cost of batteries. Due to the rush for materials from electric vehicle industry, there is a large shortage of batteries around the world, so that the cost of energy storage is still high.
  • Introduce sustainable product design, focus on improving energy efficiency, product recycling and reduction of harmful substances, such as high-efficiency amorphous transformers and energy-saving motors.
  • Actively strive for Taipower Company energy storage equipment bids, plan to build energy storage equipment at suitable sites, increase market share. With the improvement of supporting mechanisms, such as the power market trading mechanism, it can accelerate investment recovery through the participation of the power market, reduce investment risk.
  • Cooperating with high-carbon emission suppliers may affect customers' trust in the company.
  • The company's environment, energy and carbon reduction practices and performance have become the focus of stakeholders' concerns. Failure to implement management may affect brand trust.
  • Select suppliers and conduct energy performance improvement assessments for purchasing major energy-using equipment according to the "Energy Design and Procurement Management Procedures".
  • Continue to operate ISO 14001, ISO 14064-1, ISO 50001 to improve the performance of environment, energy and carbon reduction.

The identified opportunities and measures under climate change

Type Descriptions Potential financial impacts Measures Targets
Opportunities brought by climate change Energy saving market The market demands for the products with features of energy saving and high energy efficiency. Match to market trends and expand revenue.
  • Introduce products with Energy Label to increase selling and increase profits. For example, in 2021, the product split-type air conditioners with Energy Label has been well received by the market, with total of 20,869 units sold.
  • Launched IE4 grade energy-saving motor.
  • Products continue to apply for Energy Label, Green Mark or first-class energy efficiency label.
  • In 2025, IE4, Super Premium, GB2 and MEPS high-efficiency motor series will be launched; in 2030, IE5 and GB1 high-efficiency motor series will be launched.
Energy creation and storage
  • The industry is in urgent need of low-carbon energy, and the demand for solar power plants has greatly increased.
  • In response to the increase in the number of renewable energy installations, in order to stabilize the power grid, the market demand for energy storage equipment has increased.
  • Actively strive for solar power generation projects to increase sales profits.
  • Actively strive for Taipower Company energy storage equipment bids to increase brand exposure and increase sales profits.
  • Widely set up solar energy projects and expand the fields of green power transfer and renewable energy certificate.
  • Widely set up energy storage facilities.
  • The cumulative capacity of 250MWp units will be connected to the grid by the end of 2022.
  • Taipower Company promotes the target to reach 1GW of energy storage capacity in 2025, and Tatung will strive to achieve 300MW participation in 2025.
Improve on resources and energy efficiency.
  • Switch to more efficient electrical equipment.
  • Promote energy-saving projects.
Reduce energy cost and carbon emissions.
  • Purchasing energy-saving equipment and office appliances. The green purchase amount in 2021 reached NT$48,101,781.
  • Support green procurement and receive a certificate of appreciation for green procurement from Taipei Environmental Protection Bureau in 2021.
  • Promote energy-saving projects in the factories through the "Annual Energy Audit" program.
  • Continue to support green procurement and try to use more efficient equipment.
  • The energy intensity of the represented products in 2023 will be reduced by 6% compared to 2018.