Coping Measures in Response to Climate Change
Winbond Electronics is committed to coming up with measures against climate change risk. In order to understand the impact of climate change on the environment and our business operations, Winbond Electronics has adopted the Task Force on Climate-Related Financial Disclosures’ (TCFD) framework and established a set of Operating Guidelines on the Evaluation of Climate Change Risks and Opportunities. Each year, based on both domestic and foreign research reports and the latest market outlook observations, we identify and disclose the financial impacts of climate-related risks and opportunities (both quantitative and qualitative), providing comments on the situation as
well as proposing a management strategy in order to continue improving the Company’s operational capabilities. Additionally, we have established an internal ESH and Risk Management Committee chaired by the President, with representatives of the head of each relevant unit serving as committee members. A meeting shall be convened each quarter, where goals and progress towards these goals shall be reviewed, critiqued, and updated.
The greenhouse effect has led to climate change and impacted both the environment and business operations. From a legal risks perspectives, governments from around the world have been deliberating on introducing a carbon or energy tax. Along with the global year
on year increases to prices of raw materials and energy needed for manufacturing, all of these factors would lead to a rise in manufacturing costs. In terms of environmental concerns, climate change would also bring about more extreme climate events such as storms, flooding, and even droughts. In recent years, as rainfall becomes increasingly heavy during the rainy season and increasingly sparse during the dry season, this had led to adverse impacts on the allocation and usage of water resources, which can potentially affect the Company’s business operation and manufacturing capacity. There are also other concerns, such as consumers becoming increasingly aware of climate change issues and requesting companies to disclose information on their climate impact.
Therefore, Winbond Electronics continues to work towards optimizing resource management and reducing carbon emissions. Apart from developing and designing all of our products with high efficiency and low power consumption in mind, we have also devoted our efforts to directly reducing our own carbon emissions. By promoting various carbon reduction plans, increasing our energy usage efficiency, and implementing important ESG indicators, we are steadily making progress towards sustainable development.
TCFD Climate Change Management Framework
Climate change highlighted the fragility of the society and the importance of business resilience.Winbond has established a business continuity management (BCM) system to identify potential risks in business operations, develop systematic response mechanisms, and implement regular trainings and drills. The system will facilitate quicker response and faster recovery from the impact.
As dealing with climate change is a responsibility we need to participate, Winbond adopted the TCFD (Task Force on Climate-related Financial Disclosures) framework in 2021 to evaluate the risks and opportunities associated with climate change. The result will form the basis of our climate action and help to improve our operation resilience.
| Governance | In order to achieve our corporate social responsibilities, the Company’s Corporate Social Responsibility (CSR) Implementation Committee is responsible for issues related to overall corporate governance, environmental protection, climate change, and labor. The Committee convenes an Environmental, Social, and Governance (ESG) meeting each quarter, reporting to senior management on the performance of the management system, and providing recommendations for any necessary improvements. The President shall report on the results of that year’s implementation at the Board of Director’s Meeting in the fourth quarter of year. The work plan for the next year will be revised after listening to the opinions of the board of directors. The Board of Directors is Winbond Electronic’s highest management unit. The Risk Management Committee is established under the Board of Directors, and based on the progress of future Committee work, their responsibilities shall eventually expand to cover issues and management goals related to climate change risks. |
| Strategy |
a. Winbond Electronics classifies climate-related risks and opportunities into short-, mid- and longterm categories based on their time periods and evaluates each risk and opportunity based on these categories. A period of 0-2 years is classified as short-term, while medium and long-term refers to a period of 2-10 years. b. Climate risks can be divided into two main categories transition risks and physical risks. Each category can be further divided into political and legislative risk, technology risk, market risk, and reputational risk, as well as into immediate and long-term risks. Opportunities are classified into five major categories: resource efficiency opportunities, energy source opportunities, product and services opportunities, market opportunities, and organizational resilience opportunities. |
| Risk Management |
a. We have differentiated between the transition and physical risks (8 in total) posed to the Company’s operations due to climate change and the potential opportunities (2 in total) presented by climate change, before having each relevant unit evaluate the relevance of these risks and opportunities to their business operations, as well as their short-, mid-, and long-term vulnerability levels and opportunity potential based on a business relevance, vulnerability (risk response measures/opportunity preparations) level and impact level evaluation table. c. After an evaluation and discussion of the reference value-at-risk, high-risk and high-opportunity factors are selected and combined with key short-, mid- and long-term climate risk indicators. A qualitative or quantitative financial impact evaluation is then carried out based on these values and used to establish a response strategy or define key climate goals. |
| Metrics and Targets |
a. In order to reduce the impact of our business operations on the surrounding environment, Winbond Electronics has invested significant resources into improving our performance on environmental metrics. Through developing methods to conserve energy and reduce carbon emissions, make more efficient use of water resources, prevent pollution, and improving management of hazardous substances (please refer to Chapter Three - Greening the Environment - Committed to Environmental Protection of this report for our results in these areas), we look to pursue our vision of sustainable development. b. At the moment, renewable energy is mainly produced via solar or wind power, both methods which face issues with unstable and unreliable power supply and thus reliant on energy storage technology. |
Climate Change Risks
| Climate Change Risks | Risk Description | Scope of Impact | Winbond Response Strategy |
Increased cost of
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GHG reduction requirements may impact on the cost of energy use due to higher energy prices and need to improve equipment performance. | Market price |
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More robust
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Domestic environmental legislation is still being amended and is becoming stricter. | Operating cost |
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| Amendments to the Renewable Energy Development Act increases the cost of energy use for businesses. |
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| The Greenhouse Gas Reduction and Management Act will impose caps on GHG emissions and a carbon tax. These may increase operating costs by raising the cost of GHG emissions and electricity. |
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Business interrupted by
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Extreme rainfall and drought:Reduction/disruption of production. | Business interruption |
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| Production activities affected by climate disasters such as:flooding, drought, fire, heat, and heavy snow. These events may impact on the delivery time of raw materials. |
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Climate Change Opportunities
| Climate Change Opportunities | Opportunity Description | Scope of Impact | Winbond Response Strategy |
Development and/or choose of
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Choose low carbon emission or pollutionreducing eco-friendly products. | Market opportunities |
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Use of recycling and resource saving purchases |
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Operating cost |
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