|Metrics and Targets
|Climate Risks Items
|①Renewable energy and carbon reduction regulations and requirements
②Cost of the low-carbon transformation
③Rise of operating cost
④Climate abnormalities (typhoon)
⑤Climate abnormalities (flood)
⑥Climate abnormalities (rise of sea level)
⑦Climate abnormalities (rise of average yearly temperature)
⑧Cost to build corporate resilience
⑨Cost to develop low-carbon technology and services
|Climate Opportunities Items
|①Better energy efficiency
②Better energy efficiency
|Chance of Occurrence
|Chance of Occurrence
|Chance of Occurrence
|Countermeasure and Potential Financial Effects
|Policies and Laws
|The Greenhouse Management Act is about to be stricter. If GHG emission control is launched in the future, carbon prices will increase the operational costs of the Company.
|To improve energy efficiency, TTY will continuously implement its energy-saving and carbon-reduction plan and install energy-saving facilities. TTY will also continually improve processes to reduce the environmental impact via source controls and terminal prevention equipment reinforcement.
According to data from PTC, if nuclear power is replaced by renewable energy and fuel coal is replaced by gas in the future, power generation costs per degree will increase by 45.45% in year 2025. Taking the average power price of NTD$2.6 per degree in year 2018, power generation costs per degree will increase by NTD$1.182 in year 2025.
Based on the 14 million kWh power outsource of the last 2 years, an annual increase of NTD$16.55 million in power cost is expected.
|The economic system has gradually turned to supporting low-carbon, highly efficient technology improvement and innovation, which may affect the competitiveness of the Company and likely increase procurement, production and distribution costs to meet demand and depth as required by customers.
|Evaluate the comprehensive impact to climate change related policies to make short- to mid-term operational plans. To continue energy-saving measures, including changing fans and motors of cooling towers for the A/C, installing a cooling tower water quality monitor, improving A/C system performance to reducing power use, gradually moving toward green transformation.
1. A total of NTD$32.19 million budget is expected on replacement of assets and equipment for year 2023.
2. To conserve power in factories include changing fans and motors of cooling towers for the A/C, implementing a cooling water quality monitor and improving A/C system, and installing LED lighting from traditional T8 lighting with a total cost of NTD$1.03 million.
|To correspond with climate change risk and carbon emission control requirements, new business models have gradually been created and enterprises are required to create carbon assets management capabilities to adapt to this trend. The inventory costs of TTY increased to avoid the risks of supply chain disruption due to unstable supply of raw materials.
|To enhance the ability to assume climate change risk, TTY has created new revenue opportunities and market expansion through the establishment of environmental protection related mechanisms and carbon emission control measures. Meanwhile, inventory costs will increase along with the increase of safe inventory levels. With inventory of about NTD$1.026 billion in year 2022, NTD$10.26 million in inventory costs are expected, an additional 1% each.
|Climate change might affect the image that customers and social groups have in terms of how committed the Company is to the low-carbon transformation. If the Company produces high carbon emissions or high levels of pollution, it may not win tenders, lose orders, experience a decrease in revenue or even suffer a reputational damage.
|To develop more environmentally friendly products and services, TTY is not only continuously improves sewage and waste recycling rates, and manageing environmental sustainability activities to build a green enterprise culture from the inside out, and evaluating its investment in green energy and low carbon logistic development to reduce the carbon footprint of Company products, and enhance its industrial competitiveness in line with market demand.
|Climate change may cause a typhoon, flood, draught and other extreme climate events, resulting in damage to assets, supply chain disruption and other events with an immediate financial impact.
|Reinforce water resource management and ensure the safety of plant equipment to maintain uninterrupted operations. In response to draught in Taiwan, TTY has completed a list of water suppliers but costs have increased. With 99,652 degrees of water consumption in year 2022, the cost of water outsourcing is calculated at NTD$80,000/day (25t water tanks for 4 rounds) to cover water shortages.
Revenue will also be affected if materials and finished products cannot be delivered on time due to a typhoon and floods. To mitigate the risk, warehouse leases in different locations will be evaluated and rent will be increased by about NTD$20 million.
|Rising temperatures around the world and the gradual shortage of water, electricity and fuel resources may cause discontinued factory operations, resulting in rising operational costs or penalties due to delivery delays.
|Evaluate the use of regional energy and resources consumption and arrange off-peak production as needed. Prepare the BCP to actively find new suppliers and create a list of emergency power generators and water suppliers to ensure stable materials and energy resources supplies, and enhance the ability of TTY to respond and adapt to disasters accordingly.
|Type of Opportunity
|Countermeasures and Potential Financial Effects
|Resources Use Efficiency
|Increase energy use efficiency to reduce mid- to long-term operational costs and achieve carbon reduction goals.
|The use and upgrade of equipment with less energy consumption, water, and power reduction goals, and better efficiency in year 2022 continued at an expense of NTD$1.04 million. Such measures expect to save NTD$400,000/year. The renewal of outdated machines in year 2023 is given a budget of NTD$32.19 million, contributing to a cost reduction of NTD$2.7 million/year.
|Improve the ability to adapt to climate change to managing climate change related risks and seizing the opportunities.
|The Risk Management Center convenes all sessions to identify climate change related risks and opportunities, and plans management strategies. The Finance Division establishes climate governance material principles to trace progress and effects, and to reinforce the risk response ability of the Company.