Climate Change Response – Mitigation and Adaptation
In the face of global climate change, businesses encounter severe challenges. Everlight, following the requirements of the Financial Supervisory Commission (FSC) and referencing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), discloses the risks and opportunities brought by climate change based on four core elements: governance, strategy, risk management, and indicators and targets.
To align with the national net-zero carbon policy and the “Sustainable Development Action Plan for Listed Companies” released by the FSC in 2023, Everlight’s board of directors has approved the Group’s carbon reduction target for 2030, aiming for a 25% reduction based on 2021 carbon emissions levels. Everlight is committed to addressing mitigation and adaptation to climate change and believes that Everlight can jointly create a sustainable future through communication and collaboration with stakeholders.
Implementation Results in 2023
Positive
The company formulates and implements carbon reduction plans, which can help stakeholders reduce carbon emissions, support climate action, and mitigate climate change.
Negative
The company does not formulate carbon reduction plans or fails to implement them effectively, or continues to increase carbon emissions/water consumption, causing negative environmental impacts.
The company has set targets to reduce carbon emissions by 25% in 2030 and achieve net zero carbon emissions by 2050, while also signing the “Net Zero Emissions Declaration.”
Headquarter | Sustainability Development Committee.
Subdivided into three groups: Governance, Social, and Environmental Groups.
- Everlight’s board of directors is the highest-level oversight organization for climate-related risks and opportunities.
- The Risk Management Committee and the Sustainability Development Committee are responsible for assessing climate change impact-related matters.
- The subgroups under the Sustainability Development Committee execute daily actions.
- Analyze risks and opportunities based on the TCFD framework, WBCSD chemical industry case guidance, and CDP questionnaire.
- Introduce risk management processes referencing “ISO 31000:2018 Risk Management – Principles and Guidelines.”
Greenhouse Gas Emission Intensity (tCO2e/million NTD in production value)：≤ 8.7 (2023 management target).
- Sustainability Development Committee: twice per year
- Risk Management Committee: twice per year
- Governance Group, Environmental Group, Social Group: irregularly
- Tracking Process: Referencing “ISO 31000:2018 Risk Management – Principles and Guidelines” to identify risk attributes and categories, as well as the probability and severity of risks, and to develop risk management strategies.
- Through the “Risk Assessment Process”: Identify risks → Risk ranking → Risk impact assessment → Risk adaptation and pre-emptive planning. These processes are integrated into the existing risk management system, with continuous review and improvement of the status of achieving various targets and objectives.
- Effectiveness of Previous Actions: Annually review whether the set targets have been achieved.
Through regular/irregular communication in various forms.
▍Governance
Everlight’s board of directors is the highest-level oversight organization for climate-related risks and opportunities.
The Board and the Audit Committee are responsible for overseeing the effectiveness of risk control. The Board has established the Risk Management Committee and the Sustainability Development Committee, which are responsible for assessing climate change impact-related matters. Board members have a thorough understanding of the importance and impact of climate change, and they consider the impact of climate change issues in major investment decisions.
To enhance senior executives’ understanding of the TCFD, the Group will hold a TCFD workshop in January 2024.
Participants will include members of the Sustainability Development Committee and its Climate Change Task Force, members of the Risk Management Committee, and senior executives from various operating units of the Group. Management is required to consider climate-related risks and opportunities when managing various tasks, set specific goals to implement into various policies and programs, and build consensus on the Group’s climaterelated
mitigation and adaptation issues.
▍Strategy
Everlight has set targets to reduce carbon emissions by 25% by 2030 and achieve net zero carbon emissions by 2050. To achieve the vision of low-carbon transformation, the Group’s operational strategies are as follows:
The Climate Change Working Group identifies climate-related risks based on the TCFD framework, the World Business Council for Sustainable Development (WBCSD) chemical industry case guidance, the CDP questionnaire, and the specific nature of the chemical industry. Using a risk matrix, climate-related risk issues are prioritized. Based on the company’s risk management system, countermeasures are developed to control these
risks.
Climate-related risks are identified based on their severity and probability of occurrence. A climate risk matrix is created, and the identification results of short, medium, and long-term climate risks and opportunities are organized as follows.
●Major Risks Identified ●Secondary Risks ●Minor Risks
Note 1: The above numbers represent climate risk scores and are for ranking purposes only.
Note 2: Severity is divided into 4 levels: Level 1: Acceptable, Level 2: Minor, Level 3: Severe, Level 4: Very Severe.
Note 3: Probability of occurrence is divided into 4 levels based on the frequency of occurrence: Level 1: >15 years, Level 2: 10-15 years, Level 3: 5-10 years, Level 4: 1-5 years.
Evaluating climate mitigation and adaptation strategies must also consider various aspects, including product research and development, manufacturing, supply chain management, and market operations. Carbon issues are managed based on the Group’s five main product categories. The organization comprehensively assesses the likely financial impact of low carbon transition actions required for each issue based on an inventory of key risks and opportunities, as shown in the table below. This helps understand the overall financial impact and develop preventative measures and timelines.
▍Climate Change Risk Management
Everlight refers to “ISO 31000:2018 Risk Management – Principles and Guidelines” to implement risk management processes. Based on different risk attributes and categories (market, political, environmental, legal, financial, operational, others) and the probability and severity of risks, we develop risk management principles and strategies.
- Climate change risk is part of environmental risk. In 2021, under the Environmental Group of the Sustainability Development Committee, a cross-departmental Climate Change Working Group was established to identify and assess climate change-related risks and opportunities.
- Climate risks are divided into two major categories: transition risks and physical risks. According to Everlight’s current risk management system, assessments of transition and physical climate risks include policies and regulations, technology, market, corporate reputation, as well as immediate and long-term climate risks that may impact Everlight.
- The assessment process includes Identifying risks → Risk ranking → Risk impact assessment → Risk adaptation and preemptive planning, integrated into the existing risk management system.
- When a climate risk issue is evaluated as a major risk, specific countermeasures are proposed according to the risk handling procedure.
- Risk reporting, response, and monitoring: All responsible units should continuously monitor risks related to operations, track disposed risks to confirm that residual risks are effectively controlled, and review by the Risk Management Committee or through various management system. The status of risks and risk handling results are reported as a reference for adjusting risk control mechanisms and operating strategies.
▍Indicators and Targets
Since 2005, Everlight has consecutively passed third-party verification of greenhouse gas emissions under ISO 14064-1:2006 for six years (for Plants I, II and III). We continue to use this systematic approach to establish the Group’s organizational carbon inventory data (including Everlight Plant IV, Trend Tone Imaging, and Everlight Suzhou) to ensure the accuracy of greenhouse gas emissions.
Greenhouse Gas Emission Intensity in Recent Years and 2030 Targets
