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Sustainable Environment

Sustainable Environment

Environmental Policy
Conflict Minerals Policy
Climate Change Response and Adaptation (TCFD)
Energy and Greenhouse Gas Management
Water Resources and Pollution Prevention Management
Raw Material and Waste Management
Biodiversity

Climate Change Response and Adaptation (TCFD)

Governance

Board of Directors
Directors and Senior Management Sustainability Committee Review climate risks and opportunities, GHG management and reduction targets; report regularly to the Board.
Risk Management Team Consolidate risks and opportunities, track carbon reduction and energy management, and integrate climate governance information.
Steering Team / Finance Division Climate risk assessment and response, policy and financial impact analysis, and supply chain climate risk management.
QA / Marketing / R&D / Facilities / Procurement Energy saving and carbon reduction, water and environmental management, low-carbon innovation, green product design and sustainable supply chains.
Human Resources / General Affairs Climate regulatory compliance, corporate carbon inventories, climate disclosures, local and social participation, environmental education and advocacy.
  1. Board of Directors
    1. Directors and Senior Management Sustainability Committee Review climate risks and opportunities, GHG management and reduction targets; report regularly to the Board.
      1. Risk Management Team Consolidate risks and opportunities, track carbon reduction and energy management, and integrate climate governance information.
        1. Steering Team / Finance Division Climate risk assessment and response, policy and financial impact analysis, and supply chain climate risk management.
        2. QA / Marketing / R&D / Facilities / Procurement Energy saving and carbon reduction, water and environmental management, low-carbon innovation, green product design and sustainable supply chains.
        3. Human Resources / General Affairs Climate regulatory compliance, corporate carbon inventories, climate disclosures, local and social participation, environmental education and advocacy.

Board of Directors: Supreme oversight body.

Sustainable Development Committee: Review climate risks and opportunities, review greenhouse gas reduction targets, and report regularly to the Board.

Risk Management Task Force: Conduct inventory of risks and opportunities, execute carbon reduction management, and integrate climate governance information.

Strategies

Five Core Strategies

  1. Low-Carbon Transformation

    Drive energy conservation in manufacturing processes and increase the proportion of green energy usage.

  2. Supply Chain Resilience

    Diversify supply sources and develop alternative materials.

  3. Customer Collaboration

    Construct greenhouse gas reduction pathways and implement RBA management.

  4. Green Products

    Accelerate the development of high-efficiency, low-carbon manufacturing process products.

  5. Operational Resilience

    Strengthen site infrastructure capacity to adapt to extreme climate events.

Risk Management

Climate Risk and Opportunity Assessment

Climate Risk and Opportunity Assessment
Type Climate risk / opportunity Time Horizon Potential Financial and Operational Impacts Response
Transition Risk－Policy and Law Carbon-reduction targets / carbon fees Medium-long Industrial electricity costs increase 15%-20% in the short term; cumulative carbon costs may increase 25%-35% in the medium to long term. Increase the green electricity share in phases and implement process improvements, limiting the overall cost increase to 2%-5%.
Transition Risk－Market Customer ESG Requirements Short-medium-long Under BAU, the short-term impact is about 1% of annual group revenue, increasing to 10%-20% in the medium to long term. Establish a GHG reduction pathway and RBA management, with estimated guidance and audit costs below 0.05% of revenue.
Transition Risk－Market Raw-material price increase Short-medium-long Coating procurement costs increase nearly 55%, affecting gross profit by about NT$158 million (approximately 11% of gross profit). Engineering and R&D teams test new materials and diversify supply sources to spread risk.
Opportunity Product/Service Develop High-Power, Low-Carbon Products Short-medium Traditional processes have long cycles and high chemical costs, with significant environmental compliance pressure. Introduce thick-film printing to reduce production time by 50%, lower costs and improve the estimated gross margin by about 12%.

Risk Management Process

01 Risk Identification
02 Risk Analysis
03 Risk Evaluation
04 Risk Response
05 Risk Monitoring
06 Risk Reporting
  1. 01 Risk Identification
    • NextRisk Analysis
  2. 02 Risk Analysis
    • NextRisk Evaluation
  3. 03 Risk Evaluation
    • NextRisk Response
  4. 04 Risk Response
    • NextRisk Monitoring
  5. 05 Risk Monitoring
    • NextRisk Reporting
  6. 06 Risk Reporting

Climate Risk Assessment

Climate Risk Assessment. Yellow highlight = item for which management action was adopted after assessment. 0.5 1 1.5 2 2.5 3 3.5 4 4.5 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 High Low Magnitude of financial impact High Likelihood of impact Enhanced emissions-reporting obligations Enhanced emissions-reporting obligations Mandates on and regulation of existing products and services Mandates on and regulation of existing products and services Cost of low-carbon technology transition Cost of low-carbon technology transition Increased cost of raw materials Increased cost of raw materials Changing customer behaviour Changing customer behaviour Rising mean temperatures Rising mean temperatures Increased pricing of GHG emissions Increased pricing of GHG emissions Uncertainty in market signals Uncertainty in market signals Substitution with lower-carbon products and services Substitution with lower-carbon products and services Changing consumer preferences Changing consumer preferences Unsuccessful investment in new technologies Unsuccessful investment in new technologies Changes in precipitation patterns and extreme weather variability Changes in precipitation patterns and extreme weather variability Increased stakeholder concern and negative feedback Increased stakeholder concern and negative feedback Increased severity of extreme weather events such as floods and cyclones Increased severity of extreme weather events such as floods and cyclones
Assessed items
  • Enhanced emissions-reporting obligations
  • Mandates on and regulation of existing products and services
  • Cost of low-carbon technology transitionManagement action
  • Increased cost of raw materials
  • Changing customer behaviourManagement action
  • Rising mean temperatures
  • Increased pricing of GHG emissionsManagement action
  • Uncertainty in market signalsManagement action
  • Substitution with lower-carbon products and services
  • Changing consumer preferences
  • Unsuccessful investment in new technologies
  • Changes in precipitation patterns and extreme weather variability
  • Increased stakeholder concern and negative feedback
  • Increased severity of extreme weather events such as floods and cyclones

Yellow highlight = item for which management action was adopted after assessment

Climate-Related Opportunity Assessment

Climate-Related Opportunity Assessment. Yellow highlight = item for which management action was adopted after assessment. 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 High Low Magnitude of financial impact High Likelihood of impact Development and/or increased low-carbon products and services Development and/or increased low-carbon products and services R&D and innovation in new products and services R&D and innovation in new products and services Use of low-carbon energy Use of low-carbon energy Use of more efficient production and distribution processes Use of more efficient production and distribution processes Renewable energy projects and energy-saving measures Renewable energy projects and energy-saving measures Move to more efficient buildings Move to more efficient buildings Diversification of business activities Diversification of business activities Use of public-sector incentives Use of public-sector incentives Access to new markets Access to new markets Energy substitution / diversification Energy substitution / diversification Reduced water usage and consumption Reduced water usage and consumption Adoption of incentive-based strategies Adoption of incentive-based strategies Use of more efficient modes of transport Use of more efficient modes of transport Participation in carbon markets Participation in carbon markets Shift to decentralised energy Shift to decentralised energy Use of new technologies Use of new technologies Shift in consumer preferences Shift in consumer preferences
Assessed items
  • Development and/or increased low-carbon products and services
  • R&D and innovation in new products and services
  • Use of low-carbon energyManagement action
  • Use of more efficient production and distribution processes
  • Renewable energy projects and energy-saving measuresManagement action
  • Move to more efficient buildingsManagement action
  • Diversification of business activities
  • Use of public-sector incentives
  • Access to new markets
  • Energy substitution / diversification
  • Reduced water usage and consumption
  • Adoption of incentive-based strategies
  • Use of more efficient modes of transport
  • Participation in carbon markets
  • Shift to decentralised energy
  • Use of new technologies
  • Shift in consumer preferences

Yellow highlight = item for which management action was adopted after assessment

Metrics and Targets

2030 Carbon Reduction Target

Cumulative Reduction 28 %

Taiwan Sites (Base Year: 2021)

GHG Intensity Reduction Target

YoY Reduction 2 %

Scope 1 & Scope 2 for Taiwan Sites

Energy Intensity Reduction Target

YoY Reduction 1 %

Scenario and Sensitivity Analysis

Sensitivity Analysis: Impact of Electricity Price Fluctuations on Profitability (2025 Baseline)

Assuming operational scale and product mix remain constant, this evaluation references the IPCC AR6 SSP scenario framework to assess the financial impact of electricity price variations. Without concurrent energy-efficiency improvements or cost pass-through, rising electricity tariffs will impose distinct pressures on corporate profitability.

SSP2-4.5 Intermediate Emissions Scenario: Transition Pathways & Financial Impact Analysis

SSP2-4.5 Intermediate Emissions Scenario: Transition Pathways & Financial Impact Analysis
Timeframe Internal Transition Pathway Key Operational Assumptions Expected Financial Impact Core Management Actions
Short-term

(~2030) 		Proactive Transition Drive energy-saving projects, enhance manufacturing efficiency, and progressively introduce green power / Renewable Energy Certificates (RECs). Cumulative increases in energy- and carbon-related costs remain modest, resulting in a slight drop in gross margin. Prioritize projects with shorter payback periods; integrate these initiatives into operational planning and CapEx decisions.
Delayed Transition Meet only baseline legal and customer compliance requirements; postpone energy efficiency and low-carbon investments to the medium term. Short-term cost pressure remains low, but buffering capacity against future electricity price and carbon fee hikes will be limited. Establish early warning mechanisms; project required capital and cash flows for future transition.
Medium-term

(~2040) 		Proactive Transition Continuously phase out high-energy equipment, adopt high-efficiency processes, and expand green power procurement. Energy- and carbon-related cost increases remain manageable; gross margin declines slightly while order volumes stay stable. Incorporate carbon costs and payback yields into product pricing strategies and customer negotiations.
Delayed Transition Face rapidly rising carbon fees, higher electricity prices, and stricter customer demands, requiring significant one-time corrective investments. Energy and carbon costs increase by 25%–35% (net increase of ~2%–5%), putting substantial pressure on gross margins. Reserve CapEx and cash flow buffers; evaluate exiting high-carbon product lines.
Long-term

(~2050) 		Proactive Transition Temperatures and extreme weather risks rise; the market universally demands low-carbon and net-zero operations. Proactive: Costs and gross margins remain manageable.
Delayed: Risk of order loss and declining competitiveness. 		Continuously invest in low-carbon processes and product innovation; reinforce business continuity planning (BCP).

Internal Carbon Pricing (ICP) Mechanism

To mitigate climate transition risks and align with IFRS S2 requirements, TA-I Technology will gradually introduce an Internal Carbon Pricing (ICP) mechanism starting in 2026, integrating carbon costs into operational and investment decision-making to accelerate our low-carbon transition.

Implementation Mechanism (Shadow Pricing)

In the initial phase, a Shadow Price (a virtual carbon cost) will be integrated into major capital expenditures, equipment upgrades, and green energy procurement to prioritize resources for high-impact low-carbon projects.

Pricing Model & Dynamic Adjustment

We have built a dynamic evaluation model combining internal abatement costs (energy efficiency and renewable energy investments) with external factors (MOENV carbon fee regulations, market prices, and 1.5℃ (science-based pathways). The ICP framework will be regularly reviewed and adjusted to optimize our long-term decarbonization strategy.