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Climate Change Response

In recent years, affected by climate change, the world has experienced rising average temperatures, increased frequency of extreme weather events such as storms, blizzards, and droughts. They bring a range of challenges to corporations by affecting business operations and production activities, causing property losses and threatening the health and safety of employees. Faced with climate-related challenges, enterprises around the globe as well as their supply chains need to confront climate issues more seriously and enhance their resilience and ability to respond to climate change.

Climate-Related Financial Disclosures (TCFD)

Following the introduction of the TCFD framework in 2021, WNC added its signature to the TCFD official website in 2022. In addition to urging the industry, companies, and the public to focus on climate change issues, WNC is also committed to the continued improvement of the quality of information disclosure on its handling of climate related issues. WNC regularly convenes working groups to review changes in climate risks and opportunities relating to climate risks.

Based on the framework guidelines, we categorize issues into five main areas: energy resources, administration and assets, markets and business, products and technology, and supply chain management to identify potential climate risks and opportunities related to each topic and their materiality, and formulate management strategies for major climate risks and opportunities. Through scenario analysis, we quantify the financial impact to the company of these risks and opportunities, evaluating their effect on company strategy under different scenarios. For details, please refer to WNC’s 2023 TCFD Report.

Governance

Board of Directors

The highest climate governance unit, responsible for overseeing the implementation of climate-related policies and providing strategic guidance to the executive team

Sustainable Development Committee

The committee is composed of the Chairman, two independent directors, one director and three top-tier managers. The Chairman serves as the convener of the committee.

Environmental Protection Working Group

There are three working groups under the Sustainable Development Committee. The Environmental Protection Working Group is responsible for coordinating, promoting, and implementing environmental projects.

TCFD
Working Group

The Sustainable Development Center coordinates units to identify climate-related risks and opportunities across all operational aspects based on factors such as climate conditions, environmental changes, and market fluctuations.

Strategy

Through impact analysis, significant risks and opportunities are identified by ranking them based on two determining factors: likelihood of occurrence and degree of impact.
The process involves dividing into short term (1–2 years), medium term (2–5 years) and long term (5–10 years) phases, while considering eight major categories of risk and the scope of the upstream, midstream, and downstream value chain. It entails estimating potential financial impacts and formulating corresponding short, medium, and long-term management measures.
We utilize scenarios including the government’s net-zero emissions pathway, IPCC AR6 SSP1-1.9 pathway, and scenario estimation based on the Science-Based Targets for Net-Zero (SBT-NZ), to analyze potential risks.
No. Major Climate RisksNote 1 Potential Financial Impact Response Measures Management CostNote 2(unit: NT$)
R1 Transition Risks - Government Regulations
GHG emissions regulations		 Expanding the scope of greenhouse gas inventories leads to increased operating costs. Greenhouse Gas Management: Establish a global inventory of GHG emissions for all WNC sites, stay updated on government policies and implement GHG emissions reduction initiatives. Progress on these initiatives is reviewed quarterly by the Sustainable Development Committee. The annual expenditure for greenhouse gas verification and counseling, as well as the usage fees for related management systems, is approximately NT$1.13 million.
R2 Transition Risks - Government Regulations
Renewable energy regulations		 Installation and maintenance requirements of solar panels lead to direct cost increases.
  • Energy Management: Introduce the ISO 50001 energy management system and continue to promote energy-saving initiatives to enhance equipment energy efficiency.
  • Renewable Energy: Formulate a long-term strategy for renewable energy, and gradually increase the number of solar panels installed in WNC sites to achieve the goal of 100% renewable electricity.
 Annual expenditure for installation, maintenance, and platform usage fees for renewable energy equipment is approximately NT$9.16 million.
R3 Transition Risks - Government Regulations
Conventions or agreements on climate change mitigation and adaptation		 Complying with international net-zero goals results in increased expenditure on carbon reduction implementation.
  • Participating in climate advocacy initiatives: Joining international carbon reduction organizations such as SBT and RE100 aligns our corporate sustainability goals with global objectives.
  • Climate-related information disclosure: Participating in international rankings and connecting with global resources, we annually publish a Sustainability Report and TCFD Report to enhance our ability to disclose climate-related information.
  • Energy-saving investment: Renewable energy purchasing, energy-saving equipment, and related manpower costs, amounted to approximately NT$24 million in 2023.
  • Participation in initiatives: The annual membership fee for related initiatives is approximately NT$180,000.
  • Verification support: The execution of ISO management system updates, as well as guidance on SBTi and TCFD, amounted to approximately NT$2.63 million in 2023.
R4 Transition Risks - Government Regulations
Self-declared commitments and targets relating to GHG emissions
R5 Transition Risks - Market
Customers have different considerations than before when choosing products or services		 Decreased product orders and additional communication costs with clients lead to increased costs. Relevant Regulations and Trends Monitoring: Based on international trends and related regulations, customer environmental goals and practices, customer requirements for overall suppliers and WNC, and information on practices of industry benchmark enterprises, we formulate or adjust WNC's strategies and practices. Industry market research reports and human resources investment amounts to approximately NT$6 million annually.
R6 Transition Risks - Market
It is difficult to grasp the market demand for future products or services
R7 Transition Risks - Company Reputation
Customers begin to prefer or reject specific products and services
R8 Physical Risk - Immediate Risk
Extreme rainfall and drought
  • Extreme rainfall can lead to flooding, resulting in damage to production sites, employees being unable to work, and interruptions in the supply chain.
  • Droughts may also affect water usage in manufacturing processes.
  • Water Resource Management: Install monitoring devices to regularly inspect water usage and identify areas for improvement, thereby promoting water-saving and water recycling measures.
  • Waste Management: Apart from recycling metal scrap, WNC has fully implemented recycling and reuse projects.
  • Response and Prevention: Establish a disaster recovery organization and convene emergency meetings to assess the severity of the incident and initiate recovery operations. Simultaneously, plan backup production and material risk diversification measures, and conduct regular internal process drills.
 Response Measures: The annual expenditure for regular risk assessment costs, emergency response equipment, monitoring management platforms, and education and training plans related to business continuity planning is approximately NT$13.66 million.
R9 Physical Risk - Long-term Risks
Average temperature changes		 Prolonged high temperatures may lead to increased electricity demand and higher water usage for cooling towers.
No. Major Climate Opportunities Potential Financial Impact Management Measures Management CostNote 2(unit: NT$)
O1 Products and Services
Low carbon products or services
  • Launching low-carbon products leads to increased revenue.
  • Expanding the application scope of network communication products brings new business opportunities.
  • Developing low-energy technologies or systems can help reduce production costs.
  • Low-carbon Technological Innovation: Align with the global trend of low-carbon and net-zero emissions, we explore potential applications for wireless communications technologies (e.g., products relating to Mobility as a Service). At the technological development level, we continue to allocate research and development resources to product technologies, implement green design concepts, and develop low-energy technologies and systems to enhance the competitiveness of said products.
  • Green products: We integrate eco-design and incorporate green management principles into supplier management mechanisms.
  • For green product design, we are driving a carbon footprint project, with an investment of approximately NT$1.38 million in 2023.
  • Total investment in environmental research and development is approximately NT$10 million.
O2 Adaptation and Solutions
Products or services that contribute to climate adaptation and climate solutions
O3 R&D Innovation
Innovative processes that change the way services are provided
O4 Operations Diversification
Provide more low-carbon products and services
  • Note1: Through a dual assessment of likelihood of occurrence and degree of impact, there are currently no significant physical risks associated with WNC's owned or leased premises. However, considering the uncertainty of climate disasters, the most frequently occurring rainfall disasters in Taiwan and global concerns about water resources are also included in significant issue management.
  • Note2: Management costs are calculated based on internal company data, with some clearly estimable financial costs listed for calculation.

Risk Management

Identification and Evaluation Process

The Working Group collects internal and external issues related to macroeconomics, industry and technology, customers and markets, supply chains, internal personnel, and operational processes to conduct a risk and opportunity identification and assessment process based on the members’ duties, expertise and experience, ranking them based on two determining factors: likelihood of occurrence and degree of impact.

Integration with the Organizational Risk Management Mechanism

Manage risks related to corporate operations in accordance with the existing organizational structure, internal controls and management mechanisms. Each business unit and functional unit are responsible for identifying risks in their respective areas and formulating management strategies and response measures for prevention, reduction, or transfer of risks.

Metrics and Targets

Scope 1, 2 and
3 GHG Reduction Goals

Reduction goals are set according to the Science-Based Targets (SBT), aiming to align with the Paris Agreement and be consistent with net-zero goals by 2050. Additionally, Scope 3 emissions accounting is included to further expand WNC’s emissions reduction scope, thus achieving more comprehensive sustainability goals.

Energy Conservation and Renewable Energy Usage Goals

Joining the RE100 initiative, we aim to enhance energy efficiency and increase the proportion of renewable energy use annually.

Other Climate-related Management Goals

We have established management objectives for aspects such as water resource use, waste management, biodiversity, and green product design to ensure comprehensive management of the impacts of climate change on our business and supply chain. We promote practices that contribute to sustainable development and environmental protection.