Climate Governance

Risk Management and Actions for Climate Change

TCC pays close attention to global climate change and the market flow. To mitigate the direct or indirect impact of climate change and respond to government policies, we followed the four pillars of the Task Force on Climate-related Financial Disclosures (TCFD) framework: "governance", "strategy", "risk management", and "metrics and targets", then identified potential climate-related risks and opportunities, as well as response measures and strategy.

Management Action

  • The Board of Directors is the highest governance body for risk management, responsible for overseeing the operation of the risk management mechanism and ensuring its effectiveness.
  • We established the Risk Management Committee, consisting of the Chairman, the President, and the Vice President of the Company. The committee is responsible for reviewing the Company's annual risk management plan and assessing the implementation of risk management measures. It ensures that the risk management mechanism adequately addresses the risks faced by the Company and integrates it into daily operations. The committee reports annually to the Board of Directors and the Audit Committee on the operations and implementation status.

Management Action

  • We studied global trends, policies, regulations, and norms, and formulated response strategies for short, medium, and long-term climate-related risks and opportunities, reducing the impact on operations and seizing potential opportunities.
  • We adopted an approach that includes "mitigation" to reduce greenhouse gas emissions and minimize potential impacts of climate change, and "adaptation" to adjust and adapt to climate change impacts. Through this dual approach of "mitigation" and "adaptation", we reference various scenarios from the IPCC and NGFS to evaluate potential climate-related risks and opportunities and take corresponding measures.
    1. Transition Risks: This mainly involves assessing the impact of regulations and technologies such as renewable energy, fuel and energy taxes, and carbon fees on TCC and developing response measures.
    2. Physical Risks: This primarily addresses risks related to the increased frequency of extreme weather events including storms and floods, resulting in risks such as project delays.
    3. Opportunities: Corporations continue to focus on low/zero-carbon energy topics such as renewable energy due to the trend of sustainability both domestically and internationally, which would increase TCC's opportunities for related operations and business expansion.

Management Action

  • After researching relevant topics, we compiled those that might impact the Company and formulated corresponding strategies for further management.
  • The Company continues to adopt ISO 14001 and 14064 Standards, plan emission reduction measures, and check environmental impact and greenhouse gas emissions annually.
  • Implement transition risk management along with suppliers, reducing the impact of climate change on the supply chain through measures such as the supplier corporate sustainability commitment, and the on-site audit of sustainability performance.
  • Incorporate climate-related risks and opportunities into scopes of risk management policies and processes, as well as risk management plans, review and update on a rolling basis, and hold task force meetings and Risk Management Committee meetings to discuss and identify relevant risks across departments.

Management Action

  • According to topics associated with the impact of climate change risks and opportunities on the Company, KPIs related to alternative fuels, energy conservation, carbon reduction, and water management, as well as short-, medium-, and long-term goals are set to reduce the impact of climate change.
  • Conduct inventory and disclose Scope 1 and 2 greenhouse gas emission data periodically and assess relevant transition risks and measures to promote the Group's greenhouse gas inventory and verification plan.
  • Continue to carry out energy-saving and carbon reduction-related measures to improve business performance and reduce energy consumption, including process improvement, power saving, etc.

Climate-related Risk / Opportunity

Organizational Structure of the Committee

The Board of Directors is the highest governing body for risk management at the Company. The Board of Directors and the Audit Committee are responsible for overseeing the operation of the risk management mechanism and ensuring its effectiveness. The Risk Management Committee is chaired by the Chairman, with the President and Vice President serving as committee members.

A Risk Management Promotion Team is set up under the Risk Management Committee, which involves departments in conducting risk assessment and control activities. The Planning & Investment Management Dept. acts as the promoting and reporting unit to ensure the effectiveness of the risk management mechanisms and procedures.
 
  • Frequency: The committee reports to the Board and the Audit Committee on the implementation and operation status of risk management at least once a year.
  • Responsibility: The committee is responsible for reviewing the Company's risk management mechanisms, risk management plans, and the effectiveness of these plans.

Climate-related Risk / Opportunity

Climate-related Risk: Transition Risk
Category
Item
Management Impact / Financial Impact
Response Strategy
Policies and Legal (1)
Renewable Energy, Fuel / Energy Tax and Regulations
  • Loss of investment due to changes in policies or regulations
  • Change of regulations leads to increased operation costs of existing power plants
  • Promptly gather information on government policies and legislation implementation schedules, and carry out assessment on impact and response measures in advance
  • Provide suggestions to regulatory authorities promptly, and carry out external engagement
Policies and Legal (2)
  • Climate Change Response Act
  • Cap and Trade
  • Carbon Tax / Fee
  • The cap on total GHG emissions and stricter air pollution standards increase equipment
    upgrade costs and operation costs
  • Government legislation to levy carbon fees leads to increased operational costs
  • Reduce internal energy consumption and carbon emissions
  • Greenhouse gas inventory management and power plant energy audit system
  • Conduct maintenance regularly, replace old equipment to reduce energy consumption and carbon
    emissions
  • Increase the ratio of alternative fuels in cogeneration plants to reduce coal usage
  • Continuously monitor regulatory revisions related to carbon fee
Technology
Low-carbon Transition
  • In response to the net-zero emissions trend, traditional coal/gas power plants need to assess unit upgrades, which may lead to increased operational costs
  • Promote unit upgrades and evaluate the feasibility of co-firing hydrogen and ammonia
  • Assess the implementation of CCUS (Carbon Capture Utilization and Storage) technology
Market
Energy Supply and Demand
  • Changes in the supply and demand structure of the energy market and the emergence of new business models in the power market will impact operational costs
  • In response to the energy transition, assess the feasibility of upgrading and replacing existing power
    plant units
  • Expand renewable energy-related business to increase green electricity capacity
Reputation
Company Reputation
  • Climate issues have a significant impact on the energy industry, with power plant accidents and carbon emission issues affecting reputational risk
  • Strengthen power plant operation management to reduce the likelihood of accidents
  • Establish a greenhouse gas management mechanism, promote regular inventory and verification, and
    formulate carbon reduction strategies and targets
Climate-related Risk: Physical Risk
Category
Item
Management Impact / Financial Impact
Response Strategy
Acute
Extreme Weather Events
  • The occurrence of extreme weather events such as typhoons, rainfall or flooding, heatwaves and drought have increased, resulting in project delays or operation losses
  • Purchase relevant insurance to avoid huge losses from natural disaster
  • Review the project schedules weekly, and provide immediate responses to emergencies
  • Establish an emergency response system for disasters and conduct drills periodically
  • Develop management plans and response measures for risks related to extreme weather events
Chronic
Changes of Climate Patterns
Long-term changes in temperature and rainfall patterns may lead to an increase in drought
periods, which would affect operations and reduce revenue
  • Purchase relevant insurance to avoid huge losses from natural disaster
  • Review the project schedules weekly, and provide immediate responses to emergencies
  • Establish an emergency response system for disasters and conduct drills periodically
  • Develop management plans and response measures for risks related to extreme weather events
Climate-related Opportunity
Category
Item
Management Impact / Financial Impact
Response Strategy
Markets
Domestic and International Trends
  • The rise of international environmental initiatives such as RE100, SBTi and green supply chain promote trades in the green energy market
  • The regulations for energy-heavy industries have increased the demands for renewable energy purchase and installation
  • Actively expand renewable energy retailing business
  • Seek collaboration with renewable energy power plants outside of the Group
Resource Efficiency
Energy and Resource Integration
  • Expand regional energy integration, improve energy efficiency, and reduce environmental impact
  • Consolidate electricity and steam demand in the region to improve energy and resource utilization efficiency
Renewable Energy
Development of Renewable Energy
  • In response to the renewable energy promotion policies, domestic services related to renewable energy have increased
  • Expand the development of renewable energy and energy storage business
  • Undertake domestic, large-scale renewable energy projects
  • Establish various types of renewable energy O&M teams

Actions

TCC's 2024 Specific Actions for Climate-related Risk and Opportunity
  • Guan Tian Plant and 3 invested gas-fired power plants's greenhouse gas inventory information and reports are audited by an external third-party verification body in accordance with ISO 14064-1 and 14064-3.
  • Wushantou Reservoir Floating Solar Photovoltaic Power Phase II project investment and development
  • The Group has sold 137 GWh through renewable energy retailing, and also the largest green electricity retailer in Taiwan.
  • Guan Tian Plant and Star Energy obtained ISO 14001 Environmental Management System certification, which is valid from 2023/9/19 to 2026/9/19.
 
In 2024, the company invested in energy-saving or green energy-related environmental sustainability machinery and equipment, as well as in the green energy industry, with the following amounts:
Investment in environmentally sustainable machinery and equipment related to green energy:
  • The company installed equipment for transporting resource-circulated fuels (e.g., wood pellets and SRF) with an investment of NT$2.4 million. This initiative is expected to achieve a 30% fuel substitution rate annually, reducing coal usage and greenhouse gas emissions.

Investment in renewable energy power plants:
  • The company, through its 100%-owned subsidiary Star Energy Co., Ltd., injected NT$340 million in cash on September 4 into its sub-subsidiary Star Power Co., Ltd. for the construction of a wind power plant with an installed capacity of approximately 33.6 MW. This project is estimated to reduce carbon emissions by 41,496 tons annually, calculated using the 2023 electricity emission factor of 0.494 kg CO₂/kWh.