AcBel Polytech Inc. 康舒科技

Energy Consumption & GHG Emissions

Environmental Management Strategy

AcBel actively works towards mitigating climate impacts by emphasizing technological innovation, reducing carbon emissions, increasing the use of renewable energy, and developing solutions for automotive power systems. AcBel recognizes the need to address climate change risks and is committed to implementing climate adaptation strategies to build a resilient enterprise.

AcBel considers external drivers such as "international trends" and "government regulations" in alignment with its operational context. The company's environmental management is primarily divided into two main themes: "Energy and Resource Management" and "Waste Management." Energy and resource management primarily focus on electricity and water usage and reduction. Waste management primarily deals with business and general waste management. The implementation of ISO systems and verification ensures the effective execution of various initiatives. Additionally, starting from 2022, customer requirements related to renewable energy and recycled materials are also incorporated into the environmental management considerations.

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For detailed ISO system list and certificate download, please refer to Sustainability Management System and Certificate.

 

Climate Related Financial Disclosure (TCFD) and Governance

AcBel's Board of Directors has formed a "Sustainable Development Committee" responsible for "Climate Risk Management" matters. The committee holds regular meetings every year to discuss related issues. The Corporate Sustainable Development Office (CSD Office) serves as the dedicated unit for driving climate governance within the company. Together with the Operation & Management Division, they are responsible for convening and executing the annual identification and assessment of climate-related risks and opportunities. They assist the Board of Directors in overseeing and implementing decisions regarding potential risks, including climate change risks, to ensure effective risk management across operations. They also provide recommendations for improvement.

Each department evaluates the likelihood and impact of risk factors based on their responsibilities, manages risks appropriately, and formulates necessary measures to be implemented. In addition, an internal "Corporate Sustainable Development Implementation Committee" is established within the company to track the progress of the goal of "Energy Sustainability 2030" on a quarterly basis. The highest responsible person from each production plant or project confirms the progress and submits the annual implementation results for two-way communication with the Board of Directors. Each production plant submits monthly reports on the implementation status of climate governance plans. The CSD Office aligns the resource usage and carbon emissions with climate-related indicators and targets, coordinating and analyzing the data to ensure that the execution and outcomes of the plans align with the company's climate change policy direction. Annually, reports including climate change risk identification and carbon management response strategies are submitted to the Board of Directors.

The company integrates the TCFD framework with its internal risk management processes to conduct identification and assessment of climate-related risks and opportunities. This is done through a four-step process of identification, assessment, management, and monitoring. The company develops strategies and measures to address climate-related risks and opportunities.

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Conforming to the risk management process, AcBel assesses the likelihood and impact of various risks and opportunities. Among the 54 climate-related risks and opportunities identified, 3 type of significant risks and opportunities have been identified:
➊ Transition Risk - Other: ESG Investment Development and Sustainable Financial Regulations (R6), Customer Behavior Changes (R9)
➋ Physical Risk - Increased severity of extreme weather events such as typhoons and floods (R12)
➌ Opportunity - Transition to More Efficient Buildings (O3), Development or Expansion of Low-Carbon Products and Services (O5), Research and Innovation for Developing New Products and Services (O6)

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Considering the different nature of AcBel and Shanghai Sino Hardware product manufacturing and their respective geographical locations, climate-related risks and opportunities are identified separately. In 2022, SINO identified two categories of highly significant impact topics from the assessment of 38 climate-related risks and opportunities, based on the evaluation of their likelihood and impact through the risk management process.
➊ Transition Risk – Other: Unstable Power Supply Due to Electricity Rationing Policies (R2), Customer Behavior Changes (R5)
➋ Opportunity – Adopting More Efficient Production and Distribution Processes (O1), Transition to Low-Carbon Energy Sources (O2)

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"Sustainable Energy 2030" Goal

Limiting global warming to within 1.5℃ and achieving "net-zero emissions" by 2050 has become a mainstream consensus. In response to the global climate governance trend, countries and regions around the world have set their own net-zero targets for 2050. In the face of this challenge, companies cannot remain indifferent. Therefore, in addition to environmental aspects, AcBel's carbon reduction goals have expanded to include product and service offerings as well as energy transition, aiming to build a climate-resilient enterprise.

For the three indicators of "Reducing Energy Consumption," "Domestic Water Usage," and "Hazardous Waste Generation," AcBel has set its "Energy Sustainability Goals" for the target year of 2030 based on the base year of 2021. In alignment with the SBT pathway, the reduction in GHG emissions serves as the basis for the energy consumption reduction. Each factory uses the "Energy Sustainability Goals" as the target basis for achieving reductions.

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AcBel aligns itself with the international goal of "limiting global warming to 1.5°C" by setting Science-Based Targets. These targets are established to meet stakeholders' expectations and demands for achieving net-zero emissions. The company has developed the "Energy and Natural Resources Policy" and "Greenhouse Gas Inventory Declaration" as the guiding principles, and has formulated short, medium, and long-term energy management goals and plans. AcBel, as a group, has set GHG reduction targets across various scopes, extending to each factory. This demonstrates the company's commitment to proactive carbon reduction and ensures the achievement of the net-zero emissions goal by 2050.

Under the SBT framework, AcBel ensures the accuracy of its greenhouse gas emissions information by implementing the ISO 14064-1 standard for GHG inventory and the ISO 14046 standard for water footprint inventory across its operational sites. This enables the quantification, monitoring, reporting, and verification of data using consistent standards. Based on the inventory results, AcBel conducts emission hotspot analysis to identify areas with significant emissions. This analysis serves as the basis for implementing reduction plans in various factories, including initiatives to improve energy efficiency, usage, and consumption, as well as the increased utilization of renewable energy. These measures aim to enhance the achievement of the company's resource reduction targets.

To achieve the SBT of AcBel and meet the requirements for using renewable energy in various customer product processes, the company implemented a diversified strategy in 2022. This included promoting energy-saving schemes in the manufacturing facilities, purchasing Renewable Energy Certificates, and signing Power Purchase Agreements (PPAs) for the procurement of green energy. These initiatives were undertaken to achieve the annual carbon reduction targets.

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Energy Consumption

Energy Consumption Analysis in 2022

Based on the analysis of energy usage and GHG inventory, purchased electricity accounts for the majority of energy consumption, representing approximately 97.82% of the total energy usage. Natural gas is the second-largest energy source, accounting for 1.09%. To mitigate the environmental impact associated with electricity consumption, priority will be given to improving energy efficiency and increasing the utilization of renewable energy sources. The focus will be on enhancing energy efficiency measures and adopting renewable energy solutions to reduce the overall environmental footprint caused by electricity usage.

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GHG Emissions Status

Over 99% of AcBel's GHG emissions are attributed to CO2, primarily from electricity use, product procurement, 85 transportation, and product use. The remaining emissions consist of a small portion of methane (CH4) generated by human activities and hydrofluorocarbons (HFCs) emitted from air conditioning refrigerants.

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GHG Emissions

Scope 1 & Scope 2

In 2022, the GHG emissions, when combined for Scope 1 and Scope 2, accounted for 4.76% and 95.24% respectively. This is mainly due to the significant reliance on purchased electricity for operational needs. AcBel's primary carbon reduction strategy involves increasing the use of renewable electricity and reducing reliance on purchased electricity.

Scope 3

In 2022, the overall carbon emissions from Scope 3 decreased by 23.45% compared to the previous year. Among the Scope 3 emission categories, employee travel, downstream transportation and distribution, and capital goods showed positive increases. However, when analyzing the specific carbon emission sources in Scope 3 for 2022, the procurement of goods and services accounted for 42.37%, and the use of sold products accounted for 53.96%, totaling 96.33% of Scope 3 emissions. To address this, AcBel will strengthen supply chain management and improve the efficiency of energy products as the primary carbon reduction strategies.

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Waste and Air Emissions Management

AcBel has dedicated units at each operational site responsible for waste, air emissions, wastewater monitoring and management. With the goal of "Energy Sustainability 2030," AcBel implements waste reduction programs to achieve a waste diversion rate of at least 80% or higher, in compliance with the UL 2799 Zero Waste to Landfill validation standard. AcBel contracts with qualified and legally compliant waste management companies for waste collection and disposal. Through regular on-site audits, AcBel strictly supervises the flow and disposal methods of waste, ensuring that the final waste treatment process maximizes resource or energy recovery, ultimately achieving the goal of zero waste to landfill.

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AcBel has implemented various waste reduction initiatives through employee education and training, waste classification, and process improvements. These include replacing paper boxes with reusable plastic crates, reusing metal scraps, and reducing plastic waste. In 2022, the per capita generation of household waste remained stable, but the total waste volume decreased by 31.17% compared to the previous year. Moreover, the intensity of waste and hazardous waste generation decreased by 40.44% and 38.74% respectively.

AcBel and SINO primarily generate hazardous waste in the form of waste fluids from soldering agents and cleaning agents. AcBel achieved a 42.54% reduction in the intensity of hazardous waste generation compared to the previous year. On the other hand, SINO experienced a significant increase of 22.55% due to changes in product processes. We will focus on optimizing raw materials and processes to reduce the intensity of hazardous waste generation.

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Water Resources Management

The company utilizes the framework of the Task Force on Climate-related Financial Disclosures (TCFD) to assess water- related risks and develop adaptation strategies to mitigate operational risks. In addition, AcBel has implemented ISO 14046 for organizational water footprint inventory. This allows for an assessment of water usage at the factory level and enables the development of water conservation strategies. By incorporating this verification process, the company ensures the accuracy of disclosed information regarding water resources.

AcBel primarily focuses on the manufacturing of electrical products, with the main process being the assembly of electronic components. As such, the company does not have significant water usage for industrial purposes. However, Shanghai Sino Hardware, a subsidiary of AcBel, produces stamping products and utilizes process water for metal surface treatment. To address water conservation, AcBel implements employee education programs to raise awareness and promote water-saving practices. Water conservation goals are integrated into the "Energy Sustainability 2030" initiative. The company also introduces water-saving technologies to reduce water consumption and closely monitors water quality. Efforts are made to minimize environmental impact while ensuring compliance with regulations.

In order to protect the safety and health of employees, each of AcBel's operating bases has included "providing 100% of employees with fully functional and safely managed water, sanitation and personal hygiene facilities (WASH)" as a management goal in accordance with international requirements. In 2022, 100% AcBel employees use safely managed drinking water services, and it has been extended to suppliers. At the same time, suppliers are audited to ensure compliance with safe management of washing and sanitation services and wastewater management to prevent water pollution.

In 2022, AcBel successfully achieved its water conservation goals through various water-saving measures. Furthermore, the company has formulated water conservation targets for each plant in 2023 to ensure the optimization of water usage.

Considering the differences in products and processes across various manufacturing facilities, a comparable basis for water conservation performance is established by using water withdrawal and water intensity as key metrics. In 2022, both AcBel and SINO had an overall reduction in water consumption by approximately 30%. However, when analyzing water intensity, AcBel achieved a 50% reduction, while SINO maintained the same level. The significant reduction in water withdrawal by AcBel can be attributed to the effective implementation of various water-saving measures at Tamsui smart factory which played a crucial role in optimizing water usage. AcBel aims to introduce additional water optimization initiatives to further enhance the efficient utilization of water resources.

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