Climate-Related Financial Disclosure (TCFD) and Governance

AcBel has established a comprehensive risk management system from a macro perspective to enhance organizational resilience. Due to the increasing climate-related risks caused by global warming, the company’s Board of Directors’ “Sustainable Development Committee” is responsible for “climate risk management” and holds regular meetings every year to discuss relevant issues.

The “Corporate Sustainable Development Office” is the dedicated unit for AcBel’s climate governance. In collaboration with the “Strategic Transformation Office,” it is responsible for convening and executing the annual identification and assessment of climate-related risks and opportunities, assisting the Board of Directors in identifying potential risks, including climate change risks, to ensure effective control of various operational risks and provide improvement suggestions. Each functional department assesses the likelihood and impact of risk factors according to their job responsibilities, properly manages each risk, formulates necessary response measures, and implements them.

Each department evaluates the probability and impact of risk factors according to their responsibilities, manages various risks appropriately, formulates necessary measures, and ensures their implementation. Additionally, the company has formed the “Corporate Sustainability Implementation Committee,” which tracks the progress of the “Energy Sustainability 2030” goals quarterly. The highest responsible person for each factory or project confirms the progress and submits annual execution results to the Board of Directors for two-way communication.

Each production site reports the execution status of climate governance plans monthly. The Corporate Sustainable Development Office aligns and analyzes climate-related indicators and targets, such as energy resource usage and carbon emissions, to ensure that the execution and results of the plans align with the company’s climate change policy direction. Annually, a report including climate change risk identification and carbon management response strategies is submitted to the Board of Directors.

Each department reviews the identified risks and opportunities, using occurrence rate as the X-axis and impact intensity as the Y-axis. They define short-term (0-3 years), medium-term (3-10 years), and long-term (>10 years) periods, and create a climate-related risk and opportunity matrix. Financial impact assessments and management measures are implemented for medium and high risks. The results are reported step-by-step to the President, the Sustainability Development Committee, and the Board of Directors for evaluation and review. These serve as references for operational decisions and adjustments in financial capital expenditures. Simultaneously, rolling adjustments are made to the short, medium, and long-term response strategies for each project to ensure sustainable operations. For detailed management measures on each issue, please refer to AcBel’s TCFD report.

AcBel evaluates the severity of extreme rainfall due to climate change, considering floods, landslides, and debris flows as vulnerabilities, and the location of sites as exposure factors for physical risk analysis under climate change scenarios. The hazard assessment refers to the Sixth Assessment Report (AR6) published by the IPCC in 2021. It incorporates results from various international climate change research communities, using multiple Shared Socioeconomic Pathways (SSPs) and Representative Concentration Pathways (RCPs) combinations. The risk is projected under four scenario matrix combinations (SSP1-RCP2.6, SSP2-RCP4.5, SSP3-RCP7.0, and SSP5-RCP8.5) across different time scales (short-term: 2021-2040, mid-term: 2041-2060, mid-long-term: 2061-2080, and long-term: 2081-2100) to evaluate the hazard of extreme rainfall. Vulnerability is analyzed based on disaster maps and severity announced by various government units in Taiwan. Exposure is determined by the locations of AcBel’s 21 sites, including its own, its suppliers, and SINO suppliers within Taiwan.

The risk scores for vulnerability at each site are categorized into three risk levels—no risk, low risk, medium risk, and high risk—based on a risk classification matrix. The overall risk is represented by the highest vulnerability risk level at each site. The following is an explanation of the risks at AcBel’s Taiwan sites under various climate change scenarios:

The risk levels of AcBel’s own sites under various climate change scenarios and time scales are shown in the table below. The results indicate that one site (50.0%) has no potential for flooding, landslides, or debris flows under climate change scenarios and is therefore classified as no risk. The remaining site (50.0%), located in Taipei City, is identified as having a flooding risk. This site is affected by different climate change scenarios and rainfall hazards in various periods, resulting in its risk level ranging from “low” to “high.”

AcBel has formulated short, medium, and long-term strategies to adapt to physical risks at its owned sites. Short-term (1-3 years): Focus on inventorying existing asset risks and establishing Standard Operating Procedures (SOP) for risk adaptation. Medium-term (5-10 years): Enhance the disaster resilience of sites to improve operational sustainability, such as planning flood control and slope stabilization measures. Below are the specific strategies for short, medium, and long-term periods:

GHG Emissions Status

AcBel has implemented the ISO 14064-1 greenhouse gas inventory standard at its major operational sites to monitor the greenhouse gas emissions across all global factories and ensure the credibility of the inventory data. Each year, the data undergo verification by a third-party independent organization. Based on the inventory results, AcBel conducts hotspot analyses of emissions and promotes reduction plans at each factory, which include improving energy efficiency, reducing energy consumption, and building or purchasing renewable energy or certificates, to achieve energy-saving and carbon reduction targets and move toward net-zero emissions.

Analysis shows that more than 99% of AcBel’s greenhouse gas emissions are carbon dioxide (CO2), primarily from electricity usage, product procurement, transportation, and product use. The remaining emissions come from human activities producing methane (CH4) and hydrofluorocarbons (HFCs) from air conditioning refrigerants.

In 2023, AcBel’s Scope 1, Scope 2, and Scope 3 emissions accounted for 0.1%, 2.2%, and 97.7% of total emissions, respectively. Analyzing direct emissions in Scope 1 and energy indirect emissions in Scope 2, the majority of emissions come from Scope 2, accounting for 94.9%, primarily due to purchased electricity needed for operations. Scope 1 direct emissions account for only 5.1%. Therefore, AcBel’s main carbon reduction strategies focus on self-sufficient energy-saving, reducing purchased electricity, and increasing the use of renewable electricity. Scope 3 emissions come from upstream raw material procurement and product use phases. Consequently, AcBel collaborates with the entire value chain, monitors the carbon coefficients of raw materials, incorporates low-carbon recycled materials, and improves the efficiency of power products as primary carbon reduction strategies.

In 2023, Scope 3 emissions totaled 1,421,345.71 metric tons of CO2 equivalent, with most categories showing a downward trend. Overall carbon emissions decreased by 29.5% compared to the previous year. Analyzing the carbon emission categories, the use of sold products accounted for 56.8%, and purchased goods and services accounted for 39.7%, together making up 96.5% of the total Scope 3 emissions. Therefore, strengthening supply chain management and improving the efficiency of power products will be our main carbon reduction strategies.

In 2023, Scope 3 emissions totaled 1,421,345.71 metric tons of CO2 equivalent, with most categories showing a downward trend. Overall carbon emissions decreased by 29.5% compared to the previous year. Analyzing the carbon emission categories, the use of sold products accounted for 56.8%, and purchased goods and services accounted for 39.7%, together making up 96.5% of the total Scope 3 emissions. Therefore, strengthening supply chain management and improving the efficiency of power products will be our main carbon reduction strategies.

Internal Carbon Pricing

In 2022, AcBel launched an internal carbon pricing project to internalize external environmental costs, aiming to achieve its Science-Based Targets (SBT) for carbon reduction, respond to regulatory changes, influence investment and procurement decisions, and enhance energy efficiency. AcBel adopted a shadow pricing model, r eferencing both internal and external costs in the countries where it operates, including carbon taxes/fees, emissions trading, and penalties. For 2024, the announced carbon price is NT$1,500 per ton.

Waste and Air Emissions Management

AcBel properly disposes of waste according to the waste disposal regulations of the countries where it operates. The Environmental Safety Declaration and Environmental Safety Policy serve as the highest guiding principles for waste disposal at each operational site. The company has established standardized procedures for waste management operations and has implemented the ISO 14001 Environmental Management System and UL 2799 Zero Waste to Landfill Certification to ensure the effectiveness of various management measures.

Each operational site has set up departments for occupational safety and health, plant management, and general affairs to monitor and manage waste, emissions, and wastewater treatment. With the goal of “Energy Sustainability 2030,” the company is dedicated to reducing the amount of hazardous waste generated. In response to recent trends in waste management and customer demands, AcBel has also set a target to achieve a waste conversion rate of at least 80%. As of now, the factories in Dongguan, Wuhan, and the Philippines have received the UL 2799 Zero Waste to Landfill Certification,and the Tamsui factory is expected to obtain the certification in 2024.

AcBel mainly produces general and hazardous waste, categorized into household waste, PCB boards, activated carbon, cleaning agents, hardware, cardboard boxes, wood, plastic, and tin slag. All waste is entrusted to qualified waste disposal vendors for transportation and disposal. Regular onsite audits of these vendors are conducted to monitor the waste flow and disposal methods, ensuring proper waste handling.

The company’s hazardous waste mainly consists of flux and chemical waste liquids from manufacturing. Our “Energy Sustainability 2030” initiative aims to reduce the intensity of hazardous waste. AcBel’s hazardous waste intensity increased by 26.83% compared to the previous year, failing to meet the 2023 target due to customs disposal in 2023, which increased the weight of hazardous waste. On the other hand, Shanghai Sino Hardware reduced its intensity by 26.88% due to the implementation of effective management measures.