Listed Companies Under the Formosa Plastics Group Publish TCFD Reports for the First Time

Global warming has significantly impacted the world economy in recent years, directly or indirectly affecting the business operations of many companies. In or-der to create a standardized and uniform set of information disclosure bench-marks, allowing investors to understand the impact of climate change on compa-nies and what strategies each company has adopted in response, the Financial Stability Board (FSB) established the Task Force on Climate-related Financial Disclosures (TCFD) following the 2015 signing of the Paris Agreement by vari-ous countries. In 2017, they published the TCFD Recommendations, a set of guidance on how companies should disclose climate change information related to four core aspects: governance, strategy, risk management, and targets and met-rics.

The TCFD Recommendations are the most widely-used set of climate disclosure standards in the world, which is why nine of our listed companies, namely For-mosa Plastics Corporation, Nan Ya Plastics Corporation, Formosa Chemicals & Fibre Corporation, Formosa Petrochemical Corporation, Nanya Technology Corporation, Nan Ya Printed Circuit Board Corporation, Formosa Sumco Tech-nology Corporation, Formosa Taffeta Co., Ltd., and Formosa Advanced Tech-nologies Co., Ltd. have chosen to register their support for the TCFD initiative as of 2021. In 2022, each of these companies individually published their TCFD re-ports based on the TCFD Recommendations, describing how they have super-vised and implemented sustainable organizational governance, identified risks and opportunities related to climate change, and established strategies and risk management mechanisms in response. The reports also detail the carbon reduc-tion targets and carbon measurement metrics that each company has adopted in order to reduce the impact of climate change on their business operations and fi-nancials, improving climate resilience.

Using the TCFD reports published by companies in the petrochemicals and plas-tics industry such as Formosa Plastics Corporation, Nan Ya Plastics Corpora-tion, Formosa Chemicals & Fibre Corporation, and Formosa Petrochemical Cor-poration as an example, following are the main points discussed under each of the four core reporting aspects:

First, on the topic of governance, each company has established a Sustainable Development Committee under its board of directors providing oversight on sus-tainability issues, such as measures implemented against climate change.

Second, as for strategy and risk management, each company has evaluated the carbon fees to be collected under government policy as a major risk. At the same time, each company has identified related development opportunities, such as the development of low carbon production processes and products.
Thus, in order to continue promoting efforts towards energy and water conservation and establish-ing a circular economy, these companies have adopted AI technology to optimize their production processes and increase their resource utilization rates. At the same time, they have implemented various carbon reduction measures, including: switching to gas boilers, and adopting carbon reduction technologies such as bi-omass raw materials and waste fuels. These companies have also developed re-newable energy sources such as solar power, hydropower, and wind power, and conducted research into carbon capture, storage and utilization as well as hydro-gen fuel.

Additionally, in response to global carbon reduction trends, as well as increased market demand for low-carbon products, each company has already proactively begun research into recyclable and reusable green products, expanding into new markets by developing equipment and raw materials used for renewable energy. By making advance deployment on various new development opportunities, they have made progress towards transitioning into a low carbon economy.

And when it comes to setting carbon goals and defining carbon benchmarks, the companies mentioned above have all established both short-term (2025) and long-term (2030) carbon reduction goals, as well as metrics for measuring the proportion of renewable energy used, recycling and reusing carried out, and sales of recycled products. They have also set a long-term goal of becoming carbon neutral by 2050.

Apart from individually publishing TCFD reports, the Group has participated in the Carbon Disclosure Project’s (CDP) climate change questionnaire for many years. In the results published for 2021, Nanya Technology Corporation was awarded an outstanding leadership level score of A, while 6 of our listed compa-nies: Formosa Plastics Corporation, Nan Ya Plastics Corporation, Formosa Chemicals & Fibre Corporation, Formosa Petrochemical Corporation, Nan Ya Printed Circuit Board Corporation, and Formosa Taffeta Co., Ltd. were awarded the excellent leadership level A- score. This clearly demonstrates that the efforts made by each company towards sustainable development have led to good re-sults, winning recognition and praise from authoritative international institu-tions.

In the future, each of the Group’s companies shall take action to carry out their sustainability commitments. They shall continue to implement greenhouse gas reduction measures and adopt carbon reduction technologies, as well proactively recycle and reuse products and develop low carbon products, in order to fulfill their responsibility as global citizens whose survival and prosperity are tied to the wider environment.

Note: The Task Force on Climate-related Financial Disclosures (TCFD) has established a set of standards for disclosure of information related to climate issues focused on four core aspects: governance, strategy, risk management, and targets and metrics. The following is a description of the disclosure items described in the TCFD Recommendations:
1. Governance: Describe the board of directors and company management’s oversight and management of climate-related risks and opportunities.
2. Strategy: Describe the short-term, mid-term, and long-term climate-related risks and oppor-tunities identified by the company, including transition risks (political/legislative, techno-logical, market, and reputational risk), physical risks (both acute and long-term risks), and climate opportunities (resource efficiency, energy sources, products/services, market, resili-ence), as well as their impact on business operations and the company’s financials. Provide a strategy in response to these risks and opportunities.
3. Risk Management: Describe how the company identifies, assesses and manages climate-related risks, as well as how these processes are integrated into the company’s overall risk management.
4. Metrics and Targets: Describe the metrics and targets used to assess and manage relevant climate-related risks and opportunities. Disclose Scope 1, 2, and 3 greenhouse gas emis-sions and related risks.