Sustainable Issues
AOT pays attention to global climate action-related trends and follows the government’s net-zero transformation goals. We adopted The Climate-related Financial Disclosure (TCFD) framework in 2024 to integrate climate change risks into our risk management governance. We included climate change risk in ESG material topics and aligned it with business strategy. We analyze policies, market and technology changes, and reputation and physical risks to develop adaptation and mitigation strategies. We also disclose climate-related financial information to showcase our resilience and responsibility while enhancing stakeholder communication.
The implementation of climate-related information
Frame | Item | Action Plan |
Governance | Disclose the governance of organization’s climate-related risks and opportunities: 1. Describe the Board of Director’s oversight of climate-related risks and opportunities. 2. Describe management’s role in assessing and managing climate-related risks and opportunities. |
The highest responsible unit for the Company’s climate-related risk oversight and governance is the Board of Directors, which approves risk management policies and related regulations. The Audit Committee is responsible for supervising and ensuring the implementation of risk management and reporting climate risk management results to the Board of Directors. The risk management team is composed of the heads of each responsible unit and is responsible for the planning of climate risk identification, measurement and control. The Corporate Governance Officer plans, leads and supervises the risk team’s climate risk identification, measurement, control and monitoring, and reports to the Audit Committee. Climate risk management is discussed and evaluated by the risk management team, and climate change-related resolutions are reported to senior management by the Corporate Governance Director on implementation performance and necessary improvement suggestions. In the fourth quarter of each year, the Company reports the implementation results of the current year and the work plan for the next year to the Audit Committee and the Board of Directors, and makes revisions based on the opinions of the Audit Committee and the Board of Directors to include issues related to climate change risks and their management objectives. |
Risk Factor | Promoting items | Status of implementation |
Strategy | Disclose actual and potential climate-related impacts on an organization’s business, strategy and financial planning 1. Describe the short-, medium- and long-term climate-related risks and opportunities identified by the organization. 2. Describe the impact of climate-related risks and opportunities on the organization’s business, strategy, and financial planning. 3. Describe the resilience of the organization’s strategy, taking into account different climate-related scenarios (including 2˚C or more severe scenarios). |
1. In response to the impact of climate-related risks and opportunities on the Company’s strategies and planning, the Company refers to the TCFD’s climate-related scenario analysis and uses quantitative and qualitative analysis to take corresponding measures. The major climate risks faced by the Company are divided into physical risks and transition risks. Physical risks include rising electricity prices and raw material costs, power shortage risks, changes in rainfall (water) patterns and extreme changes in climate patterns. Transformation risks mainly come from the requirements of various countries’ laws, customers and investors for greenhouse gas reduction and product energy saving and carbon reduction standards. 2. Short-term risks and opportunities: Changes in rainfall (water) patterns and extreme changes in climate patterns, rising raw material costs, and increased costs for carbon inventory and carbon emissions disclosure. However, if carbon emissions disclosure is complete and responded to in advance, it can increase customer trust. Mid-term risks and opportunities: risks of power shortage and rising electricity prices, compliance requirements for carbon emissions disclosure, increased costs for carbon emissions calculation, etc. However, developing low-carbon products can improve product competitiveness. Long-term risks and opportunities: Carbon emission costs such as carbon taxes will increase cost, and the value chain including low-carbon supply chain, low-carbon R&D, production, transportation and distribution must be adjusted accordingly. However, if it can be executed more efficiently, the company’s competitiveness can be increased. 3. The Company refers to the scenarios of SSP1 2.6 and SSP5 8.5, and the risk management team discusses the definition of short, medium and long term intervals, setting “1-3 years” as the short term, “3-5 years” as the medium term, and “6-10 years” as the long term which are used to assess climate risk and opportunity. Climate risk types include transition risks and physical risks, which are further divided into policies and regulations, technology, market, reputation, and immediate and long-term. Opportunities are divided into five categories: resource efficiency, energy sources, products and services, markets, and organizational resilience. The physical risk is simulated based on the SSP5 8.5 scenario, which is a scenario of high greenhouse gas emissions. The greater the possibility of physical risk, the higher the risk. Transition risk is simulated using the SSP1 2.6 scenario. The closer the temperature is to 2.0°C, the closer it is to net zero emissions and in line with current trends, which will cause regulatory risks, such as the amendment of the Greenhouse Gas Reduction and Management Act to the Climate Change Act. The regulatory risks of enterprises will increase. Regarding the impact of physical risks on finance, the company suffered losses due to the suspension of production lines caused by extreme weather and wind disasters, as well as water restrictions caused by extreme weather droughts, resulting in increased operating costs due to the company’s water storage and transportation. After scenario simulation, the above-mentioned physical risk losses have limited impact on the company, and are estimated to be no more than 0.5% of revenue each year. In terms of transition risks, since the company’s current Scope 1 and Scope 2 greenhouse gas emissions combined do not exceed 10,000 tons, it will not meet the carbon tax threshold in the short term. In addition, the 2100KW contract capacity of electricity does not meet the contract capacity standard of the Renewable Energy Development Regulations. Therefore, the transformation risk has limited impact on the company’s finances in the short term. However, the company will continue to pay attention to regulatory changes to comply with regulatory requirements. |
Risk Factor | Promoting items | Status of implementation |
Risk Management | Uncover how organizations identify, assess and manage climate-related risks 1. Describe the organization’s process for identifying and assessing climate-related risks. 2. Describe the organization’s processes for managing climate-related risks. 3. Describe how the process of identifying, assessing and managing climate-related risks is integrated into the organization’s overall risk management system. |
• Climate risk identification The Company’s risk management team conducts climate risk identification based on historical disasters, policies and regulations, market trends, climate risk factors, and stakeholders’ concerns. The climate risk assessment boundary is mainly based on Taiwanese companies that accounted for more than 95% of revenue in 2023. Based on the information provided by each unit, the possible changes in the company’s operations and physical risks and opportunities caused by climate change factors are discussed. • Climate risk assessment The risk management team discusses the identified climate risk types and items in terms of probability of occurrence, timing and impact on operations, and ranks them according to their severity and draws a risk matrix. • Climate risk control After measuring and summarizing the risks, the risk management team will consider factors such as climate risk appetite, cost-effectiveness of risk response, possibility and impact reduction, and take corresponding risk management measures to control the risks within a reasonable range. • Climate risk management and supervision The Corporate Governance Officer plans, leads and supervises the risk management team in identifying, measuring, controlling and monitoring climate risks, and regularly reports to the Audit Committee and the Board of Directors on climate risk management-related information, implementation status, and follow-up improvement items, response measures and strategic goals. • Risk reporting and disclosure In addition to disclosing relevant information in accordance with the regulations of the competent authorities, the risk management team shall also disclose information related to enterprise risk management in the annual report and the company website for reference by external stakeholders. • Climate Risk Management and Promotion Unit The Company’s Audit Committee is responsible for overseeing climate risk management. The Risk Management Team implements the management process of identifying, analyzing, evaluating and controlling the Group’s operational risks in accordance with the “Risk Management Policies and Procedures”. Climate risks are integrated into the risk management framework, and risk identification and assessment are carried out according to procedures. After the response policies and strategies are formulated, they are implemented by the responsible units and the implementation results are reported to the board of directors. |
Risk Factor | Promoting items | Status of implementation |
Indicators and targets | For material information, disclose the indicators and targets used to assess and manage climate-related issues 1. Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management processes. 2. Disclose Scope 1, Scope 2 and Scope 3 (where applicable) GHG emissions and associated risks. 3. Describe the objectives used by the organization to manage climate-related risks and opportunities, and its performance against those objectives. |
1. Electricity saving: Reduce electricity intensity per unit of output by 2% compared with the previous year. 2. Reduction of greenhouse gas emissions: The greenhouse gas emission intensity per unit of output is reduced by 2% compared with the previous year. 3. Water saving: Reduce water intensity per unit of output by 1% compared to the previous year. 4. Waste reduction target: Reduce waste intensity per unit output by 1% compared to the previous year. |
In light of the global consensus on net-zero carbon emissions at COP28, the implementation of Nationally Determined Contributions (NDCs), and the official launch of the Climate Change Adaptation Act, alongside the European Union’s Carbon Border Adjustment Mechanism (CBAM) set to take effect in 2026, Rong Chuang has proactively undertaken greenhouse gas emissions assessments for Scope 1 and Scope 2 since 2013. We achieved ISO 14064-1 certification in this endeavor. In 2023, we have further advanced by initiating assessments and verification for Scope 3 emissions ahead of schedule. Moving forward, we will gradually implement greenhouse gas assessments and certifications across all subsidiaries in accordance with sustainable development pathways, preparing for potential international carbon reforms.
Greenhouse Gas Reduction Targets
● Electricity Savings:The electricity intensity per unit of output will be reduced by 2% annually, aiming for a 13% reduction in electricity intensity by 2030, based on the year 2023.
● Greenhouse Gas Emissions Reduction:The greenhouse gas emissions intensity per unit of output will be reduced by 2% annually, aiming for a 13% reduction in emissions intensity by 2030, based on the year 2023.
Promotion Measures
1. Replace and upgrade old production equipment to reduce energy loss.
2. Purchase energy-efficient equipment, replacing inefficient chiller units.
3. Promote low-carbon automated production to improve efficiency and reduce greenhouse gas emissions.
4. Implement habits such as turning off lights and controlling air conditioning temperatures, along with managing equipment operating times to optimize energy usage efficiency.
5. Stay informed on carbon tax regulations; assess and plan to purchase green energy certificates when carbon emissions reach the carbon tax threshold.
6. Monitor changes in renewable energy regulations; assess and plan to install solar panels or other renewable energy systems on factory rooftops when electricity contract capacity reaches renewable energy thresholds.
Achievement Status
In 2023, the greenhouse gas emissions for Scope 1 and Scope 2 amounted to 7,571 tons, resulting in a reduction of 545.45 tons, achieving a reduction rate of 14.88%.
In 2023, the total electricity consumption was 14.4 million kWh, with total electricity savings reaching 1.27 million kWh, achieving a reduction rate of 8.11%.
Investment in energy-saving related environmental sustainable machinery and equipment
Investment Situation and Specific Outcomes
In 2024, our company invested 8,050 thousand yuan in energy-saving and environmentally sustainable machinery and equipment. This investment is expected to save approximately 626,060 kWh of electricity annually, equivalent to a reduction of 309,273 tons of carbon emissions. The investment items and benefits are detailed below:
Item 1: Replacement of Old Chilled Water Machine with New Magnetic Levitation Variable Frequency Chilled Water Machine
Energy Efficiency: Level 2.
Investment Amount: NT$7,800,000.
Electricity Savings: 61.47 kWh/hour, resulting in an annual savings of 538,460 kWh.
Carbon Reduction: Based on a carbon emission of 0.494 kg per kWh, the total annual carbon reduction is 265,999 tons.
Item 2: Installation of Variable Frequency Drive for Air Conditioning Box Fan Motor
Investment Amount: NT$250,000.
Electricity Savings: 10 kWh/hour, resulting in an annual savings of 87,600 kWh.
Carbon Reduction: Based on a carbon emission of 0.494 kg per kWh, the total annual carbon reduction is 43,274 tons.
Greenhouse Gas Inventory and Assurance Information
2022
Scope | Total Emissions | Intensity | Assurance Provider | Assurance Description |
(tons CO2e) | (tons CO2e/NTD thousand) | |||
1 | 356.42 | 0.000148 | SGS Taiwan Ltd. | The above verification opinion is assured by SGS in accordance with ISO 14064-3 standards, with a reasonable assurance level. |
2 | 7760.35 | 0.003219 |
2023
Scope | Total Emissions | Intensity | Assurance Provider | Assurance Description |
(tons CO2e) | (tons CO2e/NTD thousand) | |||
1 | 433.5937 | 0.000231 | Taiwan Testing and Certification Center(ETC) | The above verification opinion is assured by ETC in accordance with ISO 14064-3 standards, with a reasonable assurance level. |
2 | 7137.7281 | 0.003798 | ||
3 | 1069.771 | 0.000569 |
Greenhouse Gas (GHG) Verification Statement
Waste Management
Our company has implemented an ISO 14001-certified waste management system to minimize our environmental footprint. We categorize our waste into two main types: general waste and industrial waste. General waste, which includes employee household waste and non-process-generated waste like paper, plastic, and aluminum cans, is managed by certified disposal companies.
Industrial waste primarily includes waste solvents, anti-static metal bags, wiping cloths, and sludge resulting from wastewater treatment. Our company has implemented measures for resource recycling and waste classification for many years. We have entrusted all scrap materials to qualified recycling vendors for processing. In terms of packaging materials, we strive to use recycled materials to minimize environmental impact. For example, anti-static metal bags are reused until their anti-static properties diminish, after which they are disposed of.
All waste removal and processing vendors possess the necessary clearance and handling permits, and we have signed contracts with them. The company conducts regular annual visits to waste processing facilities to understand the waste treatment processes. Additionally, each year, we perform TCLP tests on hazardous industrial waste (C-0301 & D-0902).
The specific waste management measures are as follows:
1. Promote various management programs through the ISO 14001 Environmental Management System, such as integrating operational checklists into an electronic format to achieve 100% paperlessness.
2. Implement resource recycling and reuse to enhance waste management and increase the resource recovery rate.
3. Design products that reduce volume and material usage to decrease waste generation.
4. Prioritize the use of recycled materials to achieve waste reduction and implement circular reuse.
5. Commission licensed vendors to handle waste disposal.
Waste reduction target: A 1% decrease in waste intensity per unit compared to the previous year.
Waste reduction status: In 2023, waste totaled 57.48 tons, a decrease of 25.49 tons compared to 2022, representing a reduction rate of 30.72%.
Waste Generation Situation
The waste generation at our plants in 2022 and 2023 are as follows:
Plant | Waste volume (tons) | |
2022 | 2023 | |
Siwei | Non-hazardous 59.61 | Non-hazardous 47.02 |
Hazardous 1.51 | Hazardous 0.83 | |
Hukou | Non-hazardous 19.10 | Non-hazardous 9.07 |
Hazardous 2.75 | Hazardous 0.56 | |
Total | Non-hazardous 78.71 | Non-hazardous 56.09 |
Hazardous 4.26 | Hazardous 1.39 |
Certificate
Year | Certificate | |
ISO14001 | ISO45001 | |
2024 | 2024_ISO14001_HK&SW | 2024_ISO45001_HK&SW |
2021 | 2021_ISO14001_HK&SW | 2021_ISO45001_HK&SW |
Water Resource Management
According to the Environment Sustainable Index (ESI), Taiwan ranks among the top 18 water-scarce countries globally. To address the risks of water shortages, the management of water resources is a significant issue.
Our company is located in the Hsinchu Industrial Park in Hukou Township, Hsinchu County, with water sourced primarily from the Shimen Reservoir, First Baoshan Reservoir, Second Baoshan Reservoir, and the Toucian River. The water supply comes from the Taiwan Water Corporation Third District Management Office. Wastewater is discharged into the sewer system of the Hsinchu Industrial Park and treated at the central wastewater treatment plant before being released into the Qiedong River, meeting regulatory discharge standards.
According to the World Resources Institute’s (WRI) Aqueduct Water Risk Assessment Tool, a water pressure assessment was conducted for each of Rong Chuang Energy’s facilities. The results indicate that by 2030, even under the most pessimistic climate scenarios, the water resource pressure in the areas where our facilities are located will remain low to moderate (10%-20% Low – Medium risk), with no operations situated in “high” or “very high” water-scarce regions.
For water resource management, we ensure the reuse of process water without compromising quality, continuously maximizing water efficiency in our facilities, and increasing output with the same water usage. We have installed water meters in our production areas and buildings to monitor water consumption and reduce water use risks. Our company has set up wastewater treatment equipment, appointed personnel to manage environmental affairs, and obtained wastewater discharge permits. We have also been certified under the ISO-14001 Environmental Management System to effectively reduce negative impacts on the ecological environment.
The specific water resource management measures are as follows:
1. Install additional water storage facilities to implement water-saving management.
2. Establish a comprehensive water monitoring mechanism and emergency response procedures, with regular drills.
3. In response to drought risks, implement water-saving measures and prepare water tankers, establishing backup water pools with a three-day supply at each facility.
4. Sign contracts for water tanker services during drought periods to ensure water source allocation during dry seasons.
Water saving target: Achieve a 1% reduction in water intensity per unit compared to the previous year.
Water reduction status: In 2023, water consumption was 48,470 cubic meters, a decrease of 2,418 cubic meters, representing a reduction rate of 4.75%.
Water Usage Situation
The water generation at our plants in 2022 and 2023 are as follows:
Plant | Water consumption (tons) | |
2022 | 2023 | |
Siwei | 30,635 | 34,935 |
Hukou | 20,253 | 13,535 |
Total | 50,888 | 48,470 |
Certificate
Year | Certificate | |
ISO14001 | ISO45001 | |
2024 | 2024_ISO14001_HK&SW | 2024_ISO45001_HK&SW |
2021 | 2021_ISO14001_HK&SW | 2021_ISO45001_HK&SW |