Climate Change Adaptation
In 2015, the Financial Stability Board established the Task Force on Climate-related Financial Disclosures (TCFD) working group, whose mission is to develop a consistent set of voluntary climate related financial disclosure recommendations to help investors and decision makers understand the material risks of companies and to more accurately assess climate related risks and opportunities. Eurocharm follows the framework of TCFD’s Climate Related Financial Disclosure Proposal :Governance, Strategy, Risk Management, Metrics and Targets.
TCFD’s Four Major Revealing Structures
|Governance||The Eurocharm’ s governance around climate-related risks and opportunities.|
|Strategy||The actual and potential impacts of climate-related risks and opportunities on the Eurocharm ’s businesses, strategy, and financial planning.|
|Risk Management||The processes used by the organization to identify, assess, and manage climate-related risks.|
|Result||To effectively manage the impact of climate change-related risks and opportunities on Eurocharm, we are also progressively planning to conduct greenhouse gas inventories.|
In 2020, the Company will use the TCFD framework to assess risks and opportunities and propose strategies to address them. The Chairman will review and report to the Board of Directors and formulate the annual work plan. In recent years, global climate change may cause windstorm, water shortage, flooding, transportation and communication disruptions, etc. The Company requires major suppliers of raw materials to prepare possible response plans to reduce the impact of supply disruptions caused by accidents.
In December 2015, nearly 200 countries adopted the Paris Agreement to neutralize pre-industrial average temperatures and ensure that global average warming does not exceed 2˚C, with a goal of keeping warming to 1.5˚C. The United Nations Intergovernmental Panel on Climate Change (IPCC) wrote a special report on the science of 1.5˚C and published it in 2018, highlighting how a difference of 0.5˚C could affect the lives of millions of people. The EU’s new green policy, announced in 2019, has led to an international race to Net Zero by 2020. Planning for the actual and potential impact of climate-related risks and opportunities on Eurocharm’s business, strategy and finances.
In response to the potential crisis of climate change and energy supply, we are integrating environmental, social, and economic / governance aspects. We are also actively implementing projects related to energy saving, carbon reduction, and water saving, and identifying and reducing risks related to climate change, developing products and services, and strengthening climate resilience and establishing a culture of sustainable development. In response to the impact of climate change on business operations and the appeal of specific climate change information, since 2020, we have been collecting data, identifying and evaluating the financial impact of climate change in accordance with the framework of the TCFD’s climate-related financial disclosure proposal, in order to reduce risks and grasp opportunities.
In order to effectively manage the impact of climate change-related risks and opportunities on Eurocharm, we are also gradually planning to conduct a greenhouse gas inventory and continue to improve the resilience of climate change, in the hope of driving industrial innovation.
|Climate-Related Risks||Potential Financial Impacts||Climate-Related Opportunities||Potential Financial Impacts||Climate Change Result|
|Electricity and Water Supply||Production impact and operating cost increase.||Use of high performance equipment, rise water efficiency and emerging water sources used.||Reduce operating utility costs, strengthen climate resist, and reduce the cost of disaster impact on production.||Purchase of high-efficiency equipment and enhanced wastewater treatment and reuse.|
|Company Image||Failure to meet the expectations of stakeholders, causing damage to the company’s reputation or image.||Enhance investors’ willingness to invest in the long term.||Stabilize the shareholder structure and reduce the chance of significant stock value fluctuations.||Strengthen the resist in response to climate change.|
|Drought||Production was affected, lead to financial losses and lower revenue.||Enhance natural disaster resist.||Strengthen climate resist to reduce operational disruptions and potential losses.||Strengthen the reuse rate of wastewater treatment.|
|Flooding||Production was affected, lead to financial losses and lower revenue.||Enhance natural disaster resist.||Strengthen climate resist to reduce operational disruptions and potential losses.||The new five-plant base are raised and the rainwater gutter is deepened and increased.|
|Rising Temperatures||Increased electricity used, costs and carbon emissions are rise, and increased staff turnover.||Promote green building to reduce air-conditioning energy consumption, improve production environment and reduce staff turnover.||Save electricity and personnel stability, and save the cost of repetitive training of personnel.||Improve ventilation lines and increase local cooling facilities.|