Sustainable Value
Climate-Related Financial Disclosures
Climate-Related Financial Disclosures
The Global Risks Report 2021, published by the World Economic Forum, points out that "extreme climates" are the risk with the highest probability of occurrence and that failure to act against climate change will have the greatest impact on the world in long run, causing environmental damage and loss of biodiversity. Despite the 8% reduction in global greenhouse gas emissions in 2020 due to COVID-19, emission levels are expected to return to pre-epidemic levels after the disease is contained, making it impossible to meet the Paris Agreement target of reducing warming to 2° C or even 1.5° C.
Core Elements of Recommended Climate-Related Financial Disclosures
Governance
The organization's governance around climaterelated risks and opportunities.
Strategy
The actual and potential impacts of climaterelated risk and opportunities on the organization's businesses, strategy, and financial planning.
Risk Management
The processes used by the organization to identify, assess, and manage climate-related risks.
Metrics and Targets
The metrics and targets used to assess and manage relevant climate-related risks and opportunities.
Governance
Climate change related risks have been incorporated into the Company’s risk management framework and are identified as one of the six major risk categories. The Risk Management Committee is responsible for reviewing risk management policies, procedures, and overall implementation, overseeing the Group’s overall operational risks, and regularly reviewing the risk assessment results and mitigation measures proposed by the Risk Management Task Force. The Committee reports to the Board of Directors at least once a year.
Actual Risks
|
Description |
Increasing severity and frequency of extreme weather events such as typhoons and floods |
Climate changes have increased storm severity, which may cause power outages |
|---|---|---|
|
Financial Impacts |
Extreme weather events create supply uncertainties and increase raw material costs |
Unexpected power outages caused by impacts of weather conditions on Taiwan Power Company's power grid may interrupt our operations and increase manpower needed for emergency repairs, resulting in loss of manpower and time |
|
Opportunities |
Develop more comprehensive raw material supply mechanisms |
Formulate management systems for uninterrupted operations |
|
Response Measures |
Prevent breakdowns in supply chains: We have established four main strategies to prevent pandemic conditions and extreme weather events from impairing supply of imported raw materials and supply shortages within our supply chain. Additionally, we have developed a two-supplier policy to ensure that we can make timely adjustments if supply becomes unstable |
We use underground power cable to connect to power sources from Taiwan Power Company so as to prevent weather conditions from affecting power transmission and distribution from electricity poles. We have also installed emergency generators and UPS backup systems for our main equipment to reduce losses from unexpected power outages. |
|
Description |
Changes in rainfall and extreme weathe | |
|---|---|---|
|
Financial Impacts |
Impacts supply of water for production processes, which in turn results in unstable production and reductions in sales revenue | Flooding can affect employee lives and work as well as damage factory equipment, interrupting operations and increasing production costs |
|
Opportunities |
Improve equipment water usage efficiency and utilization of water resources to reduce long-term costs of water usage | Improve response capabilities toward flooding disasters |
|
Response Measures |
Water shortages: Our Longtan Branch participated in the “Hsinchu Science Park Water Conservation, Energy Conservation, and Carbon Reduction Program” in response to water shortage crises. We have established projects for recovering wastewater from MBR equipment and concentrate water from RO equipment in accordance with suggestions offered by the Hsinchu Science Park water conservation team. |
Floods: Data from the National Science and Technology Center for Disaster Reduction's Disaster Risk Adaptation platform showed that Zhongli, Pingzhen, and Longtan, the areas where our factories are located, are RCP 8.5 scenario regions. Combined analysis of hazard, vulnerability, and exposure levels shows that Zhongli has the highest flood risk (level 5) in the future (2036-2065). Apart from implementing existing flood prevention measures at our factories, we will continue to strengthen our response measures to acute flooding disasters.。 |
Transformation risks
|
Description |
Increased use of renewable energy in response to the requirements of international initiatives |
Increased operating costs due to carbon prices |
|---|---|---|
|
Financial Impacts |
Capital expenditures |
Operating costs |
|
Opportunities |
Medium |
Low to medium |
|
Response Measures |
Grape King Bio made a commitment to join the RE100 in 2019 and plans to fully use renewable energies by 2035. |
Although Grape King Bio is not among the first targets for carbon levies under the Environmental Protection Administration's “Climate Change ResponseAct, ” wecontinue to achieve our annual power reduction targets each year through energyand carbon-reducing activities as part of our responsibilities in mitigating environmental impacts. |
|
Description |
Increased raw material costs due to climate change impacts on sourcing regions |
Impacts on energy expenditures due to fluctuations in international energy prices |
|---|---|---|
|
Financial Impacts |
Operating costs |
Capital expenditures |
|
Opportunities |
Medium |
Low to medium |
|
Response Measures |
Please refer to Table I for a list of raw materials used in Grape King Bio products. We have established four strategies to prevent stockouts and developed a two-supplier policy to ensure that we can make timely adjustments if supply becomes unstable. | Grape King Bio has established energy management policies in response to the impacts of fluctuations on international energy prices. Our Pingzhen Headquarters has not only obtained ISO14001 Environmental Management System certification, but also began implementing the ISO50001 Energy Management System in 2019. Additionally, our participation in RE100 is a commitment to achieve 100% renewable energy usage by 2035 and implement our goals for reduction of carbon emissions. |
Risk Management
To mitigate the impacts of climate change on the company, the ESG Committee coordinated and convened senior managers from each unit to conduct cross-functional communication in 2025, and designed the "Climate Change Risk and Opportunity Management Process" with reference to the TCFD framework. This comprehensive management process includes issue collection, management participation, risk assessment, risk identification, response strategy development, and management tracking. By consolidating domestic and international climate change issues alongside industry trends, we determined the applicable disclosure topics to identify the climate-related risks and opportunities relevant to the Group. To identify the material climate-related risks and opportunities that require focus, we discussed possible development scenarios, formulated response strategies and action plans, and established management targets and checkpoints to closely monitor timelines and progress, thereby mitigating potential financial impacts arising from climate-related risks.
Indices and Goals
Grape King Bio is a company with many food manufacturing plants, and issues of energy, greenhouse gas emissions, water use, and waste are the most directly relevant indicators for our operations. With regards to goals, we will set short-term, medium-term, and long-term climate-related goals in the Sustainable Development and ESG Committee to fulfill our social and environmental responsibility.