In recent years, the growing occurrence of severe weather events has heightened the awareness of the global warming threat. Furthermore, international research reports and the escalating government focus on climate change have underscored the importance for corporations to integrate climate change into their operations. This can be achieved by prioritizing regulatory compliance and adapting to changes in laws and regulations that can have a significant impact. In addition to learning how to identify operational risks caused by climate change, Taisun has also consulted the TCFD (Task Force on Climate-Related Financial Disclosures) issued by the Financial Stability Board (FSB). We have integrated the four essential disclosures of “Governance,” “Strategy,” “Risk Management,” and “Indicators and Targets” into our operational management. Furthermore, we have disclosed the effects of climate change-related risks and opportunities, along with the corresponding measures to address these impacts, in our Sustainability Report.
1. Management Methods
- Governance
The Sustainability Committee discusses and evaluates the Company’s climate change-related discussions and management. Climate change-related actions are resolved jointly by the Sustainability Committee and approved for implementation by the Chairman. - Strategy
● Transition Risks – Policies and Regulatory Risks
The Climate Change Response Act will introduce a carbon fee on high-emission products that have direct or indirect emissions starting in 2024. This may lead to higher operating costs for our company, but it will not affect our overall operations. By 2020, the Company had completed education and training on greenhouse gas inventories and implemented management policies, including energy equipment replacement. The Company intends to establish carbon reduction targets that are both reasonable and attainable by 2023.
Following the centennial drought, there has been a widespread agreement among the public and various community sectors regarding the implementation of a water consumption charge by the Water Resources Agency. In 2022, the Company was included in the national fee system for groundwater through the introduction of the “Water Consumption Fee”. Additionally, the Company has actively collaborated with government regulations to decrease water usage by implementing measures such as water conservation and recycling.
These efforts have been applied across various aspects of our operations, including product cooling, package material enhancements, and employee water consumption. Throughout these initiatives, our top priority has
been ensuring food safety.● Physical Risk – Immediate
The rise in extreme weather events has caused an uptick in the occurrence of typhoons, rainstorms, lightning, and high temperatures. Despite the plant’s location in a central, near-mountainous area where the
likelihood of wind and flooding used to be relatively low, the elevated temperatures could potentially trigger spontaneous combustion of oil waste if not effectively controlled. Additionally, the storms and heavy rainfall will amplify the operational consequences on the plant’s water treatment for cleanliness and equipment integrity, ultimately leading to financial losses.
Although there have been few instances of major floods and storms in the factory equipment storage area, Taisun remains committed to prioritizing waste recycling management, regular maintenance of the factory drainage system and equipment, waterproofing and disaster prevention system construction, as well as increasing storage space and adjusting flexibility. Our aim is to ensure stable production and shipments, while also developing a disaster handling mechanism for our consumer food and livestock customers’ warehouses, in order to maintain operations and minimize immediate and significant risks.
The Company anticipates that extreme weather conditions will have an impact on the acquisition of raw materials and products, as well as disruptions in transportation both upstream and downstream. This is likely
to lead to a temporary rise in costs. To address these challenges, the Company is collaborating with various procurement channels, consolidating transportation orders and routes, and exploring subcontracting alternatives.
These measures aim to minimize carbon emissions, prevent product and manpower losses, and ensure personnel safety.● Resource Efficiency Opportunities
In addition to complying with the government’s water conservation policy, the Company has initiated discussions regarding the implementation of a water recycling system. However, the Sustainable Development Committee has not yet assessed the most suitable treatment plan due to considerations related to the equipment system and recycling site. It is anticipated that this initiative may lead to an increase in operating costs in the short term. Nevertheless, in the long run, it remains an effective solution for promoting environmental friendliness and reducing the annual extraction of raw water for clean water. - Risk Management
The Company’s Sustainability Committee initiated TCFD Climate Change Related Financial Disclosure training in 2022. Additionally, the committee regularly convened relevant members to discuss and identify transition risks, including policy and regulations, technology, market, and reputation. They also examined physical risks, both immediate and long-term, as well as opportunities related to resource efficiency, energy sources, products/services, market, and resilience. - Indicators and Objectives
a. From 2020 onwards, we promoted the greenhouse gas inventory in accordance with ISO 14064-1:2018.
b. We have replaced our outdated equipment with new and improved models. Annually, we create budgets for process improvement and equipment renewal, and we prioritize the use of energy-saving equipment to minimize energy consumption.
c. To promote the reduction of electricity consumption year by year, it is important to prioritize the analysis of purchased electricity, which is one of the main sources of carbon emissions, along with the average electricity
consumption in relation to the number of boxes produced annually.
d. The ratio of annual carbon emissions to total sales volume is utilized as the benchmark for reducing carbon emissions each year.
e. Increase the irrigation status of pennisetum using pasture waste liquid to reduce treatment water consumption.
f. Establish management and personnel culture to achieve the goal of increasing the recycling rate of business waste (currently >95%).
| Sorting | Risk and Opportunities |
No. | NO | Issue |
| 1 | Transition Risks | Market | R10 | Rising Raw Material Costs |
| 2 | Opportunities | Resource Efficienc | O5 | Reducing Water Use and Consumption |
| 3 | Physical Risks | Long-term | R14 | Changes in Rainfall (Water) Patterns and Extreme Changes in Climate Patterns |
| 4 | Physical Risks | Long-term | R15 | Average Temperature Increase |
| 5 | Opportunities | Energy sources | O6 | Use of Low-Carbon Energy Sources |
| 6 | Opportunities | Products and Services |
O13 | Development Of New Products And Services For R&D And Innovation |
| 7 | Physical Risks | Immediate | R13 | Increased Severity of Extreme Weather Events Such as Typhoons and Floods |
| 8 | Opportunities | Resource Efficiency |
O2 | Utilization of More Efficient Production and Distribution Processes |
| 9 | Opportunities | Products and Services |
O15 | Changes In Consumer Preferences |
| 10 | Opportunities | Resource Efficiency |
O3 | Recycle and Reuse |
3. Short- to Mid-Term Corresponding Measures to the Top Ten Issues
| Issues regarding Risks and Opportunities |
mpact on the Company’s Operations and Finances |
Corresponding Measures |
| R10 Rising Raw Material Costs |
1. Climate change will impact the availability and price stability of raw materials, potentially causing disruptions in the supply chain and increasing costs. As a result, the Company’s profitability may be affected 2. Rising costs due to ESGrelated requirements. |
1. Expand thedevelopment of alternative suppliers and develop alternative principles and response programs.
2. Expand the warehouse space and increase raw material inventory to stabilize prices based on volume. 3. Stabilize prices through contract farming or own production, and ensure sufficient and relatively stable sources of raw materials. Monitor price 4. Make inventory adjustments within a 5. Research and development of new formulas to reduce the demand for high-priced raw materials and sensitivity to fluctuations. |
| O5 Reduced water use and consumption |
1. Water saving equipment management improvement 2. Water recycling equipment 3. Process management |
1. Installed water recycling equipment for each production line.
2. The new plant incorporated a water recycling system to achieve 12% reduction. 3. Promoted the certification of ISO 14046 water footprint principle requirements and guidelines. 4. Oil-fired boilers increased efficiency and reduced water consumption. 5. Increased usage of waste liquid for watering Pennisetum and reduced water consumption for treatment. |
| R14 Changes in rainfall (water) patterns and extreme changes in climate patterns |
1. Increased equipment damage and maintenance costs
2. Increased energy consumption of water treatment equipment 3. Water shortages hinder 4. Increase in penalties on contractual deliveries 5. Increased risks in personnel commuting and work safety |
1. Installation of water recycling equipment for each production line. 2. The new plant incorporated a water recycling system to achieve 12% reduction. 3. Promoted the certification of ISO 14046 water footprint principle requirements and guidelines. 4. Increased groundwater source water rights and tap water facilities. 5. The farm has added a wastewater-saving highbed hog barn. |
| R15 Average temperature increase |
1. Increased customer complaints from refrigerator temperature increase 2. The shelf life of refrigerated products is shortened. 3. Increased risk of spontaneous combustion of oil waste 4. Overheated rooms/storage spaces 5. Increased warehouse |
1. Warehouse temperature monitoring and control (cold chain management production end to logistics and distribution management).
2. Product cooling insulation conditions and safety period adjustment. 3. Monitor process productivity, efficiency and quality improvement. 4. Shorten the treatment time of oil waste. 5. Improvements in the space to keep the waste and temperature. 6. Regularly monitor the energy efficiency of refrigeration equipment in order to decrease electricity consumption and carbon emissions. 7. Invest in automated warehousing facilities to minimize temperature changes caused by product movement. |
| O6 Use of low-carbon energy sources |
1. Reduced operating costs (e.g. using carbon reduction measures with the lowest costs)
2. Reduced exposure to future fossil fuel price increases 3. Reduced risk of greenhouse gas emissions and mitigated 4. Returns on investment in low carbon technologies 5. Increase in capital required for low carbon manufacturing 6. Increased reputation and demand for goods/services |
1. Improve production and management efficiency, reduce costs and expenses, and minimize the impact of carbon tax increase.
2. Pay attention to policy developments and low carbon subsidy applications. 3. Enhanced the ratio of green energy use (e.g., solar energy equipment installation) and developed low-carbon plant and equipment replacement (e.g., oil-fired boiler replacement). Continuously enhanced the value of our products to increase gross profit margins and minimize the impact of cost increases. 4. Low-carbon incentives for raw materials and monitoring of long-term benefits (e.g., use of low-carbon feeds on farms and meat exchange rates) 5. Obtained ISO 50001 energy management system certification to control energy consumption compliance. 6. Continuing to study new energy sources and promote alternatives to non-fossil fuels, including biomass, hydrogen, geothermal, and energy storage. |
| O13 Development of new products and services for R&D and innovation |
1. Increase in R&D testing costs
2. Cost of marketing and testing |
1. New product development takes into account issues related to sustainability and cultivates employees’ awareness of sustainable development.
2. We continue to study ESG-certified raw materials or related packaging materials, and develop products with ESG-related concepts. 3. We continue to develop ESG products and sales models. 4. We keep abreast of new consumer trends and actively develop and introduce new products to meet consumer demand |
| R13 Increased severity of extreme weather events such as typhoons and floods |
1. Increased equipment damage and maintenance costs
2. Increase in penalties on contractual deliveries 3. Increased risks in personnel commuting and work safety |
1. Review and revise the Emergency Response Management Plan on a regular basis.
2. Promote ISO 45001 Occupational Safety Management System certification to strengthen management processes and talents. 3. Comprehensively strengthen disaster prevention measures for both personnel and equipment. 4. The operation and maintenance of the pump in the basement avoids flooding, and a waterproof drainage system is added. 5. Aquafeed plants have set up remote county and city warehouses (e.g., Tainan, Pingtung) to increase safety stock levels, and emergency response plans have been set up for employee dormitories on the farm. 6. Aquafeed plants are located in the southern part of Taiwan, and most of the farms have satellite farms in various areas. |
| O2 Utilize more efficient production and distribution processes |
1. Improve automated production equipment 2. Personnel training and 3. Improvement of distribution processes |
1. Enhance production efficiency through equipment improvement and monitoring.
2. Increase warehouse capacity and centralize production. 3. Strengthen education and training in each unit to develop agents (multi-skilled worker) for equipment and work. 4. Conduct research on the planning and investment of production line automation equipment and the integration of related support (talent and equipment), and the construction of a highly efficient product distribution process system. |
| O15 Changes in consumer preferences |
1. Increase in consumer marketing costs 2. Increase in domestic and international market research costs 3. Frequency of consumer trend analysis surveys |
1. We conduct regular surveys on customer needs, study domestic and international consumer trends, and research for appropriate products in accordance with those trends.
2. Regularly monitor and study the effectiveness of the use of imported raw materials versus the use of local raw materials. 3. Incorporate ESG concepts to enhance commodity value. |
| O3 Recycle and reuse |
1. Equipment improvement expenses
2. Improvement of waste |
1. Establish management and staff cultured that increase the recycling rate of business waste (currently >95% at this stage).
2. Research and experimental improvement of recycled water schemes (cooling water for tin 3. Research and experimental improvement of exhaust vapor reuse. 5. We are working with manufacturers to promote the reuse of waste products and achieve the goal of zero waste. |
