Climate Change Risk

In response to the increasingly rapid impact of global climate change, we have adopted the TCFD ( Recommendations of the Task Force on Climate-related Financial Disclosures ) and gradually integrated them into the company's operating decisions to identify risks and opportunities related to climate change, implement greenhouse gas adaptation and mitigation, and disclose the risks and opportunities of climate change to the group's operations to internal and external stakeholders:

TCFD （ Task Force on Climate-related Financial Disclosures）-2024 (Some information is still being updated)

Core Elements	Content
Governance	1.Board oversight of climate-related risks and opportunities (revealing how the organization manages climate-related risks and opportunities) (1)Proposals agreed or approved by the board of directors ▪ On March 8, 2024, the board of directors approved the implementation progress report of the company’s greenhouse gas inventory and verification schedule plan. ▪ On May 14, 2024, the board of directors approved the implementation progress report of the company's greenhouse gas inventory and verification schedule plan. ▪ On June 21, 2024, the board of directors approved: the appointment of members of the Corporate Governance and Sustainable Development Committee and the selection of the convener and chairman. ▪ On August 26, 2024, the board of directors approved the implementation progress report of the company's greenhouse gas inventory and verification schedule plan. ▪ On November 8, 2024, the board of directors approved the implementation progress report of the company's greenhouse gas inventory and verification schedule plan. (Content includes agreed water density and waste recycling management goals) (2) Oversight and governance of climate-related risks and opportunities A.Corporate Governance and Sustainability Committee: It is the highest-level organization to promote ESG in the group and is also the main platform for climate change issues. The general manager of the group serves as the convener of the committee. The committee has a functional group, whose members include the top executives of functional departments. They are responsible for formulating the company's climate-related policies and strategies, and ensuring the promotion of risk (and opportunity) plans through the committee and annual management review meetings. B. The Corporate Governance and Sustainability Committee will hold two meetings in 2024, on May 14 and November 8 respectively, regarding reports or proposals on climate-related risks and opportunities: ▪ Implementation progress report of annual greenhouse gas inventory and verification schedule. ▪ 2023 Sustainable Development Implementation Report. ▪ Proposal for the 2023 Sustainability Report. ▪ Risk management annual implementation report. C. Board reports or proposals on climate-related risks and opportunities (A) The implementation progress report of the company's annual greenhouse gas inventory and verification schedule plan at each stage. (B) Approved the implementation of sustainable development in 2023. (C) Reporting to the Financial Supervisory Commission on the "Sustainable Development Roadmap for Listed Companies", the company responds to its plans and progress. (D) Risk management annual implementation report. 2. Management’s role in assessing and managing climate-related risks and opportunities: (1)Four functional groups are responsible for identifying climate risks and assessing and responding to climate impacts within each area of ​​responsibility. The highest person in charge of climate issues management is the group general manager, who leads first-level managers to implement climate change-related management work and reports directly to the Corporate Governance and Sustainability Committee (the functional committee of the board of directors). (2)The environmental function team promotes green operations to improve environmental management performance and environmental risk control. After identifying major risks and opportunities, it discusses relevant countermeasures and grasps opportunities with various departments of the company.
Strategy	1. Identify climate-related risks and opportunities in the short, medium and long term (1)short term ▪Transformation risks: independent commitment to science-based greenhouse gas reduction targets (SBT) and uncertainty in market information. ▪Physical risks: The severity of extreme weather events such as typhoons and floods increases. ▪Market opportunities: Use of low-emission energy, local production to reduce CBAM costs and logistics costs, R&D and innovation of new products and services. (2)medium term ▪Transition risks: costs of emissions inventory and assurance, costs of transitioning to a low-carbon economy, changes in customer behavior, increased concerns and negative feedback from customers and investors, product requirements and supervision. ▪Market opportunities: towards green energy production, new market partnerships. (3)long term ▪Transition risk: Increase in the price of greenhouse gas emissions (cap control/carbon tax). ▪Physical risks: Sites with high risks of rising average temperatures and partial flooding must consider the appropriate timing of relocation in the long term. ▪Market opportunity: Use more efficient production and distribution processes. 2. The major climate risks faced by the company mainly come from clients’ requirements for corporate greenhouse gas reduction; while the opportunities brought by climate change mainly appear in the product aspect, the company continues to move towards green energy production, and responds to market demand and develops new markets with energy-saving and waste-reducing products. (1) Response to climate-related risks in business, strategic and financial planning. A.Main transformation risks (A) The company follows relevant international norms to reduce renewable energy cost risks. (B) Actively engage in research and development in green design, and help customers reduce costs and improve efficiency with high energy conversion rates and low-carbon product portfolios. (C) Green design is based on life cycle thinking, integrates the 3R principles (Recycle, Reuse, Reduce) into product development, and aims at environmentally friendly products such as non-toxic, lightweight packaging and low energy consumption products. B.Main entity risks (A) In order to reduce the impact of heavy rains, snowstorms, and typhoons, relevant factories have invested in emergency disaster prevention plans and drainage facilities, strengthened various pumping and drainage facilities, and carried out various property protection coverage. At the same time, they have formulated emergency response plans to reduce operational losses caused by disaster risks. For example: In order to prevent the physical risks of disastrous climate change such as heavy rains, snowstorms and typhoons, regular inspections of roofs, doors, windows, drainage pipes, pumping motors, and cleaning and dredging of drainage pipes in factories are carried out. When there is obvious snow on the house surface, check whether the beams are deformed, especially the corner parts of the building with height differences. Any abnormalities should be dealt with immediately and properly. (B) The company encounters natural disasters such as high temperatures, droughts, rains, typhoons or composite environmental disasters during operations, which directly or indirectly cause malfunctions, damage or abnormalities of machinery and equipment, delays in equipment delivery, production capacity restrictions, and the inability of workers to come to work in the factory. The company insures fixed assets and inventories in accordance with the practice of the country where it operates. For example, the total insurance amount of BizLink Group's China regional branch including subsidiaries and related companies is RMB 3,180,698 (thousand yuan), and the total insurance amount of property all risks plus business interruption insurance is NT$507,268 (thousand yuan). The total insurance amount of Taiwan Bizlink is NT$507,268 (thousand yuan), and fire insurance with additional clauses is purchased to reduce the financial impact on the company's operations when physical risks arising from climate change occur. For example: losses caused by Typhoon Bebigia in mid-September 2024, due to insurance claims, can reduce recovery losses by 11%, slightly reducing the financial impact. (2) Utilization and development of climate-related opportunities A. The company has been working hard for a long time and actively uses core technologies to invest in research and development based on market demand. Therefore, when the sustainability wave rises, it will have the opportunity to develop a wide range of green products and local production to develop new income from new environmental markets and products: (A) Develop renewable energy business customer base in solar energy, electric vehicles, energy storage and other industries. (B) Develop low-carbon, green product and other solutions to respond to customers’ new needs. B. Improve sustainability/ESG index ratings: The improvement of BizLink's corporate governance, sustainability-related assessments and ESG index ratings will help attract domestic and foreign investors and increase opportunities to obtain funds. 3. Strategic resilience, and considering different climate-related scenarios, simulate and analyze the impact of future climate change with reference to the 2°C scenario published by the International Energy Agency (IEA), and accordingly formulate scientifically based greenhouse gas reduction targets (SBT) and estimate future carbon reductions as a reference for adjustments to operating strategies.
Risk Managemen	1. Identification and assessment process of climate-related risks. (1)In addition to ISO 9001: 2015, "Risk Probability Matrix", "Risk Severity Matrix", "Risk Assessment Criteria" and "Matrix Action Plan", the functional team also follows ISO 14001: 2015's "6.1 Action Measures to Handle Risks and Opportunities" and "8.2 Emergency Preparedness and Response", and collects the future climate development trends of external markets, regulations, technologies and entities, and lists the climate risks and opportunities that the company may face. After considering the degree of impact and likelihood of occurrence, identifying major climate risks and opportunities.Relevant climate risks are then converted into financial figures, and projects that may cause major financial impacts every year are regarded as influential risks and opportunities. According to the local assets (buildings, machinery, equipment, wealth-generating equipment, inventory) of the factory area and the loss caused by the interruption of operations, the risk possibility and severity are prioritized and corresponding countermeasures are formulated. (2)For risks with higher assessment results, additional climate scenario analysis will be conducted to consider the current operational layout and calculate its potential financial impact. 2.Climate-related risk management processes (1)After identifying the main risks, we discuss relevant countermeasures with each business unit of the company. The relevant risk assessment is also referred to the Corporate Governance and Sustainable Development Committee and the Audit Committee for supervision. The Corporate Governance and Sustainable Development Committee regularly reports to the Board of Directors based on the risk management and assessment results. On November 8, 2024, the Board of Directors will report on the annual risk management implementation proposal. How processes for identifying, assessing and managing climate-related risks are integrated into the company’s overall risk management system. (2) Incorporate climate change into major issues and key risk projects for the company's sustainable development, implement risk management plans in all factories, and plan response measures for operations, products, and supply chain management. (3) Based on ISO 9001: 2015, "Risk Probability Matrix", "Risk Severity Matrix", "Risk Assessment Criteria", "Matrix Action Plan", and also follow ISO 14001: 2015's "6.1 Action Measures to Handle Risks and Opportunities" and "8.2 Emergency Preparedness and Response", and collect future climate development trends of external markets, regulations, technologies and entities, and continue to improve environmental climate change risk management and management overall enterprise risk management System integration.
Metrics and Targets	1.Explain the indicators used by the company to evaluate climate-related risks and opportunities in accordance with the strategy and risk management process. In terms of climate change mitigation, the company uses greenhouse gas emissions as the main key indicator for quantitative assessment, and also sets indicators such as the proportion of renewable energy usage, electricity usage per unit revenue, and water consumption per unit revenue. (1)Greenhouse gas emissions: Taking Scope 1 and Scope 2 as the inventory scope, the total greenhouse gas emissions in 2024 will be 32,492 metric tons of CO2e (third-party verification is in progress), which is a decrease of approximately 10% compared to the total emissions in 2023 of 35,883.98 metric tons of CO2e (third-party verification is in progress). (2)Renewable energy usage ratio: In 2023, self-generated renewable energy (solar energy) is 1.27%, purchased renewable energy (solar, hydropower, wind power) is 8.92%, and purchased green power certificates are 7.76%, totaling 17.95%. (3)The greenhouse gas emission intensity in 2024 is 0.59 metric tons CO2e / one million New Taiwan dollars, a decrease of 37.89% from 2023. (4)The water consumption intensity in 2023 will be 9.95 cubic meters per million NT dollars, a decrease of 4.94% from 2022. 2. Scope 1, 2 and 3 greenhouse gas emissions and related risks (1)Since 2017, we have continued to implement scope 1 and 2 greenhouse gas inventories with reference to ISO 14064, and are expected to obtain a verification statement before 2027; we will investigate employee commuting carbon emissions in 2023, and expand the scope of the inventory to scope 3 projects in 2024. Greenhouse gas emissions (metric tons CO2e) in 2023 are as follows: A.Scope 1: 6105.77 metric tons CO2e B.Scope 2：33774.97 metric tons CO2e C.Scope 3： (A)Employee commuting carbon emissions in 2023 : 6,682 metric tons CO2e (B)Rental car carbon emissions:974 metric tons CO2e 3.Targets used to manage climate-related risks and opportunities, and performance against them (1)Development of use of climate-related opportunities In the process of developing low-carbon products and services, the company is committed to improving the energy resource efficiency of itself and its customers. In addition to applying for SBTi goals, it has also set waste reduction and water conservation goals to comprehensively reduce environmental impact. A.Carbon emissions target ▪ Short-term 1-3 years: Using 2022 as the base year, the total annual greenhouse gas emissions will be reduced by 6%, and the cumulative reduction in 3 years will be 18% compared with 2022. ▪ Medium-term 3-5 years: Using 2022 as the base year, the total annual greenhouse gas emissions will be reduced by 6%, and the cumulative reduction in 5 years will be 30% compared with 2022. ▪ Long-term 5-10 years: Using 2022 as the base year, total greenhouse gas emissions will be reduced by 6% in 2028, total greenhouse gas emissions will be reduced by 7% annually from 2029 to 2030, and the cumulative reduction in 7 years will be 50% compared with 2022. The annual reduction in total greenhouse gas emissions from 2031 to 2032 will continue to decrease based on actual conditions, and will eventually move towards "Taiwan - Article 4 of the Climate Change Response Act, the national long-term greenhouse gas reduction target of 2050 net-zero greenhouse gas emissions." B. Description of internal carbon pricing as a planning tool: The company currently does not use this tool because the company provides products and services that are not the highest priority for inclusion in carbon pricing. However, it will continue to improve the quality of data required for internal carbon pricing to facilitate the response to the phased system. C. Energy management objectives: If there is a new factory building or additional production site, priority should be given to renewable energy (such as solar energy, water power, wind power). D. Waste management goal: Resource recycling waste weight ÷ Total waste weight * 100%, no less than the previous year. Use reusable materials as much as possible to reduce the proportion of waste incinerated and buried. E. Water resources management goals: water consumption intensity decreases compared with the previous year. (2) Management objectives A. Carbon emissions and energy (A) Taking 2022 as the base year, the total greenhouse gas emissions in 2024 will be 32,492 metric tons of CO2e (Scope 1 and Scope 2 ). (B)Taking 2022 as the base year, the annual energy saving and reduction will be 6% from 2022 to 2028. (C)The total greenhouse gas emissions in 2024 will be 32,492 metric tons of CO2e, a 33.86% reduction compared to the total emissions of 49,131 metric tons of CO2e in 2022, and the 2024 target has been achieved. B.Improved product energy efficiency Using environmentally friendly technologies to actively reduce pollution, and continue to improve and prevent pollution, with the goal of rationally utilizing raw materials, reducing resource waste, reducing raw material costs, and not using banned substances and raw materials. C.waste The research, recycling and reuse of recycled raw materials increase the value of raw materials and reduce environmental pollution caused by raw material waste. D.water resources The statistical scope in 2023 covers 34 production sites around the world. The total water consumption for the year was 508,116 cubic meters, and the water consumption intensity was 9.95 cubic meters/NT$ million. Compared with 2022, the water consumption intensity dropped by 4.94%, showing that the water conservation measures at each site continue to show results.

Opportunities brought by climate change 

climate opportunity issues	financial impact category	opportunity management measures
Improve sustainability/ESG index ratings	The improvement of BizLink's corporate governance, sustainability-related assessments and ESG index ratings will help attract domestic and foreign investors and increase opportunities to obtain funds.	1. Invest existing manpower to research and plan ESG improvement measures, and improve ESG-related external ratings. 2.Improve information disclosure and strengthen stakeholder communication so that stakeholders can better understand the company's financial business status and corporate social responsibility actions.
Develop new revenue streams from new environmental markets and products	1. Develop customer base for renewable energy business in solar energy, electric vehicles, energy storage and other industries. 2. Develop solutions such as low-carbon and green products to respond to new customer needs.	1. Provide education and training to R&D units to establish professional capabilities related to R&D of sustainable products. 2. Gradually increase the proportion of related products to meet customer needs for low-carbon and green product solutions.