Taiwan - TCFD of TCC

Issues and Objectives

Climate change has become a hotly debated issue in recent years, primarily due to the increasing frequency of extreme events and the expanding scope of their losses and impacts. In the past, responding to climate change and proposing countermeasures was generally considered the responsibility of the public sector, with some government agencies turning to academia for research support. However, businesses have also begun to seriously consider climate change, assessing its impact on their own operations and the entire supply chain. Coupled with rising awareness of corporate sustainability and social responsibility, some companies have started incorporating climate change mitigation and adaptation as part of their corporate goals. However, assessing the impacts of climate change remains a significant challenge for businesses, as the results directly influence subsequent countermeasures and seizing opportunities. This team has compiled the results of Taiwan Cement Corporation's climate change risk assessment and analysis process, presenting a practical case study of how companies implement such work.

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Improvement Measures Taken

According to Taiwan Cement's website, since 2018, Taiwan Cement has voluntarily responded to Climate-Related Financial Disclosures (TCFD), disclosing the financial impact of climate change on Taiwan Cement and its future response strategies.

1. A CSR (Corporate Social Responsibility) committee will be established to oversee issues related to sustainable development and climate management.
2. The CSR Committee has established an Integrity Governance and Risk Management Team, which is responsible for assessing emerging risks and opportunities related to sustainability and climate, and reporting to the General Manager on the performance of each team's strategic planning and implementation plans.
3. Taiwan Cement Corporation has established a separate climate change performance indicator, linking the carbon management of executive-level personnel to performance evaluations.

In 2018, Taiwan Cement Corporation identified three significant climate risks and two significant climate opportunities, and formulated effective response strategies to strengthen the management of climate change risks. Although only three climate change risks and two significant climate opportunities were ultimately presented, Taiwan Cement Corporation may have considered a large number of factors in the first stage and gradually screened them to arrive at the final options. This case only presents the final results.

risk assessment	Potential impact	Response Strategy
Global warming is causing operating costs	Insufficient water supply to hydropower plants/insufficient cooling water to nuclear power plants and petrochemical fuel power plants can cause local power instability, potentially affecting the stability of plant operations and increasing the difficulty of fulfilling contractual obligations.	Understand the local electricity usage situation and schedule production accordingly to avoid peak electricity consumption times.
Higher greenhouse gas emission pricing increases operating costs	In accordance with Taiwan's greenhouse gas emission control regulations, total greenhouse gas emission controls will be implemented in the future, and excessive carbon emissions will result in additional expenditures.	Continue to invest in low-carbon production research and development to reduce carbon emissions per unit of product.
Increasingly stringent environmental policies and regulations have led to higher operating costs.	Policy changes have led to the early decommissioning of existing production equipment, resulting in additional expenses.	A comprehensive assessment of the impact of climate change and policy factors on market demand and production is conducted to develop short- to medium-term operational plans.

Emerging opportunities	Opportunity shock	Response strategy
Develop new products or services through research and innovation.	Based on Taiwan's carbon reduction commitments and the Environmental Protection Administration's policies, Taiwan Cement believes that corporate transformation and investment in green energy development will not only contribute to Taiwan's renewable energy sector but also reduce its own brand's carbon footprint.	Taiwan Cement Green Energy Co., Ltd. was established using the old factory buildings of Taiwan Cement Corporation in Changhua Coastal Industrial Park, with wind power and solar power facilities being built simultaneously, and solar power generation facilities being installed inside the factory buildings.
New business models and adaptation to demand led to increased revenue.	Since 2017, Taiwan Cement Corporation (TCC) has fully declared its corporate transformation, aiming to shift from a traditional cement company to a green environmental engineering company. Due to the increasingly severe effects of climate change and in response to carbon emission management requirements in many countries and regions, TCC plans to establish a global carbon asset management service company to address the impact of carbon emissions on the company and create new revenue opportunities.	Taiwan Cement possesses extensive experience in carbon credit development and management. Through the financial operation of carbon credits and voluntary carbon credit development projects, Taiwan Cement can have a high risk tolerance when facing carbon emission regulations, and can also generate new revenue for the company.

Glossary

Climate change risk assessment: Using effective assessment tools to understand the medium- and long-term impacts of climate change on various sectors, and to propose corresponding adaptation strategies and actions to reduce the risks brought about by climate change.

Case type:

Structural and physical options: engineering techniques or reinforcement of existing structures, integrated technology development

Social options: learning and exchanging disaster knowledge in the community, and developing and applying early warning information.

Institutional options: Establishing institutions at the economic, policy, and legal levels

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Results

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Reference Websites

https://www.taiwancement.com/tw/csr6-3.html

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