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Green Future

Implementing the TCFD Recommendations

The Financial Stability Board (FSB) established Task Force on Climate-Related Financial Disclosures (TCFD). The climate-related risks and opportunities have become the most important sustainability issues to Unimicron, so we should assess and manage the connection of operation strategies instead of only focus on the step of identification. In the past, the capital market only focused on economic indicators, but now more information is used as a reference for investment decisions. For pursuing a clear and efficient platform for negotiation with stakeholders by TCFD framework. TCFD concerns that transition and physical risks may affect demand for products and services and every type of sector could effectively for financial disclosures. We realized that the disclosure of climate-related financial risks should be present to businesses and financial markets.

Risk and Opportunity Identification

The relevant departments in the Corporate Sustainability Committee identify and analyze the potential climate change risks and opportunities within their business areas. Based on the occurrence probability (7 levels) and severity (5 levels) of each risk and opportunity, a matrix is drawn to capture significant risks and opportunities, and management methods are developed to reduce, transfer or avoid potential impacts.



Unimicron Climate Change Opportunity Matrix





Transition on Scenario Analysis and Financial Implications

Based on the results of the climate risk identification, Unimicron uses three different warming scenarios, namely 1.5°C, NDC and BAU, to make parametric assumptions and financial impact estimates for the transition and physical risk factors. Among them, 1.5℃ and NDC are the scenarios with a higher transition risk, so the risk factors are assumed to include carbon tax, total control and carbon penalty, and market. In the high-temperature scenario of BAU, we make simulations with the changes of temperature and rainfall. In the simulations of all three scenarios, the financial impacts are mainly in the form of cost increase and revenue decrease; the financial impact is the highest in the lowest temperature of the 1.5°C scenario, and the financial impact is the lowest in the BAU scenario.

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