Climate change risks are part of Taiwan Mobile's material risks. Given their potential material financial impact on business operations, Taiwan Mobile took inventory of and disclosed climate change risks and opportunities according to the Task Force on Climate-related Financial Disclosures (TCFD) framework, enabling related stakeholders to grasp climate change risks and opportunities and their financial impact more systematically.
*NoteIn 2023, TWM has held three inter-departmental TCFD workshops, and the
first TCFD report will be published to fully reveal the implementation of climate-related risks and
opportunities management through the four directions of Governance, Strategy, Risk Management,
Indicators and Targets.>>Download TWM’s First TCFD Report
Climate Change Governance
Board of Directors: annually review and oversee climate risk and opportunity issues facing
the Company.
ESG Steering Committee: The Chairman of the Board of Directors is the convener, and five
independent directors are members of the Committee. The Committee meets twice a year to oversee all
aspects of ESG decision-making, including climate risk and opportunity-related strategies and
objectives, and reports to the Board of Directors.
Risk Management Committee: The chairman of the Board of Directors or the designated proxy is
the chairman, and the top executive of each risk management area is a member. The Committee meets
semi-annually to evaluate and approve mitigation and adjustment plans in accordance with the risk
control mechanism, and reports the Company's risks (including climate risks) to the ESG Steering
Committee and the Board of Directors as needed.
Environmental Working Group: The Chief Technology Officer is the chairman and the top
sustainability officer is the vice chairman. The Working Group meets once every six months and regularly
identifies and manages climate change risks and opportunities in accordance with the Company's risk
management system, and reports climate risk trends and issues to the Risk Management Committee.
ESG Working Group: The president is the President and the top executive of each business
group is a member. The ESG Working Group meets four times a year to conduct research on international
climate risk trends and to provide feedback to the Environmental Working Group on the latest climate
risk trends.
Climate-Related Management Incentives
The president (Chief Executive Officer, CEO): Set the individual annual KPIs as supervised the company's overall carbon reduction. CEO achieved the objective will directly align one's performance-based bonuses.
Technology Executives Officers (CTO): Incorporated energy efficiency, carbon reduction, and renewable energy usage into individual annual KPI, and the performance will directly influence one's performance-based bonuses.
The Company-wide Energy Conservation Competition: The technical and non-technical units will compete energy conservation annually. Managers and employees from the units that conserves the largest amount of energy throughout the year will be publicly praised and awarded by the CEO. The result of 2023 Energy Conservation Competition as following：
Strategy
Cross-departmental discussion and identification of significant climate risks and
opportunities that have a direct/indirect financial impact on the Company in the short, medium, and long
term and input into management practices.
Transformation Scenario Analysis: Evaluate the potential financial impact and input
management practices of businesses in three external transformation scenarios (including governmental
net-zero path, SSP1-1.9 and SBT net-zero emissions).
Actual Scenario Analysis: Evaluate four climate models (including RCP2.6, RCP4.5, RCP6.0,
and RCP8.5) with extreme rainfall under climate change as the hazard level, extreme rainfall-induced
flooding, landslides, and mudslides as the vulnerability level, and the location of owned assets and
supplier locations as the exposure level for the actual risk value analysis.
Risk Management
Participants in the TCFD workshop are divided into groups according to their operational attributes,
and follow the TCFD framework to identify climate risks. 36 climate risks and 22 opportunities are
presented in the value chain, and their impact type, scope, intensity, time of occurrence and
likelihood are analyzed.
Establish a matrix of climate risks and opportunities, and classify the impact level of
the matrix as 'moderate to high' or higher and the probability as 'possible' or higher as significant
risks and opportunities; based on the results of the identification and ranking of climate risks and
opportunities, report the assessment results and response plans of climate-related risks and
opportunities.
In addition to completing the greenhouse gas inventory for the first, second and third categories, TWM has also set short-, medium- and long-term greenhouse gas reduction targets, renewable energy use targets and practices to enhance the resilience to climate change. The relevant targets and adaptation practices are as follows:
Targets
Enhanced Climate Financial Impact Disclosure: See the TCFD report planned for publication in 2023 for details of quantified projects in 2022; 1 quantified in 2021; 2 quantified in 2019.
Cell Tower Server Room Smart Energy Saving: 66% reduction in energy intensity in 2022 compared to 2016, 86% reduction in 2030 target compared to 2016; 5.64 million kWh of electricity savings and 2,872 metric tons of carbon reduction in 2022 for telecom server rooms & cell towers.
Self-built Green Power Plant/Purchase Green Power/Green Energy Investment Note 1: Total renewable energy use reached 4.5% in 2022, target is 20% in 2030; Cloud IDC renewable energy use reached 68.9% in 2022, target is 100% in 2030.
Note 1TWM has not yet invested in green energy in its short-term plan and is continuing to evaluate options.
Climate Risks assessment
Taiwan Mobile identified climate risks in 2022 that had a significant impact on operations or finances are transition risks, such as cap and trade, carbon tax, and renewable energy regulations, also including legal risk. TWM also has conducted an in-depth assessment of the potential impact of climate change on intensity, value chain stages, time horizon, and financial impact for the five major climate risks, and carried out management responses. As below table：
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Type of risk
No.
Risk level
Explanation of Risk
Location of occurrence
Time horizon
Type of impact
Financial Impact
Management practices
Management costs
Transition
1
Medium-high
Cap & Trade
Organization itself
Short to medium term
Indirect cost increase
SSP1_1.9
2030: The estimated carbon emissions are 283,000 metric tons, and the regulations require an
annual total reduction of 4.2%, assuming a 4.2% reduction in 2030, that is, 271,000 metric
tons should be achieved; therefore, the payment for excess emissions is NTD 3.56 million
2035: The estimated carbon emissions are 252,000 metric tons, and the regulations require an
annual total reduction of 4.2%, assuming a reduction of 21% in 2035 compared to 2030, that is,
223,000 metric tons should be achieved; therefore, the payment for excess emissions is NTD
8.53 million
SSP1-2.6
2030: The estimated carbon emissions of the Company are 283,000 metric tons, and the
regulations require an annual total reduction of 2.5%, assuming a 2.5% reduction in 2030, that
is, 276,000 metric tons should be achieved; therefore, the payment for excess emissions is NTD
2.12 million
2035: The estimated carbon emissions of the Company are 252,000 metric tons, and the
regulations require an annual total reduction of 2.5%, assuming a reduction of 12.5% in 2035
compared to 2030, that is, 248,000 metric tons should be achieved; therefore, the payment for
excess emissions is NTD 1.31 million
SSP2-4.5
2030: The estimated carbon emissions of the Company are 283,000 metric tons, and the
regulations require an annual total reduction of 1.23%, assuming a 1.23% reduction in 2030,
that is, 279,000 metric tons should be achieved; therefore, the payment for excess emissions
is NTD 1.04 million
2035: The estimated carbon emissions of the Company are 227,000 metric tons, and the
regulations require an annual total reduction of 1.23%, assuming a reduction of 6.15% in 2035
compared to 2030, that is, 265,000 metric tons should be achieved by TWM; therefore, the
payment is not required
Outsourcing of renewable energy
In response to the total emission control, TWM must try to reduce carbon emissions. If the
management target for 2030 is set as 20% of the total renewable energy use, which can be converted
into 61 million KWh of renewable energy use, and the unit price per KWh is NTD 6, the estimated
input cost will increase by about NTD 366 million.
Transition
6
Medium
Carbon tax
Organization itself
Short to medium term
Direct cost increase
For the amount of tax levied on carbon emissions, assuming there are no basic emissions, based
on the carbon tax of NTD 300/ton in 2021, and using the IPCC SSP1-1.9 scenario where the
temperature rise is maintained at 1.5°C, the estimated financial impact is as follows according to
the annual growth rate of carbon tax:
Scenario 1: Non-nuclear home
2030: the estimated carbon emissions are 283,000 metric tons, and a carbon tax of NTD 430
million needs to be paid
2035: the estimated carbon emissions are 252,000 metric tons, and a carbon tax of NTD 523
million needs to be paid
2040: the estimated carbon emissions are 214,000 metric tons, and a carbon tax of NTD 565
million needs to be paid
Scenario 2: Extended service of nuclear energy
2030: the estimated carbon emissions are 260,000 metric tons, and a carbon tax of NTD 394
million needs to be paid
2035: the estimated carbon emissions are 227,000 metric tons, and a carbon tax of NTD 472
million needs to be paid
2040: the estimated carbon emissions are 189,000 metric tons, and a carbon tax of NTD 499
million needs to be paid
Scenario 3: Plan of the Energy Bureau
2030: the estimated carbon emissions are 253,000 metric tons, and a carbon tax of NTD 384
million needs to be paid
2035: the estimated carbon emissions are 211,000 metric tons, and a carbon tax of NTD 438
million needs to be paid
2040: the estimated carbon emissions are 163,000 metric tons, and a carbon tax of NTD 429
million needs to be paid
Green power directly transmitted to TWM
According to the Company's 2040 RE100 path, the estimated management costs (assuming the
transfer-supply mode is adopted and the mean price of green electricity is NTD 6 per kWh) are as
follows:
2030: outsourced green electricity accounts for 20% of the total electricity consumption, with an
estimated investment of NTD 780 million
2035: outsourced green electricity accounts for 60% of the total electricity consumption, with an
estimated investment of NTD 2.47 billion
2040: outsourced green electricity accounts for 100% of the total electricity consumption, with an
estimated investment of NTD 4.37 billion
Transition
7
Medium-high
Compulsory declaration
Organization itself
Long-term
Direct cost increase
Penalty for failure to declare on time
SSP1-1.9
2030: NTD 32 million
2040: NTD 72 million
2050: NTD 112 million
SSP1-2.6
2030: NTD 24 million
2040: NTD 54 million
2050: NTD 84 million
SSP2-4.5
2030: NTD 16 million
2040: NTD 36 million
2050: NTD 56 million
Internal and external labor costs for checking and declaration
2030: NTD 6.3 million
2040: NTD 14.2 million
2050: NTD 22 million
Transition
9
Medium-high
Product efficiency regulations and standards
Upstream & Organization itself
Short-term
Direct cost increase
SSP1-1.9
2030: NTD 3.06 billion
2040: NTD 8.86 billion
2050: NTD 14.64 billion
SSP1-2.6
2030: NTD 320 million
2040: NTD 1.16 billion
2050: NTD 2.24 billion
SSP2-4.5
2030: NTD 53.75 million
2040: NTD 120 million
2050: NTD 290 million
Consulting
2030: NTD 15 million
2040: NTD 16.5 million
2050: NTD 18.15 million
Transition
34
High
Renewable energy regulations
Organization itself
Short-term
Rise in energy prices
Direct cost increase
Amount of expenditure on outsourcing of renewable energy due to compulsory regulations
SSP1-1.9
In line with the government's 2050 net zero policy, it is expected that the use ratio of
renewable energy needs to reach 100% in 2050.
The total consumption of renewable energy required is about 730 million kWh, and the penalty
is calculated based on the payment of electricity fees (NTD 4/kWh), which will increase the
electricity cost by about NTD 3 billion.
SSP1-2.6
It is expected that by 2030, a certain percentage of renewable energy will be added to the
business premises with a single contract capacity >100 kW.
Taking 10% as the basis for calculation, an inspection shows that about 30 premises will be
affected, with a total contract capacity of 5,373 kW.
A total of 537.3 kWp of renewable energy will be installed, and the penalty will be
calculated based on the payment of electricity fees, that is, 537.3 kWp*2,500 kWh/kWp*NTD 4,
which is approximately NTD 5 million.
SSP2-4.5
It is expected that by 2025, a certain percentage of renewable energy will be added to the
business premises with a single contract capacity >800 kW.
Taking 10% as the basis for calculation, an inspection shows that a total of 2 premises will
be affected: 4,990 kW for cloud IDC and 3,150 kW for optoelectronic machine room.
499 kWp and 315 kWp of renewable energy will be used respectively, and the penalty will be
calculated based on the payment of electricity fees, that is, (499+315) kWp*2,500 kWh/kWp*NTD
4, which is approximately NTD 8 million.
Installation of renewable energy
SSP1_1.9
If RE100 is set as the management target for 2050, which can be converted into about 73 million
KWh of renewable energy use, and the unit price per KWh is NTD 6, the electricity cost will
increase by about NTD 4.3 billion.
SSP1_2.6
If RE10 is set as the management target for 2025, which can be converted into about 122 million
KWh of renewable energy use, and the unit price per KWh is NTD 6, the electricity cost will
increase by about NTD 700 million.
SSP2_4.5
If RE20 is set as the management target for 2030, which can be converted into about 60 million KWh
of renewable energy use, and the unit price per KWh is NTD 6, the electricity cost will increase
by about NTD 36 million.
Base Stations: A total of 740 units of highly weatherproof Note 1 power supply systems (SMR)
are used to prevent operation interruptions caused by drastic temperature changes.
Cloud Internet Data Center(IDC): Equipped with generators, uninterruptible power supply
system, and n+1 redundancy system to avoid service interruption due to disaster.
Mobile Broadband Mobile Service Stations: 25 mobile broadband mobile service stations have
been built to avoid the disconnection of cell towers due to disasters.
Mobile Communication Platform for Disaster Relief: Build 17 fixed mobile communication
platforms with more than 72 hours of power backup for disaster prevention and relief, and optimize 10
existing mobile communication platforms to facilitate emergency mobile communication services in
disaster areas.
Note 1Acceptable ambient temperature 0~65 degree Celsius.
For More Adaptive Practices Please Refer to TWM’s TCFD Report
Low-Carbon Products
Type & Description of product(s)
% of total revenues from "climate change" product(s) in FY 2023
Estimated total avoided emissions per year
Low carbon product(s)：
TWM provides 5 low-carbon online products or services, including value- added services such as myfone online, MyBook, MyMusic, MyVideo and e-services such as high efficient Data Center, renewable energy powered services.
1.18
332,604.67
metric tones
Avoided emissions for third-parties：
TWM provides 10 avoiding emission online services, including My Charge, M+, Direct carrier billing (DCB), MySports APP, TAMedia (e-service), Customer Service APP, E-bill, Fleet Manager, Broadband and Cloud-based AI Energy Management System.
