According to the risk map analysis in 2019, climate change risks belong to the Company's material risks. Considering its material financial impact on business operations, therefore, according to the TCFD* framework, the inventory and disclosure of climate change risk and opportunity management are carried out, enabling relevant stakeholders to grasp the climate change risks and opportunities as well as financial impact more systematically.
*Note"Task Force on Climate-related Financial Disclosures (TCFD)" was officially released in June 2017 by the Financial Stability Board (FSB).
Climate Change Governance
The identification and management of climate change risks and opportunities are handled by the Environmental Management Committee, and the climate risk issues and environmental risk issues are reported to the Risk Management Committee on a regular basis in accordance with the Company's risk management system, and then relevant mitigation and adaptation projects are assessed and approved by the Risk Management Committee.
In addition, the Risk Management Committee reports the Company's risks (including climate risks) to the Board of Directors on a regular basis to allow the Board of Directors to understand and monitor the risks faced by the Company.
Climate Change Risk Management
In 2019, a total of 12 major climate risks were identified, four of which belonged to high-risk impacts on operations, namely increased frequency and severity of typhoons/hurricanes, increased costs of greenhouse gas emissions, increase in demand and regulations relating sustainability, and increase in the cost of transformation to low-carbon technology. For the management of climate-related risks, the Company's various levels of accountability are internalized into its risk management procedures.
Climate Change Strategy
We evaluate the impact of 12 major climate risk factors on TWM's strategy, operations and financial planning, and relevant response measures. Also, a more in-depth climate scenario analysis is conducted in terms of 4 high climate risks to understand the impact of climate risks in different scenarios for TWM.
TWM selects 2 major risks as risk quantification targets to draw a climate risk path map, as explained below.
The impact on TWM is evaluated based on the hypothesis of climate change, with the total loss due to typhoons in 2019-2030 estimated to reach up to NT$58 million, while investment in low-carbon technology transformation is estimated to be NT$2.05 billion for the same period.
Climate change indicators/goals
In order to effectively manage the impact of climate change-related risks and opportunities on TWM, we have worked on scope 3 greenhouse gas inventory in addition to completing scope 1 and 2, as well as setting short-, medium-, and long-term goals for greenhouse gas reductions, renewable energy use and climate change resilience. The relevant climate risk and opportunity management objectives for improving the resilience to climate change are as follows.