According to the risk map analysis in 2020, climate change risks are part of the Company's material risks. Given their potential material financial impact on business operations, the Company took inventory of and disclosed climate change risks and opportunities according to the TCFD framework, enabling related stakeholders to grasp climate change risks and opportunities and their financial impact more systematically.
Climate Risk Identification and Assessment is incorporated into the Enterprise Risk Management (ERM) process>> Please link to Risk Management for details.
- Note 1
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. TWM also has conducted an in-depth assessment of the potential impact of climate change on intensity, value chain stages, time horizen, and financial impact for the five major climate risks, and carried out management responses. As below table：Please Swipe Left or Right View All.
|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
||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
|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
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
|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
||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
|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.
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.
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.
- Note 1
|Type & Description of product(s)||% of total revenues from "climate change" product(s) in FY 2022||Estimated total avoided emissions per year|
|Low carbon product(s)：
TWM provides 6 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.
|Avoided emissions for third-parties：
TWM provides 9 avoiding emission online services, including 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.