Risk & Opportunity

In order to effectively implement and fulfill ASE's commitments on and corporate social responsibility, we examined the financial implications of the risks and opportunities resulting from climate change. We also continuously manage climate change-related activities and performance. We have established a stable system to address climate change adaptation and mitigation, which includes constructing green facilities (highefficiency building designs), conserving energy, increasing energy efficiency, installing solar panels, purchasing renewable energy and International Renewable Energy Certificates (I-RECs), as well as other initiatives. We are seeking to minimize the impact and potential risks of climate change. ASE also continues to participate in the Climate Change and Supply Chain programs of the CDP (formerly the Carbon Disclosure Project; it is the international nonprofit organization that provides the most comprehensive environmental data from global companies). We received a grade of "A-" (leadership-level) in 2017 in both these programs.

Under the framework of the existing Enterprise Risk Management (ERM) system, ASE identified climate change risks and opportunities by referring to the risk and opportunity issues in the Task Force on Climate-related Financial Disclosures (TCFD) issued by the Financial Stability Board*(FSB) in 2017. The overall assessment process is as follows:

Using the above procedure, we identified six medium and important level risks in 2017. They were: increased cost of raw materials; increased pricing of GHG emissions; fuel/ energy taxes and renewable energy regulations; substitution of existing products and services with lower emissions options; stigmatization of sector; and increased severity of extreme weather events. We also identified 11 corresponding opportunities. They are: a shift towards more efficient buildings; reduced water usage and consumption; use of new technology, participating in carbon market; a shift to decentralized energy generation; development and/or expansion of low-carbon products and services; new products and services through R&D and innovation; new market partnerships; acquisition of public sector incentives; participating in renewable energy programs and energy efficiency measures and resource substitution and diversification.

Climate Risks Matrix Diagram

Opportunities also accompany climate change and at the United Nations Climate Change Conference in Paris in December 2015, green bond financing was a key topic. ASE began the first issue of Green bond in 2014 and used the funds for Green Buildings and conservation programs in energy and resources. We will continue assessing and planning Green Bond issue, to capture the opportunities provided by new green trends. ASE Group will integrate greater facility management in accordance with its merger and acquisition plans. We will re-examine our inventories, conduct preparatory work for Science based carbon emissions reduction targets, and invite experts to conduct assessments and outline future management methods.

ASE's Climate-related Risks and Opportunities