Taiwan Strategy for Climate Change
The aspects included in Asia Cement’s climate change strategy are: products, supply chain, adaptation to mitigation, low carbon investment and operational activities.
Climate change management
Asia Cement has established a Corporate Sustainability Committee, which is directly managed by the president and director. It requires all production unit and business unit to assess the risks and opportunities relating to climate change, particularly the long-term impact of climate change on business operations, including plant assets, production processes, raw material delivery, and even changes in regulations and consumer preferences.
The Corporate Sustainability Committee takes climate related issues into consideration when reviewing and guiding strategy, key action plans, risk management policies, annual budgets, and business plans, as well as setting organizational business goals, monitoring implementation and execution, and overseeing significant capital expenditures. The achievement of Asia Cement's net-zero emissions targets is also confirmed through semi-annual board meetings.
Incentive measures for climate change
Stipulate incentive measures and KPIs for climate change,fulfill the target of SBTi.
Climate Change Risk Management
Asia Cement’s climate change risk management process is composed of three steps: identification and assessment of existing risks and opportunities, definition of financial impact analysis and significant risk opportunities, and response measures to significant risks and opportunities and cost estimation.
Planning for financial impact by climate change
Asia Cement’s climate change strategy of financial aspect affected includes the possibility of increasing operational expenses, increasing capital expenses for low carbon technology, and rising of raw material costs. Identify and quantify the impact of major risks in accordance with the "Risk Management Policies and Procedures" of ACC. These standards define the financial risk impact as five levels of "very low, low, medium, high, and very high." "High" and "very high" impact are considered to have a substantial impact on ACC.“ High” indicates an impact on EBITDA of 4% to 5%, while “Very High” indicates an impact on EBITDA of more than 5%.
Significant Risks and Opportunities and Analyze Financial Impacts
China Response to Climate Change
Asia Cement (China) actively undertakes corporate responsibility for the achievement of the national “Carbon Peaking” and “Carbon Neutrality” goal. In May 2021, the Company established an action group to formulate suitable carbon reduction measures for each division under its jurisdiction, so as to promote carbon reduction work in an orderly manner by one division and one policy.
《Organizational chart of Asia Cement (China) Carbon Reduction Team》
《Assessment of risks and opportunities from climate change faced by Asia Cement (China) and corresponding action plans》
We refer to Task Force on Climate-related Financial Disclosures (TCFD)
| Type of risks | Item | Climate-related risks | Risk management and action plan |
|---|---|---|---|
| Transition risks | Regulations | “Carbon Peaking” and “Carbon Neutrality” and “Carbon Neutrality” policy, the Greenhouse Gas Emissions Reduction and Management Law | Implement energy conservation and carbon emissions reduction; purchase renewable energy certificates |
| Technology | Technological transformation costs and rising raw material costs | Integrate energy saving and intelligent development, promote low-carbon cement manufacturing and fuel conversion, use renewable energy and energy with low carbon footprint | |
| Market | New product development and changing customer needs | Analyze the risk of being substituted by other company's products, compare our advantages and disadvantages with other materials | |
| Goodwill | Changes in customers' or the society's impression of the Company | Control the total amount and intensity of energy consumption, save water, create green mines, provide humanistic care, launch charity activities | |
| Physical risks | Acute | Extreme weather such as floods and typhoons affect production facilities or transportation and cause operational losses | Develop emergency response plan against disasters |
| Chronic | Potential safety hazards in the working environment affect the safety and health of employees | Monitor relevant climate risks |
| Type of opportunities | Climate-related opportunities | Opportunity management and action plan |
|---|---|---|
| Resource efficiency | Develop circular economy and reduce operating costs | Transform production equipment to increase efficiency, and recycle waste for reuse |
| Energy source | “Waste treatment”: disposal of municipal waste, sludge, industrial hazardous waste, etc. in co-processing kilns | Increase alternative raw material procurement channels, improve resource substitution, diversity, plan for sustainable mining and participate in renewable energy projects |
| Products and services | Develop special cements, low-carbon products, conduct reconstruction after extreme climate change | Develop innovative sustainable products, new low-emission products and services to benefit from shifting customer preferences, find business opportunities from post-disaster reconstruction |
| Market | Increase market capacity and market share | Diversify operations, create new sources of profit and seize favorable opportunities during the low-carbon transition |
| Adaptability | Build long-term resilience to climate change | Incorporate climate change factors into business strategies, increase investment in low-carbon product R&D and production process improvement |