Risks and Opportunities of Climate Change
Chia Hsin Cement Group identifies climate-related risks and opportunities, evaluates potential impacts, and manages the indicators and targets of climate-related topics. Since 2021, the Group plans to use the TCFD (Task Force on Climate-related Financial Disclosures) as a framework to conduct climate risk matrix analysis on physical risks, transition risks, and other risk profiles based on the four core elements below.
Climate-Related Scenario Analysis
Physical Risks
Climate-related scenario
SSP5-8.5
Risk Description
Due to the increased frequency of extreme weather conditions (i.e., typhoon, flood, and heavy rainfall), causing a decrease in customers' travel intentions, resulting in a decline in room reservations and cancellations, which has led to a reduction in revenue.
SSP5-8.5
Risk Description
Due to the increased frequency of extreme weather conditions (i.e., typhoon, flood, and heavy rainfall), causing a decrease in customers' travel intentions, resulting in a decline in room reservations and cancellations, which has led to a reduction in revenue.
Methods used to manage this risk
． Establishing of emergency handling procedures and contingency measures for disasters, such as typhoons, to minimize damage to assets.
． Taking out a corporate indemnity insurance policy to transfer the risk of accidents and to cover disaster losses.
． Monitoring changes in wind speed, rainfall and water level with reference to various weather data for immediate response.
． Establishing of emergency handling procedures and contingency measures for disasters, such as typhoons, to minimize damage to assets.
． Taking out a corporate indemnity insurance policy to transfer the risk of accidents and to cover disaster losses.
． Monitoring changes in wind speed, rainfall and water level with reference to various weather data for immediate response.
Transition Risks
Climate-related scenario
Taiwan Nationally determined contributions(SSP1-2.6)
Risk Description
Rising raw material prices leading to an increase in operational costs. In the future, the need to purchase and use green energy may result in additional cost increases.
Taiwan Nationally determined contributions(SSP1-2.6)
Risk Description
Rising raw material prices leading to an increase in operational costs. In the future, the need to purchase and use green energy may result in additional cost increases.
Methods used to manage this risk
．Constructing solar panels on top of tenant rooftop to supply green energy to affiliated business.
．Constructing solar panels on top of tenant rooftop to supply green energy to affiliated business.
Diversified Business Activities
Opportunity description
In response to climate change, the diverse development of the high-carbon cement industry can disperse the impacts of climate change and strengthen climate change resilience.
In response to climate change, the diverse development of the high-carbon cement industry can disperse the impacts of climate change and strengthen climate change resilience.
Potential impacts
• Increased market needs and revenue
• Improved competitiveness due to market transformation
• Enhanced operational resilience
Management guidelines
1. Business diversification disperses climate- related operational and investment risks, and is included in the Group's investment evaluation and risks management systems.
2. Conduct overall evaluations to reduce investments in industries with high GHG emissions and increase the Group's proportion of low-carbon, high-resilience products and services.
• Increased market needs and revenue
• Improved competitiveness due to market transformation
• Enhanced operational resilience
Management guidelines
1. Business diversification disperses climate- related operational and investment risks, and is included in the Group's investment evaluation and risks management systems.
2. Conduct overall evaluations to reduce investments in industries with high GHG emissions and increase the Group's proportion of low-carbon, high-resilience products and services.
Entering New Markets
Opportunity description
Climate change promotes discourse on low-carbon emission and environmental impacts, indirectly drives the demand for new hotels and care center services in relation to healthy buildings.
Climate change promotes discourse on low-carbon emission and environmental impacts, indirectly drives the demand for new hotels and care center services in relation to healthy buildings.
Potential impacts
• Increased market needs and revenue
• Improved competitiveness due to market transformation
• Enhanced operational resilience
Management guidelines
1. Conduct overall evaluations to reduce investments in industries with high GHG emissions and increase the Group's proportion of low-carbon products or services.
2. Introduce ISO 14064 and ISO 50001 management systems into all of the Group's operations to promote energy and GHG emissions related goals for our products and services and secure a competitive foothold in emerging sustainable markets.
• Increased market needs and revenue
• Improved competitiveness due to market transformation
• Enhanced operational resilience
Management guidelines
1. Conduct overall evaluations to reduce investments in industries with high GHG emissions and increase the Group's proportion of low-carbon products or services.
2. Introduce ISO 14064 and ISO 50001 management systems into all of the Group's operations to promote energy and GHG emissions related goals for our products and services and secure a competitive foothold in emerging sustainable markets.
Change in Customer Preferences
Opportunity description
The adoption of LEED and WELL building standards, IHG Green Engage systems, and products or services with low energy intensity in response to climate change improves competitiveness and corporate image, which in turn enables us to obtain building bulk-ratio or floor-area-ratio incentives from the government.
The adoption of LEED and WELL building standards, IHG Green Engage systems, and products or services with low energy intensity in response to climate change improves competitiveness and corporate image, which in turn enables us to obtain building bulk-ratio or floor-area-ratio incentives from the government.
Potential impacts
• Increased market needs and revenue
• Improved competitive edge
• Reduced operational costs
Management guidelines
1. The Group's ESG and environmental sustainability strategies are established by governance and top-level management while dedicated teams are responsible for promoting the sustainable transformation plans.
2. Promote ESG goals related to our products and services to enhance brand value and customer awareness.
3. Green buildings in Taiwan are entitled to building bulk- ratio or floor-area-ratio incentives depending on the certification category. Such bonuses help to reduce the cost of managing and running the building.
• Increased market needs and revenue
• Improved competitive edge
• Reduced operational costs
Management guidelines
1. The Group's ESG and environmental sustainability strategies are established by governance and top-level management while dedicated teams are responsible for promoting the sustainable transformation plans.
2. Promote ESG goals related to our products and services to enhance brand value and customer awareness.
3. Green buildings in Taiwan are entitled to building bulk- ratio or floor-area-ratio incentives depending on the certification category. Such bonuses help to reduce the cost of managing and running the building.
Industry and Regulatory Changes, Reduced Customer Demand
Risk description
Given the country's net zero emissions target, relevant laws, regulations, and state-mandated restrictions on the use of coal,as well as carbon reduction trends, it is necessary for the company to provide low-carbon products and services, which reduces the company's business activities while raising operating costs and capital expenditures.
Given the country's net zero emissions target, relevant laws, regulations, and state-mandated restrictions on the use of coal,as well as carbon reduction trends, it is necessary for the company to provide low-carbon products and services, which reduces the company's business activities while raising operating costs and capital expenditures.
Potential impacts
• Reduced demand of services
• Increased operational costs
Management guidelines
1. Assess the regulation and control trends of each business for incorporation into the Group's risks management system, for the timely monitoring and adjustment of the management system.
2. Introduce ISO 14064 and ISO 50001 management systems into all of the Group's operations and set energy and GHG-related policies and goals to reduce the energy and GHG intensity of our services.
3. Promote business diversity to disperse climate- related investment risks.
• Reduced demand of services
• Increased operational costs
Management guidelines
1. Assess the regulation and control trends of each business for incorporation into the Group's risks management system, for the timely monitoring and adjustment of the management system.
2. Introduce ISO 14064 and ISO 50001 management systems into all of the Group's operations and set energy and GHG-related policies and goals to reduce the energy and GHG intensity of our services.
3. Promote business diversity to disperse climate- related investment risks.
Low-carbon Products Replacing Current Products and Services
Risk description
Competitors provide better low- carbon warehousing, sales services and accommodation services.
Competitors provide better low- carbon warehousing, sales services and accommodation services.
Potential impacts
• Reduced demand of services
• Increased operational costs
Management guidelines
1. Introduce energy and GHG management systems, set GHG-related policies and targets at the initial development and design stage of new businesses, enabling them to become top choices in the low- carbon market of the future.
2. Realize energy management, save energy, and reduce carbon emissions in regular operations, so as to reduce the dependency on the use of energy.
• Reduced demand of services
• Increased operational costs
Management guidelines
1. Introduce energy and GHG management systems, set GHG-related policies and targets at the initial development and design stage of new businesses, enabling them to become top choices in the low- carbon market of the future.
2. Realize energy management, save energy, and reduce carbon emissions in regular operations, so as to reduce the dependency on the use of energy.
Rising Sea Levels
Risk description
In regards to storage and hotel-related assets located in coastal areas, the rise in sea level may affect their long-term operation and asset values.
In regards to storage and hotel-related assets located in coastal areas, the rise in sea level may affect their long-term operation and asset values.
Potential impacts
• Asset impairment
• Increased operational costs
Management guidelines
1. Assess the physical climate risks of the assets in both our current and planned operations; formulate backup plans such as an emergency reporting procedure or alternative working locations during emergencies; and evaluate the needs for relocation and redesign.
2. Incorporate physical climate risks into the Group's risks management system for regular review and monitoring. For suppliers located in low terrains, identify the risks of breach of contract or material supply disruption and plan for backup suppliers and materials in advance.
3. Periodically evaluate insurance coverage for assets that are exposed to physical climate risks.
4. Consider foundation elevation and appropriateness of location in new construction plans.
• Asset impairment
• Increased operational costs
Management guidelines
1. Assess the physical climate risks of the assets in both our current and planned operations; formulate backup plans such as an emergency reporting procedure or alternative working locations during emergencies; and evaluate the needs for relocation and redesign.
2. Incorporate physical climate risks into the Group's risks management system for regular review and monitoring. For suppliers located in low terrains, identify the risks of breach of contract or material supply disruption and plan for backup suppliers and materials in advance.
3. Periodically evaluate insurance coverage for assets that are exposed to physical climate risks.
4. Consider foundation elevation and appropriateness of location in new construction plans.
Increase in the Severity of Extreme Weather
Risk description
Extreme weather fluctuations affect business operations, products, services, and asset status, as well as increase the frequency of asset maintenance.
Extreme weather fluctuations affect business operations, products, services, and asset status, as well as increase the frequency of asset maintenance.
Potential impacts
• Business disruptions
• Reduced demand of services
• Increased operational costs
Management guidelines
1. Assess the regulation and control trends of each business for incorporation into the Group's risks management system, for the timely monitoring and adjustment of the management system.
2. Introduce ISO 14064 and ISO 50001 management systems into all of the Group's operations and set energy and GHG-related policies and goals to reduce the energy and GHG intensity of our services.
3. Promote business diversity to disperse climate-related investment risks.
4. Adopt remote work or work from home plans to avoid the risk of business disruptions caused by extreme weather.
5. Regularly review asset status and reinforce repair and maintenance work to avoid concerns about operational safety.
• Business disruptions
• Reduced demand of services
• Increased operational costs
Management guidelines
1. Assess the regulation and control trends of each business for incorporation into the Group's risks management system, for the timely monitoring and adjustment of the management system.
2. Introduce ISO 14064 and ISO 50001 management systems into all of the Group's operations and set energy and GHG-related policies and goals to reduce the energy and GHG intensity of our services.
3. Promote business diversity to disperse climate-related investment risks.
4. Adopt remote work or work from home plans to avoid the risk of business disruptions caused by extreme weather.
5. Regularly review asset status and reinforce repair and maintenance work to avoid concerns about operational safety.
