Identify Material Issues and CSR Goals from Mega Trends
To further satisfy the sustainable development vision, TECO has reviewed publication reports of numerous consulting companies this year, and has summarized the world mega trends and external impacts of force majeure events, along with the utilization of task force on climate-related financial disclosures (TCFD) structure, in order to analyze the impacts of external threats and opportunities on The Company’s operations and to re-examine the vision and goal of corporate social responsibility
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Decarbonization against Climate Emergency
If we don’t adopt major global actions, the average temperature will increase by more than 1.5°C, which is the irreversible threshold value for climate change as determined by scientists. Mankind must achieve the goal of zero carbon emissions by 2050 in order to stay below such a critical limit. Advanced countries and leading enterprises have consecutively declared their commitment to the zero carbon target year. The levying of a carbon tax may be one of the means to achieve this target.
Impact on Company Operations
TECO's Strategy
Relevant Material Issues
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Accelerated Innovation for Sustainbility
In 2020, the quantity of interconnected equipment was seven times the earth’s population. The interactive business opportunities on the Internet have caused the economies of scale of enterprises to lose their absolute competitive advantage, and the expectations of consumers and even employees with regard to information tools transcend the environment that can be provided by enterprises. Capital is invested in sustainability related R&D efforts including deployment of electric vehicle powertrain systems, solar power stations, onshore substations for offshore wind power, energy storage systems, and digitized & intelligent automated systems to create new business opportunities and future thresholds.
Impact on Company Operations
TECO's Strategy
Relevant Material Issues
Geopolitical Changes
New emerging economies, especially Brazil and Russia, are under decline. China is facing the re-balance process of transformation from the previous reliance on export and capital investment model to domestic demand consumption model. India may become the world’s second largest economy surpassing the U.S. by 2050. The use of the country-centered political and economic notion becomes the mainstream. As the future outlook becomes more uncertain than the past years, to manage the potential fluctuation, risk diversification among economies becomes more important nowadays.
Impact on Company Operations
TECO's Strategy
Relevant Material Issues
The Uncertainty of Oil & Gas Industry
The oil and gas is deeply affected by international market trends. The recurrence of the epidemic had a profound impact on all market activities. Key factors that have a direct impact on the industry include the production cut agreement between OPEC nations and Russia and whether or not it will be honored, the follow-up development of the Sino-US Trade War, and global support for renewable energy. In addition, industry leaders such as Shell also face significant challenges. In a historic verdict, the Hague District Court ordered the losing party Royal Dutch Shell PLC, to cut carbon emissions by 45% by 2030. In the election of a new board of directors for US oil giant Exxon Mobil, the carbon reduction investment fund garnered two seats. A recently convened shareholders’ meeting of Chevron adopted a resolution requiring the Company to expand its carbon reduction targets by including Scope 3 emissions.
Impact on Company Operations
TECO's Strategy
Relevant Material Issues
Material issues identified are as Follows:
Relevant analysis results clearly indicate a rapidly rising emphasis on decarburization and rising confidence in already deployed short-chain supply frameworks among employees against the backdrop of a strong focus on internal training in the Company and noticeable climate change in 2020. It should be pointed out that the expectations of outsiders with regard to corporate governance and economic performance have grown significantly under conditions of increasing pressure caused by external shareholder actions.
Three Major Material Issues 2021
| Why it is important | Long term goals | KPIs | |
| SmartAuto products | In line with the rapid development and adoption of 5G and AIoT technologies, the Company is actively committed to R&D and innovation efforts in the field of smart products in order to meet the demands of the digital transformation and post-epidemic era. TECO places high emphasis on strategic alliances & cooperation and mergers & acquisitions in the field of powertrain and energy. The Company strives to apply digital and intelligent automation technologies to its electric vehicle powertrain solutions, solar power station smart diagnosis and monitoring systems, onshore substations for offshore wind farms, and energy storage systems with the ultimate goal of increasing its revenues and profitability. |
We also strive to strengthen the integration of group resources, R&D capabilities for our core products, and multiple application fields with a focus on the three key dimensions of smart green energy, smart city, and smart manufacturing. This initiative is projected to generate revenues of around USD 660 million within the next three years. It is also expected to accelerate industrial cooperation, enhance electric vehicle technical standards, and boost smart green energy applications. |
KPI linked with the revenue: For KPI completion level 0-100%, after the executing unit completes the self-evaluation, it is submitted to the review meeting. Once the completion percentage is approved, it is submitted to the personnel department in order to make remuneration changes for senior managerial officers. KPI:
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| Supply Chain Resilience | In response to the growth of regional markets which is coupled with a rising demand for decentralized production capacities, the Company relies on Industrial Internet of Things (IIoT) technology, intelligent automated production environments, and integration of low-voltage motor production lines with the supply chain resources of manufacturing locations to strengthen the stability and reliability motor market supply chains with the ultimate goal of preventing disruptions of production operations caused by systemic risks. | Increase high-efficiency product manufacturing in Vietnam, setup new facility in India and relocate supply chain in both China and Taiwan. Design automation manufacture process and consolidate stamping resources. Apply new technology in factories including 3D robotic arm, unmanned loading AGV platform and automation wiring machinery. To build the number one scale smart-auto manufacture center in Asia. |
KPI linked with digital project promotion: For KPI completion level 0-100%, after the executing unit completes the self-evaluation, it is submitted to the review meeting. Once the completion percentage is approved, it is submitted to the personnel department in order to make remuneration changes for senior managerial officers. KPI:
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| Climate change risks and opportunities | Issues such as the rising frequency of extreme weather events resulting in business interruptions, periodic legislative controls by the Taiwanese government, adoption of principles for responsible investment by capital markets, and laws governing low-carbon products and carbon border taxes imposed by export target countries have a significant impact on corporate climate governance and planning of net zero carbon schedules. It is therefore imperative for the Company to formulate adaptive strategies in response to these issues. |
Minimization of financial impacts associated with climate risks, expansion and addition of product series and multi-field applications related to climate opportunities, and formulation of concrete quantified targets and mid- and long-term implementation action plans for various Sustainability KPIs. |
KPI linked with revenue: For KPI completion level 0-100%, after the executing unit completes the self-evaluation, it is submitted to the review meeting. Once the completion percentage is approved, it is submitted to the personnel department in order to make remuneration change of senior managerial officers KPI:
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Contact window: CSR Task Force/Jay LC Huang, Special Assistant, csr@teco.com.tw