Climate Action
Governance：Board Oversight of Climate-Related Risks and Opportunities
TECO empowers its Board of Directors as the highest TCFD-aligned decision-making authority for enterprise risk management, holding ultimate oversight for all significant risks and opportunities, with a specific focus on climate-related issues.To enhance governance effectiveness, the Board has established the "Corporate Governance and Sustainability Committee," consisting of five directors, including two independent directors, to ensure objectivity and professionalism in oversight.The Committee is tasked with reviewing the company’s risk management strategies and outcomes in critical areas such as sustainability (ESG), regulatory compliance, and information security. It incorporates comprehensive assessments and response strategies for climate change risks and opportunities, holding regular meetings to evaluate management systems, monitor target progress, and address potential challenges.
Management’s Evaluation and Handling of Climate-Related Risks and Opportunities
To ensure effective execution of sustainability strategies, TECO established the "ESG Office" as the core unit for corporate sustainability governance, coordinating climate initiatives and advancing sustainability policies.Following the Task Force on Climate-Related Financial Disclosures (TCFD) framework, the office develops and maintains KPIs, embedding sustainability management into the enterprise risk management process and regularly monitoring related topics to support the Board and top management in overseeing implementation.To enhance execution effectiveness, the ESG Office collaborates closely with the cross-departmental taskforce, composed of representatives from each business group, plant operations, and support functions (such as Safety & Health, Human Resources, and Finance), forming an integrated sustainability management framework.The ESG Office monthly reports progress to the Chairman, Vice Chairman, and the convener of the "Corporate Governance and Sustainability Committee" (three directors in total). It also compiles sustainability performance data and leads the development of the annual Sustainability Report, disclosing TECO’s science-based commitments and advancements in climate initiatives, corporate governance transparency, and social responsibility, showcasing the company’s tangible actions and long-term sustainability vision.
⚫ The ESG Office collects and assesses climate-related risks and opportunities, then reports findings to management and the Board of Directors
⚫ The Internal Audit Team evaluates internal control risks by developing audit plans based on prior audit experience and current organizational structure. It assesses TECO’s management, business unit operational risk controls, and the effectiveness of internal control system design and execution, submitting audit reports to the Audit Committee and the Board of Directors
Emission Reduction Strategy
TECO, recognized five times by global sustainability rating institutions such as the Dow Jones Sustainability Index and S&P Global Sustainability Yearbook, has set ambitious climate commitments. Using 2021 as the base year, the Group declared a science-based target to reduce operational (Scope 1 and Scope 2) carbon emissions intensity by 50% within ten years, with the long-term vision of achieving net-zero emissions by 2050. To ensure accountability, sustainability KPIs have been embedded across all business units, driving collective action and integrating sustainability into TECO’s corporate culture.
(Until 2023, the total emissions for the whole group were estimated; since 2024, the inventory result of consolidated boundary was adopted.)
TECO Global Value Chain and Greenhouse Gas Inventory
Global Greenhouse Gas Inventory Digitalization System
Internal Carbon Pricing Mechanism
Approved by the Board and launched in 2023, TECO’s Internal Carbon Pricing (ICP) scheme applies the “polluter pays” principle, with the Group uniformly charging business units a carbon fee of NTD 1,600 per ton CO₂e for Scope 1 and Scope 2 emissions. Annual emission allowances are allocated to the Presidents of the three major business groups, who must budget accordingly; exceeding the target requires additional payments, directly linking emission performance to business results and bonuses.
In 2024, TECO further formalized the Internal Carbon Pricing and Carbon Fee Management Guidelines and appointed the President as convener of the ICP Management Committee. The carbon price is reviewed annually, and the accumulated carbon fund is strategically utilized to optimize energy efficiency, support renewable energy deployment, and foster low-carbon product and service innovation. By embedding ICP into financial and operational decision-making, TECO incentivizes all business units and employees to prioritize carbon management, accelerating the Group’s transition toward its medium- and long-term reduction targets and its ultimate goal of net-zero emissions by 2050.
Value Chain Emission Reduction Actions
TECO integrates greenhouse gas (GHG) reduction risk assessment into supplier evaluations, hosts sustainability supply chain forums, and supports SME suppliers in building emission reduction capacity through GHG inventory guidance.
In 2024, TECO:
The program began in January 2024, with all participating suppliers completing GHG inventory lists by year-end, forming the baseline for future reductions. TECO will continue to provide inventory training, track suppliers’ annual updates and reductions, and help mitigate ESG risks while enhancing supply chain sustainability performance.
Key Transition Points and Risk Assessment
Indicator Management
Scope 1 and Scope 2 Inventory
In 2024, TECO completed a GHG emissions inventory for global core production and sales sites, achieving 84.34% coverage (based on consolidated Group revenue). Scope 1 and 2 data, using 2021 as the base year, were externally verified, covering 61.4% of operations (primarily factory units).
Scope 3 Inventory
TECO initiated Scope 3 inventory in 2019. In 2024, TECO Taiwan passed ISO 14064-1:2018 verification.
(Unit: ton CO2e) 2024 Scope 3 total emissions: 18,756,913.22 ton CO2e
Motor Carbon Footprint Analysis
Based on TECO's high-efficiency 150-horsepower motor series, the proportion of metal content is shown in the figure below:
Status Update on Participation in Science Based Targets (SBT)
Energy Management Plan
Renewable Energy Installation at Plants
Power Regeneration Installation at Plants
Energy-Saving Initiatives Summary Table
Water Resource Management
Waste Management
Pollution Prevention
At the Chungli plant, air pollutants—mainly VOCs from motor manufacturing—are reduced by replacing solvent-based coatings with water-based paints and low-VOC varnish. Chungli and Tesen plants operate qualified air pollution control equipment, managed by certified personnel, ensuring compliance with standards. Pollutants include SOx, NOx, particulates, and VOCs.
Return on Environmental Investments
in NTD k
Biodiversity and Ecosystem Restoration
TECO recognizes biodiversity loss, climate change, and resource scarcity as key business risks. Guided by the TNFD framework, ISO 14001, and enterprise risk management, TECO identifies and manages nature-related dependencies, impacts, and risks across its value chain, integrating biodiversity protection and ecosystem restoration into its sustainability strategy to enhance environmental resilience and operational adaptability.
Biodiversity Management Framework and Indicators
