Climate Governance (TCFD)

Governance

Board Oversight

TECO has established the “ESG Office” to provide periodic reports on the execution and tracking of TECO’s corporate social responsibility goal and policy implementation status to the Chairman directly on a monthly basis. To integrate TCFD culture into KPI evaluation and risk management processes, The task force consists of the administrative units of “Representatives of each business department/plant site” and “Safety and Health,” “Human Resources,” and “Financial Department” etc., and the task force is responsible for the promotion of routine affairs.

Management's Role

The “ESG Office Executive Officer” equivalent to CSO, is the highest responsible rank of the management level. The ESG Office establishes the sustainability management specialist to be a full-time position responsible for the execution of works, and cross-department members also form part of the task force, consisting of the administrative units of “Representative of each business department/plant site” and “Safety and Health,” “Human Resource” and “Financial Department” etc. in order to facilitate the promotion of management of works for the entire company synchronously. ESG office reports the work progress to the Chairman and President monthly.

• For the climate related risks and opportunities, after information provided by all members is collected by the “ESG office,” it is summarized, reported, and recommended to the management level and board of directors.
• For the risk of TECO internal control, the “Audit team” proposes the audit plan according to the past audit centerpiece and the existing organizational structure in order to examine the operating risk control implemented by TECO management level, business department of TECO, and to review the effectiveness of internal control design and execution, in order to issue an audit report for submission to the “Audit Committee” and board of directors.

Strategy

Declaration of the “emission reduction by 50% within ten years”

Under the pledge of "10-year 50% emission reduction," TECO has aimed to halve emission by 2030 (base year 2020), including inauguration of expanding PV power devices at its factory premises worldwide, so as to enhance the group's share of renewable-energy consumption, on top of establishment of sustainable supply chain, via assistance for smart and medium enterprises to conduct greenhouse-gas inventory and emission reduction. TECO launched internal carbon price system this year, in the hope of spurring employees to actively carry out carbon abatement plan and imprint net zero emission concept in their minds.

Impact on Organization

The "ESG office" acts as the responsible unit of the Company to perform material issue analysis according to the Task Force on Climate-Related Financial Disclosures (TCFD) framework. Through research reports, literature review, and internal/external major stakeholder communication, the content and priority level of each issue is examined and determined and the risk lists submitted by each department are integrated, in order to perform risk assessment and propose corresponding strategies and recommendations. After the review by the Chairperson, a report is submitted to the "Corporate Governance and Sustainability Committee" of the board of directors, and the annual work plan is established according to the sustainability commitment in order to concretely achieve the vision of "Energy Conservation, Emission Reduction, Intelligence, Automation."

Metrics and Targets

GHG Emissions in SCOPE 1,2

TECO conducts GHG emission assessment for sites in Taiwan, US, China, Vietnam and Italy with ISO 14064-1. In year 2021 the coverage rate reached 89.5%, 49.7% (by group revenue ratio) among it (data from Taiwan) has been verified by BSI (British Standards Institution)’s ISO 14064-1 (GHG audit) verification to provide the assurance about accuracy of assessment data.

The methods for summarization of the GHG quantity are operational control and recognition of all the emissions of the subsidiaries over which TECO has the control. The emission coefficients cited are the standards announced by the countries concerned. The “estimated total emission” is the quotient of the “actual inventory” divided by “coverage” to simulate the annual potential total emission within the Group. The “emission intensity” is the quotient of the “estimated total emission” divided by the “consolidated revenue”. A third credible and fair party is appointed to conduct the assessment and certification against the GHG emissions by various plants.

2021 Target Scope1: 24,006 ton; Scope2: 63,176

GHG Emissions in SCOPE 3

TECO initiates Scope3 emission assessment from year 2019. Based on motor business. Calculate its emission from purchased good and service, Upstream Transportation, used of motor products and end of life treatment.

In 2021, TECO obtainedSO 14064-1:2018 certification through third-party verification for Taiwan sites.

Upstream Transportation and distribution: 1,785.7 tonCO2e 

Data certified by BSI. Coefficient source: Government Data and Ecoinvent 3.0

Purchased goods and services: 349,810.1 tonCO2e   (TW+CN)

Fuel-and-energy-related activities: 4,603.8 tonCO2e  (TW)

Data certified by BSI. Coefficient source: Government Data and Ecoinvent 3.0

Coefficient source: Government Data and Ecoinvent 3.0

End-of-life treatment of sold products: 262.2 tonCO2e

Data certified by BSI. Coefficient source: Government Data, Waste handling coefficient 340 kgCo2e/ton, and waste water handling coefficient 0.553kgCO2/m3

Use of sold products: 18,682,092 tonCO2e

• According to the actual motor sale volume 2022 and its energy efficiency, the carbon emission associated with the annual power consumption is estimated.
• Motor annual power consumption estimation: For each motor, the number of operating hours of 5,000 hours per year*motor average unit time power consumption is used for the calculation.

Other Indirect GHG (category 3~6): 19,038,553.8 tonCO2e

2022 Target: Scope3 21,598,530 (tonCO₂e)

Contact window: ESG Office/ Jay LC Huang, csr@teco.com.tw