The World Economic Forum (WEF) published its Global Risks Report 2025 in January 2025. The report highlights that environmental challenges dominate the long-term risk outlook for the next decade, including extreme weather events, biodiversity loss and ecosystem collapse, critical changes in Earth systems, and natural resource shortages. This reflects the increasingly severe global challenges posed by climate change and the loss of natural capital, underscoring the growing urgency for a sustainable transition. In response to these long-term risks and potential opportunities, Chicony Electronics continues to reference the TCFD framework, utilizing dynamic scenario analysis to assess climate-related risks and opportunities. In alignment with emerging trends from the TNFD, the Company is also incorporating biodiversity and natural capital into its strategic considerations, formulating adaptation and mitigation measures to strengthen its capacity for environmental sustainability and climate resilience.
Climate- and Nature-related Governance Framework
Chicony Electronics' climate and nature governance framework designates the Board of Directors as the highest governing body for climate-related matters, overseeing the Company's overall decision-making on climate change and nature-related issues. The Corporate Sustainable Development Committee serves as the primary management level, with the ESG Sustainability Office reporting directly to the committee members. The Corporate Governance Officer also serves as the Chief Sustainability Officer, and the Head of Administrative Management is appointed as the Vice Chief Sustainability Officer. The ESG Sustainability Office regularly convenes various business units to hold workshops aimed at comprehensively assessing and analyzing the climate change and nature-related issues and trends faced by the Company. We continue to promote cross-departmental collaboration through project-based initiatives and report progress and response measures to the Board of Directors on a quarterly basis, ensuring that relevant risks and opportunities are effectively managed and supervised.
Climate- and Nature-Related Governance Framework
Note: The Company’s various types of environmental issues are also incorporated into the climate governance framework for management and reporting.
Climate- and Nature-related Risk Management Process
Chicony has followed TCFD and TNFD recommendations to identify various departments' climate change and natural risks and opportunities; moreover, it has taken effective measures to respond to the extensive issues derived from climate change and natural capital loss. The TNFD's approach—including scoping analysis, as well as dependency and impact assessments—is detailed in Management of Biodiversity Sensitive Areas and Significant Dependencies & Impacts in the Value Chain. Identified material risks and opportunities are incorporated into the Company’s overall risk management framework in accordance with the Risk Management Policies and Procedures .
Climate-and Nature-related Risk Management Process
Climate- and Nature-related Risk Identification
We conduct an in-depth analysis of the potential transition risks, physical risks, and related opportunities arising from climate change and natural capital loss, based on scientific reports published by the Intergovernmental Panel on Climate Change (IPCC), the International Energy Agency (IEA), and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). This enables us to gain a comprehensive understanding of the potential impacts on future operations and strategy.
In 2024, we expanded the scope of climate risk and opportunity assessment to the entire value chain. A preliminary list of risk and opportunity topics was developed based on industry characteristics, enhancing transparency for stakeholders regarding the impact of climate-related risks and opportunities on the Company's business model.
Climate-and Nature-Related Risk Identification
Climate- and Natural-related Scenario Analysis
To enhance Chicony Electronics' operational resilience and address the high uncertainty brought about by climate-related issues, we have adopted the widely recognized climate risk analysis method—Scenario Analysis—to comprehensively understand response strategies under extreme risks, as well as potential maximum opportunities and business potential.
This year, we have referenced the official version of the TNFD recommendations and selected four scenarios for analysis. The core factors are physical risks (ecosystem services) and transition risks (market drivers), and the scenarios are divided into four categories: Ahead of The Game, Go Fast or Go Home, Sand in The Gears, and Back of The List. At the same time, we assess the potential impact on operations based on the background assumptions of each scenario.
After in-depth internal discussions, we have determined that our climate and natural capital strategy will align with the background of the Ahead of The Game scenario. However, if the overall economic environment and policy planning turn conservative or passive, it may develop toward the Sand in The Gears scenario. To this end, we have constructed appropriate scenario assumptions to simulate the impacts of the significant risks and opportunities identified in the previous section under the corresponding scenarios.
After constructing the background assumptions, we incorporate socio-economic pathways that align with the scenario assumptions, strengthening the reference to background parameters such as population, economic growth, globalization, and other relevant macroeconomic factors. Additionally, specific impact drivers (e.g., climate change) are addressed using the corresponding scenarios.
Climate- and Nature-related Risk Scenario
Material Climate-and Nature-related Risks and Opportunities
Based on the prioritization of climate- and nature-related risks and opportunities, we have identified three material risks and three material opportunities. These were assessed for their potential impact on Chicony Electronics' value chain within specific time horizons, serving as the foundation for subsequent response strategies and risk management measures.
Climate- and Nature-elated Risk Matrix Climate- and Nature-related Opportunity Matrix
Material Climate and Nature Risk
| Climate-and Nature-Related Risk |
Scenario Analysis Event | Impact on Chicony's Operations | Value Chain | Impact Time Frame |
|---|---|---|---|---|
| T3 Policy and Legal- Introduction of sustainable product design standards |
Ahead of the game: 1. Product standards becoming more unified 2. Stricter regulatory policies to be implemented across regions |
CEC's products must comply with global sustainability regulations, such as the EU Ecodesign Directive. As an OEM for clients, CEC may face potential impacts on its bargaining power if it fails to respond to customer specifications in a timely manner. | 1. Maufacturing stage 2. Downstream customers |
Short-term |
| T6 Technology- Automation and intelligent transition |
Ahead of the game: The reduction in the cost of green technology has made green products competitive. |
To reduce carbon emissions and improve energy and resource efficiency, Chicony Electronics promotes process automation and intelligent transition across its production sites, which requires investment in equipment procurement and increases short-term capital expenditure pressure. | Maufacturing stage | Mid-term |
| T9 Market- Cost fluctuations of renewable energy and recycled materials |
Ahead of the game: 1. Increase in scarcity of specific resources leads to price fluctuations. 2. Consumers show stronger willingness to pay for environmental value. |
In the future, if CEC increases the use of recycled materials, it will be subject to fluctuations in recycled material prices; additionally,increasing the purchase of renewable energy certificates will also lead to higher electricity expenditures. | 1. Upstream value chain 2. Maufacturing stage |
Mid-term |
Material Climate and Nature Opportunity
| Climate-and Nature-Related Risk | Scenario Analysis Event | Impact on Chicony's Operations | Value Chain | Impact Time Frame |
|---|---|---|---|---|
| O4 Products/ Services- Meeting the green product requirements of downstream customers |
Ahead of the game: Increase in demand for lowresource consumption materials |
The reduction in green technology costs enhances the competitiveness of green products. By increasing the use of recycled and regenerative materials, CEC reduces resource dependency while creating new revenue opportunities in the green market. | 1. Upstream value chain 2. Maufacturing stage 3. Downstream customers |
Short-term |
| O2 Resource Efficiency- Enhancing the efficiency of resource utilization in production facilities |
Ahead of the game: The reduction in the cost of green technology has made green products competitive. |
CEC enhances energy and resource efficiency through the adoption of automated facilities, which not only reduces operating costs but also improves production processes and promotes resource recycling and reuse, thereby helping to reduce resource dependency. | Maufacturing stage | Short-term |
| O6 Sustainable Use of Natural Resources- Collaborate with downstream customers to recycle products |
Ahead of the game: Product standards have become more unified, reducing dependency on resources from specific regions. |
CEC collaborates with value chain partners to promote recycling programs for end-of-life electronic products (such as computers) and defective product recall initiatives. Recovered components from these programs help reduce manufacturing costs by enabling the reuse of parts. | 1. Maufacturing stage 2. Downstream customers |
Short-term |
Note: Short-term: 2025-2026; Mid-term: 2027-2030; Long-term: 2031-2050.
Material Climate and Nature Risk and Opportunity Measures
