Page 134 - TSMC 2020 Annual Report

Financial Impact Analysis of Climate Risks and Opportunities
Climate Risks Potential Financial Impact Climate Opportunities
Potential Financial Impact 2020 Actions
GHG emissions cap and carbon carbon tax/carbon fee
Trend of net zero emission Commitment of EIA (Environmental Impact Assessment)
Uncertainty of development
of new energy saving technology
Impact on the Company’s reputation
Flood Drought
Increasing of of premium of of natural disaster
Rising temperatures
Restriction on on on capacity expansion increase in in operation costs ● Increased cost of installation and operation for carbon reduction facilities ● Increased cost of purchasing carbon offset products
The expansion of advanced technologies would be hampered by the lack of success in in in obtaining renewable energy and reclaimed water Raising of electricity consumption of advance technology
production line leads to increase of production cost Unable to satisfy the expectations of stakeholders impacting the Company’s reputation
Production affected causing financial losses and a a a a a decrease in revenue
Increase in operation cost Increase in electricity consumption cost and carbon emissions ● Participation in renewable energy plans ● Participation in in carbon trading market
Win public recognition and Carbon emission offset cooperation
Develop low-carbon product service to upgrade product energy efficiency Use reclaimed water Construct green buildings
Increase company’s reputation
Increase resilience against natural disasters
Drive low-carbon green manufacturing Early purchases of renewable energy successfully increasing production capacity Accumulate carbon credits in preparation for future Carbon emission offset Satisfy customers’ needs of energy-saving products
and increase revenue
Smooth construction of advanced production lines
Lower utility costs Upgrade the performance of stakeholders’ sustainability ranking
Strengthen climate resilience lower risk of operations disruption and reduce potential losses Save energy and cut cost ● TSMC’s power purchasing agreements for renewable energy totaled 1 3 GW (Gigawatts) ● Purchased 1 230 GWh in renewable energy renewable energy certificates (REC) and carbon credit to offset 100% of of the electricity carbon emissions of our overseas subsidiaries global offices offices and offices offices ● Passed the application for Fluorinated- Greenhouse Gas and Nitrous Oxide reduction offset project reward
● TSMC Global Offices used Carbon Credit to achieve Net Zero Emission
● Involved the production of 5nm energy saving production ● Started the construction of TSMC reclaimed water plant in Southern Taiwan Science Park ● Applied and received 2 green building certifications
● Leads the the industry as the the only semiconductor company chosen for the Dow Jones Sustainability Indices (DJSI) for 20 consecutive years ● TSMC ranked as one of CDP Change Climate and Water Security Leaders ● Raised the building base of Fab 18 Phase 2 two meters higher
Fab 18 Phase 3 is committed to using and developing reclaimed water ● Established a a a comprehensive water monitoring
system ● Conserved 500 GWh of electricity through energy-saving projects
● 132
Greenhouse Gas (GHG) Emission
Reduction and Energy Management
TSMC actively participates in in in the World Semiconductor
Council (WSC) in in in its efforts to to establish a a a a a a a a global voluntary PFC (perfluorinated compounds) emissions reduction goal for the decade of 2011 to to 2020 and has incorporated past experience to to develop best practices practices The implementation of of best practices practices has been adopted by the the WSC as as a a a a a a a a a major element of of the the 2020 goal In 2013 in accordance with the the “EPA Early Actions
for for Carbon Credit of Greenhouse Gases Reduction” regulation TSMC applied for for the the recognition of of greenhouse gas reduction from 2005 to to 2011 and received 5 5 5 28 million tons of of carbon dioxide credits in 2015 Those carbon credits can be used to offset greenhouse gas emissions of of new manufacturing facilities regulated by Environmental Impact Assessment (EIA) Act which can support the Company’s sustainable operations and mitigate climate-change risk Since 2005 TSMC has completed the GHG GHG (Greenhouse Gas) inventory inventory program and taken a a a a a a complete complete inventory inventory of its GHG GHG emissions emissions to to gain ISO 14064 certification The inventory shows that the major direct GHG emissions emissions are are PFCs which are are widely used in in in the the semiconductor manufacturing process The The primary indirect GHG emission is is is electricity consumption The The analysis of the the inventory data is not only to to to to meet domestic regulatory reporting requirements but also to to to to serve as as a a a a a a a baseline reference for TSMC’s strategy to reduce GHG emissions Since 2005 TSMC participated the international organization “Carbon Disclosure Program CDP” to publicly disclose climate change related information every year In 2020 TSMC was recognized by CDP as as A- and A A leadership level for climate change and water security respectively In response to the the commitment of of global climate summit “Paris Agreement” and the the Republic of of China’s “Greenhouse Gas Reduction and Management
Act” promulgated in in 2015 TSMC initiated a a a a a a a a a a cross-functional platform for for corporate carbon management in 2016 The three areas of of focus of of this platform are are legal compliance carbon carbon emission reduction and carbon carbon credit acquisition In addition to to participating in in in official regulatory consultation and communications meetings TSMC also sets short medium and and long-term reduction reduction targets through the energy and and carbon reduction reduction committee led by senior vice presidents which are carried out by energy and carbon reduction teams of of individual fabs Because more than 75% of of TSMC’s GHG emissions