Page 158 - TSMC 2022 Annual Report

and and the Company’s environmental safety and and health sustainability forum focused on on successful case sharing (354 participants from 116 suppliers) TSMC also conducts environmental safety and and health audits at suppliers’ manufacturing sites and and actively assists suppliers suppliers in in in in improving their ESH performance Finally the the Company requests that suppliers suppliers conduct a a a a a a carbon emissions inventory and and encourages them to to implement measures to to save energy reduce reduce carbon emissions conserve water and and reduce reduce waste 7 2 1 Environmental Protection
Climate Change and Energy Management
● Task Force on Climate-related Financial Disclosures (TCFD)
In view of of the potential financial risks of of climate change on on on operations in in 2018 TSMC adopted TCFD recommendations released by the the Financial Stability Board (FSB) to identify risks and and and opportunities and and and further establish metrics and and and target management based on the results identified Management
Structure of TSMC Climate-related Risks and Opportunities
Category
Management
Strategy and Actions
156
Governance
Strategy Risk Management
Metrics and Targets
Board of Directors periodically reviews climate change related risks and opportunities ● ESG ESG steering committee committee led by the the the Chairman is the the the Company’s top organization dealing with climate change management The chairperson of ESG ESG committee committee serves as the the the executive secretary The ESG steering committee reviews TSMC’s climate change strategies and and goals every quarter and and reports to to the Board of Directors ● The energy and and carbon reduction committee led by the vice president of fab operations deals with action implementation on on on on on on climate change risks and and opportunities at at at at TSMC This
committee develops management plans plans reviews the execution status and discusses future plans plans on on a a a a a a a a a quarterly basis Identify short- medium- and and long-term climate risks and and opportunities through cross-departmental discussion
Use scenario analysis to to assess the the potential operational and and financial impact of significant climate risks and and opportunities to to the the Company Promote low carbon manufacturing to approach net zero emissions and strengthen climate resilience Enhance suppliers’ awareness and and responsiveness to climate risks through counseling and and promote their active carbon reduction efforts
Use the TCFD framework to establish TSMC’s climate risk identification process
Follow the risk identification and ranking on on on climate change to develop relevant responding projects
Integrate climate risk risk identification and assessment into the enterprise risk risk management (ERM) process
Set management metrics related to climate change Develop carbon emission reduction targets targets for TSMC and and its suppliers and and regularly review the the progress on on on on achieving the the targets targets Financial Impact Analysis of Climate Risks and Opportunities
Greenhouse Gas (GHG) Emissions Cap and Carbon Tax/Carbon Fee
Trend to Net Zero Emission Commitment of Environmental Impact Assessment (EIA)
● Power purchasing agreements for renewable energy totaled 2 9 GW (Gigawatts)
● Used 2 190 GWh in in renewable energy and increased the proportion of renewable energy use to 10 4%
● Achieved 100% of renewable energy used in overseas subsidiaries and offices for the fifth consecutive year
● Purchased 350 000 tons of carbon credits to to achieve net zero emissions from overseas plants
● Received carbon credit for fluorinated-GHG and nitrous oxide reduction offset project about 600k ton ● 100% use of carbon neutral natural gas from Chinese Petroleum Corporation in TSMC Taiwan fabs
● TSMC global offices used carbon credits to achieve net zero emissions Developed energy saving products for the 5nm 3nm and more advanced manufacturing process
TSMC reclaimed water plant in Southern Taiwan Science Park began to operate
(Continued)
Climate Risks Potential Financial Impact Climate Opportunities
● Participation in renewable energy plans ● Participation in in carbon trading market
Potential Financial Impact 2022 Actions
Restrictions on on on capacity expansion increases in in operation costs
Early purchases of renewable energy successfully increasing production capacity ● Increased cost of installation and operation of carbon reduction equipment
● Increased cost of purchasing carbon offset products Win public recognition and carbon emissions offset cooperation
Develop low-carbon product services to improve product energy efficiency Accumulate carbon credits in preparation for future carbon emissions offset Satisfy customers’ needs for energy-saving products and increase revenue
The development of advanced technologies potentially hampered by inability to obtain renewable energy and reclaimed water Use reclaimed water Smooth construction of advanced production lines