Page 156 - TSMC 2024 Annual Report

actively assists suppliers in in in improving their ESH ESH performance A new ESH ESH Technical Forum was introduced to to provide solutions to to common ESH issues (199 participants from 175 suppliers) Furthermore the the Company requested that suppliers suppliers conduct a a a a a a carbon emissions emissions inventory and and and encouraged them to to to reduce these emissions emissions and and and implement measures to to to save energy conserve water and and and reduce waste 7 2 1 Environmental Protection
Climate Change and Energy Management
● Task Force on Climate-related Financial Disclosures (TCFD)
To address the the potential financial risks of climate change on on on operations in in 2018 TSMC adopted the the TCFD’s 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 management targets based on the results identified Management
Structure of TSMC Climate-related Risks and Opportunities
Category
Management
Strategy and Actions
Governance
Strategy Risk Management
Metrics and Targets
Board of Directors periodically reviews climate change related risks and opportunities ● ESG ESG Steering Committee: TSMC’s TSMC’s top organization in in in climate change management Led by TSMC’s TSMC’s Chairman with the the chairperson of the the ESG ESG committee serving as executive
secretary the the committee reviews TSMC’s climate change strategies and and and goals every quarter and and and reports to to the the Board of Directors/nominating corporate governance and and and sustainability committee ● Energy Saving and and Carbon Reduction Committee: The Company’s management organization for taking action on on on on on climate change risk and and opportunity Chaired by the senior
executive
of fab operations every quarter this committee formulates management plans plans reviews implementation status and discusses future plans plans 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 Through communication and and and and coaching enhance suppliers’ climate risk awareness and and and and response capabilities and and and and cooperate with suppliers suppliers to actively develop and and and and implement specific carbon reduction
actions
Use the TCFD framework to establish TSMC’s climate risk identification process
Follow risk identification and ranking
on on on climate change to develop relevant response 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 emissions reduction
targets targets for TSMC and and its suppliers and and regularly review the progress on on on on achieving said targets targets Financial Impact Analysis and and Response of Climate Risks and and Opportunities
Greenhouse Gas (GHG) Emissions Cap and Carbon Tax/Carbon Fee Trend to Net Zero Emission Commitment of Environmental Impact Assessment (EIA) Uncertainty of Development of New Energy Saving Technology
● ● ● ● ● ● ● ● ● Have signed power purchase agreements for renewable energy totaling 4 4 4 4 GW Used 3 610 GWh in in renewable energy and increased the proportion of renewable energy use to 14 1%
Achieved 100% renewable energy used in overseas subsidiaries and offices for the seventh consecutive year
Received carbon credit for fluorinated-GHG and nitrous oxide reduction
offset project about 1 500 thousand tons 100% use of carbon neutral natural gas from Chinese Petroleum Corporation in TSMC Taiwan fabs Purchased approximately 289 thousand tons of carbon credits with around 234 thousand tons used to to offset Scope 1 carbon emissions emissions achieving net-zero emissions emissions Developed energy saving products for the 3nm 2nm and more advanced manufacturing
process
Consumed 19 65 million cubic meter/year of reclaimed water Climate Risks Potential Financial Impact Climate Opportunities
Potential Financial Impact 2024 Actions
Restrictions on on on capacity expansion increases in in operation costs
● Participation in renewable energy plans ● Participation in in carbon trading market
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
Accumulate carbon credits in preparation for future carbon emissions offset Develop low-carbon product services to improve product energy efficiency Satisfy customer 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
Rising electricity consumption in in advanced technology production lines
increases production costs
Construct green buildings
Reduce utility costs
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Received nine green building certifications
(Continued)