Climate Change Risk and Opportunities and Related Climate Issues Response Measures

I. Description of Climate Change

In response to the management risk posed by climate change facing Allied Supreme Corporation (ASC), and to strengthen the climate change governance, the Company has identified the potential risks and opportunities of climate change. By cataloging and pinpointing the risks posed on the operating activities and the opportunities resulting from transformation and other aspects to its operation, the Company has established risk management strategies as the core action of responding to climate change, in hopes of curbing major risks. For example, to manage the risks posed by climate change, the Company has made amendments to the relevant policies and principles to reduce the risks. Furthermore, the Company also estimates the management costs and financial impact of climate change and systematically assesses how climate change impacts its financial position to reduce the risks and make use of business opportunities.

In response to such changes, ASC seeks to substantially reduce product energy consumption and reduce the environmental impact so that customers may be more satisfied with ASC products. To uphold the corporate core values of integrity, equality, accountability and collaboration, the Company also takes the opportunity to assess different aspects of risks and potential opportunities in energy conservation and carbon reduction management, including regulations, physical aspects, etc. The details are as follows:

Item Risk item Description of risk/opportunity Future strategy/ action
Legal aspect The Environmental Protection Agency of Taiwan has promulgated the relevant regulations on “greenhouse gas reduction”, green products from other countries and the certification items. Risk: Specific entities are required to undertake the reporting of greenhouse gas emissions, which may give rise to compliance risk for companies. Risk: Increase in the cost of raw materials/parts and cost of design/inspection shall increase the overall production costs.
Opportunity: In response to the energy tax or carbon tax regulations of different countries, the market demand for renewable energies shall increase in the future, providing companies the opportunities to develop or invest in renewable energies.
ASC has not been subject to the law and regulations in this regard yet, but shall gain an understanding of the legal trend and international regulations as soon as possible to make preparation for the future.
Physical aspect Direct impact of extreme climate, e.g. flood/drought/wind hazard.
Indirect impact of abnormal climate, e.g. increase in energy cost, rapid spread of vectors.
Risk: Interruption of the supply chain, reduction or disruption of production capacities, loss of lives and property damage, reconstruction costs.
Opportunity: Change in rainfall pattern, causing companies to realize the importance of water resource management.
Search for other supply sources of components to avoid disruption in product delivery.
Undertake energy conservation and carbon reduction campaigns, water resource management, and increase the awareness of risk management.
Others Eco-friendly products have become a market trend. Risk: Low-carbon and eco-friendly labeled products have become market mainstream. The use of low-carbon design and supply chain products shall increase the operating costs.
Opportunity: If companies are able to implement energy conservation and carbon reduction, their corporate image may be enhanced.
Actively respond to the relevant stakeholders whose strategies and actions contribute to ASC's energy conservation and carbon reduction management to fulfill corporate social responsibility.

The management policies formulated by the Company in response to climate change and environmental consideration are as follows:

1. Energy conservation and carbon reduction policy
Effective use of energy is one of the keys to corporate sustainable development. Electricity use is the main source of greenhouse gas emission for the Company. Apart from practicing electricity conservation as the main carbon reduction means, the Company also answers different calls for energy conservation measures and purchases green electricity. Currently, the Company has installed solar panels in Plant A1, A2 and A3 that produce 499 KW, 497.35 KW and 613 KW respectively, totaling 1609.35 KW. The measure is able to increase green energy use and reduce the use of non-renewable energy.

2. Greenhouse gas policy
Due to greenhouse gas emissions, the global climate is deteriorating. The Company has taken on reviewing relevant processes concerning greenhouse gas emission, promoting greening and tree planting in factory areas, using LED lights and other measures. Meanwhile, the Company also encourages all its employees to implement energy conservation and carbon reduction principle to alleviate global warming issues.

3. Water conservation
In the face of global environmental changes, apart from energy conservation and carbon reduction, increasing scarcity of water resources is another important environmental impact facing humans. As a result, to protect water resources, the Company has established plans for conserving water resources. By improving the production process, water conservation, recycling and reusing water etc, the Company actively seeks to reduce water waste in the manufacturing process.

4. Green procurement
To answer the government's call in promoting green procurement, the procurement department requires the suppliers to have their materials and production process meeting environmental protection standards. Furthermore, it also selects products and raw materials that fulfill green production. The Company hopes to reduce environmental impact by green procurement, thus creating a balanced ecosystem conducive for co-existence and mutual prosperity.


II. Relevant energy conservation and environmental protection measures

1.Set the temperature of the air conditioning at 26℃ to 28℃.
2.Replace office lighting with LED lights.
3.Switch off lights not in use. During lunch breaks, switch off all office lighting.
4.Encourage colleagues to bring their own utensils for lunch to reduce the use of disposable utensils.
5.For internal documents, use old photocopy paper to reduce paper consumption.
6.Unplug computers after work. Check for unswitched-off lights or air conditioning. During day-off, apart from essential electrical appliances, unplug all other non-essential ones.
7.Forbid smoking in all offices and buildings to reduce air pollution.
8.Reduce the number of waste bins to decrease garbage quantity. Waste sorting is made compulsory to strengthen the recycling rate.


III. Five-year reduction goals

1. The growth of average electricity use shall not exceed 5%.
2. The average water conservation shall reach 5%.
3. The growth of average greenhouse gas emissions shall not exceed 6%.

IIII. Section Four: Actual Implementation Results

2022 Ultra-Pure Water Emission Recycling and Utilization:
In 2022, our company established a new SCADA monitoring module. Originally, ultra-pure water used for cleaning was directly discharged. Currently, a recirculation system has been added to enable the recycling and reuse of ultra-pure water. From 2022 to 2023, a total of 11,698 tons of water usage was saved, with an average monthly recovery of 975 tons.

2023 Addition of Solar Panels:
In 2023, our company installed new solar panels in the factory. The solar photovoltaic project covers an area of approximately 1,500 square meters, with a solar photovoltaic power generation capacity of 252.84KW (the highest power generation capacity per hour).