The impacts of global climate change on businesses are becoming increasingly significant, and operational transformation has become a major challenge for companies. Due to the uncertainties associated with climate change, TIPC needs to consider the variations in operational behaviors across different ports and develop corresponding climate change adaptation strategies. By gradually implementing these adaptation measures, TIPC can progress towards achieving sustainable development.

Since 2021, the Company has been gradually establishing an effective climate governance framework by referring to the core four elements of the Task Force on Climate-related Financial Disclosures (TCFD) published by the Financial Stability Board. We integrate internal and external information and conduct progressive assessments of climate-related risks and opportunities. We are also planning to incorporate TCFD into our corporate governance initiatives. This allows us to assess the financial impacts of climate change-related risks that our operations may face and makes it an integral part of our overall ESG management capabilities and performance.

Governance

In 2023, the Company adjusted its sustainable governance framework by establishing the Sustainable Development Strategy Committee and the Sustainable Development Promotion Committee. The various functional teams within the Sustainable Development Promotion Committee develop goals and action plans for relevant important issues and submit them to the Sustainable Development Promotion Committee for drafting. The Sustainable Development Promotion Committee reports to the Sustainable Development Strategy Committee and the Board of Directors on a regular or ad hoc basis, depending on the progress of the initiatives.

Strategy

In 2023, OSHC took the lead and work with external experts to identify the climate-related entities and transition risks of the ports under its management based on the corporate’s business development needs and the external environment. From 2024 onwards, the working groups of Sustainable Development Executive Committee will identify the climate risks and opportunities. Besides, the groups will review and take into account the existing and emerging climate change regulations (e.g., emission control) and other relevant factors, so as to decide whether to re-identify the relevant climate risks and opportunities. Risk monitoring and assessment are conducted by each authorized unit to plan and implement the respective internal control system in corporate governance workflow.

Risk Management

The growing scale and frequency of extreme climate events, and the process of transformation to low-carbon are threatening the operation and safety of ports. Therefore, TIPC has taken into account climate change factors in its risk management, in order to manage risks encountered during port operations through risk assessment and analysis, adoption of mitigation strategies, tracking and verification of improvements, and the establishment of indicators and targets to measure the effectiveness of improvements on a regular basis.

The future plan involves the Sustainable Development Promotion Committee and its respective functional teams, along with external experts, defining short-term (1-3 years), medium-term (4-10 years), and long-term (over 10 years) timeframes, and ranking the materiality of climate-related risks and opportunities, followed by a scenario-based quantitative assessment of their significant impacts on the corporate’s operation and finance. Hence, resilience adaptation measures will be planned to address physical risks, while low-carbon transformation goals and measures will be determined in response to transition risks. The subsequent action plans will be developed and carried out by respective functional groups of Sustainable Development Executive Committee.

Operational and Financial Impacts

TIPC, under the guidance of Occupational Safety and Health Division and in collaboration with external experts, identified climate-related entities and transition risks in every port based on the business development needs and external environment, and have discussed or assessed the impacts of the identified climate change risks and opportunities on the corporate’s operation or finance, and therefore formulated the action plans to adapt to the related risks. The financial impacts of climate change identified in 2023 are as follows：

Transition Risks

Physical Risk

Schematic diagram of climate change heavy rainfall and flooding hazard assessment

碼頭、防波堤暴露在強風下因船隻撞擊的實體損壞與服務功能喪失之風險評估示意圖

Mitigation Measures and Goals

TIPC has proposed targets and metrics for net-zero emission, prevention and countermeasures against extreme climate events, and renewable energy. We look forward to minimizing the potential impacts of climate risk, gradually implementing the relevant strategies of carbon and emission reduction, and progressing towards the goal of“Reduce greenhouse gases by 50% by 2030, and acieve net-zero emission by 2050”in Scope 1 and 2. The risks and opportunities in 2023 are summarized in the table below：

1. Transition Risks

Market Risk

• In response to market demand for carbon reduction and changes in operational needs.
• Mitigation Measures/Future Plans：
  Enhance port sustainability awareness and organized 36 promotional activities (e.g., briefing sessions, environmental education, conferences, etc.) on sustainability issues (carbon reduction, environmental protection) in 2023, reaching more than 900 people.
• Metrics and Targets :
  Organize promotional activities related to sustainability issues (carbon reduction and environmental protection) with number of participants as an indicator, in order to encourage stakeholders to jointly promote sustainable development and boost the positive image of the corporate.

Policy and Regulatory Risk

• Risk Description：
  To cater for requirements of “Climate Change Response Act”
• Mitigation Measures/Future Plans：
  • Performed greenhouse gas (GHG) inventory-related operations in 2021 according to ISO14064:2018 standard, and obtain third-party assurance statement for headquarter and branches (ports) in 2023.
  • In 2023, Sustainable Development Executive Committee proposed the target of “Reduce greenhouse gases by 50% by 2030, and achieve net-zero emission by 2050” for Scope 1 and 2, with 2020 as the baseline, and with reference to SBTi's carbon reduction target of 4.2% per annum. TIPC also began to procure green power in 2023, with a wheeling capacity of approximately 150,000 kWh and a carbon reduction of approximately 74 metric tons of CO2e*. It is expected that in 2024, some of the renewable energy power generation facilities at port area will begin to supply electricity at the same time, with an annual generation capacity of about 2,293,000 kWh and carbon reduction of 1,142 metric tons CO2e*.
  • The corporate’s 2023 GHG Preliminary Inventory is being initiated in January 2024 and has not yet been verified by third party.
• Metrics and Targets :
  • The operation and management of the port area integrate the awareness of sustainable carbon reduction. The investment regulations require operators to commit to using a certain percentage of renewable energy or electrical machinery, and major electricity users to commit to a specific carbon reduction schedule and percentage, so as to mutually achieve the goal of carbon reduction in the port area.
  • In 2023, Sustainable Development Executive Committee proposed the target of “Reduce greenhouse gases by 50% by 2030 for Scope 1 and 2, and achieve net-zero emission by 2050”.

2. Physical Risk

Acute Risk

• Risk Description：
  Increased severity of extreme weather conditions such as typhoons and flood
• Mitigation Measures/Future Plans：​​​​​
  • Reinforce implementation of disaster relief:
    1. Introduction of emerging smart applications for disaster monitoring and detection and observation. For example, Smart Port has launched the application of oceanic- meteorological observation and 3D mapping systems in the monitoring and observation of commercial ports.
    2. Enhance disaster-related fundamental infrastructures and expand backup capacity, e.g. in line with the Federal Government's policy, signing support agreements with relevant public or private organizations around the port, such as military, police, constitutional affairs, fire services, medical and other units.
  • Ongoing preparation activities:
    1. Emerging digital technologies are systematically introduced into disaster prevention and relief preparation. For example, TIPC has set up a dynamic monitoring center in the port area and developed its system, which is expected to be implemented in disaster prevention and relief preparations in future.
    2. Establish international cooperation mechanisms and channels to prevent emerging biological pathogens. For example, TIPC has long cooperated with the “IHR Designated Port Core Capacity Development and Maintenance Program” by Taiwan Centers for Disease Control of Ministry of Health and Welfare, and has equipped the port with core capacity and ability to deal with public health emergencies, so as to reduce the risk of different disasters. Besides, TIPC has continued to maintain its ports through the maintenance and preservation program, which provides annual self-assessment and the assessment by international experts every five years to secure health and safety of nation and the sustainable operation.
  • TIPC has formulated the “Disaster Prevention and Response Operation Plan” to enhance disaster prevention, emergency response, and recovery, as well as to take into account changes in the disaster environment and social structure, climate change, and epidemics, in order to effectively carry out disaster prevention and response at different phases, ranging from mitigation , prevention, and response, to reconstruction, therefore minimizing the incidence and loss of lives and property.
     
• Metrics and Targets :
  • Assess physical risks of climate changes (strong gusts, heavy rainfalls and flash floods) and propose resilience adaptation approaches in 2023.
  • Through the construction of a dynamic monitoring center in the port area, the goal of using digital transformation technology to assist in disaster command and contingency decision making is accomplished, with the aim of early disaster response alert and action, and avoiding recurrence of disasters.
  • Ongoing review of the disaster prevention and relief capacity of commercial ports. The shortfalls have accelerated the signing of support agreement by public or private organizations around commercial ports, and continued to cooperate with the “IHR Designated Port Core Capacity Development and Maintenance Program” by Taiwan Centers for Disease Control of Ministry of Health and Welfare in reviewing and collaborating internationally in emerging biological pathogens for emergency response, in order to bolster the disaster-related infrastructures and expand the backup capacity.

3. 機會

能源來源

• Risk Description :
  因應再生能源相關法規，需建置綠電自發自用。
• Mitigation Measures/Future Plans：
  為符合能源局用電大戶及高雄市綠建築自治條例之裝置再生能源之規定， 透過能源管理系統整合分散式能源，增加電力資源調度彈性，提升能源使用效益，降低台電契約容量。
• Metrics and Targets :
  • 穩定供電促進港區發展，配合商港未來永續之發展，本案推動將以提供「安全、穩定、可靠」之能源供給及管理為目標。 
  • 若電網發生事故，透過能源管理系統調度分散式能源（再生能源），提升港區供電穩定度，穩定維持港埠必要營運。