Climate Action-ESG Sustainability, Taiwan International Ports Corporation, Ltd.

2024Performance Highlights (E)

Assessed climate-related physical and transition risks in accordance with the Task Force on Climate-related Financial Disclosures (TCFD) framework. Completed a qualitative analysis of physical risks, with the primary hazards identified as tidal surges, strong winds, flooding, high temperatures, and dense fog. Protection targets include piers, breakwaters, substations, Vessel Traffic Service (VTS) centers, data centers, large-scale cargo handling equipment, containers, access roads, vessel entry and exit operations, and cargo handling activities.
Kaohsiung Port as the subject of quantitative assessment: Quantitative analysis of four major hazards, including strong winds, flooding, tidal surges, and high temperatures, has been conducted, and response strategies have been proposed. TIPC shall review the implementation status of the response strategies.
Transition risks: Risks mainly stem from policy and regulatory risks. By developing renewable energy, electrifying public transport vehicles, replacing fuel-powered equipment, upgrading energy-efficient facilities, and establishing green low-carbon ports, we can seize transition opportunities and achieve carbon reduction of 2,974.25 metric tons of CO₂e.[Note]

Note: Based on the 2024 electricity emission factor (0.474 kg CO₂e/kWh).

A cumulative total of 13 climate-proofing wharves have been constructed in the port cluster, and one ecological inspection has been performed for the “New Construction Project of Access Road to the Qilaibi Coastal Scenic Corridor at Hualien Port”.
A total of three training sessions on engineering ecological audits were conducted. For details, please refer to TIPC Global Information Network.

Comply with the SDGs

SDG9【SDG 9.1】
SDG13【SDG 13.1；SDG 13.2；SDG 13.3】

Management Policy

Covered material topics

Climate change risks and opportunities

Policy

Climate Goals and Indicator Management【Net-Zero Carbon Reduction Policy Goals】
Climate Goals and Indicator Management【Climate Risk Mitigation Measures】

Management Evaluation System

Risk Management and Financial Impact【Risk Flowchart for Climate-Related Risks and Opportunities】
Climate Goals and Indicator Management【Climate Risk Mitigation Measures】

Climate Governance and Strategy

Governance of Climate-Related Risks and Opportunities

In response to the continuous revision of climate change-related regulations and the growing threat of extreme weather, the Port Authority has adjusted its sustainable governance framework in 2023 to promptly address climate challenges from all sides and explore potential climate-related opportunities. It has established the Sustainable Development Strategy Committee and the Sustainable Development Promotion Committee. The functional teams within the Sustainable Development Promotion Committee develop goals and execution plans for major issues, which are then submitted to the Sustainable Development Promotion Committee for formulation and the Sustainable Development Strategy Committee for review. The Sustainable Development Promotion Committee reports annually to the Sustainable Development Strategy Committee and the Board of Directors. For details on the sustainable governance framework, please refer to 2024 ESG Report Section 1.1.2 Sustainable Governance Framework.

Identification of Climate-Related Risks and Opportunities

The working groups of Sustainable Development Promotion Committee, together with the external experts, shall define the corresponding short-term (1-3 years), medium-term (4-10 years), and long-term (10 years or more) time frames for climate risks and opportunities, and establish a significance ranking process. They shall then adopt a scenario-based quantitative approach to assess the significant impacts on the company's operations and finances. To this end, resilience adaptation measures are planned under physical risks, while low-carbon transformation goals and measures are set to address transition risks. The subsequent implementation plans are planned and executed by the functional groups of Sustainable Development Promotion Committee.

Risk/Opportunity type	Risk/Opportunity description	Possible duration of impact
Risk/Opportunity type	Risk/Opportunity description	Short term	medium-term	long-term
Physical Risk	Increased severity of extreme weather conditions such as typhoons and floods (acute).	V
Physical Risk	Prolonged high temperatures cause extended heat waves (chronic)		V	V
Transition Risk	Enforcement of greenhouse gas emission control and carbon fees under ‘Climate Change Response Act’ (Policy and Regulations)		V	V
	Addressing market demands for carbon emission reduction and changes in operational requirements (Market)			V
	Negative impression among operators and travelers on TIPC (Reputation)			V
	Low-carbon technology R&D and application (Technology)			V
Opportunity	Active promotion of low-carbon port services to attract environmentally conscious shipping companies or cruise operators (Products and Services)			V
	Introduction of automation and electrification of equipment, circular economy, etc. (Efficiency of Resource Utilization)			V
	Switch to low-carbon alternative energy sources (Energy Sources)			V

Risk/Opportunity description	Assessment of specific climate risks and opportunities
Increased severity of extreme weather conditions such as typhoons and floods (acute)	Physical damage and loss of service functionality of piers and breakwaters exposed to strong wave impacts. Physical damage and loss of service functionality of piers and breakwaters exposed to strong winds due to vessel collisions. Operational disruption due to exposure to strong wind. Operational disruption due to exposure to tidal surges. Physical damage and functional loss of large-scale cargo handling equipment due to exposure to strong winds. Physical damage and functional loss of port operation-related infrastructure and access roads due to storm surge and flooding. Operational disruptions during vessel entry/exit and cargo handling operations due to dense fog.
Prolonged high temperatures cause extended heat waves (chronic)	Disruption of cargo handling operations under high temperatures.
Enforcement of greenhouse gas emission control and carbon fees under ‘Climate Change Response Act’ (Policy and Regulations)	Climate Change Response Act’ regulates carbon reduction targets and imposes penalties for non-compliance. A comprehensive review of the SDGs will soon be conducted in 2025. During the deliberation process of Climate Change Response Act, members raised the request to include civil proceedings in the law. Climate Change Response Act’ enacts a carbon fees scheme that will affect the mode of operation.
Negative impression among operators and travelers on TIPC (Reputation)	Due to market demands for carbon emission reduction and changes in operational requirements, operators have specific requirements for the equipment specifications needed for port construction. Change in travelers’ needs and demand for port facilities and services. Price growth of raw materials.
Negative impression among operators and travelers on TIPC (Reputation)	Failure to meet the carbon reduction targets creates a negative impression of TIPC among industries and travelers. Failure to practise carbon reduction by port operators negatively impacts the community’s perception towards ports. Employees do not agree with the company's efforts to promote transformation, leading to resignations and a shortage of manpower.
Low-carbon technology R&D and application (Technology)	The growing demand for electricity and green energy policy lead to the risk of power shortages, which may affect the power stability of corporate and business operations. High power consumption and carbon emissions resulting from the failure to replace outdated equipment timely affect the efficiency of energy use. Costs of R&D or application of technologies required for low-carbon transformation.
Active promotion of low-carbon port services to attract environmentally conscious shipping companies or cruise operators (Products and Services)	Complying with national policies and the increasing public awareness of low-carbon living will attract businesses with low-carbon development potential to set up operations here. Low-carbon port services will attract environment-conscious shipping companies and cruise lines to develop new routes to the port. Shaping an image of international sustainability: Participating in relevant initiatives through carbon reduction efforts will enhance the port's low-carbon image abroad.
Introduction of automation and electrification of equipment, circular economy, etc. (Efficiency of Resource Utilization)	Reducing port operating costs through energy conversion, automation and electrification of equipment, and the introduction of a circular economy.
Switch to low-carbon alternative energy sources (Energy Sources)	TIPC and local businesses are experiencing increased demand for renewable energy, with ongoing technological breakthroughs driving the market's rapid growth.

Risk Management and Financial Impact

Risk Flowchart for Climate-Related Risks and Opportunities

TIPC implements risk management and internal control systems in accordance with the “Operating Principles for Risk Management and Crisis Handling of the Executive Yuan and its Affiliated Agencies, ”the “Handbook for Risk Management and Crisis Handling of the Executive Yuan and Affiliated Agencies ”and the “Highlights of the Government Internal Control and Surveillance Operations.” Each department sets operational objectives based on its responsibilities and business scope, assesses the importance and potential risks of its business operations, conducts risk identification and evaluation, analyze the significance and likelihood of risks, and establish various risk assessment criteria and internal control procedures. Please refer to Section 2.2.1 for details on the “Risk Management and Internal Control System.”

Financial Impact of Climate-Related Risks and Opportunities

Risk/Opportunity description	Potential financial impact	Risk/Opportunity description	Potential financial impact
Increased severity of extreme weather conditions such as typhoons and floods (acute)	Operating costs (increase)	Low-carbon technology R&D and application (Technology)	R&D costs (increase)
Prolonged high temperatures cause extended heat waves (chronic)	Operating costs (increase)	Active promotion of low-carbon port services to attract environmentally conscious shipping companies or cruise operators (Products and Services)	Operating revenue (increase)
Enforcement of greenhouse gas emission control and carbon fees under ‘Climate Change Response Act’ (Policy and Regulations)	Operating costs (under assessment)	Introduction of automation and electrification of equipment, circular economy, etc. (Efficiency of Resource Utilization)	Fixed assets (increase) Operating costs (increase/decrease)
Addressing market demands for carbon emission reduction and changes in operational requirements (Market)	Operating revenue (under assessment) Fixed assets (increase) Operating costs (increase)	Switch to low-carbon alternative energy sources (Energy Sources)	Fixed assets (increase) Operating costs (increase/decrease) Profit (increase)
Negative impression among operators and travelers on TIPC (Reputation)	Operating revenue (decrease)

Climate Goals and Indicator Management

Net Zero Carbon Reduction Policy Goals

In 2023, TIPC proposed Scopes 1 and 2 targets of “Reduce greenhouse gases by 50% by 2030, and acieve net-zero emission by 2050” to the Sustainable Development Executive Committee, using 2020 as the base year and setting an annual carbon reduction target of 4.2% in reference to the Science Based Targets initiative (SBTi). In 2024, TIPC self-generated 2,356.336 MWh and purchased 110.288 MWh of green power, resulting in a total carbon reduction of 1,169.18 metric tons CO₂e [Note].

Note: Based on the 2024 electricity emission factor (0.474 kg CO₂e/kWh).

Each operational unit shall establish climate-related targets/indicators based on operational feasibility and regulatory requirements:
Indicator	(1) Conducted greenhouse gas inventory-related operations in 2021 in accordance with ISO 14064:2018, and obtained third-party verification statements for the headquarters and all branches (ports) in 2022. (2) Assessed entity risks related to climate change (strong winds, heavy rain and flooding, and storm surges) in 2023, and proposed a resilient adaptation roadmap.
Target	(1) Incorporate sustainable carbon reduction awareness into port operation management. Recruitment regulations require operators to commit to using a certain proportion of renewable energy or electric machinery and equipment. Heavy electricity users must make specific commitments regarding carbon reduction timelines and proportions, working together to achieve port-wide carbon reduction targets. (2) In 2023, Sustainable Development Executive Committee proposed Scopes 1 and 2 targets of ‘Reduce greenhouse gases by 50% by 2030, and acieve net-zero emission by 2050’.

Each operational unit shall establish climate-related targets/indicators based on operational feasibility and regulatory requirements:

Indicator

(1) Conducted greenhouse gas inventory-related operations in 2021 in accordance with ISO 14064:2018, and obtained third-party verification statements for the headquarters and all branches (ports) in 2022.

(2) Assessed entity risks related to climate change (strong winds, heavy rain and flooding, and storm surges) in 2023, and proposed a resilient adaptation roadmap.

Target

(1) Incorporate sustainable carbon reduction awareness into port operation management. Recruitment regulations require operators to commit to using a certain proportion of renewable energy or electric machinery and equipment. Heavy electricity users must make specific commitments regarding carbon reduction timelines and proportions, working together to achieve port-wide carbon reduction targets.

(2) In 2023, Sustainable Development Executive Committee proposed Scopes 1 and 2 targets of ‘Reduce greenhouse gases by 50% by 2030, and acieve net-zero emission by 2050’.

Our company completed a preliminary inventory of greenhouse gas emissions for 2023 in 2024, and plans to perform a third-party verification in 2025 to acquire an ISO 14064-1 statement and explain the corresponding GHG protocol specifications.

Climate Risk Adaptation Measures

Due to the unpredictability of disasters and to improve the disaster prevention and response system, TIPC has formulated a ‘Disaster Prevention and Response Operation Plan’. For detailed plan measures, please refer to 2024 ESG Report 5.2 Port Operation Safety Management.

In order to fulfill its financial management responsibilities and address operational management risks, TIPC transfers property loss and operational liability risks through property insurance. TIPC should complete the centralized insurance bidding process for the following year before the expiration of the current insurance term (December 31, 2024) to avoid an insurance gap, thereby ensuring adequate property protection and reducing operational liability risks.

Insurance type
Commercial fire insurance	Operational equipment overview	Comprehensive artwork	Vessel	Marine pollution liability
Liability of shipping operators	Passenger injury	Passenger accident	Responsibility for operating remote-controlled drones	Public liability for premises
Note: TIPC's 2025 property insurance was successfully bid on December 31, 2024, with the insurance period from January 1, 2025, to December 31, 2025, and the insurance premium is approximately NT$44.35 million. Complete the property insurance procurement for the following year before the end of the insurance year.

Climate Risk Adaptation Measures

TIPC must take into account carbon reduction and sustainability targets when assessing transition risks, ensuring these goals can be achieved as planned. Through annual rolling reviews and adjustments, TIPC must collaborate with industry stakeholders to address transition risks. Given that their own carbon emissions are relatively low compared to those of industry stakeholders and account for only a small proportion of total port emissions, TIPC can achieve carbon reduction targets by promoting energy conservation, electrification, low-carbon fuels, and the development or purchase of renewable energy. While there are opportunities and resources to implement these measures, from the perspective of the port as a whole, it is essential to avoid situations where the lack of carbon reduction efforts or high-pollution behaviors of operators negatively impact the company’s reputation among general public and stakeholders. The specific measures for climate risk management, energy conservation, carbon reduction, and environmental performance of TIPC in 2024 are detailed in 2024 ESG Report Chapter 4, ‘Transition to Low-Carbon and Green Port Group'.