Our Focuses｜Climate Change Management｜Climate Risk Management
Climate Risk Management
Risk Management Framework
Winbond is a manufacturer of semi-conductors. Natural disasters, accidents, man-made disasters, changes in the international political and economic situation, the introduction of new technologies by competitors, and changes in policies and regulations can potentially result in severe impacts on operations and finance. In light of this fact, Winbond established the Risk Management Committee under the Board of Directors to implement risk management through the Committee’s subdivisions or responsible units in accordance with their scope of operations. Aside from formulating a sound set of internal regulations and operating procedures, the Committee is also responsible for developing comprehensive plans and procedures for preliminary assessments, hedging, and loss prevention and crisis management, and regularly reporting to its oversight and governing bodies.
Identify significant risk items, assessment methods, and risk appetite for the annual operational plans and goals of each unit, and obtain approval from the supervisor for the annual budget.
Calculate the risk value for identified significant risks, and in addition to the annual estimation, conduct quarterly revisions of the risk value. Any significant changes should be reported in the quarterly reports.
Each unit assesses significant risk items according to the appropriate operational frequency and compares them with the approved risk appetite, reporting to the management unit as needed.
When the actual situation exceeds the approved risk appetite, each unit immediately proposes risk response recommendations. Upon approval, the appropriate responses are implemented in accordance with risk management policies, procedures, and hierarchical responsibility criteria.
Supervision and Review
Risk management-related requirements are incorporated into the audit system in accordance with risk management policies and procedures for tracking, enabling the establishment of control points, self-assessment, and audit verification operations.
Winbond has incorporated climate change risks into its long-term operations management. To understand the impacts of climate change risks on the environment and operations, Winbond has introduced the TCFD, conducts annual evaluations, discloses climate risks and opportunities as well as their financial impacts (both qualitative and quantitative), and proposes review and management strategies based on international regulatory trends and market development observations since 2021. Winbond will continue to monitor risks and impacts resulting from climate change, strengthen its operational capabilities, promote carbon reduction projects, increase energy efficiency, and firmly step towards sustainable development.
Procedures for Identifying Climate Change Risks and Opportunities
In 2022, Winbond established the TCFD with 40-plus members, over 60% of whom are at the department executive level. Members are divided into teams according to the nature of their job. Each team discusses climate change issues with relevance to their area of operations. Over the course of four workshops and educational training, the TCFD has identified four major climate risks and seven minor climate risks, as well as five major climate opportunities and four minor climate opportunities.
Climate Risk and Opportunity Matrix
Climate Risk Matrix
Climate Opportunity Matrix
Impacts of Major Climate Change and Responses
Major Climate Risks
(－) represents a negative impact, (＋) represents a positive impact
|Type||Cimate Risk||Time of Occurrence||Potential Financial or Operational Impacts||Response Measures|
|Transition Risks||Demand for renewable energy||Medium-term|
|Carbon tax/ carbon fee||Medium-term|
|Unstable electricity supply||Long-term|
|Physical Risks||Extreme rainfall and drought||Medium-term|
Major Climate Opportunities
|Climate Opportunity||Time Frame||Potential Financial or Operational Impacts||Response Measures|
|Changes in customer behavior||Medium-term|
|Participation in renewable energy projects||Short-term|
|Process optimization and R&D innovation||Short-term|
|Development of low-carbon products and services||Short-term|
|Improvements in energy efficiency||Short-term|