Climate change is now a well-known word worldwide. Some regions have even been subjected to the devastating power and threat of climate change already. In 2016, the Paris Agreement established the common international goal to keep the global temperature increase within 2°C or less compared with levels before industrialization. In its 2018 report, the United Nations Intergovernmental Panel on Climate Change (IPCC) stated that climate heating up of less than 1.5°C may slow down the impacts of rising sea levels, floods, droughts, and famine on hundreds of millions of people. To reach the 1.5°C goal, global carbon emissions must be brought down to zero by 2050. This task cannot be accomplished through intergovernmental agreements and efforts alone, but is an issue that all companies, NGOs, societies, and even individuals must contribute, as we all rely on planet Earth for our survival.

GIGABYTE recognizes and agrees with this position so we have made the mitigation as well as adaptation to climate change an element of sustainable development. Action is being taken in GHG management and everyday operations to aggressively reduce our environmental impact and fulfill our corporate social responsibility.

Response Strategies to Climate Change
In response to the risks and opportunities posed by climate change, internal education on climate change risks and management is being conducted by GIGABYTE through the Green Sustainable Development Committee and the Green Action Plan. We are also engaged in climate change management through 5 key strategies.



Greenhouse Gas Reduction Target and Outcome
The goal of the 1st stage of greenhouse gas control in Taiwan has now already been approved, and the 13th Five-Year Plan for controlling greenhouse gas emission in China has also become a national policy that the local governments need to cooperate with. Moreover, countries around the world also have policies correspondent to the Paris Agreement. These all show that individual countries’ policies and laws related to greenhouse gas control are gradually completed. The development of the greenhouse gas emission control and potential risk requirement will affect the market opportunities and capacity layout of GIGABYTE’s locations. Although GIGABYTE is not directly controlled by relative laws and policies currently, we can expect the potential influence of the relative control in the future. As a member of the manufacturing industry, GIGABYTE needs to carry the responsibilities and obligations of reduction.
To respond to the trend of GHG managing requirements and potential risks, GIGABYTE has conducted greenhouse gas inventory annually since 2010 in accordance with ISO 14064-1. Also, we set up a long-term carbon reduction target, and enhance the employee involvement and build up internal consensus on carbon reduction through internal verifying procedures and reviewing reduction performance periodically.

In recent years, global attention on the extent of business ambition to cut emissions has kept rising, and various related initiatives and standards have been developed by creditable parties. In view of this, GIGABYTE decided to advance the target year of our emission reduction target from 2030 to 2025. Thus, the new target is cutting 50% of emissions from the 2009 level by 2025. GIGABYTE will make our all effort to achieving the more ambitious target!
The main source of GIGABYTE’s greenhouse gas emission is Scope 2 indirect emission. The gross greenhouse gas emission in 2018 (Scope 1 and Scope 2) was 27,663.92 tons CO2e. However, due to the expansion of operating scale and growth in product demand, the gross greenhouse emission of 2019 increased to 28,458.54 tons CO2e, reducing by 41.87% compared to the base year. GIGABYTE will continue to promote emission reduction plans, review the performance, and endeavor to reach the 2025 target.

Identification of Climate-related Risks and Opportunities
To effectively control the developing trend of climate change issues, we have designated personnel to focus on issues related to international climate change management, such as the laws and regulations in different countries, and corporate management trend. Moreover, through the framework suggested by the Task Force on Climate-related Financial Disclosures (TCFD), we examine the frequency and intensity of potential climate-related risks and their derivative opportunities that are affecting or will affect GIGABYTE. The meetings are then held regularly to control the issues with higher climate-related risks in order to plan timely correspondent strategies and respond to international consensus. Further details on these climate issues and opportunities are given in the 2019 GIGABYTE Corporate Responsibility Report.

Risk Category Risk Description Potential Financial Impact Management Measure Derived Opportunity
Transition Risk Policy and Legal The national GHG emission standard in Taiwan expands its controlling scope. ​Increased operating costs, such as compliance costs ■ Introduce the GHG emission management system.
■ Invest in climate-related research and management manpower.
■ All business locations implement energy conservation solutions and replace old equipment to improve process efficiency.		 ■ Join the carbon trade mechanism to increase additional income.
■ Improve process and equipment energy efficiency to lower the operating costs.
■ Cross into the low-carbon technology services or product market to enhance the brand competitiveness.
■ Shift into green product services to fit in the consumer preferences.
■ Apply renewable energy to improve brand favorability.
In response to the air pollution and renewable energy regulations promulgated by the Taiwan government, the Taipower may increase electricity charges in the future. ​Increased production costs with the rise of energy and waste disposal rates
The Chinese government has increased the efforts of environmental management, such as expanding environmental protection tax regulation items and tightening environmental protection policies in the 14th Five-Year Plan, which will bring compliance risks to the bases located in China. ​Increased operating costs, such as compliance costs
In response to the 2°C target consensus, the international market will be increasingly strict on the product's carbon footprint disclosure standards. Nearly 96% of GIGABYTE's products are exported, which means we may be affected by the disclosure requirements of environmental impacts of market products in various countries. Decreased revenue due to a decline in demand for products and services ■ Implement energy conservation policies in all business locations and invest in the research and development of low-energy consumption and low-carbon products.
■ Strengthen supply chain management and reduce the environmental impacts of the overall value chain.
Reputation With the rise of consumer awareness for climate change, consumer preferences may be changed. A decline in demand for products and services due to changes in consumer preferences Calculate and disclose environmental data including product carbon footpri
Market With the increasing awareness of corporate climate change, the carbon reduction requirements of the supply chain will become increasingly strict. The corporates failing to meet the standards may face a loss of orders. ​Changes in customer behavior lead to a decline in demand for products and services ■ Invest in R&D to create products that meet market needs.
■ Set energy-saving targets, plan green projects and track results.
Technology Renewable energy and low-emission related environmental protection technologies must be introduced in response to the laws and regulations. The costs of applying new processes or new business models
Physical Risk Acute The frequency and severity of extreme weather events increase. In particular, Taiwan is located in the northwest Pacific typhoon-affected area where the risk of floods and wind disasters keeps increasing. The health and safety of employees is threatened, the cost of manpower management and maintenance increases, resulting in reduced profits Develop typhoon and flood-related management approaches and increase supplier diversity. ■ Diversify supply chain and decentralize supply of goods to strengthen the stability of material supply and improve the resilience to risk.
■ Operating costs decrease due to the improvement of process and equipment energy efficiency.
Chronic The Headquarters, manufacturing bases, and most of the main suppliers are located near the marine area. With the risk of drought and flood increases, the stability of operation and product supply may be affected. ​Due to the interruption of transportation and the unstable supply of raw materials that resulted in a reduction of production capacity and affected the sales revenue
Global warming continues to intensify, which will lead to a substantial increase in the cooling costs of offices and factories. ​Increased energy expense rates and production costs ​Monitor and improve air-conditioning efficiency, establish extreme climate response plans, and maintain the eco-roofs to reduce indoor temperatures.