USI Corporation Website ESG中文

To adapt to the impacts from climate change, we adopted in 2019 the Task Force on Climate-related Financial Disclosures (TCFD) of the Financial Stability Board (FSB) to identify the risks and opportunities from climate change and assess the potential financial impacts in order to establish countermeasures based on the identification results.

In November 2020, we became one of the 1,846 global TCFD supporters.

TCFD Climate-Related Risks and Opportunities

Following the execution of the Glasgow Climate Pact at the UNFCCC COP26, Taiwan has announced amending the Greenhouse Gas Reduction and Management Act into the Climate Change Adaptation Act. After re-assessing our own carbon emission structure, we set a new carbon reduction target to 27% less emissions over 2017 by 2030, actively implement corresponding countermeasures and management mechanisms, request domestic core manufacturers to plan and implement the relevant action plans, and actively engage in the Group’s renewables planning. In 2021, we already developed solar generation of nearly 5MW.

To adapt to the impact from climate change, we identified climate risks and opportunities and assessed the potential financial impact based on the climate-related financial risk disclosures developed by the Task Force in 2019 on Climate-related Financial Disclosures (TCFD) created by the Financial Stability Board (FSB) in order to set contingency plans based on the identification outcomes. In November 2020, we became one of the 1,846 global TCFD supporters.
Please visit https://www.fsb-tcfd.org/supporters/ for details.

USI TCFD Framework

Governance
The Board The Board is the top overseeing unit of climate change management and periodically reviews climate-related risks and opportunities each year.
ESG Committee The ESG Committee established under the Board is chaired by an independent director, with the president being the deputy chair. Each year the Committee assess the plan for promoting climate change adaptation, review its effectiveness, and report the review results to the Board.
Group Environmental Quarterly Review Meeting The Division of Equipment Preventive Maintenance and Environmental Risk Control is the Group’s top management for energy management. It reports the planning and progress to the Group’s chairman each quarter and make decisions on energy management.
Strategy
Identification of Risks and Opportunities Identify climate-related risks and opportunities and material items based on the likelihood and impact of each item.
Assessment of Potential Financial Impact Assess the potential financial impacts of identified material risks and opportunities.
Risk Management
Implementation of TCFD Identify risks and opportunities based on the TCFD framework, communicate with all responsible units, and confirm by senior management.
Submission of Identification Results Each year the ESG Committee meeting is held to report the identified material risks and opportunities and present countermeasures.
Indicators and Targets
Group Energy Management Targets The group sets the annual average energy conservation by a minimum of 1.2% during 2020-2025. The target is reviewed every three years
Group carbon reduction targets Carbon reduction by 27% in 2030 (base year 2017)
Climate-Related Response Strategy Equipment renewal, construction of renewables equipment, optimization of production scheduling, planning building aircon, energy management system, extreme weather events contingency plans
GHG Emissions Disclosure Disclose the data of scopes I and II emissions in the ESG report every year and review the causes for changes periodically.

Identification of Climate-Related Risks and Opportunities

The impact of climate change on USI’s operations has been increasing. To tackle the potential risks and capture the potential new business opportunities, we have spared no efforts in implementing programs to enhance energy conservation and carbon reduction, improving production efficiency, and replacing old equipment with high-efficiency equipment. We adopted the TCFD method to identify the transition risk and physical risk in business transformation and the emerging opportunities from climate change. As a result, we identified 8 major risks and 10 major opportunities. In the future, we will review the countermeasures every year and develop a resilient climate change culture.

Map of Climate-Related Risks and Opportunities

USI-ESG-Climate Change and Energy Management

Potential Financial Impact of Risks and Opportunities and Countermeasures

Type Climate Related Risk Time Range Risk Level Potential Financial Risk Countermeasures USI Specific Description
Transition Enhance GHG Emission Pricing Short-Medium Term Medium-High Increase in capital expenditure
Increase in operating costs
  1. Implement the energy management system.
  2. Invest in green power, energy conservation, and carbon reduction equipment, and increase the expense of carbon fee.
 Own-brand manufacture (ODM) is our core business. The electricity cost accounts for 7.9% of the total production cost. The annual electricity conservation target at 1% and energy conservation at 1.2% can help save over NT$5 million.
With reference to the example of Singapore, based on the carbon fee of NT$100/MT, the annual expense on carbon fee will exceed NT$15 million.
Transition Raw material cost rises Short-Medium Term Medium-High Increase in capital expenditure
Increase in operating costs 		Accelerate AI production scheduling to enhance efficiency and reduce material losses from number plate change. Ethylene is our major material. To increase ethylene sources, we invested in the Gulei Project (nearly NT$8 billion) and the Ethylene Storage Tank Project of Kaohsiung Intercontinental Container Terminal Project (NT$906 million).
Transition Product Stigmatization Short-Medium Term Medium-High Reduction in asset value.
Reduction in revenue.
  1. Accelerate transformation
  2. Invest in green energy equipment and use green products.
  3. Recycling and reuse of plastic materials.
 In 2020, we approved a budget of NT$110 million for building the R&D building to accelerate the R&D pace.
Transition Enhance emission report obligation Short-Medium Term Medium-High Increase in operating costs
  1. ISO 14064-1 and promote Scope 3 and the product carbon footprint verification under ISO 14067.
  2. Enhance website and media disclosures.
  1. We invested about NT$56,000 in ISO 14064-1 guidance and verification (2019-2021). In 2021 we invested about NT$26,000 in implementing product carbon footprint verification under ISO 14067.
  2. Invested IT workforce in website construction to disclose related information.
Physical Extreme changes in rainfall pattern change and climate pattern Short-Medium Term Medium-High Increase in capital expenditure
Increase in operating expense
  1. Build an AI water information system to establish countermeasures based on the precipitation in reservoirs.
  2. Implement the ISO 46001 Water Efficiency Management System.
  3. Improve the wastewater reclamation system and enhance operational management to increase the capacity of water reclamation.
  1. In case of water shortages, we need to purchase water from outside. In case of water scarcity, we need to reduce production line output or shut down operations. It is estimated that water purchase will increase production costs by over NT$0.1 million/day. In case of production line shutdown, the loss will increase to about NT$2.5 million/day. In case of operation suspension, the loss will be over NT$10 million/day.
  2. In 2021 we invested about NT$32,000 in implementing the ISO 46001 Water Efficiency Management System.
  3. In 2021 a total of 10,986MT of water was reclaimed, and the volume will increase to 12,000MT in 2022.
Physical Physical Extreme changes in rainfall pattern change and climate pattern Increase in the severity of extreme weather events: typhoons and floods Short-Medium Term Medium-High Increase in capital expenditure
Increase in operating expense 		Build flood control and drainage facilities. To reduce the loss on operation suspension caused by floods, we progressively plan budgets of about NT$14 million to build flood control and drainage facilities. Otherwise, the loss on operation suspension will be about 650MT/day.
Physical Sea level rises Long-term Medium-High Increase in capital expenditure
Increase in operating expense
  1. Raise the equipment foundation.
  2. Build flood control and drainage facilities.
 Countermeasures corresponding to the rainfall pattern change and extreme weather events such as typhoons and floods.
Physical Average temperature rises Long-term Medium-High Increase in capital expenditure
Increase in operating expense
  1. Use eco-friendly heat-shielding coatings, reduce the fugitive emissions of VA gases, and reduce aircon uses.
  2. Modify cooling towers with inverter control. Enhance the heat insulation of pipelines and equipment.
Countermeasures corresponding to the rainfall pattern change and extreme weather events such as typhoons and floods.
Type Climate-Related Opportunities Time Range Opportunity Level Potential Financial Risk Countermeasures USI Specific Description
Resource Efficiency Reduce water use and water consumption Short-Medium Term Medium-High Increase in capital expenditure
Reduction of operating costs
  1. Invest in wastewater reclamation equipment.
  2. Improve process equipment and operation to reduce steam use.
  3. Constantly develop water conservation programs.
  1. In 2020 a total of NT$1.6 million was invested in the reclamation of condensate from the process steam to reclaim up to 17,500MT of water. In 2022 we will improve process operation to reduce steam use to save water up to 2,880MT/year (projected).
  2. Constantly develop water conservation programs.
Resource Efficiency Recycling and reuse Short-Medium Term Medium-High Increase in revenue
Reduction of operating costs
  1. Wax recycling and reuse
  2. Materials recycling improvement
  1. The cost of wax recycling equipment is NT$776,574. In 2021, the profit from wax recycling was NT$71,430.
  2. Materials recycling: 12.3%.
Energy source Participation in carbon trade Medium-Long Term Medium-High Increase in operating costs Constantly trace related laws and regulations and seek transaction opportunities. Constantly trace related laws and regulations and seek transaction opportunities, and participate in related seminars from time to time.
Energy source Use low-carbon energy Short-Medium Term Medium-High Increase in asset value. Engage in renewables programs within three years. Constantly assess and seek appropriate programs to engage in renewables programs within three years.
Energy source Use of new technology Long-term Medium-High Increase in asset value.
Reduction of operating costs
  1. Constantly enhance process carbon efficiency.
  2. Engage in high-performance investments.
  3. Purchase Green Mark equipment.
 In 2021, we activated the smart factory system to constantly keep track on equipment energy consumption.
Energy source Use of incentivizing policies Short-Medium Term Medium-High Reduction in capital expenditure Coordinate with the Renewables Incentivization Regulations Propose corresponding actions according to the Renewables Incentivization Regulations
Products and Services R&D and innovation of new products and services. Medium-Long Term Medium-High Increase in asset value.
Increase in revenue
Increase in capital expenditure 		Cultivate new markets and engage in industrial transformation, and develop plastic-reduced and low-energy-consumption products. In 2020 we invested in a new R&D center to cultivate new markets and engage in industry transformation.
Products and Services Consumer preference changes Long-term Low-Medium Increase in revenue Develop CBC new materials Develop CBC new materials in response to the pandemic.
Resilience Participation in renewables projects and adoption of energy conservation measures Medium-Long Term Medium-High Increase in asset value.
Reduction of operating costs 		Constantly participate in related activities. Constantly participate in related activities, engage in local procurement, and implement green procurement.
Resilience Alternative energy and energy diversification Medium-Long Term Medium-High Increase in asset value. Invest in green power. Actively seek suitable sites for green energy development. In 2021, we invested in solar generation of about 5MW.

Factory smart energy management system

After applying to IDB for the Factory Smart Energy Management Demonstration Guidance Program in 2020, we engaged in active construction. With the assistance of IDB and Taiwan Green Productivity Foundation (TGPF), we progressively achieved the KPIs of energy management system.

  1. Establish energy performance indicators and baseline requirements.
  2. Develop the data collection and analysis and control and management capabilities of plant personnel.
  3. Practice the application of smart production and management.
  4. Provide decision-making references of corrective action for management.
  5. Reduction of management workforces and costs.
  6. Discover the room for improvement of energy conservation and references for improvement of energy performance supervision.

In March 2021, we were selected as a demonstration plant for the smart energy management system. Besides sharing the results of energy conservation and arranging onsite demonstration for other businesses in the same industry, Kaohsiung Plant earned critical acclaim from them. In October 2021, we were invited by the Taiwan Chemical Industry Association to share our practice in energy conservation and carbon reduction using the ISO 50001 Energy Management System with other members.

USI-ESG-Climate Change and Energy Management

To extend the spiritual framework of the energy management system, we selected the AI Energy Conservation Assessment--Chiller System as the target in 2021, hoping to further enhance energy efficiency using IoT data as the implementation strategy in the big data era.

USI-ESG-Climate Change and Energy Management

Group Energy Management Targets

In 2019 we set the energy management target at 7.2% less in 6 years during 2020-2025. We kept tracking the international trends and national policies to make dynamic reviews and requested all USI businesses to maintain an average of 1.2% less each year, with plants planning related action plans. To effectively manage energy performance and make continual improvement, we implemented the ISO 50001 EnMS at all USI plants. By 2021, 9 plants have passed ISO 50001 certification. In 2022, one plant will implement the system. Through constant energy conservation and carbon reduction, we hope to demonstrate our influence to reduce environmental impact.

Every year USIG holds the “plant technology exchange meeting” and several and “northern/Kaohsiung plants resource integration meetings” for plants to share resources and exchange technologies to improve performance in energy conservation and carbon reduction. At the “plant technology exchange meeting” in December 2021, the group organized the case sharing in the form of competition based on the subjects of “HSE", “predictive maintenance", and “energy conservation and carbon reduction". Through case submission and documentary review, 7 cases eventually entered the final for senior officers and all presenting plants to elect the top 3 cases. The group chairman also presented the certificate and bonus to winners in order to encourage technology improvement within the group through competition and mutual learning.

USI-ESG-Climate Change and Energy Management

GHG management

Based on the ISO 14064-1:2018 GHG inventory standard and the GHG Emissions Inventory and Registration Guidelines of EPA, we performed GHG inventory, consolidation, and system establishment with the assistance of external experts. We set organizational boundary for GHG inventory based on the “operational control method”, The organization has 100% of GHG emissions from facilities under its operational control. GHGs under inventory include CO2, CH4, N2O, HFCs, PFCs, SF6, and NF3. The emission coefficients are cited from EPA’s GHG Emission Coefficient Management Table V.6.0.4, and the global warming potential (GWP) is reported based on IPCC’s AR5 (2013).

In 2021, the direct (Scope 1) GHG emissions were 16,380 tCO2e, the energy indirect (Scope 2) GHG emissions were 131,790 tCO2e, and the combined direct and indirect GHG emissions were 148,170 tCO2e. We will continue to implement energy conservation and carbon reduction measures to progressively plan and implement the inventory of other indirect (Scope 3) GHG emissions to effectively review the environmental impact of CO2 in order to achieve the win-win of environmental protection and profit together.

USI-ESG-Climate Change and Energy Management

Note 1: Scope 1 refers to major emission sources including stationary combustion, mobile combustion, process, and fugitive emissions.

Note 2: Scope 2 refers to indirect emissions of purchased electricity.

Note 3: Scope 3 refers to the indirect emissions produced from the treatment of solid and liquid waste.

Note 4: The electricity emission coefficient is subject to the latest data announced by the Bureau of Energy: 0.509 tCO2e/MWh for 2019-2020 and 0.502 tCO2e/MWh for 2021.

Note 5: Diesel containing no biofuel was used in 2021. The combustion emission of biofuel was 0 kgCO2e.

Note 6: Verification according to the ISO 14064-1:2018 standard by SGS Taiwan Limited.

The 2021 targets and performance and the 2022 targets for energy conservation and carbon emissions

Year 2021 2022
Item Targets Performance Targets
Electricity Conservation (%) 0.75 0.75 1.71
Energy Conservation (%) 0.58 5.10 7.36
Emissions Reduction (%) 0.67 2.39 4.07
Water Conservation (%) 3.63 4.26 3.63
Note 1: Energy conservation types were reduction of electricity and LNG consumption.
Note 2: Emissions reduction covers emissions from energy consumption.

Programs and Performance of Energy Conservation and Emissions Reduction

The table below shows the programs and performance of energy conservation and emissions reduction in 2021. The energy conservation volume reported to the Bureau of Energy in 2021 was 1,972,419 kWh, equivalent to 1,004 tCO2e.

Item Type Program Energy Saved kWh/Year Carbon Reduced tCO2e/year Period (2021)
1 Electricity Saving Improved the C/E/F FKC water pump with the high-efficiency motor. 2,272 1.2 Jan-Apr
2 Electricity Saving Low-pressure steam condensate recovery 11,171 5.7 Jan-Dec
3 Electricity Saving Process Exhaust Recovery 1,084,007 551.8 Jan-Dec
4 Electricity Saving Suspension of TO 691,545 352 Oct-Dec
5 Electricity Saving Demand bid 183,424 93.4 Jan-Dec
Total 1,972,419 1,004 -
Note 1: Electricity to emission conversion coefficient is 0.502 tCO2e/MWh.
Note 2: Based on the 2021 Report on the Annual Energy Saving Audit System of Energy Users of the Bureau of Energy.
Note 3: Electricity conservation of item1 was calculated based on the design value/measured value and operating time of equipment before and after replacement.
Note 4: The energy conservation volume of items 2-4 is converted based the measured value or flowmeter readings, operating duration with the heating value.
Note 5: Energy conservation volume: 1kWh = 64,345 GJ. Energy conservation types included electricity and LNG.