Risk Management
Natural Capital Depletion: Avoiding the Impacts of Raw Material Extraction on Natural Capital
Metals(Minerals)
Electronic products use metals such as tantalum, tin, tungsten, and gold extensively to meet performance requirements. These metals are used in key components including resistors, capacitors, central processing units, hard drives, memory, motherboards, and connectors. ASUS uses the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas as its core methodology and references the Responsible Minerals Initiative (RMI) survey framework and the European Union Conflict Minerals Regulation’s definition of Conflict-Affected and High-Risk Areas (CAHRAs). On this basis, ASUS has established a responsible minerals supply chain due diligence mechanism encompassing risk identification and assessment, risk mitigation measures, management system establishment, and information disclosure to ensure effective responsible minerals management.
In 2025, ASUS traced the distribution and conformance status of upstream smelters for 599 suppliers representing approximately 95% of its procurement value. The analysis showed that the smelters were located primarily in Asia (57%), followed by the Americas (17%), Europe (16%), Africa (9%), and Australia (1%). Since 2018, ASUS has continuously required that key minerals, including tantalum, tin, tungsten, and gold, be sourced from conformant smelters under the Responsible Minerals Assurance Process (RMAP). Through an ongoing due diligence mechanism, ASUS reduces potential forced labor, human rights, and environmental risks in its supply chain.
According to the European Union’s critical raw materials review, one-third of the world’s cobalt is sourced from the Democratic Republic of the Congo and neighboring countries in Central Africa, where risks of illegal operations also exist. In 2019, the Responsible Minerals Initiative designated cobalt as the fifth mineral category under its management. As cobalt is a key material in battery manufacturing, ASUS also includes it within the scope of responsible minerals procurement management and conducts annual due diligence. Through on-site audits, ASUS reviews suppliers’ progress in transitioning cobalt sourcing to conformant smelters and provides guidance and support resources. Compared with 2019, the proportion of conformant cobalt smelters used by suppliers has increased from 29% to 100%. In 2025, ASUS used more than 15 metric tons of third-party-certified pre-consumer recycled metals, including aluminum, magnesium, and steel. The ExpertBook P3 commercial AI notebook contains 30% pre-consumer recycled aluminum, while recycled rare-earth metals account for 46.9% of its magnets.
Paper(Forests)
A 2016 study by the World Economic Forum and the Ellen MacArthur Foundation indicated that most packaging is used only once and that only 5% of the vast amount of plastic waste generated after use is effectively recycled. Beginning in 2018, countries around the world successively introduced plastic-reduction policies in pursuit of a circular plastics economy1. Since 2019, ASUS has replaced PE bags with PET nonwoven fabric and increased the recycled pulp content of paper packaging to 90%. Extending these efforts to resource and ecosystem protection, ASUS has progressively introduced paper certified by the Forest Stewardship Council (FSC™) since 2020, moving its packaging strategy beyond recycling and reuse to support responsible forest management and strengthen sustainable packaging management. More than 90% recycled paper has been introduced into ASUS notebook packaging, and the Company continues to increase the use of environmentally friendly paper to reduce the overall environmental impact of its packaging. Since 2024, FSC™ Mix-certified paper has also been introduced across all packaging for new monitor products, further expanding the application of sustainable packaging. In 2025, ASUS used more than 9,100 metric tons of FSC™-certified paper, and recyclable packaging accounted for 92% of all packaging. Compared with the 2020 base year, the total use of environmentally friendly paper increased by 87%.
Plastics (Petroleum)
Research published by the United Nations Environment Programme (UNEP) in 2021 indicates that approximately 400 million metric tons of plastic are produced globally each year, of which approximately one-third is not properly managed and is indiscriminately discarded; packaging materials account for approximately 40% of this amount. Plastics account for more than 30% of the total weight of ASUS core products. To reduce the environmental impacts of plastic use, ASUS continues to work with major raw material suppliers to introduce third-party-verified postconsumer recycled (PCR) plastics without compromising product performance or durability. ASUS has also established a comprehensive Chain of Custody (CoC) traceability mechanism to ensure the traceability and authenticity of recycled material sources and avoid the risk of mixing in uncontrolled recycled materials. On average, each commercial notebook product now contains more than 5% third-party-verified PCR plastic. In 2025, ASUS core products used approximately 15,700 metric tons of plastic, of which approximately 2,400 metric tons consisted of PCR plastic verified by third parties such as SGS. Since 2017, ASUS has used more than 5,900 metric tons of PCR plastic in total, cumulatively avoiding approximately 41,300 metric tons of CO2e emissions.
Environmental Quality Degradation: Mitigating the Value Chain’s Impact on Natural Capital
Since 2018, ASUS has used the Environmental Profit and Loss (EP&L) assessment as its core tool for measuring the environmental impacts of its value chain. Based on the ISO 14040:2006 Environmental management — Life cycle assessment — Principles and framework, PwC’s methodology for monetizing corporate environmental impacts, and the Natural Capital Protocol, ASUS applies Input-Output Analysis (IOA) to comprehensively evaluate energy and resource inputs across the value chain and convert environmental outputs into quantifiable environmental impacts.
In addition to data from its operational sites, ASUS collects primary data through its supply chain management platform from key original equipment manufacturers, key suppliers, and the five suppliers with the highest procurement value. The Company monetizes the environmental profit and loss of its operational sites and supply chain, focusing on the external costs of five environmental indicators—GHG emissions, water resources, water pollution, waste, and land usage2—to enable precise management of operating activities and optimize its biodiversity strategy.
The 2025 environmental impact pathways are shown below:
Boundaries and Scope
In accordance with the definitions in the Product Category Rules (PCR), ASUS defines the boundary and scope as covering the principal product components and supply chain representing 86.8% of procurement value:
- Value chain: ASUS operations, including product design, validation, marketing, and other activities (Tier 0), Contract manufacturing and assembly (Tier 1), Components (Tier 2) and Raw materials (Tier 3).
- Main components: CPU, memory, display, GPU, motherboard, connectors, hard drive, battery, and power supply.
- Environmental impact indicators: GHG emissions, water resources usage, water pollution, waste, and land usage.3
Environmental Footprint Data Collection
Following an inventory of the environmental footprints of its 2025 operations and value chain, ASUS reports the current status of water resources usage, water pollution, GHG emissions, and waste as follows:
Water Resource
Water Resource usage at Operational Site
- Total water withdrawal at ASUS operational sites was 290,700 m³, of which 236,142 m³ was in Headquarters and 54,558 m³ in Mainland China operational sites.
- Of the water withdrawn at ASUS operational sites, 2.4% was recycled water and 97.6% was supplied by municipal water utilities.
- Total water discharge4 at ASUS operational sites was 261,630 m³, of which 212,528 m³ was in Headquarters and 49,102 m³ in Mainland China operational sites.
- 100% of water discharged from ASUS operational sites was treated by local third parties.5
Supply Chain Water Resource usage
- Total water withdrawal by key suppliers was 9.07 million m³, including 0.63 million m³ in the Taiwan region, 4.61 million m³ in the Mainland China region, and 3.83 million m³ in other regions.
- Key suppliers primarily withdrew water from municipal water supplies, which accounted for 90%; groundwater accounted for 4% and surface water for 6%.
- Total water discharge by key suppliers was 6.72 million m³, including 0.32 million m³ in the Taiwan region, 3.37 million m³ in the Mainland China region, and 3.03 million m³ in other regions.
- The discharge destinations of key suppliers were as follows: treatment by local third parties5: 90.7%; groundwater: 3.7%; and surface water: 5.5%.
Value Chain Water Resource Usage and Water Pollution Inventory
Solid Waste
Waste at Operational Sites (Operational Headquarters)
- In 2025, ASUS operational sites generated 50.8 metric tons of general industrial waste, of which 45.7 metric tons was incinerated and 5.1 metric tons was reused.
Supply Chain Waste
- General industrial waste:
- EMS facilities accounted for approximately 77%.
- General industrial waste was primarily recycled: 6,666.5 metric tons was recycled, 1,373.1 metric tons was incinerated, and 64.5 metric tons was landfilled.
- Hazardous industrial waste:
- PCB and display suppliers accounted for approximately 79%.
- Hazardous industrial waste treatment included recycling of 8,405.5 metric tons, incineration of 4,677.8 metric tons, and landfill disposal of 66.8 metric tons.
Waste at Operational Sites (Operational Headquarters)
Waste Generated by Key Suppliers in 2025
GHG Emission
GHG Emissions from Operational Sites
- Scope 1: ASUS’s total GHG emissions were 1,946.89 metric tons of CO2e.
- Scope 2: ASUS’s total market-based emissions were 8,561.81 metric tons of CO2e.
Supply Chain GHG Emissions
- Calculated using the supplier allocation method under ISO 14064, Purchased Goods and Services emissions amounted to 1,191,531.82 metric tons of CO2e
Environmental Profit and Loss Analysis Results
The results of the Environmental Profit and Loss analysis are as follows: greenhouse gases account for the highest share at 66.96%, followed by freshwater resources—comprising wastewater pollution at 20.04% and water resource usage at 10.72%—waste at 1.41%, and land usage, newly disclosed this year, at 0.88%.
2025 Category Breakdown
| Category | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| GHG Emission | 218 | 235 | 363 | 381 |
| Water Pollution | 392 | 442 | 311 | 114 |
| Waste | 13 | 13 | 5 | 8 |
| Water Resource Usage | 3 | 3 | 6 | 61 |
| Land Usage | - | - | - | 5 |
| Total | 625 | 693 | 685 | 569 |
Unit: million dollars
ASUS further identified environmental hotspots at each tier: Tier 0 (T0) ASUS operations, comprising design, validation, and marketing; Tier 1 (T1) contract manufacturing and assembly; Tier 2 (T2) components; and Tier 3 (T3) raw materials, as shown below:
Tier 0
Tier 1
Tier 2
Tier 3
- GHG emissions: Because Tier 0 uses renewable energy, its share of GHG emissions is lower than that of the other tiers. The principal impacts are therefore concentrated in Tiers 1 and 2 (T1 and T2) and arise from energy use and process emissions, indicating that carbon reduction is ASUS’s foremost environmental management priority. The relative increase in GHG impacts in 2025 was attributable mainly to changes in monetization factors and increased procurement volumes from upstream suppliers.
- Water resource usage: Water use accounted for 1.43% of the total impact and was concentrated mainly in water consumed by manufacturing processes. In response to increasing pressure on global water resources, water recycling and reuse and efficiency optimization should be strengthened in the future.
- Wastewater pollution: Wastewater pollution accounted for 20.09% of environmental impacts, making it the second-largest environmental impact factor. It arose mainly from chemical use and cleaning activities in production processes, indicating the need to strengthen wastewater discharge management.
- Waste: Raw material extraction at Tier 3 and component manufacturing at Tier 2 had greater environmental impacts. ASUS headquarters applies the Zero Waste to Landfill Standard and reduces waste generation and environmental burdens by improving process efficiency, advancing the circular economy, and expanding material recycling. ASUS also collaborates with suppliers to strengthen waste management at production sites and promote resource reuse.
- Land usage: Environmental impacts were concentrated mainly in the Tier 2 and Tier 3 supply chain, primarily due to material demand arising from upstream raw material extraction and component manufacturing. These impacts generally occur at the furthest upstream stages of the value chain, with multiple supply chain intermediaries between ASUS and upstream raw material extraction. ASUS currently manages these impacts indirectly through mechanisms such as the Responsible Minerals Initiative/Responsible Minerals Assurance Process (RMI/RMAP) and FSC forest certification and will continue to assess the feasibility of expanding the scope of management.
Risk and Opportunity Identification
ASUS assesses the impacts of its value chain on nature through its EP&L assessment. The results show that GHG emissions, freshwater resources—including water withdrawal and wastewater pollution—and waste are the three environmental factors with the greatest impacts. However, the EP&L assessment measures the inside-out impacts of a company on nature and does not reflect the reverse impacts of changes in nature on business operations. To gain a complete understanding of the financial and operational implications of nature-related issues for ASUS, the Company further identifies risks and opportunities associated with these material environmental factors from an outside-in perspective. Risks and opportunities related to GHG emissions are disclosed separately under the Task Force on Climate-Related Financial Disclosures (TCFD) framework. This section focuses on freshwater resources and waste management and analyzes the nature-related risks and opportunities they present to operational sites and key suppliers.6
ASUS defines nature-related risks as follows:
- Physical risks: Water resource usage, where ASUS’ access to water resources may be reduced due to environmental degradation and the loss of ecosystem services, potentially resulting in economic losses for ASUS and its supply chain.
- Transition risk: More stringent regulations governing water resources, soil, and waste will expand the future scope of supply chain regulation and require corresponding actions.
| Affected Entity | Risk Type | Description | Region | Risk Description (Issue) | Time Horizon | Impact Scenario (Event Outcome) | Response Measures and Financial Assessment |
|---|---|---|---|---|---|---|---|
| Supplier | Ecological Impact | Damage to Habitats and Surrounding Ecosystems | Taiwan (Tamsui River Basin, Dajia River Basin, and Zengwen River Basin); Mainland China (Yangtze–Taihu Basin, Yangtze–Chishui Basin, and Pearl River Delta Basin); southeast Asia (Lower Mekong Basin) | Environmental degradation caused by suppliers through land use, water withdrawal, wastewater pollution, and other activities may potentially affect surrounding ecosystems. | Medium term; degradation of ecosystem service functions |
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Supporting suppliers in introducing water-efficiency equipment and wastewater recycling and treatment equipment; strengthening audits of supplier waste classification and reporting; and implementing biodiversity management actions will increase ASUS Operating Expenditure (OpEx).
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| Freshwater Transition Risk | Wastewater Pollution from Supplier Discharges | Across Mainland China | Environmental regulation and pollutant discharge management requirements in Mainland China are becoming more stringent. Suppliers that discharge wastewater exceeding applicable standards, cause heavy-metal pollution, or discharge pollutants illegally may face production suspensions, penalties, and media exposure, potentially affecting brand reputation and supply stability. | Near term; regulations to be implemented across all provinces within 1–3 years |
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| Freshwater Physical Risk | Water Scarcity at Supplier Sites | Yangtze River Basin, Mainland China | Climate change may increase the frequency of droughts and extreme rainfall in the Yangtze River and Taihu Lake Basins, Mainland China, causing fluctuations in regional water supply. In recent years, various parts of Mainland China have experienced high temperatures, drought, declining water levels, and electricity rationing, affecting production stability. | Medium term; reduced rainfall and increased local water use may occur within 3–10 years |
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| Waste and Soil Transition Risk | Improper Waste Treatment and Soil Pollution | Across Mainland China | More stringent solid-waste and soil-pollution regulations strengthen soil quality monitoring and environmental management. | Near term; implementation across all provinces within 1–3 years |
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| Direct Operations | Freshwater Physical Risk | Water Scarcity at Direct Operational Sites | Taiwan (Tamsui River Basin, Dajia River Basin, and Zengwen River Basin) | According to climate scenario projections by Taiwan’s National Science and Technology Council, Taiwan may face increasingly uneven spatial and temporal rainfall distribution, longer dry seasons, and more frequent extreme drought events, potentially increasing pressure on water supplies. | Long term; reduced rainfall and increased local water use may occur in 10 years |
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Expenses for ISO 46001 Water Efficiency Management System certification and other certifications will increase ASUS Operating Expenditure. |
| Yangtze River Basin, Mainland China | Climate change may increase the frequency of droughts and extreme rainfall in the Yangtze River Basin, Mainland China, causing fluctuations in regional water supply. In recent years, various parts of Mainland China have experienced high temperatures, drought, declining water levels, and electricity rationing, affecting production stability. |
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Additional personnel will be required to collect water-resource data and communicate with overseas operational sites, increasing ASUS Operating Expenditure. |
Based on the foregoing risk and opportunity identification results, ASUS determined that existing operations and supply chain practices already comply with applicable discharge and treatment standards for wastewater pollution and solid waste treatment, which are among the physical and transition risks related to freshwater resources and solid waste. ASUS therefore maintains regulatory compliance as its governing principle and continues to monitor regulatory trends at the locations of its operational sites and suppliers to maintain compliance. Water scarcity, however, concerns the stability of water supply within river basins and directly affects suppliers’ process water and production capacity, creating an immediate operational impact. ASUS therefore prioritizes in-depth analysis of water scarcity risk, assesses risks at its operational sites and key suppliers, and implements corresponding actions.
ASUS Natural Capital Impact Pathways
Supplier A – Guangdong, Mainland China
Located near Cuiheng National Wetland Park in Zhongshan, Guangdong.
- Cuiheng National Wetland Park in Zhongshan is located in Cuiheng New Area and covers 625.6 hectares, including 243.9 hectares of land and 395.44 hectares of wetlands, with a wetland ratio of 63.21%.
- The park includes multiple wetland types, including estuarine waters, mangroves, permanent rivers, and marshes.
- It supports numerous bird species, including 10 species under Class II national protection in Mainland China, such as the Black Kite, Black-winged Kite, and Common Kestrel.
Supplier A – Tainan, Taiwan
Located near the Tainan City Sicao Wildlife Refuge.
- The Sicao Important Wildlife Habitat is located in Annan District, Tainan City, and covers 543.1859 hectares. Its boundaries extend from west of Provincial Highway 17 to the coastline, with the Zengwen River to the north, and it is divided into three zones.
- The area comprises diverse wetland habitats formed by salt pans, estuarine sandbars, intertidal zones, waterways, and mangroves, and is classified as a marine or coastal wetland.
- Endangered species include the Oriental Stork and Black-faced Spoonbill; rare and valuable species include the Eastern Marsh Harrier, Osprey, Common Kestrel, Little Tern, and Hwamei.
1. Reference: WEF, Ellen MacArthur Foundation & McKinsey (2016) The New Plastics Economy: Rethinking the future of plastics.
2. 2025 EP&L Methodology Update: The environmental impact calculation for key suppliers has shifted from the previous "weight-based method × coefficient" to "activity data × emission factor," making the baseline closer to suppliers' actual operations. Additionally, a land use indicator (accounting for 0.85% of the total) has been introduced in 2025 to further expand the scope of assessment.
3. Based on ASUS’s internal assessment, the environmental materiality assessment for this issue did not reach a significant level. Based on the materiality principle, the issue was therefore not included in the core management actions for 2025.
4. ASUS estimates water discharge at 90% of water withdrawal.
5. Municipal water utilities, municipal water suppliers or wastewater treatment plants, public or private facilities, and other organizations involved in providing, transporting, treating, disposing of, or using water and effluent.
6. Given the fundamental differences between the assessment methodologies for climate and biodiversity, ASUS has planned and responded to each according to its respective characteristics. For GHG emissions, which have the greatest impact, the complete inventory, management strategies, and actions will be presented in the thematic report—the Task Force on Climate-Related Financial Disclosures (TCFD) Report; for freshwater resources (wastewater pollution and water use) and solid waste, management strategies and actions will be presented in the Natural Impact Assessment Report.
7. RBA validation currently does not include fees related to biodiversity validation.