Sustainability Management

Sustainability Risk Management

According to the "Global Risk Report 2023" published by the World Economic Forum (WEF), the majority of the top ten global risks for the next decade are in the categories of environment, economy, and society. In order to incorporate sustainable risk management into the company's strategic development, ASUS has introduced a risk management process to identify the potential reputational and financial impacts of ESG issues on the company's operations, as well as to explore opportunities for sustainable transition and integrate risk response actions into the corporate development strategy.

ASUS' Board of Directors acts as the highest governance body of sustainability risk management. The sustainability team annually evaluates the positive and negative impacts of material issues on ASUS, while identifying potential sustainability risks and opportunities. The analysis results and risk mitigation actions are reported to the Board of Directors quarterly.

Meanwhile, "sustainable development" is also included as one of the management topics in ASUS' BCM Committee, which conducts regular reviews of risk control progress. The BCM Committee reports to the board of directors on the status of the risk management review at least once a year.

Sustainability Risk Management Process
Risk Identification
  • Consolidate materiality analysis process and identify potential sustainability risks/opportunities
  • Financial impact of prioritized risks and opportunities
Risk Control/ Mitigation
  • Report sustainability risk management actions to the Board of Directors quarterly
  • Through the Business Continuity Management (BCM) Committee, continuously monitor and manage sustainability risks, demonstrating organizational resilience in combination with operational practices
Risk Monitoring/ Reporting
  • Incorporate sustainable risks into key issues of continuous management
  • Develop strategies and control mechanisms for sustainability risks

This year, the primary focus was on identifying key risk and opportunity issues within the boundary defined by ASUS’s standalone financial statements. The financial impacts of these issues and their corresponding response measures were evaluated, along with the related accounting items. Please refer to TCFD Report. Going forward, ASUS will expand the boundary of issue assessment and enhance the quantification of financial impacts across short-, medium-, and long-term time horizons.

Issue Time Horizon Impact on ASUS Financial Impact Response Measures Financial Impact
① Carbon tax implemented in Mainland China Long/Mid-term Mainland China is anticipated to extend its carbon tax regulations to include the electronics industry, potentially leading suppliers to transfer the associated costs to ASUS. Increase in Operating Costs/Expenses (Income Statement)
On the right is the financial impact after taking countermeasures.
 Supplier Carbon Reduction Engagement and Counseling Program
Issues to be addressed: ①②③
  • Support suppliers in implementing improvements for audit deficiencies
  • Provide guidance to suppliers on process optimization, equipment energy efficiency improvements, and the adoption of renewable energy
  • Allocate resources for supplier carbon reduction programs and audit personnel
  • Incorporate audit performance into the Quarterly Business Review (QBR) evaluation
  • Increase in Operating Expenses - Salaries
Supplier Carbon Reduction Performance Audit
Issues to be addressed: ①②③
② Carbon Border Adjustment Mechanism (CBAM) Long/Mid-term Electronic products are expected to be included in the second phase of the CBAM regulatory list, requiring importers to pay carbon taxes on covered goods. Increase in Operating Costs/Expenses (Income Statement) Establish Carbon Management Platform
Issues to be addressed: ①②③
  • Digitalized Carbon Data Management
  • Increase in Operating Expenses - Labor Costs
Use of Renewable Energy at the Operating Locations
Issues to be addressed: ②③
  • Cost of Photovoltaic and Energy Storage Equipment Installation
  • CCorporate Power Purchase Agreement (CPPA)
  • CPurchase of Renewable Energy Certificates
  • Increase in Capital Expenditure - Machinery and Equipment - Power Generation Equipment
  • Increase in Operating Expenses – Utilities
  • Increase in Operating Expenses - Environmental Certificate Costs
③ Green product management Near-term Failure to obtain voluntary eco-label certifications, meet energy efficiency standards, or satisfy customer energy-saving requirements may lead to a loss of competitiveness in the green market and result in revenue loss. Increase in Operating Costs/Expenses (Income Statement) Use of Environmentally Friendly Materials
Issues to be addressed: ②③
  • Increase in cost of self-purchased materials
  • Transfer of Consignment Materials Cost
  • Increase in Cost of Goods Sold - Direct Materials
  • Increase in Cost of Goods Sold - Outsourced Processing Costs
Improving Product Energy Efficiency
Issues to be addressed: ②③