Response to Climate Change

WT's strategy and management in response climate change

Climate change is an issue that needs the world to face together‭, ‬no matter who‭. ‬As a distributor in the semiconductor sector‭, ‬WT has operating bases‭, ‬partners‭, ‬collaborators‭, ‬and vendors all over the world and they are all subject to impacts of climate change‭. ‬WT’s management understands the potential impact of climate change on its operations and long-term development‭. ‬Since 2021‭, ‬it has been promoting relevant management mechanisms and operations‭, ‬formulating policies and goals‭, ‬and investing resources in assessment and research on transition plans‭. ‬In the future‭, ‬it will continue to track the achievement of goals‭, ‬and take a more aggressive course of action accordingly‭.‬

The Climate Change Risk Management Task Force has convened three meetings since the fourth quarter of 2022‭, ‬inviting functional‭ ‬and business units to identify risks and opportunities‭, ‬assess financial impacts‭, ‬and discuss response plans‭. ‬The evaluation and‭ ‬planning results were to be included in the promotion and implementation plan of relevant units‭, ‬and reported to the Board of Directorsas occasionally to support the governance‭.‬

Climate Change Risk and Opportunity Management Process

WT follows the TCFD recommendations‭, ‬WT will continue to follow the climate change risk management process to identify risks and‭ ‬opportunities‭, ‬evaluate response strategies‭, ‬and conduct regular internal and external reports‭.‬

Daily operations and management were analyzed to support risk assessment‭.‬

As WT is not in a sector with intensive or high carbon emissions‭, ‬the impact of climate change is mainly on its value chain‭, ‬including the transition pressure on the vendors and customers‭, ‬and potential physical risks during the transport‭. ‬In order to understand the impact of these transitional and physical risks on WT’s operations‭, ‬WT uses scenario analysis to identify risks and opportunities‭. ‬The assessment results are used for response plan development by relevant units‭, ‬and for daily operation adjustment‭. ‬The Board of Directors are briefed on a quarterly basis the GHG inventory and verification schedule planning progress for the‭ ‬parent company and subsidiaries‭, ‬and requested to determine the guidelines‭. ‬

Therefore‭, ‬WT conducts the annual climate change risk assessment based on the RCP 8.5‭ ‬scenario for physical risk and the national target scenario for transitional risk‭, ‬information such as changes in laws and regulations‭, ‬physical external environment‭, ‬and‭ ‬issues of concern for sustainability assessments‭.‬

Climate Change Risks and Opportunities were reviewed‭.‬

In 2022‭, ‬WT reviewed the ranking of risks and opportunities identified in 2021‭. ‬For implementation benefits‭, ‬those involving short-time impacts‭ (‬1-3‭ ‬years‭) ‬were re-assessed for current implementation status‭, ‬impact scale‭, ‬financial impact‭, ‬with which three‭ ‬key risks and two major opportunities were identified as requiring continuous attention‭.‬

Climate Change Risks
Risk
Financial Impacts
Response Strategies and Solutions

Increased severity and frequency of extreme weather events‭ (‬typhoons‭, ‬heavy rains‭, ‬etc‭.)‬

· Reduced asset value
· Reduced useful life of assets
Note: A financial impact of up to NTD 26 million could be possible, based on the assumptions and calculation factors set internally by WT.

Short-term: Follow meteorological information in real time, plan corresponding prevention and response measures against different natural disasters, and maintain full communication with the park's management center;
Mid-term: Purchase property insurance focus on transferring and diversifying risks, and continuously evaluate the locations of important facilities that need to be installed in areas that are less affected by climate;
Long-term: Assess climate change factors (such as flood resistance, earthquake resistance) when selecting new or relocating operating bases.

Extremely high temperature

· Increased operating expenses
Note: A financial impact of more than NTD 1.08 million per year could be possible, based on the assumptions and calculation factors set internally by WT.

Short-term: Give priority to products with energy-saving labels and install energy-saving facilities whenever possible, including office air conditioning, electrical appliances, office machines, and regularly review the energy-saving performance of each unit, continue to promote energy-saving awareness through various activities, translate knowledge into employees' practic in order to reduce energy dependence;
Mid-term: Continue to check whether the replacement plan is in line with the latest trends to ensure that the energy efficiency of the replacement meets expectations;
Long-term: Establish reliable energy supply strategies, including seeking alternatives and developing renewables.

Supply chain transportation affected by extreme weather events

· Increased capital cost
Note: A financial impact of more than NTD 220,000 per day could be possible, based on the assumptions and calculation factors set internally by WT.

Strengthen communication with customers‭, ‬including information exchange on climate change-related impacts‭, ‬to mitigate the impact of supply chain transportation‭.‬

Note‭: ‬Short-term 1-3‭ ‬years‭, ‬mid-term 3-5‭ ‬years‭, ‬long-term 5‭ ‬years and more

Climate Change Opportunities
Risk
Financial Impacts
Response Strategies and Solutions

Reduced capital cost

· Reduced operating costs

Continue to pay attention to the sustainability indicators related to the organization and the performance of the organization-related sustainability indicators‭; ‬actively communicate with financial institutions on green financing conditions‭.‬
At the end of 2022‭, ‬WT has a green financing rate agreement‭.‬

New/expanded low-carbon products or services

· Increased product demand and revenue

Short-term: Plan product applications, analyze classifications, and define low-carbon products;
Mid-term: Keep track of vendors' technical application capabilities, and improve the ability to support vendors' low-carbon products;
Long-term: Promote low-carbon products to customers to increase the proportion of low-carbon product sales.

Guidelines in three aspects for the net zero goals

In response to international trends and Taiwan’s 2050‭ ‬net-zero goal‭, ‬WT set climate change indicators and goals in three aspects‭: ‬governance and strategy‭, ‬operations‭, ‬and GHG reduction‭.‬

Carbon reduction efforts were successful with the target met again in 2022‭.‬

To address the increasingly serious problem of global warming‭, ‬WT follows the national overall GHG reduction strategy towards the sustainable development goal of energy conservation and carbon reduction Since 2018‭, ‬WT has been developing‭, ‬pursuant to ISO 14064-1:2006‭ ‬Part 1‭: ‬Specification with Guidance at the Organization Level for Quantification and Reporting of Greenhouse Gas Emissions and Removals‭, ‬and the Greenhouse Gas Protocol‭, ‬a comprehensive inventory of GHG Scopes 1‭ ‬and 2‭ ‬emissions‭. ‬The inventory is verified by a third party to assure its accuracy and reliability every year‭. ‬With 2018‭ ‬as the base year‭, ‬WT promised to reduce‭ ‬the intensity of its Scopes 1‭ ‬and 2‭ ‬GHG emissions by 1%‭ ‬every year‭, ‬and keep its management policies updated according to the reduction situation‭.‬

In 2022‭, ‬a GHG Inventory Task Force meeting was convened in accordance with the ISO 14064-1:2018‭ ‬Greenhouse Gases to identify major indirect emission sources of the year‭. ‬The meeting resolved that the indirect GHG emissions from purchased electricity‭ (‬Category 2‭: ‬Capital Goods‭) ‬and upstream transportation and distribution‭ (‬Category 4‭) ‬were to be included within the boundaries‭, ‬and‭ ‬the base year changed to 2022‭ ‬after Hong Kong and Singapore Logistics Centers were included within the organizational boundaries‭. ‬A higher target was also set and a promise made to reduce the annual GHG emissions by 2%‭ ‬compared to the base year‭. ‬In 2022‭, ‬the voluntary inventory was extended to include operating bases in China‭, ‬Hong Kong‭, ‬South Korea‭. ‬A voluntary GHG emissions inventory covering all operating bases of the Group is planned to be completed by 2025‭, ‬with the third-party verification completed by 2027‭ ‬at the latest‭.‬

In 2022‭, ‬WT emitted 2,794.05‭ ‬tonnes‭  ‬CO2e of GHG across areas where the inventory was completed‭ (‬including operating bases in Taiwan‭, ‬Hong Kong‭, ‬Singapore‭, ‬China and South Korea‭), ‬of which 1,810.08‭ ‬tonnes‭  ‬CO2e‭  ‬was verified by a third party‭ (‬including Taiwan‭, ‬Hong Kong and Singapore Logistics Centers‭). ‬The intensity of Scopes 1‭ ‬and 2‭ ‬emissions was 0.0028‭ ‬tonnes‭  ‬CO2e/NTD million‭, ‬or 0.0398‭ ‬tonnes‭  ‬CO2e/m²‭. ‬The target was met with a 27.18%‭ ‬reduction in emissions intensity compared to the base year‭ (‬2018‭).‬

Total emission amount
Total
Taiwan
Hong Kong
China
Southeast Asia& India
Korea

Category I

218.82
75.14
18.30
98.12
10.27
16.99

Category II

2,362.90
1,225.37
192.11
712.79
121.47
111.16

Category III

212.33
212.33

-

-

-

-

Category IV

-

-

-

-

-

-

Category V‭ ‬

-

-

-

-

-

-

Category VI

-

-

-

-

-

-

Over all

2,794.05
1,512.84
210.41
810.91
131.74
128.15

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