文曄科技 - WT MICROELECTRONICS

Response to Climate Change

Response to climate change

Response to Climate Change

2025-09

Climate change is an issue that needs the world to face together, no matter who. As an electronics component distributor, WT has operating sites, 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.

Climate change governance and architecture

Board of Directors
The highest decision-making unit for climate change risk management is responsible for approving relevant risk management measures, tracking the implementation of climate-related risk management, guiding decision-making response plans, and supervising the implementation results and goal achievement of the plans.

Sustainable Development Committee
A functional committee established by directors and independent directors regularly reports to the Board of Directors the results of climate change risk and opportunity assessments and guides the implementation of climate risk and opportunity management.

Risk Management Team
It is composed of the Accounting Officer and other senior executives of the sustainability management team to coordinate and plan risk management processes such as identification of risks and opportunities, and planning of response plans. Regularly confirm implementation results and integrate climate change risk management reports.

Functional/Business units
Regularly conduct assessment and analysis of climate change risks and opportunities, plan and implement response plans, and regularly report implementation results and performance.

Risk management team held four meetings in 2024, inviting each functional/business unit to identify risks and opportunities, assess financial impacts, and discuss response plans. The evaluation and planning results will be incorporated into the operation promotion plan of relevant units and reported to the Board of Directors periodically as reference for governance
Climate change risk and opportunity management process
Climate-related risk assessment has been integrated into the existing risk management mechanism and regularly conducted by the Risk Management Team. 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.

Climate change risk assessment process

01
Risk item inventory

• Identify possible risks and opportunity projects with reference to TCFD recommendations, relevant domestic and foreign regulations, and expectations of external stakeholders.

02
Key risk analysis

• Analyze and identify key risks based on the risk occurrence time interval, risk occurrence possibility, risk possible location, and degree of risk impact.

• Sort the analysis results in a quantitative manner and select the top three risk and opportunity items as key risks.

03
Financial impact assessment of risks and opportunities

• Consider the possibility of risks/opportunities occurring and the extent to which they affect operations, and evaluate the possible financial impact items and extent.

04
Response planning and reporting

• For key risks and opportunities, the degree of financial impact is considered, response strategies are evaluated (mitigation, control, transfer, and tolerance), and response plans are planned.

• Reporting is performed in accordance with internal management procedures. Implementation results are regularly disclosed in the sustainability report.

Scenario analysis
As WT does not operate 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. These are also reported on an annual basis to the Sustainable Development Committee and the Board.
Therefore, WT conducts the annual climate change risk assessment based on the SSP5-8.5 scenario from IPCC AR6 Shared Socioeconomic Pathway (SSP) for physical risk, the national target scenario for transitional risk, as well as information such as changes in laws and regulations, physical external environment, and issues of concern for sustainability assessments.
Climate change risks and opportunities
The acquisition of Future Electronics in 2024 has globally expanded our operational scope. WT reviewed the risks and opportunities identified and ranked in 2021 and selected items that may have an impact in the short term (1 to 3 years) based on the implementation benefits. After understanding current implementation status, WT re-evaluated the impact scale and financial impact, and identified three key risks that require continued attention and two major opportunities.

Three major climate change risk factors

Risk Factors
Impact Scope
Financial Impacts
Response Strategies and Solutions

Increased severity and frequency of extreme weather events (typhoons, storms, etc.)
Directly on the operations
∙ Decreased asset value

∙ Reduced asset service life

Note: Based on WT’s internal assumptions and calculation factors, the maximum financial impact may be NT$50 million approximately.
∙ Short-term: Understand meteorological information in real time, plan prevention and response measures accordingly for different natural disasters, and continue to maintain full communication with the park management center.

∙ Mid-term: It mainly focuses on transferring and diversifying risks, and purchasing relevant property insurance. The location of important configurations is continuously evaluated and needs to be located in an area less affected by the climate.

∙ Long-term: When choosing to add/relocate an operating location, the assessment items include climate change factors (such as flood prevention, earthquake prevention, etc.).

Extreme climate and high temperatures
Directly on the operations
∙ Increased operating costs

Note: Based on WT’s internal assumptions and calculation factors, it may cause a financial impact of NT$14.5 million approximately per year in the future.
∙ Short-term: When purchasing, priority is given to products with energy-saving labels, including office environments, electrical equipment, office machines, etc. Energy-saving facilities are installed, and the energy-saving results of each unit are regularly reviewed. Continue to promote energy conservation and various activities, and integrate the concepts into the habits of all colleagues, with the aim of reducing energy dependence.

∙ Mid-term: Continuously review whether the replacement plan is in line with the latest trends to ensure that the energy efficiency of the relevant equipment used meets expectations.

∙ Long-term: Establish a stable energy supply strategy, including seeking alternative energy and developing renewable energy.

Extreme weather events impacting supply chain logistics
Directly on the operations, vendors, customers
∙ Increased cost of capital

Note: Based on WT’s internal assumptions and calculation factors, it may cause a financial impact of NT$500,000 approximately per day.
Strengthen communication with customers, including exchanging information on the impacts of climate change, to reduce the impact of the effect on supply chain logistics.

Note: Short-term 1 to 3 years, medium-term 3 to 5 years, and long-term over 5 years

Two major climate change opportunities factors

Opportunity Factors
Financial Impacts
Response Strategies and Solutions

Reduced capital acquisition cost
∙ Reduced operating costs
Continue to pay attention to the sustainability indicators related to the organization and the performance of the sustainability indicators related to the organization. Actively communicate green financing conditions with financial institutions. By the end of 2024, the Company has reached 5 green financing interest rate agreements.

Develop/expand low-carbon products or services
∙ Increased demand for products leads to increased revenue
∙ Short-term: Plan product application and category analysis work, and define low-carbon products.

∙ Mid-term: Continue to track the technology application capabilities of the vendor and improve the support capabilities for the vendor’s low-carbon products.

∙ Long-term: Actively market low-carbon products to customers and increase the sales proportion of low-carbon products.

Major indicators and goals for climate change
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.

Aspect
Indicator
Short-term
Mid-term
Long-term

Governance and strategy
Linking Executive Compensation to ESG Performance
The remuneration of directors and managers is determined and reviewed in accordance with the Procedures for Remuneration of Directors and Functional Committee Members and the Procedures for Remuneration for Managers as necessary to strike a balance between sustainable management and risk control. In 2024, we established an Executive Compensation and Clawback Policy, incorporating environmental and social performance metrics, each accounting for 10% of the evaluation criteria.

Internal carbon pricing
Implementation plans are made to evaluate and roll out internal carbon prices.

Implementation of climate change risk management
Risks and opportunities are assessed, analyzed and reported every year.

Operation
Asset insurance rate
20%
40%
100%

Proportion of energy-saving lights and green-labeled energy-saving electrical appliances
50%
Lights in Taipei HQ are 100% LED.

Electrical appliances are 80% green energy-saving.
Electrical appliances are 100% green energy-saving.

Customer demand forecast
∙ Order volume for the next three months are updated monthly.

∙ Delivery schedules are updated monthly.

∙ Contracts are amended to incorporate climate exclusion clause.

Reduced capital cost
∙ ESG credit line proportion is increased year by year, achieving 10% in stage one.

∙ Mid-term financing is linked to ESG indicators.
Financial institutions are engaged to formulate ESG indicators suitable for the distribution sector, and further expand the ESG credit line. Relevant ESG indicators are included in WT’s sustainable target management.

Proportion of revenue involved in sustainable economic activities
∙ All suppliers provide statement of compliance with the latest regulations on the restriction of hazardous substances.

∙ Green energy, energy storage, and low-carbon transportation related applications are studied and designed.
∙ Suppliers are continuously required to comply with the latest environmental laws and regulations.

∙ System solutions are offered for green energy, energy storage, and low-carbon transportation related applications.
Revenue portion involved in sustainable economic activities is 20% or more.

GHG emissions
GHG inventory
Inventory of all operating sites are developed by 2025.
Inventory of all operating sites are verified by 2027.

Total emissions
Down by 3%-5% every year compared with previous year
Scope 1 and 2 emissions down by 50% relative to 2022 by 2035
Net zero carbon emission by 2050

Risk Factors	Impact Scope	Financial Impacts	Response Strategies and Solutions
Increased severity and frequency of extreme weather events (typhoons, storms, etc.)	Directly on the operations	∙ Decreased asset value ∙ Reduced asset service life Note: Based on WT’s internal assumptions and calculation factors, the maximum financial impact may be NT$50 million approximately.	∙ Short-term: Understand meteorological information in real time, plan prevention and response measures accordingly for different natural disasters, and continue to maintain full communication with the park management center. ∙ Mid-term: It mainly focuses on transferring and diversifying risks, and purchasing relevant property insurance. The location of important configurations is continuously evaluated and needs to be located in an area less affected by the climate. ∙ Long-term: When choosing to add/relocate an operating location, the assessment items include climate change factors (such as flood prevention, earthquake prevention, etc.).
Extreme climate and high temperatures	Directly on the operations	∙ Increased operating costs Note: Based on WT’s internal assumptions and calculation factors, it may cause a financial impact of NT$14.5 million approximately per year in the future.	∙ Short-term: When purchasing, priority is given to products with energy-saving labels, including office environments, electrical equipment, office machines, etc. Energy-saving facilities are installed, and the energy-saving results of each unit are regularly reviewed. Continue to promote energy conservation and various activities, and integrate the concepts into the habits of all colleagues, with the aim of reducing energy dependence. ∙ Mid-term: Continuously review whether the replacement plan is in line with the latest trends to ensure that the energy efficiency of the relevant equipment used meets expectations. ∙ Long-term: Establish a stable energy supply strategy, including seeking alternative energy and developing renewable energy.
Extreme weather events impacting supply chain logistics	Directly on the operations, vendors, customers	∙ Increased cost of capital Note: Based on WT’s internal assumptions and calculation factors, it may cause a financial impact of NT$500,000 approximately per day.	Strengthen communication with customers, including exchanging information on the impacts of climate change, to reduce the impact of the effect on supply chain logistics.

Opportunity Factors	Financial Impacts	Response Strategies and Solutions
Reduced capital acquisition cost	∙ Reduced operating costs	Continue to pay attention to the sustainability indicators related to the organization and the performance of the sustainability indicators related to the organization. Actively communicate green financing conditions with financial institutions. By the end of 2024, the Company has reached 5 green financing interest rate agreements.
Develop/expand low-carbon products or services	∙ Increased demand for products leads to increased revenue	∙ Short-term: Plan product application and category analysis work, and define low-carbon products. ∙ Mid-term: Continue to track the technology application capabilities of the vendor and improve the support capabilities for the vendor’s low-carbon products. ∙ Long-term: Actively market low-carbon products to customers and increase the sales proportion of low-carbon products.

Board of Directors	The highest decision-making unit for climate change risk management is responsible for approving relevant risk management measures, tracking the implementation of climate-related risk management, guiding decision-making response plans, and supervising the implementation results and goal achievement of the plans.
Sustainable Development Committee	A functional committee established by directors and independent directors regularly reports to the Board of Directors the results of climate change risk and opportunity assessments and guides the implementation of climate risk and opportunity management.
Risk Management Team	It is composed of the Accounting Officer and other senior executives of the sustainability management team to coordinate and plan risk management processes such as identification of risks and opportunities, and planning of response plans. Regularly confirm implementation results and integrate climate change risk management reports.
Functional/Business units	Regularly conduct assessment and analysis of climate change risks and opportunities, plan and implement response plans, and regularly report implementation results and performance.

Climate change risk assessment process
01 Risk item inventory	• Identify possible risks and opportunity projects with reference to TCFD recommendations, relevant domestic and foreign regulations, and expectations of external stakeholders.
02 Key risk analysis	• Analyze and identify key risks based on the risk occurrence time interval, risk occurrence possibility, risk possible location, and degree of risk impact. • Sort the analysis results in a quantitative manner and select the top three risk and opportunity items as key risks.
03 Financial impact assessment of risks and opportunities	• Consider the possibility of risks/opportunities occurring and the extent to which they affect operations, and evaluate the possible financial impact items and extent.
04 Response planning and reporting	• For key risks and opportunities, the degree of financial impact is considered, response strategies are evaluated (mitigation, control, transfer, and tolerance), and response plans are planned. • Reporting is performed in accordance with internal management procedures. Implementation results are regularly disclosed in the sustainability report.

Aspect	Indicator	Short-term	Mid-term	Long-term
Governance and strategy	Linking Executive Compensation to ESG Performance	The remuneration of directors and managers is determined and reviewed in accordance with the Procedures for Remuneration of Directors and Functional Committee Members and the Procedures for Remuneration for Managers as necessary to strike a balance between sustainable management and risk control. In 2024, we established an Executive Compensation and Clawback Policy, incorporating environmental and social performance metrics, each accounting for 10% of the evaluation criteria.
	Internal carbon pricing	Implementation plans are made to evaluate and roll out internal carbon prices.
	Implementation of climate change risk management	Risks and opportunities are assessed, analyzed and reported every year.
Operation	Asset insurance rate	20%	40%	100%
	Proportion of energy-saving lights and green-labeled energy-saving electrical appliances	50%	Lights in Taipei HQ are 100% LED. Electrical appliances are 80% green energy-saving.	Electrical appliances are 100% green energy-saving.
	Customer demand forecast	∙ Order volume for the next three months are updated monthly. ∙ Delivery schedules are updated monthly. ∙ Contracts are amended to incorporate climate exclusion clause.
	Reduced capital cost	∙ ESG credit line proportion is increased year by year, achieving 10% in stage one. ∙ Mid-term financing is linked to ESG indicators.	Financial institutions are engaged to formulate ESG indicators suitable for the distribution sector, and further expand the ESG credit line. Relevant ESG indicators are included in WT’s sustainable target management.
	Proportion of revenue involved in sustainable economic activities	∙ All suppliers provide statement of compliance with the latest regulations on the restriction of hazardous substances. ∙ Green energy, energy storage, and low-carbon transportation related applications are studied and designed.	∙ Suppliers are continuously required to comply with the latest environmental laws and regulations. ∙ System solutions are offered for green energy, energy storage, and low-carbon transportation related applications.	Revenue portion involved in sustainable economic activities is 20% or more.
GHG emissions	GHG inventory	Inventory of all operating sites are developed by 2025.	Inventory of all operating sites are verified by 2027.
GHG emissions	Total emissions	Down by 3%-5% every year compared with previous year	Scope 1 and 2 emissions down by 50% relative to 2022 by 2035	Net zero carbon emission by 2050