Climate Change Management

Due to extreme climate caused by global warming, as well as the increasingly important influences brought by energy and climate change issues in recent years, to mitigate the impact of climate change on company operations, Cameo Communications has adopted the Task Force on Climate-related Financial Disclosures (TCFD) framework since 2022, which includes governance, strategy, risk management, and metrics and targets. The Sustainability Implementation Committee identifies climate-related risks and opportunities and formulates subsequent response strategies, reporting to the Board of Directors at least once annually, with the Board monitoring the implementation effectiveness。

Governance
Cameo Communications has established a Sustainability Implementation Committee, chaired by the General Manager. The Committee holds regular meetings each year to discuss potential climate change risks, energy resource efficiency, and various environmental impacts associated with the product life cycle arising from the company’s operations. The Committee reports climate change issues and implementation status to the Board of Directors regularly each year. The Company has also appointed a Corporate Governance Officer to include climate change factors in the operational risk management scope, implementing response measures to reduce operational risks。

Strategy

In response to the impact of climate-related risks and opportunities on the company’s strategy and financial planning, Cameo Communications refers to TCFD’s climate-related scenario analysis and uses quantitative and qualitative climate-related scenario analysis to adopt corresponding strategies. The Company references the 1.5°C Scenario (1.5DS) in the Sustainability Implementation Committee meeting, and simultaneously used the tools provided by TCCIP (Climate Change Integrated Service Platform) as a reference for the assessment of physical risk scenarios of climate change. It finally decided to adopt the 1.5DS/RCP2.6 scenario as the Company’s physical climate change risk scenario. At the same time, based on the ISO 31000 Risk Management – Guidelines, climate change risks and opportunities are analyzed based on the degree of impact and occurrence for transformation risks, physical risks, etc. in the above scenarios. Finally, we identified the climate risks and opportunities related to the Company’s operating scope, and referred to the TCFD report related to the communications network industry: The Company’s long-term operational development is considered based on a ten-year period (a decade), where short-term is defined as 1-3 years, medium term as 3-5 years, and long term as 6-10 years。

Cameo Communications 2024 TCFD Climate Risk and Opportunity Matrix

Risk management
Cameo Communications conducts discussions through the Sustainability Implementation Committee in the “TCFD Climate Change Related Financial Disclosure Discussion Meeting”. Through this meeting, relevant members are convened to discuss and identify climate change risks and opportunities, with the TCFD Recommendation Framework incorporated in the discussion, Upon discussion, transformation risks (policy and regulations, technology, market, reputation), entity risks (immediacy risks and long-term risks), and opportunities (resource efficiency, energy sources, products/services, markets, resilience) have been identified。

Overall, the risk assessment results show that there are no major risk items. Based on the consideration of reducing risks, Cameo Communications has selected items with relatively high likelihood to occur and level of impact to carry out relevant improvement operations。

  1. Market Risk – A moderate risk identified, which is increase in raw material price : Cameo Communications will establish cooperative relationships with multiple suppliers to reduce dependence on single suppliers and build long-term mutual trust and cooperation foundations to obtain supplier support and preferential treatment. The Company will closely monitor market and industry changes, including raw material price trends and supply conditions. This allows early identification of potential problems and, when necessary, signing long-term supply contracts with suppliers to ensure stable supply and pricing。
  2. Resource Efficiency – A moderate opportunity identified, which is using processing equipment with higher power usage efficiency : Priority will be given to purchasing water-saving and energy-saving equipment when updating equipment in the future。
  3. Energy Source – A moderate opportunity identified, which is building solar panels : Currently, the Tainan factory has installed solar panels and sold them to government agencies in accordance with the law. In the future, it will continue to evaluate the expansion of solar panels。
  4. Resilience – A moderate opportunity identified, which is energy alternatives/diversification : For renewable energy projects, the Company will closely monitor new legal developments and renewable energy progress, review the Company’s current compliance with regulations and potential development directions, and then formulate various measures to meet regulatory compliance and renewable energy usage. The Company will simultaneously comply with environmental, energy, and other related regulations to further reduce environmental burden and independently implement related energy-saving, water-saving, and waste reduction measures。
Note : This flowchart illustrates the Company’s tracking and monitoring of climate change risks, upon collecting data, we determine risk level based on a risk matrix. The Sustainability Implementation Committee carries out a comprehensive analysis and evaluation, then forms strategies and sets targets, and perform rolling review of achievement performance carried out every yea。

Metrics & Targets

Based on the metrics established for TCFD climate risks and opportunities, Cameo Communications has further set the following targets：

  1. Energy conservation and carbon reduction management quantitative target: the base year is updated from 2022 to 2024 due to the addition of Hsinchu R&D Center, with a 1 % carbon emission intensity reduction every year。
  2. Water conservation management quantitative target: Using 2020 as the base year, reduce water consumption rate by 1% every year。
  3. Achieve net zero carbon emissions by 2050。