Climate Change Risk-FETnet

Environmental Sustainability

Climate Change Risk

FET followed Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to present a comprehensive inventory of key climate changes, energy risks and FET management, with a focus on corporate governance, strategy, risk management, indicators and targets. FET identified potential climate change risks, while also evaluating the process and scale of financial impacts related to those risks and related countermeasures.

Process of Risk Identification

Climate Change Risk Matrix

TCFD Guide Framework-Governance

FET’s Board-level “Risk Management Committee” is the company’s highest risk governance body and hold regular discussion with the board of directors on key corporate risk management issues, including climate change risks. Under the Risk Management Committee is an “Environment and Energy Management Committee” which is responsible for promoting and executing climate change related policies.

Strategy

FET implements climate-related financial impact analysis on physical risk and transition risk to understand the potential impact of major climate risks on business strategies and decisions

Risk Management

Transition Risk

Among the key climate change risks, the costs to transition to lower emissions technology includes the transmission of equipment that needs to be replaced in advance in response to the low-carbon transformation trend, improvement on GHG emissions management, development and cooperative research of energy-saving and low-carbon technologies. Uncertainty of energy policy and increased pricing of GHG emissions also have great impact on FET, such as failure to achieve national GHG reduction and renewable energy use targets could lead to the imposition of fines on FET or the need to buy carbon credits from other enterprises, impacting the image of the company. In addition, if FET adjusts its business model and is forced to forgo services with high levels of carbon emissions that will impact enterprise revenue, and If national renewable energy policy leads to an increase in electricity prices or unstable power supply, it could disrupt FET operations or services.

FET develop climate change adaptation plan for key transition risks, including roll out new renewable energy business and research renewable energy use targets and timetable, while increasing the installation capacity of renewable energy annually (including increasing the purchase of renewable energy certificates and self-certification capability) and plan to build solar energy base stations, and renewable energy next to newly constructed data centers should be included as part of evaluations. To effectively control and reduce GHG emissions created in FET operations and supply chain, proactively cultivating low carbon technology transformation talent and cooperating with upstream and downstream operators. Also, strengthen energy monitoring and management systems, while using equipment replacement and upgrades to improve the efficiency of energy use and reduce overall power consumption, to balance the cost of rising electricity prices. FET evaluate the impact and current implementation of important related laws, while conducting quarterly reviews of possible legal changes and planning countermeasures, and purchase related liability insurance and adopt other disaster prevention measures to improve business continuity management.

Physical Risk

Adaptation plan of physical risks (increased frequency of severe typhoons and extreme rains) is indicated in the following table, all of the countermeasures cover 100% of existing and new operating site.

Targets and Indicators

In terms of mitigating climate change, the biggest issue for the telecommunications industry is energy use. Every year, in response to the global objective of keeping increases in temperature to under 2 degrees Celsius, FET tracks the energy use of its base stations, data centers, stores and office buildings and drafts science-based volume reduction targets, as part of its pursuit of energy transformation. FET‘s target is to reduce total Scope 1 and Scope 2 GHG emissions in year 2030 by 20.3% from our base year in 2016, and to reduce total Scope 3 emissions by 17.2% from that of 2016. In addition, FET increases renewable energy installed capacity annually, as part of its pursuit of energy transformation. FET also establishes management indicators and targets for energy use in those aforementioned areas of major energy consumption and promotes energy conservation.

Inventories of FET Telecom's 2021 GHG Emissions

2021 GHG Emission Inventories (statistical data based on Scopes 1-3)

ENVIRONMENTAL SUSTAINABILITY