Climate Change Risk-FETnet

Environmental Sustainability

Climate Change Risk

In response to the potential effects of climate change on our operations, FET adheres to the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We implement a comprehensive approach to managing climate risks, focusing on corporate governance, strategy, risk management, indicators and targets. We continuously identify risks and opportunities related to climate impacts throughout our value chain. We evaluate the financial impact and scale of each risk factor under various scenarios, reviewing and implementing response measures accordingly. Additionally, we establish measurement indicators and objective management to ensure the progress and effectiveness of our action plan.

Governance: FET has established board-level functional committees to strengthen governance over sustainability and climate-related issues. In accordance with their respective functions and responsibilities, these committees ensure effective management across key dimensions, including sustainability strategy and execution, risk management, board competencies, and the alignment of sustainability performance with remuneration. FET has established the Board-level ESG Committee, which is authorized by the Board of Directors to oversee economic, environmental, and social issues associated with operational activities, while reporting regularly to the Board of Directors.

The Board of Directors of FET: Meets on a quarterly basis, oversees the Company's implementation of sustainable development initiatives and regularly reviews performance and progress, ensuring the implementation and continuous improvement of relevant policies. To elevate the height and breadth of sustainability and climate-related governance, the Board of Directors approved the establishment of the Board-level ESG Committee in 2025. The Board authorizes the Committee to address economic, environmental, and social issues arising from operational activities, aiming to achieve FET's sustainable development goals, strengthen sustainability governance, and demonstrate a firm commitment to corporate social responsibility and sustainable operations.

Board-level ESG Committee: Meets on a quarterly basis, supervises and strengthens the company’s ESG policies, annual plans, and strategies. The Committee reviews the implementation and effectiveness of sustainability development, including sustainability-related risks and opportunities, and oversees sustainability disclosures. The Committee's operational status and relevant resolutions are reported regularly to the Board of Directors to ensure the effective operation of the sustainability governance framework.

Board-level Risk Management and Information Security Committee: Responsible for integrating the results of sustainability-related risk identification into FET's Enterprise Risk Management (ERM) system to implement enterprise risk management.

Sustainable Development Task Force: Meets regularly on an annual basis. The Corporate Communications & Social Responsibility Department serves as the executive secretary, with a senior executive appointed as the Chief Sustainability Officer. The Chief Sustainability Officer is responsible for coordinating FET's cross-organizational sustainability-related and climate-related policies, targets, strategies, and execution plans, as well as strengthening sustainability disclosures, while reporting regularly to the ESG Committee.

Process of Risk Identification

Climate Change Risk Matrix

Risk Event Identification

Supplementary Note: Impact timeframe - short term (1 year), medium term (2-4 years), long term (more than 5 years)

Strategy

FET has established a Sustainability Strategy Blueprint covering the three main pillars—Environmental, Social, and Governance (ESG)—with medium- to long-term goals set through 2035. The company is committed to maximizing its positive impact on the economy, environment, and society, striving to become a trusted partner for all consumers. Regarding key sustainability (including climate) risks and opportunities, through the aforementioned processes of identification, assessment, and prioritization, FET gains a comprehensive understanding of their impacts on its business model and value chain.

According to the 2025 climate risk and opportunity identification results, the climate risks under transition risks include “Higher operational costs due to the Large Electricity Consumer Regulations”, and “High carbon emission costs and risks resulting from ineffective government decarbonization policies”, which consequently lead to energy usage restrictions or shortages.Among the identified physical climate risks, “Business interruption driven by extreme weather” was assessed as a material risk. In addition, “Increased demand for sustainable products and services” was identified as a key climate-related opportunity.

Climate Risks, Opportunities, and Financial Effects

Detailed financial effects of relevant climate-related risks and opportunities on FET's 2025 reporting period and over the short, medium, and long term are described below: Impact Time Frame: Current Year , short term (1 year), medium term (2-4 years), long term (5 years and beyond)

Note 1: Electricity cost savings from the Company's solar sites are calculated by multiplying actual green power wheeling volume (via Taipower) by the applicable Time-of-Use (TOU) rates at each site.

In accordance with climate-related financial disclosure recommendations, FET conducted a financial impact analysis on the physical risk of “increased frequency of extreme rainfall events”.

Note 1: Adaptation measures apply to all (100%) existing and new base stations and data centers. The measures are planned based on the projected 50-year service life of base stations and core data centers. In response to potential impacts under this long-term climate scenario, timely reinforcements will be implemented as a principle to extend their service life.
Note 2: Changes in future typhoon frequency and severe typhoon proportions are projected based on climate scenario analyses from the National Climate Change Science Report 2024.

Climate Resilience Assessment

Note 1: IEA NZE 2050 Scenario: A 1.5°C net-zero pathway for transition risks, assuming aggressive climate policies and technology adoption to keep global warming around 1.5°C. It is used to assess transition risks under strict climate action.
Note 2: IEA STEPS Scenario: A stated policies pathway for transition risks based on currently announced government policies, carrying higher warming risks than strict mitigation pathways.
Note 3: RCP 2.6 (Mitigation Scenario): A low-warming pathway for physical risks, representing an active decarbonization scenario with controlled warming. Used to evaluate physical climate impacts under strong mitigation.
Note 4: RCP 8.5 (Business-as-Usual Scenario): A high-warming pathway for physical risks, representing a worst-case scenario with rising emissions and severe warming. Used to assess extreme physical impacts without effective mitigation.
Note 5: Physical risk inputs and parameters are based on extreme weather trends from the National Climate Change Science Report 2024. For example, by mid-to-late century, total typhoons hitting Taiwan may fall (~10% / ~50%), but the ratio of strong typhoons may increase (~105% / ~60%).

Metrics and Targets

Energy use is the most critical climate change mitigation issue for the telecommunications industry. FET has established climate-related Metrics for greenhouse gas (GHG) emissions, energy use, and water resources to track and manage performance. In addition to setting medium- and long-term targets for each mitigation measure, we review progress annually and make rolling adjustments based on external trends to reduce climate impacts through targeted management.

ENVIRONMENTAL SUSTAINABILITY