Climate Change


In response to the increasing concerns about global warming, extreme weather events, environmental conservation, energy efficiency, and safety, our company officially became a signatory to the Task Force on Climate-related Financial Disclosures (TCFD) in 2021 . In January 2022 , we successfully completed an external assessment conducted by SGS-Taiwan and obtained the " 2021 TCFD Performance Assessment - Achiever" statement, marking our commitment to TCFD recommendations. We published our first TCFD Climate-related Financial Disclosures Report. Primax Group continues to reference the TCFD recommendations issued by the Financial Stability Board (FSB) to ensure the disclosure of climate-related financial information. Following the four core elements of climate-related financial information disclosure: "Governance," "Strategy," "Risk Management," and "Metrics and Targets," we have established a risk framework. This framework enables us to identify significant risks and opportunities that may impact our operations and develop corresponding strategies to address them.

We keep a close eye on global climate trends and international responses and include climate change as one of the material issues and risks in relation to corporate sustainability. Ongoing analysis and control are underway to mitigate and adapt to greenhouse gas (GHG) emissions. Primax started in 2016 to implement ISO 14064 - 1 GHG emission inventory and obtained third-party verification. We participate in the voluntary reduction program and disclose the GHG management information for the reference of stakeholders. The inventory details are recorded in the National Greenhouse Gas Registry Platform.

The report is the second of Primax TCFD Climate-related Financial Disclosures Report. The disclosure of this report covers
Primax’s major operating locations: Taipei Headquarters, three factories in mainland China (Primax Dongguan, Primax
Chongqing, Primax Kunshan), and Primax Thailand, but excludes subsidiaries.

Climate change related governance

Primax has established an ESG Office under the Board of Directors and authorized the Chairman to designate the ESG Office as responsible for climate change risk assessment and management. Vice President Yen-Ying Chiang serves as the chair and established the Risk Assessment Taskforce by pulling together different functions. Risk and opportunity identification in relation to climate change is performed at least once per annum according to Primax’s risk management workflows set forth in the “Corporate Risk Management Policies and Procedures”. The purpose is to evaluate and manage financial impacts, formulate responding strategies and define the targets of relevant items. Implementation results are reported to the Board of Directors each year.

The Board of Directors provides guidance and reviews climate change risks and opportunities, assesses results, responding strategies and management performances. Measures are taken and ongoing monitoring is conducted on high-risk items. The management of climate change risks, strategies, and goal setting were presented by Yan-Ying Chiang, the Convener of the ESG Office and Vice General Manager, to the Board of Directors in November, 2022 , and were approved.

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In order to realize green production, we have put in place for all our employees “Management and Control Regulations on Energy Efficiency and Waste Reduction”. This includes proposals for energy efficiency and carbon reduction. The proposers will be rewarded with merit points based on project effects. Year-end performance bonuses will be issued according to the Regulations Governing Employee Rewards and Penalties. Furthermore, in 2022 , we developed a sustainability strategy blueprint. Starting from 2023 , senior executives at the level of Vice General Manager and above will have their compensation linked to sustainability performance, with a variation of 10 - 15 %. This linkage includes targets such as smart manufacturing and greenhouse gas reduction.


Process for Identifying Climate Change-Related Risks and Opportunities

Primax establishes the Risk Management Committee, with the ESG Office leading the Risk Assessment Team, responsible for convening, propelling, and executing. The ESG Office focuses on researching and evaluating domestic and international regulations and initiatives related to climate change. This effort aids in the company's formulation of environmental policies, ensuring alignment with national developmental trends and enhancing Primax's capacity to respond to the challenges of climate change.

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The risk assessment team, based on the questionnaire scales, considers international trends, existing company measures, and scenario simulation results to score and evaluate the risks. The ESG Office then discusses the results based on the scoring and identifies five climate change risks and three climate change opportunities. The TCFD Risk and Opportunity Response Strategy Discussion Meeting is convened by the ESG Office to determine the future climate changerelated measures for the company. Based on the assessment results and the anticipated timeline for risks opportunities, the risk matrix is depicted as follows:climate 6

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Climate-related Risk/Opportunity Identification Results and Strategies

In response to the identified key risks and opportunities, our company follows the risk response steps outlined in the 'Corporate Risk Management Policy and Procedures.' For high-risk or necessary reporting items, we develop risk mitigation plans and ensure ongoing monitoring and improvement. The execution of significant plans is regularly audited by the audit unit, as part of our audit plan.climate 3


Financial Impact Assessment of Climate-Related Risks and Opportunities

For the identified risk opportunity items, their corresponding strategies, actions, and expected output benefits are quantified as financial information. The analysis of their impact on revenue composition is presented in the following chart. In the short term ( 2023 - 2024 ), the financial impact is estimated to be approximately 12 . 41 % of revenue. In the medium term ( 2025 - 2027 ), the financial impact is estimated to be approximately 19 . 13 % of revenue. In the long term ( 2028 - 2032 ), the financial impact is estimated to be approximately 21 . 02 % of revenue.

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For comprehensive information regarding Primax's climate change risk, please refer to: 2022 TCFD Climate-related Financial Disclosures Report for complete information on Primax’s climate change risks.
For information and outcomes related to climate change adaptation and management, please refer to: Chapter 4 Environmental Sustainability