Climate Change and Environmental Risk Management
Adopted at the end of 2015 and went into effect at the end of 2016, the "Paris Agreement" is the latest version of the Global Climate Agreement following the Kyoto Protocol. The "Paris Agreement" not only agglomerates the global consensus on climate change, but also reflects how the countries facing the challenges of sustainable development are dealing with the issue. Greenhouse gas emissions have slowly become the inevitable direction with the global trend. Under the driver and influence of the government, foreign investors, financial institutions and rating organizations, enterprises have been urged to establish corporate carbon management strategies, goals and actions in a more science-based way.
Although Taiwan is not a member of the United Nations nor a contracting state of the United Nations Climate Convention, based on the responsibility of the Earth Citizens and a part of the global supply chain, we also face the potential risks of climate change and the pressure of energy saving and carbon reduction. Therefore, the Taiwan Legislative Yuan has adopted the "GHG Emission Reduction and Management Act" in 2015 and sets out the objective of reducing “Greenhouse gas emissions in 2050 by 50% or more compared to 2005", and the objective will be reviewed and adjusted every five years in the future. This action is the determination of voluntarily reducing carbon emission that Taiwan declares to the international community. On October 8, 2018, IPCC released the “Special Report on Global Warming of 1.5 °C,” and the Taiwan government has complied with “The Greenhouse Gas Reduction and Management Act” for the first time to provide for specific carbon reduction actions from 2018 to 2020. Combined with the overall carbon reduction strategy blueprint for the country, it will decrease the first stage of the greenhouse gas emissions control target of 2% in 2020 compared with 2005.
If Chunghwa Telecom does not immediately respond to the climate change issues and relevant environmental laws and regulations and systems, there may be risks of legal penalties and losing the industry leading edge at the same time. Faced with the challenges of stakeholders and damaging corporate reputation, therefore, we deeply understand the importance of climate change issues. The following illustrates the potential risks and opportunities of climate change and how we manage the issues.
Climate change may cause the following risks to operations:
2. Following the implementation of the "GHG Emission Reduction and Management Act," our country will conduct greenhouse gas emissions control in the future, open carbon rights and carbon trading. Since the daily network and facilities operation are dependent on a large number of energy support, followed by increased operating costs, the Company’s finances will certainly be affected.
CHT is using the "Corporate Core Competencies" to develop energy-saving and carbon-reducing products to serve the community and consumers. We promote the concept of environmental sustainability through internal and external strategies and communicate with consumers and all stakeholders through the issuance of the "Corporate Social Responsibility Report" to comprehensively and systematically organize all efforts in the environmental sustainability.
(1) Internal; we use the organized and systematic approach to set up the "Corporate Environmental Sustainability Strategy and Objectives" to implement the environmental actions, and with self-developed environmental information system to manage all the environmental information.
(2) External; we implement "Green Products and Services" to provide enterprises with professional energy-saving technologies and services to assist the industry easily achieving the purpose of energy saving management.
We have used many years of experience in the development of the "Electricity Environment Monitoring and Information Communication System", in addition to integrate and monitor energy consumption equipment in various areas of the building, use the cloud platform to provide customers with energy efficiency calculations, equipment operation status and immediate notification to achieve the predictability and prevention mechanisms, to assist the enterprises reducing energy-saving and carbon-reduction threshold, and furthermore to achieve the objectives of energy-saving and carbon-reduction.
Opportunities and Actions
For the early response to current and future potential environmental and climate change relevant laws, regulations and international agreements, we adopt the following strategies:
1. Commit to setting "Science-Based Targets, SBT”
In order to identify the mid and long-term carbon reduction targets, we plan to officially commit to setting SBTs and submit targets to SBTi for review within two years. The substantial benefits of energy conservation and carbon reduction are expected to be reflected in the revenue of green products, which will bring substantial benefits to Chunghwa Telecom. At the same time, we will publish information on carbon management results in the CSR Report every year.
2. Support Task Force on Climate-Related Financial Disclosures, TCFD
In 2018, Chunghwa Telecom became the world's 513 companies, and the first Taiwanese telecom company to sign the “Task Force on Climate-Related Financial Disclosures, TCFD.” The 2018 Chunghwa Telecom Corporate Social Responsibility Report has revealed information on climate change in accordance with the framework recommended by TCFD.
3. Pay close attention to the changes in domestic and foreign laws and regulations, and actively negotiate with the competent authorities and other stakeholders, to be fully prepared as soon as possible
Starting in 2017, incorporate GHG emissions with related operations and activities, introduce the idea of carbon pricing management, and conduct stress testing from the perspective of risk management, in response to future regulations such as the Greenhouse Gas Reduction and Management Act, or respond to stakeholders’ interests, and as a reference for promoting energy-saving emission reduction and renewable energy system construction accordingly.
4. Plan for an environmental sustainability program
We established the "Five-Year Plan for Environmental Sustainability Development Strategy and Objectives" in 2015, and actively expand our environmental protection initiatives with the aim of "Green Enterprise", "Green Sustainability" and "Green Innovation." In addition, we also promoted facilities room disaster reduction and climate adaptive programs, to strengthen the disaster response measures and reduce the climate risks.
5. Introduce and develop renewable energy
Besides cooperating with subcontractors in the generation of solar energy and install solar panels on the roofs of rented spaces to provide the leasing contractor with power, and sell any excess back to Taipower, we have been assessing the possibility of participation in government bidding or investment in Taipower wind energy projects where we could leverage our telecom expertise and experience of energy conservation and carbon reduction. In addition, we actively respond to the government's renewable energy development policy and purchased 2 million kWh of green electricity in 2015 as the fifth largest purchasing organization. In 2016, we again purchased four million kWh of green electricity as the second largest purchaser.
In the future, we will continue to support the government's renewable energy trading mechanism, budget for T-RECs, and respond with actions to promote Taiwan moving towards a cleaner and more sustainable future.
6. Develop solar power as cross-industry business opportunities
Solar power generation is one of the typical applications of renewable energy for the circular economy, which paves the way for the next generation of energy development. With enterprises investing in green energy meeting the consensus and vision of all walks of life, the global green energy industry developing rapidly, and the issue of green energy is also promoted by the Taiwan government to catch up with the world.
Chunghwa Telecom actively responds to government policies and focuses on ICT innovation, research and development. We have actively invested in the solar energy industry and deployed solar power stations over the years. In addition to the self-built sites, a total of 97 T-RECs were obtained in 2018. We also contracted Taipower, Taiwan Cement Corp and a number of private enterprises to build solar power stations and the total power generation has exceeded 150MW, estimated to contribute to the Company’s solar energy revenue of about NT$ 7 to 8 billion. In 2017, we contracted the construction of a solar power plant in the Zhangbin Industrial Park of Taipower Corporation. At the beginning of 2019, it had fully supplied 100MW, which became an important milestone for us since entering the solar energy industry.
7. Greenhouse gas emissions management measures
We continue to actively implement all types of energy, resource reduction and re-use activities, enhance the efficiency of renewable energy applications, conduct annual greenhouse gas inventory and verification, as well as public disclosure of relevant information. With self-developed EARTH (Environmental Sustainable Development) system, we effectively control the environmental resources and environmental protection energy-saving efficiency, to not only help reduce energy costs, but also improve the environmental management efficiency. Since the vast majority of carbon emissions during the operation process are from the supply chain, therefore, we also invite supplier partners to work together to implement sustainability activities, and build a sustainable life circle together.
In addition to lowering the impact of operations, products and services on the environment, we also view the crisis as a turning point. There are various possibilities for us from the product and service-oriented aspects by providing green innovation services, such as video conferencing, electronic billing, cloud products and other technological innovations.
We reduce the carbon footprint and leverage our technical advantages to enhance the existing products for creating a smart city. For instance, smart taxi dispatch can avoid circling around, reduce fuel consumption, use energy more efficiently, and explore more low carbon emission solutions for customers.
Renewable Energy Actions Plan (Aligned with SDGs 7: Affordable and Clean Energy)
As the leading telecommunication services provider in Taiwan, Chunghwa Telecom pursues sustainable operations coupled with business growth while providing both environmentally friendly and energy-efficient telecom services to consumers. Chunghwa Telecom has been actively supporting the government’s Green Power Plan and continues to promote renewable energy sources and assists the government in the creation of green energy economy by making a major contribution to the industrial development of green energy supply and environmental protection. The Company expects to make the best of its expertise in information and telecommunication, as well as Internet of Things, while working together with county and city governments under their autonomous regulations of low carbon city development to promote the construction of renewable energy infrastructure.
In 2016, we announced the establishment of "Energy Office," locked in aspects of solar energy, wind power and LED as the directions of development. We cooperate with subcontractors in the generation of solar energy and install solar panels on the roofs of rented spaces to provide the leasing contractor with power, and sell any excess back to Taipower. We have been assessing the possibility of participation in government bidding or investment in Taipower wind energy projects where we could leverage our telecom expertise and experience of energy conservation and carbon reduction. Among them, we worked with Taipower on a solar power project in Zhangbin Industrial Park under a TWD 58 billion contract. As of the end of 2018, Chunghwa Telecom has established 70 solar power stations around the island, with a total capacity of 672 kWp. The capacity of power generated by renewable energy is expected to reach 1000 kWp by 2023.
We have installed photovoltaic panels on base stations in some of the remote mountain areas to provide green power and reduce energy consumption and carbon emissions. In the event of main power loss due to natural disaster, or breakdown at Taipower, the solar facilities can provide emergency power for the base stations. We also worked with Taipower on the construction of a 100 MW solar power facility in Changhua County, Taiwan. Chunghwa Telecom will create a digital network for the facility, to better streamline the operation of the plant. The 150-hectare site, which was originally set to house a coal-fired power plant, will be transformed into the nation’s largest ground-mounted solar system. The solar power projects are in line with Chunghwa Telecom’s plan to accelerate the development of renewable energy in the nation and meet the government’s goal of phasing out nuclear power by 2025.