Climate Change Strategy and Management

Climate Change Strategy and Management

As the world’s leading provider of industrial computers and business networking technologies and services, Advantech understands its responsibility to the global environment policy statement on climate change is consistent with the goal of Paris Agreement to limit the global temperature rise below 1.5° C. After passing the sciencebased target (SBT) in 2021 and committing to the SBT, we further joined the RE100 initiative in 2023 and committed to achieving the goal by 2040, considering renewable energy as an important strategy for moving towards net zero, and setting the goal of achieving net zero by 2050. Starting from 2025, to further accelerate our carbon reduction plans, we will adopt the 1.5° C SBT as our carbon reduction goal for the next decade and continue to promote global initiatives such as RE100 across all RBUs.

Advantech has included climate change as one of the material risk projects of corporate sustainable management, and has managed it according to the two standpoints of "mitigation" and "adaptation." Meanwhile, we are also actively identifying risks, building adaptation capabilities, further researching and analyzing opportunities for climate change, and accumulating and deepening R&D momentum. We continue to invest in eco energy and in energy-saving products and solutions, and we are integrating them with the core business of energy management to promote energy saving and sustainability.

Advantech's Net Zero Vision

Advantech's Climate Change Development History

Extreme weather events caused by climate change, the growing pressure for low-carbon transitions due to aggressive national carbon reduction goals, and carbon reduction demands from upstream and downstream value chain partners have already begun to pose potential operational challenges for enterprises. In response to the growing global emphasis on linking identified climate risks with financial impacts, Advantech has adopted the TCFD framework. We promote climate change management and disclosure based on the four core elements recommended by the TCFD: governance, strategy, risk management, and metrics and targets. This systematic approach allows Advantech to assess the climate risks and opportunities we face. We conduct in-depth evaluations of climate-related risks identified through our existing risk management processes and map them across our Pan-Operational Risk Map to ensure comprehensive coverage of our overall operational risk landscape. The assessment results and response plan has also been reported to the Senior management of the SDC for confirmation, and the SDC will report the progress of climate management to the Board of Directors on a regular basis to enhance the Company's resilience in responding to climate risks. For more details on our climate risk and opportunity disclosures and management actions, please refer to the “2024 Advantech Task Force on Climateand Nature-related Financial Disclosures.“

Advantech identifies significant climate-related risks and opportunities by referencing the risk and opportunity definitions outlined in the TCFD framework, combined with multidimensional issue collection, cross-departmental discussions, and external consultations Through this process, we concretely identify significant risks and opportunities relevant to Advantech, their potential occurrence scenarios and impact levels, and analyze their possible financial implications. We focus on operational aspects (reduction, natural disasters), product aspects (including the supply chain), and market aspects based on industry characteristics and international developments. This enables us to comprehensively inventory climate risks and opportunities at the organizational level and develop precise response strategies. Consequently, Advantech's climate risk management covers the entire value chain, including upstream, downstream, and our own operations. Advantech's climate-related risks and opportunities, financial impact evaluation process, items, and materiality assessment results are shown in Figure.