Energy Management and Addressing Climate Change

Climate change is the contemporary topic over the world for inducing profound impacts and challenges to humankind, ecology and earth environment. According to the Global Risks Reports published by the World Economic Forum (WEF) over the decade, the extreme climate has always been the primary risk that threaten the world, despite of the possibility and the impact. The research by Stanford University indicated that failure to achieve the goal of the Paris Agreement may lead to a loss of trillions in USD by the next century.

The climate issue has been identified as a material topic for ASUS, which does not only attract high attention from stakeholders, but also imposes great influences in governance, environment and society. ASUS supports the Paris Agreement, as well as the science-based targets. Although ASUS is not an energy-intensive industry, we still strive to impose industrial influence on the topic of mitigating climate change based on no regret policy. To allow investors and stakeholders in understanding and corresponding, we adopted the TCFD (Task Force on Climate-related Financial Disclosures) issued by FSB (Financial Stability Board) where we disclosed governance, strategy, risk and opportunities and indicators in the annual report to address climate change.

We integrated the climate action into the business strategy. Regarding to the material climate risks and opportunities, which including “mandates on and regulation of existing products and services”, “changing customer behavior”, “increased severity of extreme weather events” and “costs to transition to lower emissions technology”, we conducted simulated scenarios to analyze ASUS climate resilience from the supply chain, operation, and product usage, and then adopt strategy and actions based on the governance structure, as well as implementing tracking performance by qualitative and quantitative measures.

Since our main production and supply chain is located in China, the INDC (Intended Nationally Determined Contribution) under China was used as one of the scenarios, while the other scenario was based on the Paris Agreement. The two scenarios corresponded with scenarios 2.6 and 8.5 under RCPs (Representative Concentration Pathways) respectively.

  • IEA WEO 2016 estimated the cost change of global resources under 2°C (RCP2.6) and 4°C (RCP8.5). ASUS built the simulated scenarios according to this for estimating cost increase in the carbon tax and regenerated energy that could possibly be confronted in the supply chain.
  • The Energy Technology Perspectives 2017 estimated in 2DS that the global growth in energy consumption must reduce from an increase of 3% per annum to 1.5%. ASUS built the simulated scenarios according to this for estimating product energy efficiency required to improve for achieving the 2DS (2 Degree Scenario) goal, as well as assessing the potential risks, financial impact, commercial opportunities and strategic adjustment to be faced under such scenarios.

Regarding the simulation of significant climate risks and opportunities, we set relevant administration measures on mitigation, transfer and control over the full value chain. The main actions include:

  • Product and service: Introduction of green design platform and continuous investment of innovation to improve the efficiency of energy utilized in software and hardware.

In the simulated scenario, energy efficiency statutes for global products become gradually strict and generates potential risks. To prevent interruption by energy efficiency statutes and create competitiveness among the market of green products, each ASUS laptop computer must comply with Energy Star requirements before entering into the market. Although Energy Star revised with stricter efficiency requirements, ASUS still holds the criterion for our laptop computers. 100% of notebook computers newly launched in 2019 and developed by the ASUS’ New Product Development Project are compliant with the requirements for computers defined in Version 7.1 ENERGY STAR® Program. The average energy consumption of the notebook computer is 27% more efficient than the standard value of Energy Star. The efficiency was also improved by 34% compared to 2013.

  • Supply chain: Under the RBA audit mechanism, we guided suppliers to strengthen resilience in corresponding with climate change, which motivated the supply chain in the transformation towards low-carbon manufacturing.

During the process of risk analysis, we estimated that the supply chain might experience an increase in energy cost and risk in the natural disasters. Toward low-carbon manufacturing, we partnered with suppliers to conduct out the GHG investigation. For relevant information, please refer to the Chapter on supply chain management.

  • Operation: With the ISO 50001 energy management system, we identify the hot spot with high energy consumption for improving energy efficiency gradually.

In ASUS, 99% of CO2 emissions generated from use of electricity in office operation. Since 2015, we build up the ISO 50001 Energy management system to identify hot spots with high energy consumption, gradually improve energy efficiency and reduce power consumption towards a goal of 1% annually. Moreover, the ASUS buildings are within convenient distance to public transportation for reducing CO2 emission from staff commuting. Both of our operation headquarters have certified the top class of green building that reduces environmental impact. In 2019, our CO2 emission increased by 12% compared to the previous year due to the movement of the new building, which was 15% lower than the benchmark. We will plan and re-assess the baseline and reduction targets, and consider renewable energy as optional energy source.

On the other hand, ASUS collected GHG activity of products transportation. All of the GHG data in material scope were validated by 3rd parties.

TThe amount of energy consumed and GHG produced by the operation headquaters and foreign subsidiaries is shown as below. Due to the adjustment on the product maintenance centers in 2019, ASUS modifies the surveyed boundary after considering the material principle, control and reduction potential of emission. The offices with less than 50 employees and perform marketing, sales and customer service as their main function are excluded.

Global GHG Emission Portfolio are shown as below:

Please visit HERE for GHG emission in supply chain.