Climate Action

Climate change is a contemporary global issue that has profound impacts and presents challenges to humankind, ecology, and the earth. Over the past decade, according to the Global Risks Report that is published annually by the World Economic Forum (WEF), extreme climate is now the primary threat the modern world is facing. Research by Stanford University1 indicates that failure to achieve the goal of mitigating climate change, as specified in the Paris Agreement under the UN, may lead to the global economy losing trillions (USD) by the next century.

ASUS supports the goals of the Paris Agreement together with the targets and solutions drafted through scientific means. Although we are not in an energy-intensive industry, we persist with a no-regret policy and facilitate industrial influence on the topic of mitigating climate change. In addition to contributing to the environment and to society through innovation, we have integrated climate action into our operations policies by creating corresponding strategies set against major climate risks and opportunities. We use qualitative and quantitative methods to track progress.

2020 Goal/Performance

The average energy efficiency of our new notebook computers was 28.2% better than notebooks that followed the minimum Energy Star requirements.

New climate action goals announced in 2021:

In order for investors and stakeholders to understand our corresponding actions, we adopted the TCFD (Task Force on Climate-related Financial Disclosures) issued by FSB (Financial Stability Board) to disclosed governance, strategy, risk and opportunities and indicators to address climate change.

Please visit the Carbon Disclosure Project website for further information.

Climate Risk

A report published by World Meteorological Organization highlighted that "continuing climate change, an increasing occurrence and intensification of extreme events, and severe losses and damage, affects people, societies and economies." On the other hand, the world reached a consensus in the Paris Agreement to accelerate the movement towards a low-carbon economy. The goal is to hold the increase in global average temperature below 2° C above pre-industrial levels, and preferably limit the increase to 1.5 ° C. This means that regardless the success of actions in response to climate change around the world, companies will face certain risks.

ASUS identifies physical and transition risks based on the impact and frequency/probability of the risks, including:

 

Scenario Simulation

For the climate risk of priority concern, ASUS adopted a data-measurement sustainability strategy and used scenario simulations to quantify climate risks as the basis for climate action.

  • Increase in costs due to carbon tax/energy policy

ASUS main supplier are located in China. In order to assess the risk of carbon tax, we used the carbon tax scenario with China INDC: reduce carbon emission intensity (CO2 emissions/GDP) by 60-65% in 2030 compared with 2005. and another scenario with carbon emissions limited in the context of 2DS. We simulated two types of carbon taxes with exceeding the limit (regardless of whether they were assessed directly or passed through completely) and both will increase operating and production costs.

Potential financial impact: in Business As Usual (BAU) scenario, when the scale of production increases, carbon emissions were estimated to double in 2030 compared to 2019. If China updated its INDC target to be consistent with the strict 2DS scenario, the carbon tax would have a higher economic impact.

  • Product/service energy efficiency regulations led to change in customer behaviors

In IEA 2DS scenario, in addition to encouraging the use of renewable energy, governments around the world must regulate the energy efficiency of products. In BAU scenario, the annual growth rate of energy demand was 3%, and in 2DS scenario, it could be controlled within 1.5% by improving energy efficiency of products. Therefore, ASUS expected governments around the world to formulate stricter product energy efficiency regulations, and customers' requirements for energy-saving products would also increase.

Potential financial impact: we observed that all energy efficiency laws around the world were based on Energy Star. For example, the European legislation ErP Directive for Computer adopted the previous version of the Energy Star as the basis for revision. Since ASUS' main products have been compliant with Energy Star since 2013, even if Energy Star has undergone several revisions and the restrictions have become stricter, ASUS product still adheres to this principle for design, so there is no potential risk.

Action Taken

In response to the mitigating of climate change as a long-term strategy, ASUS formulated new climate action target based on the analysis results of scenario simulations and the carbon reduction pathway through scientific basis in early 2021, with 2020 as the baseline year:

Activity Data

ASUS' overall GHG emissions mainly come from the supply chain, followed by product use. The total carbon emissions in 2020 was 1,221,355 tons CO2e.

Direct Emissions

ASUS does not have an assembly plant, and the main direct emission sources are the use of firefighting equipment, backup generators and office vehicles.

Indirect Emission - Energy Input

According to the list in the financial report, after excluding companies that ASUS does not have control rights, the statistics on electricity consumption and carbon emissions of ASUS Group are as follows:

The carbon emissions came from the use of electricity for office operations. Since 2015, we build up the ISO 50001 Energy management system to identify hot spots of high energy consumption, gradually improve energy efficiency and reduce power consumption towards a goal of 1% annually. Moreover, the ASUS buildings are located in the area that close to public transportation system for reducing CO2 emission from staff commuting. Both of our operation headquarters have received the LEED Platinum certification, the top class of green buildings that reduces environmental impacts.

On the other hand, we realized that the office-based operation model has reached the marginal benefit in improving energy efficiency, and thus the development of renewable energy will be a necessary method. Therefore, ASUS signed a memorandum regarding renewable energy. ASUS will gradually increase the usage ratio of renewable energy.

Indirect Emission - Supply Chain

Emissions in supply chain emissions were 862,972 tons CO2e.

Supply chain is the major source of greenhouse gas emissions for ASUS. Analyzing more than 100,000 data from environmental footprint surveys over the years, we identified 90% of emission was from 9 types of key component suppliers in the manufacturing process, including: panels, motherboards, IC, wires, power supplies, mechanical components, keyboards, batteries, hard drives, as well as OEMs for notebook computers, desktop computers, monitors, and motherboards.

ASUS introduced Environmental Profit and Loss assessment project to monetize environmental impact of water pollution, greenhouse gas, and waste, allowing comparability of different environmental impacts by using the same unit to optimize the quality of decision making. Please see Chapter Responsible Manufacturing for more details.

After analysis and evaluation, we require suppliers to have ISO 14001 environmental management system certification. According to the ISO 14001 framework, companies must take necessary climate actions and formulate related mitigation and adjustment plans. Continuous improvement through the PCDA cycle can reduce the negative impact of suppliers due to climate factors.

For key suppliers, ASUS formulated a plan to guide suppliers to continuously improve through the following methods:

  1. Establish a list of greenhouse gas emissions data and complete third-party verification
  2. Require suppliers to achieve a 30% reduction in carbon emissions by 2025 (with baseline 2020)

Indirect Emission - Product Use

The world is moving towards the goal of the Paris Agreement. One of the management actions is to achieve the goal of reducing carbon emissions by improving the energy efficiency of products and meet the requirements. According to the estimation of Energy Technology Perspectives 2017, in order to achieve the 2° C target, the growth rate of energy consumption must be reduced from an annual increase of 3% to 1.5%. This means that the energy efficiency of products must be greatly improved.

After ASUS obtaining the world's first carbon footprint certificate in 2009, we have devoted in green design and have invested resources in improving the energy efficiency of hardware and software, as well as reducing carbon emissions during the use phase. Therefore, low-carbon products have always been one of ASUS' appeal. In ASUS 2020 Sustainability Goals, one of the goals was "increase energy efficiency of major products by 50%" and thus we had been tracking the performance over the years.

ASUS adopted a more aggressive product goal: "ensure that each year's key products demonstrate energy-efficiency that's 30% above the Energy Star standard", and the goal was more transparent and easy to measure. The Energy Star Program is the world's most stringent energy efficiency program. Before each revision, it will investigate the current best available technology and refer to global laws and regulations to maintain its high energy efficiency threshold. Setting a target of 30% above the Energy Star standard not only can we avoid sales obstacles caused by failure to meet global energy efficiency laws, but also create competitiveness in the green product market.

ASUS has adopted external power supplies with the highest energy efficiency level on the market, Level Ⅵ . At the same time, we set the internal specifications of 10% stricter than the law when the product is in the power off status to reduce power consumption. ASUS' new notebooks launched in 2020 were on average 28.2% better than the Energy Star standard.

Indirect Emission - Transportation

Business travel and upstream transportation of products were material.

  • Business Travel
    We calculated the carbon emissions of employees' business travel on planes. Domestic business trips and foreign business trips on land trips were not included in the calculation due to low significance. Due to the impact of the COVID-19 epide
    Due to the impact of the COVID-19 epidemic, emissions of business travel were 607 tons CO2e, with a significant reduction of 85% from previous year.
  • Upstream Transportation of Products
    The carbon emissions of products shipped from OEMs to markets around the world were 21,146 tons CO2e.
    Product lines included notebook computers, desktop computers and monitors.