Climate Change Response and Adaptation

In response to global trends on climate change, in 2020, Everlight Chemical began conducting assessments on climate-related risks and opportunities based on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations by the Financial Stability Board (FSB). In 2021, the Company established its Climate Change Working Group as the dedicated unit for the assessment of financial impact from climate-related risks and opportunities and formulation of short-, mid- and long-term emissions reduction goals and measures. In 2022, we adopted a more scientific and quantitative approach to manage GHG emissions and develop carbon reduction targets. In the future, we will continue to adopt various energy management systems and innovative technology and equipment to drive energy conservation and carbon reduction. This section describes our climate change response and adaptation efforts using the TCFD framework.

I. Governance

1. Board’s Oversight of Climate-Related Risks & Opportunities

The Company’s Board of Directors is the highest governance body for climate-related risks and opportunities. The Board of Directors and the Audit Committee are responsible for overseeing the effectiveness of risk controls. In addition, the board has established the Risk Management Committee and Sustainable Development (ESG) Committee as responsible units for the assessment of matters on climate-related impacts. Board members have a thorough understanding of the significance and impact of climate change and factor impacts of climate change issues when making major investment decisions.

Management Committee: The committee is chaired by the chairman of the board. The committee holds at least two meetings each year to discuss risk-related issues and reports risk management results to the board. Climate-related risks are classified as environmental risks.
Sustainable Development (ESG) Committee
: The committee is chaired by the chairman of the board. The Governance Team, Environment Team and Social Team are established under the committee.

In 2022, to further respond to the global movement towards net-zero emissions, Everlight Chemical pledged to and signed the TCIA 2050 Net-Zero Emissions Declaration by the Taiwan Chemical Industry Association.
2. Management’s Role in Assessing & Managing Climate-Related Risks & Opportunities
The management team is part of the Company’s Sustainable Development (ESG) Committee. In 2021, the Environment Team under the committee established a Climate Change Working Group, which consisted of personnel from production, finance, resource management, R&D, logistics, energy and resource management, risk management, and environment, health & safety, etc. The working group is responsible for assessing the Company’s climate-related risks and opportunities and making recommendations on how to manage these risks and opportunities. The Executive Secretary of the ESG committee regularly reports to the board on relevant measures and progress.

II. Strategy: Short-/Medium-/Long-term Climate-related Risks & Opportunities Identified

1. Short-/Medium-/Long-Term Climate-Related Risks & Opportunities Identified by the Company
To assess the effects and the potential financial impacts of climate change, the Climate Change Working Group identifies climate-related risks based on the TCFD framework, WBCSD chemical sector guidance, and CDP questionnaire. The identified climate-related risks and issues are ranked by significance using the risk matrix. Risk management and control measures for climate-related risks are part of the Company’s broader risk management system. Relevant monitoring and management plans are developed to minimize the potential impacts.
  • Description of Climate-Related Risks & Opportunities Identified
We categorize and rank climate-related risks based on severity and likelihood to quantify the impact of each risk and consider potential opportunities and responses. The risks are then mapped out in a climate-related risk matrix (TCFD Risk Matrix) based on significance, as shown below.
TCFD Risk Matrix
Note: The number next to each climate-related risk refers to its risk rating, which is used for prioritization of significance. Items in red refer to major risks,items in blue refer to moderate risks, and items in green refer to minor risks . Severity of risks is categorized into four levels: Level 1 is acceptable, Level 2 is marginal, Level 3 is critical, and Level 4 is catastrophic. Likelihood is assessed on a four-point scale based on potential frequency of occurrence: Level 1 refers to one occurrence in >15 years, Level 2 in 10-15 years, Level 3 in 5-10 years, and Level 4 in 1-5 years.
  • Taking Actions–Responding to Transition Risks & Opportunities
Based on the above climate-related risk and financial impact assessment, we have devised corresponding measures to mitigate and adapt to climate-related risks, as summarized below:

Mitigation/Adaptation Measures


2021-2023 Actions/Plans

Develop Sustainable Products

Develop green/sustainable products that improve use-phase efficiency and reduce energy/resource consumption during production processes

Everzol ERC Solution (reactive dyes for cotton) from the Color Chemical Business Unit provides dyeing solutions with better energy efficiency, which enable a reduction of 10,000 tCO2e in GHG emissions.

Develop Green Chemistry Production Techniques

Apply green chemistry principles in product design and production

We implement the 12 Principles of Green Chemistry in our product design and have received the Green Chemistry Application & Innovation Award by the Environmental Protection Administration in 2019 and 2021

Promote Circular Economy Practices

Increase resource efficiency by collaborating with others in the industry

We have been implementing circular economy practices for years and have received the TCIA Circular Economy Award in 2021

Implement Energy Management Measures

Establish energy management systems per ISO 50001 to improve energy-related performance

The Company has established ISO 90001 and ISO 14001 systems and plan to obtain ISO 50001 certification in 2023

Carbon Footprint Assessment Project

Adopt the ISO 14064-1:2018 GHG inventory system

Adopt the ISO 14067:2018 carbon footprint analysis system

Organizational carbon footprint assessment & verification plans:

Obtain verification for parent company in 2023

Obtain verification for entire group in 2024

Product-based carbon footprint assessment & verification plans:

Obtain verification for selected products starting from 2023

Carbon Footprint Verification & Reduction Pathway Project

Establish clear carbon reduction goals and emissions reduction pathway for the next decade

In 2022, a 24% emissions reduction goal by 2030 was proposed based per expert guidance and recommendation (with financial impact and feasibility assessment in progress, which will be submitted for board review and approval)

After taking into consideration our risk adaptation strategies and transition opportunities, we have set the following goals:
  1. Short-Term: Increase production and distribution efficiency, and apply new technologies to develop low-carbon production processes
  2. Medium-Term: Accelerate the development of environmentally-friendly and sustainable products
  3. Long-Term: Achieve carbon neutrality/net-zero carbon emission goals
2. Impact of Climate-Related Risks & Opportunities on the Company’s Business, Strategy & Financial Planning

Mitigation and adaptation strategy considerations include product development and manufacturing, supply chain management, market trends and operations, etc. Our carbon management approach is based on the five product categories the Group offers. Based on major risks and opportunities identified, we have conducted a comprehensive evaluation of the low-carbon transition measures needed and the potential financial impact before and after these measures are implemented, so as to effectively grasp the overall financial impact and devise response strategies and timelines.

Description & Financial Impact of Climate-Related Risks & Opportunities Identified


Risk and Opportunity

Related Impact

Financial Impact

Action Taken

Type of Financial Impact


Increased cost associated with renewables

Potential increase in cost of renewable energy due to increasing demand and slow development of green energy sources.

Medium to high negative impact

Introduce the ISO 50001 system to improve energy efficiency; replace equipment for better energy conservation

Increased capital expenditure; increased operating costs

Carbon tax / carbon pricing

Impact on the competitiveness of high-carbon products due to expanded regulation of the EU’s Carbon Border Adjustment Mechanism (CBAM) and global adoption of carbon pricing

Introduce energy management system; implement carbon footprint assessment and carbon management

Increased operating costs

Increased cost of raw materials

Shortage or increased cost of raw materials due to climate change-related requirements and standards

Medium negative impact

Implement carbon footprint assessment and carbon management

Increased operating costs

Market/Consumer shifts to low-carbon products

Carbon pricing leading to increased consumer scrutiny on the carbon emissions of products or services, affecting the competitiveness of high-carbon products

Develop low-carbon products; develop sustainable products and sustainable development blueprint

Increased operating costs


Necessity to develop low-carbon products

Carbon pricing leading to increased consumer scrutiny on the carbon emissions of products or services, affecting the competitiveness of high-carbon products

Medium to high positive impact

Develop production technologies that implement green chemistry principles; promote circular economy practices

Revenue from green products

Development of sustainable products for carbon reduction at user’s end

Necessity to develop products with lower carbon emissions at the user’s end due to shifts in market/consumer preferences

Develop sustainable products and sustainable development blueprint

Revenue from green products

Based on the TCFD Risk Matrix, carbon management is one of the most critical issues. Relevant sub-issues include:

  • Policy related to carbon taxes or carbon pricing may have a greater impact on the Company’s operation.
  • Low-carbon transition risks associated with the need to gradually achieve carbon reduction targets in line with the shared goal of achieving net-zero emissions by 2050.
Based on our own GHG inventory results in 2022 and historical emissions data for the past four years, the Group’s total GHG emissions in 2022 were 72,898 tCO2e. 21.6% of the emissions was from scope 1 emissions (mainly from stationary combustion sources, which accounted for 16.2%), and 78.4% was from scope 2 emissions (mainly from purchased electricity, which accounted for 60.3%).
To devise actionable carbon reduction measures, in 2022, we engaged external experts to assist us in setting concrete carbon reduction targets and carbon reduction pathways for the next decade. The goal of reducing emissions by 24% compared to the 2021 level was proposed based on the emissions reduction goals set by National Development Council’s (NDC). We will conduct subsequent financial impact assessment and feasibility evaluation, based on which the plan will be submitted for board approval for implementation.
3. Organizational Resilience in Climate-Related Scenarios Considered

We have assessed the resilience of our carbon reduction strategies in the following scenarios: 

Business-as-Usual (BAU)

No proactive decarbonization efforts are implemented and annual targets for emissions reduction are set at only 1%. In this context, while the transition risk to a low-carbon economy is not significant, acute physical risks (such as impact of extreme weather events on operations) and chronic risks (such as rising sea levels) would materialize. Under this scenario, organizations should strengthen their adaptation strategies.

Medium/Long-Term National Emissions Reduction Pathway

Under this scenario, emissions are reduced in accordance with the National Development Council’s (NDC) goal to cut greenhouse gas emissions by 24% by 2030, and net-zero emissions are achieved by 2050 as stipulated by the Climate Change Response Act. This scenario implies moderate low-carbon transition risk and low to moderate physical risks.

1.5℃ Pathway (the most ambitious decarbonization target)

The scenario represents a 50% emission reduction by 2030 and achieving net-zero carbon emissions by 2050. In this context, it is crucial to accelerate and strengthen decarbonization strategies. Otherwise the organization will face high transition risks. Physical risks are less significant under this scenario.

The emissions reduction targets and pathways in different scenarios are shown in the chart below. Our current emissions reduction targets and pathway align with the national goals, which can be represented by the blue line for the Medium/Long-Term National Emissions Reduction Pathway scenario (abbreviated as NDC Pathway below).

No Data Found

III. Risk Management

1. Processes for Identifying & Assessing Climate-Related Risks
Everlight Chemical’s risk management procedures are based on ISO 31000:2018 Risk Management — Guidelines. We have developed principles and strategies for risk management according to relevant risk attributes, risk categories (market, political, environmental, legal, financial, operational and other), probability of occurrence and severity.
  • Climate-related risks are classified as environmental risks. In 2021, the Environmental Team under the ESG Committee established an inter-departmental Climate Change Working Group to identify and evaluate climate-related risks and opportunities.
  • We categorize climate-related risks into transition and physical risks. As part of the broader risk management system, we assess the potential transition and physical risks, including policy & legal, technology , reputation, acute and chronic risks, and how they may affect the Company.
  • Risk assessment process: Risk identification => Risk prioritization => Risk impact assessment => Planning of adaptation and response measures, which will be integrated into the broader risk management system

When a climate-related risk is considered a major risk, specific response measures will be proposed based on the risk management procedures.

  • Risk reporting, response and monitoring: Each responsible unit continuously monitors risks related to operations, including tracking and confirming that the residual risks have been effectively controlled, and reports risk treatment results to the Risk Management Committee or at management system reviews, to serve as reference for the adjustment the Company’s risk control mechanism and operational strategies.
2. Processes for Managing Climate-Related Risks
As summarized in the graphs below, our current climate-related risk management approach follows the PDCA (Plan-Do-Check-Act) management process:
3. How These Processes are Integrated into the Company’s Overall Risk Management
Everlight Chemical’s climate-related risk management system covers the management systems of the following units and levels. We consider management policies, evaluate current approaches and determine preventive measures to reduce related impacts on our operations.

The Climate Change Working Group under the Environment Team of the ESG Committee is responsible for identifying and assessing related transition risks. The working group then reports the results upwards for development of response measures through the administrative system. The Risk Management Committee oversees the effectiveness of the Company’s climate change mitigation and adaptation measures.

IV. Metrics and Targets
1. Metrics Used to Assess Climate-Related Risks & Opportunities in Line with the Company’s Strategy & Risk Management Process
As the first chemical company in Taiwan to obtain ISO 14001 Environmental Management certification, Everlight Chemical has a robust environmental management system in place and continues to make improvements, including through reviews and improvements on energy efficiency. To respond to the global trend of carbon reduction, we have introduced the ISO 50001 Energy Management System standard in 2022 and plan to begin obtaining third-party certification in 2023.
Based on assessments by the Climate Change Working Group, implementing energy management and improving energy and resource efficiency will help Everlight Chemical respond to climate-related risks and also facilitate achieving the circular economy. We have devised the following metrics and targets accordingly:

Source of Risk

Source of Risk

Key Issue

Response to Opportunity/Risk

Performance Indicator

2023 Target


Changes in carbon-related policies and regulations

Carbon tax/pricing policies

1. Implement energy management systems

2. Introduce comprehensive carbon footprint assessment and carbon risk management

1. Implement energy management systems

2. Introduce comprehensive carbon footprint assessment and carbon risk management

3. Develop sustainable products

4. Replace outdated and high-energy-consuming equipment, use low-carbon energy sources, increase energy efficiency, reduce GHG emissions intensity

5. Improve waste recycling rate

6. Improve water recovery rate

Progress on completing third-party ISO 50001 certification for energy management systems by 2023 Q3


Regulation of existing products and services

Progress on completing organizational carbon footprint assessment and third-party verification for parent company by 2023 Q3


Progress on completing third-party carbon footprint verification for selected products by 2023 Q4



Shifts in consumer preferences

Percentage of revenue from sustainable products (%)



Substitution of existing products and services with low emissions options

GHG emissions intensity reduction (tCO2e/NT$mm output)

≦ 8.7


Changing customer behavior

Water recovery rate (R2)

≧ 84%

Increased cost of raw materials

Waste recycling and reuse rate

≧ 71%



Increased severity of extreme weather events such as cyclones and floods

Improve drainage capabilities of production facilities in response to increased risk of heavy rainfall, enhance organizational resilience

Incidence of flooding at production sites due to heavy rainfall


2.Disclosures on Scope 1 / Scope 2 / Scope 3 Emissions & Related Risks
Since 2005, Everlight Chemical has obtained third-party certification for ISO 14064-1:2006 for six consecutive years (scope: ECIC Plant I-III). We continue to apply the same system and methodology to conduct carbon footprint assessment for the entire group (including ECIC Plant IV, Trend Tone Imaging and Everlight Suzhou) to ensure accurate representation of our GHG emissions. The Group’s 2019-2022 performance on GHG emissions and GHG emissions intensity are as follows:

2019-2022 GHG Emissions

GHG Emissions & Output Value (Everlight Chemical)
GHG Emissions & Output Value (Group)

2020-2022 GHG Emissions Intensity (Everlight Chemical)

No Data Found

2020-2022 GHG Emissions Intensity (Group)

No Data Found

3.Targets Used to Manage Climate-Related Risks & Opportunities and Their Performance
In 2022, we engaged external experts to assist us in developing a ten-year carbon reduction plan, including reduction targets and pathways, based on the characteristics of our industry and production processes, production facilities and current energy consumption patterns. The carbon reduction plan covers scope 1 and scope 2 emissions. Experts recommended a goal of reducing emissions by 24% by 2030 with 2021 as the base year. We have begun conducting financial impact and feasibility assessments subsequently, based on which the plan would be submitted for board approval for implementation.
  • To manage climate-related risks and opportunities, we have set the goal to reduce our medium-to-long term GHG emission intensity (tCO2e/NT$mm output).
  • In 2022, through collective efforts, the Group successfully lowered the GHG emissions intensity by approximately 7% compared to 2021. Our medium-term targets are as follows.

Short/Medium/Long-Term Targets for GHG Emissions Intensity

GHG Emissions Intensity Performance & Targets (Everlight Chemical)
Unit: tCO2e/NT$mm

GHG Emissions Intensity Performance & Targets (Group) Unit: tCO2e/NT$mm