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TCFD
This year, following the recommendations of domestic sustainability regulations, Gamania took in advance to introduce the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to promote the transparency of information disclosures regarding climate-related risks and opportunities, and progressively set up a management mechanism for climate risks and opportunities which is expected to be integrated with the company’s risk management process in the future. We thereby facilitated low-carbon transformation and strengthened climate resilience based on four strategic directions: governance, strategies, risk management, and metrics and targets.
In August 2023, Gamania’s Board of Directors passed the Group’s “Net Zero Declaration,” committing itself to a 78% reduction in Scope 1 and Scope 2 carbon emissions by 2030 compared to the emissions in 2022, achievement of Scope 1 and Scope 2 carbon neutrality, and fulfillment of net zero carbon emissions by 2050. To keep in line with Taiwan’s net zero carbon emissions policy, we actively devise carbon reduction plans, including the replacement with power-saving equipment and purchase of green power in the short term, and changes to the energy use model of data centers in the medium and long term, thereby implementing energy conservation and carbon reduction, building low-carbon data centers, and providing services of better quality. The year 2023 marks the first year of utilization of green energy for Gamania Group. As of March, the group’s headquarters has commenced the use of approximately 21% solar green electricity. Our carbon reduction commitment has even been certified by CommonWealth’s “Temperature Rising Index for Pathways” for compliance with the target for a temperature rise limit of 1.5°C under the Paris Agreement.
Governance
In response to climate change issues, Gamania established a “TCFD Team,” which was jointly managed by the relevant members gathered by the “Environmental Symbiosis Team” and ” Sustainability Planning Office.” The Head of Internal Service Division was responsible for managing and carrying out environment-related projects such as greenhouse gas inventory and carbon reduction actions, and reported to the Sustainable Development Committee and the Board of Directors on a regular basis. The Board of Directors provided full authority and guidance on climate-related issues, such as the Net Zero Declaration, carbon reduction targets, and strategic planning.
Strategy
In the climate risk assessment and prioritization processes, the Net Zero Emissions by 2050 Scenario (NZE) of the International Energy Agency (IEA) and the RCP2.6 and RCP8.5 scenarios* of the Intergovernmental Panel on Climate Change (IPCC) were included to discuss the risks and opportunities Gamania could face in different climate scenarios. For operational deployment, strategy formulation and financial planning, carbon emission factors were taken into account; short-, medium- and long-term targets and action plans covering renewable energy use, replacement with energy-saving equipment, supplier selection, platform and big data installation, etc. were accordingly set, to gradually reduce the negative environmental impact of our operations through environmentally friendly measures.
Risk management
After the list of climate-related risks and opportunities was compiled, relevant departments identified and assessed the risks and opportunities for Gamania’s value chain, and made significance assessment of risk hazards based on the level of impactand level of vulnerability of each risk with reference to the common risk management practices, and sorted the risks in order based on the significance.The results were eventually integrated into the Group’s risk management system for timely preparation and implementation of response measures.
Metrics and Targets
All departments of Gamania jointly managed climate-related issues based on their respective responsibilities. The Internal Service Division was the primary responsible unit for promoting carbon reduction actions, and used carbon emissions as the climate indicator for internal management. For climate opportunities, Gamania internally introduced low-carbon technologies and services to the Group in an active manner, and included carbon emissions as one of the assessment factorsin terms of platforms and big data, agency for new products, and self-developed new products
Since 2022, the statistics on GHG emissions have been made with the method under the “GHG Protocol” every year, and we have been certified by a greenhouse gas inventory standard (ISO 14064). In 2023, Gamania Group announced the “Net Zero Declaration,” giving a commitment that the Group will achieve net zero carbon emissions by 2050 and set relevant metrics for follow-ups.
| Description of impacts | Potential financial impacts | Countermeasures I management plans | Scope of impacts | |
|---|---|---|---|---|
| Market risk Increased prices of energy and raw materials | In order to meet the NZE scenario's requirements to triple the renewable energy capacity and quadruple the energy efficiency, energy prices might shoot up to reflect the true cost. The attempts by various industries in Gamania's value chain to adapt to climate risks might result in price fluctuation of raw materials such as energy, crude and bulk materials, which could increase Gamania's procurement expenditure and operating costs for data center maintenance, etc. | Changes in energy costs, and higher operating costs and expenses |
| Upstream parties and own operations |
| Acute risk Extreme weather event - drought | In the IPCC SSP 5-8.5 scenario applied to Taiwan based on the TCCIP estimation, the result showed that the frequency of extreme weather would increase, and the probability of no rainfall for more than 30 days would increase by multiples. Drought could cause water outage or shortage and therefore lead to higher water bills, and the following risks could subsequently arise:
| Operational disruptions, supply chain disruptions, increased operating costs or reduced productivity due to equipment maintenance and energy use, etc. |
| Upstream parties, own operations, and downstream parties |
| Chronic risk Rising average temperature | In the IPCC AR6 scenario with 1.5 to 4°C of temperature rise applied to Taiwan based on the TCCIP estimation, the waters around Taiwan would see a sea level rise of 0.5 to 1.2 meters, followed by a longer drought period and extremely high temperature; Gamania would thus face the following impacts:
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| Technology risk Development and application of renewable energy | According to the Net Zero Emissions by 2050 Scenario (NZE) proposed by the International Energy Agency (IEA), the global installed capacity of renewable energy power generators must be tripled by 2030 compared to 2022. Considering that Gamania' s main source of carbon emissions is electricity use, we intend to invest in the development and application of renewable energy in a more wide-ranging manner in the future, which will lead to greater operating costs. | Higher operating costs and expenses |
| Own operations |
| Acute risk Extreme weather event - rainstorm | In the IPCC RCP 8.5 scenario applied to Taiwan based on the TCCIP estimation, the proportion of strong typhoons will increase by about 100% and 50% in the middle and end of the current century, respectively, and the average wind speed will increase by 8%. Statistics show that 7.96 strong typhoons are expected to hit Taiwan in the following decade, and that there will be a higher probability and intensity of extreme rainfalls, and the probability of flooding will increase by 10%-20%. The accompanying risks include:
| Operational disruptions, supply chain disruptions, increased operating costs or reduced productivity due to equipment maintenance, etc. |
| Upstream parties, own operations, and downstream parties |
| Technology risk Low-carbon technology transformation | To respond to the expectations of stakeholders such as investors and consumers, and to meet future demand for low-carbon products or services, we will progressively introduce low-carbon transformation in the future through technological innovation, institutional innovation, industrial transformation , new energy development, and other means. Hence, there will be additional expenses. | Higher operating costs (e.g. for building low-carbon data centers), R&D expenditures, or new technology investment cost |
| Own operations |
In 2023, Gamania, with reference to the characteristics and benchmarks of the industry it is in, created a list of climate-related opportunity issues, which was evaluated and confirmed by the TCFD Team to be consistent with Gamania’s business philosophy and strategic directions. The list is based on the inventory of climate and business opportunities that could be grasped and developed under the low-carbon transformation trend, including resource efficiency, products and services, and green procurement/supply chain. We further formulated internal strategies and targets, and management and action plans, as described in the table below:
| Opportunity issues Internal strategies and targets | Opportunity issues Internal strategies and targets | Potential financial impacts | Management and action plans |
|---|---|---|---|
| Resource efficiency In response to climate change, introducing or developing new technologies and equipment for use in renewable energy application, resource efficiency, green buildings, etc., to reduce operating costs or enhance the resilience to climate risks. | Gamania actively promotes digital transformation, renewable energy applications, and environmentally friendly recycled materials that are of low carbon. We also continue to advocate water conservation, energy conservation and waste reduction to our employees, and plan more comprehensive management policies for water resources and waste to cut the consumption of various resources, and fulfill the Group’s philosophy of environmental symbiosis. | Lower operating costs |
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| Products and services In response to the green trend and changes in consumer behavior, developing and innovating our own services to achieve opportunities for scope expansion into new business areas and the development of new markets. | Making use of digital network technology, Gamania introduces AI, big data, etc. for the innovation of products and services, which helps effectively integrate the synergy of the Group, increase operational efficiency, improve service experience, and thereby win consumer recognition. We also accordingly provide digital business solutions, and integrate cloud data centers, information security services, mobile safety, etc. | Innovative low-carbon services, engagement in new markets, and higher revenue |
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| Green procurement/supply chain Prioritizing the procurement of green products with environmental labels (low-pollut ion, recyclable, resource-saving, or of green building materials), or with a statement that they have less environmental impact, or with a lifecycle (from raw material acquisition to disposal) of less environmental impact; or, actively participating in green procurement plans and activities, to stimulate a green consumption culture in the industry and among the public. | Gamania establishes a supplier management policy, and takes concerted actions with our suppliers to jointly promote sustainable development and reduce the environmental impact. We actively promote green procurement as well; in addition to selecting cloud suppliers with good ESG per formance, for sundry purchases such as LED lamps, computer hardware and toilet paper, we also choose products in compliance with environmental protection regulations, ISO certifications, and PEFC forest certification. | Lower operating costs, reliable supply chain, higher reputation |
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Unit: tCO2e
| 2020 | 2021 | 2022 | 2023 | Target for 2023 | |
|---|---|---|---|---|---|
| Category 1 | 2.697 | 24.276 | 45.882 | 193.463 | |
| Category 2 - location-based | 1,506.181 | 5,777.431 | 5,267.656 | 4,559.764 | Target met Reduction in Scope 2 emissions by 13.44% Reaching the target of reducing Scope 2 emissions by 6% (base year: 2022) |
| Category 2 - market-based* | 1,506.181 | 5,777.431 | 5,267.656 | 4,559.764 | |
| Category 3 | NA | 399.910 | 818.830 | 613.291 | |
| Category 4 | NA | 2,118.895 | 1,929.418 | 1,918.753 | |
| Category 5 | NA | NA | 792.965 | 1,257.437 | |
| Total greenhouse gas emissions | 1,508.878 | 8,320.512 | 8,854.751 | 8,542.709 |
Note 1: The increase in category 1 this year was mainly due to the additional installation of air conditioners in the building; the increase in category 5 was due to the increase in customers
from different industries.
Note 2: Category 3 includes upstream (downstream) transportation, employee commuting, and business travel.
Note 3: Category 4 includes emissions from the products purchased by the Company, capital goods, disposal of solid and liquid waste, and the use of other services.
Note 4: Category 5 includes emissions from downstream leased assets.
Note 5: Based on the significance, this inventory excludes emissions from visitor transportation, upstream leased assets, product use, final product disposal, franchise, and investments.
Note 6: The carbon emission coefficient of electricity is based on the figures published by the Bureau of Energy, which is 0.509, 0.502, 0.509 and 0.495 (kg/kWh), respectively from 2020 to
2023.
Note 7: The data coverage rate is 74% in 2020, and 100% from 2021 to 2023, calculated based on the operating income.
Gamania took the lead in complying with regulatory requirements starting in 2021 by introducing ISO 14064-1:2018 and obtaining certification. Henceforth, we continue to track carbon reduction performance based on greenhouse gas inventories, and move towards the net-zero ambition through scientific and systematic carbon reduction.
Since 2018, Gamania has initiated energy conservation and carbon reduction management policies and implementation plans, with recent plans as follows: