Climate Change Management   

      Climate change risks, as well as risks from natural disasters, can affect the company’s business operations and may cause disruptions throughout the value chain. They can also affect the valuation of assets, business value, and employee safety. Therefore, the company places great importance on climate change management and recognizes the significance of climate-related risks and opportunities. It regularly assesses the impacts on its business and performance.

      The goal of mitigating climate change risk is to reduce the impact of human activities that contribute to climate change. We aim to decrease greenhouse gas emissions and maintain global temperatures at a sustainable level. This includes reducing greenhouse gas emissions, promoting industrial responsibility for emission reductions by utilizing efficient risk mitigation technologies, and fostering education and understanding about the importance of mitigating climate change risks.

Climate Governance

    MFEC acknowledges the risks posed by climate change and its impact on business operations. Senior executives have a crucial role in overseeing climate-related risk and opportunity management as follows:

1. Define roles and assign responsibilities for managing climate change.

2. Monitor risk indicators and integrate climate-related risks and opportunities.

3. Review and enhance processes related to climate change management.

4. Support the development of knowledge and skills among personnel for managing climate change.

      The company has established a governance structure for climate change management, spanning from the Board of Directors level down to operational levels. This ensures operational management aligns with the company’s vision and mission. The committee responsible for overseeing climate change management is the Risk Management, Corporate Governance and Sustainability Committee. This committee sets sustainability management goals, oversees risk management operations covering climate change risks, and governs sustainability management which includes climate change management. Meetings are held quarterly to monitor risks and determine relevant control measures. Additionally, there is a Sustainability Working Team that reviews sustainable development operations, drives implementation, and fosters participation in projects under the sustainable development framework with relevant internal and external parties. Climate change risk factors are analyzed and presented to the Risk Management, Corporate Governance and Sustainability Committee to integrate climate change risks into the organization’s overall risk management for continued oversight.

Assessment of Climate Change Risks That May Impact Business Operations

      A risk analysis is conducted to report to the Board of Directors, identifying and assessing climate change risks that may impact the company’s operations, finances, and reputation. This covers cases of climate volatility, greenhouse gas management, regulatory changes, as well as shifts in customer consumption behavior.

Climate Change Risks and Impacts

      Climate change risks and impacts can be categorized into two types: transition risks and physical risks.

· Transition Risks refer to the risks arising from societal and economic shifts toward a lower-carbon economy to address global warming.

· Physical Risks are risks associated with changes in the natural environment due to global warming and other related climate changes. Examples of changes in the natural environment include rising temperatures and abnormal severe weather events such as storms, floods, droughts, and greenhouse gas emissions.

Climate Change Risks to Organizational Sustainability

      The company has identified significant climate change-related risks and opportunities, including both transition risks and physical risks. Measures have been established to address these risks: