GIGABYTE is committed to mitigating the impacts caused by business operations on climate change. Visionary management policies and effective response plans have been adopted for effectually promoting climate-rated management and adaptation measures. The GIGABYTE Green Sustainable Development Committee, chaired by the Company’s chairman, serves as the highest level responsible for supervising organizational emission management, reduction target setting, and practical measures and action plans. The Sustainable Development Office under the Operation Management Center is in charge of execution and promotion of the measures, and reporting the progress and outcomes of climate-related management to the Center, the Committee, and the Board regularly.

Greenhouse Gas Emission Management

GIGABYTE is not only concerned with climate risks and tendencies but also expecting to become a corporate practitioner of emission reduction through implementing climate mitigation actions and expanding the influence to a larger scope. In 2020, we decided to adjust the current long-term target of reducing 50% of emissions from the 2009 level to a more ambitious commitment: “GIGABYTE advances the target year of 50% reduction from 2030 to 2025”!

GIGABYTE periodically inventories own greenhouse gas emissions in accordance with the ISO14064 standard, gradually expands the scope of inventory, and strives to meet the short-term target of a 3% annual reduction in carbon emissions, water and waste compared to the previous year. We will continue to actively monitor our carbon reduction progress and performance even as we set our sights on even more significant long-term carbon reduction goals.

The globe is now encouraging businesses to respond to the Science-based Targets Initiative (SBTi) and set up their emission reduction target through scientific methods that can ensure keep the global warming under 2°C. GIGABYTE has not publicly committed to setting a science-based target. However, We have introduced the tools and target criteria recommended by SBTi to analyze the gap of the pathway between the existing carbon reduction target and the target that meets science-based principles.

Greenhouse Gas Emissions  Status

Emission reduction is the top priority in climate change mitigation. GIGABYTE established an organizational greenhouse gas emission inventory mechanism in 2010 and conducts annual inventories on the scope 1 and scope 2 emissions of the Headquarters and all factories every year. Starting from 2022, we extend the reporting boundary to encompass our offices at Taipei Silicon Valley Park in Xindian. 6 categories of scope 3 emissions are also added. All subsequently passed a third-party verification against the ISO14064-1: 2018 standard.

The Scope 1 and Scope 2 greenhouse gas emissions of GIGABYTE in the recent 4 years are as follow:

(Unit: t-CO2e) 2019 2020 2021 2022
Scope 1 Emissions 657.63 648.09 1,063.52 627.81
Scope 2 Emissions 27,800.91 28,123.84 28,874.43 27,283.64
Total (Scope 1+2) 28,458.54 28,771.93 29,937.95 27,911.44
Comparison with the Previous Year +2.87% +1.10% +4.05% -6.77%
Comparison with the Base Year (2009) -41.87% -41.23% -38.85% -42.99%

The Scope 3 greenhouse gas emissions of GIGABYTE in the recent 4 years are as follow:

(Unit: t-CO2e) 2019 2020 2021 2022
Indirect Emissions from Transportation
Employee Commuting 1,049.53 1,022.97 1,201.65✽ 1,867.53✽
Business Travel 776.19 91.68 24.13✽ 128.35✽
Upstream Distribution and Transportation 117.53 55.09 234.74 58.32
Downstream Distribution and Transportation 25,300.11 33,750.88 40,088.61 28,051.45
Indirect Emissions from Products Used by GIGABYTE
Purchased Goods 571,624.93 794,958.93 1,515,136.60✽ 892,256.60✽
Waste Generated in Operations 531.06 597.52 1,464.50✽ 1,238.66✽
Capital Goods 7,691.93 3,771.61 1,860.45 1,217.49
Fuel- and Energy-related Activities (not included in scope 1 and 2) 690.57 541.29 739.74 776.94
Indirect Emissions Associated with the Use of GIGABYTE’s Products
Processing of Sold Products 2,308.08 2,119.04 1,722.91 2,312.99
Use if Sold Products 2,275,234.75 3,017,156.14 4,239,140.03✽ 5,689,602.28✽
End-of-life Treatment of Sold Products 8,788.55 7,951.44 10,931.82✽ 8,089.73✽
Total scope 3 emissions 2,894,113.23 3,862,016.59 5,812,545.17 6,625,600.33
Total scope 3 emissions verified by a third party — — 5,767,898.72✽ 6,593,183.15✽

Note:

1. For progress towards the greenhouse gas emissions reduction target, please refer to CSR Performance – Environmental Aspect.

2. Since 2021, the Scope 3 emission categories materially relevant to GIGABYTE have been verified by a third party. Figures that have been verified are marked with “✽”. Please find the verification statement at Quality and Environment Management Certificationt.

Climate-related Risk Assessment and Management Strategy

GIGABYTE established methods for assessing, quantifying, and monetizing the impacts resulting from climate-related risks and opportunities in 2019 to gain a thorough understanding of the implications of climate change on our business. GIGABYTE Sustainability Reports have adopted the Task Force on Climate-related Financial Disclosures (TCFD) framework since 2020, which enables transparency in climate governance, identified risks and opportunities, impact assessment and management, as well as targets and performance metrics related to climate. GIGABYTE’s climate-related information following the 4 core pillars and 11 recommendations in 2022 can be found on page 77 of the 2022 GIGABYTE Sustainability Report.

In response to external stakeholders’ increasing attention on climate issues, GIGABYTE released its first GIGABYTE TCFD Report independently in 2023. The Report aims to meet the expectations and information needs of stakeholders, comply with Taiwanese and international sustainability disclosure standards and regulations, and, by strengthening communication, contribute to the continuous optimization of GIGABYTE’s climate change responses, management capabilities, operational resilience, and market competitiveness by strengthening communication.

Click here to download the 2023 GIGABYTE TCFD Report (Chinese version only)

Process of Climate-related Risk Identification

2022 Climate Risk Matrix

Climate-related Risk Risk Type
1. Tightening of GHG management policy in Taiwan and the upcoming implementation of carbon fees.

Transition Risk – Policy and Legal
2. Energy transformation policy and adjustment of electricity structure leading to fluctuations in electricity prices and new requirements on the use of renewable energy. Transition Risk – Policy and Legal
3. Impact on trade costs from activation of carbon pricing mechanisms in the international market. Transition Risk – Policy and Legal
4. Product carbon footprint is becoming a key component of market competitiveness and must be reduced from products’ life cycle. Transition Risk – Technology
5. Rising consumer awareness means product sustainability will become increasingly connected to brand value and consumer loyalty. Transition Risk – Reputation
6. Customer requirements on carbon management in the supply chain are becoming increasingly rigorous and have expanded to include product carbon footprint disclosure and carbon reduction targets. Transition Risk – Market
7. Increasing severity of extreme climate events, such as typhoons. Physical Risk – Acute
8. A drastic increase in the cost of cooling as temperatures continue to rise. Physical Risk – Chronic
9. Changing rainfall and climate patterns expose supply chains and operating locations to water risk. Physical Risk – Chronic

2022 GIGABYTE Climate-related Risks and Opportunities

Transition Risk

  GHG management policy in Taiwan Energy structure transition policy Carbon pricing mechanism in international markets
Risk Description Taiwan’s “Greenhouse Gas Reduction and Management Act” was officially amended in January 2023 to become the “Climate Change Response Act.” The target of net zero by 2050 was also made into law, and a carbon levy mechanism will be activated. The Ministry of Economic Affairs in Taiwan has set a renewable energy target of up to 20% by 2025. The energy transition policy will lead to fluctuations in electricity prices and businesses will be required to adopt more renewable energy. The EU will implement the Carbon Border Adjustment Mechanism (CBAM) in October 2023 with the ultimate goal of amalgamating CBAM with its carbon trading market mechanism. This will spur the implementation of carbon tariff mechanisms by other international markets.
Likelihood Likely Very likely Likely
Scope of Impact Business operations Business operations Upstream supply chain, business operations, downstream demand chain
Potential Financial Impact Future inclusion in the control scope will lead to increased operating costs from legal compliance.
  • Production costs will increase by fluctuations in energy prices.
  • Investment in equipment related to energy transition equipment due to regulatory requirements will increase capital expenditure.
  • International carbon pricing may lead to higher material costs and reduce product gross profits.
  • Operation costs increase to reduce carbon emissions during production in order to comply with the trading regulations.


【Management Strateg】

  • The GIGABYTE Green Sustainable Development Committee continues to enhance the environmental management system by developing and supervising the implementation of sustainability strategy.
  • The units responsible for sustainability continue monitoring international regulations and trends, implementing energy conservation projects, replacing outdated equipment, and improving production efficiency at each operating location.
  • Active tracking of domestic and overseas climate legislation to facilitate timely adjustment of climate policy direction to ensure compliance
  • Introduction of ISO 14064 management system and third-party verification.
  • The “Sustainability Fund” was set up in 2019 to reward units for reduction performance based on savings from energy and resource conservation in order to promote continued internal innovation and improvements to resource utilization.
  • Set up a life cycle assessment system for all products to analyze 16 environmental impact indicators, including carbon footprint for all product series.


【Derived Opportunities】

  • Introduce an internal carbon pricing mechanism to assess the true cost of products and target sources of energy consumption to improve product competitiveness.
  • Continue to optimize the energy efficiency of processes so that production output increases while operating costs are reduced.
  • Develop and apply renewable energy to realize carbon reduction targets, fulfill corporate responsibility for environmental protection, and enhance brand preference.

  Low-carbon products become the mainstay of the market
Risk Description The product carbon footprint has become a key part of market competitiveness due to global consensus in order to achieve global climate targets. Nearly 95% of GIGABYTE products are exported, so a low-carbon transition will be essential.
Likelihood Very certain
Scope of Impact Upstream supply chain, business operations
Potential Financial Impac
  • A decrease in demand for products and services leads to decreased revenue.
  • Production and operating costs An increase in order to respond to each nation’s environmental regulations on products.


【Management Strategy】

  • Allocate part of annual revenue to research and development to develop environmentally friendly products with high performance and low carbon footprint.
  • Promote energy conservation policy at all operating locations and investment in the R&D of energy-efficient and low-carbon products.
  • Set up a “Sustainability Fund” to reward the development of low-carbon products and cultivate the capability to develop products with low environmental impact.
  • Voluntarily inventory Scope 3 greenhouse gas emissions, analyze carbon footprint information for all products, and publicly disclose climate-related information.
  • Strengthen supplier management to lower the environmental impact of the value chain as a whole.


【Derived Opportunities】

  • Crossover into the low-carbon product or service markets to increase brand visibility and boost brand value.
  • Transition to green product services to satisfy customer requirements and consumer preferences.

  Change in consumer preferences
Risk Description Growing global environmental awareness and international advocacy and regulations continue to push for greater disclosure by businesses. Greater access to environmental information by consumers is in turn having an influence on consumer behavior.
Likelihood Likely
Scope of Impact Business operations
Potential Financial Impact Revenue may be impacted by a decrease in demand for products and services due to the inability to satisfy consumer preferences.


【Management Strategy】

  • Allocate part of annual revenue to research and development to develop environmentally friendly products with high performance and low carbon footprint.
  • Promote energy conservation policy at all operating locations and investment in the R&D of energy-efficient and low-carbon products.
  • Set up a “Sustainability Fund” to reward the development of low-carbon products and cultivate the capability to develop products with low environmental impact.
  • Voluntarily inventory Scope 3 greenhouse gas emissions, analyze carbon footprint information for all products, and publicly disclose climate-related information.
  • Strengthen supplier management to lower the environmental impact of the value chain as a whole.


【Derived Opportunities】

  • Crossover into the low-carbon product or service markets to increase brand visibility and boost brand value.
  • Transition to green product services to satisfy customer requirements and consumer preferences.

  Raising of carbon management requirements by customers
Risk Description The global climate crisis as well as advocacy on circular economy are boosting awareness of value chain symbiosis. Customers are now setting stricter requirements on carbon management for their upstream supply chain, and those that fail to meet those standards may miss out on orders and opportunities for cooperation.
Likelihood Very certain
Scope of Impact Upstream supply chain, business operations
Potential Financial Impact Revenue may be impacted by a decrease in demand for products and services due to higher standards being set by customers.


【Management Strategy】

  • Strive to achieve the “333 Reduction” target of a 3% annual reduction in carbon emissions, water consumption, and waste, and recruit supply chain partners to do the same.
  • Introduce ISO 14064 management system with third-party verification and analyze GHG emissions every year to pinpoint carbon reduction hot spots.
  • Establish a life cycle assessment system for all products to strengthen the ability to analyze and manage environmental data for products and the upstream supply chain.
  • Set up a “Sustainability Fund” to use last year’s budget savings from energy conservation to reward each plant for reduction and low-carbon projects they propose and implement.


【Derived Opportunities】

  • Crossover into the low-carbon product or service markets to increase brand visibility and boost brand value.
  • Transition to green product services to satisfy customer requirements and consumer preferences.

Physical Risk

  Increased frequency of extreme weather events
Risk Description Extreme weather events may increase in frequency and severity. Most of GIGABYTE’s operating bases are located in the northwest Pacific, where typhoons often occur. Global warming may enforce the intensity and duration of typhoons, increasing our exposure to flooding and power outages.
Likelihood Likely
Scope of Impact Upstream supply chain, business operations, downstream demand chain
Potential Financial Impact
  • Increased labor and equipment maintenance from interrupted operations.
  • Increased operating costs in upstream supply or downstream shipping may impact profits.


【Management Strategy】

  • Establishment of “Risk and Emergency Management Guidelines” in accordance with ISO14001 as well as the devising of management and response measures for typhoons and flooding.
  • Diversify suppliers to distribute supply chain risk and ensure the continuity of key raw materials.


【Derived Opportunities】

  • Diversify and distribute product sources in the supply chain to improve the stability of material supply and strengthen the risk resilience of the supply chain.
  • Improve the energy efficiency of offices, processes, and equipment to conserve operating costs as well as reduce the carbon footprint of products and services.

  Increased water risk from changing precipitation pattern Increasing severity of the warming
Risk Description Analysis based on international databases found that GIGABYTE’s Headquarters, factories, and some key suppliers were located in regions with moderately high to high water stress. Relatively high exposure to flood and drought risks may impact on continuity of operations and supply. Excessive GHG emissions will make the global warming problem worse. The urban heat island effect is becoming more obvious in urbanized regions as well. Increased electricity demand for cooling of offices and workshops increases the risk of power outages due to overload on summer days.
Likelihood Likely Very certain
Scope of Impact Upstream supply chain, business operations Business Operations
Potential Financial Impact Reduction in production output due to supply disruptions and unreliable delivery of materials that in turn have impacts on revenue Higher energy costs from fluctuations in electricity prices and increased electricity consumption
Management Strategy
  • Water shortage drill conducted by factories in response to potential water restrictions during the dry season.
  • Establish water reclamation system at the Dongguan and Ningbo factories in China.
  • Diversify suppliers to distribute supply chain risk and ensure the continuity of key raw materials
  • Replace old and worn AC and cooling equipment and improve the energy efficiency of AC equipment.
  • Optimize the power factor of electrical equipment to reduce power loss as well as stabilize and lower the load of the electrical system.
  • Set up and maintain the GIGABYTE G-HOME Eco-Rooftop to effectively reduce the indoor temperature of the top floor by 2.5℃ and the surface temperature on the rooftop by 25°C.


【Derived Opportunities】

  • Diversify and distribute product sources in the supply chain to improve the stability of material supply and strengthen the risk resilience of the supply chain.
  • Improve the energy efficiency of offices, processes, and equipment to conserve operating costs as well as reduce the carbon footprint of products and services.

Climate Scenario Analysis

Proactive Mitigation Scenario Transitional Adaptation Scenario Business as Usual (BAU)
Transition Scenario IEA B2DC IEA APS None
Physical Scenario SSP1-2.6 SSP2-4.5 SSP5-8.5
Scenario Description Adopt less cost-effective energy conservation and carbon reduction measures to realize carbon reduction targets within a short period of time. Accelerate the realization of carbon reduction targets through effective energy management and the use of renewable energy together with the investment of returns in carbon neutrality projects. A lack of energy conservation and carbon reduction projects by the Company results in a continuous increase in emissions as well as growing compliance costs. Emissions continue to increase due to stagnation in energy management methods with no carbon reduction or carbon neutrality actions taken.
Assumptions and Analysis Methods
  1. Baseline factors: Factors that remain constant in different scenarios. We assume that the annual changes in employee number, operational outputs, and energy use intensity will be consistent with the average changes during the past five years.
  2. Variable factors: Factors that differ from various scenarios, such as temperature rise, energy construction transition, carbon price levels, cost of emission reduction measures, economic loss due to physical climate risks, etc.
Summary of Analytical Outcomes
2030

Invest approximately NTD122 million towards emission reduction measures to lower the cost of compliance and accelerate emission reduction.
  • Achieve 48% reduction in GHG emissions compared to 2021 level.
  • Invest approximately NTD65.77 million towards emission reduction measures to realize the emission reduction target.
 Poor carbon reduction performance may result in up to NTD31.27 million in costs associated with carbon fees in Taiwan and international carbon tariffs.
  • Result in 18% increase in GHG emissions compared to 2021 level.
  • The failure of global climate action will result in an annual revenue loss of approximately 0.54%.
2050 Invest approximately NTD252 million towards carbon reduction measures to lower the cost of compliance and accelerate emission reduction.
  • Achieve 81% reduction in GHG emissions compared to 2021 level.
  • Invest approximately NTD215 million towards emission reduction measures to realize the emission reduction target.
 Poor carbon reduction performance may result in up to NTD189 million in costs associated with carbon fees in Taiwan and international carbon tariffs.
  • Result in 146% increase in GHG emissions compared to 2021 level.
  • The failure of global climate action will result in an annual revenue loss of approximately 2.43%.