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Environmental Profit and Loss Analysis

Monetary Valuations of Environmental Externalities

To measure and manage environmental externalities caused by resource consumption and pollution during the operating process, TSMC adopted the Environmental Profit and Loss (EP&L) valuation model and complied with ISO 14008:2019, a methodological framework for the monetary valuation of environmental impacts and related environmental aspects to identify environmental impact factors, and formulate mitigation measures.In the meantime, TSMC aims to build a comprehensive EP&L database that covers the entire value chain, from the supply chain to production and operating sites around the world, helping decision-makers allocate and utilize resources more effectively in product design, procurement, manufacturing, research, and development stages, thereby producing more eco-friendly products and a sustainable model for the common good.
Input/Output
Outcomes
Impacts
Valuation
GHGs
Water consumption
Air pollution
Water pollution
Waste
Global warming potential (GWP)
Malnutrition and
waterborne diseases
Particulate matter formation potential (PMFP)
Photochemical oxidant formation potential (HOFP)
Human toxicity potential (HTP)
Disability-adjusted Life Years (DALYs)
Social cost of carbon
Human health cost

Results of Environmental Profit and Loss Analysis

In 2022, the monetary valuation of environmental externalities from TSMC production and operations was around NT$17,893 million, a 10.6% increase from 2021. The increase was primarily caused by a growing demand for energy, water, and raw materials from the increased fabs and evolving advanced processes. GHG emissions from TSMC facilities were the primary source, accounting for 96.5% of all TSMC's environmental externalities. TSMC has actively adopted a various green innovative practices such as low-carbon manufacturing, reclaimed water sources, and the circular economy. Compared to the previous year, environmental externalities per unit product have increased by only 1.3% but decreased by 12.5% compared with 2018.
17.9 Billion 
Environmental externalities generated from TSMC production and operations (NT$)
↓12.5 % 
Reduction in environmental externalities per unit product (Base year: 2018)