Task Force on Climate-related Financial Disclosures Index

Letter from the CSR Committee Chairperson

Category

Corporate Management Strategies and Actions

2022 Execution Summary

Governance

The Board will regularly review risks and opportunities related to climate change

  • ESG Steering Committee: TSMC's top organization in climate change management. Chaired by the Chairman of TSMC with the chairperson of the ESG Committee serving as executive secretary. The Committee reviews TSMC's climate change strategies and goals every quarter and reports to the Board of Directors
  • Energy Saving and Carbon Reduction Committee: The Energy Saving and Carbon Reduction Committee is the Company's management organization for taking action on climate change risk and opportunity. It is chaired by the Vice President of Fab Operations. Every quarter, this Committee formulates management plans, reviews implementation status, and discusses future plans
  • Risk Management Steering Council: The Risk Management Steering Council briefs the audit committee each year on the ever-changing risk environment facing TSMC, the focus of the Company's enterprise risk management, and risk assessment and mitigation efforts, including climate change issues
  • The ESG Steering Committee is comprised of senior executives from various TSMC organizations and formulates long-term 2030 goals and development strategies for climate change and renewable energy. See ESG Management Platform for more information
  • The executive secretary of the ESG Steering Committee delivered quarterly reports to the Board on sustainable development strategies and achievements, including green manufacturing performance, renewable energy procurement, and net zero emission targets and strategies
  • The Energy Saving and Carbon Emission Reduction Committee defined based on different process technologies to conserve more energy from production equipment and fab facilities. As an incentive for the energy conservation teams, the Committee rewards team based on their achievement on energy conservation targets and innovative ideas
  • The chairperson of the RM Steering Committee gave an annual report to the on water resources, energy risks, natural disasters, regulations, and other topics related to climate change; TSMC Risk Management Policy was published in 2022 to establish and strengthen risk management corporate culture

Strategies

 Organize interdepartmental discussions and identify short, mid, and long-term climate risks and opportunities
Assess the potential financial and operational impact on TSMC from major climate risks and opportunities
Conduct scenario analysis and assess SBT(Science-Based Target) and net zero emission targets and actions
  • Based on the SSP1-1.9 scenario set forth by the Intergovernmental Panel on Climate Change (IPCC) AR6, TSMC analyzed climate risks in production and formulated climate change strategies and mitigation measures while also striving toward net zero emission targets

Risk Management

Use the TCFD framework to develop a process for identifying climate risks
  • Evaluated the qualitative and quantitative financial impact of major climate-related risks/opportunities discussed in the TCFD workshop by

Formulate response measures based on the risks/opportunities identified and prioritized
  • Reported assessment results of the climate risks/opportunities and response plans to the ESG Committee Chairperson

Integrate climate risk identification and assessment in the Enterprise Risk Management (ERM) process

Metrics and Targets

Set management metrics related to climate change
  • Established the following as climate change performance indicators: GHG emissions per unit product, amount of renewable energy purchased, total electricity saved, improved production efficiency, and days of production interruption due to climate disasters. See Climate and Energy Strategies, Goals, and Outcomes for more information

Through ISO 14064 annual inventory and disclosure of greenhouse gas emissions, review the impact on the company's operations, and assess the risks of Scope 1, 2 and 3 and their mitigation strategies
  • Based on carbon inventory and evaluation results, the consistent carbon reduction actions have effectively reduced risks of Scope 1 emissions, the risks of Scope 2 indirect GHG emissions due to electricity consumption and the risks of Scope 3 due to supplier indirect emissions continue to increase. See more on Drive Low-carbon Manufacturing

Set climate change management targets and review progress & performance