Environmental Care

Taisun, besides learning to identify operational risks brought about by climate change, also refers to the TCFD (Task Force on Climate-Related Financial Disclosures) recommendations published by the Financial Stability Board (FSB). The company has incorporated the four core disclosure elements – “Governance,” “Strategy,” “Risk Management,” and “Metrics and Targets” – into its operational management. Furthermore, Taisun discloses the impacts of climate change-related risks and opportunities, as well as potential response measures, in its sustainability report.

1. Governance

The ESG Sustainable Development Committee is responsible for overseeing climate-related risk management and approving climate strategies and targets. Climate-related response measures are jointly decided by the ESG Committee and approved by the chief commissioner for implementation. The committee reports to the board of directors annually, with the board monitoring implementation effectiveness.

In 2023, one report was made to the board regarding significant opportunity and risk assessments, including financial risks, product opportunity risks, and carbon fee impacts.

2. Strategy

The company refers to the IPCC’s Sixth Assessment Report (AR6) and the Environmental Protection Administration’s goal of limiting temperature rise to 1.5°C. They use the TCCIP (Taiwan Climate Change Projection Information and Adaptation Knowledge Platform) tools to assess physical risk scenarios. The company has adopted a scenario of limiting global warming to below 2°C for assessing physical and regulatory transition risks.

① Transition Risk∣Policy and Regulatory Risk
The “Climate Change Response Act” will impose carbon fees on high-emission products with direct or indirect emissions starting in 2025, potentially increasing our company’s operational costs, although it won’t impact overall operations. Our company completed greenhouse gas inventory education and training in 2020 and has introduced management approaches such as utility equipment replacement. We plan to establish reasonable and achievable carbon reduction targets in 2024.

After the century’s severe drought, there’s a consensus among political and social sectors regarding the Water Resources Agency’s plan to levy water consumption fees. Our company was included in the “water consumption fee” collection targets in 2022, bringing groundwater into the national charging system. In compliance with government policies, we’re approaching this from water conservation and recycling perspectives, with food safety as the fundamental principle. We’ve begun economizing on product cooling, packing materials improvements, and personnel water usage to reduce water withdrawal.

② Physical Risk∣Immediate
Due to increased extreme weather events, the frequency of typhoons, heavy rains, thunderstorms, and high temperatures has increased. Although our factories are located in central Taiwan near mountainous areas with relatively low probabilities of wind and flood disasters in the past, poor management of oil waste products potentially caused by high temperatures could lead to spontaneous combustion. Sudden storms will also increase operational impacts such as water source purity treatment and equipment damage in the plant area, causing financial losses.

Although our factory equipment and warehouses have little experience with major water disasters, Taisun still prioritizes waste recycling management, preventive maintenance of plant drainage systems and equipment, installation of water and disaster prevention response systems, and increasing and flexibly adjusting storage space. This ensures normal products load-out while also preparing mechanisms to deal with disasters affecting consumer food group customer warehouses and livestock group customers, maintaining operational development and reducing immediate significant risks.

Moreover, extreme climate affects raw material procurement, upstream and downstream transportation interruptions, and personnel safety. We expect this situation to lead to shortterm cost increases in various areas. Our company uses diverse procurement channel cooperation, combined order transportation, transportation route consolidation, and alternative subcontracting to achieve carbon reduction and avoid product and human resource losses.

③ Resource Efficiency Opportunities
In addition to complying with government water resource conservation policies, our company has begun to inquire about water recycling system planning. However, due to equipment system and recycling site factors, the Sustainable Development Committee currently has no optimal solution after evaluation. We expect this case may increase operational costs financially, but in the long run, it’s still an effective solution that is environmentally friendly and gradually reduces clean raw water extraction.

Risk Management

In 2022, our company’s ESG Sustainable Development Committee launched a “TCFD Climate Change-related Financial Disclosure” survey. They convened relevant members in meetings to jointly assess potential risks the company may face due to climate change, identifying risk sources, conducting risk analysis and assessment, and addressing risks to continuously reduce impact. They discussed and identified transition risks (policy and regulations, technology, market, reputation), physical risks (immediate risks, long-term risks), and opportunities (resource efficiency, energy sources, products/services, market, resilience). Considering the time frame, the assessment intervals are short-term (1-3 years), medium-term (3-5 years), and long-term (over 5 years). The top 10 in each interval are prioritized, with short-term risks addressed first. Medium and long-term risks are evaluated based on company resources. Annual reviews of strategic actions assess the effectiveness of target implementation. If necessary, risk discussions and identification are conducted again. In principle, risk management items are reviewed every 3 years for appropriateness.

Response Measures for Top Ten Issues

Metrics and Targets

Since 2020, the company has been conducting annual internal greenhouse gas emission inventories following ISO 14064-1:2018, with third-party verification planned for 2026.
Annual budgets are allocated for process improvements and equipment updates to reduce energy consumption.
The company aims to increase the rate of ranch wastewater irrigation for napier grass to 10% by 2026, reducing water treatment usage. The 2023 target of 5% was successfully achieved.
After implementing water recycling policies in 2023, water withdrawal was reduced by 2%, with a target of 5% reduction by 2026.
The company has established a management and personnel culture to increase business waste recycling rates, achieving over 95% in 2023 and aiming to maintain this level.

Taisun actively implements three main goals for waste management: “Minimize waste production, maximize resource recycling, and optimize Supplier Management.” Through production process control and operational improvements, the company reduces in-plant waste while also reducing waste treatment costs. The entire plant operates on the principle that “reduction is better than treatment, and source control is better than recycling.” Annual audits of contracted vendors and transportation management are conducted to ensure legal waste handling and prevent illegal dumping. The company takes responsibility for waste collection, treatment, and flow management, tracking vendors’ implementation of waste treatment and resource recycling. This is reported to the ESG Sustainability Development Committee, with the industrial waste management plan serving as the main tracking mechanism.

1. Food Factory Management Results

In 2023, there were 4 identified types of waste handled by contracted vendors. A tracking responsibility survey of their waste management was conducted, with 6 inspections and 3 transportation follow-ups conducted and with all meeting regulatory requirements. These are included in the waste vendor selection list.
The food factory produced 58 tons of non-resource waste in 2023. Due to intermittent maintenance of the Xizhou incinerator starting in December 2022, active search for incineration treatment led to concentrated disposal reporting in 2023, resulting in a 35-ton increase compared to the previous year.
Items still within expiration date are mainly used for animal feed and employee distribution to reduce waste.

2. Aquatic Feed Factory Management Results (Including Ranch)

The aquatic feed factory (including ranch) produced a total of 116.54 tons of industrial waste in 2023, of which 114.17 tons were resource-type waste, achieving a recycling rate of 97.97%.

3. Preferential Subsidy Program

The aquatic factory offers preferential programs to encourage customers to use bulk feed, reducing plastic packaging use. It subsidizes new bulk container installations, helping customers save labor and feeding time while indirectly reducing plastic packaging use. Some raw materials storage methods have been adjusted from bagged to bulk, indirectly reducing plastic use when processing into granules.

1. Water Resources Management and Wastewater Discharge

As a major food manufacturer, Taisun requires water resources for raw material and equipment cleaning, beverage production, and machine sanitation. Effective water management is crucial. Taiwan faces climate change and environmental impacts, leading to uneven rainfall distribution, increased heavy rainfall, insufficient flood drainage systems, and river sedimentation reducing reservoir capacity. This has resulted in recurring droughts and floods in recent years, with clean river water sources also decreasing. Taisun’s production mainly uses groundwater, which undergoes treatment and sterilization. Daily pH and residual chlorine checks and monthly microbiological tests are conducted to control water quality. Water resource usage is controlled, and process management improves water conservation efficiency.

Food manufacturing wastewater often contains suspended solids, oils, and sugars from raw materials. Production wastewater cannot be reused in-plant and requires treatment before discharge to ensure it doesn’t impact nearby farmland and sewers.

2. Beidou Ranch Waste Liquid Recycling Project

The feces and urine wastewater produced by the livestock industry, which are the most harmful pollutants in farming industry would cause pollution if directly discharged into rivers. However, if treated, it can be transformed into agricultural fertilizer, not only reducing river pollution but also reducing electricity costs and chemical fertilizer use, leading to healthier and more productive crops. In January 2023, Taisun’s Beidou Ranch obtained a legal permit for waste liquid irrigation from the Changhua County Government, resourcefully using livestock manure. The first phase recycles 5% of waste liquid, used to irrigate napier grass planted at the ranch, and provides it to nearby farmers as forage for sheep, promoting a circular economy.

Factory Management Status

In 2023, various factory energy improvement operations were actively carried out, including:
• Food factory natural gas boiler replacement project: In 2023, the construction of high-pressure natural gas pipeline began. After completion in January 2024, the natural gas boiler installation project will immediately commence, expected to be completed in the third quarter.
• Initiated green energy survey, establishing the “Tianzhong Solar Energy Evaluation Research Project” to provide recommendations on solar energy installation locations and usage value for the Tianzhong factory.

In 2023, the total energy consumption of the food factory was 206,969.45 GJ; the oil factory’s total energy consumption was 2,934.23 GJ. The food factory used biomass boiler renewable energy, accounting for 60.34% of the food factory’s energy use, a decrease compared to 2022 due to increased production capacity, but the efficiency of the biomass boiler is fixed, resulting in an overall percentage decrease.

Taisun’s energy management focuses on biomass energy. The secondary energy source – boiler oil – is the main source of carbon emissions. The planned switch to natural gas boilers in 2024 will greatly contribute to carbon reduction. Additionally, effective control of unit electricity consumption is also a key to achieving net-zero carbon emissions. The company aims to reduce annual unit electricity usage through regular internal energy consumption statistics, early replacement or reduction of old machinery, and process improvements to control energy consumption.

1. Food Factory

In 2023, the total energy consumption, from highest to lowest proportion, was: biomass energy, fuel oil, electricity, natural gas, liquefied petroleum gas, and diesel. In 2024, there are plans to invest 20 million TWD to replace oil-fired boilers with natural gas boilers to reduce carbon emissions.

2. Oil Factory

Energy consumption in 2023 increased compared to the previous year, mainly due to adjustments in oil production process equipment settings leading to increased electricity usage. Future improvements will be made at the source to reduce additional electricity consumption.

3. Aquatic Feed Factory

The total energy consumption in 2023 decreased compared to 2022, but unit energy consumption increased. This was mainly due to high raw material costs, sharp decreases in customer breeding and order quantities, and reduced production unable to concentrate production. Future plans include coordinating with customers to adjust delivery times for concentrated production.

4. Beidou Ranch

The main reason for the increase in unit energy consumption in 2023 is the consideration of animal welfare (Animal welfare), adding an uninterruptible power system to the farrowing house (allowing continuous ventilation fans for sows and heat lamps for piglets, reducing cold stress on pigs during cold waves even if power is cut).

GHG Emission Management

After internalizing greenhouse gas emissions as an environmental cost for the enterprise, reducing greenhouse gas emissions will effectively lower operating costs and increase profitability, verifying that greenhouse gas reduction can improve operational performance and implement the concept of sustainable operation.

Following the ISO 14064-1 certification obtained in June 2022, which recognized the carbon management results for 2020 and 2021, in 2023 Taisun independently completed carbon footprint inventories for 6 oil products, including 18L salad oil, 18L premium soybean salad oil, 18Kg eco-friendly iron drum salad oil, 3L premium soybean salad oil, 0.6L salad oil, and 3Kg salad oil, in preparation for introducing ISO 14067 product carbon footprint.

The Taipei headquarters adjusted official vehicles and replaced ice water units in 2023, reducing Scope 1 and Scope 2 carbon emissions. The Tianzhong feed factory saw a significant decrease in Scope 2 carbon emissions due to reduced production and lower electricity consumption. However, the food factory’s overall carbon emissions increased due to increased production. Future plans include monitoring production efficiency and testing various improvement measures, such as centralized production management for material and production-related scheduling, reducing cleaning, conversion, and transportation operations to effectively manage carbon emissions.

1. Food Factory

In 2023, the food factory’s biomass boiler air pollution emission testing and reporting included suspended particulates, sulfur oxides, nitrogen oxides, and dioxins. The oil-fired boiler testing and reporting for suspended particulates, sulfur oxides, and nitrogen oxides all complied with current environmental regulations. Natural gas boilers are exempt from testing and reporting. The food factory’s air pollution emissions increased in 2023 compared to 2022 due to the increased use of oil-fired boilers during biomass boiler renovations. Plans are in place to replace oil-fired boilers with natural gas boilers in 2024 to reduce emissions.

2. Aquatic Feed Factory

The aquatic feed factory’s oil-fired boiler air pollution emission testing and reporting in 2023 for suspended particulates, sulfur oxides, and nitrogen oxides all complied with current environmental regulations. The oil factory does not require air pollution emission testing and reporting as its processes do not use boilers.