According to analysis and research from the World Meteorological Organization (WMO), 2019 was on average the second warmest year on record, reaching an average of 1.1°C higher than the average value during the Industrial Revolution between 1850 and 1900, while the concentration of carbon dioxide in the atmosphere continued to rise. The Global Risk Report released by the World Economic Forum in January 2020 showed that the top five risks in terms of likelihood are all tied to the environment and climate change, with four such risks also ranking highly in terms of impact. Such research and investigations have shown that the internal and external impacts on business that climate change creates cannot be ignored.
On top of this, the Emissions Gap Report 2019 released by the United Nations Environment Programme (UNEP) ahead of COP 25, noted that even if the existing climate commitments of all countries—nationally determined contributions (NDCs)—are fully realized, the 1.5°C goal of the Paris Agreement will “slip out of reach.”
Although there was still a lack of consensus among the parties at COP25 on how to resolve the issue of climate change, international organizations concerned with global sustainable development have continued to work on the matter. By continuing to take an active leadership role in international enterprise organizations like the WBCSD and CDP, Acer continues to respond to directions in development with our supply chain partners.
With regard to risk management, through our Working Group on Risk Management—under the auspices of the Sustainability Committee and led by the chairman of the board—we continue to consider the potential impacts of climate change, forecast their likelihood and potential impact, draft contingencies and mitigation measures, and develop crisis management and early warning mechanisms to mitigate their impact on operations.
In terms of major climate risks, natural disasters, along with regulations and both consumer and investor preferences for energy efficiency and product labeling in various countries, will have a more significant impact than in the past. Among them, in the short term, in addition to the direct impact of the Electronic Product Environmental Assessment Tool (EPEAT) IEEE 1680.1:2018 standard on the commercial hardware tenders market, major international corporate investors and listed company authorities like BlackRock and the Taiwan Stock Exchange, where Acer is listed, have continued to express concerns about the response to corporate climate risks. We expect that this will also bring additional related information disclosure requirements.
The European Green Deal announced by the European Commission in December 2019 is expected to have an impact on business and operations in our major international markets. The medium-term 2030 carbon reduction target and goal of carbon neutrality by 2050, along with the consequent national policies and laws and their implementation, are matters to which we will continue to pay attention.
Regarding the risks above, we regularly analyze and develop countermeasures for the various risk factors according to their likelihood and potential impact, and we anticipate a reduction in the impact of climate change risks. With regard to opportunities brought about by climate change, we not only continue to pursue improvements to product energy efficiency, but also strive to integrate existing and new business groups to create a unified low carbon, sustainable “Smart Strategy.” In addition, in our primary operating locations such as Aspire Park we have set up solar power generation stations. In 2019 our Dutch subsidiary set up its own solar power facilities, further boosting the percentage of power coming from renewable sources. In the course of expanding the Group’s business, we are also making use of smart transportation subsidiaries to leverage the efficiency of the ICT industry to help society and various departments accomplish carbon reduction and corresponding adjustments.
Through internal assessment and situational analysis, we see that the financial impacts of entities, policies, regulations, and market changes brought about by climate change will be relatively limited. Through various innovations, product R&D, and strengthening our own capabilities, we also anticipate a greater ability to seize the related business opportunities in areas such as smart parking systems, improvement of the energy efficiency of information products, and the development of renewable energy.