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Climate-Related Financial Disclosure Report
China Airlines
Climate-Related Financial Disclosure
Report
January 2021
Climate-Related Financial Disclosure Report
I
Contents
Abstract...................................................................................................................................................................... 4
Chapter 1. Preface ............................................................................................................................................ 5
Chapter 2. Governance ..................................................................................................................................... 8
I. Supervisory mechanisms of the Board of Directors and the role, responsibility, and duties of the
management ....................................................................................................................................................... 8
Chapter 3. Strategy .......................................................................................................................................... 9
I. Results of the identification of short, medium, and long-term climate-related risks and opportunities ........... 9
II. Potential climate risks and opportunities for business, strategy, and financial planning, and response
strategies ........................................................................................................................................................... 13
(I) Plotting short, medium, and long-term risks and impact on operations under the 2°C and 4°C scenarios. 13
(II) Risks to be addressed and strategic adjustments in response to possible resulting material impact ......... 17
Chapter 4. Risk management ......................................................................................................................... 18
I. Identification and evaluation framework for climate change risks and opportunities ..................................... 18
(I) Climate Risk and Opportunity Assessment Procedures ............................................................................... 18
(II) Establishment of the climate risk management methodology .................................................................... 19
II. Climate risk and opportunity materiality identification .................................................................................... 19
III. Integration of climate-related risk identification, assessment and management procedures into internal
procedures of the Company .............................................................................................................................. 20
Chapter 5. Indicators and Targets ................................................................................................................... 21
I. Climate-related risk indicators .......................................................................................................................... 21
II. Greenhouse gas emissions and related risks ..................................................................................................... 21
III. Climate change targets and mitigation and adaptation strategy ...................................................................... 22
Chapter 6. Conclusion .................................................................................................................................... 26
Climate-Related Financial Disclosure Report
II
TABLES
Table 4-1. Standards for assessing climate impact risks and opportunities ............................................................... 20
Table 5-1. Climate risk indicators ............................................................................................................................. 21
Table 5-2. Greenhouse gas emissions ....................................................................................................................... 22
Table 5-3. Climate risk management strategy and operations .................................................................................. 23
Climate-Related Financial Disclosure Report
III
Figures
Figure 1-1. Relationship between climate-related risks/opportunities and financial impact ...................................... 7
Figure 2-1. TCFD management duties and organizational structure ............................................................................ 8
Figure 3-1. Climate scenarios .................................................................................................................................... 10
Figure 3-2. Climate risk/opportunity type and definitions ........................................................................................ 11
Figure 3-3. Impact of 2°C on operations ................................................................................................................... 12
Figure 3-4. Impact of 4°C on operations ................................................................................................................... 12
Figure 3-5-1. Short-term risks and risk distribution under the 2°C scenario .............................................................. 13
Figure 3-5-2. Medium-term risks and risk distribution under the 2°C scenario ......................................................... 14
Figure 3-5-3. Long-term risks and risk distribution under the 2°C scenario ............................................................... 14
Figure 3-6-1. Short-term risks and risk distribution under the 4°C scenario .............................................................. 15
Figure 3-6-2. Medium-term risks and risk distribution under the 4°C scenario ......................................................... 15
Figure 3-6-3. Long-term risks and risk distribution under the 4°C scenario ............................................................... 16
Figure 4-1. Climate risk/opportunity assessment procedures ................................................................................... 18
Figure 4-2. Climate risk financial quantitative management methods ...................................................................... 19
Figure 5-1. Four main strategies for climate change risks ......................................................................................... 23
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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Abstract
As companies now face increasingly complex challenges in the external environment, climate
change has become one of the most urgent issues in the world today. China Airlines (CAL)
understands the intricate relations between the operations of the aviation industry and climate
issues, and therefore signed and adopted the guidelines of the Task Force on Climate-Related
Financial Disclosures (TCFD) in 2018. We incorporated the guidelines into the operations of the
Company’s internal risk management mechanisms and established a TCFD Task Force composed of
different units to implement related operations.
CAL referenced the international carbon reduction pathways, scientific research (IPCC AR5), and
climate change and extreme weather incidents in recent years to identify and classify issues related
to CAL. We then gradually completed the analyses based on the operating procedures of units to
ensure the comprehensiveness of the evaluation contents. We use a matrix assessment for the
operational risk and classify the severity of risks based on their impact on operations. We also
consider both financial and non-financial impacts. We consider short, medium, and long-term impact
for time boundaries. We have identified 7 short-term risks and 10 medium to long-term risks. The
main medium to long-term high-risk issue is sustainable aviation fuel.
In addition, we have also identified three issues with direct and long-term impact on the aviation
industry for which we need to pay particular attention to, and they include the increase in operating
costs due to the intensification of extreme weather events, the shortage of water resources which
may affect daily operations and passenger services, and the cost of carbon trading or carbon
taxes/fees arising from international carbon control mechanisms. These costs will become additional
operating costs with direct impact on the operating performance and test the capabilities of
companies for cash flow management.
Contact Information for the Report:
Environment Department, Corporate Safety Office
E-mail: environment@china-airlines.com
Address: No.1, Hangzhan S. Rd., Dayuan Dist., Taoyuan City
China Airlines Concern for Climate Change website:
https://calec.china-airlines.com/csr/en/environment/manage-climate.html
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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Chapter 1. Preface
In April 2015, the G20 Financial Stability Board established the Task Force on Climate-related
Financial Disclosure (TCFD) to help the public and private sectors establish mechanisms for
information disclosure and provide investors, lenders, and insurance underwriters with the
necessary information to adequately assess the capacity of companies to respond to climate-
related risks and opportunities. TCFD provided clear, comparable, and consistent
recommendations and guidelines for information disclosure in June 2017. More than 1,600
organizations/companies and 70 countries have expressed support, and TCFD recommendations
have been incorporated by international mainstream sustainability evaluations into their surveys.
China Airlines (CAL) has signed on as a supporter of the Task Force on Climate-related Financial
Disclosures (TCFD) in September 2018 and became the first company in Taiwan’s transportation
industry to become a supporter.
The aviation industry emits large quantities of greenhouse gases and faces a staggering
amount of pressure and duties for reducing carbon emissions. They include the three-phase
carbon reduction goals and four-pillar strategy (technology improvement, operational efficiency,
infrastructural efficiency, and effective economic measures) proposed by the International Air
Transport Association (IATA), Carbon Neutral Growth from 2020 (CNG2020) proposed by the
International Civil Aviation Organization (ICAO), the Green Deal of the European Union, and
carbon pricing and carbon taxes/fees implemented by governments.
On the other hand, international stakeholders now pay closer attention to the disclosure of
non-financial information on corporate ESG (environmental, social and corporate governance)
performance. In addition to the existing sustainability standards and assessments, the
Sustainability Accounting Standards Board (SASB) has recently strengthened the industry-specific
"Sustainability Accounting Standards (SASB Standards)". In August 2020, Taiwan's Financial
Supervisory Commission (FSC) announced the "Corporate Governance 3.0 - Sustainable
Development Roadmap" and "Green Finance Action Plan 2.0". The FSC explicitly stated that it will
incorporate the guidelines published by the Task Force on Climate-Related Financial Disclosures
(TCFD) and the Sustainability Accounting Standards Board (SASB) to strengthen information
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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disclosure in corporate sustainability reports.
CAL formulated short, medium, and long-term carbon reduction targets based on the
aforementioned carbon reduction targets and strategies for the aviation industry, international
development trends, legislation development trends, the expectations of stakeholders, the
Company’s finance and operation planning, and technical feasibility. We also incorporated the
management structure in the TCFD guidelines and the indicators regarding greenhouse gas
emissions of the aviation industry in the "SASB Standards" to analyze the potential transition and
physical risks and opportunities. We implement the following key operations to gradually
strengthen CAL’s management of climate-related risks and opportunities and competitiveness.
I. We follow the TCFD guidelines and framework to identify climate risks and opportunities,
analyze the impact on finance and capital utilization, and develop decision-making
strategies and high-level governance mechanisms to strengthen our ability to address and
manage climate risks and opportunities.
II. We created methods to quantify risks and opportunities in monetary terms and learn about
the impact of climate change on current and future operations and cash flow. (Figure 1-1)
III. We enhance the efficiency of internal and external communication in governance, strategy,
risk management, and indicators and targets in response to the disclosure requirements in
TCFD and SASB Standards.
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Figure 1-1. Relationship between climate-related risks/opportunities and financial impact
Transition risks
Policies, regulations, and agreements
Technology
Market
Reputation
Opportunities
Resource efficiency
Energy sources
Products/Services
Market
Corporate resilience
Physical Risks
Short-term (acute)
Long-term (chronic)
Risks Opportunities
Business strategies
Risk management
Financial impact
Income
statement
Cash flow
statement Balance sheet
Revenues
Expenditures
Assets &
Liabilities
Capital &
Financing
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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Chapter 2. Governance
I. Supervisory mechanisms of the Board of Directors and the role, responsibility,
and duties of the management
CAL has included the issue of climate risks as a key issue for corporate sustainability and
environmental governance. It is monitored by the Corporate Sustainability and Corporate
Environmental Committee through control mechanisms and the performance is reported to the
Board of Directors on a regular basis.
This Climate Governance Report was presented to the Board of Directors in the fourth
quarter of 2020. The contents mainly included background climate information, risk and
opportunity identification results, quantitative conclusions drawn from financial information,
risks to be resolved, issues to be monitored by the Company, short/medium/long-term
strategies and performance, and difficult issues to be addressed. The action plans and budgets
were revised and formulated based on the opinions of the Directors/Committee Members after
the meeting.
The TCFD management duties and organizational structure are shown in Figure 2-1.
Figure 2-1. TCFD management duties and organizational structure
The Management - Risk Management
Corporate Sustainability Committee
Corporate Environmental Committee
The Board of Directors - Risk Supervision
Board of Directors To review the formulation of various risks and opportunities management strategies and performances.
The Working Level - Risk Control
Strategy units, finance units, flight control units, business units, administrative units, maintenance units, and service units
Sup
ervision
M
anagem
ent
Rep
ort
Rep
ort
To oversee all accountable division, which identify and evaluate potential risk faced by CAL
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Chapter 3. Strategy
I. Results of the identification of short, medium, and long-term climate-related
risks and opportunities
CAL set 2050 as the milestone year for verification based on reduction targets of IATA and
certain countries. Therefore, we analyzed the risks and opportunities arising from different
climate scenarios and related issues until the year 2050. However, the current assessments of
international transportation associations and investment institutions based on the feasibility and
effectiveness of the implementation of corporate strategies, and the impact of the COVID-19
epidemic showed that the aviation industry could only recover to operations before the epidemic
after the end of 2023. Therefore, the time and geographical boundaries for the assessment were
set as follows:
(I) Short, medium, and long-term settings:
1. Short term: 2021-2023
2. Medium term: 2024-2025
3. Long term: 2026-2030
(II) Geographical boundaries:
The geographical boundaries cover all global stations of CAL. We implemented a
"general" analysis based on the potential scenarios associated with the stations and will
incorporate the regional environmental, political, and economic conditions of the stations for
analyses.
(III) Scientific reports:
In terms of climate scenarios, we adopted the more moderate greenhouse gas emission
scenario (RCP2.6; limiting temperature increase to below 2°C) and the more extreme
greenhouse gas emission scenario (RCP8.5; global temperature increases by 4°C) in the Fifth
Assessment Report (AR5) of the IPCC, as well as the carbon reduction paths of ICAO Carbon
Offsetting and Reduction Scheme for International Aviation (CORSIA) and IATA. Climate
scenario sets as shown in Figure 3-1.
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(IV) Climate scenario:
The Company analyzes and identifies risks and opportunities that may affect operating
costs or revenues under 2°C and 4°C scenarios, and classifies the risks into transition risks
and physical risks based on TCFD guidelines. The definitions of each category are shown in
Figure 3-2.
Figure 3-1. Climate scenarios
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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Figure 3-2. Climate risk/opportunity type and definitions
Climate scenario Risk type Definitions Associated risks and
opportunities
International carbon reduction paths: ‧ ICAO and IATA carbon
reduction targets and strategies
‧ ICAO CORSIA and EU ETS regulations
‧ ICAO proposed 2% SAF target
‧ EU Green Deal carbon reduction targets
Regulations in Taiwan: ‧ Taiwan’s
energy/greenhouse gas regulations and regulatory requirements
Science-based report: ‧ IPCC AR5
RCP 2.6 RCP 4.5 RCP 6.0 RCP 8.5
Market competition:
‧ Competitors’ carbon
reduction targets and
strategies
‧ Sustainable
consumption trends
ESG investments
Transition risks
Physical Risks
Low-carbon economy transformational and transition risks
Impact of climate change on the climate system and environment, such as floods and intense typhoons.
Opportunities created by climate change such as the low-carbon economy, carbon rights, and business reputation.
Opportunities
Policy and Legal
regulations
Technology
Market
Reputation
Immediate (acute)
Long-term (chronic)
Resource efficiency
Access to energy
Resilience
Market
Products/services
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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Risks and opportunities under 2°Cand 4°C scenarios are shown in Figure 3-3 and 3-4.
Figure 3-3. Impact of 2°C on operations
Figure 3-4. Impact of 4°C on operations
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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II. Potential climate risks and opportunities for business, strategy, and financial
planning, and response strategies
(I) Plotting short, medium, and long-term risks and impact on operations under the 2°C and 4°C scenarios.
The Company has included climate risk identification and management as an important issue
for corporate sustainability and environmental management. The related risks and
operational impacts after the identification, assessment, response and review process of the
internal risk management mechanisms are as follows:
1. Plotting risks under the 2°C scenario (Note: Green bubbles correspond to
transformational risks; orange bubbles correspond to physical risks)
Figure 3-5-1. Short-term risks and risk distribution under the 2°C scenario
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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Figure 3-5-2. Medium-term risks and risk distribution under the 2°C scenario
Figure 3-5-3. Long-term risks and risk distribution under the 2°C scenario
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2. Plotting risks under 4°C scenarios
Figure 3-6-1. Short-term risks and risk distribution under the 4°C scenario
Figure 3-6-2. Medium-term risks and risk distribution under the 4°C scenario
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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Figure 3-6-3. Long-term risks and risk distribution under the 4°C scenario
3. Impact on operations
All climate risks have small short-term impact on operations and there is no
need to increase capital expenditures. The impact on medium-term operations
increases within a limited scope mainly due to ICAO CORSIA mechanisms. If we
calculate the impact based on an operating growth of 1.5% per year and a full
adoption of 2% sustainable fuel, the increased cost of sustainable fuel has a higher
impact on operations. The long-term impact is the same as the medium-term
impact. If we calculate the impact based on a growth rate of 3% per year and a full
adoption of 2% sustainable fuel, the increased cost of sustainable fuel will still have
the highest impact on operations. However, the adoption of sustainable fuel is
dependent on the scale of market supply, and it is less likely for the Company to
fully adopt sustainable fuel within a short period. Therefore, the results of the
evaluation are only provided for internal reference by CAL, and are not results of
financial forecasts. In addition, there may be mandatory long-term requirements
for the use of renewable energy due to regulations. If we choose to invest in
renewable energy facilities, capital expenditures will be required.
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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(II) Risks to be addressed and strategic adjustments in response to possible resulting material impact
1. We implement adjustments and mitigation each year to reduce the carbon trading
costs added as a result of ICAO CORSIA mechanisms. Please refer to "V. Description of
Mitigation and Adjustment Strategies for Targets and Indicators" for related
information.
2. In response to renewable energy use and energy transformation, we will continue to
improve the energy management system and various energy conservation measures
to reduce the electricity contract capacity and reduce the increased operating costs
from the use of renewable energy.
3. In response to the impact of climate change and rising sea levels on company
operations, units incorporate factors for related issues in the Company’s flight plans,
business performance management, and other operations and formulate future
response strategies and business operation adjustments and plans when necessary.
4. As sustainable aviation fuel is not readily available in Taiwan, we need the
government’s support with integrated policies and assistance for industries. We
therefore need to continue to lobby industries, the government, and the academia to
help create a development strategy for sustainable aviation fuel in Taiwan.
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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Chapter 4. Risk management
I. Identification and evaluation framework for climate change risks and
opportunities
(I) Climate Risk and Opportunity Assessment Procedures
The Company designs climate risk assessment procedures based on the impact of
climate change on the Company’s overall operations. We also referenced to the "TCFD
recommendations report" and the "Guidelines for the Analysis of Climate-Related Risk and
Opportunities V2.01". We first identified the key units and equipment in the internal
operations of CAL such as the energy necessary for providing transportation services, the
electricity demand of aircrafts, air-conditioning systems, and other electricity consumption,
and assessed the potential impact and degree of impact. The climate risk/opportunity
assessment procedures are shown in Figure 4-1.
Figure 4-1. Climate risk/opportunity assessment procedures
1 Practical guide for Scenario Analysis in line with the TCFD recommendations 2nd edition (March 2020), Climate
Change Policy Division, Ministry of the Environment, Government of Japan.
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(II) Establishment of the climate risk management methodology
CAL collected information on the international carbon reduction methods, IPCC Fifth
Assessment Report (AR5), and phenomena caused by climate change in recent years in its
risk/opportunity assessment procedures to categorize and identify potential issues related
to CAL to implement the environmental impact assessment. The climate-related financial
quantitative management methodology is shown in Figure 4-2.
B/S: Balance sheet
P/L: Income statement
Figure 4-2. Climate risk financial quantitative management methods
II. Climate risk and opportunity materiality identification
CAL considers the impact and possibilities of material climate risks and opportunities on
operations. We prioritize the financial impact for the assessing the impact on operations.
Where financial information cannot be quantified, we will use non-financial information to
Input Process Output
Financial information
B/S, P/L Operating revenues
and expenses
Non-financial information
CO2 emissions
Percentage of sustainable fuel
External issues
Information published by different countries
Other reports
B/SP/L
Impact factors and parameters
(2℃)
Impact factors and parameters
(4℃)
Financial impact on B/SP/L
(2℃)
Financial impact on B/SP/L
(4℃)
Fuel consumption Fuel efficiency
IATA, ICAO, IPCC, and IEA reports
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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consider the impact.
The risks and opportunities to be addressed are shown in Table 4-1.
Table 4-1. Criteria/matrix for assessing climate impact risks and opportunities
Risk Level Strategy Action
High Immediate improvements Establish control and management
measures and review the effectiveness.
Medium Improvements based on
actual conditions
Establish control and management
measures and review the effectiveness
for the following conditions:
‧ Regulatory requirements
‧ Commitments
‧ Decisions of high-level
management
Follow development trends and the
impact for other items and establish
control and management measures
based on requirements.
Low
Continue to follow
development trends and
the impact
III. Integration of climate-related risk identification, assessment and management
procedures into internal procedures of the Company
CAL has established a TCFD Task Force, which has been included in the scope of
Corporate Environmental Risk Management Mechanisms. We also use the following
principles to periodically collect information on domestic and foreign climate and carbon
reduction policies, identify related risks and opportunities, implement regular reviews, and
propose improvement measures.
(I) Incorporate climate factors into the existing enterprise risk management mechanism
to strengthen climate risk / opportunity detection, response, and control capabilities
in all units.
(II) Incorporate climate change consideration to continuously improve and implement
various management procedures.
(III) Combine the CAL value chain environmental risk management to strengthen the
detection of climate risks and opportunities as well as management, and enhance the
capability of continued operations in response to extreme weather.
Task Force on Climate-Related Financial Disclosures (TCFD) Project
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Chapter 5. Indicators and Targets
I. Climate-related risk indicators
CAL has adopted GRI 302-3 and 305-4 indicators to assess and track climate-related risks.
We focus on aviation fuel use and fuel efficiency, and will gradually adopt disclosure indicators
of Sustainability Accounting Standards in the future to enhance performance tracking. The
related indicators for 2018 and 2019 are shown in the table below (5-1). The specific
performance has been disclosed in the annual CSR Report and the green performance webpage
on the official CSR website.
Table 5-1. Climate risk indicators Item 2018 2019 2019 Compared to
2018
Fuel use (ton) 2,284,957 2,230,971 -53,986
CO2 emissions (CO2e) 7,229,839 7,059,083 -170,756
Transport volume (1000
RTK)
9,544,260 9,072,762 -471,498
Fuel efficiency (fuel / 1000
RTK)
0.2394 0.2459 0.0065
Carbon emission intensity
(ton CO2 / 1000 RTK)
0.7575 0.7781 0.0206
II. Greenhouse gas emissions and related risks
CAL introduced a complete ISO 14064-1 greenhouse gas management mechanism, and
established a Carbon Management Task Force under the framework of the Corporate
Environmental Committee to comprehensively manage the carbon risk issues of corporate
operations and manage compliance with international carbon control schemes based on the
structure of carbon management. CAL’s 2018 and 2019 greenhouse gas emissions are shown
in the table below (5-2). Refer to the green performance webpage on the official CSR website
for detailed energy efficiency information.
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Table 5-2. Greenhouse gas emissions (Unit: tons CO2e)
GHG Scope 2018 2019 Related risks
Scope 1
Flight
operations 7,229.903 7,059,083
Risks of international carbon reduction pressure
and increased carbon offsetting costs
Ground
operations 3,511 4,981
Risks of reduction agreements with green airport
partners
Scope 2 19,949 18,169 Risks of mandatory renewable energy usage
Scope 3 1,644,656 1,607,690 Risks of brand customer requirements and
supplier management
III. Climate change targets and mitigation and adaptation strategy
In terms of short-term carbon reduction targets, CAL referenced and adopted ICAO and
IATA strategic recommendations, practices of benchmark international airlines, and experience
accumulated in reduction operations. We work with the Civil Aeronautics Administration and
published the first voluntary greenhouse gas reduction statement in the aviation industry
with the aim of promoting autonomous management for flight operations before the activation
of the global carbon management mechanisms planned by ICAO. To attain carbon reduction
targets of the aviation industry, CAL continued to enhance fuel efficiency improvement plans
and formulated the four major strategies including " establish a TCFD information system",
"improve fuel efficiency", "participate in the international carbon management mechanisms",
and "strengthen the emergency response system" (Figure 5-1) and other specific
implementation measures. The four major climate risk management strategies and operations
are shown in Table 5-3.
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Figure 5-1. Four main strategies for climate change risks
Table 5-3. Climate risk management strategy and operations
Response Item Target and Specific Actions
Governance
Strengthen climate
governance Continue to submit climate governance reports to the Board of Directors
Enhance management
supervision and cross-
departmental
operations
1. Implement corporate governance and green finance and introduce TCFD
and SASB standards and requirements.
2. Implement rolling management to improve the short, medium, and long-
term ESG performance
Strategy
Enhance TCFD
capabilities
1. Increase the comprehensiveness and depth of quantified Climate related
financial information.
2. Establish a cross-unit information operation platform.
Climate response
strategies and
management
1. Incorporate climate risks and opportunities into the Company’s overall
strategies and plans and implement related response actions.
2. Incorporate discussions of the impact of climate change in the Company’s
flight plans, business performance management, and other operations
and formulate response strategies and business operation adjustments
when necessary.
Participate in important
engagements
1. Participate in the international and Taiwan's important climate policy
engagement platforms, keep abreast of policy development trend, and
get hold of the right to speak.
2. Lobby the industry, government, and academia to create a development
strategy for domestic sustainable aviation fuel.
Use fleet renewal, aircraft weight reduction, flight optimization, and O&M improvement to reduce
carbon emissions
Participate in ICAO CORSIA carbon offsetting mechanisms to achieve the goal
of carbon neutral growth
Establish a climate financial information framework and data collection system to strengthen climate risk assessment and
accuracy
Improve the emergency response system and enhance response and resilience
against extreme weather incidents
Four main
strategies
for climate
change risks
Improving fuel efficiency
Participation in international carbon
management mechanisms
Emergency response
system
TCFD information
system
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Response Item Target and Specific Actions
Risk
management
Strengthen the risk
management
mechanisms for the
value chain
Integrate the environmental risk management mechanism of value chain,
continue to implement and expand greenhouse gas inventory and climate
and energy risk assessments of key suppliers, extend the depth of climate risk
opportunity detection and management, and strengthen the ability to
continue operation in response to extreme weather.
Strengthen the existing
enterprise risk
management
mechanism
Incorporate climate factors into the existing enterprise risk management
mechanism to strengthen climate risk / opportunity detection, response, and
control capabilities in all units.
Respond to international
carbon transformation
risks
1. Participate in the carbon offsetting and reduction plans of the
international aviation industry.
2. Continue to enhance MRV capacity for EU ETS and ICAO CORSIA
mechanisms.
3. Research and perform carbon rights/credit transaction and trading.
Implement carbon
reduction and energy
transformation
1. Install dedicated electricity meters on equipment/processes with high
energy consumption risks to monitor electricity consumption
2. Continue to perform replacement and renewal of high-energy-consuming
facilities.
3. Evaluate to increase the installation of renewable energy generation
facilities such as solar power.
4. Enhance energy management systems and improvement of their
effectiveness
Indicators
and Targets
Continuously optimize
greenhouse gas
inventory
Conduct an ISO 14064:2018 categories inventory every year to grasp the
greenhouse gas emissions information.
Implement KPI projects
to achieve carbon
reduction targets
Establish around 60 KPIs in environmental protection and carbon emission
reduction each year to achieve short-, medium, and long-term carbon
reduction targets; review the performance at the meeting of the Corporate
Environmental Committee convened by the President quarterly.
Attain flight carbon
reduction objectives
1. Continue to promote plans for fleet renewal, aircraft weight reduction,
flight optimization, and O&M improvement.
2. Implement fleet plans in accordance with medium and long-term business
growth.
3. Continue to improve aviation fuel efficiency, increase loading factor, and
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Response Item Target and Specific Actions
focus on the development of new technologies and new low-carbon
aircrafts for purchase at an appropriate time.
Increase fuel efficiency
1. Continue to promote aviation fuel-saving operations to increase 1.5% fuel
efficiency each year.
2. Optimizing route planning and develop the most suitable passenger /
cargo fleet in response to the epidemic and international development
trends.
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Chapter 6. Conclusion
I. Although CAL has committed itself greenhouse gas emission mitigation and adaption, the rising
pressure of climate risks and opportunities have continued to increase. The introduction of
guidelines of the Task Force on Climate-Related Financial Disclosures (TCFD) helps CAL enhance
the identification and management of climate risks and opportunities, and increase business
resilience and low-carbon competitiveness.
II. Based on the short, medium, and long-term impact assessment of climate issues on CAL, we
have identified 7 short-term risks and 10 medium to long-term risks. The main medium to long-
term high-risk issue is sustainable aviation fuel. As sustainable aviation fuel is not readily
available in Taiwan, we need the government’s support with integrated policies and assistance
for industries. We therefore need to continue to lobby industries, the government, and the
academia to help create a development strategy for sustainable aviation fuel in Taiwan.
III. To continue the effective management of the identified climate risks and opportunities, CAL
proposed the core strategies of "creating a TCFD information system", "improving fuel
efficiency", "participating in international carbon management mechanisms", and
"strengthening the emergency response system". We have also promoted 13 major operation
strategies based on the four major TCFD structures for climate governance, strategy, risk
management, and indicators and targets, and implemented rolling management and reported
results to the Board of Directors each year to improve the CAL climate governance and
management.
IV. We will continue to expand and include climate change risks and opportunities to enhance the
value chain and supply chain management mechanisms.
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