Climate Change and Energy Management

Climate Change Policy

Having identified climate change as one of the major sustainability issues and key risks, LITE-ON pays close attention to climate change developments around the world and to reactions to this phenomenon in other countries. LITE-ON continues to monitor and analyze the issues, and works on adaptation and mitigation to greenhouse gases.
Having identified climate change as one of the major sustainability issues and key risks, LITE-ON pays close attention to climate change developments around the world and to reactions to this phenomenon in other countries. LITE-ON continues to monitor and analyze the issues, and works on adaptation and mitigation to greenhouse gases.
For climate change adaptation, we observe the 2 degrees Celsius scenario released by the International Energy Agency, and identify potential short-, medium-, and long-term risks arising from climate change based on international research, industry trends, and results of internal and external studies as well as our own decisions and judgments. We also follow the Task Force on Climate-Related Financial Disclosures (TCFD) framework to disclose climate change information and related risks and opportunities. We make climate related financial statements one of the means of stakeholder communication.

Overall Impact and Challenges of Climate Change

LITE-ON sees climate change as a major risk and an important opportunity. The Climate Change Risk Task Force is in place to identify LITE-ON's exposure to potential physical risks and transformation risks arising from climate change. The risks and opportunities identified are analyzed further in terms of probability and severity. The task force assesses the probability and severity of each risk and appropriate countermeasures before proceeding to implement climate change adaptation and mitigation strategies and policies.
In 2018, we identified the major climate risks of climate change, mainly from the requirements of key stakeholders such as clients and investors to reduce greenhouse gas emissions and comply with product energy efficiency standards. The opportunities brought about by climate change mainly appeared in our green products and services that respond to the trend of sustainability. In the climate change risk and opportunity management, we implement the ISO 14001 PDCA process in the environmental management system of each operation sites and set the key performance indicators based on unit revenue to reduce the environmental impact.


Climate Change Response Measures

In terms of its climate change response strategy, LITE-ON takes into account products, equipment, management and other factors, and continues to develop green design, green factory, energy management, and high-performance energy creation, conservation, and conversion products and solutions. In addition, LITE-ON focuses on energy management systems, renewable energy development, and international renewable energy certificates as key strategies, and makes plans for internal carbon pricing to provide a basis for investment strategies and risk management. To start early in making preparations for potential effects of climate change, LITE-ON is implementing the following climate change mitigation and adaptation strategies:

Climate change mitigation strategies
   Energy creation
   .Develop renewable energy and increase the energy use from renewable sources.
   Energy conservation
   .Optimize production processes and improve plant operations to effectively achieve energy and water conservation, waste reduction, and air pollution prevention.
   .Devote efforts to minimizing the impact of product packaging and business activities on the environment.
   .Improve energy conservation and environmental protection performance at all plants
  Energy conversion
   .Implement green design to improve energy efficiency for products and reduce the impact of product use on the environment
   .Continue to encourage suppliers to explore innovative means of operation that have less impact on the environment

Renewable energy development
LITE-ON supports the development of renewable energies. In addition to purchasing rooftop solar power systems and international green power certificates for raising the volume and percentage of renewable energies consumption every year, this company is seeking suitable renewable energy suppliers for power purchase agreements or charity for green power to achieve low carbon manufacturing. In 2018, LITE-ON consumed 1,447 MWh of solar power that it generated, and purchased international renewable energy certificates for 19,000 MWh. Total renewable energy consumption reached 20,447 MWh, which was 5.05% of LITE-ON's total power consumption.


Energy management strategy
LITE-ON continues to implement energy management system, and has obtained ISO 50001: 2011 certification in five operation sites such as Hsinchu Science Park Plant, LITE-ON (Guangzhou). LITE-ON (Dongguan) has received Level A certification for energy management in Dongguan, which enables it to monitor constantly energy consumption in plants and offices. The objectives are to identify potentially feasible optimization, to improve energy efficiency, to reduce consumption of natural gas, oil, and purchased electricity, and to support the campaign for automated energy saving technologies and clean energy innovations.

Production process optimization and plant operation improvement
LITE-ON plants have proposed energy saving and improvement plans focusing on four areas. The areas are air conditioning improvement, production line improvement, lighting improvement, and power system improvement. The emphasis is on better efficiency and investment. In 2018, LITE-ON plants implemented 83 energy saving projects, and saved power consumption by 14,279,407 kWh. In particular, air conditioning and production line improvement showed excellent results. For air conditioning improvement, maintenance of air conditioning pipework, improvement of cooling tower design, modification of compressor scheduling, and change to electrical heating contributed to energy conservation and pollution reduction. New magnetic levitation chillers continue to be installed and compressor modules upgraded along the production lines. Furthermore, the machines are scheduled to operate in a way that leads to fewer modules on standby. Regarding lighting, LITE-ON replaces traditional fluorescent tubes with LED tubes to significantly reduce energy consumption while increasing the useful life. For power systems, transformers are adjusted to reduce waste.

Climate change adaptation strategies
 .Develop and expand the range of low carbon products and services
 .Developing automated energy saving technologies and clean energy innovations
 .Identification and financialization of climate change risks and opportunities

Developing and expanding the range of low carbon products and services
To counter the threat of climate change, LITE-ON devotes itself to developing low carbon products and services and related innovations. By reducing energy consumption and cutting waste, LITE-ON enables itself and its customers to make more efficient use of energy resources, thereby achieving higher energy conversion efficiency, reduced material use and weight for products, and reduced waste. For example, the energy saving chip, one of the results from this R&D process, when compared to products in the past, has achieved: (1) 38.1% weight reduction per unit or 81 tonnes in total and (2) 34.4% reduction in the use of non-recyclable heatsink paste. Both contribute to a lower environmental impact.

Developing automated energy saving technologies and clean energy innovations
LITE-ON reconstructs quality manufacturing through automation and digital transformation. In 2015, the company was the first manufacturer in the country to introduce the first unmanned LED lighting production line. In 2017, it started implementing big data and IoT remote monitoring, and installed a large number of smart manufacturing systems. The shift toward the use of family materials, family molds, and family jigs in production also help to reduce the energy and resource input per unit product. In 2018, LITE-ON Smart Life and Applications Division has installed part of a smart production line to provide line sharing in a small volume and achieve the objective of fast line changing for fast production. Mobile phone chargers also benefited from the introduction of smart manufacturing. It doubles the hourly production capacity, and reduces power consumption per unit product by 6% to 8%.

Identification and financialization of climate change risks and opportunities
We make a commitment to follow the TCFD framework to disclose climate change information and related risks and opportunities. The Climate Change Risk Task Force has been put in place in 2018. It is charged with identifying LITE-ON's exposure to potential physical risks and transformation risks arising from climate change and assessing the financial impact of likely climate related risks and opportunities. Furthermore, LITE-ON continues to follow international carbon trading issues. The company has also started formulating internal carbon pricing plans for its own science based targets to internalize costs of carbon emission. It adopts the shadow carbon pricing methodology, and takes into account the carbon trading regulations in Taiwan and the prices in Mainland China to determine carbon prices for main operation sites in Taiwan and Mainland China. The concept of total emission control will be applied in the future to set reduction targets for individual business units as part of LITE-ON's effort to start early in anticipation of changes in the energy market after new carbon reduction and carbon trading regulations and in mitigation of business risks.

Greenhouse Gas Mitigation

Greenhouse Gas Inventory
LITE-ON continues to work on transformation and upgrade of low carbon products and improvement of renewable energy utilization in order to fulfill the promise of greenhouse gas reduction. LITE-ON has been passing third party (SGS Taiwan Ltd) certification standards and performing on greenhouse gas emission verification (reasonable level of assurance) since 2007 in accordance with the carbon management strategy. In 2018, LITE-ON's Scope 1 and Scope 2 GHG emissions were 322,293 tonnes. The CO2 emission reduction was 50,152 tonnes CO2e (13.47%) compared to 2017 or 79,091 tonnes CO2e (19.70%) compared to 2014 (base year). The carbon intensity was 1.69 tonnes CO2e/NTD million, 15.03% lower than in 2014.

Greenhouse gas emissions and intensity 2014-2018


Greenhouse Gas Emissions 2014-2018


Greenhouse Gas Reduction Measures (GHG Scopes 1 and 2)
LITE-ON continues to work on improving the efficiency of energy saving and business equipment in plants and offices. LITE-ON focused its efforts on upgrading and improving management of the lighting systems at the plants; improving production processes; upgrading air conditioning units; and improving management systems and other energy saving measures in 2018. The total GHG emission reduction was 11,914 tonnes CO2e. The energy and carbon saving measures at individual plants and offices are as follows:


Greenhouse Gas Value Chain Inventory (GHG Scope 3)
To maximize the value of the LITE-ON value chain and to identify key factors in slowing down climate change, LITE-ON takes inventories of emissions from its own business activities as well as those from its entire GHG value chain. LITE-ON adopted the GHG Protocol Evaluator Tool to identify Scope 3 emissions in 2017. The company also followed the GHG Protocol Scope 3 Standard to establish related inventory methodologies. GHG emissions were quantified by category in 2018. The plan was to identify emission hotspots in the value chain, set reduction targets, and start implementing reduction measures.
Regarding the use of products sold from Emission Source Category 11 on the value chain, for example, LITE-ON set the target to be a 2% improvement of energy conversion efficiency for power supply products by 2023 with the products and technologies developed in 2016 as the baseline. Through green design, LITE-ON worked with upstream IC suppliers to develop a new generation of synchronous rectification ICs for higher efficient power conversion. The company achieved a 1.19% improvement in conversion efficiency and 108,577 Tonnes CO2e in emission reduction in 2018.


Direct and Indirect Energy Consumption

Direct energy
LITE-ON consumed 63,228 GJ in fossil fuels in 2018. It was a 19.72% reduction compared to 2017. The consumption intensity was 0.33 GJ/NTD million, 19.35% lower than in 2017. Below are details regarding the company's use of fossil fuel:
 .287.6 kiloliters of diesel were used in 2018, which was 20.1% less than in 2017.
 .415.4 kiloliters of gasoline were used in 2018, which was 27.3% lesser than in 2017.
 .806.5 cubic meters of natural gas were used in 2018, which was 9.9% less than in 2017.
 .220.6 Tonnes of LPG were used in 2018, which was 29.9% less than in 2017.
 .76.8 Tonnes of alcohol liquids were used in 2018, which was 11.3% less than in 2017.
Indirect energy
LITE-ON's indirect energy includes purchased electricity and steam. The electricity consumption was 405,249 MWh or 1,458,896 GJ in 2018. It was 18,885 MWh or 67,986 GJ or 4.45% less than in the 2017 consumption and the electricity intensity fell by 4.01%. Compared to the year of 2014 (base year), the electricity consumption was 8.69% lower and the electricity intensity fell by 3.37%. The steam consumption is 3,656 MWh or 13,162 GJ, which is 515 MWh or 1,858 GJ or 12.37% lower than in the 2017 consumption.

Total energy consumption
LITE-ON consumed a total of 1,535,286 GJ in energy in 2018. It was 90,136 GJ lower than in 2017. The consumption intensity was 8.03 GJ /NTD million, 5.11% lower than in 2017 or 5.46% lower than in 2014 (base year).

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