Response measures for climate change

Identify climate risk issues, systematic management, taking climate action

In the face of global climate change issues, we will actively fulfill and promote the net-zero goals of reaching 50% renewable energy use in 2030 and 100% renewable energy use in 2050 through the three major aspects of "green design", "energy saving and carbon reduction" and "sustainable supply chain management", achieving net-zero greenhouse gas emissions.

Links between the four core pillars of the TCFD framework and related Issues

4.1.1

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Novatek identifies and evaluates the potential impacts of climate change in accordance with aspects such as operational activities, service provision and environmental interaction, and takes into account the norms of international initiatives related to sustainability and climate change as well as Taiwan's environmental sustainability regulations to implement countermeasures and formulate management policies. Novatek actively identifies its climate-change related risks and opportunities, strengthens its response measures in the face of such risks, and takes this opportunity to create a competitive advantage for the Company.

Governance	Dedicated Unit	Novatek organized the "ESG Sustainability Committee" as the core of the Company to implement sustainable development. The chairman, president and many senior executives of Novatek from various fields formulate medium- and long-term sustainable development goals in the management meeting, and are responsible for coordinating and integrating the Company's resources from different departments, identifying climate issues related to the Company's operations, formulating corresponding climate strategies, as well as tracking the achievement of goals.
Governance	Regular Follow-ups	The ESG Sustainability Committee is responsible for promoting the development of ESG, climate and environmental strategies, coordinating and managing various climate and environmental goals. The Committee holds at least two meetings each year to monitor the implementation of these goals. The Risk Management Committee is responsible for supervising the effectiveness of the operation mechanism, and at least once a year, reports regularly to the Audit Committee and the Board of Directors on the planning and implementation of these goals. This helps the Board of Directors track progress, provide feasible strategies or other directional suggestions, and urge management to evaluate and adjust planning issues.
Strategy	Risk Analysis	Establish climate risk management tools to analyze the significant financial impacts that major climate risks may bring, identify short-term, medium-term, and long-term climate-related risks and opportunities, and enhance climate resilience.
	Design and R&D (Clean Technology)	Committed to the design and research of smart imaging and display technology ICs, we strive to be a trusted global partner for customers while also addressing sustainability trends by developing innovative products that are energy-efficient and reduce carbon emissions.
	Renewable (Clean) energy	Set up a solar power generation system, continuously evaluate the purchase of renewable energy, and increase the percentage of renewable energy use year by year.
	Energy-saving installations	Continue to carry out the plan to replace old equipment and purchase energy-saving facilities to improve energy efficiency.
	Promotion of supplier sustainability project	Work closely with suppliers to enhance sustainability management processes and jointly address environmental sustainability issues through negotiations or exchange forums, creating a sustainable value chain.
Risk management	Risk Assessments	Novatek's "ESG Sustainability Committee" conducts a potential risk assessment for the Company through the risk identification process, summarizes major climate risk issues as well as the corresponding risk management measures, reports to the Risk Management Committee on the implementation of risk management and control on a quarterly basis, and performs regular reviews and tracking.
	Assessment Follow-ups	Novatek reviews the changes in policies, regulations, technologies, markets and business reputation on transition risks and opportunities every year. Furthermore, it strengthens the regular review of the assessment results of physical risks, transition risks and opportunities through climate risk management tools, and continues to make adjustment on a rolling basis.
	Sustainability Forums	Through holding the supply chain sustainable operation exchange forum, the sustainable management process for suppliers is improved, allowing suppliers to jointly respond to environmental sustainability-related issues and creating a supply chain with sustainable value.
Metrics & Targets	Reduction of Energy Consumption	The energy consumption of full-range main products is reduced by 2~5% compared with the previous year.
	Conserving Water and Power	Set internal water and electricity saving standards every year, regularly track the achievement of goals, and actively respond to the risks associated with climate change.
	International Verification	Promote suppliers to obtain a number of certificates for ISO management system verification, including carbon emissions and disclosure, water footprint and energy management, and work with suppliers to follow the Company's sustainable development goals.
	Renewable (Clean) Energy	Increase the procurement of renewable energy and the targets for the use of renewable energy: 20% by 2025, 50% by 2030, and 100% by 2050.

Climate change risk and opportunity identification

The extreme weather caused by the increasingly severe climate change may have a serious impact on business operations and finances. Novatek implements climate change risk and opportunity identification according to the TCFD, and considers internal as well as external environmental changes to identify potential impacts and possible risks/opportunities on the Company's operations and finances, and formulate corresponding management policies:

Climate change risks

Climate change opportunities

Climate change indicator and target setting

Based on the above identified climate change risks and opportunities as well as the corresponding management policies, Novatek has established a tracking system. The goals and results of each climate change issue in 2023 and the goals for 2024 are detailed in the following table:

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Note 1：Key overseas suppliers: Outsourced overseas suppliers for Novatek's wafer and back-end production processes.

Note 2：Key suppliers：Top three suppliers in terms of supplying capacity for the year or potential suppliers based on the evaluation of procurement amount, products, services and business partnership.

Protect Biodiversity

Declaration of Biodiversity

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As Novatek strives to fulfill its environmental responsibility and monitor international developments, mitigation of environmental impacts remains a top priority. Novatek incorporates biodiversity risk factors into its assessments and develops response action plans. Through concrete actions, and by leveraging corporate strength, the Company aims to preserve natural ecosystems and achieve the United Nations Sustainable Development Goals (SDGs). In 2024, Novatek officially integrated biodiversity into its corporate sustainability strategy, aiming to mitigate the crises and impacts of climate change through the implementation of corporate sustainability.

Novatek an IC design company, does not engage in production or manufacturing. By utilizing the "National Land Ecological Green Network Blueprint" from the Ministry of Agriculture to cross-reference the addresses of its offices in Taiwan and incorporating the resource usage and material emissions from its operations for evaluation, Novatek aims to identify specific directions for mitigation or restoration. The comparison results indicate that none of the company's operational sites in Taiwan are located within 2 kilometers of wildlife protection areas or nature reserves. In addition to continuously maintaining the green ecology of its plants and implementing environmental education, Novatek also collaborates with governmental organizations and conservation groups, among other stakeholders, to assess and promote relevant conservation projects locally, thereby enhancing the diverse values of biodiversity.

Over the years, Novatek has been actively involved in forest protection and biodiversity efforts within protected national forest areas：

Yushan National Park Trail Maintenance		Since 2007, Novatek has been donating to Yushan National Park, consistently dedicating efforts to the maintenance of Taiwan's alpine forest ecology and sustainable conservation in protected national forest areas.
Adoption of the "Skyline Viewing Area" Air Quality Purification Zone in Hsinchu City		Starting from 2022, Novatek has adopted the "Skyline Viewing Area" air quality purification zone in Hsinchu City. This area comprises 69 plants with a carbon sequestration amount of 4.237 metric tons of CO₂e, capable of naturally purifying 6.007 metric tons of CO₂e annually.

Spotlight

Environment Spotlight

Climate Change Response

Since 2021, Novatek adopted the framework of the Task Force on Climate-Related Financial Disclosures (TCFD). Through close discussions as well as the implementation of training courses across organizations and various responsible departments, employees can better understand the structure and concept of the TCFD, so that they can be internalized into the scope of work for departments to strength the follow-up work outputs.

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