Environmental Protection & Occupational Safety
Climate Change and Carbon Management
Following our Regulatory Compliance & Responding to Environmental Campaigns pillar of USI's Environment, Health, Safety, and Energy Policy (EHS & Energy Policy), we continue to cooperate with local environmental protection authorities and actively participate in environmental improvement agreements to create an eco-friendly, healthy, and safe working environment. USI integrates the concept of ecologically sustainable development with company's managerial decision-making and operation management. Through the continuous promotion of management systems ISO 14001, ISO 50001, and ISO 14064-1:2018, we have improved and reduced environmental impact of our operations and hereby make a public disclosure about USI's environmental information for the implementation of corporate environmental responsibility.
In recent years, climate warming caused by greenhouse gas emissions has brought great risks to the world economy and affected many companies. Therefore, stakeholders are concerned about the risks and opportunities due to climate change, and the company also supports and echoes the goals of the Paris Agreement. In response to this international trend, EcoSolar has launched the Climate-related Financial Disclosure (TCFD) initiative based on the main axis of the sustainable development strategy - "Low Carbon Mission". Based on the TCFD recommendation report, we will reveal the risks and opportunities brought by climate change, and show the responsibility and strategy of enterprises, and allocate capital rationally and efficiently, in order to achieve the vision of low-carbon economic transformation.
Financial Impact Analysis of Climate Change
With reference to IEA's NZE 2050 and country-defined contribution scenario targets for each facility, we have conducted financial impact analysis of climate change risks and opportunities. USI's physical and transition risks and opportunities are analyzed with the relevant units in the organization, and the physical risks are identified in the form of financial and revenue losses due to the impact of natural disasters that would impact our production, operations and supply chain, and transition risks are identified in the form of customer demand for green products and future international carbon tax requirements; failure to do so will result in reduced customer orders and higher carbon tax costs. In terms of opportunities, we will continue to manage and improve energy efficiency, actively develop energy-saving components and enter the electric vehicle market, which is envisaged to save manufacturing costs and increase demand for our products. In the future, we will evaluate establishing a mechanism to estimate the financial impact of risks and opportunities.
We ranked the projects with high climate risk in terms of risk score and manage them according to "mitigation" and "adaptation". In terms of mitigation, we actively promote sustainable manufacturing, the use of renewable energy and the enhancement of energy efficiency; in terms of adaptation, we strengthen USI's climate resilience and search for alternative energy sources, analyze the risk of climate change and propose research and development strategies, and provide customers with integrated solutions to help them adapt to climate change. The following are our current strategies for responding to the corresponding risks and opportunities.
Physical Risk Analysis for Climate Change Scenarios
We refer to the scenario data released by international organisations, and analyse the situational entity risk of our own operating sites and suppliers (Taiwan), and have proposed strategies and measures to deal with different situational risk scores. For detailed analysis of situational entity risk, please refer to:
Climate Change Strategies and Target Paths
We plan to progressively obtain high-quality carbon credits by 2045 to offset our remaining carbon emissions and achieve our goal of net zero carbon emissions by 2050. We continue to implement climate change and energy management, water management, waste management and air pollution prevention to help customers produce energy-saving and carbon-reducing products. We are presenting our efforts and results in response to climate change through a systematic disclosure framework, further raising awareness of climate crisis, formulating relevant mitigation plans and measures, accelerating the implementation of risk control and climate change mitigation actions, strengthening our operating sustainability management capabilities, and moving towards sustainable corporate development.
USI continues to promote a greenhouse gas reduction policy and conducts internal greenhouse gas inventories in accordance with the ISO 14064-1 standard, which is verified by a third-party verifier. USI's total GHG emissions in 2022 were 220,896.47 metric tonnes of CO2e (Scope 1 & Scope 2),an increase of 14,764.92 metric tonnes of CO2e from 2021,and our GHG emissions intensity was 3.72 metric tonnes of CO2e,a decrease of 0.4 metric tonnes of CO2e from 2021.
We conduct 15 categories of significant identification and inventory of upstream and downstream activities in Scope 3, the results of which were verified by a third-party verification unit as follows:
Category(1) | Description | Greenhouse Gas Emissions |
1 | Purchased goods and services | 8,068,349.38 |
2 | Capital goods | 126,694.20 |
3 | Fuel and energy related activities | 17,263.83 |
4 | Upstream transportation and distribution | 119,164.28 |
5 | Waste generated in operations | 1,324.25 |
6 | Business travel | 243.42 |
7 | Employee commuting | 10,515.81 |
8 | Upstream leased assets | 2,840.17 |
9 | Downstream transportation and distribution | 60,451.29 |
10 | Processing of sold products | N/A(2) |
11 | Use of sold products | N/A |
12 | End-of-life treatment of sold products | N/A |
13 | Downstream leased assets | N/A |
14 | Franchises | N/A |
15 | Investments | 2,067,094.67 |
Total | 10,473,941.30 |
Note:
1. The data presented came from the ISO 14064-1:2018 inventory results, rounded to the 2nd decimal place, converted to the GHG Protocol for disclosure
2. N/A: Non-significant after assessment of the indirect emissions materiality criteria in accordance with ISO 14064-1:2018
In the green-house gas emissions, power loss shares about 97.6% in USI. The key to reducing carbon emission is to save power, making maximum efforts for electricity efficiency. The total energy consumption of USI in 2022 was 1,095,673.3 gigajoules, an increase of 109,040.1 gigajoules from 2021. Based on the turnover, the energy consumption per million CNY in 2022 decreased by 2.1 gigajoules. USI's energy intensity for 2022 is 18.5 (GJ/M CNY), a decrease of 36.6% compared to 2015.
Category | Direct Energy Consumption | Indirect Energy Consumption | Total Energy Consumption | ||
Diesel | Gasoline | Natural Gas/Liquid Petrol Gas | Electricity | ||
2022 | 1,266.0 | 2,215.4 | 28,307.9 | 1,063,884.0 | 1,095,673.3 |
2021 | 1,335.8 | 2,575.2 | 34,239.0 | 948,483.2 | 986,633.2 |
2020 | 1,393.6 | 2,523.9 | 74,103.6 | 870,905.2 | 948,926.3 |
2019 | 1,065.4 | 3,572.9 | 103,881.1 | 769,756.9 | 878,276.2 |
USI actively responds to the call for renewable energy use. We purchased 241,221 MWh International REC (I-REC, the registration authority is I-REC Registry and GEC, Green Electricity Certificate) in 2023 to offset CO2 emitted by traditional power in 2022 (the annual electricity use for Zhangjiang, Jinqiao, Huizhou, Kunshan Facilities were all offset, and 50% of Mexico Facility's electricity was offset). Low-carbon products produced in facilities using renewable energy accounts for 67.07% of USI's annual revenue. According to GHG Protocol Scope 2 Guidance, the statements are used to neutralize Scope 2 Market-based emissions.
Category | Item | Scope 1 | Scope 2 | Total |
---|---|---|---|---|
Location based | GHG Emissions (Metric tonnes CO2e) | 5,385.74 | 215,510.73 | 220,896.47 |
Percentage (%) | 2 | 98 | 100 | |
Market based | GHG Emissions (Metric tonnes CO2e) | 5,385.74 | 26,912.82 | 32,298.56 |
Percentage (%) | 17 | 83 | 100 |