Environmental Protection and Occupational Safety
Nature, Climate Change
Climate change and nature loss present increasingly important risks and opportunities for businesses worldwide. Recognizing the potential financial and operational impacts of these global challenges, USI supports the goals of the Paris Agreement and has integrated climate- and naturerelated considerations into its sustainability strategy. Following the recommendations of the TCFD and TNFD frameworks, USI published its inaugural Climate and Nature Risk Management Report in 2024, providing transparent disclosure of climate and nature-related risks, opportunities, governance mechanisms, and response strategies.
With oversight from the Strategy and Sustainability Committee, USI continuously monitors and evaluates emerging developments related to climate change, biodiversity, natural resource management, and evolving sustainability regulations and initiatives. Through ongoing risk assessment and strategic planning, USI seeks to strengthen organizational resilience, identify sustainable growth opportunities, and support long-term value creation.
In assessing the financial impacts of climate- and nature-related risks and opportunities, the Company evaluates transition risks based on the International Energy Agency (IEA) World Energy Outlook 2025 scenarios, including the Current Policies Scenario (CPS), Stated Policies Scenario (STEPS), and Net Zero Emissions by 2050 Scenario (NZE), to analyze the potential impacts of carbon pricing mechanisms on its operations. Physical risks are assessed using climate change scenario data from the National Science and Technology Center for Disaster Reduction (NCDR) and tools such as the World Resources Institute (WRI) Aqueduct Floods and Water Risk Atlas to evaluate the impacts of extreme rainfall, flooding, landslides, and water stress on operational sites and the supply chain. Through its Enterprise Risk Management (ERM) framework, the Company collaborates with business units to identify, assess, and analyze material climate- and nature-related risks and opportunities and their potential financial impacts.
Based on the results of the climate- and nature-related risk and opportunity materiality assessment, the Company manages material topics through two key approaches: mitigation and adaptation. On the mitigation side, the Company continues to promote greenhouse gas emissions reduction, renewable energy adoption, energy efficiency improvement, and low-carbon manufacturing to reduce carbon emissions and transition risks. On the adaptation side, the Company strengthens its resilience to extreme weather events and long-term climate change through climate scenario analysis, business continuity management (ISO 22301), disaster preparedness and response mechanisms, water resilience enhancement, and supply chain risk management. In addition, the Company seeks to capture market opportunities arising from the low-carbon transition through measures such as renewable and low-carbon energy deployment, the use of sustainable finance instruments, and carbon asset management, thereby enhancing corporate resilience and long-term competitiveness.
TCFD Significant Financial Impact Analysis
| Risk and Opportunity Description | Estimated Financial Impact | Estimated Investment Cost | Impact Timeline | |
| Transition Risk | Requirements and regulations applicable to existing products and services (regulatory and policy risk). With the gradual implementation of Taiwan’s carbon fee system and Shanghai’s carbon emissions trading scheme, together with increasingly stringent climate-related regulations and disclosure requirements, the Company may face increased costs associated with carbon fees, carbon credit procurement, compliance reporting, and low-carbon transition initiatives. Failure to comply with emission management or disclosure requirements may result in additional carbon charges, retroactive payments, or regulatory penalties. | Scenario analysis based on IEA WEO 2025 CPS, STEPS, and NZE scenarios. Without implementing carbon reduction measures, the estimated carbon costs in 2050 are: CNY 3.47 million under the CPS scenario; CNY 8.44 million under the STEPS scenario; CNY 49.64 million under the NZE scenario. The NZE scenario results in the highest financial impact. |
1. Third-party verification costs for ISO 50001 and ISO 14064-1: approximately CNY 0.4 million/year 2. Green electricity certificates and related transaction costs: approximately CNY 17.72 million/year 3. Additional costs for PPAs and self-generated renewable electricity: approximately CNY 1.34 million/year 4. Renewable energy equipment and energy system operating expenses: approximately CNY 1.01 million/year; capital expenditure approximately CNY 3.71 million 5. Operating expenses for energy-efficient equipment: approximately CNY 9.13 million/year; capital expenditure approximately CNY 33.98 million Total: approximately CNY 67.29 million |
3 Years |
| Physical Risk | Increased severity of extreme weather events (flooding / slope-related disasters). Climate change is increasing the frequency and intensity of extreme rainfall, typhoons, and heavy precipitation events, which may lead to flooding, slope failures, equipment damage, logistics disruptions, and operational shutdowns, thereby affecting production and delivery capabilities. | A single flooding event at the Caotun Plant and Nangang Plant in Nantou is estimated to result in daily revenue losses of approximately CNY 29.97 million. If other operating sites are forced to suspend operations for one day due to extreme weather, the estimated revenue loss would be approximately CNY 135.79 million. In the past, facilities in Mainland China suffered equipment losses of approximately CNY 0.2 million due to typhoons and flooding. Total: approximately CNY 165.96 million. |
1. Natural disaster insurance premiums: approximately CNY 11.58 million/year 2. Climate and natural risk consulting fees: approximately CNY 0.4 million/year 3. Investment in disaster prevention equipment and flood control supplies: approximately CNY 0.01 million Total: approximately CNY 11.99 million |
3 Years |
| Changes in climate patterns (drought / water stress). Rising temperatures and changing precipitation patterns may lead to unstable water supply, increased drought risk, deteriorating water quality, and higher cooling demand, resulting in increased operating costs, reduced equipment efficiency, and heightened supply chain disruption risks. | Currently, no quantifiable direct financial impacts have been identified at operating sites. However, future water shortages, water restrictions, or supply chain disruptions may result in production interruptions and additional operating costs. Therefore, management investment costs are used as the basis for the financial impact assessment. | 1. Investment in wastewater recycling equipment: approximately CNY 1.12 million 2. Maintenance and depreciation of water resource equipment: approximately CNY 2.09 million/year 3. Emergency external water procurement: approximately CNY 2.93 million/year 4. Dedicated personnel costs for climate risk and water management: approximately CNY 13.26 million/year Total: approximately CNY 19.4 million |
5 Years | |
| Opportunity | Use of low-carbon energy. By adopting renewable energy, entering into renewable energy Power Purchase Agreements (PPAs), implementing self-generated renewable energy systems, utilizing sustainable finance instruments, and enhancing carbon asset management mechanisms, the Company can reduce energy price volatility and carbon cost risks while improving corporate reputation, customer recognition, and market competitiveness. | Estimated overall benefits include: 1. Revenue from the sale of surplus carbon allowances: approximately CNY 2.03 million 2. Interest savings from sustainability-linked loans: approximately CNY 0.457 million 3. Estimated energy procurement cost savings of approximately CNY 1.10 million in 2026 due to increased renewable electricity purchases Total: approximately CNY 3.59 million |
1. Green electricity certificates and related transaction costs: approximately CNY 17.72 million/year 2. Additional costs for PPAs and self-generated renewable electricity: approximately CNY 1.34 million/year 3. Renewable energy equipment and energy system operating expenses: approximately CNY 1.01 million/year 4. Capital expenditure on renewable energy equipment in 2025: approximately CNY 3.71 million Total: approximately CNY 23.78 million |
5 Years |
In alignment with ASEH's SBTs, which were revalidated by SBTi in 2025 under the 1.5° C pathway, USI has established GHG reduction targets that support the parent company's commitment to achieve net-zero emissions by 2050. In response to customer expectations and global climate commitments, USI aims to achieve a 90% absolute reduction in Scope 1, Scope 2, and Scope 3 emissions by 2050. To address the remaining residual emissions, USI will evaluate and invest in carbon removal solutions, including carbon capture, utilization and storage (CCUS), new energy technologies, and nature-based solutions, supplemented by the responsible use of carbon credits.
Through a systematic disclosure framework, the Company demonstrates its efforts and achievements in addressing climate change, while further enhancing climate awareness across the organization. By formulating relevant mitigation plans and actions, the Company accelerates the implementation of risk management and climate change mitigation measures, strengthens business continuity management capabilities, and advances its commitment to sustainable development.
Net Zero Carbon Emissions Roadmap
USI attaches great importance to the supply, regulation, support and cultural services provided by the ecosystem for company operations, and is committed to reducing the impact on the ecosystem. Currently, the Mainland China, Nantou, Mexico and Vietnam facilities are all located in high-tech parks and industrial parks. None of the parks are located in biodiversity-sensitive areas.
Biodiversity Commitment
To achieve a balanced coexistence and maintain the integrity of natural ecosystems and forest conservation, USI established our Biodiversity and No Deforestation Commitment and publicly disclosed our biodiversity targets:
- Target Objective:to work towards No Net Loss (NNL) and No Gross Deforestation across our operations and value chain, we establish a global monitoring system to track biodiversity loss and comply with statutory biodiversity and forest conservation regulations, reducing environmental impacts and dependencies in the best practicable way.
- Risk Assessment:USI engages with internal and external stakeholders to assess potential biodiversity and deforestation risks following international guidelines. We analyze dependencies and impacts, consider local operational and ecological characteristics, identify priority areas to work on, and manage material risks by developing action plans with clear and measurable metrics.
- Mitigating Impact:to balance our impact on the ecosystem, USI adopts a nature-based mitigation hierarchy approach of prevention, mitigation, restoration, and offsetting throughout the operation life cycle to investigate and monitor material risks, protect biodiversity and ecosystem services, and prevent deforestation or invasive species.
- Scope of Coverage:all operations, suppliers, and partners are subject to the Commitment. New Facilities and value chain operational activities are prohibited, where avoidable, to be located near sites containing globally or nationally important biodiversity, environmentally-sensitive hotspots, ecological corridors, in areas contiguous with hydrological and vegetation conditions, or the vicinity of the sites mentioned above.
With the Board of Directors’ endorsement and approval, this Commitment is implemented across all operating sites, subsidiaries, suppliers, and business partners inside and outside the value chain worldwide to achieve the long-term goal of 2050 Net Positive Impact (NPI).
As part of our restoration efforts, USI began afforestation in partnership with an organization in 2013 to increase biodiversity and soil and water conservation. In addition, to reduce the Potentially Disappeared Fraction of species and achieve No Gross Deforestation by 2050, USI continues the hierarchical mitigation approach of prevention, mitigation, restoration, and offsetting in our facilities and carry out measures such as energy saving, carbon reduction, and resource recovery to ameliorate our impact.
Biodiversity Dependence and Impact Analysis
We use the LEAP (Locate, Evaluate, Assess, Prepare) process recommended by the TNFD framework to conduct biodiversity dependence and impact assessments on USI's existing own sites and supplier sites.
Biodiversity Risk Assessment Process
The Company utilizes the Exploring Natural Capital Opportunities, Risks and Exposure (ENCORE) tool to identify nature-related dependencies and impacts associated with its business activities. Key issues with a severity level of moderate or above are further screened and assessed. Identified dependencies include water supply, water quality regulation, flow regulation, and flood and storm mitigation, while key impacts include toxic pollutant emissions and disturbances such as noise and light pollution. Based on these assessment results, the Company implements measures including water resource management, climate strategy development, energy management, waste management and circularity initiatives, and air pollution control to continuously improve environmental performance, reduce nature-related risks, and strengthen operational resilience.
