Climate Change Risks and Opportunities
GC has assessed risk factors, impacts, and opportunities associated with climate change that may directly and indirectly occur and affect our business, in accordance with the National Determined Contributions (NDCs) and the International Energy Agency’s (IEA) Two Degree Scenario (2DS) which limits warming to no more than 2 oC. GC has disclosed beneficial information on risk management to investors and stakeholders, in line with the guidelines of the Task Force on Climate-related Financial Disclosures (TCFD). Additionally, GC has applied these risk factors as indices in governance, strategy planning and formulation of effective climate change plans in the alignment with international standards.
Moreover, GC has considered environmentally friendly technology as part of decision making in an investment of future projects in order to ensure the effectiveness of overall greenhouse gas management, which is linked to the strategy execution risk, investment risk and policy & regulatory change risk.
Enterprise Risk Management Committee (ERMC) has been assigned to closely monitor our risk management performance on a monthly basis and reported to Management Committee (MC), which chaired by CEO and comprised of top executive managements to review the performance of climate related risk/opportunity management and provide recommendations on further strategy or action plan. The MC will escalate the risk management report to the RMC respectively every quarter. Additionally, in case, there is an investment of low carbon projects required, CEO as chairman of Investment Committee will make decision through this committee.
Below is a summary of key risks and opportunities related to climate change as well as GC’s mitigation measures in 2021
|Climate-Related Risks||Mitigation Measures|
|Many countries have announced targets to reduce greenhouse gas emissions and established more intense climate change policies, such as implementing carbon taxation, using carbon tax as a trade barrier tool through the Carbon Border Adjustment Mechanism (CBAM), encouraging the use of electric vehicles and clean energy, etc. These mechanism may increase GC’s operation cost.||
|Consumer and entrepreneurs demands have changed because of the trend in low-carbon economy. Consequently, GC is affected by the decreased demand for conventional plastics and chemicals as well as the rising production costs in complying with more stringent laws, rules, and regulations. Changes in consumer behavior also affects GC’s image as global leader in chemical production||
|Water shortage in the production process can cause process disruption, affecting GC’s operational credibility. GC might be faced with higher production costs due to increased costs in water procurement to ensure sufficient water supply for production and other future projects.||