Climate Change Information

The Company calculates its financed emissions in accordance with the methodology of the Partnership for Carbon Accounting Financials (PCAF) and with reference to the Practical Handbook on Financed Emissions (Scope 3) for the Investment Portfolios of Domestic Futures Commission Merchants issued by the Futures Industry Association. By measuring and disclosing the financed emissions generated by the companies or projects in which it invests, the Company establishes a fundamental basis for understanding the impacts of its investment and financing activities on climate change, and for subsequently identifying climate-related risks and opportunities as well as formulating medium- and long-term carbon reduction targets.
The Company has conducted a carbon inventory for its long-term investment positions (accounting classified as financial assets measured at fair value through other comprehensive income). The financed emissions associated with these long-term investments amount to 93.315 tCO₂e, and the overall data quality score is 1.018 (where a score of 1 represents the highest data quality and a score of 5 represents the lowest).

Capital Futures evaluates scenarios based on the NGFS framework, including six related climate change scenarios such as orderly transition, disorderly transition, and uncontrolled warming, as shown in the table below.

【Explanation of Scenario Analysis for Transition Risk】

【Results of Scenario Analysis for Transition Risk】

The National Center for Disaster Reduction (NCDR) has published the results of "Climate Change Flood Disaster Risk Assessment" and "Climate Change Landslide Disaster Risk Assessment" on the Dr.A Climate Change Disaster Risk Adaptation Platform. These results are mapped by administrative units of towns, townships, cities, and districts, simulating and forecasting flooding and landslide disasters. The entire Taiwan is analyzed into five risk levels. Capital Futures, affected by physical risks, will experience varying impacts depending on the location of individual operational sites. Based on the risk levels classified in the disaster risk maps, each operational site is assessed for its exposure to flooding and landslide disasters. The statistics are as follows:

【Flooding】

【Landslide Disaster】

According to the climate risk definitions proposed by the IPCC, risk is composed of three factors: Hazard (H), Vulnerability (V), and Exposure (E). "Hazard" refers to the degree of threat posed by climate or non-climate factors to the object of protection (the target of risk assessment). "Vulnerability" refers to the extent to which the object of protection is susceptible to impacts and potential losses from the given hazard conditions. "Exposure" refers to the degree to which the object of protection is exposed to the threat of the hazard in terms of time and space.

Physical risk scenario: Simulate the expected average annual flood loss for each operating site under different emission scenarios (RCP 2.6 to 8.5), using the formula R = H × V × E.