Climate Change Information

By providing a globally recognized framework, PCAF fosters consensus within the financial industry regarding each contribution and progress made toward climate action. As data quality improves, this tool will become increasingly valuable in assessing the impact of financial activities on the climate. In accordance with the financial asset categories and methodologies defined by PCAF, and with reference to the “Practical Guidelines for Financial Carbon Emissions (Scope 3) of Domestic Futures Firms’ Investment Portfolios” issued by the Taiwan Futures Association, Capital Futures has conducted a carbon inventory for relevant long-term investment positions (accounted for as financial assets measured at fair value through other comprehensive income). The financial carbon emissions of these long-term investment positions amount to 93.315 metric tons of carbon dioxide equivalent (tCO2e), with an overall data quality score of 1.018 (where a score of 1 indicates the highest data quality and 5 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.