Climate-Related Financial Disclosures，TCFD

World Economic Forum (WEF) released its "Global Risks Report 2023" in January 2023. In the "Global Risks Perception Survey Ranks," which examines the perception of global risks, six out of the top ten long-term (within the next 10 years) risks are related to the climate and environment. Topping the list is "Failure of Climate Change Mitigation." Additionally, only one out of the top ten critical risk issues in the short term differs from those in the long term. This highlights that the focus of risks in the next decade will largely revolve around similar issues, with a primary emphasis on environmental and societal risks.

The 27th United Nations Climate Change Conference (COP27) took place in Egypt in November 2022. Consensus was reached regarding the Climate Loss and Damage Fund, though the specific timeline, operational mechanisms, and funding remain subjects for discussion and resolution at the climate summit in the following year. In September 2023, the United Nations released the first-ever Global Stocktake report, with unsurprisingly unfavorable conclusions. The Earth has already warmed by 1.2°C, and the window of opportunity for a sustainable future is rapidly diminishing. According to the initial Paris Agreement, nations pledged to keep global warming well below 2°C, with 1.5°C as the ultimate goal. Exceeding this threshold carries the warning from scientists that it may trigger multiple tipping points, leading to uncontrollable consequences such as severe floods, droughts, heatwaves, wildfires, and species extinction.

The implementation of ESG (Environmental, Social, and Governance) strategies to promote low-carbon operations has become a global development trend. UVB has recognized the significant impact of climate change on the economy, society, and the environment. As the leading company in the field of vision biotechnology in Taiwan, we take our corporate social responsibility seriously and actively respond to the challenges posed by climate change. In order to assess and analyze the impacts of climate-related risks and develop control measures, we have adopted the framework provided by the Financial Stability Board (FSB), specifically the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. This framework covers governance, strategy, risk management, as well as metrics and targets, providing investors and stakeholders with insights into our climate action initiatives.

UVB stay highly attentive of our climate change risks and opportunities to ensure that we can fulfill our responsibilities to society, the environment, and all our stakeholders. All members of our management team from our chairman to senior managers consider climate change to be an important corporate issue and work to monitor and manage climate topics using an effective governance framework.

Board of Directors of UVB serve as the highest governing body to drive corporate sustainability. Guided by principles of ethical business conduct and the protection of shareholder interests, the board oversees a broad spectrum of environmental risks and opportunities, including those related to climate change impacts.

In order to implement sustainable measures, the Board of Directors approved the“ Sustainable Development Best Practice Principles” and established ESG Office to carry out various sustainability actions.

In terms of climate action, the Office acts as a platform for horizontal connection and vertical integration, self-management completed 2022 greenhouse gas inventory and disclosure, and the converted total emissions are as follows:

In accordance with the responsibilities of each task force, an assessment of potential climate-related risks and opportunities has been conducted. Countermeasures have been devised, and plans have been made to execute greenhouse gas inventories and disclosures. The performance of various carbon reduction targets is regularly monitored.

2020 served as the base year for greenhouse gas reduction management goals. Here is an overview of the achievements in reaching these goals:

ESG Office assessed significant climate risks and opportunities currently faced by UVB under the TCFD item. Subsequently, TCFD Material Topics was developed, which analyzes physical and transition risks that may occur over short, medium, and long-term timeframes, as well as relevant business opportunities. The company utilized this analysis to further formulate mitigation and adaptation strategies, enhancing the climate resilience of the organization. The results are as follows:

Based on the recommendations of the TCFD guidelines, we used the worst-case scenarios to assess the business impact of climate change, and incorporated the results into the risk management procedures to take appropriate adaptation actions.

In accordance with the TCFD framework, UVB sets the benchmark scenario and the 2°C scenario, and identifies and analyzes the short, medium and long-term climate risks and opportunities in the company's business scope and the entire life cycle of assets. In terms of transition risks, the university’s benchmark scenario and 2°C scenario refer to the RCP8.5 and RCP 2.6 climate scenarios of the United Nations Panel on Climate Change (IPCC) respectively, and conduct risk assessments on immediate physical risks and long-term physical risks:

UVB is not an energy-intensive company and based on the risk identification procedure, transition risks will not have a significant impact on its operations. We still pay close attention to global climate-related measures and analyze the financial impact of the transition risks. Based on the assessment results, it can be determined that transition risks have no significant impacts on the Company’s operations. In order to mitigate the impact of transition risks, we persist in our efforts to implement various energy conservation measures and search for potential carbon reduction opportunities.

In order to enhance the Company’s corporate governance, establish an effective risk management mechanism, assess and supervise the risk-taking ability and the current risk management situation, UVB expected to approve the “Risk Management Policies and Procedures” in 2023 as the Company’s highest guiding principle of risk management.

Trough the policies and procedures, the Company integrates and manages various potential strategic, operational, financial and hazardous (climate change, legal compliance, market competition) risks that may affect operations and profitability, carries out risk warnings and takes appropriate preventive measures, or maintains operational activities in the event of an accident.

The responsible unit identifies relevant risk factors, analyzes the potential impact of each risk on the Company’s operations, and develops and adopts measures to control risks within the Company’stolerable range. The board of Directors receives regular reports from the Risk Management Task Force and supervises the status of risk management execution by the Company and its important subsidiaries.

For the company’s risk management implementation status, please also refer to 【Risk Management】 section of the company’s website.

Although energy consumption, water use, and waste management are not major issues of the company, we still use the results of greenhouse gas inventory to introduce circular economy thinking, reduce waste and strengthen climate and environmental issues to improve our colleagues. Recognize with cooperative units to reduce carbon emissions generated during operation.

The Company has been identifying climate change risks, including the analysis of the direct or indirect impacts brought by extreme weather and the risks and opportunities brought by regulatory, technical, or market demand transformational impacts and other humanity, social aspects for the Company’ s operational activities. Based on the analysis findings, the risk management strategy plan is created as the core of the climate change action and related opportunities are identified to mitigate risks and grab business opportunities.

The evaluation results are hereby summarized as follows：