Assessment of Nature-Related Risks and Opportunities (TNFD)
Climate change and ecosystem degradation are recognized as key global risks over the coming decade. Natural capital is not only the foundation of human well-being, but also a critical driver of business continuity and resilience. To advance its vision of living in harmony with nature, the Company has aligned with the LEAP approach recommended by the Taskforce on Nature-related Financial Disclosures (TNFD) since 2024. Through a systematic assessment of the value chain’s dependencies and impacts on nature, the Company translates its environmental commitments into concrete actions that strengthen operational resilience and support sustainable development.
Nature Risk Management Process: LEAP Assessment Results
Nature-related issues have been incorporated into the Company’s overall transition and development framework. Through the implementation of the LEAP approach, a science-based management foundation has been established throughout the process, from location identification to action preparation:
Scope 3 Decarbonization Strategy
Through in-depth analysis of different business groups and the supply chain, the Company identified the interactions between its value chain and natural capital. The assessment results indicate that all business groups demonstrate significant dependencies on hydrological regulation ecosystem services, while resource consumption and emissions generated throughout operations also contribute to specific ecosystem impact drivers.
- Nature Dependency Analysis: Operational stability is highly dependent on ecosystem services such as water supply, flood control, storm mitigation, and water flow regulation.
- Nature Impact Analysis: Key impact drivers include water consumption, greenhouse gas emissions, disturbances (such as noise and light pollution), and toxic emissions to soil and water.
Nature-Related Risks, Opportunities and Response Measures
Through the assessment of material nature-related issues, the Company translates identified risks into opportunities to enhance operational resilience and aligns its assessment approach with the financial materiality principles of IFRS S2.
Management Strategy and the AR3T Action Framework
Management practices are guided by the AR3T Framework—Avoid, Reduce, Restore & Regenerate, and Transform—to support the Company’s long-term vision of achieving a Nature Positive future.
- Ecosystem Protection and Digital Enablement:
•FMM Smart Monitoring (Amazon Rainforest): Leveraging edge computing and sensing technologies, the Company has established a monitoring network around its operations in Brazil to support the detection of illegal deforestation, demonstrating the tangible contribution of digital technologies to environmental protection.
•Curumim Youth Empowerment: Supporting Indigenous communities in the Amazon in establishing self-managed monitoring and patrol mechanisms, closely integrating ecosystem conservation with a just transition.
- Water Resource Risk Management：
•Applied the WRI Aqueduct tool for ongoing water risk assessment, with the objective of reducing water consumption.
- Environmental Education and Community Engagement:
•Pinglin Organic Tea Initiative: Integrating ecosystem conservation with sustainable agriculture practices to protect watershed conservation areas and promote the harmonious development of industry and the environment.
•Longmen Beach Cleanup Initiative: Integrating environmental education with on-site beach cleanup activities to enhance stakeholder understanding of marine ecosystems and resource circularity.
Looking ahead, the Company will continue to strengthen data-driven management and enhance its capability to quantitatively assess nature-related risks. The Company is committed to progressively advancing toward the goals of No Net Loss and Zero Net Deforestation, ensuring that business growth and the natural environment remain in balance while upholding the core values of sustainable development.
No Deforestation Actions
To achieve the long-term goal of Zero Net Deforestation by 2050, Compal Electronics is implementing the following strategies to progressively fulfill its forest conservation commitment:
- Forest Production Risk Assessment and Management: Completed a comprehensive inventory of forest production used in business operations, serving as the foundation for deforestation risk control and substitution planning.
- Phased Transition to Forest-Friendly Paper Product : By prioritizing the use of forest-friendly materials such as Forest Stewardship Council (FSC), Programme for the Endorsement of Forest Certification (PEFC), or recycled paper, the Taipei headquarters has fully adopted paper certified by FSC and is expanding its application to outsourced printed materials. Compal’s facilities in China have also launched paper substitution initiatives to increase the adoption of forest-friendly paper products.
- Alignment with Customer Sustainable Packaging Requirements: In line with brand customers’ sustainability policies and packaging requirements, Compal continues to adopt forest-friendly packaging materials to strengthen no-deforestation practices across the supply chain.
- External Collaboration and Stakeholder Engagement: Collaborates with suppliers, partners, and other stakeholders to identify and mitigate potential deforestation risks and land-use impacts, promoting the sustainable management of natural resources.
- Long-Term Commitment and Progress Monitoring: Compal aims to achieve Zero Net Deforestation by 2050.