In light of the potential physical impacts and transition risks posed by climate change on business operations, MPI has adopted the Task Force on Climate-related Financial Disclosures (TCFD) framework as the foundation for establishing its climate risk management mechanism and adaptation strategies. The TCFD framework encompasses four key dimensions — governance, strategy, risk management, and metrics & targets — helping the Company systematically identify, assess, and respond to the potential financial impacts of climate change.
Since 2022, MPI has participated in the Carbon Disclosure Project (CDP) and, in 2024, was awarded a B rating for its disclosure performance. Moving forward, MPI will continue to enhance climate risk assessments, refine response strategies, and integrate more comprehensive risk management practices to ensure the sustainability of its supply chain.
| Risk Description | Risk Category and Time Horizon | |||
|---|---|---|---|---|
| Risk | Transition Risk | Policies & Regulations | With the advancement of domestic net-zero policies and the implementation of international carbon tariffs, rising carbon costs may increase operating expenses and impact profitability. MPI must proactively plan GHG management strategies and compliance measures to mitigate regulatory shocks. | Impact Level: High Potentially significant cost increases; adjustments needed in both processes and supply chain strategies. Time Horizon: Short to Medium Term (1-3 years) Most regulations require formal announcements and transition periods, but implementation has already begun gradually, such as the introduction of carbon fees and carbon trading mechanisms. |
| Technology | To adapt to the low-carbon manufacturing transition, MPI must replace high-energy-consuming equipment and adopt energy-saving technologies and smart energy management systems. This shift may increase upfront capital expenditures and create pressure on R&D investments. | Impact Level: Medium The required capital outlay and the steep learning curve pose challenges, but these can be progressively addressed over time. Time Horizon: Medium to Long Term (3–5 years or more) The development and implementation of such technologies require time, and benefits may not materialize immediately. | ||
| Market | As global supply chains continue to tighten ESG compliance requirements, failing to continuously improve carbon management performance may result in losing eligibility to participate in the procurement networks of leading international companies, thereby limiting future market expansion opportunities. | Impact Level: Low In the short term, the impact on order intake is limited; however, ESG considerations have increasingly become a key selection criterion for international brand supply chains. MPI must therefore continue enhancing its sustainability performance to remain competitive in the global market. Time Horizon: Long Term (5 years or more) MPI must gradually respond to evolving ESG-driven procurement trends to maintain its future market competitiveness. | ||
| Reputation | Failure to consistently demonstrate a commitment to climate action and sustainability responsibility could erode MPI’s reputation among external stakeholders, potentially leading to a lower ESG rating and reduced long-term partnership opportunities. | Impact Level: Low While this does not directly affect short-term financial performance, it can significantly influence long-term brand value, corporate credibility, and stakeholder trust. Time Horizon: Long Term (5 years or more) Brand reputation is cumulative and not easily reversible in the short term. | ||
| Physical Risk | Immediate Heavy Rainfall / Flooding | MPI’s facilities in Hsinchu and Kaohsiung are located in high flood-risk areas. Typhoons or heavy rainfall could lead to flooding, causing equipment damage, production stoppages, and facility downtime. | Impact Level: High Potentially lead to delays in supply chain deliveries, operational disruptions, and loss of production capacity. | |
| Immediate Power Outages | Due to typhoons and abnormal climate patterns, the stability of the power grid may decline, potentially leading to unexpected power outages. | Impact Level: High Power supply disruptions may affect manufacturing processes and equipment stability. To mitigate such risks, backup power systems and uninterruptible power supply (UPS) units are deployed to ensure operational continuity. | ||
| Long-Term Sea Level Rise | The Kaohsiung plant is located near coastal areas. If future sea level rise leads to saltwater intrusion or land subsidence, infrastructure security could be threatened, increasing insurance costs and operational risks. | Impact Level: Low Potentially influence future site selection decisions and overall operational cost structures. | ||
| Long-Term Rising Temperatures | Prolonged temperature increases may place additional burdens on cooling systems, driving up energy consumption and operational costs. Such conditions could also reduce equipment efficiency and lifespan, while posing risks to the quality stability of products that require strict temperature control during manufacturing. | Impact Level: Low Under extreme heat conditions, there is a potential risk of facility equipment overheating, which may result in system shutdowns or even damage. | ||
| Opportunity Description | Time Horizon | ||
|---|---|---|---|
| Opportunities | Resource Efficiency | By introducing high-efficiency production equipment, implementing intelligent energy management systems, and optimizing manufacturing processes, MPI can improve both energy and water utilization efficiency. These measures reduce per-unit product carbon emissions and resource consumption, ultimately lowering operational costs and enhancing production stability. | Short to Medium Term (1–3 years) |
| Renewable Energy | MPI is actively evaluating and progressively adopting renewable energy solutions, such as green electricity procurement and solar panel installations. These efforts not only align with global net-zero transition trends but also mitigate risks associated with traditional energy dependency, strengthening the stability of the Company’s power supply. | Medium to Long Term (3–5 years or more) | |
| Products and Services | In response to the growing global demand for low-carbon and energy-efficient products, MPI is accelerating the development of low-power consumption and energy-saving testing technologies. By expanding sustainable product portfolios and offering innovative solutions with enhanced ESG value, the company aims to capture emerging market opportunities. | Long Term (5 years or more) | |
| Market | With the rising awareness of ESG, companies with strong carbon management capabilities and proven green manufacturing practices are more likely to gain procurement and partnership opportunities. This strengthens MPI’s ability to expand its presence in sustainable supply chain markets and enhances international customer trust. | Medium Term (3 years) | |
| Resilience | By adopting the ISO 22301 Business Continuity Management System (BCMS) and proactively implementing climate risk adaptation measures — such as redundancy and backup mechanisms, emergency response drills, and recovery planning — MPI enhances its ability to minimize operational disruptions and maintain uninterrupted service within the supply chain. This provides a significant competitive advantage. | Short to Medium Term (1–3 years) | |