PI Advanced Materials connects people, society, and the world by realizing the potential of Polyimide
through creative innovation technology.
PI Advanced Materials is preemptively identifying risk factors caused by climate change and preparing response strategies by referring to the recommendations of TCFD (Task force on Climate-related Financial Disclosures). Risks are classified as 'transition risks' due to changes in laws, technology, markets, and reputation, as well as policies arising from the industrial transition process, such as a low-carbon economy, and 'physical risks' due to the physical effects of climate change. PI Advanced Materials plans to establish a sustainable management system by analyzing the financial impact and response direction of each risk and systematically manage the impact.
The ESG team at PI Advanced Materials assesses the risks of climate change at least once a year. Risks are assessed using criteria such as time of occurrence (short-term, medium-term, and long-term), risk, and opportunity size (financial impact, urgency of response, and future management impact). Following that, we establish a course of action to respond to risks in consultation with the working team, explore opportunity factors, and derive new strategies.
PI Advanced Materials has identified predictable risks and financial impacts related to climate change in future business activities. While taking preemptive responses to identified risks, we will also strive to seize new opportunities. Furthermore, we will continue to strive for PI Advanced Materials' sustainable growth through risk management that takes climate change into account.
| Category | Factor | Risk/Opportunity Type | Potential Financial Impact | Response Measures | Timeframe | |
|---|---|---|---|---|---|---|
| Physical Risk |
Acute | Increasing Frequency of Extreme Weather Events (Floods/Typhoons, etc.) |
Typhoons· monsoon flooding and facility loss from natural disasters |
Economic·physical losses from production delays caused by facility damage Transaction losses from shipping delays due to natural disasters |
Establish emergency response system and conduct regular safety inspections Develop flexible production plans Build logistics emergency contact network and secure insurance |
Short-Term |
| Chronic |
Rising Temperatures·Water Shortage, etc. Chronic Climate Change |
Higher energy costs from strain on cooling and ventilation systems Lower process efficiency as cooling-water temperatures rise |
Higher production costs from increased power use. Process quality decline and added cooling-equipment investments |
Ongoing energy efficiency improvement activities Secure cooling-capacity buffer and strengthen water-temperature monitoring Strengthen monitoring systems for sustainable resource management |
Mid/Long-Term | |
| Transition Risk |
Policy & Regulation | Rising Carbon Prices (carbon tax introduction and K-ETS expanded paid allocation ratio) | Higher Carbon Compliance Costs Resulting from Stricter GHG Regulations and Reduced Free Allocation |
Direct carbon cost increase tied to allowance market price and allocation cuts Higher reduction-technology investment and operating costs |
Pursue process improvements and energy efficiency. Minimize actual vs. allocated emissions via site-level reduction roadmaps. Strengthen monitoring systems for sustainable resource management |
Mid/Long-Term |
| Expanding and Strengthening GHG emissions disclosure requirements | Data Accuracy Risks Associated with Expanded Scope 1, 2, and 3 Disclosure Requirements | Higher costs associated with system development and data collection |
Build Scope 3 emissions measurement and management systems Enhance emissions data transparency through comprehensive verification |
Mid/Long-Term | ||
| Strengthening environmental regulations and expansion of the Serious Accidents Punishment Act | Tightening environmental regulations and the expansion of the Serious Accidents Punishment Act may increase compliance costs and expose executives to greater legal and regulatory liabilities in the event of major industrial or public incidents.Climate change-driven extreme weather events may indirectly increase workplace safety risks and operational disruptions. | Exposure to Fines and Regulatory Sanctions for Non-Compliance.Serious accidents may lead to business suspension, legal liabilities, and significant financial losses, compounded by reputational damage. |
Manage ESG framework for legal review and policy reflection Build safety & health management system per Serious Accidents Punishment Act·implementation monitoring Strengthen workplace safety standards for extreme-weather conditions |
Short-Term | ||
| Market & Technology | Increasing Customer Demand for Carbon Reduction and Scope 3 Emissions Management | Increasing customer requirements for Scope 3 emissions management are driving the need for Product Carbon Footprint (PCF) calculation, emissions reduction, and broader low-carbon transition efforts.Failure to adequately respond may result in lower sustainability ratings and the potential loss of customer orders. |
Higher costs associated with the low-carbon raw material transition, process improvement, and PCF system development Financial impact from order losses due to inadequate responses |
For key products: Build PCF calculation system Reduce via renewable energy transition for Scope 2 and pursue source-analysis-based reductions |
Mid/Long-Term | |
| Reputation | Growing Investor Interest in Climate Response Efforts | Declining ESG Ratings Leading to Reduced Investor Confidence and Investment Opportunities | Investment withdrawal and customer loss |
Expand internal and external sustainability disclosures Improve ESG ratings and achieve rating upgrades Actively address stakeholder requests |
Short-Term | |
| Opportunities | Energy | Transitioning to Renewable Energy and Improving Energy Efficiency |
Cost savings from renewable energy transition Returns on energy-efficiency investment |
Reduced energy costs and increased surplus allowances through process and efficiency improvements | Expand renewable energy procurement and invest in facility upgrades | Mid/long-term |
| Market | Expanding Climate-Related Disclosure Requirements | Stronger market credibility and investor access through advanced disclosures | ESG rating upgrades enable ESG preferential rates on ESG-linked financing. Stronger order competitiveness via improved customer supply-chain due-diligence response |
Build TCFD based disclosure framework Improve domestic and overseas ESG assessment response. Review Scope3 external verification adoption |
Mid/Long-Term | |