Excellence in Governance｜Climate Change

Nuvoton always explore new markets actively, continuously maintaining the profitability of the company's operations, and investing in strategic patent layouts. To ensure integrity in management and compliance with laws, it constantly monitors domestic and international policies and emerging risks that may affect the company. It regularly promotes the core values of integrity in management, establishes a robust corporate culture, and develops a sustainable new situation.

SDGS

100

Integrity management education and training

5300+

Patents Granted

Accumulated approved patents globally

Operations and Governance

Climate Change

Business Integrity

ESG Risk Strategy

Information Security

Climate Change Management Framework (TCFD)

For	Strategy and Action	2025 implementation status
Governance	The Board of Directors is the highest supervision unit for climate change management and is responsible for reviewing annual risk management reports, implementation reports and audit reports to ensure the effective implementation of climate-related risk management systems. The Sustainability Committee is the driving organization responsible for implementing and managing climate change risks and opportunities. It reports to the Board of Directors every year on corporate governance and sustainable development operational risk issues ( including climate change issues ) , risk assessments and control measures. The board of directors makes decisions on important issues. The Finance Center is responsible for identifying and assessing the risks and opportunities of climate change, and coordinating regular climate change discussion meetings, convening the risk management team to identify the physical risks, transformation risks and opportunities of climate change, and guiding the proposal of corresponding improvement countermeasures and goals.	The Sustainability Committee reports to the Board of Directors every year on issues such as carbon emissions, water resources, power supply risks, natural disasters and regulations related to climate change. The Chairman of the Sustainability Committee reports to the Board of Directors on a quarterly basis, including greenhouse gas emissions, reduction measures in various areas, and related derived environmental issues and activities.
Strategy	Identify short, medium and long-term climate-related risks and opportunities based on the TCFD framework ( define the management period: Short-term: 2026; Medium- to long-term: 2030). Actively develop solutions in the hope of reducing the operational and financial impacts caused by climate change to enhance organizational climate resilience. Introducing scenario analysis to understand the impact of climate change on Nuvoton.	Each unit identifies climate risks and opportunities as a result. Use scenario analysis to identify the impacts of climate change on Nuvoton. To improve the efficiency and accuracy of carbon emissions accounting, Nuvoton Taiwan is developing a carbon accounting system, which is expected to officially go live in the first quarter of 2026. The system will initially cover Scope 1, Scope 2, and selected Scope 3 emissions data, and will be used for carbon emissions accounting and product carbon footprint management. In 2025, the Company’s total Scope 1 and Scope 2 greenhouse gas emissions amounted to 109,466 metric tons of CO₂e. Under the science-based target validated by the Science Based Targets initiative (SBTi), the Company aims to reduce absolute Scope 1 and Scope 2 greenhouse gas emissions by 48.8% by 2030 from the 2022 base year. The Company continues to work toward its emissions reduction target through energy efficiency improvements, the adoption of renewable energy, and other measures.
Risk management	Identify climate change risks and opportunities based on the TCFD framework. Based on climate risk identification results, plan and implement relevant response plans. Integrate climate risk identification and assessment into corporate risk management processes.	Assess the qualitative financial impact of each unit's identification of significant. climate-related risks and opportunities. Adopt processes such as identification, assessment, treatment and monitoring to manage possible climate risks.
Metrics and targets	Set management indicators related to climate change. Discover greenhouse gas emissions and assess impacts. Set climate change management goals and review goal achievement and performance.	In 2025, the following climate-related targets were set: Water conservation: Reduce water consumption by 10% by 2030 compared with the 2021 baseline year. Digital transformation: Reduce labor costs for product development through digital transformation. Fluorinated greenhouse gas reduction: Continue to install fluorinated greenhouse gas abatement equipment. Compared with the 2021 baseline year, achieve a reduction of more than 73% by 2026 and more than 77% by 2030. Energy-saving equipment: Continue to install energy-saving production equipment to reduce greenhouse gas emissions. Compared with the 2021 baseline year, achieve a reduction of more than 30% by 2026 and more than 32% by 2030. Supplier greenhouse gas emissions management: Establish and collect greenhouse gas emissions baselines and reduction targets for major suppliers. Compared with the 2021 baseline year, reduce greenhouse gas emissions from Nuvoton Taiwan's major suppliers by 15% by 2030. SBTi science-based emissions reduction target: Reduce absolute Scope 1 and Scope 2 greenhouse gas emissions by 48.8% by 2030 compared with the 2022 baseline year. Low-carbon R&D and investment: Increase the number of products using advanced process technologies by more than 90% by 2030 compared with 2023. Operational resilience: Plan to obtain ISO 22301 certification and establish a BCP/BCM framework. For more details, please refer to TCNFD Report ''Climate Change-related Metrics and Targets.''

Climate Change Risk and Opportunity Assessment Process

Climate Risk and Opportunity Identification and Response Practices

In terms of climate risks/opportunities, Nuvoton identifies the types of risks/opportunities that the affected areas (Taiwan and Japan) may encounter, as well as potential financial or operational impacts, and formulates response measures for each risk/opportunity.

Risk

Category	Type	Time of occurrence	Potential financial or operational impact	Response Approach
Technology	The cost of transition to low-carbon technologies	Short-, mid- and long-term	Increased operating costs Reduced income Increase in costs	Evaluate market demand, formulate product strategies, and ensure product design aligns with consumer preferences to address the low-carbon transition. Improve design and production efficiency through digital transformation and AI technology, while enhancing supply chain management to increase resilience. For capital allocation, as capital expenditures for low-carbon transition increase, it may be necessary to make timely adjustments, and develop financing plans to support the required investments for the transition.
Policies and Regulations	Increase pricing on greenhouse gas emissions	Short term	Increased operating cost Reduced income	Increase investment in low-carbon equipment to reduce greenhouse gas emissions. At the same time, enhance supply chain resilience through diversification and sourcing alternative raw materials to reduce raw material cost risks, and establish stable supply chain relationships to withstand price fluctuations.
Immediacy	Increased severity of extreme weather events such as typhoons and droughts	Short term	Direct cost increase Increased operating cost Reduced income Reduced access to capital	Add water storage facilities, enhance the efficiency of process water treatment facilities, and increase water recovery rates to improve drought response capabilities. Strengthen supply chain management, regularly assess suppliers vulnerable to climate impacts, and enhance their resilience. Utilize climate monitoring technology for early warning, improve the durability of buildings and infrastructure, and ensure business continuity to enhance operational resilience.
Long term	Average temperature rise	Short-, mid- and long-term	Increased operating costs	Increase investment to enhance the health and safety improvements of the operating environment, avoid health hazards, and reduce the risk of heat stroke among personnel.

Opportunity

Category	Type	Time of occurrence	Potential financial or operational impact	Response Approach
Toughness	Energy substitution / diversification	Short-, mid- and long-term	increasing income Operating costs reduced Operating expenses decreased	Install solar power systems and use natural gas equipment to reduce carbon emissions through diverse energy sources. Plan to increase the use of renewable energy and strengthen carbon management, including providing customers with carbon footprint reports and adding energy-saving devices. Achieve net carbon zero through carbon reduction efforts and purchasing carbon offsets, increasing customer trust.
products and services	R&D and innovation to develop new products and services	Short-, Mid- and Long-term	Increase in operating income Operating costs reduced	Increase investment in R&D and innovation, focusing on the development of low-carbon products and improving energy efficiency. Collaborate with suppliers to choose low-carbon raw materials, enhance the environmental standards of products and the supply chain, and meet market demand for low-carbon products. Increase the visibility of low-carbon products by expanding sales channels and strengthening marketing campaigns, adhere to sustainability principles, and enhance brand image.
Market	Participate in incentive policies	Short-, mid- and long-term	Operating cost reduction Increase access to capital	Continuously track and plan to apply for government incentive policies, formulate and implement carbon reduction targets and strategies. Conduct greenhouse gas inventories, communicate with stakeholders to reach consensus, and identify and manage sustainability risks, meeting financial institution assessment standards to strengthen sustainability management plans.
Products and services	Develop climate adaptation solutions	Short-, mid- and long-term	Increase in operating income Operating cost reduction	Establish BCP/BCM systems, select suppliers that meet standards, and increase development and evaluation costs. Introduce and obtain ISO 14064, ISO 50001 and ISO 22301 certifications, increasing maintenance and IT construction costs, and investing necessary IT and human resources.