The development and impact of current climate change issues show that companies need to engage in active response and management. To optimize President Chain Store Corporation’s governance performance on climate change issues, we have integrated the disclosure and management framework recommended by the Task Force on Climate-related Financial Disclosures (TCFD) into our management foundation for climate change issues, assessing and evaluating the impact of climate change issues on President Chain Store Corporation in a comprehensive manner. We have gone one step further in formulating the governance strategies and objectives for the short-, medium- and long-term climate change issues.

President Chain Store Corporation supports the Paris Agreement and the government's 2050 Net Zero Transition Policy, and commits to achieving net zero in Scope 1 and Scope 2 of the GHG inventory within our own operations by 2050. We have developed transition plans to achieve net zero in Scope 1 and Scope 2 through the introduction of renewable energy, energy management systems, optimizing store design and equipment management. In the future, we expect to follow the spirit of the Science-Based Targets (SBTi), plan medium-term reduction roadmap, and strengthen carbon management of the entire value chain, aiming at the long-term vision of net-zero transition.

 

In addition to managing aforementioned internal climate change issues, we also promote climate sustainability by complying with changes in laws and regulations of the government. We provide advice when the government consults us on climate sustainability. In addition, we participate in relevant public associations to promote climate sustainability initiatives and actions. If there is any inconsistency between the public associations’ climate sustainability objectives and the goals of the Paris Agreement, we will communicate with the public associations within half a year as well as keeping an eye on whether the objectives have been adjusted. If the communication fails, the Company will terminate its participation in the public association. In the same vein, we will not participate in any organization that violates the Paris Agreement.

Climate Risk Governance

The governance structure of President Chain Store Corporation regarding climate change issues is overseen by the Board of Directors as the highest supervisory unit. The relevant issue control mechanisms are established under the Sustainable Development Committee. The committee manages and assesses risks through its working groups and regularly reports the implementation status of issue management to the Board of Directors.

 

In 2021, President Chain Store Corporation formally established the Carbon Reduction Task Force as the executive committee to evaluate and manage climate change risks and issues. This task force reports on climate issues to the Board of Directors through the Sustainable Development Committee. The task force is convened by a member of the Sustainable Development Committee and is organized into task groups based on the responsibilities of various departments.

Assessment for Climate Risks and Opportunities

To achieve the sustainable vision of President Chain Store Corporation, we must establish a robust management mechanism and a clear roadmap, and continuously communicate with stakeholders about the foreseeable risks and opportunities in business operations to maintain the long-term sustainable value of the business and its stakeholders. Moreover, President Chain Store Corporation's operational locations are spread across Taiwan, affecting a wide range of value chains, and the operational risks faced at different stages of these value chains vary. To effectively reduce the impact of various risks on President Chain Store Corporation's operations, we need to manage them proactively.
Therefore, President Chain Store Corporation adopts an integrated risk management strategy and, since 2020, has been conducting climate-related risk assessments and management based on the Task Force on Climate-related Financial Disclosures (TCFD) framework.

 

Climate Risks and Opportunities

 

• Physical risk
• Transitional risk
• Opportunities

President Chain Store Corporation’s Climate Adaptation and Transition Strategies

As one of the local retail channels, President Chain Store Corporation cannot evade the responsibility on the road to net-zero transition. We take actions based on the identification of climate risks and opportunities to come up with an overall response strategy focusing on “energy transformation,” “industrial transformation,” “life transformation” and “climate adaptation and mitigation.” We hope to start from our own operations and work together with suppliers/logistics partners to reduce carbon emissions, as well as leveraging the fact that convenience stores are an integral part of people’s everyday life to help people move towards a low-carbon and green lifestyle, creating a net-zero sustainable society with our stakeholders.

 

Energy transformation

In order to reduce potential future financial impacts, President Chain Store Corporation continues to promote a number of energy-saving and carbon-reducing measures at its operating locations across Taiwan, gradually improving energy efficiency and reducing greenhouse gas emissions. For relevant details, please refer to President Chain Store Corporation Climate-related Disclosures Report.

 

• Introduction of renewable energy: In response to international carbon reduction criteria and to reduce dependence on traditional energy sources, President Chain Store Corporation integrated the concept of green energy into the design of Yawan store in 2023 by introducing solar photovoltaics.
• Introduction of energy management system: Promote energy conservation and energy efficiency improvement at the head office and stores. In 2023, the head office building and two stores maintained ISO 50001 energy management system certification. Other locations also engage in energy management in line with the spirit and structure of the energy management system to continuously improve energy use.
• Store energy-saving measures and results: In order to effectively improve the energy efficiency of stores, President Chain Store Corporation has formulated basic requirements for equipment and store environment management for new stores by incorporating 7 energy-saving designs such as heat insulation, energy-saving signboards, lamp reduction, reduction of window area, frequency conversion system and LED lamps, and indoor lighting management, as well as introducing the energy-saving windbreak room depending on the stores. Existing stores actively evaluate the feasibility of introducing various energy-saving measures and gradually replace high-efficiency equipment. In the meantime, we work with the government and academic institutions to improve energy efficiency in the stores.
• President Chain Store Corporation has formulated a climate reward mechanism within the Company and in the stores to encourage employees to participate in carbon reduction actions. Please refer to our Climate-related Disclosures Report for further details.

 

Industrial transformation

In order to enhance the benefits brought by the low-carbon economy, we promote low-carbon transportation for our logistics subsidiaries and private-label low-carbon products. Please refer to our Climate-related Disclosures Report for further details.

 

We are currently working on two aspects for low-carbon logistics:

• ntroduction of logistics vehicles with the latest environmentally-friendly standards: To reduce the carbon emissions caused by logistics, President Chain Store Corporation actively introduces logistics vehicles with the latest environmentally-friendly standards, as well as arranging exchange on logistics and transportation both at home and abroad based on adjustments in line with trends and regulations in Taiwan.
• Optimizing the internal operation procedure and equipment: Introduce distribution automation to the internal operational environment and equipment in logistics centers to reduce the picking load of personnel, walking distance, etc., saving the operating time of human distribution. In the meantime, we integrate initial transshipment logistics routes, upgrade lighting in logistics centers to improve the energy-saving benefits of the overall internal operations.

 

We prioritize Veggie Selection, low-carbon rice and fresh boxed meal with paper packaging in terms of low-carbon products to reduce carbon footprint of fresh food products, giving consumers the opportunity to purchase low-carbon products with convenience and peace of mind.

 

Life transformation

As one of the industries closest to people’s everyday life, the retail industry has to assist consumers with transforming their lives. Just like our slogan “Planet Sustainability In Our Everyday Life,” we maximize our core retail capabilities to promote sustainable actions that are closely related to consumers, including “food waste reduction,” “plastic reduction” and “carbon reduction. To this end, we promote low-carbon diet, reduce food waste, encourage plastic reduction and recycling and reuse models to help consumers move towards a low-carbon and green life. In addition to promoting sustainable living to consumers, please refer to our Climate-related Disclosures Report for details of specific actions.

 

- OPEN iECO Recycled Cups Renting Service

• Since 2022, consumers can borrow and return recycled cups through the app to reduce the use of single-use plastic and paper cups.
• In 2023, the OPEN iECO Recycled Cups Renting Service was introduced in 542 stores, bringing the total to 1,042 stores. It has also been expanded to the Group’s chain restaurants, creating a recycled cup life circle of more than 1,500 stores.
• A discount is given on the first of every month to customers who bring their own cups. The proportion of bringing your own cups increased to 18.90% in 2023, achieving the target of 15% for the year.

 

- Intelligent Automatic Recycling Machine

• The machine can recycle PET bottles and batteries, with a crushing function to reduce the volume for transportation and carbon footprint.
• In 2023, the machine was installed in 140 stores to recycle 7.912 million PET bottles and 2.748 million waste batteries. It is expected to expand to 262 machines in 2024.

 

- iLove Food

• The “iLove Food Map” was also launched for the consumers to check on the stock with ease.
• In 2023, the “iLove Food” program reduced the generation of leftover food by approximately 13,723.31 metric tonnes, with a growth of 3,943.16 metric tonnes compared to last year.
• Implement the program to extend the shelf life of fresh food to reduce food waste.

 

- Innovative Solutions for Food Waste

• The “Furbaby Welfare Enterprise Project” initiative was launched to reduce food waste and encourage recycling. Leftover vegetables, fruit and salads are turned into freeze-dried food for pets with a campaign with donation pledges.
• “Sustainable Farm” recycling turns coffee ground from the stores into an organic fertilizer, before using the fertilizer on its contracted sustainable farms and selling the fruit and vegetables in the stores afterwards to recreate economic value. In 2023, about 5 tonnes of expired, opened or defective scrap products and coffee grounds were recycled in two batches, converted into fertilizer and used on contracted farms. The fertilizer helped producing approximately 22,000 heads of cabbage, 200,000 bananas and 10,000 ears of corn. They were used in fresh boxed meals, “golden corn on the cob” and premium bananas, winning over nearly 800,000 consumers.

 

- External Initiatives and Consumer Engagement

• President Chain Store Corporation integrates store employees, consumers and external partners in the value chain to promote knowledge on carbon reduction, plastic reduction, food waste reduction, etc. through “Good Neighbor Funfest” activities to promote communication with consumers on sustainable concepts.
• In 2023, President Chain Store Corporation hosted more than 15,000 Sustainable Good Neighbor Funfest activities in stores across Taiwan, reaching more than 140,000 people. 7 ELEVEN stores were turned into “Good Neighbor Classrooms” for educational institutions, with a total of more than 290,000 people using out sustainable picture book DIY materials.

 

- Participation in Industry Associations and Lobbying Activities

President Chain Store Corporation is committed to managing the risks of the climate change transition and that all climate lobbying activities should be consistent with the Paris Agreement and the goal of limiting global temperature rise to a maximum of 1.5⁰C compared with pre industrial levels. The scope of this commitment applies to President Chain Store Corporation and its subsidiaries, as well as to all areas in which it operates.

In order to ensure that direct and indirect climate change lobbying in each region is consistent with the goals of the Paris Agreement, the public policies implemented by industry associations and lobbying activities that we participate in are reviewed annually. If the policies involve climate change issues, the Company and its subsidiaries should determine whether the Paris Agreement has been violated. If it violates the aforementioned provisions, the Company will communicate the results with the relevant public policy planning units or industry associations within six months to decide whether to continue participating in the industry association (including withdrawing financial support suspension or termination of membership).

In addition, when participating in industry associations and lobbying activities, the Company abides by relevant laws and regulations, explains the reasons for participating in industry associations and lobbying activities, and follow the Company and its subsidiaries’ internal evaluation procedures before reporting to the President or above for approval. The result of participating industry associations and lobbying activities is disclosed each year. The following is the actual result of participating in industry associations and activities:

• Ministry of Economic Affairs: Take part in micro-carbon offsets to replace store lighting with LED, and submit the amount of carbon reduction verified by BSI to the Ministry of Environment for review.
• Ministry of the Interior: Engage in “Store Energy Consumption Classification.” President Chain Store Corporation supports the government’s building energy saving and carbon reduction policies as the first convenience store to receive the “Nearly Zero Carbon Building” label issued by the Ministry of Interior.
• Ministry of Environment: Participate in the discussion and practice of the environmental protection and plastic reduction project on outlying islands and the “Good Service Guidelines for Recycled (Rented) Cups.”
• The Society of Wilderness: Participated in the “Earth Hour” event and low-carbon diet initiative, and held a total of 2,400 summer sustainability funfests at 7-ELEVEN stores.

 

Climate adaptation and Mitigation

In view of the physical risks of “increased severity of extreme weather events such as typhoons, floods and snowfall,” the probability of flooding, equipment damage, power and water outages in President Chain Store Corporation stores may increase with an impact on store operations. Besides store operations, these events might also cause physical risks to upstream logistics and downstream customers, as well as delivery, customer inconvenience and product unavailability. We evaluate the risk of flooding in the middle of this century (2050) for all stores in Taiwan under different climatic scenarios. Please see our Climate-related Disclosures Report for detailed result of the analysis.

To reduce the impact of flood risks on stores, President Chain Store Corporation has formulated the “Construction Specifications for Flood Control Gates and Dwarf Walls in the Stores Located in Low-lying Areas” and the “Weather Information Distribution System” to immediately notify the stores of the weather and issue flood warnings, so as to reduce the risks caused by flooding. In addition, to reduce the losses caused by flooding in the stores, President Chain Store Corporation has formulated emergency response procedures for risks, standardized the logistics and distribution contingency mechanism, and purchased property insurance against natural disasters for the stores to reduce the financial impact of losses.