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, the Company 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 overall impact of climate change issues on President Chain Store Corporation in a comprehensive manner. The Company 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, as well as commits to achieving net zero in Scope 1 and Scope 2 of the GHG inventory within our own operations by 2050. The company has 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, the Company also promote climate sustainability by complying with changes in laws and regulations of the government. President Chain Store Corporation provide advice when the government consults us on climate sustainability. The Company also 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, the Company 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. Additionally, President Chain Store Corporation 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 relevant topics. 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

In pursuit of President Chain Store Corporation's sustainability vision, the establishment of a robust management framework and a clearly defined roadmap is essential.Concurrently, the Company is committed to transparent and ongoing communication with stakeholders regarding potential risks and opportunities associated with our business operations, thereby ensuring the long-term sustainability and value creation for both business operation and our 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

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, logistic 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 the 2024 President Chain Store Corporation Sustainability Report.

 

• Introduction of renewable energy: In response to international carbon reduction trend and to reduce dependence on traditional energy sources, President Chain Store Corporation integrated the concept of renewable energy into the design of Yawan store by introducing solar photovoltaics.
• Introduction of energy management system: Promote energy conservation and energy efficiency improvement at the head office and stores. In 2024, the head office building and two stores continued to hold 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 energy-saving measures 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 with high-efficiency equipment.
• Introduction of Internal Carbon Price mechanism: In order to strengthen our own operational carbon reduction management, President Chain Store Corporation introduced an internal carbon pricing mechanism in 2024, prioritizing the management of Scope 2 greenhouse gas emissions based on shadow price. According to the carbon price announced by the Ministry of Environment in 2024, the internal carbon price has been set at NT$300/ metric ton CO₂e. Internal carbon pricing is mainly used to manage Scope 2 emissions related to purchased electricity. It is hoped that internal carbon pricing will encourage energy saving and carbon reduction actions to improve energy efficiency. Starting from 2024, President Chain Store Corporation took internal carbon pricing into consideration for major investment and procurement, as well as conducting cost-benefit analysis, such as evaluating the payback period of equipment investment and making a comprehensive comparison of the total cost after adding internal carbon pricing. To ensure that investment projects follow carbon reduction management targets, the subsequent plan is including internal carbon pricing in management reports to track changes in greenhouse gas emissions. The implementation of internal carbon pricing also helps us consider climate issues in our business strategies with an impact on key financial planning. In addition, although President Chain Store Corporation has not yet been included as a target under the government's regulations, the implementation of internal carbon pricing can also cope with potential financial impacts brought about by future regulations in advance.
• 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. For the 2024 action performance, please refer to the 2024 President Chain Store Corporation Sustainability Report.

 

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

• Introduction 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.

 

President Chain Store Corporation 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, the Company promote low-carbon diet, reduce food waste, encourage plastic reduction and recycling and reuse models to help consumers move towards a low-carbon and eco-friendly life. For the 2024 action performance, please refer to the 2024 President Chain Store Corporation Sustainability Report.

 

- 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 2024, the OPEN iECO recycled cup service was implemented in a total of 2,531 stores, expanding to the group's chain restaurant channels, such as Starbucks and 21 Plus. The service scope, providing customers with the option to borrow a cup from store A and return it to store B, is being expanded to establish a recycled cup ecosystem.
• A discount is given on the first of every month to customers who bring their own cups. The proportion of customers bringing their own cups increased to 20.91% in 2024, achieving the target of 19% for the year.

 

- Intelligent Automatic Recycling Machine

• The machine can recycle PET bottles and batteries, with a shredding function to reduce the volume for transportation and carbon footprint.
• In 2024, President Chain Store Corporation continued to increase the number of recycling machines, setting up in 6 stores Yilan, Hualien and Taitung to make “24/7 Services from Our Stores All over Taiwan” a reality. A total number of machines installed was 246. In addition, in order to improve the utilization rate of equipment and promote the mechanism of turning around sub-standard stores, the equipment configuration will be adjusted in a timely manner for stores whose recycling volume does not meet expectations, with the relocation accelerated to maximize the benefits. In 2024, a total of 5 stores had the machines relocated.

 

- iLove Food

• The “iLove Food Map” was also launched for the consumers to check on the stock with ease.
• In 2024, the “iLove Food” program reduced the generation of food loss and waste by approximately 17,866.94 metric tons, with a growth of 4,143.63 metric tons compared to last year.
• Implement the program to extend the shelf life of fresh food to reduce food waste.

 

- Innovative Solutions for Food Loss and Waste

• President Chain Store Corporation launched the “Coffee grounds Recycling Program” in 2024 to convert coffee grounds from store operations into performance fabrics and shoe materials. Coffee grounds are systematically recycled in the store and processed in an innovative method to create a series of recycled products to reuse, conveying the concept of sustainable fashion and environmental protection to young consumers.
• “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 2024, the Sustainable Farm program was expanded to turn coffee grounds and scrapped food products from specific stores into organic fertilizers through agricultural biotechnology for growing fruits and vegetables. The scope of cooperation has been expanded to four agricultural product manufacturers to increase crop yields. In 2024, a total of 3.5 metric tons of coffee grounds were recycled and converted into fertilizers to produce crops such as cabbage, bananas and corn on contract farms, before being sold in the stores, allowing more consumers to participate in and support a sustainable diet, as well as further realizing the targets of resource recycling and environmental protection.

 

- 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 2024, a total of 1,850 “Good Neighbor Healthcare Funfests” were organized with blood donation, blood pressure measurement, waist measurement, health seminar, health education for the physically- and mentally-challenged, healthcare for elders and the disadvantaged, OPEN! CARES, etc. for over 20,000 participants. The goal is hosting 2,000 sessions in 2025 and 2026.

 

- 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.”

• 2024 Initiative: Earth Hour

  a.Initiated by the World Wide Fund for Nature (WWF), Earth Hour is the world’s largest environmental action to raise awareness on sustainability through a one-hour lights-off campaign. President Chain Store Corporation has actively participated in Earth Hour since 2022. In 2024, it became one of the first authorized party to host the campaign in Taiwan. From 8:30 p.m. to 9:30 p.m. on Saturday, March 23rd, the Company mobilized over 440 corporate partners to turn off lights across more than 10,000 locations. According to the latest data from Taipower, the campaign reduced electricity consumption by 289,000 kWh and cut carbon emissions by 143,000 kg, equivalent to the carbon absorption of Daan Forest Park over 135 days, setting a new energy-saving record.

  b.Summer Solstice Lights-Off Campaign: The summer solstice marks the peak electricity consumption of the year. On June 21st, 2024, President Chain Store Corporation became the pioneer of the industry by turning lights off for 7-ELEVEN store signage from 3:00 a.m. to 6:00 a.m. across 1,500 stores. This initiative is projected to save over 960,000 kWh annually and reduce carbon emissions by approximately 474,981 kg, equivalent to the carbon sequestration of 3,166 trees in a year.

  c.In collaboration with long-term partner the Society of Wilderness, the Company advocated for public energy conservation awareness through the “Bring Back the Love” fundraising platform. On the same day, the Society of Wilderness hosted a Summer Solstice Lights-Off Market in Taipei’s Daan Forest Park from 4:00 p.m. to 9:00 p.m., featuring unplugged activities and a lights-off hour at 7:30 p.m., inviting the public to experience the value of energy conservation.

 

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.