Type 1：Increased severity of extreme weather events such as typhoons, floods and snowfall

- Adaptation/Management Strategies：

• Make plans of purchasing appropriate property insurance against natural disasters for the stores to reduce the financial losses
• Formulated emergency response procedures for typhoons, such as contingency logistics and distribution arrangements to reduce the risk of supply shortages and cargo damage
• Formulated construction specifications for flood control gates and dwarf walls in the stores located in low-lying areas to reduce the likelihood of flooding in the stores

Type 2：Rising mean temperatures

- Adaptation/Management Strategies：

• Actively introduce energy-saving measures in stores and the headquarters to optimize energy efficiency
• Stay updated with the raw material quality and supply and develop various sources as well as alternative materials to maintain supply chain stability

Type 1：Mandates on and regulation of existing products and services

- Adaptation/Management Strategies：

• Set up Plastic Reduction Task Force to reduce plastic in our products and services by introducing single-use plastic reduction, packaging material improvements and other strategies
• Set up Food Waste Task Force, planning short-, medium- and long-term food waste reduction programs to reduce waste
• By adopting ISO 50001 energy management system and ESCO (Energy Service Company) energy-saving service system, understand the energy saving potential of the stores and further introduce relevant energy management measures, optimizing energy efficiency in the stores

Type 2：Use of lower-emission sources of energy or technology

- Adaptation/Management Strategies：

• Evaluate the feasibility and ways of introducing renewable energy equipment, in an effort to increase the percentage of renewable energy use
• Promote upgrades of refrigeration equipment and technological innovation, as well as enhancing low-carbon technology use and energy efficiency

Type 1：Use of more efficient modes of transport or distribution processes

- Adaptation/Management Strategies：

• Optimize transportation routes and introduce environmentally friendly vehicles, reducing the number of transportation trips and mitigating environmental impact
• Evaluate and develop delivery vehicle with green energy
• Automate distribution process such as tally and picking

Type 2：Move to more efficient buildings or equipment

- Adaptation/Management Strategies：

• By adopting ISO 50001 energy management system and ESCO (Energy Service Company) energy-saving service system, understand the energy saving potential of the stores and further introduce relevant energy management measures, optimizing energy efficiency in the stores
• Continue to promote innovative technologies and invest in equipment R&D through academia and industry collaboration, with the aim of developing industry-leading energy-saving measures

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 PCSC 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, according to the level of flood risks of the National Science and Technology Center for Disaster Reduction (NCDR) during the base period (1976-2005) and RCP8.5 scenario. For detailed analyses, please refer to PCSC 2022 sustainability report.

To reduce the impact of flood risks on stores, PCSC 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, PCSC 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.

Schematic Diagram of Weather Information Distribution System

Considering that the Environmental Protection Administration had amended the Climate Change Adaptation Act, it is expected that carbon fees will be charged for large carbon emitters in 2024. Although the act has not been extended to the residential and commercial sectors at this stage, with the government’s net zero emission policy, PCSC has a high probability of being included in the carbon fee regulations in the future. For detailed analyses, please refer to PCSC 2022 sustainability report.

To reduce the potential financial impact in the future, PCSC will continue to adopt a variety of energy-saving and carbon-reduction measures by gradually improving energy efficiency and reducing GHG emissions in the stores all over Taiwan.

• Introduction of renewable energy: In response to international carbon reduction requirements and to reduce the dependence on traditional electricity, we plan to introduce renewable energy in our stores in 2022 and gradually transition to low-carbon energy.
• Introduction of energy management system: To promote energy conservation and energy efficiency improvement in headquarters and the stores, the headquarters building and two stores maintained the ISO 50001 energy management system certification in 2021. Other bases also engage in energy management in the spirit and structure of the energy management system to continuously improve energy use.
• Store energy conservation measures and achievements: To effectively improve the energy efficiency of stores, PCSC has formulated basic requirements for equipment and store environment management for new stores, including 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. We also cooperate with the government and relevant academic institutions to improve the energy efficiency of our stores.
• Award Program: to encourage employees to participate in carbon reduction actions, in the company and in the stores. Please refer to Section 4.1 for more details.

In response to the increasing severity of climate change, the world is turning its attention to carbon reduction and low-carbon transition. Taiwan’s relevant regulations and policies are also developing net-zero emission pathways. With PCSC having many stores all over Taiwan, logistics is an important element in PCSC’s operations. If we can transition towards low-carbon transportation in advance, it will contribute to the development of the national net-zero policy. For detailed analyses, please refer to PCSC 2022 sustainability report.

We are currently working on two aspects of our low-carbon transition plan

• Introduction of logistics vehicles with the latest environmentally friendly standards: To reduce the carbon emissions caused by logistics, PCSC not only actively introduce new environmentally friendly logistics vehicles but keep in contact with our logistics partners and regularly arrange domestic and foreign logistics and transportation exchanges, in order to make in-time adjustments in response to trends and regulations in Taiwan.
• Optimizing the internal operation procedure and equipment: We plan to introduce distribution automation to the internal operational environment and equipment in the logistics centers to reduce the picking load of personnel, walking distance, etc., saving the operating time of human distribution. In the meantime, the initial transshipment logistics routes are integrated and lighting in the logistics centers has been upgraded to improve the energy-saving benefits of the overall internal operations.