Oneness Biotech recognizes the enormous impact of climate change on the economy, society, and the environment. As one of the leading biotech pharmaceutical companies in Taiwan, we must heed our corporate social responsibility and respond to the challenges brought forth by climate change. In 2021, the Oneness Biotech Risk Management Committee identified climate change as one of the potential risks. To measure and analyze the impact of climate-related risks and to formulate control measures, we adopted the framework from the Task Force on Climate-related Financial Disclosure (TCFD) issued by the Financial Stability Board (FSB). Based on the framework, we disclosed our governance, strategies, risk management and metrics, and targets to help investors and stakeholders understand Oneness Biotech’s climate actions.
We have incorporated climate issues into our sustainable development strategy. The Board of Directors monitors, manages, and makes decisions on such issues and sets up dedicated units in charge of implementation of corresponding contingency measures.
|Board of Directors||The Board of Directors, which is the highest governance unit responsible for the promotion of the sustainable development, oversees a wide range of environmental risks and opportunities, including climate change-related impacts. It receives regular reports from the ESG Committee on relevant issues and supervises the formulation of management approaches, strategies, and goals for sustainability or climate-related issues.|
|ESG Committee||The General Manager serves as the Chairman of the ESG Committee, which is responsible for the execution of sustainable actions and the submission of annual reports to the Board of Directors. In terms of climate actions, the committee acts as a platform for horizontal linkage and vertical integration. It evaluates potential climate-related risks and opportunities, formulates countermeasures, executes and discloses greenhouse gas inventories based on the responsibilities of each designated team, and regularly tracks carbon management performance.|
Climate Risks and Impacts
In consideration of the degree of impact and occurrence time, as for short-term (within 3 years), we have identified two major climate-related risks, namely “extreme precipitation and drought” and “increased severity and frequency of extreme climate events”. For long-term (over 5 years), “Difficulty to attract investments due to poor low-carbon performance” represents the higher impacts. We have therefore formulated contingency strategies and launched mitigation and adaptation actions to enhance climate resilience.
In order to enhance climate resilience, the workshops not only mitigate risks, but also identify potential opportunities in response to climate change.
Scenarios for Resilience
We assess physical and transition risks arising from the impact of climate change on business operations with reference to IPCC (Intergovernmental Panel on Climate Change) and AR6 (Assessment Report) methods. AR6 proposes the SSPs (Shared Socioeconomic Pathways) assessment method for climate change. This method is based on five narratives (scenarios) describing alternative socio-economic developments.
Oneness analyzed the physical climate risk based on the SSP5-8.5 scenario set forth by the Intergovernmental Panel on Climate Change (IPCC) AR6. According to the assessment by National Science and Technology Center for Disaster Reduction (NCDR), the max 1-day precipitation amount will increase 20% and 41.3% in the middle and end of 21th century in the worst scenario (SSP5-8.5). Oneness adopted the disaster potential map of the National Science and Technology Center for Disaster Reduction marked risk of flood disasters of each area in Taiwan, placing the area of potential flooding caused by extreme rainfall, a daily rainfall exceeding 650 mm, with the Nanchou Plant area, it shows that the Nanchou Plant is not in the potential flooding area under the extreme rainfall scenarios (figure 1). In order to prevent floods with high standards, the height of the Nanchou Plant was increased by 85 cm during the planning of the construction and a comprehensive drainage system was set up to effectively reduce the impact.
On the other hand, Oneness Biotech has planed the storehouse in the Nanchou Plant to store the amount of dry material for 2-years production capacity, and established inventory principles to avoid interruption of supply caused by flooding. The raw materials have a safe inventory amount ranging from three months to one year in response to the delivery duration to ensure that the inventory can be replenished at any time as well. Plectranthus amboinicusis planned to be grown in different sites to avoid the climate impact of a single region.
The subsidiary Cotton Field Organic Farm is in an area of potential flooding caused by extreme rainfall with a daily rainfall exceeding 650 mm (figure 2).
▲ Figure 1, Flood risk for Nanchou Plant
▲ Figure 2, Flood risk for Cotton Field Organic Farm
In order to avoid the impact of extreme rainfall, the government has built a retarding basin with an area of approximately 10 hectares in the local area. Cotton Field Organic Farm not only has added facilities such as its own retarding basin, water gates, and water pumps in the area, but also conducted drainage cleanings every year, so that it is expected to effectively reduce the risk of flooding.
Oneness analyzed the potential financial impacts caused by transition risks by utilizing the SSP1-1.9 scenarios. SSP1 represents the most sustainable development path. With a view to achieving the low-carbon environment as specified in this scenario, global emphasis on economic growth shifts toward a broader emphasis on human well-being. International capital therefore flows to businesses with excellent low-carbon and ESG performance.
Based on a simulation of information transparency and carbon reduction achievements failing to satisfy the requirements of institutional investors, it can be surmised that we will face potential capital acquisition risks, which requires the formulation of contingency strategies.
Oneness is not an energy-intensive company and based on the risk identification procedure, transition risks will not have a significant impact on its operations. We still pay close attention to global climate-related measures and analyze the financial impact of the transition risks based on the carbon reduction scenario of IPCC AR6 SSP1-1.9.In order to reduce the impact of the transition risks, we have completed the carbon footprint assessment of the product FESPIXON® cream, continued to promote various energy-conservation measures, planned the feasibility of using renewable energy in advance, and sought various possible carbon reduction opportunities, to improve the ESG performance and create well communicated channels with investors.
In order to enhance the Company’s corporate governance, establish an effective risk management mechanism, assess and supervise the risk-taking ability and the current risk management situation, the Oneness Biotech Board of Directors approved the “Risk Management Policies and Procedures” in 2020 as the Company’s highest guiding principle of risk management. Through the policies and procedures, the Company integrates and manages various potential strategic, operational, financial and hazardous (climate change, legal compliance, market competition) risks that may affect operations and profitability, carries out risk warnings and takes appropriate preventive measures, or maintains operational activities in the event of an accident.
The responsible unit identifies relevant risk factors, analyzes the potential impact of each risk on the Company’s operations, and develops and adopts measures to control risks within the Company’s acceptable range. The Risk Management Committee receives regular reports from the Risk Management Task Force and supervises the status of risk management execution by the Company and its important subsidiaries.
At the meeting of the Risk Management Committee in 2022, the risks related to extreme climate were monitored with relevant countermeasures formulated, including, raw material inventories and future production capacity responses.
Metrics and Targets
In line with the Government’s goal of 2050 net zero emission, Oneness has taken active carbon reduction after completing greenhouse gas inventory in 2021. Furthermore, we set the ambitious targets that reduce carbon emission year by year, through continue to promote energy-saving replacement, renewable energy and carbon credit projects, and then remove 100% Scope 1 and Scope 2 emissions and reach carbon neutrality by 2025.
Metrics for Climate-related Rsks
According to the significant climate-related risks which identified in 2022, the Company has set the metrics to ensure the impact of the risks are controlled at acceptable level.
Rewards for Climate-related Contribution
The Company understand that we need every employee’s effort to mitigate the climate-related impacts and achieve the carbon reduction goals. The Company has published the “Employee Reward and Discipline Regulations” and set criteria for granting rewards. The rewards will be recorded in the Performance Evaluation, and be used as the basis for promotion, salary adjustments, and various bonus or incentives. The examples from the regulations as the table below:
“80% of the environmental impact of a product is determined at the design phase.” In order to take into account the health of human beings and the environment, FESPIXON® cream is made using natural herbs as the main raw material. Compared to using chemical raw materials as the source, natural ingredients can reduce greenhouse gas emissions and environmental impact. In order to further reduce carbon emission, Oneness Biotech conducted the carbon footprint of the FESPIXON® cream in 2021 and obtained a third-party certification from SGS in April 2022. As the first step of carbon reduction, product carbon footprint inventory enables Oneness Biotech to understand the emission hotspots in product life cycles and take effective improvement measures.
According to the analysis on carbon footprints, the emission hotspots of Oneness are in the electricity usage at the production phase. Therefore, we take energy efficiency improvement as the key factor in reducing carbon footprint. In the future, we will gradually promote energy conservation measures such as making improvements to air conditioners and air compressors. Meanwhile, in response to the development of global renewable energy sources, the Company has also begun to evaluate setting up solar power generation devices to meet the increasing energy demand due to the increasing production capacities in the future.
ISO 14067 Product Carbon Footprint Verification Statement
In the face of increasing extreme weather phenomenon and events, resilience against climate disasters is an important part of business operations.
Energy Consumption Analysis
We are fully aware that “the greenest energy is the energy we don’t use”. Enhancement of energy efficiency is therefore the key prerequisite for realization of carbon reduction goals. We will persist in our efforts to review and improve the energy efficiency of the equipment and assess the feasibility of renewable energy use to meet the rising future demand for electricity and minimize environmental impacts.
Historical Electricity Consumption of Oneness’ Operating Sites (unit: k Wh)
Note: the 2021 data was updated based on the 3rd party validation comments. There is no direct electricity consumption statistics in Nangang. The data was calculated based the annual electricity price (NT$/kWh) published by Taiwan power company, 2.619 in2019 and 2.5986 in 2020, and based on the monthly average electricity price for the office that owned by the groups’ company (at the same location) in 2021 to improve the accuracy.
2022 Energy Consumption Analysis
Note: No renewable energy used in 2022. The heating values were quoted from the Bureau of Energy, Ministry of Economic Affairs.
Note: The consolidated revenue means the total amount of Oneness revenue and Cotton Field Organic Farm revenue. It is the same as below when calculating energy intensity.
Carbon Emission Analysis
Oneness annually conducts GHG inventory in accordance with ISO 14064-1:2018 since FY 2021, which identified emission sources based on the operation control method and calculated by adopting the IPCC AR5 Global Warming Potential (GWP). The inventory was also validated by 3rd party for the data quality and completeness.
Scope 1: Direct Emission
Oneness calculated Scope 1 emission from stationary and mobile combustion and from fugitive emissions and used the emission factors according to the GHG emission factors database which published by Taiwan EPA.
2021 Energy Consumption Analysis
Seven Greenhouse Gas Emission
Scope 1 Emission Intensity
Scope 2: Indirect Emission
The factors (kgCO2e/kWh) used to calculate scope 2 emissions are: 0.509 published by Bureau of Energy, Ministry of Economic Affairs in 2021, and 0.509 in 2020/2019.
Scope 2 Emission by Locations (unit: tCO2e)
Note: The ISO 14064 -1 verification was firstly done in 2022 and the 2021 data was updated according to the verification result.
Scope 2 Emission Intensity
Scope 3: Other Indirect Emissions
At the initial stage, Oneness included the emissions from business trip and operational waste. The statistics will be expanded in the future based on the significance analysis of each emission category.
Business trip statistics cover domestic and international flights, domestic self-driving (private cars for official use) and domestic long-distance business trips (High Speed Rail). Statistics of Cotton Field Organic were not conducted as there are only seven full-time employees and the percentage of business trips was too low to affect the overall emissions.
The emissions occurred from the transportation and treatment process of Nanchou Plant and Nangang Laboratory operational wastes are included in the statistics. The general waste at the Nangang Office and Xinyi Office, which is removed by a building cleaning management company, and the waste of Cotton Field Organic, which is removed by a local municipal recycling system are not included in the statistics due to the information was unable to obtain.
Emission Factors for Waste Treatment
Third Party Verification
Oneness annually conducts GHG inventory in accordance with ISO 14064-1:2018 since FY 2021. The boundary which includes the subsidiaries is aligned with the consolidated report, and the coverage is 100%. The inventory was also validated by 3rd party for the data quality and completeness.
2021 Greenhouse Gas Verification Statement
2022 Greenhouse Gas Verification Statement
Research indicates that organic farms sequester 26% more soil carbon fixation than non-organic farms. Cotton Field Organic Farm uses organic farming method that not only avoids indirect emissions from the use of chemical fertilizers, but also reduces nitrous oxide (N2O) emissions from synthetic nitrogen sources, and increases the soil’s organic carbon content and achieve carbon sinks. Although there currently is no credible quantitative measurement method for the calculation of carbon sinks in the world, Oneness Biotech will include that in future evaluations.
Note: Cooper, J.M., et al. 2016. Shallow Non-Inversion Tillage in Organic Farming Maintains Crop Yields and Increases Soil C Stocks: A Meta Analysis. Agronomy for Sustainable Development 36: 1–20
In order to gradually move towards Oneness Biotech’s carbon reduction goal, we have completed the first ISO 14064 audit and the third-party verification in 2022. Based on the inspection results, we will review and improve the energy efficiency of the equipment, and assess the feasibility of renewable energy to meet the rising demand for electricity in the future and to reduce environmental impact.
※The above content is taken from the ESG Report