Sustainable Environment

Sustainable Environment Management Policies and Commitment

In 2018, PharmaEssentia first introduced its Environmental, Health, and Safety Policy aimed at ensuring the safety and health of our employees and protecting the environment to prevent disasters. Our environmental management during the production process is governed by various documents, including Greenhouse Gas Management Procedures, Waste Management Procedures, and Chemical Hazard Management Procedures.
Additionally, we plan to implement the ISO 14001 Environmental Management System in 2024 to further enhance our environmental management efficiency and reduce the negative environmental impacts of our production and operational processes.

Sustainable Environment Implementation Effectiveness and Future Planning

Environmental Impact Assessment and Cost Investment

• Increased environmental costs：

  At PharmaEssentia, the potential environmental impacts of our operational activities primarily stem from energy use, water resources, and waste management. In 2023, the total investment in environmental costs amounted to NT$2.72 million, which represents a 3% increase from the previous year. The highest cost was attributed to waste management, totaling NT$1.817 million. This increase was mainly due to expanded production capacities.

  

• Energy conservation and carbon reduction：

  In March 2023, new energy-saving equipment such as air compressors was purchased. This equipment collectively saved approximately 87,300 kWh of electricity, reducing energy consumption by about 1.7%.

Sustainable Environment Short, Medium, and Long Term Management Indicators

TCFD_Climate Action Management Policy

In response to the issue of climate change and to support SDG 13 - Climate Action, PharmaEssentia has gradually developed a comprehensive strategy to address climate change and its impacts. In 2022, we formally adopted the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) framework and actively identified and took action to address the challenges and opportunities presented by climate change. We have established Environment Policies as an internal guideline for preventing and responding to environmental impacts, and also created a GHG Management Procedures. Starting with our main production base, the Taichung Plant, we have conducted greenhouse gas inventories and completed third-party verification for the years 2019 to 2022. And it is expected to complete the external audit verification for the fiscal year 2023 by Q3 of 2024.

TCFD_ Governance

The Board of Directors is the highest climate governance body at PharmaEssentia, overseeing and formulating strategies related to climate change from a sustainability perspective and responding to domestic and international net-zero commitments. The Board authorizes the Sustainability Development Center and the Eco-Friendly Team to promote various climate change management activities. Execution units include the EHS (Environmental, Health, and Safety) department and other relevant departments such as R&D, production, logistics, warehousing, and engineering, each with specific tasks. The EHS department conducts bi-weekly meetings/factory affairs meetings to report progress on various projects to senior management. Every quarter, a representative from the Sustainability Development Center reports overall ESG project progress to the Board.

TCFD_Strategy

To assess the short-, medium-, and long-term impacts of climate-related risks and opportunities on organizational operations, the PharmaEssentia Sustainability Development Center, in collaboration with external consultants, conducts interviews with managers and surveys to discuss and identify climate-related risks and opportunities with relevant department heads. Through departmental discussions, proactive solution development is undertaken.

• Climate Risk and Opportunity Matrixs

  

• Climate Risk Analysis

  • PharmaEssentia’s climate risk management strategy focuses on managing and adapting to short-term (1-3 years) high-impact climate risks; through management actions, we aim to mitigate the immediate and medium-term impacts and plan for potential climate-related opportunities. We have identified high-impact short-term climate risks including "#5. Raw Material Supply Shortages" and "#1. Greenhouse Gas Management and Carbon Fees," as well as preparations needed in response to "#3. Legislative Requirements for Phased Net-Zero Carbon Emission Targets."
  • Furthermore, medium to long-term climate risks such as "#2. Legislative Requirements for Renewable Energy Usage Ratios" and "#4. Uncertainty in New Energy-Efficient and Carbon Reduction Technologies" are expected to materialize in the medium to long term. We will initially observe these risks and reassess whether immediate management is necessary in future annual evaluations.
  • Regarding climate-related opportunities, "A. Carbon Reduction Benefits from Improved Resource Efficiency" has been identified as a relevant opportunity at our Taichung facility. We have already planned updates to energy-saving equipment and are implementing energy-saving devices at new plant locations.

• Financial Impact Analysis of Climate Change

  

• Climate Risk Responses

  

TCFD_ Risk Management

The board of directors serves as the highest supervisory and decision-making unit for risk management and assign senior management to be responsible for promoting and operating various issues. We have gradually implemented the TCFD framework guidelines. In 2022, we completed the first stage of climate risk and opportunity identification. In 2023, we completed the second stage, which involved scenario analysis of significant climate-related risks and opportunities, as well as impact analysis on financial implications, and developed corresponding strategies. In the future, we will continue to assess how to integrate potential impacts of climate change into business strategy and operational planning to ensure effective management.

• Climate Risk Management Process

  We consider climate-related risk management policies, actual assessment practices, and pre-response measures to mitigate the impact of climate risks on operations. We began conducting major operational risk assessments, including the assessment process for climate risks within environmental risks, education and training, and implementation of specific practices to address various risks in each department starting in 2023. These assessments are expected to be conducted regularly each year to ensure a thorough understanding and timely adaptation to changes in these risks, and to develop relevant reduction management methods and measures as well as risk management objectives and policies as needed.

TCFD_ Indicators and Targets

GHG Emissions Analysis

ISO 14064-1:2018

The main production facility in Taichung has implemented the ISO 14064-1: 2018 Organizational Inventory Management System. As of the end of 2023, the Taichung plant has obtained the 2022 SGS verification certificate. Additionally, the greenhouse gas inventory operations for 2023 have been completed, with external verification expected to be passed in Q3 of 2024.

GHG Emissions Analysis

In 2023, the largest source of GHG emissions for PharmaEssentia is from Scope 2 purchased electricity, accounting for approximately 66%. With the global commercialization of major new drugs ,overall sales volume and production increased, leading to a rise in total electricity consumption. However, energy intensity and greenhouse gas emission intensity decreased by 52.3% and 42% respectively compared to the previous year.

Energy Use Analysis

Purchased electricity is the primary source of energy consumption for our company, accounting for approximately 70%. Over the past three years, there has been a downward trend in total energy usage, with a 52.3% decrease in energy intensity in 2023 compared to the previous year.

Energy Conservation and Carbon Reduction Achievements

At the Taichung plant, new energy-saving equipment was purchased in March and June 2023, including variable frequency drive air compressors and suspended ice water chillers. These investments resulted in savings of 87.3 kWh of electricity, equivalent to a reduction of 43.2135 tones of CO2e (approximately 314.2 GJ of energy), accounting for a total energy consumption reduction of about 1.7%.

Impact Assessment and Water Resource Risk

PharmaEssentia's production base is located in the Central Taiwan Science Park, Taichung Park. According to statistics, the daily water supply capacity of the Central Taiwan Science Park is 107 million liters, while the Taichung factory of PharmaEssentia withdraws 0.04 million liters per day, which represents a proportion of 0.037%. This level of water use does not have a significant impact on the community.

Water Intake and Discharge treatment process of Taichung plant

Our main production facility, the Taichung Plant, is located within the Taichung Science Park, where the water source is municipal water, and the discharge is managed through the Taichung Park's wastewater treatment plant. In compliance with the regulations of the Ministry of Environment, water quality monitoring of the discharge is conducted biannually by an inspection agency authorized by the Environmental Protection Administration. The Taichung plant met the emission standards set by both the Environmental Protection Agency and the Central Taiwan Science Park of Taichung for the year 2023.

Water Recycling and Reuse

At the Taichung plant, water recycling and reuse are enhanced through the reclamation of reverse osmosis brine and wastewater, which are redirected into the cooling towers of the air conditioning system to improve the efficiency of water resource cycling. In 2023, a total of 6.62 million liters of water were recycled.

PharmaEssentia adheres to regulatory requirements for air pollution control. We do not use or emit ozone-depleting substances (ODS) regulated under the "Montreal Protocol," nor do we release any persistent organic pollutants (POPs). Compliance with the Environmental Protection Agency's standards includes regular testing and reporting of stationary air pollution sources. Testing is outsourced to Jichuan Environmental Technology Co., Ltd., an EPA-approved agency, conducted as per regulatory intervals. The test results show that air pollutant emissions are below legal limits, and there were no violations of environmental regulations in 2023.

Air Pollutant Emissions Statistics

Waste Management Actions

PharmaEssentia primarily produces general business waste from operations, including a small amount of chemicals used in R&D and laboratory experiments. We examine waste output, elimination, treatment, and recycling from a lifecycle perspective, meticulously recording input materials and waste output. Waste disposal is outsourced to qualified third-party waste treatment firms.

Waste Output Volume

With the global expansion,our production capacity and efficiency have continued to improve. The overall waste intensity per unit product has decreased for four consecutive years, with a 33.3% reduction in 2023 compared to the previous year.

Toxic Chemical Substance Management Action

In terms of hazardous waste management, our company is focused on source management and its proper storage and usage. At the same time, we also stipulate written records of usage status to manage the flow of chemical toxicants and prevents toxicant pollution on the environment and human health. In 2023, there were no incidents of chemical or waste leakage.

Classification and Control of Toxic Substances

Chemical Disaster Response Actions

The Taichung factory is equipped with one general-level professional emergency responder to maintain safety. We have established a "Chemical Spill Emergency Response Standard Operating Procedure" that allows for quick and effective response actions. To date, no such incidents have occurred.

Conservation of Diverse Species in the Central Taiwan Science Park

PharmaEssentia's production bases are located in the Central Taiwan Science Park in Taichung and the under-construction Zhubei factory in the Hsinchu Biomedical Science Park. Neither site is located in a conservation area or habitat for protected or rehabilitated species. Assessments have determined that there is no direct impact on biodiversity.

However, to ensure water resource protection, the Taichung facility has applied for a water pollution prevention permit and adheres to its regulations for production operations and reporting. Regular sampling and testing reports are within standards, posing no risk of environmental impact. According to the Central Taiwan Science Park Sustainability website, ecological surveys have shown an increase in many species inhabiting the area. Future efforts will continue to enhance conservation actions to attract more species and enrich the habitat of the park. Simultaneously, in 2023, we also sponsored a public welfare project by the international Jane Goodall Institute, indirectly participating in initiatives to protect plant diversity. This contributes to maintaining ecological balance, preventing ecosystem degradation, and promoting soil conservation and water stewardship.