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Challenge, Drivers and Opportunity:Sustainability & the Taiwan Electronics Sector

Association for Sustainable & Responsible Investment In Asia

ACER CSR FORUM

David St. Maur Sheil, Director December 2008

Association for Sustainable & Responsible Investment in Asia www.asria.org

The ESG Challenge

Electronics Industry Challenge• Asian Regulatory regimes slowly emerging• Managing risk in the supply chain• Sector initiatives & co-operation• Stakeholder engagement• Transparency & disclosure• Maintaining competitiveness in current

unstable financial environment

Challenge

Drivers

Opportunities

Image:Enorth


The Drivers

Drivers • Sustainable investment (SRI) & CSR• Standards & regulatory regimes• Fluctuating energy costs• Acceleration of climate change• Infrastructure investment• Establishment of Asian brands• Changing consumer attitudes

Challenge

Drivers

Opportunities

Taipei Times, 1st December 2008


SRI Funds Globally: US$4.5 Trillion

US$36bn funds & church assets

US$2.3tn in funds and portfolios

Canada US$433bn

Japan and rest of Asia

US$10bn+

UK: US$1.1tn in funds and portfolios

Rest of Europe US$340bn in funds

and portfolios


Korea37 funds, incl.

Allianz Global InvestorsDaishin Investment TrustDeutsche Asset ManagementKDB Asset ManagementNonghyup CA Samsung Investment ManagementSH Asset Management

MalaysiaMaybank Mgt Bhd.Phillip Mutual

IndonesiaSeveral Islamic Funds

SingaporeUOB Asset Mgt

TaiwanUBS Global Asset Mgt.Allianz Global Investors

IndiaABN Amro

Australia 89 funds, incl.

HendersonAustralian EthicalBIAM AustraliaBT Financial GroupChallenger GroupEquity TrusteesGlebe Hunter HallING GroupKaplan PartnersSAM Sustainable State Street Global AdvisorsTOWER Asset MgmtWarrakiri Asset Mgmt

Japan 60 funds, incl.• AIG Global• Asahi Life Asset Management • Commerz Asia• Daiwa SB Investments • DIAM • Invesco Japan• Mitsubishi UFJ Asset Management • Nikko Asset Management • Nomura Asset Management • SG Asset Management• Sompo Japan Asset Management • Sumitomo Mitsui Asset Mgmt.• UBS Global Asset Management • UFJ Partners Asset Management

Hong Kong20 funds, incl.• ABN Amro• HSBC Investment• Tai Fook.• UBS Global Asset Mgt.• Lloyd George Management

Over 200 SRI Funds in Asia Today

Full details atASrIA SRI Fund Portal

www.asria.org

Association for Sustainable & Responsible Investment in Asia www.asria.org 6

Drivers: Standards and Regulations

Global & National Standards & Regulatory Regimes• UN Global Compact• UNEPFI - Principles for Responsible Investment (PRI)• Carbon Disclosure Project (CDP)• Global Reporting Initiative (GRI)• Equator Principles• FTSE4Good, Dow Jones Sustainability Index, • Climate change Indexes • ISO14001, SA8000, REACH, ROHS, WEEE

Industry Standards and Resources• Electronic Supply Chain Initiative


CDP—Asia’s Carbon Leaders are

Stepping Forward

Investor-CorporateDialogue on

Climate Change

Disclosure: CDP Process in Asia


CDP 2008, Asia Ex-Japan Report Total 220 Companies

39%

28%

5%

28%

AnsweredQuestionnaire

InformationProvided

Declined to Participate

No Response

ChinaHong KongIndiaIndonesiaKoreaMalaysiaSingaporeTaiwanThailand

Disclosure: CDP Asian Response Metrics

Data: Association for Sustainable & Responsible Investment in Asia (ASrIA), CDP 2008 Report, Asia Ex-Japan


CDP6 Asian Metrics



Singapore Korea Taiwan

Yuanta Financial HoldingsAU OptronicsChina SteelAsustek Computer IncAcer IncChai Mei OptoelectronicsCompal ElectronicsDelta ElectronicsFoxconn TechnologyHigh Tech ComputerHon Hai Precision Industry CompanySiliconware Precision IndustriesTaiwan Semiconductor ManufacturingUnited Microelectrics

Highest response by Country

Disclosure: CDP Asian Response Metrics

CDP 2008 - Asia 220Response Rates:28% Answered Questionnaire



Drivers: Climate Change - The Perfect Storm

Guangzhou train station during the January 2008 Chinese New Year

Climate Change Risks• 70% of respondents cited

physical risks linked to climate change

• Flooding, wind damage, drought, and dust storms top the list of risks

• Impacts on schedules• Damage to infrastructures• Disruption to supply chains• Increasing insurance costs• Rising sea-levels


Responding to Climate Change

Challenge

Drivers

Opportunities

Opportunities• Operational & Efficiency gains• Management of supply chain risk• Improved credit rating • Climate & green initiatives, including

products, services and CDM investments

• Positive engagement with key stakeholder & industry groups


Opportunity: Climate Initiatives



Key Future Tech AbatementOpportunities• Supply Chain & Logistics• Sustainable Transport• Green Buildings• Intelligent grids• Transmission & Drives (T&D)

in industrial processes• Dematerialisation

The Tech sector’s direct carbon footprint amounts to 2% of the global man-made carbon footprint in 2007, and is expected to grow to 6% by 2020, largely by growth in emerging markets (McKinsey)

The potential opportunity of Tech to reduce CO2 emissions in industries of the future is estimated to be 5 times that of its own footprint.

Tech & Climate Change

Green data centre, Iceland, Data Islandia

Part of the Problem and

Part of the Solution


Drivers: Shifts from high carbon to low carbon economies

• Physical to virtual infrastructures (bits to bytes)• Motor-age to sustainable transport (cars to rails)• Air-travel to tele-conferences (airways to airwaves)• old tech to clean tech (coal to solar) • Energy intensive to Green Building (high-rise to high-wise)• Consumer lifestyle to green lifestyle (ego to eco)

Electronics industry is a solutions provider


Criteria of Tech Companies Commitment to ESG

• Board level responsibility• policies and management

systems• active supply chain

engagement• participation in sector &

cross-industry initiatives• engagement with policy and

regulatory bodies• environmentally friendly

products & services• dedicated R&D

ESG: What are SRI Investors Looking For?

Key industry challengeIndustry collaboration to:• raise standards• reduce supply chain overlap• improve confidence with disclosure

Focus:CDPEICC


Climate Change Resources

www.asria.org

Association for Sustainable & Responsible Investment In Asia

www.asria.org

News Research Resources

Membership

David St. Maur SheilDirector of Operations

[email protected] tel: 09 8305 2740

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