ESG Report 2023

94 The Group proactively monitors potential climate change risks in its operations and is committed to implementing energy-saving and emission-reduction measures and formulating contingency plans to mitigate and adapt to the potential impacts of climate change on its business. To strengthen the identification, assessment, and management of risks and opportunities related to climate change, and to establish measures for managing risks and opportunities, the Group has established the “Regulations for Managing Climate Change Risks” in the Year to enhance its risk resilience. To comprehensively identify, assess, and respond to the risks and opportunities of climate change in production, operation, and management activities, each unit should establish a list of potential climate risks and opportunities and corresponding measures. This includes identifying and confirming the risks and opportunities present in the department and recording the assessment results in the Checklist for Identifying and Assessing Climate Risks and Opportunities'. Identification evaluations should generally be conducted annually based on changes in environmental factors. To systematically implement response measures, the Group evaluates identified risks based on time, likelihood, and financial impact, comprehensively assessing the severity. Based on the severity of the risks, measures are determined to reduce or eliminate risks and seize opportunities. Below is a table showing the climate-related risks and opportunities identified for the current year. 10.3 Responding to Climate Change RISK CATEGORY POTENTIAL IMPACT Climate-related Risks: Physical Risks RESPONSE MEASURES RISK Immediate Risks Increased ventilation and cooling needs for production facilities and offices, leading to higher energy consumption and operating costs. During high temperatures, the power system may experience peaks in electricity demand, causing power outages and affecting normal production. Sudden high temperatures increase the risk of factory fires. Increased risk of heat-related illnesses such as heatstroke, affecting employee health. Develop staggered electricity use plans and work schedules during peak electricity demand periods. Establish contingency plans for energy use and develop energy emergency plans in advance. Arrange hazardous material shipments in the morning or afternoon during summer to avoid high-temperature periods, reducing the risk of fires. Provide heatstroke prevention and cooling supplies during summer and ensure outdoor work safety for employees. Increased heating needs for production facilities and offices, leading to higher energy consumption and operating costs. Icy roads causing transportation disruptions for production materials, leading to material shortages and production delays or halts. Dry weather conditions can lead to accidents such as fires, explosions, leaks, and poisoning, posing safety risks to employees. Low temperatures can cause equipment failures and property damage. Develop contingency plans for energy use and establish energy emergency plans in advance. Regularly analyze supplier supply risks, develop key raw material stocking strategies, and strengthen supplier relationships. Establish emergency plans to prevent accidents such as fires, explosions, leaks, and poisoning. Strengthen employee winter safety training and ensure safe work operations for employees. Implement insulation and anti-freezing measures in each workshop to prevent equipment damage and production interruptions. Immediate Risks Extreme Heat Extreme Cold Increased ventilation and cooling needs for production facilities and offices, leading to higher energy consumption and operating costs. Increased probability of heat-related illnesses such as heatstroke, leading to decreased production efficiency. Implement energy-saving renovations for air conditioning and ventilation systems in production facilities and offices to increase energy efficiency. Provide adequate heat prevention supplies for employees during summer and conduct annual employee health checkups. Long-term Risk Global Warming Environmental, Social and Governance Report 2023 The United Laboratories International Holdings Limited