EnvironmentalCorporate Governance Dimension 57 Table of Contents Overview 1 Letter from the Chairman 2 Stakeholder Engagement 3 Corporate Governance 4 Economic Dimension 5 Environmental Dimension 5.1 TSMC’s Mid-to-long-term Environmental Protection Goals and Achievement Status 5.2 Global Climate Change 5.3 Water Resource Management 5.4 Pollution Prevention 5.5 Environmental Dimension Special Topics 6 Social Dimension 7 Appendix Environmental Dimension 58 Table of Contents Summary water management and pollution prevention (Please refer to the concerned daily water management is first to save water in the production process, topics materiality analysis of the stakeholders in Chapter 2 “Stakeholder followed by water reclamation and recycling measures. In addition, an Overview TSMC’s environmental policy, as set down by Chairman Dr. Morris Engagement” in this report) . Please refer to the related contents in effective real-time online water resource management platform helps Chang, is to do our utmost to achieve environmental sustainability 1 Letter from the Chairman this chapter for a summary of TSMC’s management approaches for these TSMC significantly reduce water consumption. and to be a world-class company in environmental protection. TSMC’s three topics follows: 2 Stakeholder Engagement strategies to achieve our environmental goals are to comply with Pollution Prevention regulations, strengthen recycling and pollution prevention, manage Global Climate Change 3 Corporate Governance TSMC believes that pollution prevention is one of a corporation’s most environmental risks, instill an environmental culture, build a green TSMC treats climate change as one of our material enterprise risks. important responsibilities. TSMC’s pollution prevention is based on the 4 Economic Dimension supply chain, and fulfill our corporate social responsibilities. We continue to promote company-wide greenhouse gas inventory and ISO 14001 environmental management system, and uses the “Plan-Do- 5 Environmental Dimension TSMC acknowledges responsibility for environmental protection. We not verification, and perfluorinated compounds greenhouse gas emissions Check-Act” management model to promote continuous improvement. only comply with the environmental regulations of the locations where we reduction. At the same time, we also collaborate with industry, government We believe that conserving raw materials, energy, and resources as 5.1 TSMC’s Mid-to-long-term operate, but also track new developments in global environmental issues, and academia on climate change adaptation, which includes flooding and well as reducing waste and pollutants both save production costs and Environmental Protection and take the lead in adopting new environmentally friendly measures. drought risk assessment and prevention. TSMC joined EICC (Electronic protect the environment. Currently, all TSMC existing fabs are certified Goals and Achievement In addition to protecting the environment of our manufacturing sites Industry Citizenship Coalition) in the end of 2014. We hope to collaborate by ISO 14001. It is mandatory for all new manufacturing facilities to Status in Taiwan and around the world, we lead our suppliers to establish a with other EICC members to promote climate change management of receive these certifications within 18 months after mass production. 5.2 Global Climate Change green supply chain. At the same time, TSMC also shares environmental the supply chain to reduce environmental impacts of the supply chain protection knowledge and offers recommendations to government and keeping a stable supply of raw materials. 5.3 Water Resource Management to face a variety of new challenges together. A summary of TSMC’s 5.1 TSMC’s Mid-to-long-term Environmental 5.4 Pollution Prevention environmental protection approaches follows: Water Resource Management Protection Goals and Achievement Status TSMC will continue expanding production capacity to fulfill global 5.5 Environmental Dimension TSMC has a long-term record of assisting governments in establishing TSMC’s goal is to be a leading global company in water resource management. semiconductor demand. Although we have achieved the highest level of Special Topics regulations, promoting projects and providing recommendations. We Our water resource management policy is to promote water savings to energy intensity performance in the global semiconductor industry and understand the concerns about environmental topics stakeholders have, reduce water usage per unit of production, and to promote collaboration 6 Social Dimension met an extremely challenging PFC emissions reduction goal over the including stakeholders in academia, media, customers, sustainable evalu- between industries, government and academia to ensure that water past 10 years, we will continue improving our productive efficiency to 7 Appendix ation organization and environmental protection non-governmental orga- shortages do not occur. Our strategy for reaching this goal is both to reduce energy and resource consumption as well as our environmental nizations through participation of environmental sustainable activities and save water in daily operations and to adapt to water shortages, and impact. According to this, TSMC’s mid-to-long-term environmental the mailbox in our company’s website. We have concluded that the most implement these measures both internally and in our supply chain. protection goals are set as follows. material environmental topics in 2014 are global climate change, TSMC’s Environmental Dimension 59 Table of Contents • Greenhouse gas PFC reduction: Reduce PFC emission intensity to • Water Conservation: TSMC’s water use per 8-inch wafer equivalent Continuous • Trend Monitoring 30% below the year 2010 level by 2020 through adoption of best practices per mask layer in 2014 decreased by 10.1% compared to 2013 from Overview Improvement & Priority recognized by the World Semiconductor Council. Reduce the total GHG 51.5 liters to 46.3 liters. Identification • Strategy/Tactics 1 Letter from the Chairman emission intensity to 18% below the year 2010 level by 2020. Action Plan • Risk Assessment/ • Waste Reduction: Achieved a waste-recycling rate of 93%, in 2014, Amendment Mitigation & • Energy saving: Reduce power usage intensity to 2% below the year 2 Stakeholder Engagement surpassing 90% for 6 consecutive years. In addition, our landfill rate Opportunity 2010 level by 2015; 12% below the year 2010 level by 2020. Generation is also less than 1% for 6 consecutive years. 3 Corporate Governance • Water saving: Reduce water usage intensity to 2% below the 2010 • Strategy/Tactics Preparation level by 2015; 30% below the year 2010 level by 2020. 4 Economic Dimension 5.2 Global Climate Change Check Do • Waste reduction: Achieve 95% waste recycling rate by 2015, and 5 Environmental Dimension maintain above 95% by 2020. TSMC Is Highly Concerned about Climate Change • Performance Check • Benchmarking • Implementation 5.1 TSMC’s Mid-to-long-term The Achievement Status of Our 2014 Quantitative Global climate change is a major environmental concern for the United Nations and governments around the world, as well as for TSMC. We Environmental Protection Environmental Goals Is as Follows: continuously monitor global climate change and international response Climate Change Strategy Goals and Achievement TSMC continued to improve our energy saving, water conservation and trends as one of our enterprise risk management items to be evaluated TSMC’s strategies for responding to climate change are to: Status waste reduction technology, and implemented this technology in our and controlled, with regular reviews by senior executives, and reports • Consider both climate change mitigation and adaptation 5.2 Global Climate Change newly-constructed fabs. are made to the Audit Committee of the TSMC Board of Directors when • Consider both green manufacturing and green products 5.3 Water Resource Management special issues are encountered. • Greenhouse Gas-perfluorinated Compound (PFC) Emissions • Consider both TSMC and its supply chain 5.4 Pollution Prevention Reduction: After we achieved our PFC total emissions reduction goal • Integrate industry, government and academia to solve climate change in 2010, we continue to move forward on emissions reduction. PFC 5.2.1 TSMC’s Climate Change Response Strategy 5.5 Environmental Dimension issues emissions per 8-inch wafer equivalent in 2014 were 4% less than Climate Change Management Process • Collaborate with industries & supply chain to tackle climate change Special Topics 2013 due to our continuing reduction efforts. Because of the importance of climate change, TSMC uses the PDCA through experience sharing 6 Social Dimension • Energy Conservation: TSMC reduced power consumption per 8-inch cycle to manage its climate change strategy, which is organized in TSMC not only continues to inventory and reduce its own greenhouse wafer equivalent per mask layer by 3.5% from 10.2 kWh in 2013 to 7 Appendix several steps: Continuous Monitoring, Risk Assessment/Mitigation and gas (GHG) emissions, but also takes action on climate change adaption 9.8 kWh in 2014; 7.7% improvement compared to 2010, which has Opportunity Generation, Strategy/Tactics Preparation, Implementation, in cooperation with industry, government and academia, including risk achieved mid-term energy saving goal. Performance Check, Benchmarking, and Strategy/Tactics Amendment. assessment and measures such as flood and drought control. These TSMC reduced natural gas consumption per