Risk Management：
The Company upholds the philosophy of sustainable management by identifying and managing internal and external risks, and systematically assessing potential risks and opportunities across various dimensions, including corporate governance, energy and resource management, social inclusion, information security, and research and innovation.
We continuously monitor changes in internal and external environments and adopt flexible response measures and contingency strategies to mitigate risks such as financial loss, business interruption, and regulatory non-compliance. At the same time, through our opportunity management mechanism, we regularly review and optimize resource utilization, promote market expansion and technological innovation, enhance brand value, and ensure the Company’s stable operations and sustainable development while safeguarding the interests of all stakeholders.
Risk Management Organizational Structure
Risk Management Process
JET Optoelectronics adopts a systematic and traceable approach to risk and opportunity management. Each year, all departments identify and assess potential risks and opportunities that may arise in the following year and utilize SWOT analysis to help establish the company’s overall strategic direction.
To effectively quantify and manage risks, the company has established a “Risk and Opportunity Assessment Form,” through which each department evaluates risks based on the formula “Risk Coefficient = Severity × Frequency.” The results are categorized into three levels — low, medium, and high. For high-risk items, specific countermeasures are formulated, along with a follow-up review and adjustment mechanism to ensure the continuous effectiveness of control measures.
In addition, the company conducts an annual review of the previous year’s risk management objectives to evaluate the effectiveness of risk control and the achievement of each item. For items not yet achieved, departments are required to propose improvement plans and carry out follow-up tracking. The overall risk assessment results and improvement progress are regularly reviewed by the Sustainability Development Committee and reported in the annual meeting to strengthen the company’s overall risk management effectiveness.
In 2024, a total of 13 risk items and 4 opportunity items were identified. The company also disclosed the estimated risk items and corresponding response measures for the year to ensure transparency and traceability in risk management.
TCFD Climate-Related Financial Disclosures
JET Optoelectronics supports the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and is committed to enhancing transparency regarding climate issues in corporate governance and business decision-making. The Company has gradually established a comprehensive framework for managing climate-related risks and opportunities based on the four TCFD pillars — Governance, Strategy, Risk Management, and Metrics & Targets — to strengthen corporate resilience and long-term sustainability competitiveness.
1. Governance
The Sustainability Development Committee serves as the Company’s highest climate governance body. In accordance with the Organizational Regulations of the Sustainability Development Committee, the Committee convenes at least twice a year and regularly reports climate-related risks and opportunities to the Board of Directors. The Board oversees key decision-making on climate issues to ensure that climate management is fully integrated into the Company’s long-term strategies and operations.
2. Strategy
The Company assesses the potential impacts of climate change on its operations, supply chain, and markets. Scenario analyses are conducted for the short term (1 year), medium term (2–5 years), and long term (over 5 years) to evaluate possible outcomes and formulate corresponding mitigation and adaptation strategies, thereby reducing the business and financial impacts of climate change.
3. Risk Management
Climate-related risks are incorporated into the Company’s overall risk management framework. Each department regularly identifies and evaluates physical risks (e.g., extreme weather events) and transition risks (e.g., carbon tax policies and regulatory changes) and establishes corresponding response measures and tracking mechanisms to ensure timely and effective management.
4. Metrics & Targets
The Company continuously measures and discloses its greenhouse gas emissions (Scope 1 and Scope 2) and plans to include Scope 3 supply chain emissions in the future. Based on inventory results, reduction targets are set, and energy-efficient equipment and renewable energy are gradually introduced to minimize the Company’s operational carbon footprint.
Climate Change Risk and Opportunity Identification and Financial Impact
| Type of Risk / Opportunity | Description of Risk / Opportunity | Potential Impact Timeframe | Financial Impact | ||
|---|---|---|---|---|---|
| Short-term | Medium-term | Long-term | |||
| Physical Risk | [Immediate Risk] Climate change may increase the frequency of extreme weather events (e.g., typhoons, floods, or heavy rainfall), potentially causing production interruptions, supply chain delays, or equipment damage. | ◉ | Increased operating costs due to equipment repair or replacement | ||
| Physical Risk | [Long-term Risk] Rising sea levels or severe weather conditions may lead to asset impairment or unavailability, as well as long-term increases in resource prices, thereby raising operational costs. | ◉ | Asset impairment or unavailability and rising long-term resource prices increase operational costs | ||
| Transition Risk | [Policy and Regulatory Risk] Implementation of carbon fees or higher pricing for greenhouse gas emissions. | ◉ | Increased operating costs from carbon fee payments | ||
| Transition Risk | [Policy and Regulatory Risk] Renewable energy regulations. | ◉ | Higher operating costs from purchasing renewable energy certificates | ||
| Transition Risk | [Policy and Regulatory Risk] Strengthened reporting obligations for emissions. | ◉ | Increased costs due to fines or legal penalties | ||
| Transition Risk | [Technological Risk] Transition to low-emission or low-carbon technologies and services. | ◉ | Higher costs for low-carbon technology transition; potential revenue loss from customer shifts | ||
| Transition Risk | [Market Risk] Rising energy costs. | ◉ | Higher purchasing costs for renewable energy | ||
| Opportunity | [Products and Services] Promoting low-carbon products and services to reduce operational costs. | ◉ | Promoting energy-saving and carbon-reduction initiatives to lower operational costs | ||
| Opportunity | [Resource Efficiency] Applying new technologies to improve yield, reduce material use and waste generation, enhance energy efficiency, and strengthen climate risk management to meet banking requirements and obtain better financing terms. | ◉ | Reduced operational costs through improved efficiency | ||
| Opportunity | [Products and Services] Implementing carbon footprint management and reduction planning while introducing low-carbon green products to enhance reputation and competitiveness, encouraging clients and manufacturers to prioritize low-carbon solutions. | ◉ | Increased revenue through growing demand for low-carbon products and services | ||
| Opportunity | [Resilience] Participating in renewable energy projects and adopting energy-saving measures. | ◉ | Enhanced corporate image and company valuation | ||
| Opportunity | [Resource Efficiency] Reducing paper usage through digital transformation and paperless workflows. | ◉ | Reduced operating costs | ||