Climate Change Response-Sustainable SHG | Silks Hotel Group ESG Website

Performance Results

Upgraded a 400-ton chiller, improving single-unit energy efficiency by 38.2% and achieving energy-saving goals.
80% of photocopy paper, napkins, and toilet paper used are internationally certified.
Over 70% implementation rate of large-capacity refillable bottles for toiletries.
Utilizing AI food waste machines to monitor and optimize product processes, reducing food waste generation.

Single-unit energy efficiency improvement

38.2 %

International certification percentage

80 %

Implementation rate of large-capacity toiletries

70 %

Future Goals

Short-term Goals

Medium to Long-term Goals

Prioritize purchasing electrical equipment with international energy-saving labels.
Promote renewable energy: Evaluate the feasibility of installing solar panels at various hotels within the Group.
Fully switch to large-capacity refillable bottles for toiletries by the end of 2024.
Use 5% to 10% renewable energy by 2026 and increase low-carbon and carbon footprint products by 3%.

Achieve 20% renewable energy usage by 2030.
Develop new products using local raw materials and reduce the proportion of imported raw material procurement by 5% before 2026.

Impact

Following the TCFD's recommendations for climate-related financial disclosures, Silks Hotel Group has identified five key risk management issues related to climate change: environmental regulations and policies, increased costs of low-carbon energy, raw material shortages and price increases, changes in market demand and consumer preferences, and product and service transformation. The impact on operations includes increased compliance costs and low-carbon energy costs, raw material shortages and price increases, and the growing consumer focus on environmental protection and sustainability, which influences their hotel choices. Hotels may need to pass on some costs to consumers, potentially affecting their competitiveness and market demand.

Policy Commitment

Silks Hotel Group aligns with the national overall greenhouse gas reduction strategy to achieve sustainable development goals of energy conservation and carbon reduction. We are concerned about global climate change and adapt to international environmental trends, effectively utilizing resources and fulfilling corporate social responsibility. In response to the international net-zero sustainability trend, we participate in the 1.5°C Climate Action Declaration signed by the Chinese National Association of Industry & Commerce, formulating climate action policies and environmentally friendly measures to take practical action towards low-carbon transformation and contribute to mitigating global warming.

Actions Taken

The Environmental Sustainability Committee is responsible for environmental risk assessment and establishing preventive measures for environmental hazards, as well as supervising and implementing daily operations.
We encourage employees to implement energy-saving practices in their daily work, implementing concrete measures for energy conservation, carbon reduction, and environmental protection.

Improving energy efficiency
Replacing air conditioning systems with magnetic levitation chillers, adding air conditioning monitoring equipment systems, installing LED lighting and intelligent temperature control systems in hotel rooms and public areas, and using R-717 refrigerant for all storage equipment.
Water resource management
Installing low-flow faucets and showerheads, collecting swimming pool overflow wastewater, and treating and recycling it for cooling tower water usage.
Waste management
Implementing waste sorting, recycling, and reuse programs to reduce landfill waste.

Evaluation Mechanisms

Reduction effectiveness evaluation
The energy management team regularly reviews statistical data of various equipment and facilities daily and evaluates reduction effectiveness monthly, adjusting reduction strategies in a timely manner.
Supply chain evaluation
Regularly review the sustainability performance of major suppliers.
ESG team meetings
Conduct discussions quarterly to ensure that all measures are effectively implemented and achieve the expected results, and regularly report the effectiveness to the Board of Directors.

Stakeholder Engageme

Based on the stakeholder engagement mechanism, Silks Hotel Group upholds the concept of sustainable development, actively addresses the challenges brought by climate change, encourages customers to participate in our environmental protection programs, and provides employees with training on sustainable development and climate action to enhance environmental awareness. We also disclose the results of our efforts to all stakeholders through sustainability reports.

Governance

The Environmental Sustainability Team of the Sustainability Development Committee at Silks Hotel Group is responsible for identifying potential climate change risks and opportunities. We have adopted the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to facilitate stakeholders and management in understanding the impacts and financial implications of climate change. The management evaluates and approves response strategies, relevant risk indicators, and targets for climate change risks and opportunities based on the discussions of the Environmental Sustainability Team, and regularly reports the implementation effectiveness to the Board of Directors annually.

Strategy

Silks Hotel Group has identified climate change-related risks and opportunities through "transition risks" associated with the low-carbon economy and "physical risks" related to the impact of climate change. We have listed five key risk management issues, including environmental regulations and policies, increased costs of low-carbon energy, raw material shortages and price increases, changes in market demand and consumer preferences, and product and service transformation.

Transition Risks

Physical Risks

Opportunities

Identified Risks and Opportunities	Risk Description	Potential Impact on Operations and Finances	Impact Level / Timeframe	Response Strategies and Goals
Policies and regulations	Subject to the Energy Management Act, 1% energy saving is required annually. The scope of carbon fee and carbon tax collection may expand.	If the annual energy saving rate does not reach 1%, the competent authority may not approve the submitted implementation plan. Changes in government policies and regulations on carbon reduction and promoting sustainable development may affect operating methods and cost structures, and increase sustainability-related expenses.	High / Long-term	Actively promote various environmental protection, energy conservation, and carbon reduction measures, adopt low-energy-consuming equipment, and reduce greenhouse gas emissions; observe changes in environmental policies and formulate response measures. Adopt environmentally friendly and low-energy-consuming equipment, review and optimize product processes to achieve energy-saving goals.
Technical risks Increased costs of low-carbon technology transformation	Government and consumer concerns about carbon footprint may drive emission reduction measures.	Product and service changes to low-carbon options lead to increased costs.	Medium / Medium-term	Improve energy management performance and energy use efficiency, formulate short, medium, and long-term high-efficiency equipment purchase plans; choose low-carbon transportation tools and optimize the supply chain to enhance product quality.
Market risks Changes in customer behavior Rising material costs	Increased consumer awareness of environmental sustainability leads to changes in demand for products and services. Extreme weather causes reduced raw material production.	Due to raw material shortages, product supply falls short, leading to decreased revenue.	Medium / Long-term	Strengthen product research and development, enhance cooperation plans with the supply chain, and adopt low-carbon footprint products. Reduce the use of imported raw materials and establish long-term cooperative relationships with local suppliers.
Reputational risks Corporate image	Damage to reputation reduces consumer trust.	Increased labor recruitment costs and decreased revenue.	Medium / Long-term	Comply with regulatory policies, implement product and service standards and supervision. Implement sustainable management and ESG goals.

Identified Risks and Opportunities	Risk Description	Potential Impact on Operations and Finances	Impact Level / Timeframe	Response Strategies and Goals
Immediate (Extreme) Risks Typhoons, Floods	Extreme weather events can lead to power and water supply disruptions or restrictions, causing business interruptions. Flooding can also result in property damage to equipment. Climate change may affect the supply chain, leading to raw material shortages.	Increased operating costs and reduced operational performance, frequent claims, and the need to pay higher premiums for enhanced insurance coverage.	Medium/Long-term Response	Implement relevant response measures according to disaster emergency handling procedures to minimize property damage. Install generators and uninterruptible power supply (UPS) systems to prevent business interruptions. Establish water resource transportation vendor data management, obtain adequate insurance, transfer risks, and compensate for losses.
Long-term Risks Heavy rain/drought/infectious diseases	Heavy rain may cause equipment damage and reduce revenue. Drought may lead to power and water supply interruptions, affecting operations.	Increased capital expenditures, and decreased revenue. Increased costs for purchasing raw materials. The spread of global pandemics impacts operational performance.	High/Long-term Response	Activate backup mechanisms in case of disasters to protect customer rights and interests and minimize company financial losses. Conduct regular disaster education and training. Implement supply chain management to select suppliers with stable supply and excellent quality.
Rising Average Temperatures	More energy is required to maintain operating temperatures. Impacts customer consumption habits and willingness to go out and spend.	Increased carbon emissions and energy costs, reduced operating revenue./li> New equipment purchases lead to increased operating costs.	Medium/Long-term Response	Implement air conditioning equipment efficiency analysis, replace old equipment to improve equipment utilization efficiency; formulate corresponding strategies based on changes in consumption patterns, such as transitioning to off-site catering and delivery. Purchase energy-efficient equipment. Develop takeout and retail product channels.

Identified Risks and Opportunities	Risk Description	Potential Impact on Operations and Finances	Impact Level / Timeframe	Response Strategies and Goals
Resource Use Efficiency	Use more efficient LED lighting, replace old system pumps, and adopt dual-effect energy-saving equipment such as heat pump systems.	Introduce high-efficiency production equipment, reduce energy expenditure. Increase fixed asset value.	Medium/Mid-term Response	Recycle and reuse waste, require suppliers to use recyclable transportation tools and containers, reduce garbage incineration, lower carbon emissions, and implement water-saving strategies. Set a goal of reducing greenhouse gas emissions by 3% within 3 years.
Energy Sources	Utilize new technologies and energy-efficient equipment to reduce energy costs. Purchase renewable energy.	Innovate product research and development to lower operating costs. Purchase renewable energy, which leads to increased energy costs.	Medium/Long-term Response	Use low-carbon product raw materials for production Set a goal of purchasing 5% to 10% renewable energy by 2026 and increasing low-carbon and carbon footprint products by 3%
Products and Services Consumer Preference Shifts	Innovate products and develop low-carbon, carbon footprint products to enhance product competitiveness; adopt digital marketing to expand the customer base	Increasing consumer preference for sustainable and environmentally friendly products may necessitate adjusting product portfolios and supply chains to meet these demands. Increased purchase costs	Medium/Long-term Response	Enhance product and service competitiveness, carefully select packaging materials, promote plastic reduction activities, and expand the customer base for takeout and delivery markets Implement sustainable environmental practices and enhance brand awareness Increase revenue and improve operational performance
Market	In response to rising raw material costs, develop alternative raw materials and new products Promote accelerated low-carbon economic transformation and develop a diversified supply chain	Control raw material costs and create operational performance	Medium/Long-term Response	Ensure supply chain stability to avoid disruptions due to shortages Diversify product operations and develop new markets to improve operational performance
Resilience	In response to the risks arising from climate change, cultivate adaptability, decision-making capabilities, and identify opportunities in the face of extreme weather	-	Medium/Long-term Response	Formulate emergency response measures based on materiality risks to reduce losses and improve operational performance

Climate Change Risk and Opportunity Matrix

1.5°C Warming Scenario Assumptions (Occurring within 3-5 years)

Temperature Increase >2.8°C Scenario Assumptions (10 years later)

Category	Impact Description and Financial Impact	Opportunities	Response Strategies
Policies and regulations	In response to new policies and regulations, carbon credits and equipment updates will lead to increased compliance costs and low-carbon energy costs. Some costs will be passed on to consumers, affecting market competitiveness. Energy purchase costs will increase by at least 10% or more, approximately NT$10 million.	Purchase high-efficiency equipment to improve energy use efficiency. Implement water, electricity, wastewater, and waste management policies to reduce resource waste and create operational performance.	Set water and electricity saving targets of 1%, collect swimming pool overflow wastewater for treatment and reuse as cooling tower water. Use renewable energy to achieve carbon reduction goals. Establish water resource transportation vendor data management, obtain adequate insurance, transfer risks, and compensate for losses. Implement supply chain management to select suppliers with stable supply.
Heavy rain, drought	May affect the supply chain, leading to raw material shortages and increased purchase costs. Power and water supply interruptions or restrictions due to extreme weather may cause business interruptions and increase insurance premiums. Raw material purchase costs are estimated to increase by more than 5%, approximately NT$30-40 million.	Enhance product competitiveness, adopt digital marketing to expand the customer base, and establish long-term customers to stabilize revenue.

Category	Impact Description and Financial Impact	Opportunities	Response Strategies
Rising raw material costs	Temperature rise exceeding expectations, fluctuations in crop supply and demand, and transportation costs will lead to increased raw material costs, raising operating expenses.	Carefully select suppliers to maintain stable supply quality and develop new products using local raw materials.	Adopt readily available raw materials to develop new products, increase local procurement, cultivate a stable supply chain, and cooperate with small farmers on contract farming.
Changes in consumer habits	Increased consumer awareness of sustainability leads to changes in demand for products and services.	Diversify product research and development, undergo technological transformation, and purchase low-carbon products.	Implement diversified marketing strategies, improve product quality, and attract consumers. Expand off-site catering, takeout, and delivery business models.

We have formulated adaptation strategies based on the identified climate change risks and opportunities, such as regulatory compliance, resource recycling and reuse, improving operational efficiency, energy conservation and carbon reduction, low-carbon product diversification, and greenhouse gas emission reduction measures, in order to mitigate the operational risk impact caused by global extreme climate and gradually incorporate the assessment of financial impact.
Through these strategies, Silks Hotel Group not only reduces the burden on the environment but also enhances its adaptability to climate change challenges, demonstrating its commitment and actions as a responsible company.

Greenhouse Gas Inventory

Due to the nature of hotel operations, the main types of energy used are purchased electricity and natural gas. The carbon emissions from purchased electricity account for the highest proportion at 60%, with air conditioning and refrigeration equipment being the primary sources of electricity consumption, followed by kitchen cooking gas at 30% and waste at 3%.

Silks Hotel Group established a greenhouse gas inventory promotion organization and formulated standard operating procedures for greenhouse gas emission control in 2023 to facilitate the implementation of greenhouse gas inventory and carbon reduction measures by each hotel.

Greenhouse Gas Inventory Promotion Organization and Structure

The responsibilities of the greenhouse gas inventory promotion organization are as follows:

Manager

Approves the greenhouse gas inventory report and the identification results of indirect significant greenhouse gas emissions, and supervises the operation of the inventory team.

Executive Secretary

Supervises and provides human resource support for conducting the greenhouse gas inventory, convenes and forms an internal verification team, and reviews indirect significant greenhouse gas emissions.

Inventory Team Leader

Serves as the primary contact window for each hotel or department, handles the identification of indirect significant greenhouse gas emissions, collects greenhouse gas emission factors, prepares the greenhouse gas emission inventory and inventory report, and develops and revises relevant procedural documents and regulations for greenhouse gas inventory.

Financial Committee Member

Responsible for all accounts, provides data and receipts to the inventory team leader, and assists in verification and reimbursement.

Greenhouse Gas Emissions in Recent Three Years

Regent Taipei

Just Sleep

Silks Place Tainan

Silks Place Taroko

Category	2021	2022	2023
Scope 1: Direct Emissions (Metric Tons CO2e)	2.248.277	2,665.092	5,845.230
Scope 2: Indirect Emissions (Metric Tons CO2e)	90,026.306	9,852.591	9,859.210
Scope 3 (Metric Tons CO2e)	Not Applicable	Not Applicable	281.810 *
Total (Metric Tons CO2e)	11,274.583	12,517.583	15,986.250
Revenue (Million NTD)	2,341	3,027	3,846
Emission Intensity (Metric Tons CO2e / Million NTD)	4.8158	4.1353	4.160

Regent Taipei discloses Scope 3 greenhouse gas emissions starting from 2023

Category	2021	2022	2023
Scope 1: Direct Emissions (Metric Tons CO2e)	NA	NA	NA
Scope 2: Indirect Emissions (Metric Tons CO2e)	1,787.368	2,017.837	2,338.759
Total (Metric Tons CO2e)	1,787.368	2,017,837	2,338.759
Revenue (Million NTD)	292	383	451
Emission Intensity (Metric Tons CO2e / Million NTD)	6.121	5.269	5.186

Scope 1 statistics have not been conducted yet and are expected to be disclosed starting from 2024.
Just Sleep Ximending is a sublet floor with a single electricity meter shared among tenants. Therefore, the figures for this branch are not included in this table.

Category	2021	2022	2023
Scope 1: Direct Emissions (Metric Tons CO2e)	697	816	874
Scope 2: Indirect Emissions (Metric Tons CO2e)	3,542.92	3,792.86	4,660.071
Total (Metric Tons CO2e)	4,239.92	4,608.86	5,534.071
Revenue (Million NTD)	649	864	904
Emission Intensity (Metric Tons CO2e / Million NTD)	6.533	5.334	6.122

Category	2021	2022	2023
Scope 1: Direct Emissions (Metric Tons CO2e)	947.85	1,017.75	1,070.22
Scope 2: Indirect Emissions (Metric Tons CO2e)	2,750.84	2,938.03	2,999.079
Total (Metric Tons CO2e)	3,698.69	3,955.78	4,069.30
Revenue (Million NTD)	510	668	684
Emission Intensity (Metric Tons CO2e / Million NTD)	7.2523	5.9218	5.949