Risk Management | ACER ESG
Risk Management
Acer's corporate philosophy is based on the ultimate goal of “sustainable development.” We believe that rigorous and pragmatic risk management not only reflects Acer's persistent commitment to our customers, employees, supply chain partners and investors, but also to our long-term commitment to ensuring sound business performance and compliance of corporate social responsibility. It is also a concrete act of ensuring sound business performance and fulfilling corporate social responsibility. The relationship between sustainable corporate development and risk management is intricate. Only by continuously identifying and analyzing the short-term dynamic changes and long-term trends of risks and implementing relevant risk management strategies, and by establishing a risk-conscious corporate culture through frank internal communication and training programs, can we ensure our hard-earned business results and achieve our goal of "sustainability."
Risk Management Organization
To proactively identify and manage internal and external operational risks, and effectively control these risks through appropriate assessment and handling procedures, Acer has established the Risk Management and Sustainability Development Committee (RMSDC) to assist the Board of Directors in risk governance.
The Risk Management and Sustainability Development Committee is a functional committee established by the Board of Directors in accordance with Article 13 of the Company's Articles of Incorporation and reports directly to the Board of Directors. Pursuant to the organization rules of Acer's Risk Management and Sustainable Development Committee, its members, as determined by the Board of Directors, consist of three or more directors, with a majority being independent directors. There is one convener and chair of the committee, who is elected by either the Board of Directors or the committee. Under the committee, there is the Risk Management Executive Committee (RMEC), Information Security Governance Committee (ISGC), Corporate Sustainability Committee (CSC), Risk Management Working Group (RMWG) and specific task cross-departmental teams at the operational level include the Sustainability Project Task Force, Information Security Risk Audit Team, and Information Security Incident Response Team, which are responsible for organizing committee meetings and handling the planning, preparation, and execution of matters related to the organization rules.
The Risk Management Committee is responsible for overseeing the overall risk management of Acer Group. It executes the risk management decisions of the Board of Directors, coordinates and promotes cross-organizational risk control programs, supervises and manages the improvement mechanisms for overall risk control within Acer Group, and reviews and integrates various risk control reports. The committee submits reports to the Board of Directors annually, at least once a year, and provides timely updates on the implementation of risk management and necessary recommendations. The Board of Directors serves as the highest decision-making body for risk management, approving major decisions related to risk management based on business strategies and environmental changes.
Risk Management Policies
To achieve our vision of sustainable development and establish a corporate culture that prioritizes risk awareness, the Company not only adheres to organizational management systems and operational procedures at all levels to implement relevant risk management measures, but also strives for continuous improvement in our risk management practices through the active involvement of senior executives. We rely on international standards such as the ISO31000:2018 Risk Management System and the Enterprise Risk Management - Integrated Framework (COSO ERM 2017), as recommended by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), to guide our efforts. In line with this commitment, the Company has developed risk management policies, which was approved by the Board of Directors and implemented on March 16, 2022.
Risk Management Goals
The objective of the Company's risk management is to identify and control the risks faced by the Company within the risk appetite (that is, risk tolerance) level through a comprehensive risk management system that is integrated into our operational activities and daily management practices. Our principles are to effectively utilize opportunities and minimize risks while maintaining a balance in order to achieve the following goals:
Achieving operational goals
Improving management effectiveness
Providing reliable information
Allocating resources effectively
Scope of Risk Management
The Company's scope of risk management encompasses major risk aspects of strategic risks, operational risks, financial risks, disaster risks, information risks, climate change-related risks, and other emerging risks. We strictly adhere to the provisions of relevant laws and regulations and follow a cyclical process of identifying, analyzing, evaluating, responding to, monitoring, and reviewing risks in order to effectively manage them. We are committed to continuously enhancing our risk management practices through ongoing learning and experience.
Risk Management Procedures
01 | Risk identification
Risk identification utilizes risk management tools and is informed by past experiences,information, and assessments of internal and external risk factors, as well as stakeholder concerns. By conducting a thorough analysis and discussion from both a bottom-up and top-down approaches, potential risk events that could impede the Company's objectives or result in losses or negative impacts are identified.
02 | Risk analysis
To conduct risk analysis, it is important to establish appropriate quantitative or qualitative measurement standards based on the Company's risk characteristics. The Risk Management Working Group should have a thorough understanding of the nature and characteristics of identified risk events. This analysis should consider factors such as the effectiveness of existing control measures, past experiences, and cases within the industry. By analyzing the probability and impact of risk events, the risk value can be calculated.
03 | Risk assessment
The purpose of risk assessment is to provide businesses with a foundation for making decisions. By comparing the results of risk analysis with risk appetite, priority can be designated to the management of risk events and serve as a guide for selecting subsequent response measures.
The Risk Management Working Group should develop and execute risk response plans based on the results of the risk analysis, in alignment with the approved risk appetite set by the Risk Management Committee.The results of the pertinent risk analysis and assessment should be accurately documented and submitted to the Risk Management Committee for approval.
04 | Risk responses
The purpose of risk assessment is to provide businesses with a foundation for making decisions. By comparing the results of risk analysis with risk appetite, priority can be designated to the management of risk events and serve as a guide for selecting subsequent response measures.
The Risk Management Working Group should develop and execute risk response plans based on the results of the risk analysis, in alignment with the approved risk appetite set by the Risk Management Committee.
The results of the pertinent risk analysis and assessment should be accurately documented and submitted to the Risk Management Committee for approval.
05 | Risk monitoring and review
The risk monitoring and review mechanism should thoroughly examine whether the risk management process and relevant risk strategies are being continuously and effectively implemented. The Company should also ensure that risk management is connected to the key processes within the organization to effectively supervise and enhance its implementation.
The "Three Lines of Defense" Framework for the Risk Management Organization
Risk Identification and Management Effectiveness in 2024
The Company identifies, evaluates and discusses potential and emerging corporate risks in three major areas: environmental, social and corporate governance. The risk management organization utilizes risk map, risk impact scenario analysis/risk assessment table, and other risk management tools to assess the potential threats posed by various risks to the Company's future operations. This assessment is based on the likelihood of risk occurrence and the severity of potential losses. Risk levels are designated to determine the priority and resource allocation for subsequent risk control measures. Sensitivity analysis and stress test are also adopted to quantitatively analyze the risks and examine the degree of correlation among the risk factors.
The risk items in the 2024 risk matrix classified as medium-high or above include the policies of the new U.S. president, tax compliance, increased supply chain costs (localization of manufacturing), mergers and acquisitions (before, during, and after), U.S.-China tensions/national and corporate alignment, geoeconomics (sanctions, technology management, investment review), AI opportunities and risks, and information security risks (cyber attacks, fraud, data breaches), totaling eight items.
The Risk Management Working Group consolidates the results of the aforementioned risk analysis and assessment and regularly reports the relevant execution progress and outcomes to the Risk Management Executive Committee after formulating the subsequent risk control plans. In 2024, the Risk Management Working Group collaborated with a total of 16 departments/units. To realize practical and close integration of the implementation of Enterprise Risk Management (ERM) mechanisms with the daily operational procedures of each department/unit as well as the Company's business objectives, each department/unit first consolidates 47 key performance indicators (KPIs) and then identifies 98 risk scenarios that may impact the aforementioned KPIs. For the identified and analyzed/assessed risk items, relevant department personnel are assigned to formulate subsequent risk management strategies and related risk mitigation plans, including common risk management responses such as loss prevention, avoidance, separation and duplication, transfer, and retention. Adequate resource allocation, prioritization of implementation, and subsequent progress tracking methods are assessed in advance. Meanwhile, incident response plans and crisis management mechanisms are developed to minimize the potential negative impact of various risks on business objectives and enhance the overall risk resilience of the Company.
The aforementioned risk management strategies and related risk control plans are periodically reviewed for effectiveness and improvement opportunities during the Working Group meetings, as they following the PDCA cycle: Plan, Do, Check, Action. Finally, material risk information and the operational status of enterprise risk management are regularly (i.e., quarterly) reported to the Risk Management Executive Committee and the Risk Management Committee.
2024 Risk Map
Risks are ranked based on their severity/likelihood. The more severe a risk is, the further to the right it is placed on the risk scale. Likewise, the higher the likelihood of a risk, the higher it is placed on the risk scale.
- Note：
- The process of identifying/analyzing risks is initiated in the fourth quarter of each year and completed in the first quarter of the following year.
- The risk map presents the results of risk ranking and risk level scoring based on the 2024 risk radar chart.
- Materiality analysis is a crucial component of the Enterprise Risk Management (ERM) integration process. Therefore, ESG-related risks,compliance requirements, human rights issues and other factors have been integrated into the procedures for identifying, analyzing,assessing, and implementing response measures for risks.
- Risk Item Codes: (S) - Strategic Risk, (O) - Operational Risk, (F) - Financial Risk, (H) - Disaster Risk. The numbers represent the serial number in the risk register database, and are not related to the risk level.
Connections between Risk Management Procedures and Internal Control and Internal Audit Systems
The Head of Internal Audit reports not only to the Company's highest governance bodies for risk management-namely, the Board of Directors and the Risk Management and Sustainable Development Committee-but also attends the quarterly Risk Management Executive Committee meetings as an observer. All departments and units are responsible for regularly identifying and documenting major risks along with corresponding control measures. The effectiveness of these controls is reviewed annually through the internal control self-assessment process.
In 2024, the Company plans to hire a third-party international risk management consultant to validate and ensure the effectiveness of our risk management system/procedures. This verification will be conducted in accordance with the ISO31000:2018 Risk Management System and the Enterprise Risk Management - Integrated Framework (COSO ERM 2017) developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Upon completion, the aforementioned third-party consultant will provide an ERM compliance certification.
Risk Education Training and Risk Culture
Starting with risk awareness and ending with corporate sustainability resilience, we are gradually establishing a risk-aware corporate culture
We employ a dual top-down and bottom-up strategy, from strategic planning to the execution of daily operations, to enhance our overall risk management system and ensure effective two-way communication and feedback. We have enhanced the governance level's awareness of risks and gradually promoted the recognition and cooperation of all employees with risk management measures, building a consensus to create a risk-aware corporate culture.
Risk Education and Training for Governance Levels
Each year, Acer assists its directors in developing training plans and arranging courses based on industry characteristics, the directors' educational and professional backgrounds, and trends in domestic and international compliance requirements. Directors also independently participate in external training courses as needed. In 2024, based on international trends and the company's risk assessment results, we will arrange for our directors to participate in courses on risk management topics such as "U.S.-ChinaTaiwan Relations and Future International Situations: Political Risks of Investing in China," "Climate Change, Industrial Policy, and Risk Management," "Information Security and Risk Management," and "Global Trends and Risk Management in Digital Innovation Technology and Artificial Intelligence Development."
Risk Education and Training for All Employees
In addition to specific training on ERM implementation methods for subsidiaries or targeted advanced courses for risk management working group members (such as explanations of the ERM framework and the setting of key risk indicators, KRIs), we also promote risk management awareness among executives and general employees through various meetings and educational training sessions (for example, explanations of product liability and product liability insurance). In 2024, the group conducted a total of 38 courses related to risk topics. The statistics for the three categories of risk management courses and the number of participants are summarized as follows.
Risk Education and Training (Number of Trainees)
Operations Safety Related Courses
Executives, General Employees
2,527
Compliance- Related Courses
Executives, technical staff, professionals, general
1,850
Information Security Related Courses
Executives, technical staff, professionals, general employees
9,248
Product Risk Management and Risk Transfer Measures
As Acer's primary business model does not involve production and manufacturing processes, the company collaborates with supplier partners to provide a wide range of products, services, and solutions to customers worldwide. Based on Acer's actual operational model, while balancing overall operational efficiency and cost-effectiveness, we have implemented the following product risk management and
risk transfer measures:
Type of Measure | Specific Actions | Risk Management Effectiveness | |
|---|---|---|---|
Contractual Aspects | Contract and Legal Framework | Clarify quality standards and responsibilities | Reduce the risk of legal disputes |
| Contractual Insurance Clause Requirements | Require suppliers to obtain product liability insurance and other necessary insurance arrangements as stipulated by the contract | Ensure the future solvency of suppliers | |
| Intellectual Property Protection | Incorporation of a confidentiality clause in the contract | Prevent design leaks | |
Supplier and Product Level | Participation in the Design Process | Develop a List of Prohibited, Restricted, and Disclosed Chemicals | Reduce the use of harmful chemicals to minimize impacts on human health and the environment |
| Quality Management and Control | Regular inspection and testing of products | Ensure product quality and reduce defects | |
| Risk Assessment and Supplier Management | Assess ODM risks and monitor performance metrics | Mitigate the risk of supply chain disruptions | |
Insurance and Other Risk Transfer Measures | Insurance and Financial Protection | Product liability insurance | Mitigate the risk of financial losses |
| Risk Transfer Measures | Compensation terms, warranties, supplier diversification | Diversify risks to reduce the impact of single points of failure |
Emerging Risks
Policies of the New U.S. President
Risk Level: High
Probability of Occurrence: High
Impact Level: High
Risk Appetite: As the aforementioned risks include tax risks and significant compliance aspects, according to Acer RAS, the overall risk is categorized as low appetite
Risk Description
The United States presidential election has a significant impact on the world, as the United States is the largest economy and military power globally, and its policy decisions influence global affairs. The preliminary identification of potential emerging risks is as follows:
- with Changes in Tariff Policy
- Supply Chain Risk
- Overall Economic Risk
- Geopolitical Risk
- Risk of Changes in Tariff and Fiscal Policies
Potential Impact
- Changes in Tariff Policy: These tariffs may increase the cost of importing from China or other affected countries, particularly for semiconductors and electronic components. Rising costs may compress profit margins, forcing the company to raise product prices, which could affect market competitiveness. Furthermore, widespread changes in tariff policies will further complicate the international trade environment.
- Supply Chain Disruption: Policies may cause interference through multiple channels. Firstly, increased tariffs may lead to higher import costs from certain countries, forcing the company to seek alternative suppliers.
- Secondly, geopolitical tensions may lead to trade restrictions or embargoes, particularly affecting supply chains involving China and Taiwan. The Taiwanese semiconductor industry, including companies like TSMC, is crucial to the global supply chain. Any disruptions could lead to delays and increased costs. Furthermore, the policies of the new U.S. administration may encourage domestic manufacturing by attracting companies back through tax reductions or subsidies, which could increase Acer's operating costs in the United States.
- Finally, component shortages and production delays will pose challenges to supply chain diversification.
- Macroeconomic Risk: Multiple potential impacts on the global economy. For example, rising inflationary pressures, along with declining consumer and business confidence, may impact the demand for electronic products.
- Geopolitics: Geopolitical risks extend beyond military considerations; they also include the possibility of diplomatic sanctions or trade restrictions, which present challenges for companies operating on a global scale. This may exacerbate tensions in U.S.-China-Taiwan relations, particularly in the areas of trade and technology. As a core part of the global semiconductor and ICT industry supply chain, Taiwan is susceptible to any geopolitical instability, which could directly impact the company's operations.
- Changes in Tariff and Fiscal Policies:
1. Investment Hesitation: Uncertainty may cause the company to delay expansion or investment in new projects.
2. Financial Planning Challenge: More flexible financial strategies are needed to address potential cost fluctuations.
Responsive Measures
- Supply Chain Diversification: Seek suppliers in other countries, such as Vietnam, India, and Mexico, to reduce reliance on Chinese components.
- Advance Inventory Management: Evaluate inventory levels of key components and stock up in advance to mitigate the impact of sudden tariff changes.
- Price Pass-Through Strategy: Consider partially passing costs on to consumers or seeking to share the tariff impact with suppliers.
- Signing Long-term Contracts with Suppliers: Ensuring stable supply and mitigating the impact of price fluctuations.
- Proactive Investment in New Technologies: Accelerate the development of AI, semiconductors, and cloud computing to maintain a competitive edge.
- Strengthen Patent Protection: Ensure that the company's key technologies are patented to prevent technology loss due to market competition.
- Monitoring Regulatory Changes: Stay informed about U.S. technology regulatory policies to ensure compliance and actively participate in policy discussions.
- Strengthen Overseas Market Presence: Expand into European and Southeast Asian markets to diversify market risk.
- Monitoring Government Policies: Maintain communication with local government agencies and chambers of commerce to obtain the latest policy information and respond flexibly.
- Leveraging Tax Incentives: If corporate taxes decrease, utilize the savings to expand research and development and market investments.
- Prudent Financial Planning: In response to potential economic uncertainties arising from increased government debt, we maintain robust cash flow management.
- Expanding International Market Presence: Reduce reliance on a single market and ensure diversified revenue streams to address potential market fluctuations.
Geopolitics/ economy
Risk Level-High
Likelihood - high
Severity - high
Risk appetite – Geopolitics/ economy includes major compliance, information security and other aspects, the overall risk appetite is low based on Acer RAS
Risk Description
The current global geopolitical and geoeconomic risks are primarily evident in the following areas:
- Intensification of strategic competition between China and the United States. As the world's two largest economies, the competition between China and the United States in the fields of economy, technology, and military is becoming increasingly intense. The direction of China-US relations will significantly impact the global geopolitical landscape.
- Continued war between Russia and Ukraine. The Russia-Ukraine war is the largestscale military conflict in Europe since World War II. The ongoing war not only severely impacts the global economy but also exacerbates turbulence in global geopolitics and geoeconomics.
- Israel-Hamas conflict and the Red Sea crisis. The Israel-Hamas conflict and the Red Sea crisis are major geopolitical risks in the Middle East region. Escalation of the Israel-Hamas conflict could trigger a large-scale war in the region, while the Red Sea crisis could threaten global energy security.
- Global supply chain restructuring. The global supply chain is undergoing reconstruction due to the impact of COVID-19 and the Russia-Ukraine war. The regionalization, diversification, and fragmentation of the supply chain will have farreaching implications for the global economic landscape.
Potential Impact
- Increase in production/procurement costs: Geopolitical/geoeconomic risks may result in price increases in strategic resources and higher trade costs, thereby raising the production costs of technology products.
- Potential disruptions in the supply chain that affect the availability of technology products. The Russo-Ukrainian war has caused global energy prices to rise, which also impacts the supply of global technology products. The global supply chain is becoming more complex, making it more vulnerable to the impact of geopolitical/ geoeconomic risks. For instance, the supply chain of global technology products involves multiple countries and regions; if a country or region experiences political turmoil or natural disasters, it can lead to disruptions in the supply chain that affect the availability of technology products.
- Impediment to technological innovation: Geopolitical/geoeconomic risks can hinder technological cooperation and brain drain, thereby impeding technological innovation.
- Exacerbation of market volatility: Geopolitical/geoeconomic risks can cause a decline in investor confidence and increased market volatility, thereby impacting the financing and development of technology companies.
Responsive Measures
In the aspect of the supply chain:
- Disperse ODM production bases to India, Southeast Asia, and other countries/regions that meet the assessed conditions.
- Reduce dependency on critical components.
- Continuously monitor the market and provide real-time alerts.
- Maintain a safe inventory level.
In the aspect of Financial Markets/Treasury Management:
- Forecast cash flow and optimize working capital arrangements.
- In addition to primary banking partners, maintain at least two alternative banks as backups.
- Maintain a safe level of liquid assets and cash reserves.
- Conduct foreign exchange hedging operations.
- Establish guidelines to govern hedging principles, instruments, and authorization levels.
- Adjust transaction currencies to those with lower volatility and hedging costs.
Emerging Technologies/ Transition (e.g., AI)
Risk level – medium-high
Likelihood – medium-high
Severity – high
Risk appetite – the overall risk appetite is medium based on Acer RAS
Risk Description
Emerging technology development/transition refers to the adoption of emerging technologies by companies to improve existing businesses or develop new ones. However, emerging technology development/ transition, such as AI, may bring the following risks:
- Security risks: AI systems may be hacked or maliciously used, resulting in data leaks, system paralysis, and other damages. For example, hackers can attack the AI system's database and steal sensitive data, or exploit vulnerabilities in the AI system to launch DDoS attacks, causing system paralysis. AI technology may also be used for military or terrorist activities, posing security threats. For example, AI technology can be used to develop autonomous weapons, making wars even more deadly, or AI technology can be used to create fake news or false propaganda.
- Reliability risks: AI systems may experience errors or failures, leading to decision-making mistakes or unexpected accidents. For example, autonomous vehicles may cause traffic accidents due to system failures, or medical diagnosis systems may delay patient treatment due to incorrect diagnoses.
- Bias risks: AI systems may have biases, resulting in discrimination or unfair treatment towards specific groups. For example, AI systems used for recruitment may have biases against women or ethnic minorities, or AI systems used for credit rating may have biases against low-income individuals.
- Privacy risks: AI systems may infringe on personal privacy. For example, facial recognition systems can collect and analyze individuals' facial data for tracking or monitoring purposes, or voice assistants can collect and analyze individuals' voice data for targeted advertising.
Potential Impact
- Technical aspect: Emerging technologies may still be immature, with technical defects or instability.
- Market aspect: The market for emerging technologies may not have formed yet, with uncertainties in demand or intense competition.
- Management aspect: Companies may lack the experience and capability to manage emerging technologies, leading to project failures or cost overruns.
- Legal and regulatory aspect: Emerging technologies may face uncertainties in laws and regulations, resulting in legal disputes or regulatory penalties for companies.
- Brand aspect: Consumers demand compensation arising from product liability and personal data-related responsibilities, as well as subsequent negative impacts on brand image, may be severe.
Responsive Measures
- Regularly visit customers/distributors.
- Monitor the activities of competing companies.
- Track technological developments.
- Conduct experimental analysis to assess the feasibility of new technology and review data on technical completion and stability.
- Stay updated on regulatory changes by legislative authorities.
- Seek professional advice from external experts.
Green Inflation
Risk level – medium-high
Likelihood – high
Severity – medium-high
Risk appetite- the overall risk appetite is medium-low based on Acer RAS
Risk Description
Green inflation refers to the increase in prices caused by factors such as rising production costs and disruptions in the supply chain during the process of promoting green transformation. The potential risks of green inflation include the following:
- Intensifying inflationary pressures: Green inflation will intensify existing inflationary pressures, leading to price increases and reducing people's purchasing power. For example, the implementation of carbon pricing will raise production costs for businesses, resulting in higher product prices. Similarly, the development of green energy requires significant investment, which can also drive up energy prices.
- Impact on economic recovery: Green inflation will increase the cost burden on businesses, affecting economic recovery. For instance, businesses need to invest funds in green transformation, which can lower their profitability. Additionally, the implementation of green policies can increase compliance costs for businesses, impacting their competitiveness.
- Exacerbating social inequality: Green inflation may worsen social inequality, with low-income groups experiencing greater impacts. For example, lowincome groups may find it more difficult to afford the costs of green products and services. Furthermore, the implementation of green policies may lead to an increase in the unemployment rate among low-income groups.
Potential Impact
Inflation refers to the phenomenon of a continuous increase in the overall price level. It has several impacts on the operations of companies in the technology industry, which are mainly manifested in the following aspects:
- Increased production costs: Inflation leads to price increases in raw materials, labor, energy, and other production factors, thereby increasing the production costs of technology products. For example, semiconductor manufacturing requires a large amount of raw materials and energy. If the prices of these raw materials and energy increase, it will result in an increase in the production costs of semiconductor chips.
- Impact on demand: Inflation leads to a decrease in consumer purchasing power, thereby affecting the demand for technology products.
- Impact on profitability: Inflation leads to an increase in production costs and a decrease in demand for companies in the technology industry, thereby affecting their profitability.
Responsive Measures
- Real-time Production and Sales Reports with Alerts.
- Enhance component commonality.
- Strengthen management of specific (non-common) components.
Key Talent Risk
Risk level – medium
Likelihood – medium
Severity – medium-high
Risk appetite- the overall
Risk Description
The scarcity of key talent can hinder industrial development and impact economic growth. For instance, in the technology industry, the lack of software engineers, data scientists, and other key talent can impede technological innovation and industry upgrading. Similarly, in the manufacturing industry, the absence of highly skilled labor can affect production efficiency and competitiveness.
Moreover, in the high-tech sector, the long-term trend of talent shortage and declining birth rates often results in significant increases in compensation for highly skilled professionals, while the wages for low-skilled labor tend to stagnate, leading to widening income disparities.
Potential Impact
- Insufficient research and development manpower is affecting product innovation and competitiveness.
- Rising production costs are impacting profitability.
- Declining operational efficiency is affecting enterprise value (such as decreased productivity as well as inferior customer service quality).
Responsive Measures
- Expand the channels or opportunities for talent acquisition, such as Acer Group's annual campus recruitment event starting in every March.
- Continuously optimize the talent recruitment process.
- Evaluate the salary structures for relevant positions to ensure competitiveness in the industry.
- Assess the feasibility of offering sign-on bonus, additional benefits, or incentive measures.
- Enhance collaboration with globally recognized recruitment channels to ensure the recruitment of top talent.
- Highlight Acer Group's ESG sustainable business philosophy and its diverse business engine.
Strategic Resource Competition: Minerals, Energy, Food, and Water
ChainRisk level – medium
Likelihood – medium- high
Severity – medium
Risk appetite – the overall risk appetite is medium based on Acer RAS
Risk Description
The competition for strategic resources refers to conflicts and disputes among countries over the control of resources that are of significant importance to national security and economic development, including minerals, energy, food, and water. The potential risks of this competition include the following:
- Triggering regional conflicts: The competition for strategic resources may lead to regional conflicts and even wars. For example, in the Middle East, the competition for oil resources has been a major cause of multiple wars. Similarly, in Africa, the competition for water resources has resulted in numerous armed conflicts.
- Exacerbating global inequality: The competition for strategic resources can worsen global inequality, widening the gap between wealthy and poor countries. Wealthy countries can leverage their economic and military advantages to control more strategic resources, while poor countries may face resource scarcity.
Damaging the global ecological environment: The excessive exploitation and utilization of strategic resources can harm the global ecological environment, leading to issues such as climate change and resource depletion. For instance, mining activities can cause environmental pollution, the development of energy resources can increase greenhouse gas emissions, and the excessive consumption of food and water can deplete resources.
Potential Impact
- The increase in production costs and the rise in prices of strategic resources will lead to higher production costs for companies in the technology industry, which will affect their profitability.
- The interruption of the supply of strategic resources in the supply chain will result in production disruptions for these companies, impacting their operational efficiency.
Responsive Measures
- Diversify suppliers.
- Enhance supply chain resilience.
- Research/adopt alternative technologies.