Risk Factor Key Risk Management Measures Geoeconomic Confrontations The political tension in various regions and the use of economic sanctions as a political leverage tool may pose challenges for GC in forming economic cooperation, result in shorter supply chains, impact production costs, and lead to economic volatility, investment uncer ta int i es , and instabi l i t y in government assistance and funding, ultimately affecting GC’s business operations. Closely monitor and analyze political tensions as well as announcements regarding other countries’ product standards and trade barriers that may affect GC’s investment and operating results so as to assess impact on the organization’s business plans and long-term strategic plans, as well as ensure the regular monitoring, review, and updating of the situation and relevant factors. Conduct scenario planning for various levels of feedstock prices to promptly cope with and minimize impact arising from changes and uncertainties in the future. Focus on establishing measures that create flexibility and optionality in terms of market and products so as to enable GC to readily adapt its business in the face of uncertainties and achieve sales and profit stability. Implement efficient supply chain management by analyzing the situations and forecasting risks in collaboration with suppliers, establishing relationships with key suppliers, and expanding the number of potential suppliers in the region. Failure to Mitigate Climate Change The f a i l u r e o f c l ima t e change management measures of both the government and private sectors has led to a continuous rise in greenhouse gas levels and may thwart the goal of limiting global warming to 1.5 degrees Celsius and efforts to mitigate the impact of climate change. This could intensify environmental crises, societal challenges, and economic instability and potentially impact GC’s corporate image as the world’s leading chemical producer. Collaborate with consulting firms to assess natural disaster risks in the future and forecast their impact on both GC’s assets and operations in order to make preparations for such risks, and operate in adherence to international standards under the framework of the Task Force on Climate-related Financial Disclosures (TCFD). Monitor drought and implement water risk management sustainably through the Water Management Taskforce, advance initiatives to optimize water efficiency in production, and secure alternative water sources to ensure an adequate water supply for the current plant operations and accommodate future projects. Conduct business continuity plan drills for various scenarios. Monitor and assess the impacts and opportunities arising from changes in climate change policies in both the short and long term. Create a corporate GHG inventory for use in establishing GC’s GHG management guidelines. Actively follow the established decarbonization roadmap to minimize negative impacts and generate positive impacts on the environment and ecosystems. 96
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