FFHC's climate risk governance is overseen by the Board of Directors as the Group's highest supervisory unit. The Board approves, guides, and ensures the effective operation of the risk management policy. Under the Board, the "Sustainable Development Committee" and the "Risk Management Committee" have been established to oversee the Group's key climate-related strategies. In line with the "Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)" and IFRS S2 climate-related disclosures, the Group takes stock of and identifies the risks and opportunities posed by both physical and transition aspects of climate change to its operational activities, and develops a materiality-and-likelihood matrix for risks and opportunities. Based on the matrix analysis results, the Group formulates risk management strategies for material risks, which serve as the core of its climate action and response to climate change.

The Company has incorporated emerging risks, including climate change risks, into its risk management policy as approved by the Board of Directors, and regularly reports the climate risk assessment results to the Board to ensure effective top-down oversight of climate governance practices. In August 2022, the Group officially joined the Partnership for Carbon Accounting Financials (PCAF), and adopted PCAF’s suggested methodology to conduct an inventory of Scope 3 investment and financing financed emissions. The Group then formulated near-term decarbonization targets and submitted them to the Science Based Targets initiative (SBTi) for review; the targets were officially validated in June 2024 and have been implemented accordingly. Beginning in 2025, the Group has been progressively aligning with IFRS S2 requirements, and continues to enhance the quality of climate-related financial information disclosure through more scientific and standardized practices.

Two-dimensional matrix likelihood analysis was performed on the climate-related physical risks of the Group's 37 major suppliers; the analysis involved comparing the time and scale of the potential for three climate change-related natural disasters, flooding, mudflow, and landslide (where disaster potential is classified into three levels: low [Grade 1 and 2], medium [Grade 3], and high [Grade 4 and 5]) to calculate hazard level (low [0–50], medium [51–100], and high [101–125]). Results of the analysis indicate that among 37 primary suppliers, 5.41% (2 companies) possess level 4 high risk for flooding potential, while 10.81% (4 companies) possess level 3 moderate risk for flooding potential. All suppliers possess level 1 low risk for mudflow potential and level 2 low risk or below for landslide potential. Hazard calculation results showed that all suppliers exhibited low hazard level.

FFHC has created the industry's first "ESG Sustainable Application Map Inquiry Platform" incorporating geographic information system (GIS) and data application, which connects to API data on the government open data platform, and compiles & includes government data relating to climate change, ecology, water, environmentally sensitive areas and green life. Through location identification methods such as addresses, coordinates or map-based selection, it utilizes big data analysis to provide a range of simulated information about environmental changes, so that users understand disaster and risk potential as well as information on environmentally sensitive areas, making ESG policy-making and risk management more efficient and scientific. According to Google Analytics data, since the launch of the platform in 2024, it has recorded nearly 32,000 page views and attracted 15,000 active users as of the end of 2025.

The Company has partnered with the Kuroshio Ocean Education Foundation to promote the "Ocean Oasis: East Coast Cetacean Conservation Project." Through cetacean ecological monitoring and scientific research, the project aims to develop assessment methodologies for marine natural carbon sinks, supporting the key natural carbon sink strategy of the 2050 Net-Zero Transition.

This research focuses on how cetaceans, through their migration and feeding behaviors, transport nutrients from the deep ocean to surface waters; and how they stimulate phytoplankton growth through excretion, thereby enhancing the ocean's capacity to absorb carbon through photosynthesis (known as the Whale Pump Effect). In addition, when cetaceans die and sink to the deep ocean, carbon is sequestered over the long term in low-temperature, low-oxygen environments.

To systematically assess the carbon sink benefits of cetaceans, the project references carbon sequestration calculation methodologies from international literature (e.g., Pearson et al.) and has established a Cetacean Carbon Sink Assessment Framework (as illustrated below). The framework incorporates five key factors: biomass, carbon sequestration, nutrient cycling, ecosystem impact, human activity. The project has also compiled ecological and biological data on sperm whales and developed a preliminary carbon sink calculation model, providing a foundation for the future quantification of natural carbon sinks.