To address the transition-related challenges that climate change poses to the transportation industry, HLC is progressively introducing electric vehicles from various brands and related smart energy storage equipment, starting from its fleet structure and operating model. By incorporating low-carbon vehicles into its core service offerings, the Company aims to enhance fleet flexibility and respond to market demand for low-carbon mobility solutions. HLC continuously monitors trends in the vehicle leasing market and changes in customer usage patterns, while assessing electric vehicle adoption rates, the progress of charging infrastructure development, and ease of use. This enables the Company to keep its fleet mix and service offerings aligned with market developments and mitigate operational risks arising from shifts in demand. In managing market risk, HLC analyzes leasing data, monitors vehicle utilization, and gathers customer feedback to dynamically adjust its vehicle procurement and replacement strategies. The Company also optimizes its vehicle model mix and capital deployment efficiency to address potential market volatility and cost fluctuations during the initial introduction of low-carbon vehicles, thereby maintaining operational stability and service quality. In managing policy and regulatory risks, HLC continues to monitor developments in government policies concerning carbon emissions controls, electric vehicle subsidies, and low-carbon transportation. Relevant regulatory requirements are incorporated into fleet planning and procurement decisions. Through collaboration with vehicle manufacturers and supply partners, the Company also ensures that newly introduced vehicles comply with applicable environmental regulations and safety standards while remaining competitive in the market. Going forward, HLC will continue to enhance its climate risk identification and management mechanisms and promote the development of low-carbon fleets and related supporting services, thereby supporting the transportation industry’s transition toward a low-carbon and sustainable future.
Greenhouse Gas Emissions To fulfill its corporate responsibility for addressing climate change, HLC conducts greenhouse gas inventories in accordance with ISO 14064-1:2018. The inventory covers the operations of the Company’s 36 directly operated locations in Taiwan and includes direct emissions (Scope 1), energy indirect emissions (Scope 2), and selected other indirect emissions (Scope 3). The largest emission source is purchased electricity (accounting for nearly 50% of total emissions), followed by refrigerant (HFCs) fugitive emissions from processes and repair/maintenance. This indicates that energy conservation and refrigerant management will be key directions for future carbon reduction efforts. In response to climate change risks, HLC currently follows Hotai Group’s strategic direction and adopts a target-based management approach for annual greenhouse gas reductions. We have set a target to reduce carbon emissions by 5% per year starting from the baseline year (2025) and aim for a cumulative 25% reduction from the baseline year by 2030. This carbon reduction target covers Scope 1 and Scope 2 greenhouse gas emissions, and the inventory method must comply with ISO 14064-1 standards to ensure that carbon inventory data is accurate and meets international standards.
Energy Conservation and Carbon Management Initiatives HLC is fully promoting enhanced energy efficiency and low-carbon fleet transformation in line with the Group’s “5% annual carbon reduction” strategic target . According to the 2025 greenhouse gas inventory, the Company’s total annual carbon emissions increased by approximately 1% year on year, despite a 3% increase in the number of operating locations. This indicates that HLC maintained effective energy management as its business expanded, with no significant increase in carbon emissions, and continued to make progress toward its reduction target.
Water Resource Management Although HLC’s operational model is not water-intensive, given that vehicle repair/maintenance and facility operations still require water, water resources are considered one of our important environmental management priorities. The Company is gradually adopting various water-saving measures and water efficiency improvement mechanisms, including: Conducting Regular equipment inspection/repair and leak detection to reduce inefficient water consumption. Optimizing car wash processes at some locations by introducing high-pressure washing systems to reduce average water consumption per vehicle. Using water-saving valves in office restrooms and public areas to minimize unnecessary waste. Promoting water conservation awareness through internal education and training and posted signs to remind employees to implement water-saving behaviors.