Climate-Related Financial Risk Statement

In Accordance with TCFD Recommendations

Corporate Spec Ltd. recognizes the importance of understanding and disclosing climate-related risks and opportunities that may impact our business. This statement outlines our approach to climate-related risks in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Governance

Board Oversight: The Managing Director oversees climate-related risks and opportunities as part of our broader business risk assessment process. Climate considerations are integrated into our quarterly business reviews and annual strategic planning.

Management’s Role: Our Workshop Manager is responsible for day-to-day implementation of climate-related initiatives and reports directly to the Managing Director on these matters. The management team assesses climate-related impacts on operations and implements appropriate responses.

Strategy

Climate-Related Risks and Opportunities: We have identified the following key climate-related risks and opportunities relevant to our business model of office chair refurbishment:

Short-term (0-2 years):

  • Risk: Increased energy costs affecting workshop operations
  • Risk: Supply chain disruptions for replacement parts due to extreme weather events
  • Opportunity: Growing demand for sustainable furniture options as businesses adopt climate-friendly procurement policies

Medium-term (2-5 years):

  • Risk: More stringent regulations on waste management and material composition
  • Risk: Rising transportation costs due to carbon pricing mechanisms
  • Opportunity: Increased value of our “Complete Component Utilization” model as waste regulations tighten
  • Opportunity: Expanded market for refurbished furniture as companies seek to reduce Scope 3 emissions

Long-term (5+ years):

  • Risk: Potential material scarcity due to climate impacts on raw material supply chains
  • Risk: Changing workspace requirements due to climate adaptation measures
  • Opportunity: Leadership position in circular economy business models as market shifts from traditional manufacturing

Business Impact: Our business model of extending furniture lifecycles is inherently aligned with climate change mitigation through resource conservation and waste reduction. Our “No Component Is Waste” approach positions us advantageously in a carbon-constrained economy.

Business Resilience: We have assessed our business strategy against different climate scenarios and believe our focus on refurbishment and component reuse creates inherent resilience against both transition risks (policy changes, market shifts) and physical risks (supply chain disruptions).

Risk Management

Risk Identification and Assessment Process: We identify climate-related risks through:

  • Quarterly reviews of operational impacts from weather events
  • Annual assessment of regulatory developments in waste management and carbon pricing
  • Ongoing monitoring of market trends in sustainable procurement
  • Supply chain vulnerability mapping

Risk Management: We manage identified climate risks through:

  • Diversifying our supplier base for critical replacement components
  • Investing in energy efficiency measures in our workshops
  • Developing contingency plans for extreme weather events
  • Building inventory buffers of essential components
  • Emphasizing our climate benefits in customer communications

Integration into Overall Risk Management: Climate-related risks are integrated into our business risk register and reviewed alongside other business risks in our quarterly management meetings.

Metrics and Targets

Key Metrics:

  • Workshop energy consumption (kWh per refurbished chair)
  • Carbon emissions from operations (Scope 1 & 2)
  • Transportation emissions per delivery (kg CO₂e)
  • Component reuse rate (% of original chair components retained)
  • Waste diversion rate (% materials kept from landfill)

Carbon Emissions: We currently track our Scope 1 and 2 emissions from direct operations and purchased energy. We are developing capabilities to estimate Scope 3 emissions related to our supply chain and transportation.

Targets:

  • Reduce operational energy use by 15% by 2026 (from 2023 baseline)
  • Achieve carbon neutrality for Scope 1 and 2 emissions by 2028
  • Increase our component reuse rate to 95% by 2025
  • Maintain our zero-waste-to-landfill commitment indefinitely

Forward-Looking Statement

This disclosure contains forward-looking statements about climate-related risks and opportunities. Actual results may differ materially from those projected due to various factors including the pace of climate change, regulatory developments, market conditions, and technological advances.

We commit to reviewing and updating this assessment annually to reflect emerging climate science, regulatory changes, and evolving business conditions.