Water Risk Management

FENC regularly assesses the level of water risks in areas where FENC production sites are located using the Aqueduct Water Risk Atlas from the World Resources Institute (WRI). The tool assesses the overall water risks, such as water stress, riverine flood risk as well as regulatory and reputational risks. When the overall water risk score is between 3 and 4, which indicates “high risk,” the production site is located in an area with high water risks.

The assessment conducted in the fourth quarter of 2025 identified nine FENC production sites as being located in high-risk areas, four of which are located in water-stressed areas. FENC is responding by strengthening its adaptation strategies, such as improving production water efficiency, establishing a rainwater harvesting system and increasing reclaimed water recycling rates. 

In 2025, total water withdrawal from FENC sites in water-stressed areas increased by 22% and water consumption by 65% compared with 2024. The main factors were short-term fluctuations in water efficiency caused by adjustments in the product structure and production processes at certain production sites, as well as equipment anomalies at individual facilities during the reporting year. FENC promptly completed the repairs and reinforced monitoring and management protocols with the aim to continue enhancing water efficiency and risk prevention, ensuring stability and sustainability with the utilization of water resources.

Water Risk Response Strategies and Actions

Among the risks induced by climate change is water scarcity, and FENC is responding by allocating capital towards mitigation and adaptation projects to manage or alleviate water-related physical, regulatory and reputational risks within its operations. In 2025, the capital expenditure directed towards preempting water risks and related financial impacts is approximately NT$410 million. From 2026 to 2030, the projected financial impact is estimated at NT$270 million.

Additionally, FENC is enhancing water efficiency through multiple water conservation projects, such as lowering evaporation and wind losses from the cooling tower; increasing the concentration ratio for the water circulating through the cooling system under controlled production conditions; creating water recycling and reuse systems; recycling and reusing effluents with membrane technologies.

Situated in a high water-stressed region, FEPV takes proactive action by implementing process water management and water conservation projects that support water risk management policies. Both the polyester plant and knitting and dyeing plant propose process water conservation plans based on annual objectives while continuing the review and optimization of water efficiency. To advance recycling and reuse, FEPV has adopted rainwater and reclaimed water recycling systems, and the recycled water is applied towards appropriate production or non-production purposes. FEPV plans to gradually increase recycled and reused water to reduce water withdrawal and strengthen the overall effectiveness of water resources management. 

OTIZ is also located in a water-stressed area. To address water risks, the knitting and dyeing plant constructed rainwater harvesting systems on the rooftop and ground level. After treatment, the recycled water is directly applied towards the dyeing process, and the system recycles 18,000 KL of water annually. The tech textiles plant tackles water risks by harvesting surface runoffs and reusing water from the water softening process at the north plant, recycling 4250 KL annually. Through these water recycling projects, OTIZ has improved its ability to adjust water consumption, mitigate the risk of water shortages and bolster its overall water resilience.

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