Analysis of Material Issues : Taiwan Business Bank

Stakeholder

Analysis of Material Issues

Procedures for the Analysis of Material Issues Material Issue Analysis Matrix List of Material Issues and Explanation of Differences in 2022 Management Guidelines for Material Aspects and Major Achievement Management Guidelines for Evaluation and Target

Procedures for the Analysis of Material Issues

Step 1 Identification of stakeholders

8 key stakeholder groups

Step 2 Collect sustainability issues

The task force units under the Sustainable Development Committee gathered international sustainable development issues, sustainability regulations, international sustainability ratings, domestic and foreign peer case studies, and stakeholder feedback, and compiled 17 sustainability issues.

Step 3 Degree of attention of stakeholders

Online and offline questionnaire surveys were conducted to find out the degree of attention to 17 issues paid by internal and external stakeholders.

Step 4 Identify actual & potential impacts and select material issues

The Sustainable Development Committee further analyzed the degree of external impacts of the 17 sustainability issues. 13 material issues of the year were selected based on the results of Steps 3 and 4.

Step 5 Assess the significance of impact

An impact assessment questionnaire was used to assess the economic, environmental, and human rights impacts of business activities related to 13 major issues and their probabilities.

Step 6 Confirm the order of material issues

Results of the questionnaire and the external impact assessment were use to create a material issue matrix and describe the management guidelines and performance indicators for material issues.

Step 7 Confirm the results of effectiveness of relevant action goals by tracking the effectiveness of the actions taken

Report annually the achievement of performance indicators in the previous year to the Sustainable Development Committee, and track the effectiveness of actions through 1.5 Stakeholder communication methods and channels.

Material Issue Analysis Matrix

List of Material Issues and Explanation of Differences in 2022

Priority	Material Issue	Corresponding GRI standards and topic specific standards	Reasons for Materiality	Explanation of Differences	Boundaries of impact and degree of involvement in the value chain
					Internal Stakeholders			External Stakeholders¹
					Scope of impact on value chain			Scope of impact on value chain/Cause of impact/Coverage of business activities²/Coverage of business activities³
					Upstream⁴	TBB	Downstream⁵	Upstream					Downstream
					Employees	TBB	Shareholder	Suppliers/partners	Government	NGO/Charity groups	External consultants	Media	Customers
1	Ethical corporate management	GRI 3-3 GRI 205-1~205-3 GRI 206-1	Corporate governance and ethical management in the banking sector are important topics for stakeholders. The Bank makes integrity the first rule of business engagement and implements in management practices, which contributes to organizational optimization and sustainable development and paves the way to business success.	No change.	Direct	Direct	Indirect	Business relationship/Supply chain/>50%	Indirect/Business operation/>50%	-	-	-	Direct/Business operation/>50%
2	Legal compliance	GRI 2-27 GRI 3-3	The Bank complies with the laws and regulations, implement controls, and support the government's policies while enforcing the government's key AML/CFT and anti-fraud policies. The Bank believes active compliance with laws applicable to its business is essential to sustainable development.	No change.	Direct	Direct	Direct	-	Indirect/Business operation/>50%	-	-	-	Direct/Business operation/>50%
3	Corporate governance	GRI 3-3 GRI 205-1~205-3 GRI 206-1	Sound corporate governance contributes to organizational optimization and sustainable development, strengthen the stability and transparency of corporate operations, and increases long-term value and competitiveness. It is the basis of a company's business operations.	No change.	Direct	Direct	Direct	-	Indirect/Business operation/>50%	-	-	Indirect/Business operation/>50%	-
4	Information security	GRI 3-3 GRI 418-1	The development of financial services depends on stable IT systems. With the massive amount of business communication and data retained, it is necessary to refine information security systems and management strategies in order to protect the rights of companies and their customers.	Independent material issue previously under "Information Security and Privacy"	Direct	Direct	Direct	Business relationship/Supply chain/>50%	Indirect/Business operation/>50%	-	-	Indirect/Indirect/>50%	Direct/Products and services//>50%
5	Customer Service and Privacy Protection	GRI 3-3 GRI 417-1 & 417-2	The Bank works hard to build friendly and strong relationships with customers and increase customer satisfaction in order to increase customer loyalty and stay competitive in the market. Operations in the banking sector can easily involve customer privacy. the Bank complies with the Personal Information Protection Act and implements privacy protection policies to provide methods of using customer data in order to protect customer data from parties with intention to make illegal use.	Independent material issue previously under "Information Security and Privacy" and name change	Direct	Direct	Direct	Direct/Products and services/>50%	Indirect/Indirect/>50%	-	-	-	Direct/Products and services/>50%
6	Occupational Safety and Health	GRI 3-3 GRI 403	Attention is paid to employees' physical and mental health in key areas and promote related actions to create a safe work environment. TBB is committed to providing a work-life balance for employees.	Material issues added.	Direct	Direct	-	-	-	-	-	-	-
7	Talent retention and diverse benefits	GRI 3-3 GRI 401 GRI 402 GRI 404-1 & 404-2 GRI 405	Employees are the most important asset. The Bank offers competitive salaries, complete benefit packages, and a friendly workforce in order to attract and retain talent.	Name change, formerly "Diversified Training and Promotion"	Direct	Direct	-	-	-	-	-	-	-
8	Responsible investment	GRI 3-3 Custom material issues	The Bank understands the banking sector plays an influential role in promoting responsible investing and takes initiative to comply with the six Principles for Responsible Investment (PRI) as a basis for business conduct and disclosure. TBB continues to study the latest global trends in responsible investing, methodology and practices and to engage trend setting peers in order to create action plans and improve and refine the responsible investing process.	Name change, formerly "Management and Investment Strategies"	-	Direct	Direct	-	-	-	-	-	-
9	Environmental protection	GRI 3-3 GRI 302 GRI 305-1 ~ 305-3	Environmental protection should be an obligation of Earth citizens. The Bank starts with itself by paying attention to energy conservation and carbon reduction as well as water conservation. The Bank plays an active role in advocating environmental protection and implements the idea in the core businesses through training.	Name change, formerly "Energy Saving and Carbon Reduction"	Direct	Direct	Direct	Business relationship/Supply chain/>50%	-	-	Business relationship/Business operation/>50%	-	-
10	Climate change strategy and management	GRI 3-3 GRI 201-2 GRI 203-2	Regarding risks and opportunities arising from extreme weather, natural disasters, energy crisis, and low-carbon economy transition, the Bank takes a practical approach and sets net zero targets. The Bank actively enforces reduction of its own carbon emissions and adjust asset allocation in financing activities in an effort to extend its influence as a bank, strengthen climate resilience, and advance toward a future of net zero.	Material issues added	-	Direct	Direct	-	Indirect/Business operation/>50%	-	Business relationship/Business operation/>50%	-	-
11	Sustainable Finance	GRI 3-3 GRI 201-1 ~ 201-3 GRI 203-2	TBB exercise the influence as a financial intermediary and combines its core competencies to promote ESG financing, ESG investing and related financial services. By guiding capital flows into sustainability projects, TBB hopes to guide industries, investors, and consumers to pay attention to sustainable development.	Independent material issue previously under "Environmentally and Socially Friendly Services" and name change	-	Direct	Direct	-	Indirect/Supply chain/>50%	-	-	-	Direct/Products and services/>50%
12	Public welfare and charity	GRI 3-3 GRI 203-2 GRI 413-2	Established more than a century ago, TBB grew with the country and witnessed how the economy and culture changed in Taiwan. Therefore, CSR fulfillment has always been one of the key ideas in TBB's business philosophy.In addition to conducting core businesses, pursuing business results, increasing added value for employees, and protecting shareholder interest, TBB takes real action to show its commitment to disadvantaged groups in the community and participates in charity events to give back to the community.	No change	Direct	Direct	-	-	-	Direct/Supply chain/>50%	-	-	-
13	Inclusive finance	GRI 3-3 GRI 203-2	To eliminate inequality, the Bank reaches customers of different backgrounds through financial products and services to help financially disadvantaged groups access different financial services. The process can have a positive social impact.	Independent material issue previously under "Environmentally and Socially Friendly Services" and name change	-	Direct	-	-	-	-	-	-	Direct/Products and services/>50%

¹ External stakeholder groups impacted by the company's business activities, including the environment, society, customers and end users, and external employees (e.g. supply chains and contractors).

² Business operations, products/services and/or activities or positions on the supply chain with external impacts.

³ Percentage of business operations, products/services and/or supply chain and other business activities included in the impact assessment.

⁴ Please see 1.2.2 Current Status - Activities, value chain, and other business relationships.

⁵ Please see 1.2.2 Current Status - Activities, value chain, and other business relationships.

Management Guidelines for Material Aspects and Major Achievement

Priority	Material Issue	Responsible Unit	Key Risks and Opportunities （negative impact and positive impact）	Dimension of Impact	Policy	Commitment	Action
1	Ethical corporate management	Corporate Governance Unit	Risk (potential negative impact)︰ Financial losses and reputational damage caused by acceptance of unlawful gains and inability to discover violation of the law in operations during audit. Opportunity (actual positive impact)︰ Reinforce workplace ethics as well as understanding and execution of ethical management, and use audit mechanisms for early discovery of violation of the law in operations in order to reduce unethical behaviors.	Risk	Effectively assist the Board and the management team in auditing and assessing effective operation of the internal control system. Shape an ethical management culture to incorporate ethical management into employee competencies.	Monitor and review areas of improvement listed by the inspection agencies, accountants, and internal audit units on an ongoing basis and report to the Board and the Audit Committee. Establish honesty and integrity as core values.	Prevent potential negative impact: Follow the competent authority's rules to make audit plans and continuously conduct audits according to audit plans. Manage actual positive impact: Conduct professional ethics, compliance training, and internal audits simultaneously.
2	Legal compliance	Corporate Governance Unit	Risk (actual, potential negative impact): Compliance failure causes losses as well as reputational damage if the competent authority takes disciplinary action. Opportunity (actual positive impact): Ensure effective compliance in order to increase customer trust in the company and facilitate potential sales.	Risk	Compliance is the responsibility of the Board, senior management, and all employees.	Familiarize every employee with laws and regulations and ethical guidelines relevant to their roles.	Solve actual negative impact: devised improvement measures in response to penalties imposed by the competent authority. Prevent potential negative impact; manage actual positive impact: All units perform compliance self assessments. Conduct trainings of "Compliance Business Seminar" for compliance officers at the Bank and securities subsidiaries. Conduct trainings of "AML/CFT Seminar" for banking and securities subsidiaries.
3	Corporate Governance	Corporate Governance Unit	Risk (potential negative impact: A less than fully developed organizational structure or operation will affect competitiveness and innovation at a corporation. Opportunity (actual positive impact): Continue to enhance corporate governance, facilitate sustainable development and win stakeholders' support in order to achieve mutual success.	Risk	Improve the corporate governance system to achieve sustainability.	Inspect corporate governance on an ongoing basis to create a mutually beneficial environment.	Prevent potential negative impact, manage actual positive impact: Protect the rights of shareholders and strengthen the role of the Board.
4	Information security	Customer Rights Unit	Risk (potential negative impact): Inadequate protection of the information and communication system and IT assets leads to failure of the company's cyber security measures. Opportunity (actual positive impact): Add to the reference materials for future cyber security incident drills after taking response action or control measure in order to shorten the response time for information security incidents and reduce potential information security risk and make the company better equipped to handle information security and achieve information security resilience for sustainable development.	Risk	Compliance with the Cyber Security Management Policy	Ensure confidentiality, integrity, and availability of information and communication systems and IT assets and reduce operational risk.	Prevent potential negative impact; manage actual positive impact: Enforce the annual cyber security maintenance program.
5	Customer Service and Privacy Protection	Customer Rights Unit	Risk(potential negative impact): Service Industries to Treat Clients Fairly and personal information protection that leads to damage to customers' rights and their trust in the Bank. Opportunity (actual positive impact): Enforce the Principle for Financial Service Industries to Treat Clients Fairly and personal information protection to increase customer satisfaction and stickiness.	Risk	Established the Bank’s "Treat Client Fairly Policies" and "Treat Client Fairly Strategies", and personal information protection guidelines. Enforce the Principle for Financial Service Industries to Treat Clients Fairly to ensure the quality of products and services; and prohibit unauthorized disclosure of customer information to external parties.	Follow the Financial Consumer Protection Act, the Treat Client Fairly Principles, the Personal Data Protection Act and related regulations to protect customers' rights.	Prevent potential negative impact; manage potential positive impact: Continue to provide employee training on fair customer treatment and personal information protection in order to protect customers' rights, and provide product information and channels for making contact, complaint, and application on the Bank’s official website.
6	Occupational Safety and Health	Employee Care Unit	Risk (potential negative impact): The absence of an occupational safety and health management system may create a higher chance of accident or health hazard to employees and cause less work efficiency and higher personnel costs. Opportunity (actual positive impact): Establish the Occupational Safety and Health Committee to ensure effective occupational safety and health management in order to prevent occupational accidents and protect workers' safety and health.	Cost	Ensure employees' safety and health and create an accident-free workplace.	Pay attention to employees' safety and health management and provide a friendly workplace.	Prevent potential impact; manage actual positive impact: Continue the "Maternal Employee Health Protection Plan", "Human-Factor Hazard Prevention Plan," and "Abnormal Workload-Triggered Diseases Prevention Plan". Manage actual positive impact: Obtain the ISO45001 occupational safety and health standards and create a healthy and safe work environment.
7	Talent retention and diverse benefits	Employee Care Unit	Risk (potential negative impact): A lack of effective employee retention amid mass retirement in recent years may cause gaps in the workforce. The absence of a wide range of benefits and fair remuneration system may lead to loss of talent. Opportunity (potential positive impact):Talent is the core asset of a corporation. Retaining and developing professional talent to prevent gaps in the workforce will benefit the Bank's business as a whole.	Risk	Promote various employee benefits and a reasonable and fair remuneration system in order to create an excellent workplace and encourage employee loyalty.	Uphold employee safety in the workplace and strive to create a fair and friendly workplace with a reasonable and fair remuneration policy.	Prevent potential negative impact; manage potential positive impact: Provide subsidies or allowance for childbirth and training. All holidays and leaves are amended to reflect changes in the law. Some holidays and leaves exceed the statutory requirements. Continue to provide Employee Stock Ownership Trust to foster loyalty.
8	Responsible investment	Sustainable Finance Unit	Risk (actual, potential negative impact): Growing ESG awareness and regulatory requirements lead to higher operational costs. Opportunity (actual positive impact): Increase the percentage of ESG investment to align to global trends and reduce risk in asset allocation.	Cost	Support enterprises committed to environmental protection, social responsibility, and corporate governance and avoid investing in controversies.	Exercise due care and uphold ethical management.	Alleviate actual negative impact; prevent potential negative impact: Many domestic and foreign studies indicate a positive correlation between ESG and a company's financial performance as well as ESG investing as a means to support environmental sustainability and social issues through action. Manage actual positive impact: Select investment targets with caution and continue to monitor after transactions.
9	Environmental protection	Sustainable Finance Unit	Risk (potential negative impact): Energy transition and carbon reduction missions add to the push for rising prices of water and electricity, and a risk of higher operational costs to the Bank. Climate change poses a risk to the operation of the Bank. Environmental and workplace safety issues involving suppliers have an impact on the environment and the Bank's reputation. Opportunity (actual, potential positive impact): Procure new equipment to replace old equipment that generates more greenhouse gas, implement an energy management system to achieve energy saving and carbon reduction, reduce operational costs, and mitigate climate change risk on the Bank's operation. Purchases eco-friendly products and support vendors in developing technologies or acquiring environmental protection labels and certification to build a green sustainable society together	Cost	Carry out the Bank's environmental sustainability, disclose GHG emissions, and save energy and reduce carbon emissions to build a green sustainable society. Increase energy efficiency and utilize environmentally friendly products Implement the Supplier Management Guidelines and detailed action plans to provide a basis of supplier evaluation for the Bank during procurement. Review and assistance are conducted regularly to require suppliers give active support to economic, social, environmental issues and other ESG causes.	Fulfill CSR and due care for the environment. Support green and environmentally friendly businesses and follow the government's green procurement policies by avoiding engaging controversial suppliers directly and adding a supplier's statement to procurement contracts in order to fulfill CSR.	Manage actual, potential positive impact: Implement ISO energy and environmental management systems, control water and electricity usage, replace old equipment, and reduce power consumption in the offices. Install short-, mid-, and long-term monitoring mechanisms and manage direct and indirect GHG emissions (Scope 1 and Scope 2), and reduce GHG emissions year by year. Give priority to procuring energy efficient products with environmental labels and green materials, expand the scope and quantity of green procurement, and raise the amount of green procurement year by year. Prevent potential negative impact: Conduct supplier evaluation and search through environmental and labor regulations and publicly available information and require explanation and improvement for any unethical conduct or violation of environmental, occupational safety and health, and worker rights regulations. The Bank may cancel or terminate a contract and terminate the supplier's eligibility for bidding if improvement is not made after the Bank provided advice.
10	Climate change strategy and management	Sustainable Finance Unit	Risk (potential negative impact): >Strong storms and tropical cyclones arising from extreme weather pose direct threat to the Bank's operation and cause disruption to borrowers' operations that lead to repayment difficulty and real estate collateral impairment. Domestic and foreign carbon tax and fee policies will impact customer operations and lead to an increase in customer default risk. Opportunity (actual positive impact): Develop green loans that help borrowers respond to climate change transition and develop low carbon financial services.	Risk	Follow the competent authority's Guidelines for Domestic Banks' Climate Risk Financial Disclosure and identify climate change related risks and opportunities, implement response plans, and develop climate governance policy. Will formulate the "Guidelines for Climate Risk Management". Will formulate the "Directions for Responsible Investment" and "Directions for Responsible Lending".	Perform climate change risk and opportunity analysis regularly to strengthen climate change governance of the Bank, assess financial impacts, and reduce risk while grasping business opportunities. Continue to disclose information regarding carbon emissions and reduction of the Bank. Incorporate investment and financing activities into the ESG assessment process.	Manage potential positive impact: Continuous development of environmentally friendly financial products and services related to green and sustainability. Continue to fill out the CDP questionnaires for climate change. Prevent potential negative impact: Real estate collaterals are taken into account in determining the climate physical risk level, and in the consideration of guarantee policies and strategies. Set the upper limit of the proportion of investment and financing positions in "high polluting/energy consuming industries" to control the climate transition risk of the Bank's investment and financing objects.
11	Sustainable Finance	Sustainable Finance Unit	Risk (potential negative impact): Increase pollution and energy consumption will affect quality of life and economic sustainability. The lack of response measures will expose the financial industry to operational risk. Opportunity (actual positive impact): The Bank combines core businesses and utilizes characteristics of cash flow in the banking sector to fulfill its social responsibility in the financial supply chain and explore new profit sources in sustainability related opportunities. Raise sustainability awareness among customers and take real ESG action to generate positive benefits for society.	Risk	Integrate ESG issues into the development strategies and processes of financing, wealth management, and credit card businesses. Support the global trend of carbon reduction and follow the government's policy while directing customers' attention and action to ESG risks and opportunities. Reject loan applications from controversial customers. When processing loan applications, search applicants on government websites for background data on environmental protection, workplace safety, food safety, and employee pension contribution rates and make these data part of the key factors for financing.	Follow the ESG practice and offer green loan products as part of the commitment to the environment and society. Support businesses implementing environmentally friendly and green developments and avoid working with businesses with environmental and social risks. Encourage customers to support environmentally friendly spending through green diet and green transportation and pay attention to environmental sustainability. Support environmentally friendly and green industries and avoid establishing loan business relationship with controversial enterprises.	Manage potential positive impact: Provide preferred financing terms to encourage customers to purchase renewable energy powered equipment, green label property, and energy efficiency label appliances in order to reduce carbon emissions and energy consumption. Inject funds into environmental conservation and green energy industries and SMEs, and provide upgrade & transformation guidance, ustainable finance and other onestop services to guide customers to implement ESG sustainability. Provide fast information inquiries services regarding urban renewals and one-stop financial services, offering case inquiry, counseling, and project loans, as well as trust management for the public. Launch wealth management products with ESG concept. Promote Sustainable Life Card, which advocates vegetarian diet and carbon reduction, green energy, and the sharing economy, and provide high cash back on green channels. Increase e-Statement applications and the percentage of online credit card application. Alleviate potential negative impact: Require borrowers who caused major environmental pollution, food safety or other hazard incidents submit improvement plans, and urge those who undercontribute to labor retirement reserve and cause damage to workers' rights to make up the shortfall as soon as possible.
12	Public welfare and charity	Social Benefit Unit	Risk (potential negative impact): The world and Taiwan remain in the shadow of the pandemic, which has sent shock waves through all kinds of economic activities and increased operational risk. It becomes more difficult for minority groups to access resources and blocks certain charity efforts. Failure to fulfill corporate social responsibility will affect a company's brand image. Opportunity (actual positive impact): Combine core competencies of a financial institution and maximize resource utilization while promoting sustainable finance and charitable causes to extend ESG to all aspects of the business.		Promote four public welfare strategies, "senior care", "social care", "arts and cultural education", and "sports competition", to increase recognition of the brand from employees and the public while fulfilling the Bank's responsibility in business development and social and environmental friendliness. New observation and collaboration will also be brought into the development of financial products and services.	Uphold the spirit of giving back to the local community and social practice, connect positive forces and use a variety of platforms to gather and use resources for maximum benefits while resolving environmental and social issues.	Preventing potential negative impact: Besides the commitment to business operation and profit, it is more important to fulfill CSR and give back to the community as a corporate citizen. Manage actual positive impact: Senior care: In support of the government's long term care policy, the Bank allocates 0.3% of total consumption amount of Silver Love Cards to charities that help seniors share meals and learn together. The fund will also help communities provide senior learning. The Bank continues to promote senior care in communities to help seniors retire locally. Social Care: Follow the philosophy of giving back to the community to support minority groups and those with physical/mental disabilities, take action in community care and social assistance, and care for the natural environment to bring love to all corners of the country. Arts and cultural education: Support local artists and organizes a diverse range of exhibits in the arts and culture space at the Bank. Sponsor arts and cultural activities and promote arts and cultural exchange. Sponsor academic forums to facilitate communication among the industry, academia, and government and support education and cultural campaigns. Sports Competition: Support grassroot spor ts and sponsor sports competition and games, help the agencies develop athletes and support sports in the local community so that Taiwan can adopt international standards, become more competitive in sports, and encourage more people to take on sports.
13	Inclusive finance	Customer Rights Unit	Risk (actual negative impact): A lack of equal access to financial services for the financially disadvantaged Opportunity (actual positive impact): Actively help business owners start their own businesses and work together on issues faced by SMEs Reach out and support each other as motivated by care. Continue with service innovation to ensure customers are fully protected and create more benefits for customers of all ages.		Help business owners start their businesses and work together on sustainability issues faced by SMEs.	Help business owners achieve sustainability and become a good business partner for customers.	Manage actual positive impact: Engage external institutions to organize a series of seminars and courses on "startup loans" and "how to build a relationship with banks" in order to provide the help needed in running businesses.
					Promote small and micro startup loans as a solution to the financing difficulty faced by small and micro businesses.	Help small and micro businesses obtain funds needed to operate and grow in order to achieve economic stability.	Solve actual negative impact: Provide different financial services for different groups in society, thereby creating jobs and economic development.
					Promote mobile payment tools and provide customers with more friendly payment methods while improving customer experience with financial services.	Continue to expand the venues and increase the number of mobile payment users in order to raise the percentage of mobile payment.	Manage actual positive impact: In addition to expanding in certain shopping districts, the Bank encourages customers to use the mobile payment code provided by the Bank to pay taxes and receive bonus. The Bank tries to bring mobile payment into the everyday life and fulfill its role in financial inclusion.
					TWSE started offering the intraday odd lot trading system officially in October 2020 and kept after-market odd lot trading in a move that facilitated diversity significantly in the securities market.	Help young and small-budget investors invest in TWSE listed companies and invigorated the odd lot market.	Manage actual positive impact: The Bank developed the intraday odd lot trading service in alignment with Taiwan Stock Exchange’s new system and customers’ trading needs, and officially launched the service on March 30, 2021 to provide a more convenient way for investors on a small budget to trade odd lots.
					Actively expand the elder care trust service.	Ensure safety of funds and protect customers' lifestyle.	Manage actual positive impact: Actively expand the elder care trust service to satisfy customer needs for asset allocation, financial planning, and elder care trust funds. Work through cross sector alliances with long term care, elder care, medical and social benefit providers to provide solutions to elder care, medical care, and fund management issues. The trust fund mechanism is used to protect the elderly and provide complete care and achieve financial inclusion.
					Provide several friendly micro insurance products and services to be sold to minority customers or those with specific roles by salespersons to extend the reach of micro insurance	Keep designing and offering financial products and services that can protect the disadvantaged and the elderly in order to expand the customer base	Manage actual positive impact: Promote small whole life insurance policies for more caring and friendly service for the elderly, and fully utilize characteristics of such products: The age bracket is wider and premium lower compared to other types of whole life policies. The intention is to enable consumers to care for the disadvantaged and the elderly by buying this type of policy.

Management Guidelines for Evaluation and Target

Priority	Material Issue	Evaluation and target
Priority	Material Issue	Performance Indicator	2022 (short-term) goal	Achievement in 2022	Result to confirm effective action⁶	2023 (short-term) goal	2024-2028 (mid to long-term) goal
1	Ethical corporate management	KPI 1: Execution of audit plans	Audit plan execution rate 100%	The 2022 audit plan was 100% executed.	In 2022, the Bank was not involved in any fraud, insider trading, anti-competition, antitrust or monopoly, market manipulation or any other ethical management related incidents. There were zero lawsuits and penalties.	Audit plan execution rate 100%	Audit plan execution rate 100%
		KPI 2: Professional ethics and compliance training.	95% pass rate	The pass rate of the 2022 H1 online evaluation was 99.71%, and the pass rate for 2022 H2 was 99.76%.⁷。		95% pass rate	97% pass rate
		KPI 3: Incidents of acceptance of unlawful gain.	0	No incident of acceptance of unlawful gain was reported in 2022.		0	0
		KPI 4: Reporting the execution status of ethical corporate management to the Board of Directors	At least once a year	Ethical management update on the previous year was presented to the board of directors in March 2022.		At least once a year	At least once a year
2	Legal compliance	KPI 1: Training completion rate of "Compliance Business Seminar" for compliance officers at the Bank and securities subsidiaries	Training completion rate 100%	The 2022 H1 Compliance Business Seminar and the 2022 H2 Compliance Business Seminar took place on June 30, 2022 and November 17, 2022, respectively. The training completion rate was 100%.	Penalties imposed by the competent authority fell by 50% compared to 2021.⁷。	Training completion rate 100%	Training completion rate 100%
2	Legal compliance	KPI 2: Training completion rate of "AML/CFT Seminar" for banking and securities subsidiaries	Training completion rate 100%	TBB held the 2022 AML/CFT Seminar (3hrs) on June 30, the 2022 AML/CFT on-the-job training - external institution (7hrs) (organized by Taipei Foundation of Finance on behalf of TBB) on October 18, and the 2022 AML/CFT statutory onthe- job training - TBB online learning website (2hrs). The completion rate was 100%.		Training completion rate 100%	Training completion rate 100%
3	Corporate Governance	KPI 1: Board diversity	Directors of either gender account for one fifth of the total number of directors	There were 2 female directors in 2022, which was below the required one fifth.	Ranked Top 6%-20% in 9th Corporate Governance Evaluation	Independent directors account for one third of the total number of directors	Both directors and independent directors of either gender account for one half of the total number of directors
3	Corporate Governance	KPI 2: Board meeting attendance on average and for individual directors	90%/80%	The average Board meeting attendance was 100% in 2022. The lowest individual attendance was 100%.	Ranked Top 6%-20% in 9th Corporate Governance Evaluation	92%/83%	96%/87%
4	Information security	Completion rate of damage control or recovery within 36 hours after becoming aware of the following cyber security incidents: Core business information is leaked (in a mild/serious case) Core business information or core information and communication systems are altered (in a mild/ serious case) Cyber security incidents classified as Material Contingencies	100%	No core business information was leaked (in a mild/ serious case) or core business information or core information and communication systems altered (in a mild/serious case) in 2022. Only one cyber security incident classified as a material contingency was reported. Damage control or recovery was completed within 36 hours in this incident. The completion rate was 100%.	MSCI ESG Ratings Report shows the Bank to have a higher score in Privacy and Information Security than its peers worldwide.	100%	100%
5	Customer Service and Privacy Protection	Customer satisfaction survey	Customer satisfaction reached 82%.	Customer satisfaction reached 89.3%.	Customer satisfaction reached 89.3%. The Bank received a high score of 92 in the Refinitiv ESG Combined Score for Social (S) – Product responsibility	Customer satisfaction reached 83%.	Customer satisfaction reached 85%.
6	Occupational Safety and Health	KPI 1: The protection rate of the“Maternal Health Protection Plan”	≧80%	Completion rate 86%	The Bank received a high score of 95 in the Refinitiv ESG Combined Score for Social(S)–Workforce¹¹	≧80%	≧82%
6	Occupational Safety and Health	KPI 2: Completion rate of nurses following up on employees with major irregularities in their physical examination reports	≧90%	Completion rate 100%		≧90%	≧92%
7	Talent retention and diverse benefits	KPI 1: Encourage fertility by providing a childbirth subsidy	Employee Welfare Committee: NT$5,000 per child Employer: Employer: NT$5,000 for the first child, and NT$10,000 for the second child and afterward	Employee Welfare Committee: NT$5,000 per child (subsidized 115 persons for a total of NT$575,000) Employer: NT$5,000 for the first child (subsidized 70 persons for a total of NT$350,000) NT$10,000 for the second child and afterward (subsidized 42 persons for a total of NT$420,000)	Employee satisfaction at 78.12%, higher than 76.40% in 2021.	Employee Welfare Committee: NT$5,000 per child Employer: NT$35,000 for the first child, NT$70,000 for the second child, NT$100,000 for the third child, NT$150,000 for the fourth child and afterward	Employee Welfare Committee: NT$5,000 per child Employer: NT$35,000 for the first child, NT$70,000 for the second child, NT$100,000 for the third child, NT$150,000 for the fourth child and afterward
		KPI 2: Reinstatement rate after parental leave	≧78%	91.94%		≧78%	≧80%
		KPI 3: Retention rate after parental leave	≧85%	86.67%		≧85%	≧85%
		KPI 4: Percentage of participation in Employee Stock Ownership Trust	Participation≧95%	Total participation: about 95.39%		Participation≧95%	Participation≧95%
8	Responsible investment	KPI 1: Investing in ESG bonds or related industries or products	Bond investment increases by 3 % compared to the previous year	ESG bond investment was NT$2.63 billion in 2022, up by 7.3% compared to NT$2.45 billion in the previous year. Among these bonds, a total of 9 tranches have been approved by the Taipei Exchange for green bond qualification, with a total investment of NT$2.3 billion.	The Bank received a high score of 83 in the Refinitiv ESG Combined Score for Governance(G) - CSR strategy.¹²	Bond investment increases by 3% compared to the previous year.	7% of total bond investment
8	Responsible investment	KPI 2: Participation in electronic voting at shareholders’ meetings hosted by TWSE/TPEx listed companies	80% participation in electronic voting at shareholders’ meetings hosted by TWSE/TPEx listed companies	Participation in electronic voting at shareholders’meetings hosted by TWSE/TPEx listed companies in 2022 was 100%.		85% participation in electronic voting at shareholders’ meetings hosted by TWSE/TPEx listed companies	95% participation in electronic voting at shareholders’ meetings hosted by TWSE/TPEx listed companies
9	Environmental protection	KPI 1: Percentage of energy saving across all offices of the Bank	An annual energy saving of 1% at the head office building, Linkou server rooms, and 125 domestic branches.	2.78% energy saving in 2022 compared to 2021	SGS verification result	An annual energy saving of 1.5% at offices premises of the entire Bank (compared to electricity consumption across all office premises in 2022)	A total of 10% (2022 as the base year for power consumption)
		KPI 2: Percentage of total GHG emissions (Scope 1+2)	A carbon reduction of 1% (Scopes 1 and 2) at the head office building, Linkou server rooms, and 125 domestic branches	3.38% carbon reduction in 2022 compared to 2021	SGS verification result	2% carbon reduction (compared to TBB's total carbon emissions in 2022)	A total of 10% (2022 as the base year for carbon emissions)
		KPI 3: Percentage of total green procurement	Annual procurement amount increases by 2% (2020 as the base year for procurement amount)	The amount of green procurement in 2022 increased by 17.36% compared to the base year 2020. 2020: NT$98.22 million 2021: NT$99.12 million 2022: NT$115.28 million	Named an excellent green procurement unit for 11 consecutive years	Annual procurement amount increases by 4% (2020 as the base year for procurement amount)	A total of 14% (2020 as the base year for power consumption)
		KPI 4: Number of cases with confirmed supplier violation but no improvement	No violation and no cases with failure to improve	No violation and no cases with failure to improve	Performed a CSR self-assessment before the procurement process to select excellent suppliers. There was no supplier violation in 2022.	No violation and no cases with failure to improve	No violation and no cases with failure to improve
		KPI5: Percentage of suppliers who have signed the “Statement of Commitment to Human Rights and Environmental Sustainability”	95%	100%		100%	100%
10	Climate change strategy and management	KPI 1: Fill out the CDP questionnaires for climate change	Completion rate 100%	The CDP questionnaire was completed at the end of July 2022. The completion rate was 100%.	Received a B score, above the global average among financial institutions (B- score) and Asia average (C score).	Completion rate 100%	Completion rate 100%
		KPI 2: Implement TCFD analysis and publicly disclose main TCFD information	Completion rate 100%	Main TCFD information for 2021 was simultaneously disclosed in the 2021 Annual Report and the Sustainability Report. The 2021 TCFD report was disclosed on the Bank’s official website in August 2022. The completion rate was 100%.	Climate-Related Financial Disclosures (TCFD) Report rated Level 5 Excellence grade, the highest level.	Completion rate 100%	Completion rate 100%
		KPI 3: Organize third party certification of TCFD report	Completion rate 100%	The TCFD conformity certification was completed and rated Level 5: Excellence grade at the end of June 2022. The completion rate was 100%.		Completion rate 100%	Completion rate 100%
11	Sustainable Finance	KPI 1: The accumulated amount of green energy-related project loans for providing finance and help individual customers improve and enhance equipment.	NT$10 million in total loans approved in the first year	NT$39.76 million in total loans approved	The Bank received a high score of 82 in the Refinitiv ESG Combined Score for Environment(E)-Innovation.¹³	NT$20 million in total loans approved	NT$160 million in total loans approved
		KPI 2: Total number of green loans to help corporate customers improve and enhance equipment	Year-on-year growth of 10%	The total number of green energy-related project loans approved reached 899 cases, up by 13.08% compared to 795 cases in 2021.		Year-on-year growth of 10%	Year-on-year growth of 10%
		KPI 3: Total loans approved for urban renewal and old building reconstruction	NT$50 billion in total loans approved	NT$68.699 billion in total loans approved for urban renewal and old building reconstruction		NT$60 billion in total loans approved	NT$100 billion in total loans approved
		KPI 4: Number of ESG funds launched	5 ESG funds launched	1 ESG fund launched		Annual growth of number of funds: 3% (Target for 2022 as the base)	Annual growth of number of funds: 18% (Target for 2022 as the base)
		KPI 5: Number of credit cards made of environmentally friendly materials	The percentage of total credit cards issued with environmentally friendly materials is 8%.	The percentage of total credit cards issued with environmentally friendly materials is 23%.		The percentage of total cards issued has reached 13%. (Number of cards issued in 2020 as the base)	The percentage of total cards issued has reached 23%. (Number of cards issued in 2020 as the base)
		KPI 6: Number of improvements made by corporate borrowers	Follow-up on improvement is noted in the conditions of approval for customers who had environmental protection or workplace safety issues.	Each loan case will be checked against the government websites for any environmental or workplace safety penalties and disclosure. There is no major improvement outstanding at the present.		Follow-up on improvement is noted in the conditions of approval for customers who had environmental protection or workplace safety issues.	Follow-up on improvement is noted in the conditions of approval for customers who had environmental protection or workplace safety issues.
12	Public welfare and charity	KPI 1: Accumulated donations to charity funds	NT$21 million	NT$21.23 million	The Bank received a perfect score of 100 in the Refinitiv ESG Combined Score for Social (S)-Community¹⁴	NT$24.50 million	NT$41.08 million in accumulated donations
		KPI 2: Number of recipients of senior care every year	270,000	280,000		280,000	330,000 every year
		KPI 3: Accumulated number of recipients of social care	560,000	570,000		600,000	Accumulated recipients reaching 800,000
		KPI 4: Number of arts and cultural education events as host or sponsor every year	8	14		9	71 events hosted or sponsored since 2022
		KPI 5: Number of sports competition hosted or sponsored every year	4	8		5	43 events/persons hosted or sponsored since 2022
13	Inclusive finance	KPI 1: Organize or participate in seminars hosted by external parties.	5 or more	24	MSCI ESG Ratings Report shows the Bank to have a higher score in Inclusive Finance than its peers worldwide. Received Trust 2.0 Program by Trust Enterprises Phase 1– Care Trust Award.	5 or more	5 or more
		KPI 2: Market ranking by number of small and micro business borrowers	First place	First place		First place	First place
		KPI 3: Number of transactions by Taiwan Pay QR code	845,000 new transactions	1,619,494 new transactions		900,000 new transactions	1,150,000 new transactions
		KPI 4: Volume of odd lot transactions	Volume of odd lot transactions up by 10%	Volume of odd lot transactions up by 23%		The volume of odd lot transactions rose by 20% compared to 2021.	Volume of odd lot transactions up by 50%
		KPI 5: Number of trust beneficiaries	2,000 new elder care trust beneficiaries in a single year	7,091 new elder care trust¹⁵beneficiaries in a single year		2,300 new elder care trust beneficiaries in a single year	3,300 new elder care trust beneficiaries in a single year
		KPI 6: (Number of ) new micro accident insurance and small whole life insurance policies	150 new contracts	422 new contracts		180 new contracts	288 new contracts

⁶ Please see 1.5 Stakeholder Communication for actions taken in response to material issues communicated with stakeholders and effectiveness of these actions.

⁷ It was attributed to some employees missing the evaluation or failed to achieve the passing score.

⁸ Total penalty was NT$1.74 million in 2021 and NT$840,000 in 2022.

⁹ Refinitiv, a London Stock Exchange Group business, is one of the world's largest providers of financial markets data.

¹⁰ Produce quality goods and services, integrating the customer’s health and safety, integrity and data privacy.

¹¹ Measure job satisfaction, a healthy and safe workplace, and diversity and equal opportunities.

¹² Integrate environmental, social, and governance dimensions into decision-making processes and communicate actions.

¹³ Reduce the environmental burdens, thereby creating new market opportunities through new technologies and processes, or products

¹⁴ The commitment to being a good citizen, protecting public health and respecting business ethics

¹⁵ In 2022, the expenditure of elder care trust amounted to approximately NT$2.578 billion with an approved payment rate of 100%.