Chang Hwa Bank|Corporate Social Responsibility-Message from the Chairperson

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Message from the Chairperson

Chang Hwa Bank, established in 1905, is approaching its 120th anniversary and has consistently adhered to the business philosophy of “Passion for Service, Efficiency in Action, and Innovation for the Future.” Through professional operation sites distributed globally, the Bank serves as an important driving force in promoting capital flow efficiency and socio-economic development. We continuously monitor domestic and international sustainable development trends, with the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement as our core principles. We have formulated the "SMART Strategy," encompassing Strengthening operational foundation & Shareholder value, Market-oriented & Market Driven precision marketing, AI & Automation, Resilience enhancement, and Training advancement, serving as the planning blueprint and core foundation for operational development. Additionally, we have established "ABCDE: A (Action & Accountability), B (Better continuous optimization), C (Compliance & Customer orientation), D (Three Lines of Defense), E (ESG sustainable finance)" as management guidelines, outlining the implementation framework for new sustainable development strategies.

In 2024, the global economy faced multiple challenges, with climate change and global socio-economic chain effects intensifying. ESG issues have become important indicators for measuring corporate competitiveness. In terms of governance, the Bank continues to enhance corporate governance and risk management, voluntarily participating in the "CG6014(2023) Corporate Governance System Evaluation" by the Taiwan Corporate Governance Association and obtaining certification. We have also introduced the "Responsibility Map " and " Sustainability Information Internal Control Mechanism" to strengthen corporate governance resilience. The Bank has been selected as a constituent stock of the Taiwan Stock Exchange Corporate Governance 100 Index (TWSE CG 100) for two consecutive years and ranked in the top 5% overall in the Corporate Governance Evaluation for four consecutive years, placing among the top 4 in the financial and insurance category in the 11th evaluation, recognizing our outstanding performance in the four major evaluation dimensions: "upholding shareholder rights and equitable treatment," "strengthening board structure and operations," "enhancing information transparency," and "promoting sustainable development." In environmental and social aspects, the Bank voluntarily assumes corporate social responsibility and actively promotes sustainable development to contribute positive environmental and social benefits, implementing concrete actions through our 4C Sustainability Vision - Carbon, Capital, Credit, and Customer. In 2024, the Bank demonstrated exceptional achievements in sustainable development, being selected for the second consecutive year as a leading bank in the Sustainable Finance Evaluation, as the constituent stock of the Dow Jones Sustainability World Index (DJSI World), and as a Top 10% Member of the S&P Global Sustainability Yearbook 2024. We were also newly selected as the constituent stock of the DJSI Emerging Markets Index, fully demonstrating the Bank's high priority and proactive approach to sustainability issues.

To Toward the net zero goal, the Bank will focus on 4C in the next step.
Carbon - Expand the greenhouse gas inventory and actively take action to reduce carbon emissions.
Capital - Create investment value and exert long-term sustainable influence.
Credit - Follow the Equator Principles and assist enterprises in transformation by green finance.
Customer - Value the Principle to Treat Clients Fairly and optimize financial friendly services.

The Bank has set its net-zero emissions target in alignment with the national 2050 Net-Zero carbon emission blueprint.

In July 2024, the Bank obtained official validation from the Science Based Targets initiative (SBTi) for its near-term reduction targets—aiming to limit global warming to within 1.5°C for Scope 1 and Scope 2 emissions, and to well below 2°C for investment and financing portfolio emissions—in alignment with the goals of the Paris Agreement, further strengthening our carbon reduction targets for both operations and investment/financing portfolios.

In our operations, we enhance carbon management by transforming buildings to green standards, expanding renewable energy use, establishing solar-powered and carbon-neutral branches, and improving internal carbon pricing mechanisms, ensuring steady progress toward phased carbon reduction targets. In 2024, we received an A leadership level rating in the CDP Climate Change Questionnaire, the Silver Award in the National Enterprise Environmental Protection Award from the Ministry of Environment, and the honor of being among the Top 100 Carbon Competitiveness by Business Weekly 2024.

The Bank has established the "Sustainable Finance Policy" to integrate environmental, social, and governance (ESG) factors into our core strategy, committed to leveraging financial influence through sustainable finance business to drive customers to jointly promote balance between climate change and the environment.

We have formulated the "Net Zero Emission Credit Limit Management Guidelines" and "Principles for Responsible Investment" to concretely implement our net-zero plan, setting target timelines to gradually phase out investments and financing in thermal coal and unconventional oil and gas related industries, as well as reduce non-green financing for high-carbon industries. We strive to align our business development strategy with the goals of the Paris Agreement and have launched green deposits, green project loans, Sustainability Linked Loans, and issued sustainable development-related bonds to drive corporate low-carbon transformation, jointly promoting sustainable development and circular economy, and building a sustainable finance ecosystem.

In 2024, we received the "Sustainable Finance Award" from the Joint Credit Information Center and were selected for the second consecutive year on the Taiwan Stock Exchange's List of Top Institutional Investors in Stewardship Information Disclosure.

Chang Hwa Bank advances financial inclusion through a top-down approach, with the Board of Directors spearheading fair treatment experience and education initiatives, and continuously promoting a diversified range of inclusive finance products and services, such as loan programs that create favorable entrepreneurial conditions for women, youth, middle-aged and senior individuals, microenterprises, and communities, as well as cross-industry collaborations to promote elderly care trusts that help seniors secure post-retirement living and plan for wealth succession.

In addition, we provide comprehensive non-financial support, including the installation of accessible ATMs, the establishment of barrier-free branches, and the organization of financial literacy education campaigns, to reduce barriers for people with special needs, ensure equal access to financial resources across all groups, and create inclusive value. In recent years, as fraud has become increasingly prevalent, the banking industry has acted as the first line of defense against such crimes. Chang Hwa Bank actively raises public awareness and enhances internal training, while leveraging technology to build more precise and timely alert and review systems. We also work closely with law enforcement agencies to detect and prevent fraud, thereby safeguarding people’s assets.

Looking ahead, the Bank will continue to strengthen our sustainable governance framework, create long-term value through the practice of sustainable finance, and collaborate with value chain partners across sectors to advance a shared vision for sustainable development.