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Material Aspects Identification

Our Company values the views of our stakeholders. Our stakeholders include shareholders and investors/creditors, government agencies, customers/debtors, current employees, potential employees, media, communities, and suppliers. We employed various channels and stakeholder communication to understand and identify their concerns. The Company conducts major theme assessments and reviews every year, of which the results are presented, along with the potential internal/external risks of financial-related business, to the Board of Directors.

The major themes of 2022 were evaluated and adjusted in accordance with the GRI Sustainability Reporting Standards: Universal Standards 2021 and the practical situations reflected within and outside the Company, through discussions and joint decisions made by the head of the Corporate Sustainability Office and the group leaders. In response to these major themes, corresponding management policies and concrete actions are disclosed, and the assessment process and identified major themes are as follows:

Procedures for Identifying Material Topics
Step 1: Identification In 2022, based on the GRI standards and upholding the dual importance principle, the Company selected 17 key sustainability issues by taking into account factors such as peer development in the industry, international standards (SASB and DJSI), international trends (UN SDGs, etc.), industry characteristics, and the concerns raised by stakeholders through communication channels.
Step 2: Evaluate To evaluate the probability and magnitude of positive and negative impacts on the external economy, environment, and society (ESG) in each sustainability issue that the Company may encounter, based on the expertise of each sustainability team on the issues .Note
Step 3: Prioritization To calculate the impact level of each sustainability issue based on the probability and magnitude of positive and negative impacts and rank the impact levels accordingly. Sustainability issues with impact levels reaching 60% or above are considered significant. In 2022, 12 significant sustainability issues were identified and confirmed by the head of the Corporate Sustainability Office and the leaders of each sustainability group to ensure that important ESG information has been fully disclosed in the report.
Step 4: Review After the completion of the report, the Corporate Sustainability Office's teams conduct a final review and report to the Sustainable Development Committee and the Board of Directors to determine whether there are any ESG information and performance improperly or unfaithfully expressed. The results of the identification of Material Topics and feedback from stakeholders are also used as an important reference for the next annual report.

Note:According to the GRI Standards 2021, the assessment is divided into positive and negative impacts. The positive impact assessment focuses on the probability of occurrence, as well as the size and scope of the impact. The negative impact assessment focuses on the probability of occurrence and the severity of the impact.

Impact of sustainability topics
Material Topics and Their Impact Boundaries

In 2022, 12 significant sustainability issues were identified, and remained the same ones as those identified in 2021. The following is an analysis of the involvement levels of these significant sustainability issues in terms of the "Value Chain Impacts", "Impact Dimensions", and "Impact Categories".

Risk Management and Strategies for Material Topics
Aspect Material Topics Importance to Yuanta Impact Description Policy Evaluation Corresponding sections to ESG Report
Corporate governance Corporate governance The Company believes that good corporate governance and integrity management are the foundation of its operations. In particular, the financial industry plays an important role in maintaining the stability of the financial environment and the flow of commercial capital. Therefore,we are committed to sound management, decision-making oversight, and professional and ethical operations, which are key to gaining the trust of our stakeholders. Enforce relevant laws and regulations such as the Corporate Governance Guidelines to help build favorable corporate governance systems and ensure stable company operations. Corporate Governance Gudielines
  • Every two years, the Taiwan Corporate Governance Association is comissioned to conduct an evaluation of the Company's corporate governance system. Through regular and in-depth reviews by external institutions and experts, the evaluation examines the completeness of the Company's relevant governance system, effectiveness of the system operations, implementation of disciplinary measures, and relevance and integrity of disclosures. The results of this evaluation serve as a reference for the Company to continuously improve and strengthen its corporate governance system.
  • The performance of the Board of Dreictors and Functional Committees is evaluated annually (self-evaluation), and every three years, the performance of the Board of Directors is evaluated by an outside professional and independent organization or outside experts.
Ch5.1 Corporate governace
Integrity Management Integrity has always been our management philosophy. In order to carry out our corporate philosophy of sustainable management, we have been promoting corporate governance, strengthening the management of the Board of Directors on integrity management and practicing corporate social responsibility, and integrating integrity and ethical values into our management strategy. Implement integrity management to help stabilize market order and protect the rights and interests of our stakeholders.
  • Integrity Management Gudielines
  • Procedures for Integrity Management and Guidelines for Conduct
  • Whistleblowing System and Implementation Measures
  • Professional Code of Ethics
  • The prevention plan and the related regulations established by the Company.
  • Internal control and other related regulations for each unit to follow internal control and operating procedures.
  • General business audits conducted by the auditing unit on an annual basis.
Ch5.2 Integrity management
Risk Management The global financial environment is becoming more complex and the risks involved in the financial industry are more diversified and intensified. Through the three lines of defense of risk management, the Company can effectively diversify, transfer or reduce risks to achieve a win-win-win situation for customers, shareholders, and employees. Establish comprehensive risk management measures to help improve operational resilience against crises, safeguard assets, and maintain financial market stability.
  • Risk Management Policy
  • Crisis Management Policy and Procedure Rules
  • Various risk management measures
  • Compliance and enforcement of regulations and internal control systems are verified through the Internal Auditing Department, which is part of the Board of Directors.
  • An annual risk management mechanism assessment is conducted, and the assessment results are reported to the Audit Committee and the Board of Directors.
Ch5.3 Risk management
Legal compliance Good compliance with laws and regulations is an important basis for companies to gain the trust of their stakeholders. In order to reduce compliance risks and ensure that the Company operates in compliance with relevant laws and regulations, we aim to strengthen employees’ awareness of compliance, maintain an effective and appropriate internal control system, and promote sound operation of the Company. Comply with relevant laws and regulations to help stabilize market order, and protect the natural environment as well as the rights and interests of our stakeholders.
  • Compliance Manual
  • Anti-Money Laundering and Counter-Terrorist Financing Policy
Through the Internal Auditing Department under the Board of Directors, the Company conducts general business audits at least once a year and project business audits every six months. Ch5.4 Legal compliance
Information and Transaction Security With the increasing development of technology, the financial trading environment is becoming more and more dependent on the Internet, and the diversification of services also brings the impact of information security risks. The Group aims to provide stable and secure information services with the sustainable goals of “protecting the security of information assets” and “maintaining business continuity to achieve sustainable business operation”. Strengthen information security protection networks and employee information security awareness to prevent hackers and to prevent private customer information from leaking, protecting the rights and interests of our stakeholders. Information Security Policy The information security team of the Company and each subsidiary holds regular group meetings and management review meetings every year to evaluate and improve the effectiveness of information security management, audit and evaluation results, and feedback from stakeholders. Ch5.5 Information security
Employee Care Employee attraction and retention Talent is an important driving force for companies to move forward. The Group actively invests resources in recruiting outstanding and diversified talents, and through the employment of diversified talents, the Group is able to further expand into Taiwan. Pay attention to the issues of retaining old employees as well as attracting talented domestic and foreign workers to improve the competitiveness of domestic industries and to increase employment opportunities, including those for disadvantaged groups. We have established multiple channels to source talents and provided a comprehensive compensation and benefit system to recruit domestic and overseas talents. We have established a long-term incentive plan linked to sustainable performance, actively retained high-performing personnel, and conducted regular employee engagement surveys. Ch6.1 Employee attraction and retention
Talent Cultivation and Development In the ever-changing financial industry, human resources are one of the foundations of the Company to provide good services and corporate innovation. The Company actively cultivates multiple functions of its staff, consolidates core professions, and develops new functions to meet the needs of the financial industry and the Group’s business development and enhance the Group’s overall competitiveness. Train employees to possess multiple competences and provide them with favorable and equal career development opportunities in order to improve employee engagement and the Group’s competitiveness. The Group’s talent cultivation strategy is to align with “solidification of cores and driving of growth”, encourage employees to learn and transfer to other positions, and promote lifelong learning by combining physical and online training courses and providing learning resources through four course structures: Management College, Professional College, License College and Life College. Managing employee education and training coverage rate, cultivating green financial talents, and reviewing employee performance evaluation. Ch6.2 Talent cultivation and development
Customer Care Customer rights From the perspective of customers’ needs, the Group leverages the diverse core business characteristics of its subsidiaries to introduce diversified and innovative products, strengthen customer communication, cultivate customer trust and loyalty, and continue to provide attentive and caring services to customers. Care about the rights and interests of customers and provide them with complete communication mechanisms to understand their needs promptly and protect their rights and interests.
  • Personal Data Protection Act
  • Cyber Security Management Act
  • Financial Holding Company Act
  • Regulations on Joint Marketing among Subsidiaries of Financial Holding Companies
We incorporate the principles of fair treatment into our daily core business. Each of the five subsidiaries has established a specialized unit, with the chief executive officer as the convener, to hold regular meetings to plan, review, and promote improvement plans on matters related to the principle of fair treatment of customers and product review, and to report the implementation status to the Board of Directors to strengthen implementation from the top down. Ch4.3 Customer rights
Financial Product Innovation and Services Digital platforms and mobile services have become part of our daily life. In response to the gradual changes in the behavioral patterns of consumers and the financial industry, the Group has been improving the functions of its financial digital platform based on its business characteristics, optimizing the investment process and customer habits through a convenient and fast digital experience, cultivating customer loyalty, and strengthening the Group’s digital competitiveness. Continue to promote financial product innovations and services, increase the reach of financial services, and reduce the use of paper and carbon emissions through the increased use of digital media.
  • Digital platform development process
  • Design criteria specification document and production design specification file
We hold monthly meetings and occasional meetings with colleagues in the digital finance department of each subsidiary to discuss and ask the head of the digital finance department of each subsidiary to report on the content, progress, schedule, and promotion of mobile device development and optimization. Every six months, we evaluate the growth rate of mobile users of each subsidiary’s digital finance department. Ch4.2 Innovative social finance products
Green Operations Sustainable finance The Group places emphasis on sustainable financial development and is in line with international trends. We have developed Sustainable Finance Guidelines and are gradually incorporating ESG considerations into our lending, investment and financial products and services development. We also combine the business expertise of each subsidiary to provide diversified financial services and support the development of enterprises with sustainable concepts, and use our influence as a capital provider and manager to channel capital to sustainable industries and expand the influence of sustainable finance. Encourage our business partners to set sustainable goals, promote green energy, and support sustainability-related industries as well as companies with good ESG performance to drive society to engage in sustainable practices.
  • Sustainable Finance Guidelines
  • Industry-Specific Environmental and Social Risk Management Rules
Through half year meetings of the chief executive officers of the Company and its subsidiaries, we review the progress and performance of sustainable investment and financing, ESG products and services, and ESG consultation and negotiation, and discuss relevant international trends and directions for promoting sustainable finance, so that ESG can be implemented in our operations. Ch4.1 Sustainable finance
Financial Inclusion The Group is committed to strengthening the inclusiveness of its financial services and integrating the core idea of “fulfilling your biggest dreams” to provide diversified, convenient, and lower-cost financial services to the disadvantaged people and micro-enterprises in the society, effectively promoting the development of local finance and expanding the reach of financial services, such as micro-insurance, public trust, and barrier-free financial services. We hope to enable disadvantaged groups to enjoy equal access to financial services. Continue to promote financial inclusion, protect the rights and interests of the public to obtain financial services, promote social equity, and achieve inclusive growth. - We track and manage the performance of each subsidiary’s financial inclusion products on a quarterly basis. Through each subsidiary’s quarterly reports on the new financial products developed, the number of participants, and the amount of money involved, as well as reporting on the 24 financial inclusion indicators and 4 observation indicators of Taiwan’s Financial Supervisory Commission (FSC), we are able to grasp the financial inclusion policies of the competent authorities. Ch4.2 Innovative social finance products
Environmental Sustainability Climate action We are committed to building a corporate green culture by managing internal energy consumption and greenhouse gas emissions, continuously improving energy efficiency, and actively purchasing green power and renewable energy to reduce the environmental impact of our operations. Care about climate action issues, set carbon reduction targets, and implement GHG inventory, energy management, climate finance, and supply chain carbon reduction management to mitigate global warming; and use our financial power to promote low-carbon industrial transformation. Environmental and Energy and Climate Change Management Policy
  • Environmental related ISO standard system is introduced and third-party verification is obtained.
  • Annual review of carbon reduction, energy saving, renewable energy use, water saving, and waste reduction targets.
Ch3.1 Response to the international carbon reduction program