Chunghwa Telecom Co Ltd

## External Engagement Management Mechanism on Climate Change

| Item | Description |
| --- | --- |
| Mechanisms and Responsibilities | * Guidelines in Participation in the Climate and Sustainable Development Public Policies has been formulated, and relevant management mechanisms have been established. * The Sustainable Development and Strategy Committee, overseeing the Company's sustainability efforts, consists of 5-9 directors, predominantly independent, and functions under the Board, with one Director designated as the convener. The Sustainable Development Promotion Committee, chaired by the Chief Sustainability Officer, is responsible for promoting the implementation of sustainable development, which include supervising the Company's engagement in climate and sustainable development-related public policies, participation in associations, and negotiation activities. |
| Reviewing and monitoring process to assess whether public policy engagements is aligned with the Paris Agreement | * Rigorous participation and management mechanisms through pre-participation review and ongoing monitoring have been established to ensure that the positions of climate-related associations in which Chunghwa Telecom participates continue to align with the Paris Agreement, i.e., aiming to limit the average global temperature increase to within 1.5°C of pre-industrial level. * If the policy and activities position of the association are not aligned with the Paris Agreement and the Company's climate policy and sustainable development goals and positions, the Company will take the following steps: (1). Clearly address the Company's position to the association through multiple channels, actively engage in communication, and continue to monitor whether the association makes any adjustments in its response, plans, or related activities. (2). If there are no adjustments or appropriate responses from the association after six months of communication, the Company will terminate any form of support and participation in the association and announce the withdrawal publicly. |

## External Engagement Management Mechanism on Climate Change

| Item | Description |
| --- | --- |
| Mechanisms and Responsibilities | * Guidelines in Participation in the Climate and Sustainable Development Public Policies has been formulated, and relevant management mechanisms have been established. * The Sustainable Development and Strategy Committee, overseeing the Company's sustainability efforts, consists of 5-9 directors, predominantly independent, and functions under the Board, with one Director designated as the convener. The Sustainable Development Promotion Committee, chaired by the Chief Sustainability Officer, is responsible for promoting the implementation of sustainable development, which include supervising the Company's engagement in climate and sustainable development-related public policies, participation in associations, and negotiation activities. |
| Reviewing and monitoring process to assess whether public policy engagements is aligned with the Paris Agreement | * Rigorous participation and management mechanisms through pre-participation review and ongoing monitoring have been established to ensure that the positions of climate-related associations in which Chunghwa Telecom participates continue to align with the Paris Agreement, i.e., aiming to limit the average global temperature increase to within 1.5°C of pre-industrial level. * If the policy and activities position of the association are not aligned with the Paris Agreement and the Company's climate policy and sustainable development goals and positions, the Company will take the following steps: (1). Clearly address the Company's position to the association through multiple channels, actively engage in communication, and continue to monitor whether the association makes any adjustments in its response, plans, or related activities. (2). If there are no adjustments or appropriate responses from the association after six months of communication, the Company will terminate any form of support and participation in the association and announce the withdrawal publicly. |

#### (I) Governance Organizational Structure
The Sustainable Development and Strategy Committee is the highest governing body for CHT's sustainable development. It operates under the Board of Directors as a functional committee, with a convener elected by and among the members. The committee comprises nine directors and is primarily responsible for providing strategic guidance on CHT's vision for sustainable development, medium to long-term goals, long-term policies, and management principles. Through quarterly meetings, the committee regularly oversees and evaluates the effectiveness of CHT's initiatives on climate change, as well as nature-related risks and opportunities. Board members, with their extensive backgrounds and experiences, strengthen CHT's sustainable governance capabilities. Significant emphasis is also placed on the highest governing body's further education and training in sustainability and biodiversity, ensuring effective oversight of CHT's overall development direction and the complete integration of sustainability strategies in business activities.

In addition, the Sustainable Development Promotion Committee, consisting of management personnel, has been established to uphold CHT's sustainable development strategy and advance various sustainable action plans. It regularly reports on the implementation results and future plans to the Board of Directors, aiding in policy formulation and enhancing the efficiency of sustainable risk management. [...] Given the increasing severity of biodiversity loss and ecosystem imbalance in recent years, the World Economic Forum's "Global Risks Report 2024" has ranked this as the third biggest risk in the next decade; in the long term, it is projected to disrupt ecosystems and affect the economy, environment, and society. As a result, to enhance biodiversity management, CHT has put forward a governance framework for addressing biodiversity issues, led by the Deputy of Technology as the convener, and spearheads related efforts through groups focused on technology, restoration, afforestation, and public relations. These groups are dedicated to executing projects focused on nature-related dependencies, impacts, risks, and opportunities; in particular, activities include habitat restoration, tree planting, promoting industry-academic cooperation, and keeping abreast of sustainable natural development trends and international initiatives. [...] In the future, CHT aims to expand the scope of activities and initiatives to encompass the entire value chain, collaborating with subsidiaries and suppliers on related projects, and working together to contribute to the ecological environment, creating a beautiful and sustainable future.

The Sustainable Development Committee reports the results of climate change policy implementation to the Chairman and President each month, as well as significant ESG issues and results of stakeholder communication every 6 months to the Board for annual performance appraisal. The Sustainable Development Committee divides its responsibilities into three groups, with the Environment (E) group overseeing climate change mitigation and adaptation as well the TCFD recommendations. The Environmental Group reports aforementioned tasks for the review and oversight of the Board, including climate change risk and opportunity management, the progress of climate change mitigation and adaptation strategies and objectives, the annual implementation plan and budget for the following year, etc. CHT follows the guidance of the Board of Directors to promptly revise climate change and adaptation strategies to facilitate decision-making by Board members. [...] The Environment (E) group reports the results of the assessment and analysis to the Risk Management Committee. The Risk Management Committee evaluates climate change risks and other risks the Company faces to take necessary mitigation measures according to the degree of risk. In addition, the Sustainable Development Committee reports the implementation results of the TCFD project (including risk assessment results) in committee meetings, as well as reporting to the Board of Directors in due course.

⚫ The Board of Directors is responsible for overseeing the Company's approach to climate change and making operational management decisions; ⚫ Develop CHT's strategy for addressing climate change, with a focus on both mitigation and adaptation; ⚫ Identify, analyze, and assess the risks associated with climate change, as well as analyze the financial impact of potential risks; ⚫ Set climate change mitigation and adaptation goals, and regularly review the progress towards achieving these goals. [...] Governance With a dual management mechanism consisting of the Sustainable Development and Strategy Committee and the Sustainable Development Committee, combined with existing internal control and risk management mechanisms, reports are made to the Board of Directors quarterly, strengthening the Board's supervision over climate change issues. [...] To enhance the functions of the Board of Directors and strengthen its supervision of sustainable business development, on August 9, 2023, CHT approved the integration of the Sustainable Development Committee and the Corporate Strategy Committee into the Sustainable Development and Strategy Committee. As a result of the integration, the committee was elevated to the level of a functional committee of the Board of Directors, and became the highest governing body for the sustainable development of CHT. [...] The Sustainable Development and Strategy Committee consists of five to nine directors; committee members are recommended by the Chairman and appointed by the Board of Directors. Among committee members, more than half are Independent Directors of CHT, and one is selected as the Convener and meeting chairperson, a position currently held by Chairman Shui-Yi Kuo. The committee convenes quarterly to offer strategic guidance on the vision for sustainable development, long-term policies, management principles, and medium to long-term goals. It also monitors and evaluates the performance of the Sustainable Development Committee. [...] The Sustainable Development Committee implements strategies set by the Sustainable Development and Strategy Committee, promoting various action plans, coordinating work division, and overseeing the implementation progress. Every quarter, the committee reports key issues, stakeholder communication results, and sustainability achievements to the Board of Directors; regular updates on the promotion of sustainability initiative are also provided to the Board's Sustainable Development and Strategy Committee. [...] The Environmental Group (E), led by the SEVP of Technology, operates under CHT's Sustainable Development Committee and is responsible for coordinating climate change issues company-wide, including the management of climate change related goals. Under the guidance of the Sustainable Development and Strategy Committee, the subgroup is responsible for formulating CHT's climate change strategy and initiatives, which include climate change mitigation and adaptation, as well as climate-related financial disclosure (TCFD). In particular, following TCFD recommendations, the E Group has conducted the identification, analysis, and assessment of climate change risks and opportunities. It has also established a target of achieving net-zero emissions by 2050, long-term (net-zero) targets and short-term targets aligned with SBTs, as well as climate adaptation goals for the short-, medium-, and long-term. The E Group has also developed mitigation and adaptation strategies in accordance with approved climate change goals and commenced annual implementation plans. [...] The Environmental Group (E) convenes monthly meetings to provide updates and discuss climate change issues with the SEVP. In addition, the subgroup also regularly reports on the progress of climate change targets, achievements, and future plans at quarterly cross-group meetings and biannual Sustainable Development Committee meetings, aiding senior management in monitoring climate change initiatives and facilitating informed decisions. In addition, Group E also adheres to Sustainable Development Roadmap set by the Financial Supervisory Commission, submitting to the Board a schedule for greenhouse gas inventory and verification, as well as quarterly progress reports. [...] To foster climate change awareness and culture, the Company has tied the compensation of Directors and employees with corporate sustainability/climate change issues, so as to encourage both Directors and employees to engage in climate change effort and help the Company move towards a low carbon transition. [...] The Sustainable Development Committee will align the accomplishments of sustainable development with the variable remuneration of senior executives, increasing the linkage from 10% in 2022 to 30% by 2025 to encourage the integration of ESG into daily management. [...] In line with the "Performance Management Guidelines for Executives of Chunghwa Telecom," the sustainability indicators for CHT's executives and variable compensation include: (1) risk management, (2) codes of ethical conduct, (3) IT network security, (4) climate change, (5) stakeholder engagement and inventory, as well as (6) social participation. [...] CHT has implemented ESG management mechanisms to establish a range of sustainable policies and is dedicated to implementing sustainable actions throughout the Company. [...] The Environmental Group (E) reports the assessment and analysis results to the Risk Management Committee. After the committee has conducted a comprehensive evaluation of climate-related risks along with other risks faced by the Company, necessary mitigation measures will be taken according to the risk level. [...] Establish the Risk Management Committee, a functional committee at the Board level, to oversee the operational mechanism of risk management. [...] The Risk Management Steering Committee is responsible for facilitating interdepartmental communication and coordination, as well as enforcing risk management policies and operations. [...] The Audit Department conducts an independent internal audit and reports directly to the Board of Directors. [...] Incorporate risk management results into performance evaluation indicators and track risk status on a monthly status, convene regular Risk Management Steering Committee meetings, and report to the Risk Management Committee, as well as the Board of Directors.

To demonstrate our commitment to ESG, we elevated the competent authority for sustainable development from middle management to the Board of Directors level. We also renamed the Strategy Committee the Sustainable Development and Strategy Committee to formulate the Company's sustainability strategies and action plans, with the chair of the Company now serving as Chief Sustainability Officer (CSO) and independent directors accounting for more than half of the committee's members. With this change, the Board now plays an even greater role in ensuring that the Company's operations strategies and business decisions are consistent with its sustainable development goals. From 2022, we introduced a link between the Company's ESG performance and senior executive remuneration. We are among the very few corporations in Taiwan that have a benefit clawback mechanism in place to ensure that executive-level decision-making is in line with the long-term benefits of our investors. In addition to our existing corporate governance system, we are incorporating the accountable investment principle into liquid capital management, restructuring our data management system to enhance data application value, and enforcing cybersecurity, privacy, and personal data protection measures to strengthen corporate governance. Lastly, to reinforce intellectual property-related regulatory compliance, we became the first ICT company in Taiwan to pass the Taiwan Intellectual Property Management System (TIPS) certification. [...] The "Sustainable Development Committee" and "Strategy Committee" merged into the Board-level "Sustainable Development and Strategy Committee," the highest guiding body for sustainability. This committee meets quarterly to guide sustainability vision, policies, and goals. Dual mechanisms of the "Sustainable Development and Strategy Committee" and the "Sustainable Development Promotion Committee," along with internal controls and risk management, ensure quarterly reports to the Board, strengthening oversight on climate change issues.

⚫ The Board of Directors is responsible for overseeing the Company's approach to climate change and making operational management decisions; ⚫ Develop CHT's strategy for addressing climate change, with a focus on both mitigation and adaptation; ⚫ Identify, analyze, and assess the risks associated with climate change, as well as analyze the financial impact of potential risks; ⚫ Set climate change mitigation and adaptation goals, and regularly review the progress towards achieving these goals. [...] Governance With a dual management mechanism consisting of the Sustainable Development and Strategy Committee and the Sustainable Development Committee, combined with existing internal control and risk management mechanisms, reports are made to the Board of Directors quarterly, strengthening the Board's supervision over climate change issues. [...] To enhance the functions of the Board of Directors and strengthen its supervision of sustainable business development, on August 9, 2023, CHT approved the integration of the Sustainable Development Committee and the Corporate Strategy Committee into the Sustainable Development and Strategy Committee. As a result of the integration, the committee was elevated to the level of a functional committee of the Board of Directors, and became the highest governing body for the sustainable development of CHT. [...] The Sustainable Development and Strategy Committee consists of five to nine directors; committee members are recommended by the Chairman and appointed by the Board of Directors. Among committee members, more than half are Independent Directors of CHT, and one is selected as the Convener and meeting chairperson, a position currently held by Chairman Shui-Yi Kuo. The committee convenes quarterly to offer strategic guidance on the vision for sustainable development, long-term policies, management principles, and medium to long-term goals. It also monitors and evaluates the performance of the Sustainable Development Committee. [...] The Sustainable Development Committee implements strategies set by the Sustainable Development and Strategy Committee, promoting various action plans, coordinating work division, and overseeing the implementation progress. Every quarter, the committee reports key issues, stakeholder communication results, and sustainability achievements to the Board of Directors; regular updates on the promotion of sustainability initiative are also provided to the Board's Sustainable Development and Strategy Committee. [...] The Environmental Group (E), led by the SEVP of Technology, operates under CHT's Sustainable Development Committee and is responsible for coordinating climate change issues company-wide, including the management of climate change related goals. Under the guidance of the Sustainable Development and Strategy Committee, the subgroup is responsible for formulating CHT's climate change strategy and initiatives, which include climate change mitigation and adaptation, as well as climate-related financial disclosure (TCFD). In particular, following TCFD recommendations, the E Group has conducted the identification, analysis, and assessment of climate change risks and opportunities. It has also established a target of achieving net-zero emissions by 2050, long-term (net-zero) targets and short-term targets aligned with SBTs, as well as climate adaptation goals for the short-, medium-, and long-term. The E Group has also developed mitigation and adaptation strategies in accordance with approved climate change goals and commenced annual implementation plans. [...] The Environmental Group (E) convenes monthly meetings to provide updates and discuss climate change issues with the SEVP. In addition, the subgroup also regularly reports on the progress of climate change targets, achievements, and future plans at quarterly cross-group meetings and biannual Sustainable Development Committee meetings, aiding senior management in monitoring climate change initiatives and facilitating informed decisions. In addition, Group E also adheres to Sustainable Development Roadmap set by the Financial Supervisory Commission, submitting to the Board a schedule for greenhouse gas inventory and verification, as well as quarterly progress reports. [...] To foster climate change awareness and culture, the Company has tied the compensation of Directors and employees with corporate sustainability/climate change issues, so as to encourage both Directors and employees to engage in climate change effort and help the Company move towards a low carbon transition. [...] The Sustainable Development Committee will align the accomplishments of sustainable development with the variable remuneration of senior executives, increasing the linkage from 10% in 2022 to 30% by 2025 to encourage the integration of ESG into daily management. [...] In line with the "Performance Management Guidelines for Executives of Chunghwa Telecom," the sustainability indicators for CHT's executives and variable compensation include: (1) risk management, (2) codes of ethical conduct, (3) IT network security, (4) climate change, (5) stakeholder engagement and inventory, as well as (6) social participation. [...] CHT has set up a carbon fee fund to cover costs of promoting energy conservation, carbon reduction, and the R&D for low-carbon technologies, including encouraging all units to propose innovative carbon reduction measures, purchasing renewable energy, and replacing high-efficiency and energy-saving equipment. In 2023, a total of 100 relevant proposals were submitted within CHT, out of which 67 were approved, with a budget allocation of NT$620 million.

* 我們也於官網設置利害關係人專區,提供當地利害關係人溝通管道,不僅每季統計當地利害關係人議合成果以及重要投訴事項陳報董事長核閱,並列入董事會報告事項

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]Taiwan government and Chunghwa Telecom have proposed a 2050 net-zero emission target. Therefore, Chunghwa Telecom will consider climate change while operating and participating in external activities to ensure that all operating activities are consistent with the net-zero emission target.
In order to promote net zero emissions, Chunghwa Telecom joined the Taiwan Alliance for Net Zero Emission and became one of its founding members. The Taiwan Alliance for Net Zero Emission will make recommendations to the government and other institutions on behalf of its members, so Chunghwa Telecom will take this opportunity to make recommendations to the government and other institutions on climate change and net zero emissions.

Describe the process(es) your organization has in place to ensure that your external engagement activities are consistent with your climate commitments and/or climate transition plan?[…]Taiwan and Chunghwa Telecom have proposed a 2050 net-zero emission target. Therefore, Chunghwa Telecom will consider climate change when operating and participating in external activities to ensure that all operating activities are consistent with the net-zero emission target.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes