Fubon Financial Holding Co Ltd

The Corporate Governance and Sustainability Committee under the Company's board of directors oversees the implementation of corporate social responsibility and sustainability tasks and assesses their execution. The ESG Task Force set up under the Corporate Governance and Sustainability Committee is led by the Company's president. The Responsible Finance Team set up under the ESG Task Force encourages the Company and its subsidiaries to develop and use sustainable investment and credit planning and management mechanisms, and submits a report on related action plans and results every six months to the Corporate Governance and Sustainability Committee and then to the board of directors. The convener of the ESG Task Force appoints the Company's chief risk officer as the leader of the Responsible Finance Team. The Risk Management Division assists the Responsible Finance Team in handling the sustainable finance initiatives of the Company and its subsidiaries and guiding subsidiaries in managing sustainable finance issues. It submits a report on these activities to the Corporate Governance and Sustainability Committee on a regular basis.

實行策略

一、建立評估運作機制

本公司設有分層負責表及功能職掌,各單位依職掌屬性及業務負責範圍,個別評
估合作之學/協/公會及遊說團體是否符合本宣言相關規範,評估結果需上報至總
經理核定。若有必要性,可先行洽詢永續發展部之意見作為評估參考。

**Implementation Strategy**
1. Establishment of an operational mechanism for evaluation
The company has set a tiered responsibility table and functional responsibility, each
unit will individually evaluate whether or not the cooperating

academy/association/society and lobbying group comply with the relevant regulations
of this declaration according to their job responsibilities and business scope and the
evaluation results must be reported to the president for approval. If necessary, the
Sustainability Development Department can be consulted first as a reference.

二、積極溝通與議和

本公司期許所參與之學/協/公會及遊說團體等,均能戮力支持永續發展,因此於
加入或合作展開前,會透過該團體公開揭露之資訊(如網站、新聞報導、期刊等),
辨識及考量該組織是否支持「聯合國永續發展目標(SDGs)」與「《巴黎協定》控
制溫升目標」,並針對該團體具爭議之情事審慎評估。加入或合作後,本公司亦

會每年進行檢視與監督該團體,是否與本公司永續政策產生衝突,或對整體氣候
環境造成負面影響,積極進行議和行動;如該團體無具體改善計畫與行動,本公
司將先積極溝通,要求其制定清楚的改善時間軸與程序;若其仍無法配合改善,
應逐漸減少活動合作,或甚至取消合作夥伴關係。

2. Active communication and engagement
The Company hopes that our participating academy/association/society and lobbying
group will work together to support sustainable development. Therefore, before joining
or cooperating with the organization, the Company will identify and consider whether
the organization supports the「Sustainable Development Goals (SDGs)」 and 「the
temperature control target of the "Paris Agreement"」through information publicly

disclosed by the organization (e.g., website, news reports, periodicals, etc.), and will
carefully evaluate the controversial issues of the organization. After joining or
partnering with the organization, the Company will also review and supervise the
organization annually for conflicts with our sustainability policy or negative impacts
on the overall climate environment, and actively engage in discussion and action. If the
organization does not have a specific improvement plan or action, we will first actively
communicate with the organization and require them to establish a clear timeline and

procedures for improvement. If they are still unable to cooperate with the improvement,

the cooperation should be gradually reduced or even the partnership should be canceled.

三、強化資訊揭露

本公司秉持正確詳實且公平揭露之原則,每年編製採用國際上廣泛認可之準則或
指引之永續報告書,並取得第三方確信。若有與本公司所參與之學/協/公會及遊
說團體相關之永續發展及氣候行動,或本公司主動/受邀參與之氣候相關遊說活
動,均將於當年度永續報告書公開揭露說明。

3. Strengthen the information disclosure

In accordance with the principles of accurate, detailed and fair disclosure, the Company
prepares an annual sustainability report that adopts internationally recognized criteria
or guidelines and obtains the third-party assurance. If there are sustainability
development and climate action related to the academy/association/society and
lobbying group that the Company participates in, or if the Company actively
participates or is invited to participate in climate related lobbying activities, then these
will be publicly disclosed in the sustainability report for that year.

Fubon has made the board of directors the top oversight unit responsible for promoting sustainability, fostering the Company's sustainability culture, and overseeing the promotion and implementation of sustainability-related action plans. Climate change risk information that accounts for responsible finance and risk management purposes is regularly reported to the "Corporate Governance and Sustainability Committee" and "Audit Committee" under the board of directors. The main topics in the report for 2023/2024 were as follows: - Implementation of Sustainability Strategies and Goals (including green finance and low-carbon operation achievements) - International Initiatives, Domestic and Foreign Ratings (including joining the TNFD Forum) - New Investment/Underwriting Decarbonization Strategies - High-carbon Industry Exposure/Financed Emissions Inventories - Progress in Achieving SBT Targets - Annual Climate-related Risks and Opportunities Assessment [...] The Environmental Sustainability Team and Responsible Finance Team closely monitor international sustainability-oriented organizations, domestic and overseas ratings standards and initiatives, such as the Intergovernmental Panel on Climate Change (IPCC), DJSI, CDP, SBTi, and RE100, to stay informed on climate issues. They devise strategies, action plans and goals based on domestic and overseas trends that are adjusted as necessary. These strategies and plans are submitted for approval to senior managers or the board of directors, depending on the Company's required level of authority for approval. The Company's Risk Management Division uses rigorous risk controls to monitor climate-related risks together with the subsidiaries, and reports the results on a regular basis to senior managers and the board of directors. The responsibilities of the two teams and the one division are as follows: Environmental Sustainability Team Responsible Finance Team Risk Management Division Led by the head of the General Administration Division Led by the head of the Risk Management Division Led by the head of the Risk Management Division Coordinates the Company's and subsidiaries' green operations and environmental protection plans; responsible for Coordinates the Company's and subsidiaries' sustainable finance and low-carbon transition managing environmental sustainability initiatives and establishing the Supplier Sustainable Development Code of initiatives and plans; responsible for devising and managing sustainable finance and climate Organizes the promotion of climate-related fiConduct, coordinating procedures for low-carbon sustainability assessments for Fubon's own operations and suppli- change rules and guidelines, coordinating procedures for assessing climate-related risks and nancial disclosure projects and coordinates and ers, managing the Company's renewable energy development and carbon-reduction pathways, and promoting the opportunities, identifying material risks and opportunities, and reporting the information. oversees subsidiaries' handling of climate change sustainable development of Fubon suppliers. management issues; these actions are incorpo Fubon's main subsidiaries have also formed environmental sustainability teams that jointly arrange organizational Fubon's main subsidiaries have also formed responsible finance teams that jointly organize rated into the quarterly risk management report, greenhouse gas emission inventories, conduct supplier impact analyses, and develop strategies related to renew- carbon inventories of their investment, loan, and underwriting positions, conduct impact as- which is submitted to the Risk Management Comable energy and environmental resources; they also occasionally hold supplier ESG meetings to share information sessments, and develop related strategies; they also occasionally hold ESG meetings to share mittee, Audit Committee, and board of directors. information. and announce the results of the annual supplier sustainability assessments.

###### 2.1 Climate Governance and Oversight Framework \n\n█ Taipei Fubon Bank's Sustainability and Climate Risk Governance Structure and Three Lines of Defense \n\n###### Board of Directors \n\n President Chief Auditor \n\n|Board of|Directors|\n|---|---|\n|Board of Presi|Directors|\n|Sustainability Task Force Corporate Governance and Employee Care Environmental Responsible Innovative Social Commitment Ethical Management Team Team Sustainability Team Finance Team Services Team Team|| \n\n###### Financing and investment business units \n\nConduct assessments of climate risk during the course of their daily business activities, especially when they involve industries sensitive to climate risk \n\n###### Risk management unit Legal and compliance unit Audit office of the board of directors \n\nEffectively monitors the first line of defense's execution of Ensures that each unit's operations comply Assesses how effectively the first and second lines of defense are climate risk management with laws and regulations monitoring climate-related risks and provides recommendations for improvement \n\n###### The Bank's climate strategies and climate risk management have been approved by the board of directors, which serves as the highest decision-making unit within the Bank's climate risk management frame- work. It is responsible for approving policies and providing policy guidance and oversight. When the Bank engages in business, strategic or financial planning, we take into consideration the potential impact and likelihood of climate risks, using several sources for guidance. They include related laws, rules, recommendations, standards, ratings, initiatives or reports issued by domestic or foreign institutions, in- cluding but not limited to the "Climate-related Risk Management Practices Handbook for Taiwan Banks" published by the Bankers Association. and the Task Force on Climate-related Financial Disclosures (TCFD) issued by the Financial Stability Board (FSB). The Bank's Sustainability Task Force is responsible for implementing sustainability-related (including climate risk) plans and goals and reporting the results (including the results of financed emissions inventories and analyses of climate risk scenarios) on a regular basis. The Responsible Finance Team under the Sustainability Task Force is responsible for carrying out and managing climate risk-related tasks. \n\n█ Climate Risk Governance and Oversight Framework \n\n|█ Climate Risk Go|overnance and Oversight Framework|Col3|Col4|Col5|\n|---|---|---|---|---|\n|Level|Responsible Unit / Personnel Description||Meeting Frequency|Description|\n|Board of Directors|||Every 2 months|Approves policies related to climate risk management, guides and oversees the Bank's climate risk management|\n||Sustainability Task Force|Bank's president serves as director of the task force; the Branding and Sustainability Department serves as the task force's secretarial unit|Quarterly|Responsible for implementing the Bank's sustainability-related (including climate risk management) plans and goals and reporting the results to higher-up units on a regular basis|\n\nManagement \n\nResponsible Finance Team \n\nUnits mainly responsible for planning, executing climate risk management plans include the Risk Management Department, the Institutional Banking and Retail Banking credit departments, and other units designated by the president \n\nAs needed; no regular frequency \n\nResponsible for establishing and managing the Bank's rules related to sustainable finance, promoting sustainability-related financial products and services, such as sustainable loans investments, identifying and assessing climate-related risks and opportunities, and developing climate mitigation and adaptation measures

Taipei Fubon Bank's Climate Risk Governance Structure and Three Lines of Defense [...] The Board of Directors of the Taipei Fubon Bank is the highest decision-making body for the climate-related risk management mechanism and is responsible for policy approval, guidance and supervision. The Sustainability Task Force is a collaborative platform across units within the Bank that aims to promote sustainable development. Its main responsibilities include implementing the Bank's sustainable development plans and objectives, as well as periodic report on the results to the Board of Directors. The Responsible Finance Working Group, which operates under the Sustainability Task Force, is tasked with implementing plans and targets pertaining to sustainable finance and climate change.

To ensure the effectiveness of Fubon Life's stewardship practices, the Company has constituted a three-line defense structure for internal control, consisting of the first line (unit self-audit), the second line (units responsible for regulatory compliance and risk management), and the third line (internal audit unit). The structure ensures the effective execution of internal control systems and safeguards customer rights. As reviewed and audited, the Company confirmed that all mechanisms and activities pertaining to stewardship in 2022 were effective. To further ensure internal supervision and control, this report was approved by the President and published after it was reviewed by units responsible for Fubon Life regulatory compliance and investment management. [...] To ensure the implementation and effectiveness of our policies, Fubon Life's investment department reports to the Responsible Finance Group. The achievements of responsible investment projects from the previous year and key project plans for the current year are reported by the ESG Task Force to the Board of Directors at the beginning of each year for review. Additionally, project execution progress for the first half of the year and plans for the second half are reported to the President mid-year, facilitating the tracking and management of ESG promotion progress. Furthermore, the Company's internal audit unit conducts audits to ensure compliance with ESG-related laws and regulations. [...] All investment units within Fubon Life are required to implement responsible investment and stewardship policies in their day-to-day work. This includes both domestic and international fixed income investment departments, alternative investment departments, and investment administration departments. Resources and manpower are allocated for this purpose, and their responsibilities include: 1 Evaluating ESG indicators as part of investment analysis reports prior to investment and referencing external sources to establish a negative list. 2 Regularly conducting post-investment ESG reviews using ESG checklists and ensuring the implementation of shareholder activism. 3 All units also utilize information from external ESG rating agencies in their day-to-day work to make ESG-themed investments, e.g., selecting companies with strong ESG performance to facilitate industry development. Key areas include renewable energy and related industries, pharmaceutical development and biotechnology, low-carbon investments, green construction, infrastructure, ESG performance screening, and participation in government-promoted industry innovation programs. [...] In ensuring stewardship effectiveness, the Company follows a three-line defense structure within its internal control system, consisting of the first line (unit self-audit), the second line (units responsible for regulatory compliance and risk management), and the third line (internal audit unit). The structure ensures the effective execution of internal control systems and safeguards customer rights. As reviewed and audited, the Company confirmed that all mechanisms and activities pertaining to stewardship in 2022 were effective.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]Fubon Insurance currently uses engineering insurance to subject mining operators to some controls. At the same time that it began supporting green energy development in 2017, it started to reduce its involvement in coal-related engineering insurance in line with international trends. To give companies time to go green and reduce their carbon footprints, however, it has taken the approach of gradually reducing the coverage it underwrites for each policy, and helps clients with insurance planning for their transition to green energy. To strengthen its sustainability practices and comply with the Principles for Responsible Investment, Fubon Life incorporates environmental, social, and governance factors in the analysis and decision-making process for any investment. Those engagements are driven by Fubon Life's compliance with principles 3 and 4 in its "Stewardship Principles for Institutional Investors Compliance Statement,†.

(1). Regularly Monitoring Investee Companies: To ensure that Fubon Life obtains sufficient and valid information, industry researchers consistently track publicly disclosed information on companies Fubon Life has invested in, including their operating status and revenues.
(2). Maintaining Dialogue and Interaction: The people responsible for tracking different industries communicate with the upper management of companies invested in by phone, video conference, investor conferences, face-to-face meetings and other methods to get a clear picture of those companies' operating conditions. Those interactions inform investment decisions. If a company that has been invested in has violated the law, or the long-term interests of the company and its customers have been damaged because of actions on a specific ESG issue, Fubon Life may send a representative at any time to visit upper management, get clarification on the problem, and closely monitor follow-up developments.

In addition, to ensure that this engagement is consistent with stewardship principles, investment blacklist indicators have been established that are used to screen investment targets before an investment is made. If a violation of any of those indicators is discovered, the investment should not be made. After an investment is made, it should be regularly tracked using internal ESG indicators (such as whether the company has had environmental or human rights-related violations or experienced serious labor-management disputes).

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