Sustainability Commitment and Strategy
Cathay FHC engages with stakeholders in accordance with the four fundamental principles outlined in AA1000 Stakeholder Engagement Standard (AA1000 SES): Materiality, Inclusivity, Responsiveness, and Impact. In the meantime, we identified nine major stakeholder groups with our sustainability blueprint designed to hone in on our sustainability strategies. We subsequently compiled the "Cathay FHC Stakeholder Engagement Strategies" to listen to, understand, and respond to stakeholder voices and concerns through multiple channels/mechanisms. We aim to establish mutual benefit and trust through continued communication and engagement.
We annually report our performance of communication with stakeholders to the Board of Directors. For more information, please refer to Communication Channels and Response Method of Issues of Concern for Stakeholders.
Cathay FHC has clearly stipulated on its Code of Operation Integrity and Code of Conduct for Employees that participation in public affairs must comply with laws and regulations, and any donations made must be disclosed accordingly. Following the rapid development of digital finance technologies, financial institutions not only face competition from the technology industry or e-commerce platforms, but must also respond to a plethora of emerging risks, such as aging population and climate change. Cathay FHC engages in the affairs of various associations and societies in hopes of building a consensus in the industry and contributing to industrial development. Long time collaborators include the Insurance Society of the R.O.C., International Insurance Society (IIS), and the Bankers Association of the R.O.C. For example, Chang-Ken Lee, President of Cathay FHC, is the chairperson of the Financial Planning Association of Taiwan. All of these leaders actively promote collaboration between industry and government, and formulate related policies for mutual prosperity in the industry.
Cathay FHC not only takes stakeholder concerns into consideration when conducting materiality analysis, but we also refer to the Double Materiality concept advocated by the European Union. It adopts the impact-based methodology for materiality analysis, based on the latest general guidelines published by the Global Reporting Initiative (GRI), specifically GRI 3: Material Topics 2021. This methodology is used to identify material topics by analyzing the impacts of the company's operations on the environment and society, and determining which issues are most significant. Furthermore, Cathay FHC utilizes the Impact Valuation methodology to evaluate the impact of its operations on the economy, environment, and society, including actual and potential impacts, long- and short-term impacts, positive and negative impacts, and reparable or irreparable impacts. The company identifies significant impacts using monetary and quantitative indicators, and prioritizes ESG issues based on the significance of their impacts. This approach responds to stakeholder demands for transparency and allows Cathay Financial Holdings to develop a sustainable development direction and strategy blueprint.
2022 Goals Attainment of Material Issues
With the results of identification and impact assessment, we further deliberate our sustainability strategy with senior managers and the sustainability team. Based on double materiality, we confirm and prioritize 19 material CS issues according to "Level of Operational Impact," "Level of Stakeholder Concern," and "Level of Sustainable Development Impact.".
Ethics and Compliance, risk management, and information security were some of the material issues highlighted by Cathay FHC in 2022. Below are the risk control strategies implemented for the two material issues listed:
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Cathay has established Responsible Investment and Lending Policy, Investment and Lending Exclusion Policy and Engagement Policy. We incorporate ESG into the existing investment and lending procedures. Therefore, we have implemented exclusion screening, and more crucial, integrated ESG factors into comprehensive investment decisions in daily operations. We also managed businesses based on the risk level, and actively implemented post-investment/post-loan management after the investment and lending to reduce risks. In addition to proprietary assets, Cathay also incorporated mandate assets into the scope of responsible investment management..
We will keep improving our ability to manage ESG risks of investment and lending through enhancing carbon reduction management of our financial assets and strengthening shareholders' activism..
customer relations management as follows:
Cathay FHC ‘s business scope includes life insurance, banking, property insurance, securities, securities investment trust and venture capital, corresponding to the type of stakeholders and issues are also very broad. In 2015, we introduced the concept of integrated reporting (IR) by emphasizing opportunities, risks, corporate strategies, and value creation to identify Cathay's five major capitals for the impact evaluation of material issues. When retrieving stakeholders' opinions, we integrated the company's results of Employee Satisfaction and Voice of Customer surveys, substantially increasing feedback scope and representativeness. From among 61 issues, 18 material issues were identified. In 2015, we also clarified the level of impact that each issue has on the company and specifically incorporated interviews with senior executives to identify the counterstrategies that Cathay adopts in response to each material issue. How to achieve sustainable development of enterprises, design and control through the mechanism, effectively supervise their organizational activities, and improve its organizational operation, has become the enterprise can effectively control the risk and the use of capital to create value. The Compliance Department introduced risk-based management practices in 2016 with the view of achieving better control of compliance risks.
"Talent" is at the core of the financial services industry. Cathay has always viewed the cultivation of talent as its source of corporate competitiveness. In addition to selecting and fostering people to enrich our talent base, we have promoted Industry-academic Cooperation between the digital financial industry and academia and supported projects to uncover talent in the development of FinTech initiatives. We expect these projects to provide integrated resources that create a pool of financial elite with innovative thinking. These measures are described below:
A corporation's quest towards sustainability is a process whereby all stakeholders co-create value. Cathay FHC takes stakeholders’ expectations very seriously and upholds four principles of engagement: Materiality, effectiveness, flexibility, and respect. We established the Cathay FHC Stakeholder Engagement Policy on this basis, as well as engagement goals as the basis and methods for identifying stakeholders. We disclose engagement results through a number of channels, including reports, press releases, our website, investor conferences, shareholders' meetings, forums, charitable events, employee and customer opinion surveys; participating in CSR evaluations, and responding to investor ESG questionnaires. These are all active efforts we make to communicate with stakeholders.
Cathay FHC CS Committee regularly reviews the short-term, medium-term, and long-term goals of issues. We annually report our performance of communication with stakeholders to the Board of Directors. For more information, please refer to Communication Channels and Response Method of Issues of Concern for Stakeholders.
Cathay FHC has clearly stipulated on its Code of Operation Integrity and Code of Conduct for Employees that participation in public affairs must comply with laws and regulations, and any donations made must be disclosed accordingly. Following the rapid development of digital finance technologies, financial institutions not only face competition from the technology industry or e-commerce platforms, but must also respond to a plethora of emerging risks, such as aging population and climate change. Cathay FHC engages in the affairs of various associations and societies in hopes of building a consensus in the industry and contributing to industrial development. Long time collaborators include the Insurance Society of the R.O.C., International Insurance Society (IIS), and the Bankers Association of the R.O.C. In addition, Chang-Ken Lee, President of Cathay FHC, is the chairperson of the Financial Planning Association of Taiwan; Tiao-Kuei Huang, Chairman of Cathay Life, is the current chairperson of the Life Insurance Association R.O.C.; and Jeff Chang, Chairman of Cathay SITE, is the current chairperson of the Securities Investment Trust & Consulting Association of the R.O.C. All of these leaders actively promote collaboration between industry and government, and formulate related policies for mutual prosperity in the industry.
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