Identification and Response to Material Sustainability Issues
Cathay FHC conducted the CS Issue Materiality Analysis in 2019, and the process for identifying material sustainability issues is described below.
【Identification】
1. Collect information and identify issues
Identify issues that stakeholders are concerned about, and analyze global regulations on CSR disclosures, benchmark companies in the industry, international trend reports, and Cathay FHC's vision for sustainability and organizational development goals.
2. Identify potential issues
Find 9 economic issues, 3 environmental issues, and 8 social issues related to Cathay.
【Prioritize】
3. Understand the materiality of issues
Issued materiality analysis questionnaires in 2017 to survey the level of concern about sustainability issues among 155 stakeholders, and 15 senior executives each year determined the impact of sustainability issues on operations.
4. Prioritize issues
Take stakeholders' opinions into consideration when ranking the material issues by level of concern and analyzing their impact.
5. Adjust the priority of issues
Senior executives and the sustainability team discuss results of the materiality analysis.
【Actions】
6. Draw the matrix
Generate the 2019 Material Issue Matrix.
7. Set sustainability goals
Set short-term, mid-term, and long-term goals for material issues, and actively manage and track the goals to respond to stakeholders’ expectations.
Cathay FHC 2019 Material Topic Matrix

Description of changes in material issues in 2019:
Note 1: “Human Rights” and “Employee Diversity/ Inclusion” were merged into “Human Rights and Employee Diversity” with consideration to the contents and overlap between the issues, so the
number of material issues in 2019 decreased by 1 compared to 2018.
Note 2: “Green Finance” was included as a material issue and “Loss Control” and “Attracting and Retaining Talents” were excluded.
The material issues of Cathay FHC includes compliance, digital finance, risk management, green finance, information security, and change in demographic structure etc. Below are the two material issues and risk management strategies:
Material Issue |
Risk Management Strategy |
Digital Finance |
Cathay FHC established the Digital, Data & Technology Center (DDT) in 2016. DDT
regards “data-driven” as culture. With “Digital, Data, and Technology” as its three
pillars, DDT builds the infrastructure for big data analysis and application, utilizes
new technologies in financial operations to create a data ecosystem as a basis for
business development, risk management, product sales, and business performance
related decisions. Besides, we have closely followed regulatory developments and
changes to ensure that all operations comply with regulatory requirements.
|
Compliance |
Cathay FHC has closely followed changes in the domestic and overseas financial
and regulatory environments to strictly ensure that all operations comply with
regulatory requirements. We have built systematic management of compliance risks,
including trainings, self-evaluations and self-inspections, quantified compliance risk
assessment mechanism, and law amendment management system. We established
the External Compliance Incident Reporting and Management Guidelines for the
effective supervision of our subsidiaries and to ensure that the Board of Directors and
managers rapidly obtain warning information, evaluate, and take improvement
measures in response to the group's compliance risks. Furthermore, Cathay FHC
adopted the risk-based approach to continue to develop AML/CFT system by establishing
the AML/CFT Management Guidelines, group-level risk methodologies, risk factors, and
important internal control mechanisms, as well as risk warning mechanisms and
monitoring indicators. We also enhanced AML/CFT data sharing and management
mechanisms to deploy a group-wide defense network.
|