Cathay FHC's CS Report Focuses on Climate, Health, and Empowerment
The first of Taiwanese industries to disclose assurance of sustainability performance corresponding to the SDGs

Cathay Financial Holdings published its 2020 CS Report, and for the first time in Taiwan, disclosed sustainability measures based on the core framework of the three focus areas of its sustainability strategy "climate, health, and empowerment." The report also discloses management mechanisms, progress, and historical performance in related indicators for Cathay FHC's material issues in compliance with the GRI (Global Reporting Initiative) and SASB (Sustainability Accounting Standards Board), making it the best medium for stakeholders to examine Cathay FHC's efforts and results over the past year.

Cathay FHC's CS Report Makes Great Progress Each Year

Cathay FHC indicated that the CS Report is an important record for self-examination and external communication. It identifies and looks into the best standards to benchmark each year, and formulates, plans, and executes strategies on this basis to achieve its goals. Breakthroughs made by Cathay FHC's CS reports over the years are as follows:

1. The first in the Taiwanese industry to adopt the GRI Financial Services Sector Disclosures in 2013, published the Company's first CS Report, and continued to make improvements each year.
2. Began to engage accounts to provide assurance in 2015.
3. Adopted Integrated Reporting framework in 2016.
4. First in Taiwan to comply with the recommendation of TCFD in 2017.
5. First in Taiwan to align with the insurance industry and commercial banking industry under the SASB in 2019.
6. First in the Taiwanese industry to correspond sustainability performance to the SDGs and obtain third party assurance in 2020, establishing meaningful contribution to the SDGs.

Cathay FHC published the first ESG Integration Report in Taiwan with assurance from an accounting firm  recently. The report details how Cathay FHC established a management mechanism to internalize ESG factors into the DNA of operations.

The three focus areas "Climate, Health, and Empowerment" combines synergies of the group

Cathay FHC has aligned with international sustainability frameworks through the three engines of its operations – insurance, banking, and asset management. Cathay Life, Cathay United Bank, and Cathay Century took the initiative to comply with the Principles for Responsible Investment (PRI), Principles for Responsible Banking (PRB), and Principles for Sustainable Insurance (PSI), and incorporated sustainability into their core competencies. Cathay Life became the first life insurance company to voluntarily comply with the PSI in Asia in 2016, and publishes a report annually. It integrated the PSI disclosure framework in 2019 and actively publishes CS reports with third party assurance. After Cathay United Bank voluntarily complied with the PRB, it became the first bank in Taiwan to complete PRB assurance and publish a report in 2021. Furthermore, Cathay Century published its first Corporate Sustainability Report in 2020 using 4 international sustainability frameworks: GRI, SASB, PSI, and TCFD, and obtained assurance from an independent third party.

Cathay established the three focus areas "climate, health, and empowerment" as the direction for the group's long-term sustainability strategy in a rapidly developing era with a wide range sustainability issues, in order to enhance the group's synergies.

With regard to "climate" issue, Cathay FHC complies with the recommendation of TCFD in response to the impact of climate-related risk on financial activities. The Board of Directors oversees climate-related risks and includes them in the Company's risk management mechanism, in order to strengthen the Company's resilience to climate change. Cathay FHC has held the Climate Change Forum for four consecutive years, and has raised Taiwanese companies and the people’s awareness to recognize climate change issues and take action. Cathay FHC is also the only financial institution in Taiwan to participate in Climate Action 100+, and encourages companies to consider climate risk in their business transformation strategy, in which one of the companies engaged by Cathay FHC made the commitment in 2020 to achieve net zero emissions in its value chain by 2050. As Cathay FHC approaches its 60th anniversary, it declared in June 2021 that Cathay FHC and its subsidiaries will be actively engaging in business transformation towards net zero, and has committed to use 100% renewable energy within its operations by 2030, which aligns with the global renewable energy initiative, RE 100.

With regard to "health," studies have indicated Taiwan to enter super-aged society in 2025, and "to age healthy" has become an important issue in Taiwan. Cathay FHC not only focuses on people's physical and mental health, but also hopes to use its core competencies to strength customers' financial health. Cathay Life launched the Cathay Walker project in 2018, and was the first to advocate the transition of insurance from ex-post compensation to ex-ante prevention. Together with the insurance with spillover effects, Cathay Life aims to achieve the goal of "getting policy holders to form health habits." Cathay FHC is also actively promoting the trust mechanisms and provides a wide range of financial products and services to different groups, in order to achieve financial inclusion and improve financial health for the general public.

As for "empowerment," Cathay FHC is actively cultivating talent to build Taiwan's soft power. Internally, Cathay FHC is actively implementing digital transformation and attaches importance to employees' competency development and work as an experience. It is working with Hahow for Business to provide a wide range of online courses and "learning leave," which encourage employees to learn on their own. Externally, Cathay FHC supports rural education and local talent cultivation, is collaborating with Teach for Taiwan, implemented the Second-generation Immigrant Empowerment Program, and collaborated with National Taipei University and National Taiwan university in industry-academia collaboration projects. These efforts aim to cultivate interdisciplinary talent and prepare the next generation's resilience when facing challenges of the environment and society.

Taiwanese Industry's first to obtain third party assurance of sustainability performance corresponding to the SDGs

The UN established 17 Sustainable Development Goals(SDGs) in 2015 in hopes of mitigating crises worldwide through solutions proposed by governments, enterprises, and organizations. The SDGs have become an important indicator of sustainability measures implemented by entities and bodies around the world. Cathay FHC seeks consensus on strategies for economic development, social inclusion, and environmental sustainability from the perspective of its subsidiaries' core financial competencies. Cathay FHC is the first financial institution in Taiwan to align its sustainability performance with the UN's 17 SDGs and obtain third party assurance, in order to determine and increase the contributions of resources it invested in sustainability measures towards the SDGs.

The CS Report has improved disclosures of ESG performance indicators, including sustainable finance, environmental, social, governance, and human capital indicators, and discloses comprehensive historical data to fulfill its commitment to sustainability values, while continuing to make improvements. COVID-19 has had massive impacts on the world since 2020, but Cathay FHC will continue to strengthen its organizational resilience through ESG and create a positive impact on mutual prosperity in society.