Organization and
External Influences

Cathay FHC has a profound understanding that creating long-term value for stakeholders is the foundation for corporate sustainability. As we pursue business growth, we not only create employment opportunities, increase the output value of the industry chain, and support the government in expanding development and benefits, but also create higher returns for investors. However, this may also result in an increase in our environmental footprint or natural resource consumption, and incur a social cost. Cathay FHC began working with the Center for Corporate Sustainability Impact of Tunghai University in 2018, and developed a 5C P&L assessment method based on the triple bottom line (TBL). The method assesses the social impact derived from Company's value chain activities from an outside in approach every two years, in hopes of minimizing the negative impact and maximizing the positive impact of its operations.

Furthermore, Cathay FHC continues to increase the depth and breadth of the overall methodology, so that the analysis results are more complete and reasonable. We extended considerations of value chain activities from environment externalities to biodiversity issues in 2019 based on the concept of life cycle assessment (LCA). With regard to downstream investments, we expanded the scope of survey in 2019 from investments in only the top ten industries to all industries. We also began developing localized coefficients suitable for each region of investment in order to accurately reflect local economic conditions and environment features. As for the upstream supply chain, starting in 2021, we began using the Input-Output Table announced by the Directorate-General of Budget, Accounting and Statistics in 2016, and retroactively updated historical calculation results. We began further assessing the employment opportunities created by procurements, and the compensation received by employees in our supply chain.