About This Report The Signifi cance of Sustainability for FEDS Download Page Founded in 1967, Far Eastern Department Stores (FEDS) has the longest history as well as the steadiest growth among local chain department stores. As the benchmark for domestic listed department stores, the Company has continued to keep up with the times. The purpose of this report aims to communicate with stakeholders about how FEDS executes sustainable governance. Not only does it create innovative benchmark shopping malls to offer safe products and services to the consumers, but also builds a happy workplace for its employees and actively participates in public welfare. The Company is committed to creating a win-win sustainable growth model in economy, environment and society. This report can also be accessed and downloaded from the Corporate Social Responsibility section of the website (https://www.feds.com.tw/csr/CSR_Report). Reporting Period The report is prepared annually and regularly disclosed. This report provides a summary of FEDS’ performance in CSR management approaches, material topics, responses, and actions in 2018 (January 1st, 2018 to December 31st, 2018). Some information was traced back to previous years to increase the completeness of the information in the report. Reporting Cycle The CSR Report is scheduled to be published annually. The current version is the fi fth CSR Report of FEDS: Date of publication for the fi rst report: August 2015. Date of publication for the current report: June 2019 Date of publication for the next report: June 2020. Report Boundary The subsidiaries of FEDS belong to different business segments including department store, wholesale, shopping mall and premium supermarket. According to the fi nancial materiality and the relevance between locality and sustainable development, the boundary of the report covers all locations of the following companies in Taiwan: FEDS (Far East Department Stores Co., Ltd.) The Mall (Ya Tung Department Store Ltd.) A.Mart (Far Eastern Ai Mai Co., Ltd.) City'super (Far Eastern City Super Ltd.) FE Sogo (Pacifi c Sogo Department Stores Co., Ltd.) Financial information of this report is based on the information audited by CPAs. If the performance covers different boundaries, it will be explained in the report. Non-financial information: As FE Sogo issues a separate CSR report, please refers its CSR report for the non-fi nancial information. Reporting Guidelines and Third Party Assurance This report is prepared in accordance with the Sustainability Reporting Guidelines (GRI Standards) published by the Global Reporting Initiative (GRI). Principles of disclosure for the Core Option have been adopted. In report assurance, this report has been assured by third-party assurance authority to ensure its conformity to the Core Option of GRI Standards and Type 1 Moderate Level of AA1000 (Account Ability Assurance Standard). Contact Information Ming-Lun Wang, Business Analysis Department, Far Eastern Department Stores Address: 16F, No. 16, Xinzhan Road, Banqiao District, New Taipei City Phone: (02) 7727-8168 ext. 8532 E-mail: [email protected] Corporate Social Responsibility Section: http://www.feds.com.tw/csr/opinion Content About This Report 01 Sustainability Highlights 09 Appendix 2018 Key Sustainability Awards 09 GRI Standards Index 116 04 Message from the Chairman Sustainable development Development Performance 10 Assurance Statement 120 Message from the President 05 Material Topics and Stakeholder FEDS Sustainable Value Creation 06 Engagement 12 Sustainable Strategy and Future Outlook 06 Stakeholder Identification and Communication 12 FEDS Sustainable Value Creation Chain 08 Identification of Material Topics 12 Chapter 1. Chapter 3. Chapter 5. Sustainable Management Highly-Efficient Environmentally- A Healthy and Happy and Governance 20 Friendly Operations 58 Workplace 84 1.1 Forward-Looking Management 21 3.1 Green Energy-saving 5.1 Superior Compensation and Intelligence 59 Benefits in the Industry 85 1.2 Sustainable Governance 27 3.2 Real-time Smart Property 5.2 Integrated Talent Cultivation 92 1.3 Sound Risk Management 37 Management 63 5.3 Thoughtful and Friendly 3.3 Green Actions 66 Workplace 97 1 3 5 Chapter 4. Chapter 2. Reassuring Product Chapter 6. Innovative Benchmark Management 72 Heart-Warming Social Care 102 Shopping Mall 42 4.1 Selected High-Quality 6.1 Support for Global Initiatives 104 2.1 Digitalized FEDS 43 Products 73 6.2 Cross-border Cultural 2.2 Professional Services 48 4.2 Healthy and Delicious Food 76 Windows 106 4.3 Comprehensive Supply Chain 6.3 Local Social Welfare 107 2.3 Quality Space 54 Management 80 2 4 6 Message from the Chairman Message from the President Facing Challenges Creating the Future Innovative Management Advancing Transformation Grand Opening of Smart Retailing in 2019 Creating Curbing Carbon Emission Equivalent to 88 Daan Forest Park As Taiwan’s leading department store, FEDS has been constructing innovative sales space to satisfy every consumer. FEDS manages the service industry with the manufacturing Facing dynamic development of smart retailing, the Company industry’s efficiency framework by setting up energy conservation has been promoting store upgrades to build a new model of KPIs which track and review on a weekly basis. In 2018, Energy smart retailing; the store in question is expected to have its Use Intensity (EUI) of the Company stood at 329, 1.5% lower than grand opening in second half of 2019 in Taipei Hsinyi District. the industry average of 334. Alongside increasing revenues, we Aside from offering global luxury fashion boutiques and 24/7 have been delivering outstanding performance in energy efficiency. dining and entertainment services, FEDS Hsinyi Store will also As for electricity consumption, the Company has achieved our enhance its digital applications within the store to offer nearly energy saving target for seven consecutive years, accumulated 30 new services, each being an industry first, to enrich a new saving amounting to 35.68 million kilowatt-hour (kWh.), curbing shopping journey, and satisfy customers’ imagination and carbon emission to the equivalent emission of 88 Daan Forest expectations on e-tailing. Park. Green Building to Create Sustainable City Landscape Cultivate Human Capital Build Up Combative Team In order to create environmentally friendly shopping experiences, FEDS has long been instilling green concepts FEDS has been ploughing the Taiwan market to continue its into our store design. Based on the four major themes of expansions. To cultivate the talents for further developments, the Ecology, Energy Saving, Waste Reduction, and Health, the Company has been running management trainee programs, re- Company is creating new energy-conserving department examining the learning competency for key positions, planning stores, constituted of sustainable and aesthetic sales space, comprehensive training programs, designing nine categories allowing the store itself to become a beautiful landscape. In and including over 50 training courses to build up innovative the coming two years, we will add two more green buildings management ideas for the new generation of stores. Along (FEDS Taipei Hsinyi Store and Chubei Shopping Mall), with “talent cultivation,” we have also launched “talent retaining” alongside Far Eastern Retail Group Head Office in Mega plans to re-establish the key performance indicator system in Tower, Mega City Banqiao, and Top City Taichung, five green order to revamp the current equally shared incentive system all buildings in total, and we will continue to build a comfortable, gets awarded equality. This performance-based mechanism will healthy and eco-friendly sustainable city. Challenges can motivate greater innovation. During recent incentivize the manpower, and ensure that top talents are rewarded The New Economy is reshaping the landscape of global years, under the impact of fierce competition among retailers and stay competitive. commerce, leading even the century-old American Echo with Global Healthy Sustainability Initiative and fast-growing e-commerce, traditional department stores department store Macy’s to initiate renovation plans to have encountered numerous difficulties in their operations. Contribution to the Society respond expediently in operating at a lower cost and react FEDS is strongly dedicated to corporate social responsibilities, Facing the tumultuous environment, Far Eastern Department Engaging in 336 CSR Activities to customers’ changing expectations. Facing tremendous and hopes to instill warmth in the city through corporate Stores (FEDS) has risen to the occasion, looking to turn challenges brought by new retailing, Far Eastern Department social events. In 2018, the Company sponsored 336 non- adversities into opportunities and building strategies with Far Eastern Department Stores has served as a local CSR platform Stores (FEDS) has been responding with expediting changes profit events to care for women, children, elders, and under- a forward-looking global vision. Through forty-six cross- to sponsor various philanthropic activities to bring warmth to and transformation, establishing 46 project teams to privileged families, which averages to about one charitable departmental discussions and convoking more than 3,000 people. The most impressive event for me is the Christmas Charity promote management innovation, and setting up Digital Lab event per day. As a global citizen, FEDS has actively project meetings, the Company has been committed to Lighting Ceremony which was