1About This Report

1 1About This Report Fubon Financial Holdings is dedicated to delivering outstanding financial services to the Greater China Report Verification market as it strives to become one of Asia’s first-class financial institutions. Driven by the spirit of “positive The information and data disclosed in this report are based on statistics from Fubon Financial Holdings energy,” the Company pursues five main strategies – “leading investment,” “innovative finance,” “golden and the four foundations. Financial figures come from Fubon Financial Holdings’ audited financial practices,” “honest lending,” and “tender care” – focused on ESG (environmental, social and governance) statements. All uses of statistics follow standard practices or rely on publicly available government goals to foster economic growth, social development, environmental sustainability, and, ultimately, a information and data. There have not been significant changes in the methods used from the previous better society. reporting period, but if there are differences, they are explained in the section in which they appear. Period Covered To ensure the reliability of the information included in this report, Fubon Financial Holdings had all data verified according to the following standards by the following organizations: This report describes the company’s practices and performance in the fields of environmental sustainability, social commitment and corporate governance in 2016 (from Jan. 1, 2016 to Dec. 31, 2016). Data Compliance Standard Verification Organization Republic of China Assurance Standard No. 1 (based on the International Scope of the Report Sustainability KPMG The financial data covered in this report are consistent with those found in Fubon Financial Holdings’ Standard on Assurance Engagements ISAE 3000) consolidated financial statements, and information related to environmental and social aspects covers Rules Governing Auditing and Certification of Financial Statements Fubon Financial Holdings and its four major subsidiaries (Taipei Fubon Bank, Fubon Securities, Fubon Financial by Certified Public Accountants and publicly recognized accounting KPMG Insurance and Fubon Life), which are referred to below collectively as “Fubon Financial Holdings,” “the guidelines Company,” or “Fubon.” The report’s scope is limited to business activity in Taiwan, and covers 98% of ISO 14064-1 Greenhouse Gas Accounting and Verification Environmental BSI all net profit and 93% of all employees. Should discrepancies arise, they will be explained in the report. ISO 14001 Environmental Management System Information on social welfare activities incorporates the work of four foundations (the Fubon Charity Foundation, the Fubon Cultural & Educational Foundation, the Fubon Art Foundation, and the Taipei The Fubon Financial Holdings Corporate Social Responsibility Report was found to comply with the GRI G4 Fubon Bank Charity Foundation). “Comprehensive” level, and an Independent Limited Assurance Report issued by KPMG is included in this Reporting Guidelines report. The 2016 Fubon Financial Holdings Corporate Social Responsibility Report was developed using the Global Contact Information Reporting Initiative’s (GRI) G4 guidelines and framework issued in 2013, and follows the spirit of the Fubon Financial Holding Co., Ltd. Integrated Reporting framework established by the International Integrated Reporting Council in disclosing Corporate Communications Division the Company’s “six capitals” strategy. The report includes an index showing the extent of reporting Address: Dunhua S. Rd., Sec. 1, No. 108, Taipei based on the GRI content index, the United Nations global compact, Corporate Social Responsibility Best Telephone: 886-2-8771-6888 Practice Principles for TWSE/GTSM-listed Companies, the ISO 26000 social responsibility standard, and Fax: 886-2-6600-5506 United Nations Sustainable Development Goals. It also covers Fubon’s environmental sustainability, social Website: www.fubon.com commitment and corporate governance practices. The CSR Report will continue to be published on an E-mail: [email protected] annual basis in the future. CSR website: https://www.fubon.com/financialholdings/citizenship/sustainable_operations/sustainable_operations.html 1 1 About This Report 1 Table of Contents 2 2 Chairman’s Message 4 3.1 Identification Process 6 3.2 How Stakeholders Are Identified 6 3 3.3 Material Issues 7 Stakeholder Engagement 6 4.1 2016 Sustainability Performance 16 4.3 Macroeconomic Environment 22 4.2 Business Model 17 4.4 Sustainability Strategy 24 4 Sustainability Strategy 16 5.1 Sustainable Governance 26 5.4 Legal Compliance 34 5.7 Supply Chain 37 5.2 Composition of the Board of Directors 28 5.5 Internal Auditing 36 5 5.3 Sustainability Risk Management 32 5.6 Core Values 36 Corporate Governance 26 6.1 Heading Page 38 6.3 Investment Actions 41 6.2 Promoting Leading Investment 39 6.4 Taking Measures to Promote Investments Which Meet ESG Criteria 43 6 Leading Investment 38 2 7.1 Heading Page 44 7.4 Innovative Financial Services 51 7.7 Customer Relationship 65 7.2 Promoting Innovative Finance 46 7.5 Promoting Health Management 55 Management 7 7.3 Increasing the Resilience of Social Assets 47 7.6 Digital Innovations 57 Innovative Finance 44 8.1 Heading Page 74 8.3 Achieving Low Carbon Emissions 76 8.2 Promoting Gold Practices 75 8.4 Establishing Workplace Models 84 8 Golden Practices 74 9.1 Heading Page 100 9.3 Credit Asset Quality and Risks 102 9 9.2 Promoting Honest Lending 101 9.4 Green Financing 105 Honest Lending 100 10.1 Heading Page 108 10.4 Artistic Lifestyles 112 10.2 Promoting Tender Care 109 10.5 Social Welfare 116 10.3 Promoting Financial Literacy Education 110 10.6 Diverse Empowerment Programs 119 10 Tender Care 108 11.1~11.5 Tables 132 11.7 BSI Opinion Statement 144 11 11.6 GRI Index and Guidelines 133 11.8 Accountant’s Independent Assurance Report 147 Appendix 132 3 2Chairman’s Message The 2016 Fubon Corporate Social Responsibility Report is the Beyond getting countries to lower their greenhouse gas emissions, customer engagement, social commitment and environmental seventh CSR report issued by Fubon Financial Holdings to receive the Paris Agreement will also create new “green” opportunities as sustainability. The “Fubon ESG Visioning Project” is aimed at international certification. In the process of compiling the report, it steers the world away from the existing linear economy toward a integrating short, medium and long-term ESG development we have been able to reexamine our sustainability practices green, circular economy. This will surely lead to high expectations strategies and plans related to core financial competencies to help based on environmental, social and governance (ESG) criteria and for innovative developments in the financial, materials, building achieve 12 SDGs and spur economic growth, social development and initiate unique, far-reaching ESG action plans through our “Fubon and transportation sectors. environmental sustainability. Good health and well-being, inclusive ESG Visioning Project” that harness Fubon’s values and reflect and quality education for all, climate action, and sustainable cities international norms. Embodying the “positive energy” conveyed by A green finance wave is already sweeping across the globe, and and communities are among the SDGs pursued. the Fubon brand, those plans are focused on five core strategies – Taiwan’s financial regulator, the Financial Supervisory Commission Through this commitment to sustainable operations, Fubon’s ESG “leading investment,” “innovative finance,” “golden practices,” (FSC), has made green finance one of its top policy priorities in the performance far surpasses the industry average. In September “honest lending,” and “tender care.” hope that domestic capital can offer strong backing for the green energy sector. Fubon intends to be part of that effort as we address 2016, Fubon Financial Holdings was included in the Dow Jones Thanks to the hard work of everybody in the Fubon family, Fubon climate change and its corresponding challenges. We are leveraging Sustainability Indices (DJSI) Emerging Markets Index, and was the Financial Holdings reported net profit of NT$48.4 billion for 2016, our core financial competencies to unearth new commercial first and only Taiwanese financial holding company to be selected in the highest in Taiwan’s financial services sector for the eighth opportunities and using our capital to support and encourage the FBN Diversified Financial Services and Capital Markets industry consecutive year. Beyond our strong financial results, we have businesses to develop new technologies and “cradle-to-cradle” group. transcended the standard CSR report model focusing on disclosure products, hoping ultimately to forge a zero-waste, zero-pollution Looking ahead to 2017, we expect the global economy to continue of past and present performance by adopting an “Integrated profit model. its moderate recovery. Economic prospects are likely to be Report” framework. The framework takes stock of every business better than they were in 2016 as advanced economies resort to At the same time, the United Nations launched Sustainable area and deconstructs Fubon Financial Holdings’ inputs and outputs expansionary fiscal policies instead of monetary easing to stimulate Development Goals (SDGs) in 2015 to get companies to take ESG into six forms of “capital” to accurately convey how the Company growth, and rebounding commodity prices spur accelerated growth risks seriously and incorporate sustainability

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