Flying a Course towards Sustainability China Airlines Corporate Sustainability Report 2016 Contents Preface About This Report 02 A Letter from Our Management 04 0 About China Airlines 06 Overview of CAL’s Sustainable 1-1 CAL Vision of Sustainable Development 10 Development Strategies 1-2 Mode of Creation for CAL Sustainable Development 13 1 1-3 Sustainable Development Strategies 15 Main Frame of Sustainable 2-1 Stakeholder Engagement and Materiality Analysis 28 Development 2-2 Trust 35 2 2-3 Human Resources 46 2-4 Cooperation 77 2-5 Environment 84 2-6 Society 106 Foundations for 3-1 Sustainability Governance 118 3 Sustainability Development 3-2 Corporate Governance 122 Appendix Disclosure of Management Approach on Material Aspects for CAL 134 GRI G4 Index 138 Independent Assurance Reports 146 Preface 0-1 About This Report 0-2 A Letter from Our Management 0-3 About China Airlines 0 Cover Story Square 0-10-1 The sustainable door of China Airlines, inviting the readers to open AbouAboutt this report (including China Airlines' prole, external armation, and ThiThiss ReportReport history). Circle The sustainable management core of China Airlines (including the sustainable vision, mission, and the model for creating sustainable value). Number of entities The results of engaging with stakeholders through the sustainable strategies (including 7 types of stakeholders and 5 sustainable The ve overlapping ovals on the cover represent the ve petals of the plum blos- strategies). som—the symbol of China Airlines—which in turn represent the ve following frame- Arc works of China Airlines: the history, management core, sustainable strategy, operation The arc formed by stacked corner- principles, and stakeholder engagement. Together these frameworks form a complete stones represents the steady basic plum blossom that is also the structure of this CSR report. We transformed these ve operating spirit of China Airlines frameworks into ve kinds of geometric graphics, using them with our corporate color (including corporate governance and throughout the report to deliver the spirit of China Airlines and the idea of sustainability, risk management), and the providing a dierent visual experience to our stakeholders. accumulated weight indicates the responsibility that China Airlines is The overall visual direction is from left side to the right side. On the cover’ s the shouldering. rightmost oval, a China Airlines’ aircraft is ying up, which symbolizes China Airlines Arc line continuously creating better value for our important stakeholders in order to become the China Airlines responds to the global benchmark of corporate sustainability. expectations from the stakeholders and creates more wonderful moments through ying 02 This report is the 4th edition of China Airlines' (hereinafter Reporting Principles & Standard Data quality: Financial gures in this report were provid- CAL) Corporate Sustainability Report. In 2014, as a leader in Disclosures ed by the annual nancial report audited by Deloitte; they the industry, CAL released the rst sustainability report. In were presented in New Taiwan Dollar (TWD). The data relat- This report is prepared in accordance with the GRI G4 Core compliance with the government regulation, we released ing to ISO quality, environment and greenhouse gas emis- Option Guideline. the second edition in 2015. This report is published periodi- sions were veried by independent third-party entities. cally on an annual basis in both English and Chinese, and Report Scope & Boundary reveals information about our performance in terms of Financial Data: Deloitte The report revealed CAL’ s information from January 1, corporate governance, society, and the environment. From Quality Management ISO 9001: DNV 2016 to December 31, 2016. A number of materiality infor- the report, stakeholders can fully understand CAL's sustain- Environmental Management ISO 14001: DNV Energy mation was also reported up to March 31, 2017. Consider- ability development, our achievements, as well as the Management ISO 50001: DNV ing commercial correlation between CAL and its subsidiar- future perspectives. Please visit CAL's ocial website to Greenhouse Gas ISO 14064-1: BSI Taiwan ies as well as the nancial majority (China Airlines, Mandarin view and download our previous sustainability reports and Airlines, and Tigerair Taiwan account for up to 97% of learn about the new developments in our sustainability consolidated revenue), Mandarin Airlines and Tigerair Feedback endeavors. Taiwan were also included. If you have any suggestions or questions about this report, please contact: In order to increase transparency in sustainability informa- Guarantee of Truthful Reporting tion, CAL is determined to publish our Corporate Sustain- Internal audit: All data and information revealed in this Contact Information ability Report on a periodic basis, proactively communicat- report were provided by various departments of CAL, proof- Strategic Development Department of Corporate ing to our stakeholders about our responsibility and com- read and examined by our Corporate Sustainability Com- Development Oce mitment, as well as our performance and future goals. The mittee, then submitted to the president for nal approval, TEL: 886-3-399-8530 next Sustainability Report will be published on June 30, and reported to the board of directors according to China E-mail: [email protected] 2018. Airlines Corporate Social Responsibility and Sustainable Address: No.1, Hangzhan South Rd, Dayuan Development Best Practice Principles. District, Taoyuan City Publication History Website: http://calec.china-airlines.com/csr/en/ First edition release date: August, 2014 External certication: This report has been veried by index.html Previous edition release date: June, 2016 SGS Taiwan Ltd. In accordance with GRI G4 standards and to Current edition release date: June, 2017 the high verication level of AA 1000 AS Type-II. The truth- Next edition release date: June, 2018 fulness of this report is guaranteed. Please refer to the appendix for the certication document. 03 0-2 A Letter from Our Management Nuan-hsuan Ho Su-chien Hsieh Chairman President To all stakeholders of China Airlines: developed nearly one hundred modernized aircraft in our We want to express our gratitude for your support. You have eet and also employs more than ten thousand qualied accompanied us through a challenging and exciting year, sta in every aspect of the aviation industry. In terms of during which our work has seen great results. network, we have developed from one route to more than a hundred destinations worldwide. From those historical “China Airlines” , a well-known brand, is celebrating its 57th memories, “China Airlines” does not just represent the name anniversary this year. Sporting the “Plum Blossom” that is of CAL, but also the common pride of Taiwanese people. special to every Taiwanese citizen; China Airlines carries many people's memories and aspirations. At the very begin- In 2016, in order to continuously improve the quality of ning, CAL only consisted of two seaplanes with a small team safety and maintenance, we signed MOU with Airbus, and of air force veterans. After 57 years of history, CAL has received the certicate of IOSA with no new ndings, obser- 04 vations, or safety compliance failures. Moreover, CAL group international investors. We feel even more condent about introduced water-saving Ecoshine moist cleaning method our future in sustainability performance. from UUDS for washing the exterior of aircraft and could save at least 98% for supporting the global water shortage 2017 is the fourth year in the governance of sustainability issue. Except for the abovementioned performances related development. Facing the uctuation in the airline industry, to sustainability, we also held the annual supplier conference, CAL confronts those challenges proactively. In the foresee- ranked among top 20% of the best companies in the Third able future, we will continue to shape CAL’ s sustainable Corporate Governance Evaluation and so forth. The NexGen brand image by creating a sustainable corporate culture to cabin design has received various design awards; these participate in the promotion and discussion of various accomplishments could not within reach without the sustainable issues. In September 2015, the United Nations endeavors from the management, sta and our stakeholders. passed 17 SDGs (Sustainable Development Goals). As a global citizen and a Taiwanese enterprise, and as a leading China Airlines is the rst Taiwanese airline to publish the airline brand in Taiwan, China Airlines has incorporated corporate sustainability report. CAL has continuously and these SDGs as our long-term corporate goals. With these proactively engaged in sustainable governance; we have also goals, we can encourage our stakeholders to work with us communicated with our stakeholders and the Sustainability on corporate, social, and environmental sustainability. Committee eectively. In addition, we were recognized in various sustainability awards in Taiwan and overseas. Our China Airlines excelled in a competitive business environment achievements in sustainability have received positive for many years. We want to express our gratitude toward armation; CAL was awarded the Taiwan Corporate our employees, partners, shareholders, and customers. We Sustainability Award for three consecutive years. In terms of will always strive to be better to satisfy each passenger’ s international achievements, China Airlines participated in