Governance

The Board of Directors is the highest governance unit for climate-related issues and bears the ultimate supervision and management responsibilities for climate-related issues. The Board of Directors has set up a functional committee to supervise and manage critical issues such as sustainable operations, climate change-related strategy implementation, and risk and opportunity assessment.

The Company established the "Sustainable Development Committee" under the Chairman, who also chaired the Committee, with the President of the Company and the chairmen and presidents of major subsidiaries serving as members. The Committee set up five teams to plan, promote, and manage action plans and targets for climate change-related risks and opportunities to fulfill SinoPac Holdings' sustainability commitment to "mitigating and adapting to climate change". The implementation status was reported to the Board of Directors every six months. To further enhance the management of sustainable development, starting from July 1, 2024, our Company has elevated the Sustainable Development Committee to a functional committee of the Board of Directors. Currently the Sustainable Development Committee consists of a total of 9 Directors from SinoPac Holdings and its subsidiaries, including 3 independent directors of the Company, and the Chairman of the Company serves as the convener and chair of the Committee. In the meanwhile, the Company has also established a Sustainability Office under the Board of Directors, serving as a dedicated unit for sustainable development. The Sustainability Office encompasses five cross-departmental teams responsible for the implementation of sustainability-related tasks including climate change-related issues.

The Company establishes the "Risk Management Committee" under the Chairman, who also chairs the Committee, with an independent director, an external member, the President of SinoPac Holdings and the Chairman of Bank SinoPac serving as members. The Committee manages climate change risks to strengthen climate resilience. SinoPac Holdings incorporated climate change risks into the "Risk Management Policy" and established the "Guidelines for the Management of Climate-Related Risks and Opportunities" to improve the management mechanisms of climate risks and opportunities. The Risk Management Committee established the "TCFD team" and the Risk Management Division serves as the organizing unit, with the TCFD governance / strategy / risk management / metrics and targets, to integrate the climate-related financial information and quantitative financial impact. It uses the results to evaluate and adjust the existing strategies and policies for the sustainable finance development, sustainable products and services, and green energy and environmental energy management.

The TCFD Team discloses and manages climate information in accordance with the four major aspects of TCFD including: Governance, Strategy, Risk Management, and Metrics and Targets. The TCFD Team has four main tasks which include "specifying quantitative scenario analysis and financial impacts", "establishing corresponding operational strategies, financial plans, and mitigation and adaptation measures for climate resilience", "formulating metrics and targets", and "compiling climate and nature-related financial disclosure reports".

Main tasks of TCFD Team	Description
Specifying quantitative scenario analysis and financial impacts	Follow climate risk assessment methods and processes to identify transmission routes with other risks (credit risks/market risks/operational risks and liquidity risks) based on client and asset portfolios. Specify quantitative scenario analysis and financial impacts of physical risks and transition risks.
Establishing corresponding operational strategies, financial plans, and mitigation and adaption measures for climate resilience	Identify impacts of climate risks on operations, strategies, products, and financial plans based on different climate change scenario analysis, then formulate corresponding operational strategies, financial plans, and mitigation and adaption measures for climate resilience. Formulate management measures for clients and assets with high climate risks.
Formulating metrics and targets	Set key metrics and formulate short/medium/long term targets for investment and lending portfolios based on risk appetite. Establish integrated climate risk management dashboard for continuous management and monitoring of metrics and targets.
Compiling climate and nature-related financial disclosure reports	Compile independent climate and nature-related financial disclosure reports based on the recommended disclosure framework (governance, strategy, risk management, and metrics and targets)