Sustainable Development Strategies and Corporate Governance
Sustainable Governance
Taipei Fubon Commercial Bank Co., Ltd. (hereinafter referred to as Taipei Fubon Bank or the Bank) follows the four major sustainability strategies of Fubon Financial Holdings, focusing on "Decarbonization, Digitalization, Empowerment and Connection." The Board of Directors is the highest supervisory unit for the Bank's sustainable development. Under the President, a "Sustainability Task Force" has been established, personally led by senior management. It serves as a cross-unit collaboration platform for promoting sustainability in the Bank.
Sustainable Governance
Sustainable Governance Development Strategies
Fubon Financial Holdings, the parent company, has set four major sustainability strategies -- "Decarbonization, Digitalization, Empowerment and Connection " -- and set annual targets through 2030, demonstrating its commitment to fulfilling its sustainability goals. Taipei Fubon Bank follows the four major sustainability strategies of Fubon Financial Holdings, with the Sustainability Task Force responsible for planning and executing the sustainability strategies.
| Taipei Fubon Bank's ESG Strategies | 2030 Sustainability Vision | Sustainability Strategy Directions |
|---|---|---|
| Decarbonization | Help Customers Go Sustainable Help customers enhance their sustainability performance through investment and lending strategies, product design, and professional services; establish a low-carbon operating model |
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| Digitization | Provide the Best Financial Services Adhering to addressing customers' needs effectively, provide innovative services and experiences to efficiently satisfy customers' diverse investment, wealth management, and insurance needs |
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| Empowerment | Foster a Friendly, Healthy Workplace Establish a diverse, respectful, and harmonious culture, and continue to promote talent attraction, development and retention plans to create a healthy and safe workplace environment |
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| Connection | Connect Society's Positive Forces Connect internal and external resources, care for the underprivileged, promote financial education, practice inclusive finance, and create an inclusive environment |
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Responding to International Sustainability Initiatives
To align with international sustainable development trends, Taipei Fubon Bank actively participates in, signs and complies with international sustainability principles and initiatives, such as: the United Nations Sustainable Development Goals (SDGs), GRI Standards, Task Force on Climate-related Financial Disclosures (TCFD), SASB, The Equator Principles (EPs), Principles for Responsible Investment (PRI), Principles for Responsible Banking (PRB), etc. In 2024, the Bank was recognized among the top 25% of banks in the FSC's Evaluation of the Treating Customers Fairly Principles and the second Sustainable Finance Evaluation. In alignment with Fubon Financial Holdings' participation in various international initiatives and assessments, the Bank has: committed to and received approval for Science Based Targets (SBT), joined the RE100 initiative, participated in the Partnership for Carbon Accounting Financials (PCAF) and Partnership for Biodiversity Accounting Financials (PBAF) initiatives, and taken part in assessments by DJSI, CDP, MSCI, and Sustainalytics, and others.
Fubon Financial Holdings' sustainable honors and recognitionSustainable Governance Framework
Taipei Fubon Bank follows Fubon Financial Holdings' "Sustainable Development Best Practice Principles," and with reference to the United Nations "Sustainable Development Goals (SDGs)," the Financial Supervisory Commission's "Corporate Governance Roadmap" and "Green Finance Action Plan," independently formulated the "Sustainable Development Policy" in 2022, and established the "Sustainable Development Operating Guideline" in March 2023 to manage the Bank's risks and impacts on the economy, environment and society.
The Board of Directors is the highest supervisory unit for the Bank's sustainable development. Under the President, a "Sustainability Task Force" has been established, personally led by senior management. It serves as a cross-unit collaboration platform for promoting sustainability in the Bank.
The CEO of the Sustainability Task Force is served by the President, responsible for leading the task force to set execution goals and plans. The Branding and Sustainability Department, as the dedicated unit, serves as the secretarial unit, coordinating the promotion of sustainable development affairs.
Stakeholder Engagement
To identify and manage the environmental and social risks generated or potential in Taipei Fubon Bank's operations, the Bank refers to the GRI definition and the AA1000 Stakeholder Engagement Standard (AA1000 SES) to identify stakeholders. Through distributing internal questionnaires and benchmarking with peers, six major stakeholders are identified, including competent authorities, employees, shareholders (parent company), customers, suppliers, community/NPO/NGO, to serve as the basis for promoting sustainability.
| Stakeholders | Communication Channels and Frequency | Issues of Concern |
|---|---|---|
| Competent Authorities |
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| Employees |
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| Shareholders (Parent Company) |
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| Customers |
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| Suppliers |
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| Community/NPO/NGO |
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Material Topics Identification
Material Topics Identification Process
| Step | Main Output | Content | ||||||
|---|---|---|---|---|---|---|---|---|
| Understanding Organizational Context | 6 Major Stakeholders | Review Taipei Fubon Bank's value chain relationships, business activities, compliance responsibilities and external circumstances. Identify important stakeholders, and consult external sustainability experts to understand the overall sustainability context, which serves as the basis for identifying Taipei Fubon Bank's actual and potential impacts. | ||||||
| Identifying Actual and Potential Impacts | 11 Positive Impacts, 11 Negative Impacts |
Through various sources of information, Taipei Fubon Bank
identifies both actual and potential impacts on the economy,
environment and people (including their human rights) in
activities and business relationships, noting 11 positive
impacts and 11 negative impacts. Reference materials for impact definition include:
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| Assess the Significance of Impacts | 25 Internal Management Mechanisms | For the identified actual and potential impacts, Taipei Fubon
Bank's senior executives, Sustainability Task Force members, and
various units assess their severity and likelihood of
occurrence, while considering operational practices. These
evaluations are reviewed annually and adjusted as needed.
Impact Level
In addition to
considering the value chain stage where the topic
has an impact (such as whether it involves multiple
value chain stages) and the severity of the impact,
whether the impact involves human rights issues or
has irreparable disastrous consequences should also
be considered. If involved, the impact will be
prioritized.
Likelihood
of
Occurrence Adjustments are
based on information from Taipei Fubon Bank's
stakeholder engagement channels and internal records
on related impacts in recent years. If related
impact events have occurred in recent years, the
likelihood assessment value is increased
accordingly.
In 2024, Taipei Fubon Bank reviewed its internal management mechanisms, including whistleblowing channels, legal penalties, employee grievance section, customer complaint hotline, and information security management system, to assess their operational status. The Bank also considered stakeholder opinions and actual external impacts, making adjustments based on the previous year's results. In 2024, information was collected on the operation of 25 internal management mechanisms, with adjustments made to the likelihood of occurrence for two impact issues and the impact description for one impact issue. |
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| Positive and Negative Impact Matrix Diagram |
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| Rank the Reporting Priority of the Most Significant Impacts
and Produce Material Topics |
15 Topics | Consolidate related impacts into topics, rank the topics based
on the significance of positive and negative impacts
respectively, and determine their materiality. After consulting
external sustainability experts to set the material topic
threshold, 8 key topics and 7 basic topics are defined as Taipei
Fubon Bank's material topics in 2024.
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| Double Materiality Analysis | Double Materiality Matrix | To identify sustainability topics that have significant impacts both internally and externally, and to develop corresponding management strategies and indicator targets, Taipei Fubon Bank conducts evaluations of relevant financial risks to organizational operations for material sustainability topics. Senior executives from relevant units of the Bank's Sustainability Task Force assess the Financial Materiality of the identified topics based on their potential impacts on organizational costs, revenue, reputation, and risks. A total of 20 questionnaires were collected. The results of the financial materiality (X-axis) were combined with the results of the previous stage's external impact assessment (Y-axis) to produce the 2024 Double Materiality Matrix. | ||||||
| Disclose Material Topics in the Report | List of Material Topics | Taipei Fubon Bank's 2024 material topic results have been submitted to the Bank's Audit and Risk Management Committee and Board of Directors for their acknowledgment and approval, serving as the basis for compiling the report and disclosing relevant management approach, policies, projects and other information. |
Impact Materiality Matrix
Corporate Governance
To establish a sound corporate governance system and culture, Taipei Fubon Bank builds a comprehensive framework for risk management, legal compliance, and information security protection, and promote business development., Taipei Fubon Bank follows the "Corporate Governance Best Practice Principles" of Fubon Financial Holding and the "Corporate Governance Best Practice Principles for Banks" of the Bankers Association of the R.O.C. to formulate its "Corporate Governance Policy". The policy outlines clear principles for legal compliance and internal control systems, protection of shareholder rights and stakeholder rights, functions of the Board of Directors, and information transparency. The Board of Directors is the highest governance unit at Taipei Fubon Bank. It is responsible for supervising overall business strategies and major policies, supervising the management, and being accountable to shareholders.
Taipei Fubon Bank has an "Audit and Risk Management Committee" under the Board of Directors. In accordance with the "Organization and Evaluation Standards of the Trust Asset Evaluation Committee" of the Trust Association, a "Trust Asset Evaluation Committee" is also established.
Board Composition and Operation
The 15th Board of Directors of Taipei Fubon Bank took office in June 2023 and consists of fifteen directors, including six independent directors and four female directors (27%). Among the directors, twelve have professional qualifications in the banking industry. In 2024, the Board of Directors held nine meetings with an overall average attendance rate exceeding 98.5%.
To strengthen directors' professional competencies and enhance their ESG-related knowledge, Taipei Fubon Bank provides annual training aligned with external corporate governance trends, the Bank's business development needs, and directors' professional roles. In 2024, directors completed a total of 228 training hours, with an average of 15.2 hours per person. The training covered areas such as sustainable finance, risk management, anti-money laundering and combating terrorism financing, information security, net zero carbon emissions, and treating customers fairly.
Remuneration policies
In accordance with the "Performance Evaluation Policy", the Chairman, Vice Chairman, President, and senior managers of Taipei Fubon Bank set annual performance goals, which consist of key indicators or special projects (70%) and leadership qualities (30%). In addition to setting indicators closely related to "company operations and financial performance", they also align with the blueprint of Fubon Financial Holding's "Sustainability (ESG) Vision Project". Under the four strategies of "Decarbonization, Digitalization, Empowerment and Connection", for employees whose job responsibilities involve "ESG promotion or implementation", the weighting of ESG goals is set at a minimum of 5%-10% to achieve the Bank's ESG strategic objectives.
| Sustainability Performance Indicators | Description | Target Audience |
|---|---|---|
| Performance Evaluation | Added the "Participation in Sustainable Operations (ESG)" indicator and completes the evaluation for the previous year by March each year | Board Members |
| Evaluation items include internal control risk assessment | Board Members, Functional Committee Members | |
| ESG Promotion Goals | The weighting of ESG items in job responsibility goals is at least 5%-10% | President, Senior Managers |
Risk Management
Taipei Fubon bank is committed to establishing a sound and comprehensive risk management culture and environment, by formulating thorough risk control procedures and related business hedging strategies. These strategies aim to identify, measure, monitor, transfer, and mitigate overall risks, including market risk, credit risk, country risk, operational risk, asset-liability and liquidity risk, climate risk, emerging risks, and reputational risk. The Bank follows the Basel Accord risk management guidelines and continuously improves its professional standards in risk management.
Risk Management Structure and Culture
To enhance the independence of risk management, the Bank has set up an independent risk management unit. This unit is responsible for planning and managing the risk management system, formulating risk management policies and regulations, establishing and applying effective risk management procedures and control mechanisms. It also handles independent monitoring, analysis and reporting, provides necessary risk management information to senior management, and regularly submits reports to the Board of Directors.
To ensure the effective operation of the risk management mechanism and considering the Bank's business nature, scale, complexity and risk profile, three lines of defense risk management system is adopted. Each line of defense manages relevant business based on its role and responsibilities, while coordinating and sharing risk management operational information with each other to enhance the effectiveness of all functions.
Three Lines of Defense in Risk Management
| Role | Unit | Responsibilities |
|---|---|---|
| First Line of Defense |
Business, operational and management units | Responsible for ensuring compliance with risk management regulations and implementing risk control procedures when executing relevant work |
| Second Line of Defense |
Independent risk management unit | Responsible for planning, monitoring, and reporting on relevant risk management systems |
| Third Line of Defense |
Independent audit unit | Responsible for examining the compliance and implementation of various regulations and mechanisms |
Climate Risks and Opportunities
To objectively and quantitatively assess the impact of climate change and plan response strategies and actions, Taipei Fubon Bank follows the Task Force on Climate-related on Financial Disclosures released by the Financial Stability Board (FSB), and disclosure information in accordance with the domestic banks' climate risk financial disclosure guidelines. The bank has published an annual "Climate-related Financial Disclosure Report" (hereinafter referred to as the TCFD Report) starting from 2023.
Taipei Fubon Bank 2024 TCFD ReportClimate Governance
In response to climate risks, the Bank actively promotes climate risk governance. Beyond establishing a top-down governance framework and integrating climate management into the three lines of defense within internal control, the Bank assigns climate-related responsibilities to various units, demonstrating its commitment to addressing climate change through effective governance. Furthermore, through developing climate risk management strategies and identifying risks, it enhances its management and response to climate-related challenges.
Climate Risk Governance and Supervisory Structure
| Level | Main Responsible Unit/Personnel Description | Meeting Frequency | Content | |
|---|---|---|---|---|
| Level of the Board of Directors | Chaired by the Chairman | Bimonthly | The highest supervisory unit responsible for approving climate risk management policies and providing guidance and supervision of the Bank's climate risk management | |
| Management Level | Sustainability Task Force | CEO served by the President, secretarial unit served by the Branding and Sustainability Department | Quarterly | Responsible for executing the Bank's sustainable development-related plans and goals, including climate risk management, and regularly reporting the results to superiors |
| Responsible Finance Group | Units such as the Risk Management Department, Credit Department – Institutional Banking, Risk Management Department - International Banking, Credit Department – Retail Banking are mainly responsible for planning and executing climate risk management-related plans, etc. | Convene meetings as needed based on actual execution | Responsible for formulating and managing the Bank's sustainable finance regulations, promoting sustainable financial products and services (such as sustainable lending, sustainable investment), identifying and assessing climate change risks and opportunities, and developing climate mitigation and adaptation measures | |
Risk Management
To effectively manage sustainability development and climate risks, the Bank conducts annual climate change risk and opportunity identification in accordance with the Climate Risk Management Policy for potential risks. In 2024, referring to climate risk assessment methods that consider relevant regulations and internationally recognized standards, the Bank invited internal experts from various units including risk management, business, credit review, investment, product, general affairs, and sustainability. Using likelihood of occurrence and degree of impact as metrics, risks are categorized into transition risks and physical risks. In identifying these risks, the Bank considers both micro and macro-economic impacts of climate risks on the economic environment, as well as their correlation with other traditional risks. This process results in a concrete, manageable list of climate risk events. Based on the priority of identified or assessed risks, the Bank adopts differentiated risk management measures and reviews existing risk response mechanisms to develop short, medium, and long-term risk response, mitigation, or remedial measures. Analysis results and risk management measures are regularly reported to the Board of Directors.
Climate Strategy
In 2024, Taipei Fubon Bank identified a total of eleven climate risk events related to its businesses, including six transition risks and five physical risks. Climate Risk Identification Results. Among them, based on the likelihood and severity of impact, Taipei Fubon Bank identified four major climate risk events: rising sustainable related demands and regulations - other industries, increased greenhouse gas emission costs - carbon pricing mechanism, higher raw material costs, and sea level rise. For the top four major climate risk events identified, the Bank conducts scenario analysis to assess potential impacts and develops response measures to strengthen climate risk control and management.
Indicators and Goals
In line with the SBT targets set by Fubon Financial Holdings, Taipei Fubon Bank regularly tracks the carbon reduction initiatives across its operations as well as its investment and financing activities. The Bank has set annual Scope 1 and 2 carbon reduction targets from 2023 to 2050, requiring relevant units to comply and take actions. Additionally, the Bank continues to enhance transparency in carbon emissions by expanding the scope of its greenhouse gas inventory each year. In 2024, the Bank completed the examination for all its 274 operating locations, achieving 100% coverage. Additionally, the Bank conducted a financed emissions inventory covering the investment and financing portfolios of Taipei Fubon Bank and its subsidiaries Fubon Bank (China) and TFB Capital, as of the end of 2024. The asset classes include equity and bond investments, sovereign debt, commercial real estate, commercial loans, project finance, mortgage loans, and motor vehicle loans.
Supply Chain Management
Taipei Fubon Bank follows its parent company Fubon Financial Holdings in conducting supply chain risk management. Fubon Financial Holdings has established the Supplier Sustainable Development Code of Conduct, which covers labor rights and human rights, occupational health and safety, environmental protection, prohibition of dishonest conduct, and sustainable procurement. Suppliers are required to sign the Supplier Code of Conduct Commitment Letter to ensure compliance. As of the end of 2024, the signing rate reached 100%.
In 2024, no suppliers were downgraded or suspended due to serious violations of their commitments, while those with excellent performance had their partnerships strengthened. Additionally, new suppliers are required to submit a New Supplier Sustainability Risk Self-Assessment Checklist for review of their transition efforts. Additionally, the Fubon Supplier ESG Sustainability Management Project was launched in 2018, which includes annual supplier ESG assessments, engagement activities, education and training sessions, and ESG exchange meetings. These initiatives guide suppliers to gradually improve their sustainability transformation efforts, while providing timely educational resources, guidance, and support.
Information Security
Taipei Fubon Bank has incorporated information security risks into the Risk Management Executive Committee for unified management. The committee is chaired by the Chairman (or an executive designated by the Chairman), with members appointed by the chairperson. Meetings are held at least quarterly. Moreover, among the members of the Board of Directors, directors with information security background are recruited to supervise and manage information security work. The Cyber Security Officer is appointed under the President. A dedicated unit, the "Information Security Management Department," is established to facilitate the stability of information security management.
To establish communication and coordination mechanisms at all levels and implement information security, the Information Security Management Department reports monthly to the President on the implementation of information security management. It also provides quarterly reports to the Risk Management Executive Committee on the control status and improvement measures for information security risk indicators, and an annual report on the overall implementation of information security to the Audit and Risk Management Committee and the Board of Directors.
Information Security Management Framework
| Dedicated Information Security Personnel/Unit | Duties |
|---|---|
| Cyber Security Officer (Executive Vice President level) | Oversee the Bank's information security policy and strategy planning, promote and supervise the implementation of various information security affairs |
| Information Security Department |
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Information Security Management and Incident Response
Taipei Fubon Bank actively builds information security protection mechanisms, strictly complies with relevant regulations and standards issued by the FSC and the Bankers Association, and has obtained ISO 27001:2022 Information Security Management System certification, with the updated version obtained in 2024. The Bank implemented a "defense-in-depth" information security protection mechanism based on the U.S. National Institute of Standards and Technology (NIST) cybersecurity framework. This includes identifying, protecting, detecting, responding to, and recovering from security threats. The Bank has established firewalls, intrusion detection and prevention systems, application firewalls, and defenses against distributed denial-of-service (DDoS) attacks. Additionally, an information security incident monitoring platform (F-SOC) has been set up to ensure "Early Warning and Prompt Response," aiming to effectively manage and mitigate information security risks.
To avoid interruption of financial services caused by the information system disasters, Taipei Fubon Bank has established a backup mechanism to improve the data preservation mechanism. It passed the ISO 22301 Business Continuity Management (BCM) certification in 2022, conducting in-depth assessment of possible service interruption. It reviews and strengthens its response and recovery capabilities to ensure that business operations can be maintained during disasters, thereby protecting customer rights and minimizing financial losses. The Bank passed the annual audit in 2024, maintaining the validity of the certification.
Anti-Money Laundering and Counter-Terrorist Financing
To strengthen the anti-money laundering and counter-terrorist financing, and prevent the Bank's products or services from being exploited for these purposes, Taipei Fubon Bank has established the "Anti-Money Laundering and Counter-Terrorist Financing Policy," along with relevant management measures and operational procedures.
The "Financial Safety Department" is the Bank's dedicated unit responsible for overseeing the Bank's financial anti-fraud, anti-money laundering, and counter-terrorist financing operations. It conducts a comprehensive risk identification and assessment for money laundering and terrorist financing annually, and submits a written assessment report to the Board of Directors for reference. The Financial Safety Department regularly reports anti-money laundering and counter-terrorist financing management information to the Board of Directors and senior management, convenes quarterly AML/CFT Review Officer meetings, and continues to update the latest types of money laundering and terrorist financing on a monthly basis to enhance communication with the frontline.
Group Policy for Anti Money Laundering and Countering the Financing of TerrorismAnti-Money Laundering and Counter-Terrorist Financing Mechanism
| Anti-Money Laundering and Counter-Terrorist Financing Mechanism | Description |
|---|---|
| Internal Control System |
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| Risk Assessment | Every year, the Bank conducts comprehensive money laundering and terrorism financing risk assessment and Institutional Risk Assessment (IRA), referencing the National M/L/TF/PE Risk Assessment Report (NRA) issued by regulatory authorities. Based on these assessments, the Bank integrates relevant risk indicators and corresponding control measures. By combining quantitative data with qualitative evaluation results, the assessment accurately reflects the threats and vulnerabilities in the Bank's anti-money laundering and counter-terrorism financing efforts. The risk assessment report is submitted to the Board of Directors and regulatory authorities for reference. |
| Execution Plan | The anti-money laundering and counter-terrorist financing plan should include customer identity verification, name screening of customers and transaction parties, ongoing monitoring of accounts, transactions and correspondent banking business, record-keeping, reporting of large transactions and suspicious money laundering or terrorist financing activities, and notifications in accordance with the Counter-Terrorism Financing Act, appointment of a dedicated anti-money laundering and counter-terrorist financing officer, employee selection, appointment procedures and training, and independent audit to assess the system's effectiveness, as well as other requirements set by relevant laws and regulations. |
Customer Due Diligence
In fulfilment of its social responsibility, Taipei Fubon Bank prioritizes anti-money laundering efforts. This includes conducting ongoing customer due diligence for both existing and new business relationships based on their risk levels and transaction profiles, as well as implementing corresponding risk control measures. Customer Due Diligence Procedures: When establishing business relationships with customers, the Bank collects customer information through review forms and identification checklists. The Bank promptly conducts name screening on customers and their related parties to confirm whether they appear on control lists that require control measures. It also uses information systems to incorporate customer data, such as customer background, occupation, and socio-economic activity characteristics, to assess and assign a money laundering risk rating to each customer. Customers assessed as high-risk are subject to enhanced due diligence.
Anti-Money Laundering and Counter-Terrorism Financing Education and Training
To improve employees' professional knowledge of AML/CFT risks and detection capabilities, as well as their understanding of relevant regulations, risk identification skills, and the quality of case reporting, Taipei Fubon Bank continues to implement education and training programs. These programs are designed to align with emerging international AML/CFT trends. The training targets all current employees, including AML/CFT supervising managers and dedicated personnel. The content and duration are tailored based on the nature of each position.
To enhance team capabilities, employees of the Financial Security Department actively pursue international certifications. As of 2024, 26 employees have obtained Certified Anti-Money Laundering Specialist (CAMS) certification, and six have earned Certified Global Sanctions Specialist (CGSS) certification. Across the Bank, a total of 187 employees hold CAMS certification and 12 hold CGSS certification, enhancing the Bank's control capabilities and awareness of international sanctions.
