Shin Kong Financial : SKFH 2022 Sustainability Report

2022

SUSTAINABILITY REPORT

	Sustainability	Sustainable	Customer Service	Sustainable	Environmental	Employee	Social
Table of	Strategy and	and Innovative	Appendix
Contents	Governance	Business	Products	Finance	Sustainability	Happiness	Care

		01		02		03		04
Table of Contents
From the Chairman and
02	Sustainability Strategy and	09	Sustainable Business	27	Customer Service and	41	Sustainable Finance	57
President		Governance					Innovative Products
		1.1	SDGs Strategy	10	2.1	Corporate Governance	28	3.1	Digital and Innovative	42	4.1	Sustainable Finance Strategy	58
SKFH Overview	04	1.2	Sustainability Governance	11	2.2	Legal Compliance	31		Finance		4.2	Responsible Investment and	60
1.3	Sustainability Impact	12	2.3	Information Security	35	3.2	Customer Relationship	48		Lending
			Valuation		2.4	Risk Management	38		Maintenance		4.3	The Principles for Sustainable	68
2022 Sustainable	07	1.4	Stakeholder Engagement	14				3.3	Customer Service and	51		Insurance (PSI)
1.5	Materiality Assessment	17					Communication		4.4	Climate Actions	77
Achievements					3.4	Financial Inclusion	53
								4.5	Sustainable Finance Impact	87
2022 Sustainable	08
Performances

05	91	06	101	07	127	08
Environmental	Employee Happiness	Social Care	Appendix
Sustainability
5.1	Environmental Commitment	92	6.1	Employee Equailty and	102	7.1	Social Welfare Strategy	128	8.1	About This Report
	and Management			Inclusiveness		7.2	Health Promotion	131	8.2	Supplemental Table of
5.2	Low-carbon Operations	93	6.2	Talent Recruitment and	109	7.3	Care for the Disadvantaged	133		Economic and Social Data
5.3	Resource Utilization	98		Retention		7.4	Financial Education	135	8.3	GRI Content Index
5.4	Supply Chain Management	99	6.3	Career Development	114	7.5	Care for the Elderly	138	8.4	Index of GRI G4 Indicators
	and Green Procurement		6.4	Occupational Health and	121	7.6	Community Engagment	140		of Financial Service Sector
				Safety		8.5	Targets and Achievements
										on Material Issues
									8.6	Index of Sustainability
										Accounting Standards Board
										(SASB)

143

144

8.7 United Nations Global

156

145 Compact

	8.8	Taiwan Stock Exchange	156
149		Corporation Rules Governing
	the Preparation and Filing of
151
	Sustainability Reports by
152		TWSE Listed Companies
8.9	TCFD Recommended	157
154		Disclosures Index Comparison
	Table
	8.10	Assurance and Verification	158
		Statements

01

	Sustainability	Sustainable	Customer Service	Sustainable	Environmental	Employee	Social
Table of	Strategy and	and Innovative	Appendix
Contents	Governance	Business	Products	Finance	Sustainability	Happiness	Care

From the Chairman and President

In 2022, the world entered a post-COVID-19 era, and the economic market faced the risk of economic downturn caused by central banks' suppression of high inflation. The outbreak of the Ukraine war triggered a new round of food and energy crises, which increased the cost of people's living. According to the "Global Risks Report 2023" published by the World Economic Forum (WEF), in a world with an imbalanced geopolitical and economic environment, environmental and social crises remain the biggest challenges of the next 10 years. The top three risks include failure of climate change mitigation and adaptation, natural disasters and extreme weather events, and biodiversity loss and ecosystem imbalance. It is evident that the challenges facing the world in the future are even more severe. Shin Kong Financial Holdings (SKFH) follows the three sustainable values of "low carbon", "innovation", and "common good". And deeply understands that "one person walks fast, but a group walks far." We work hand in hand with stakeholders to strive for economic prosperity, social welfare, and environmental sustainability goals, in order to become a high-quality enterprise that combines "sustainable management" with "corporate profits".

SKFH has long been committed to corporate sustainability development, in line with the regulatory framework of the Financial Supervisory Commission (FSC) and actively aligning with international trends, to implement corporate governance. Our consolidated total assets have exceeded NT$4.85 trillion, ranking fifth among financial holding companies in Taiwan. Through the organizational structure of the Corporate Sustainability Committee under the SKFH Board of Directors, we continuously improve sustainable practices in all aspects. In 2022, we were once again selected as a constituent stock of the Dow Jones Sustainability Index (DJSI), ranked at the "Leadership Level" in the Carbon Disclosure Project (CDP) questionnaires for climate change, and won the "Most Prestigious Sustainability Awards-Top 100 Domestic Corporates" of the Taiwan Corporate Sustainability Awards (TCSA), demonstrating SKFH's sustainable business philosophy and achievements. Moreover, we received high recognition from professional evaluation institutions at home and abroad.

Low Carbon

In order to mitigate global climate change, SKFH has officially signed a commitment to develop Science-based Targets initiatives (SBTi) for carbon reduction. Starting from ourselves, we actively establish climate governance, continuously promote various measures to reduce operational GHG emissions and energy consumption, and implement the principle of carbon pricing. We have established an internal carbon pricing system to encourage SKFH and its subsidiaries to actively reduce carbon emissions and accelerate the low carbon transition of the Group. In 2022, we established our first carbon-neutral branch and were awarded 7 green building certificates as well as the "Green Level Label" by Taiwan Alliance for Net Zero Emission; In addition, to develop a climate adaptation strategy, following the framework of Task Force on Climate-Related Financial Disclosures (TCFD), we issued our first TCFD report, analyzing the potential impact of climate change on the Company's operations and value chain while establishing a complete climate risk management system, and strengthening corporate climate resilience. SKFH will continue to expand the scale of green financing and investment, fulfill the stewardship as an institutional investor, plan for a coal phase-out and take engagement actions, exercise voting rights, and leverage its financial influence to drive low carbon transition and strive for the common goal of achieving net zero emissions worldwide.

Innovation

To enhance competitiveness, we have set "digitalization as the foundation to drive transformation" as our strategic goal. The digital financial development strategy is delineated from five key aspects: artificial intelligence, blockchain, cloud computing, big data, and the ecosystem. Internally, an AI-RegTech model sharing platform and multiple robotic process automation (RPA) tools are introduced to enable real-time sharing of regulatory information between SKFH and its subsidiaries, saving over 70,000 hours of manual labor. Externally, various digital products and services are continuously launched, including online e-insurance, OU digital accounts, OU PointCard, micro-enterprise loans, a micro-investment platform for low-asset odd lot trading, and a platform for regular fixed-amount saving plans in Taiwan and US stocks, to expand the accessibility of financial products and services and enhance customer satisfaction. With the digital transformation, information security has also become a key focus. We have established a comprehensive information security protection mechanism, formed the Information Security Committee, and appointed a chief information security officer to supervise the operation of information security management and the implementation of important information security plans in SKFH and its subsidiaries for the purpose of strengthening privacy protection and implementing the principle of fair treatment of customers.

02

	Sustainability	Sustainable	Customer Service	Sustainable	Environmental	Employee	Social
Table of	Strategy and	and Innovative	Appendix
Contents	Governance	Business	Products	Finance	Sustainability	Happiness	Care

Common Good

We uphold a corporate culture and core values that are "people-oriented" and consider our employees as important assets for the sustainable development of the Company. We provide long-term support for employee career empowerment and development, actively implement gender equality, practice zero tolerance for discrimination and harassment, commit to human rights and are dedicated to defending the human rights of our employees and creating a friendly workplace environment. In terms of employee benefits, we have implemented a hybrid office model and an employee stock ownership trust. We also provide various types of leave and childbirth subsidies that exceed legal requirements, to build solidarity and improve retirement benefits, and to support our employees in achieving work-life balance through concrete actions. In addition, to promote social welfare, we have utilized our core competencies to establish five major public welfare initiatives: "Health Promotion", "Care for the Disadvantaged", "Financial Education", "Care for the Elderly" and "Community Engagement" in the hopes of realizing corporate sustainable values and promoting positive social development. In 2022, SKFH invested more than NT$88.52 million in social participation, benefiting approximately 2.54 million people.

Future Prospects

In 2023, as Shin Kong Group celebrates its 60th anniversary, we have made "Shin Kong 60, Sustainable Innovation" as our strategic theme and formulated the following six strategic directions for the future development, namely "Stabilize profitability to increase net worth", "Create profit sources and expand markets", "Integrate resources to deepen synergy", "Optimize customer experience through digital transformation", "Focus on legal compliance risk control and advance fair customer treatment" and "Implement corporate governance and promote sustainability". Upholding the innovative spirit of our former Chairman, Mr. Wu Ho-Su, who believed that "maintaining the status quo is to fall behind, and progress can only be made through research and development. "we will continue to pursue stable profitability, utilize operational synergies, cultivate value customer groups, improve overall management efficiency of distribution channels, optimize customer experience, and use digital means to enhance business growth and create new business opportunities. At the same time, we will comply with the government's regulatory objectives, align with international accounting standards (IFRS 17) and other international standards such as the Insurance Capital Standard (ICS), while implementing the principle of fair treatment to customers. We aspire to utilize ESG to build corporate resilience, implement sustainable development, achieve SDGs, and finally realize the sustainable spirit and values of "Light Everywhere, Our Hearts with You."

Chairman

President

03

	Sustainability	Sustainable	Customer Service	Sustainable	Environmental	Employee	Social
Table of	Strategy and	and Innovative	Appendix
Contents	Governance	Business	Products	Finance	Sustainability	Happiness	Care

SKFH Overview

Shin Kong Financial Holding Co., Ltd. was established on February 19, 2002, and it currently operates subsidiaries including Shin Kong Life Insurance (SKL), Shin Kong Bank (SKB), MasterLink Securities(MLS), Shin Kong Investment Trust (SKIT), Shin Kong Property Insurance Agency (SKPIA), and Shin Kong Venture Capital (SKVC). The Group creates a comprehensive financial services network composed of life insurance, banking, securities, and mutual funds for more than six million customers. SKFH upholds the vision of becoming the best comprehensive financial service institution in the Greater China region, with a mission to maximize customer, shareholder, and employee benefits. We actively participate in charitable and public welfare activities to create a better social environment, all in constant pursuit of sustainable corporate operations.

Shin Kong Financial Holding Co., Ltd.

Management Objectives

Stabilize profits and	Create profit sources and
increase net worth.	expand markets.

Industry

Company Name

Address

Paid-in capital

Website

TWSE stock symbol

Finance and insurance industry

Shin Kong Financial Holding Co., Ltd.

38F, No. 66, Section 1, Zhongxiao West Road, Taipei City (Headquarters)

NT$ 157,846,182,430

https://www.skfh.com.tw

2888

Brand Spirit

SKFH adheres to "innovation, service, integrity, and giving back" as its business ethos, values human life, and is dedicated to bringing happiness to the public. SKFH adopts a humble approach to provide local and down-to-earth services and give back to society.

Integrate resources and	Digital transformation and
enhance synergy.	experience optimization.

Emphasize legal compliance,	Implement corporate
risk control and treat	governance and promote
customers fairly.	sustainable operations.

Note: In 2022, there was no significant change in SKFH's scale, structure, and ownership.

04