Governance

Chunghwa Telecom’s risk management policy, structure and culture are approved by the Board of Directors, and has established the Risk Management Committee, with the President as the convener, reporting to the Board of Directors. In addition, the Sustainable Development Promotion Committee has been established at the Company, under which the Environmental (E) group is responsible for the management of the company-wide climate change mitigation and adaptation strategies and actions.

The group is tasked with the analysis and tracking of risks and opportunities of climate change. The Environmental (E) group and reports results to the Risk Management Committee for the Committee to perform a comprehensive assessment of the risks and implement necessary mitigation measures in line with the risk levels. The Environmental (E) group shall regularly produce the TCFD Assessment report for the reference of the Board of the Directors.

Strategies

To analyze the impacts of climate change on Chunghwa Telecom in the future, Chunghwa Telecom set a baseline scenario and a 1.5°C scenario in accordance with the TCFD framework to identify and analyze the short-, medium-, and long-term climate risks and opportunities in the business scope of the Company, the upstream and the downstream, and the entire life cycle of assets. IEA Stated Policies Scenario STEPs(Baseline Scenario) and IEA Net Zero Emissions  by 2050 NZE (1.5°C scenario) are employed as the climate scenarios for climate mitigation strategies (transition risks). IPCC RCP 8.5 (baseline scenario) and IPCC RCP 2.6 (1.5°C scenario) are employed as the climate scenarios for climate adaptation strategies (physical risks).

Risk Management

In alignment with TCFD recommendations, Chunghwa Telecom identified short-, medium-, and long-term climate-related risks and opportunities by reviewing global industry risk management reports, Taiwan’s regulatory policies, and peer company disclosures. To enhance the robustness of this assessment, perspectives were gathered through interviews with senior managers across departments (internal departments) and independent directors (external). These interviews provided insights into the relevance, potential impact, and expected timing of each identified climate-related risk and opportunity.

In accordance with the TCFD recommendations, Chunghwa Telecom reviewed global industry risk management reports, Taiwan’s regulatory policies, and peer disclosures to identify climate-related risks and opportunities across the short, medium, and long term. Additionally, Chunghwa Telecom referred to the ISO 31000 Risk Management Guidelines to establish a climate risk management process. A hazard severity assessment methodology was adopted to evaluate risk levels (low, medium, high), using the following formula: Risk Severity = Likelihood × Impact Magnitude.

Starting in 2023, Chunghwa Telecom elevated its “Risk Management Committee” to a functional committee under the Board of Directors in 2023 and renamed the former management-level committee to “Risk Management Promotion Committee,” clearly delineating the roles of strategic oversight and operational execution, and thereby enhancing the hierarchical structure of the company’s risk governance framework.

The Environmental (E) Group under the Sustainable Development Promotion Committee is responsible for overseeing climate-related risk management activities, based on a climate risk and opportunity matrix. Its duties include formulating response strategies, setting implementation directions and management targets, and planning resource allocation. The results of related assessments are reviewed by the Sustainable Development Promotion Committee and regularly reported to the Risk Management Committee. The Risk Management Committee is responsible for integrating climate-related risks into Chunghwa Telecom’s broader enterprise risk assessment and for initiating appropriate mitigation measures based on the level of risk identified. To ensure the effectiveness of response strategies, Chunghwa Telecom conducts quarterly reviews of the implementation status and progress toward risk management targets. A mechanism for ongoing monitoring and evaluation has also been established to track performance continuously. Progress and outcomes are regularly reported to both the ESG Committee and the Board of Directors. Where necessary, adjustments are made based on actual implementation results to ensure timely achievement of the stated objectives.

Metrics & Targets

Based on its two primary strategic initiatives—climate change mitigation and adaptation—Chunghwa Telecom has established corresponding metrics and set specific targets to manage the company’s identified climate-related risks and opportunities. These targets are designed to support effective risk control and opportunity realization.

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