Material ESG Issues of the Year

Material ESG Topics of the Year

2021 Material Topics Matrix

2021 Material Issues

Aspect	Material Issues	Significance to CHT	Goals	Key Results
Environmental (E)	Climate Change Mitigation and Adaptation	Aiming to become a “green enterprise”, we aspire to enhance our core competencies, identify relevant risks and opportunities, and steer the development of a low-carbon industry on the issues of energy and climate change.	Short-term (2022) Procurement of 50 million kWh or more of renewable energy Mid-/Long-Term (2023-2030) 100% IDCs using renewable energy Science-based targets proposed with the plan to cut carbon emissions by 50% by 2030 compared to the 2020 levels	6.3% IDCs using renewable energy in 2021 7.02% less carbon emission in 2021 compared to 2020 levels
Social (S)	Cybersecurity Management and Privacy Protection	We have continued to strengthen our processes and systems in response to external security threats and regulatory changes, and constantly refine information security systems and management strategies for customer data protection.	Short-term (2022) no cybersecurity or privacy breach in 2021 Continuous Data Protection Insurance Certificate of Conformity for Privacy Policy issued by SGS Mid-/Long-Term (2023-2030) 100% information assets inclusion and log collection Vulnerability intelligence, warning, and joint defense mechanisms established with high-risk vulnerability handled and responded within 7 days 100% security check to systems online, patching of high-risk vulnerabilities, and ongoing obtainment of independent third-party cybersecurity certification Cybersecurity threat early warning and swift check and response mechanisms established with notification in 1 hour and emergency response completed in 24 hours The number of cybersecurity service customers: 500,000 family and SME users and over 300 large corporate users Revenue from cybersecurity and privacy protection: >NT$10 billion	In 2018, CHT invested in the subsidiary, CHT Security Co., Ltd. yielded a revenue of NT$1.139 billion in 2021 100% information assets inclusion and log collection with reference to NIST CSF in 2021 Vulnerability intelligence, warning, and joint defense mechanisms established with high-risk vulnerability handled and responded within 7 days, CHT reached 100% completed in 2021 100% security check to systems online, patching of high-risk vulnerabilities, and ongoing obtainment of independent third-party cybersecurity certification, CHT 100% completed in 2021 Cybersecurity threat early warning and swift check and response mechanisms established with notification in 1 hour and emergency response completed in 24 hours. There are no cybersecurity or privacy breach in 2021 The number of cybersecurity service customers: 320,000 family and SME users and over 200 large corporate users in 2021 Revenue from cybersecurity and privacy protection: NT$2.566 billion of revenue from cybersecurity services in 2021
	Accurate product labelling	We accurately communicate product and service information, and actively provide instructions and usage regulations to ensure that consumers are aware of the effects while overuse of products and services.	Short-term (2022) 0 cases of major information labeling or deception Mid-/Long-Term (2023-2030) Product and service promotion information is 100% compliant with laws and internal regulations	No violation of laws concerns on health, safety or product labeling in 2021
	Friendly workplace of diversity and inclusion	We view our employees as the most important partners, materially protect their rights at work, sign the Collective Bargaining Agreement with the labor unions, and are committed to offering a friendly workplace of equality and diversity for our employees.	Short-term (2022) No discrimination cases No violation of work or human rights case The investigation committee has over half of female members Mid-/Long-Term (2023-2030) Ratio of female managers (senior director or above) raised to 30%	No discrimination cases in 2021 The investigation committee has over half of female members We fully respect aboriginal employees’ cultures and no violation of work or human rights was reported in 2021
	Competitive remuneration and benefits	With remuneration above the statutory standards and the industry average, we stress on the well-being of our employees, encourage our employees with actions for them to focus on work without distraction, and share our business results.	Short-term (2022) Certificate of Conformity for Corporate Code of Conduct (CoC) issued by SGS Maintain the reward of senior employees Mid-/Long-Term (2023-2030) Average employee salaries remain in the top 5% of the industry “Collective Agreement” employee coverage maintain over 99% 100% General courses execution performance	Collective Agreement coverage 99.21% in Feb. 2022 The base salary at CHT as 1.3 time of that in Taiwan; the average salary at CHT as 3 folds of that in Taiwan
	Health and safety	We incorporated ISO 45001 to ensure that each process is in compliance with the regulation.	Short-term (2022) Employees' participation in health screening reaches 99% Mid-/Long-Term (2023-2030) Maintain validity of ISO 45001 Occupational Health and Safety Management of all institutions	All 27 institutions complete ISO 45001 verification in 2021 The monitoring results of the working environment of employees meet the requirements in 2021 Family members are also entitled to checkups at the same rate, and a total of 3,012 persons participated in 2021
Governance (G)	Corporate Governance	The upright operation is the core value CHT insists on. We make the employees strictly follow the laws and regulations through policies and propaganda.	Short-term (2022) 0 major violations Maintain the number of independent directors above 35% At least 2 female directors on the board of directors Mid-/Long-Term (2023-2030) Ensure no major violations of Taiwan's economic, social and environmental regulations MSCI ESG rating to AAA in two phases (AA by 2025)	No FTC penalties in 2021 38.5% independent directors on the board of directors
	5G Application & Innovative ICT Services	Due to impacts from the global industrial chains, Chunghwa Telecom more proactively strengthens its core businesses, introducing momentum to drive revenues via innovative ICT products and services while elevating shareholders’ willingness to hold shares in the long run.	Short-term (2022) “Customer-centric” organizational structure initiated with an aim to become the Leader in Smart Living and Agent of Digital Economy Empowerment to build the next-generation cloud-based intelligent networks Mid-/Long-Term (2023-2030) NT$30 billion of revenue from the emerging businesses, including IDC, cybersecurity, and 5G+AIoT Over 2.2 million subscribers for MOD, CHT’s OTT platform 35% market share for 5G services with 3 million users	NT$17.512 billion of revenue from the emerging businesses in 2021 2.06 million subscribers for MOD, CHT’s OTT platform in 2021 20% market share for 5G services in 2021

Pursuant to the provisions of “Directions Governing Performances of Senior Managers of Chunghwa Telecom”, the material issues hooked with the variable compensations of the senior managers are: (1) risk management; (2) code of ethical conduct; (3) information/cyber security; (4) climate change; (5) inventory and engagement of stakeholders; and (6) social participation.

• Chunghwa Telecom 2021 Top 3 Material ESG Issues