Material ESG Topics of the Year

We follows the GRI 2021 standards and the Double Materiality principle, and identifies six material topics that have significant impact on the group’s operations and values chains through a systematic process.

2025 Material ESG Topics

Material ESG Topic	Importance to Chunghwa Telecom	Impact Hotspots on Value Chain
Material ESG Topic	Importance to Chunghwa Telecom	Upstream	Corporate Operation	Downstream
Reduction of Carbon Emissions	In response to the international initiative of the Paris Agreement to limit global warming to within 1.5°C, and to the Taiwan government's 2050 Net Zero policy, CHT actively pushes forward energy-saving and carbon-reduction strategies. The expected short-term benefit is lowering of energy cost and carbon fee-associated risks, while long-term benefits include enhancing low-carbon operational competitiveness in the ICT industry and the corporate sustainability values. However, if the carbon-reduction effort was ineffective, there is risk of increasing compliance costs and compromising operational performance and profitability.	●	●	●
Friendly Workplace and Talent Development	Employees are critical foundation for CHT's sustainable operations and stable development of its core businesses. The Company highly relies on professional talents for its network construction, system operations and service innovations. Talent recruitment, retention and development have direct impacts on the Company's business performance and long-term economic values. Protection of labor rights, healthy labor-management relations, and a sound talent development mechanism will help enhance employees' engagement, and reduce their turnover and the operational risks, ensuring stable provision of key services.		●
Personal Data and Privacy Protection	CHT inevitably has access to a large amount of customer data during service provision. As ICT services become increasingly digitalized, hacker attacks may lead to breach of personal data, theft of confidential information, and financial fraud. We highly value the customers' privacy and dedicate ourselves to strengthening cybersecurity and personal data and privacy protection, thereby elevating customers' trust, the brand image and reputation.		●	●
Digital Resilience	With a large amount of communications equipment and infrastructure, CHT forms the foundation of digital resilience for all walks of life. We strengthen operational efficacy and service quality through continued investment in R&D and equipment procurement, thereby leading continued business growth. However, malfunction of critical network equipment, inability to troubleshoot issues in key information systems, major cybersecurity incidents or unstable operation of data centers, would interrupt important services and detriment business performance and customers' trust.		●	●
Integrity Management	Integrity management is the foundation of CHT's sustainability governance. Through integrity education and a sound internal reporting mechanism, employees' confidence in the systems can be reinforced and the customers' and the society's trust on the Company be strengthened. If a culture of integrity is not created, or if whistleblower protection is not put in place, the company would be prone to frauds, corruption and crushed morale, which would further lead to loss of talents and tainted reputation.	●	●	●
Supply Chain Management	CHT relies heavily on its suppliers for the Company's operations, and thus robust management of a sustainable supply chain helps CHT identify and mitigate risks in the supply chain, ensure stability of key equipment and service provision, and prevents breach of laws or reputational damage. In the meantime, through empowering suppliers to enhance their ESG competency, the overall resilience of the value chain can be strengthened, which supports sustainable operation of the company and its competitiveness for the long term.	●	●	●

The identified material topics serve as the core of our sustainability strategy and action framework. Through refined policies and phased objectives, supported by robust performance metrics, we operationalize regular monitoring and rolling management (please refer to 2025 Sustainability (ESG) Report for details).

Integration of Material Topics with the Risk Management Process

The results of material topic identification are included in Chunghwa Telecom's Enterprise Risk Management (ERM) System each year for the annual assessment of the likelihood value of the inherent risks derived from the material ESG topics, followed by proposal of mitigate action and reassessment of the likelihood values of the residual risks, which remain within the risk appetite of the Company as manageable risks.

Risk Event Identification and Mitigation Actions of Materiality Assessment

Material Topic	Identified Risk Event	Risk Mitigation Actions
Reduction of Carbon Emissions	Sustainability and Climate Strategies	Increased renewable energy wheeling. Lowered IDC's PUE values to enhance energy use efficiency and effectively manage power savings. Accelerated infrastructure replacement projects to increase annual electricity savings.
Friendly Workplace and Talent Development	Human Capital Management and Development	Formulated training frameworks for technical knowledge transfer. Continuously replenished manpower through diverse recruitment channels. Continuously carried out compensation surveys to optimize the salary and benefits system.
Personal Data and Privacy Protection	Cybersecurity and Privacy Protection	The Privacy Policy passed third-party conformity verification. Completed the ISO 27001:2022 standard transition verification for 10 certificates, maintaining the validity of certificates. Obtained CNS 29100 de-identification certification. Completed cybersecurity assessments (including vulnerability scanning, penetration testing, and red team exercises) and vulnerability patching for all ICT systems.
Digital Resilience	Network Quality and Infrastructure Maintenance and Operations Information Systems and Technology Management	Bolstered the resilience of ICT networks around Taiwan through a comprehensive "sea, land, satellite, and sky" network integrated with fiber optics, submarine cables, satellites, and microwaves. Continuously enhance the stability of cloud services, data centers, and operational systems by establishing redundancy mechanisms, conducting regular drills, replacing legacy equipment, and enforcing change management reviews to ensure uninterrupted telecom service.
Integrity Management	Ethical Corporate Management Best Practice Principles and Code of Ethics	Passed ISO 37001 Anti-Bribery Management Systems certification as the first certified telecom operator in Taiwan. Organized various training sessions to deepen employees' awareness of integrity and implementation into their daily practices. Required suppliers and business partners to sign integrity clauses and conducted anti-corruption and anti-bribery policies promotion.
Supply Chain Management	Sustainable Supply Chain Decarbonization	Advanced sustainable supply chain management through mechanisms such as the Supplier Code of Conduct, ESG assessments, education and training, and procurement terms and conditions to support suppliers in strengthening their ESG management capabilities. Assisted suppliers in enhancing their sustainability governance and carbon management capabilities through initiatives such as supplier ESG education and training, Sustainable Environmental Education, and Decarbonization Pathway Workshops.

Notes:
1. Since the critical equipment and suppliers of the Company are secured by stable contracts and corresponding contingency measures to ensure a stable supply, "Sustainable Supply Chain Decarbonization" is the only risk event identified for management and monitoring.

ESG Material Topics with Impacts on Operations and Long-term Values

Item	Material Topic 1	Material Topic 2	Material Topic 3
Material Risks or Opportunities	Network Resilience and Product/Service Quality & Safety	Climate Response Strategy Towards Net-Zero	Cybersecurity and Privacy Protection
Impact on Business Values	Chunghwa Telecom is an integrated telecom operator offering fixed-line, mobile, broadband, and internet services. Through network transmission infrastructure built with fiber optics, submarine cables, satellites, and microwaves, it supports the ICT network resilience in Taiwan. Network stability, service availability, and product/service quality and safety directly impact connection quality, business continuity, public communication, and emergency response capabilities. Interruptions in offshore island networks, backbone networks, or critical nodes not only affect user communications but may also lead to service compensation, customer complaint handling, and increased O&M costs, directly impacting revenue and reputation. Therefore, strengthening network resilience and product/service quality & safety is not only a focus of operational risk management but also a key opportunity to maintain customer trust, enhance service competitiveness, and create long-term revenue stability.	Amidst escalating pressures from global climate governance, 2050 net-zero emissions, and carbon fee/pricing, Chunghwa Telecom, as a critical infrastructure provider, recognizes that climate transition and physical risks progressively impact its long-term value creation. Failure to timely implement a low-carbon transition, energy efficiency improvements, and climate adaptation will escalate compliance, carbon, and operating costs, along with capital expenditures and the risk of network infrastructure disruptions. To continuously advance green energy procurement, equipment replacement, GHG inventory systems, and network resilience. This year, increasing the renewable energy share raised costs and expenses by approximately NT$216 million, while capital expenditures for replacing high-energy-consuming equipment reached roughly NT$2.57 billion, mitigating future carbon risks and enhancing competitiveness.	As Taiwan's critical telecom infrastructure provider, Chunghwa Telecom recognizes cybersecurity resilience, privacy protection, and system availability as keys to operational stability and customer trust. Facing escalating geopolitical risks and complex cyber threats, Chunghwa Telecom leverages risk management, proactive defense, real-time detection, and incident response to identify potential threats preemptively and mitigate operational disruptions. Chunghwa Telecom aligns with international standards and builds joint defense partnerships with governments and global organizations to enhance cybersecurity governance and defense capabilities. Material cybersecurity incidents could cause operational disruptions, compromised customer privacy, reputational damage, and regulatory fines (up to NT$5 million), plus daily revenue losses exceeding NT$10 million, directly impacting revenues, operational risk management, and long-term corporate values.
Types of business impact	Revenue	Cost	Revenue, Risk
Response Strategies	To enhance the network resilience and service availability of critical communications infrastructure, Chunghwa Telecom deploys a multi-layered redundancy architecture of "fiber optics, submarine cables, satellites, and microwaves." Fixed networks: 7 submarine cables connect Taiwan and 3 offshore islands, with new ones planned, and multi-orbit satellite backup links in remote telecom facilities, fortify disaster response and service continuity. Mobile networks: Diversified backup routes, distributed architectures, and cloud-native architecture for core network to elevate business continuity. Satellite networks: GEO, MEO, and LEO services are introduced to mitigate single-system failures, with direct-to-cell technologies and 6G Space-Ground Integrated networks in development, enhance communication reliability. Power and Air Conditioning: Equips core data centers with power and air conditioning systems featuring multiple layers of redundancy and flexible load capabilities, ensuring operations during power outages.	The overall climate strategy at Chunghwa Telecom is driven by "mitigation" and "adaptation" in parallel. Mitigation Actions: Power consumption in IDCs and base stations is reduced through technology-driven carbon reduction, smart applications, and energy-saving technologies. Renewable energy use is expanding via self-built PV systems and long-term green power contracts, targeting RE100 by 2040 and Net Zero by 2045. Meanwhile, ESG requirements are incorporated into procurement management to promote sustainable supply chains. Adaptation Actions: A resilient, multi-layered communications network is built, integrating submarine cables, terrestrial communications, satellite, and microwave technologies. Coupled with diversified redundancy, AI decision support, and disaster monitoring and response processes, physical climate risk management is strengthened to enhance communication system resiliency and business continuity.	Chunghwa Telecom focuses on AI security governance, cybersecurity resilience, service stability and cybersecurity service development to fortify CI protection and digital resilience. Complying with ISO 42001 and government regulations, Chunghwa Telecom established an AI risk management system for assessments, controls, and protection to mitigate emerging tech and cyberattack risks. Cybersecurity resilience: A comprehensive, robust cybersecurity management system with multi-layered defenses, network/endpoint protection, security monitoring, and incident response, is built to enhance service availability and business continuity. Employee cybersecurity awareness, vigilance, and response are enhanced by company-wide training to reduce human-induced risks. Business opportunities: Integrating AI, proprietary R&D, and talents, providing enterprise cybersecurity solutions, helping strengthen defenses and resilience, driving revenue growth, and elevating brand trust and long-term advantages.
Targets/Metrics	Target Year: 2027 1. Fixed Network Resilience Complete the construction of Taiwan-Matsu and Taiwan-Penghu-Kinmen No. 4 submarine cables by 2026. Continually expand microwave backup capacity for critical nodes in offshore islands and rural areas. Deploy multi-orbit satellite backup links for telecom facilities in mountains and offshore islands by 2026. Complete the deployment of OneWeb satellite backup for 104 critical base stations by 2026. 2. Mobile Network Resilience Continually refine the SOP for IMS/VoLTE network backup switching and conduct regular drills. Add off-site backup telecom data center for the roaming service system to strengthen service resilience. 3. Satellite Network Resilience Introduce Astranis MicroGEO satellite services by 2027. Establish ground stations for SES MEO and Astranis GEO satellites by 2026. Evaluate direct-to-cell satellite pilot projects in line with government regulatory developments. 4. Backup Power Systems In 2025, backup power systems at core data centers must be capable of sustaining operations for 72 hours following an external power outage.	Target Year: 2045 PUE reduced to below 1.5 by 2030. RE100 (100% renewable energy) achieved for IDCs by 2030, and company-wide by 2040. EV100 achieved by 2030, fully electrifying engineering and official vehicle fleets. Net-zero emissions by 2045 (validated by the SBTi Net-Zero Standard).	Target Year: 2025 All ISMS certificates successfully transitioned to the ISO 27001:2022 standard within the year. 100% vulnerability scanning and patching of the ICT system. 100% of employees completed cybersecurity and privacy protection promotion and professional development. An AI-driven security operation, monitoring, and notification system established for internet cybersecurity services by 2025, aiming to cut incident detection time by at least 30 minutes. AI technology integration to enhance the competitiveness of the xTrust Zero Trust Network system, to be submitted for "Trust Inference" validation by the National Institute of Cyber Security (NICS) in 2025.
Progresses in 2025	1. Fixed Network Resilience Projected to complete TW-Penghu-Kinmen-Matsu submarine cables by 2026, reinforcing backups. Finished Kinmen, Penghu, Matsu microwave backup routes to improve offshore island service stability. Expanded microwave backup capacity for 19 remote and mountain areas and 5 offshore islands. Deployed multi-orbit satellite backup links for fixed network telecom facilities on schedule. 2. Mobile Network Resilience Completed backup deployment for the IMS/VoLTE network. Deployed two additional cloud-native MMEs to strengthen resilience and maintain service continuity during critical failures. Established an off-site backup mechanism for roaming services to enhance system resilience. Completed a backup inventory review and conducted core network failover drills. 3. Satellite Network Resilience Secured frequency licenses for Astranis GEO satellite and SES ground stations; processed setup and operational applications. Advised MODA to release mobile frequencies and allow direct-to-cell satellite services in 2027. 4. Backup Power Systems Backup power systems at core data centers can last for up to 72 hours.	The net-zero targets validated by SBTi, the Scope 1&2 carbon emissions in 2025 have been reduced by 24.49% compared to 2020; and the Scope 3 emissions have been decreased by 10.8% from 2021 levels. 90.912 million kWh of renewable energy used accounting for 6.93% of the total. Green power consumed by IDCs accounting for 39.13% and the PUE value dropped to 1.587. 386 engineering and company vehicles replaced with electric vehicles as of 2025. Adaptation actions executed as scheduled to continuously improve climate resiliency.	100% company-wide completion for the ISO 27001 transition certification achieved. 2 annual vulnerability scans of company systems and websites 100% successfully completed, with penetration testing and red team exercises performed on specific scopes. Over 1,900 pieces of external attack intelligence shared, and 100% device vulnerabilities patching completed. 100% of employee cybersecurity and privacy protection training completed, totaling 251,527 hours, with over 1,500 information security certifications obtained accumulatively. AI-driven auto data collection/analysis in the operations, monitoring, and notification system for internet security services implemented in August 2025, cutting the MTTD by over 30 minutes. AI technology integrated into the xTrust Zero Trust Network system, successfully passing the NICS validation in December 2025 to provide key functions of Identity Authentication, Device Authentication, and Trust Inference.
Remuneration Review Mechanism	Achievement of KPI on network resilience included in the performance appraisal of senior managers. The variable compensation of senior managers directly linked to the appraisal results of network resilience KPIs to strengthen the management's emphasis on and commitment to operational resilience	Compensation and performance mechanisms set by the Compensation Committee with ESG performance integrated The ESG performance of executives closely tied with variable compensation, with the correlation progressively rising from 10% in 2022 to 30% in 2025 year by year ESG indicators covering power consumption, renewable energy use, digital empowerment of SMEs, corporate governance, international sustainability ratings, etc.	KPIs related to cybersecurity as sustainability indicators linked with the variable compensation of senior managers. The variable compensation of senior managers linked with the performance appraisal results of "Cybersecurity and Privacy Protection"

Material Topics of the Year