Material Aspects Identification

Our Company values the views of our stakeholders. Our stakeholders include shareholders and investors/creditors, government agencies, customers/debtors, current employees, potential employees, media, communities, and suppliers. We employed various channels and stakeholder communication to understand and identify their concerns. The Company conducts material assessments and reviews every year, of which the results are presented, along with the potential internal/external risks of financial-related business, and presented reports to the Board of Directors to implement Enterprise Risk Management (ERM).

The material topics of 2023 were evaluated and adjusted in accordance with the GRI Standards: Universal Standards and the practical situations reflected within and outside the Company, through discussions and joint decisions made by the head of the Corporate Sustainability Office and the group leaders. In response to these material topics, corresponding management policies and concrete actions are disclosed, and the assessment process and identified material topics are as follows:

Procedures for Identifying Material Topics

Step 1: Identify	Based on the GRI standards and upholding the dual importance principle, the Company selected 17 key sustainability issues by taking into account factors such as international standards (SASB, DJSI and TCFD) peer development in the industry characteristics, and the concerns raised by stakeholders through communication channels.
Step 2: Evaluate	To evaluate the probability and magnitude of positive and negative impacts on the external economy, environment, and people, including impacts on their human rights (ESG) in each sustainability issue that the Company may encounter, based on the expertise of each sustainability team on the issues .^Note1
Step 3: Prioritization	To calculate the impact level of each sustainability issue based on the probability and magnitude of positive and negative impacts and rank the impact levels accordingly. Sustainability issues with impact levels reaching 60% or above are considered significant.^Note2In 2023, 12 significant sustainability issues were identified and confirmed by the head of the Corporate Sustainability Office and the leaders of each sustainability group to ensure that important ESG information has been fully disclosed in the report.
Step 4: Review	After the completion of the report, the Corporate Sustainability Office's teams conduct a final review and report to the Sustainable Development Committee and the Board of Directors to determine whether there are any ESG information and performance improperly or unfaithfully expressed. The results of the identification of Material Topics and feedback from stakeholders are also used as an important reference for the next annual report.

Note：

The positive impact assessment focus on the probability of occurrence, as well as the size and scope of the impact. The negative impact assessments focuses on the probability of occurrence and the severity of the impact.
The impact level is measured in points, with the total of 50 points. Sustainability issues with impact levels reaching 60% or above (i.e., 30 points or more) for total impact are considered significant.

Impact of sustainability topics

Material Topics and Their Impact Boundaries

In 2023, 12 material topics were identified, and remained the same ones as those identified in 2022. The results of the analysis differed only in the impact level order. The following is an analysis of the involvement levels of these significant sustainability issues in terms of the "Value Chain Impacts", "Impact Dimensions", and "Impact Categories".

Risk Management and Strategies for Material Topics