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The Company formulated “Sustainable Finance Guidelines” to establish a principle framework and guidelines at the financial holding company level. Through a principled framework and guidelines, the Company incorporated ESG factors into its daily operations and decision making, regulated a list of ESG issues of concern, instituted a list of industries to be actively supported, standardized the list of companies to be avoided and strengthened due diligence and prudent evaluation of ESG high-risk targets. Also, in order to guide our counterparties to pay attention to governance, environmental, and social risks and to fulfill their responsibilities as global citizens.

In order to further strengthen the ESG screening mechanism in the Group's investment and lending business, the Company set up the “Industry-Specific Environmental and Social Risk Management Rules” stipulating that when performing business with companies engaged in environmental and socially risky industries, such as steel manufacturing, semiconductor manufacturing and plastic material manufacturing, case processers are to fill out the “Industry-Specific Environmental and Social Risk Management Checklist＂applicable to their subsidiary to understand the management measures of the business counterparties in the social and environmental aspects, to examine the potential social and environmental risk impact of the customers and their ability to adjust to environmental and social risks, and ensure risk control of the transactions.

Sustainable Finance Guidelines Industry-specific Environmental and Social Risk Management Rules
Climate Finance Operations Guidelines

As of the end of the year, Yuanta Funds has 22 funds rated by Morningstar, Inc. with the highest rating of five Globes, including Yuanta Taiwan High-Yield Leading Company Fund (the source of dividend distribution of the Fund may be the income equalization), Yuanta Taiwan Top 50 ETF, Yuanta Taiwan High Dividend Fund (the source of dividend distribution of the Fund may be the income equalization), and Yuanta FTSE4Good TIP Taiwan ESG ETF (the source of dividend distribution of the Fund may be the income equalization). This year, the size of five Globes funds reached NT$723.875 billion, indicating that sustainability investment is gradually gaining market attention.

Proprietary Sustainable Investment Products Categories	2022			2023
	Asset Size (NT$ thousand)	Total Assets (NT$ thousand)	Proportion of Total Assets (%)	Asset Size (NT$ thousand)	Total Assets (NT$ thousand)	Proportion of Total Assets (%)
ESG Integratio *Note1	$28,588,551	$968,355,952	2.95	$29,432,933	$1,489,860,084	1.98
Best in Class *Note2	$9,818,078		1.01	$636,383,564		42.71
Thematic *Note3	$10,760,868		1.11	$10,530,193		0.71
Impact Investing *Note4	$474,726,250		49.02	-		-
Other *Note5	$42,983,646		4.44	$95,503,368		6.41
Total	$566,877,393		58.53	$771,850,058		51.81

Note：

1. Incorporate the ESG model into the design of financial products or set up relevant selection principles to systematically integrate ESG factors into investment analyses and decision-making.
2. Select industries, companies, or projects with relatively more favorable ESG performance when designing financial products.
3. Invest in a single or multiple thematic sustainability-related targets (e.g., climate change or clean energy) when designing financial products.
4. Have measureable social and environmental impact and financial returns when designing financial products.
5. Funds promoting environmental or social characteristics or with a sustainable investment objective, which include but not limited to EU SFDR Article 8 or EU SFDR Article 9.

Third-Party Sustainable Investment Products Categories	2022			2023
	Asset Size (NT$ thousand)	Total Assets (NT$ thousand)	Proportion of Total Assets (%)	Asset Size (NT$ thousand)	Total Assets (NT$ thousand)	Proportion of Total Assets (%)
ESG Integration *Note1	$1,771,236	$72,015,620	2.46	$643,533	$201,872,831	0.32
Best in Class *Note2	$145,579		0.20	$1,411,684		0.70
Thematic *Note3	$787,264		1.09	$1,664,693		0.82
Impact Investing *Note4	$64,317		0.09	$2,356,020		1.17
Total	$2,768,396		3.84	$6,075,930		3.01

Note：

1. Consider ESG factors into the process of investment decision.
2. Invest in the company with positive ESG performance relative to industry peers.
3. Invest in themes or assets related to certain environmental or social issues, such as energy transition, climate change, promotion of equality, and so on.
4. The investment strategy will bring positive impact on environment and society.

Yuanta Bank operates on the basis of digital operations. The carbon footprint for all types of credit cards already obtained certification from the British Standards Institution (BSI) in 2022. It also took the lead in focusing on the application of Mobile Banking APP services and verifying the carbon footprint of its APP. In addition, Yuanta Bank implemented a carbon neutrality project: it selected a wind power project that meets the sustainable development goals of the United Nations from the Gold Standard to conduct carbon offsets and achieve carbon neutrality. The carbon offsets will go to social welfare and be used to reduce poverty, improve healthcare and public health education, and create job opportunities. The bank obtained certification from BSI and became the first financial institution in Taiwan to obtain both ISO 14067 Carbon Footprint verification and PAS 2060 Carbon Neutrality verification.

In response to growing demand for mobile payment services, Yuanta Bank's "Mobile Scan Payment Service" passed the British Standards Institution (BSI) ISO 14067 Product Carbon Footprint verification in November 2023, becoming the first financial institution to voluntarily conduct carbon footprint verification for its "Mobile Scan Payment Service." Furthermore, in February 2024, it advanced to obtain carbon labels issued by the Ministry of Environment. The Carbon Account has now integrated with seven major electronic payment service providers. It aims to follow international development trends, while participating in cross-border consumer payment services in countries such as Japan and South Korea in 2023. Now, by simply opening the "Yuanta Mobile Banking APP" and selecting the scan payment function, users can easily switch the consumption country and complete transactions by scanning QR codes at local stores marked with "TWQR," continuing to diversify and deepen its presence in the sustainable digital finance field.

Yuanta Securities has integrated ESG concepts into its operation strategy. In 2022, it became the first securities company in Taiwan to pass the BSI ISO 14067 Carbon Footprint verification and the PAS 2060 Carbon Neutrality verification with the "Mr. Investor APP" mobile application, officially achieving carbon neutrality. They continue to expand its scope of business. Yuanta Securities assisted the Ministry of Environment in formulating the Product Category Rules (PCR) for "Securities, Futures, and Investment Trust and Consulting Industry Online Services." This initiative led the securities, futures, and investment trust and consulting industry to establish rules as industry-standard practices. Under "Yuanta Securities Online Financial Service”, carbon footprint verification was conducted for various online services including application, transactions, and inquiries. The ISO 14067 International Carbon Footprint Calculation Standard was used to examine the carbon footprint of online services used by investors of the Company, covering stages from raw material acquisition to service delivery and waste disposal. The carbon footprint of each online service was approximately 285 milligrams. In April 2023, "Yuanta Securities Online Financial Service" passed the BSI ISO 14067 Product Carbon Footprint verification, and in June, obtained the Environmental Protection Administration's carbon footprint labels. This achievement marked Yuanta Securities as the first benchmark operator in the securities industry to pass international carbon footprint verification and obtain domestic carbon labels. It aims to reduce the environmental impact during operations, strengthen the role of financial service institutions in global low-carbon transition, and encourage customers to move towards a low-carbon and green lifestyle.

Yuanta Bank hopes to raise the public awareness of environmental protection via the disclosure of carbon emissions reduced by implementing electronic transactions. Yuanta Bank presented the Diamond-Gold Carbon Lucky Account in 2022, allowing customers to obtain information about the total number of sheets of paper they saved by adopting electronic transactions simply by logging into their accounts via Yuanta Mobile Banking APP or Yuanta Bank Official Website and go to the My Carbon Account section. With this new feature, the customers can see the positive impact over time of the reduction in accumulated carbon reduction, the accumulated carbon reduction. It may then help to motivate them to begin making electronic transactions. Moreover, to incentivize customers to participate in carbon reduction movement with simple clicks, Yuanta Bank offers various green discounts including an exchange rate discount for online currency exchange, online applications for regular investing, and zero subscription fee for designated fund/ETF. This year, Yuanta Bank saved 260 million pieces of A4 paper from encouraging its customers to adopt online applications and delivery for various tasks; the results are beneficial for saving resources and reducing overall energy consumption.

In addition, Yuanta Bank included an introduction of the Mobile Banking APP in the My Carbon Account section, describing how the APP became a zero-carbon emission APP by obtaining ISO 14067 Carbon Footprint verification and PAS 2060 Carbon Neutrality verification and how Yuanta Bank obtained other sustainability achievements such as officially adopting green power in 2021. The section also includes a column for articles related to daily climate, food and drinks, ecological issues, and carbon reduction issues to further education customers. By inviting the customers to participate in carbon reduction, Yuanta Bank encourages them to change their behaviors, promotes green financial services, and enhances the impact of digital finance.