As global warming intensifies, controlling temperature rise to avoid climate crisis and achieving net zero emission in 2050 have become a global consensus. KTB is fully aware of the importance of sustainable environmental management. In recent years, in addition to introducing an energy management system, actively promoting environmental protection and energy conservation, formulating relevant concrete and feasible measures and promoting, implementing, and reviewing them, and continuously improving environmental management practices, KTB signed on as a TCFD supporter in July 2021, and has actively developed relevant countermeasures. In the future, we will cooperate with the "Sustainable Development Roadmap for TWSE- and TPEx-Listed Companies" issued by Taiwan Stock Exchange to gradually complete the group-wide GHG inventory and verification.

Net Zero Planning

Confronted with the trend of net zero emission internationally, our company formulated four strategies from the aspects of self-operation and investment and financing positions, respectively, to reduce our own carbon emission from operation, and we also make review every year to achieve the goal of net zero gradually.

1. Execute carbon-reduction plan: continue to reduce carbon emission during the operation process
2. Greenhouse gas inventory: understand the amount of greenhouse gas emission during the operation process
3. External verification: verify the inventory data by rigorous means
4. Set carbon reduction/net zero goal: formulate net zero goal after having rigorous and scientific data, and continue to take practical carbon reduction actions.

In addition to self-operation, it's estimated by us that the project of the largest carbon emission is the emission by investment and financing customers in Scope 3 (include all other indirect emissions). However, small and medium-sized enterprises (SMEs) have many difficulties in executing inventory and disclosure of relevant data, requiring assistance by financiers very much. To solve this problem, KTB is planning to assist with SME financing customers in making carbon inventory. This action can not only help KTB have a more comprehensive understanding of the total carbon emissions from the investment and financing positions, but also enable the SMEs not to be neglected in the carbon reduction topic nowadays.

Management Policies

■ Important Regulations for Environmental Management
KTB has formulated the "Sustainable Development Best Practice Principles", which was approved by the Board of Directors, as the principle to develop its sustainability, which has been disclosed on KTB's official website. KTB has also formulated the "Energy Conservation and Environmental Protection Standards Implementation Guidelines" and "Energy Operation Control Manual" as the principles for the promotion of environmental protection and energy conservation.

■ Environment management framework
We take initiative to set the reduction goal and employs third-party verification to review the achievement condition. At the time of implementation, KTB regularly reviews the energy consumption (water, electricity, greenhouse gas, etc.) of the whole bank compared to the same period last year, as well as monthly reviews the water and electricity consumption of each business unit for any irregularities, and reports the findings to the ESG Team meeting, so as to implement sound environmental management.

■ Introduction of Management System
 In 2018, KTB introduced the ISO 50001 Energy Management System and reduced cost and GHG emission through review, identification, measure, and management of energy consumption, and through the establishment of organizational energy management goals and action plans.
 KTB introduced ISO 14064 Greenhouse Gas Inventory in 2021, and carried out greenhouse gas inventory toward the whole KTB for the first time in 2022. KTB obtained third-party assurance report in 2023, and it's estimated to complete inventory and verification of all affiliates by the end of 2025.
 It plans to introduce ISO 14001 Environmental Management System in 2022, and estimates to obtain third-party verification in the latter half of 2023.

Sustainable Operating Environment Achievement

Environmental Goals and Achievements
In 2022, KTB achieved its reduction goals of GHG emissions, electricity consumption and water consumption (taking 2017 as the base year), where, there was reduction in both the electricity consumption and water consumption compared with the previous year, regarding which reference can be made to Energy Management and Water Resources Management; there was a small increase in GHG emissions since the inventory boundary was different from that of the previous year. There was great increase in various environmental intensity data, for the main reason that the investment profit and loss influenced overall profit performance in 2022, and the net income decreased about 50% compared with the previous year.

GHG Management

KTB's main GHG emissions are from electricity consumption. Thus, we have set forth special energy-conservation plans for light fixtures, air-conditioners, computer room, and elevators, and we have also set a goal of reduction. In 2022, we made greenhouse gas inventory of the whole KTB and obtained third-party assurance report, which showed that, Scope 1 and Scope 2 emissions of the whole bank were 2,306 t-CO2e/year, with a decrease of 19.46% compared with 2017, achieving the emission reduction goal in 2022 successfully; in the meantime, we also draft the reduction goal in 2023-2027 (please refer to Environmental Goals), and will continue to review the achievement condition in the future.

Water Resources Management

100% of the water used in KTB's operations comes from the Taiwan Water Corporation, and no groundwater or other water sources are used. The water used in all office buildings and operating sites is only for employees and some customers. There is no significant impact to the water source and is mainly used for drinking, air conditioning systems, cleaning, and other purposes. The wastewater is then discharged through the sewage system. In the face of increasingly serious water shortage in Taiwan, KTB has set a goal of reduction. Our priorities are to purchase and use products with water-saving labels and inspect the water consumption in the headquarters and branch offices for any abnormalities on a monthly basis, and advocate correct concept of water consumption. According to statistics, the total water consumption in 2022 was 18,707 cubic meters, which was still 14.75% lower than that of the base year (2017), achieving the goal successfully.

Waste Management

KTB has long had the awareness of waste reduction. Disposable tableware was never used in the employees' canteen in the Headquarters Building. All kinds of disposable utensils were not actively provided when the canteen was renovated in 2010. This policy has effectively reduced the use of about 150,000 paper containers. In addition, for inevitable wastes, KTB separates the waste into general waste (including kitchen wastes) and recycled waste to increase the recycling rate. In order to track and manage the situation of waste management in the Headquarters Building, all the wastes were weighed before disposing, since November 2018. The data for waste treatment in the past four years are shown in the right table:

To further implement reduction in wastes, KTB formulated a 5-year goal (please refer to the Environmental Goals). KTB will carry out active reduction measures actively since 2023, to reduce impact on the environment during the operation process