First Financial Holding’s Board of Directors is the highest governing body for the Group’s climate-related risks; it is responsible for approving, guiding, and ensuring the effective operation of risk management policies. Under the supervision of the Board of Directors, the Sustainable Development Committee and Risk Management Committee are responsible for supervising the group's key climate strategies.It uses the "Climate-Related Financial Disclosures Recommendations published by the Task Force on Climate-Related Financial Disclosures (TCFD) to check and identify the operation risks and opportunities of the Company due to physical, transformation aspects. It shall establish a materiality of risks and possibility of opportunity matrix and use the outcomes of the matrix analysis to establish risk management strategy regarding the major risks as the core response action to the climate change accordingly.

In 2020, the board of directors reviewed and approved the incorporation of emerging risks including climate change risks into the risk management policy, and submitted the climate change risk assessment result,its mitigation measures and implementation status to the board of directors in 2021. The bank’s subsidiaries also invited independent directors to the Risk Management Committee to provide guidance in September 2021 to effectively supervise various climate governance actions from top to bottom.In August 2022, First Financial Holdings officially joined the Partnership for Carbon Accounting Financials (PCAF) and complied with the PCAF's recommended methodology to conduct scope 3 financial carbon emissions inventory of financing and investments. In November, First Financial Holdings also joined the Science Based Target initiative (SBTi) to take inventory of carbon emissions from own operations as well as financing and investment positions.We submitted SBT short-term carbon reduction targets at the end of December 2023, continue to incorporate net-zero emission thinking into the investment and financing decision-making process, and reduce the proportion of investment and financing in high-pollution (carbon-emitting) industries to achieve the national net-zero emission goal.

Two-dimensional matrix likelihood analysis was performed on the climate-related physical risks of the Group’s 37 major suppliers in 2021; the analysis involved comparing the time and scale of the potential for three climate change-related natural disasters, flooding, mudflow, and landslide (where disaster potential is classified into three levels: low [Grade 1 and 2], medium [Grade 3], and high [Grade 4 and 5]) to calculate hazard level (low [0–50], medium [51–100], and high [101–125]). Results of the analysis indicate that among 37 primary suppliers, 5.41% (2 companies) possess level 4 high risk for flooding potential, while 10.81% (4 companies) possess level 3 moderate risk for flooding potential. All suppliers possess level 1 low risk for mudflow potential and level 2 low risk or below for landslide potential. Hazard calculation results showed that all suppliers exhibited low hazard level.

The Group's climate scenarios comply with the "Plan for Domestic Banks to Perform Climate Change Scenario Analysis Operations" ("operation plan") announced by the competent authority in combination with scenario data from the NGFS (The Network for Greening the Financial System) and IPCC AR5. Three climate scenario simulations (orderly transition, disorderly transition, no policy) were established for two points in time (2030, 2050) to perform climate risk scenario analysis, as explained in the following:

With reference to the "operation plan" of climate change scenario analysis provided by the Financial Supervisory Commission, the base climate change scenario analysis was conducted to gradually define climate hazard impact factors and identifying financial elements linked to climate in the positions of each business division. Credit risk was then calculated for each position based on climate change scenarios to obtain the following calculations:

First Financial Holding has created the "ESG Sustainable Application Map Inquiry Tool", the first in the industry to incorporate geographic information system (GIS) positioning and data application. The tool includes dedicated areas for inquiries about the three major themes of "Green Life", "Natural Environment" and "Climate Change". Publicly available government data from the Ministry of Environment, Ministry of Agriculture, Water Resources Agency, National Science and Technology Council, and Taiwan Climate Change Projection Information and Adaptation Knowledge Platform (TCCIP) have been integrated to help the public and enterprises understand their interactions with natural resources and environment, in addition to raising their awareness of climate change. This tool provides companies with an efficient instrument for their transition to sustainability, as well as for the management of natural resources and climate change risks.

Take the "Natural Environment" theme for example: the system would bring up the flood disaster potential within one kilometer of the positioning point, flooded points in the past five years, natural reserve areas, wildlife sanctuaries, and important wildlife habitats through address positioning, coordinates positioning, or positioning by clicking on the map screen. Companies can decide if their operating locations and activities touch on or overlap with sensitive natural environments or areas through this sort of information. For the "Climate Change" theme, big data analysis has been employed to provide rainfall information under three kinds of climate change scenarios. Complemented with GIS positioning and flood potential map coverage judgment, such information helps users grasp flood potential under a certain climate change scenario, while companies can formulate appropriate risk management countermeasures based on information analysis. With respect to the "Green Life" theme, users are able to understand the locations of surrounding environment-friendly restaurants and environmental education facilities approved by the Ministry of Environment in relation to their current locations by turning on the positioning function on their portable devices. This service offers reference to the general public in terms of fulfilling green life or green learning, and experiencing courses relating to environmental protection.