2024 Sustainability Report

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About This Report

Message from the Chairman

The Group's Sustainable Development Strategy The Group's Sustainable Development Goals Significant ESG Achievements in 2024 Corporate Sustainability Development Planning

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The Process of Implementing Sustainable Development 040

Material Topics Stakeholder Engagement

1Sustainable

Governance

2Financial

Services

3Employee

Development

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About This Report

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This report discloses Hua Nan Financial Group utilizing a five-point that includes sustainable governance,

4Environmental

Sustainability

5Social

Co-prosperity

Appendix 1: GRI Standards Content Index

Appendix 2: Taiwan Stock Exchange Corporation Rules Governing the Preparation and Filing of Sustainability Reports by TWSE Listed Companies

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subsidiaries - Hua Nan Commercial Bank (HNCB), Hua Nan Securities (HNSC), South China Insurance (SCIC), Hua Nan Investment Trust (HNIT), Hua Nan Venture Capital (HNVC), and Hua Nan Assets Management (HNAMC). Some information also covers the Group's sub-subsidiaries such as Hua Nan International Leasing Co., Ltd. (HNILC), Hua Nan Futures Co., Ltd. (HNFC), and Hua Nan Securities Investment Management Co.,Ltd. (HNIM). During the reporting period, HNFHC had no significant changes in size, structure, or ownership.

The data collection process and measurement methods in this report involved inviting relevant departments to discuss, interview, and collect operational management data. The Group's ESG performance information was compiled in accordance with requirements of international standards and indicators. Some performance information discloses four years of data from 2021 to 2024.

The collection, measurement, and calculation methods for data on various indicators are primarily based on compliance with local regulatory requirements. If there are no specific local regulations, international

Appendix 3: Comparison Table of Sustainability Accounting 300

Standards Board (SASB) Commercial Bank Metrics

Appendix 4: IFRS S1: General Requirements for Disclosure 301

of Sustainability-related Financial Information

standards (such as ISO) are referenced. If no applicable international standards exist, industry standards or practices are followed.

This report has been prepared in accordance with the Taiwan Stock Exchange Corporation Rules Governing the Preparation and Filing of Sustainability Reports by TWSE Listed Companies and the GRI Sustainability Reporting Standards. It also references the Task Force on Climate-related Financial Disclosures (TCFD),

Appendix 5: IFRS S2: Climate-related Disclosures Appendix 6: IFRS S2: Industry-based Disclosure

Requirements- Commercial Banks Appendix 7: Climate-related Information of Financial

Holding Companies

Appendix 8: Employee Information of the Group Appendix 9: Independent Limited Assurance Report

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The Task force on Nature-related Financial Disclousures (TNFD), Sustainability Accounting Standards Board (SASB), and the sustainability reporting standards IFRS S1 and S2 issued by the International Sustainability Standards Board (ISSB). At the same time, it responds to the United Nations Sustainable Development Goals (SDGs).

Some of the performance data in this report has been independently assured with limited assurance by KPMG in accordance with TWSAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information. The assurance

report is included in the appendix of this report.

HNFHC publishes its sustainability report annually and makes it available for download on the Company's official website. The previous report was released in June 2024, and this version is published in July 2025.

▼ Feedback

Administrative Management Department, Hua Nan Financial Holdings Co., Ltd.

Phone: +886 2 23713111 Ext: 6392、6389

Fax: +886 2 87291943

E- mail: public@hnfhc.com.tw Head Office: (110415) 23F., No. 123,

Songren Rd., Xinyi Dist., Taipei City 110415 , Taiwan (R.O.C.)

HNFHC

Sustainable Development Website

Stakeholder Questionnaire

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Preface

Nealy half of the global demographic shifts in 2024 can be attributed to major elections held in over 70 countries, with the resulting chain reactions continuing unabated. Notably, the immediate U.S. withdrawal from the Paris Agreement following President Trump's return to office, along with his wavering stance on net zero goals and the resurgence of trade wars, has heightened uncertainty surrounding the future of both the global economy and sustainability.

Global sustainability issues are once again shifting trajectory, prompting renewed reflection on both the theoretical and practical aspects of sustainable development, as we search for a harmonious balance between economic growth and environmental protection. On the other hand, what remains unchanged are the expectations of shareholders, investors, and various stakeholders towards businesses: stable profit growth, effective management of future risks and opportunities, and sustainable coexistence with society.

The evolving and enduring aspects of sustainability serve as driving forces for the Company. Drawing on a century's worth of experience as a foundation,

HNFHC is forging a path of sustainability that aligns with the Group's core values.

Guided by the following four major sustainable development goals, HNFHC strives to become:

1. A resilient enterprise that is adaptable and competitive in the market.

2. A happy enterprise committed to employee wellbeing and harmonious labor relations.

3. A blue-chip enterprise focused on stable growth and creating values to shareholders.

4. A sustainable enterprise dedicated to fulfilling corporate responsibility and coexisting sustainably with society.

The 2024 WBSC Premier 12, where Team Chinese Taipei clinched the championship and took the world by storm, showcased not only the players' outstanding performance but also the crucial contribution of the unsung heroes behind the scenes. This includes intelligence analysts and logistics coordinators whose efforts enabled the coaches to strategize and prepare for future challenges, ultimately securing a victory. To become a resilient enterprise that is adaptable and competitive in the markets, it is essential to have comprehensive market intelligence, effective resource allocation and management, and ongoing monitoring of potential risks. Particularly in sustainability issues, risks and opportunities are constantly evolving, such as climate risks, information security threats, and markets driven by green energy, which test enterprises' responsiveness and their ability to adapt to environmental changes. We are actively implementing the International Financial Reporting Standards (IFRS) S1 and S2 guidelines, establishing management mechanisms to identify sustainability risks and opportunities, and preemptively planning response strategies to enhance corporate resilience.

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Preface

The Group considers its employees as its most valuable asset. By establishing holistic talent development plans and market-competitive remuneration systems, we strive to support employees in every aspect, enabling them to work with peace of mind and cultivating quality talent to drive the Group's growth. From a management perspective, whether through Human Rights Due Diligence or other process, we conduct regular review of potential human rights risks and their impact on company operations, and establish appropriate mitigation and compensation measures for issues such as workplace bullying, labor disputes, excess workload, and sexual harassment, with the aim to create a diverse, inclusive, and respectful workplace. Just as in professional baseball, where starting pitchers were often expected to throw complete nine-inning games to secure victory, which often shortened their professional careers. In today's highly specialized work environment, employee management requires appropriate development and balanced workloads. Over reliance on talented individuals should be avoided Instead, emphasis should be placed on the effective division of labor, performance evaluation, and educational training. This approach helps to build a supportive workplace that values its employees and fosters harmonious labor relations, encouraging employees to pursue sustainable development alongside the enterprise.

The disclosure of sustainability information allows investors to evaluate a company's adaptability to emerging risks and uncertainties through its risk identification and control mechanisms, as well as assess its operational stability through factors such as corporate governance and labor-management relations. However, the latest trend now links sustainability assessment with financial impact. From this perspective, corporate sustainability development is akin to buying insurance, by evaluating future financial risks and investing appropriate resources to mitigate them, businesses can enhance their operational resilience and long-term stability. This supports the growth of both EPS and ESG, enabling companies to achieve stable growth, continued profitability, and shareholder satisfaction, ultimately maximizing values for all stakeholders.

It is assumed by many that corporate engagement in charitable activities equates to fulfilling corporate responsibility, but this is only half true. In the financial industry, profits are closely tied to society. Only when economic momentum is strong and the industrial environment is favorable can the financial sector operate at its full potential.This is why international initiatives emphasize the financial industry's role in promoting responsible investment and sustainable finance. The underlying rationale is that by enhancing the positive effects of fund utilization and directing funds toward projects that generate long-term benefits, a more favorable industrial environment can be cultivated. A healthy industrial environment is capable of responding to market demands and addressing social challenges. Ultimately, these benefits cycle back to support the financial industry's growth and profitability.Our ongoing investments in the sustainable energy industry not only increase profits and enhance our services but also provide customers with preferential green financing loan projects. These actions contribute to benefits such as promoting clean energy and reducing the impacts of climate change.Only by leveraging our expertise and amplifying our influence to create shared benefits with society can HNFHC become a truly sustainable enterprise.

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HNFHC continually reflects on its sustainable development initiatives. Beyond formulating response

concern across society. Upholding the concept of fostering mutual prosperity with communities, HNCB, led by its North Tucheng Branch on behalf of the Group, has joined New Taipei City's Dementia-Friendly Guardian Station Project to build a community protection network with neighboring residents. Furthermore, strengthening employee training is necessary to provide comprehensive and friendly care services. We also help customers prepare in advance through trust services that offer comprehensive, tailored solutions, enabling full protection of their assets. By harnessing the financial industry's services and expertise, we aim to reduce the social impact of dementia.

Additionally, through the CSR Financial Inclusion Public Welfare Program in collaboration with Taiwan Academy of Banking and Finance, HNCB's financial professionals serve as CoCo teachers, visiting elementary schools to establish fundamental financial concepts. They guide students in developing financial literacy from an early age, covering topics such as money management, risk awareness, family financial sharing, and fraud prevention, sowing the seeds of sound financial behavior and saving habits in young minds.

Furthermore, to manage the environmental impact of the Group's operations, carbon emissions, energy and water resource usage are accurately managed, through annual ISO 14064-1 greenhouse gases, ISO 14001 environmental management systems, ISO 50001 energy management system, and the newly added ISO 46001 water efficiency management systems certification in 2023.

In terms of green finance, HNCB has incorporated ESG assessment factors into the credit review process and introduced a green financing project to provide funding for customers' green capital expenditures, such as purchasing renewable energy, energy-saving, energy storage, and pollution prevention equipment or systems. In addition, HNCB offers financing services linked to sustainability performance and has introduced the SME Net Zero Transformation Financing Project to support customers in the transition toward net-zero emissions. To create a cleaner and more sustainable environment for future generations, we also continue to invest in green industries and green bonds, paying attention to the opportunities that surface from net zero concerns, and making every effort to prepare in advance.

In order to enhance sustainability information disclosure, the Company refers to the GRI Standards to engage with stakeholders and develop the information disclosure structure and content of the sustainability report. We also refer to the Sustainability Accounting Standards Board (SASB) to improve the disclosure of commercial banks. At the same time, we plan to adopt the International Financial Reporting Standards (IFRS) S1 and S2 guidelines over the course of the next three years to ensure that our sustainability reporting meets external expectations.

Our actions are often constrained by the mindset that 'no one has done this before,' which can lead to conservatism and hesitation. However, it is more constructive to view this as an opportunity to reimagine corporate management, placing greater emphasis on foresight and future planning. As the saying goes, "preparedness averts peril." Facing new challenges requires not only strategic allocation of corporate resources but also in cultivating a courage and readiness to face new challenges. Only with such an approach can we seize opportunities amid rapidly changing trends.

HNFHC aspires to be a pioneer in the field of sustainability, striving

strategies for rapidly changing international conditions, we strengthen risk control and operational resilience. We have designed service models and talent management strategies in response to domestic social trends such as an aging population and a declining birth rate, and develop products and services aligned with carbon pricing trends. These are the directions we are committed to pursuing.

With a broader and longer-term vision, we apply our expertise to enhance the value of every action. As Taiwan approaches super-aged society status in 2025, dementia has become a pressing

to enhance our adaptability, responsiveness, and capacity to learn from external changes. We aim to strengthen our resilience remain steadfast in times of adversity. This commitment protects the interests of our shareholders and customers, fosters growth alongside employees, and creates shared value for all who support HNFHC. is the true essence and importance of our sustainable development.

Chairman