Environmental Governance

Principles and Policies

While pursuing business development, China Airlines recognizes the value and irreversibility of the environment, and understands the corporation's responsibility and obligations to protect natural resources and the environment. Based on this understanding, China Airlines has established four principles of environmental and energy management principles and six policies of environmental and energy management according to the codes of practice for Development of Sustainable Environment (China Airlines Corporate Social Responsibility and Sustainable Development Best Practice Principles) announced in the Board of Directors meeting. China Airlines also integrated UN's SDGs for devising instructional strategies to align future business operations with the sustainable development concepts of environmental friendliness, low-carbon emissions, and energy conservation, hoping for a better and happier future.

China Airlines Corporate Social Responsibility and Sustainable Development Best Practice Principles

Environmental and Energy
Statement Policies Statement

The Principles of Environmental and Energy

Environmental Promotion Strategies

China Airlines implements promotion strategies of environmental management based on the concept of systematized risk control management, actively setting up mechanisms to manage corporate environmental risks. The PDCA culture has been instilled to make continual improvements in corporate environmental protection, which include establishing organizations, announcing policies, introducing ISO 14064 Greenhouse Gas (GHG) Accounting & Verification, ISO 14001 Environmental Management System, and ISO 50001 Energy Management System, along with the promotion of staff education, setup and execution of key performance indicators (KPI). The goal of comprehensive coverage and effective control over the overall corporate environmental and energy risk management is thus achieved to ensure the sustainable development of company operations.

In the face of demanding environmental regulations and increasing awareness of low-carbon consumption, CAL has endeavored to develop and implement a variety of strategies based on environmental and energy management ideals and policy statement. With four major tasks, CAL have developed action plans based on the business philosophy of stable operation, prevention, common prosperity, leading the overall industry and value chain to improve sustainable value. By introducing ISO14001:2015 Environmental Management System, CAL is aware of risks and opportunities arising from issues of stakeholders' concern and context of the organization based on the life cycle perspective.

Fulfilling Strategies for Environmental and Carbon Management

China Airlines Corporate Social Responsibility and Sustainable Development Best Practice Principles

Environmental and Energy Principle

Complying with environmental laws & regulations

Converving the Earth's resource

Improving eco-efficiency

Fulfilling social responsibility

Environmental and Energy Policy

Enforcing compliance obligations to fulfill the company’s responsibilities in environmental protection and energy conservation	Establishing environmental and energy management systems, including performance indicators, to verify compliance with established policies	Promoting environmental and energy conservation education to foster employees' eco-awareness	Implementing green supply chain management to raise overall eco-efficiency	Creating a low-carbon operating environment to establish continual improv-ement of environmental protection and energy efficiency	Supporting green design and procurement to promote sustainable development
Keep abreast of the domestic and international trends and promote the channels and platforms of stakeholders' engagement Participate in international cooperation and keep up with major issues Improve management / monitoring mechanisms	Improve the quality of the environmental and energy management system Plan and implement environmental performance and carbon reduction objectives	Create diverse channels of communication Establish incentive plans to encourage employees to achieve and promote environmental protection	Establish a supply chain risk assessment and management system Build corporate capacity for environmental and energy management	Optimize equipment efficiency Organize energy conservation training to establish a corporate culture of energy conservation Introduced low-carbon and renewable energy-based facilities	Improve the awareness of environmental protection and energy conservation Promote green procurement and consumption
Regularly check statutory requirements and commitments Participate in domestic and international meetings at industry and government levels to keep up with regulatory trends Implement management system compliance audits Participate actively in response to DJSI and CDP	Keep abreast of ISO standards and improve the environmental management system Improve the risk assessment and management mechanisms for environmental protection, energy, and carbon emissions Establish and implement energy conservation and carbon reduction and environmental protection performance objectives Implement internal audit and management review mechanisms and implement third-party certification Establish a climate-related financial disclosures (TCFD) system Establish an environmental management information system to keep track of environmental performance	Implement company-wide environmental protection and energy conservation training Organize an annual seminar on environmental protection and environmental protection contest Establish a knowledge-based platform to promote environmental protection and energy conservation from time to time Establish a proposal incentive mechanism	Train seeds of environmental protection among CAL and its key suppliers Organize energy conservation and environmental protection training for the value chain Conduct supply chain risk assessments Conduct the contractor / supplier conference and regular meetings to communicate the sustainable and environmental requirements of CAL	Check and optimize energy equipment and management measures Establish and implement energy conservation management and training programs Keep abreast of technology and regulatory trends and introduce renewable energy equipment in a timely manner	Incorporate Environmental Management System (EMS) to service processes and enhance personnel training Consider environmental protection and energy conservation in the purchase of supplies Establish and promote the green fares - carbon offset program Provide environmentally-friendly in-flight supplies and sell environmentally-friendly duty-free products Promote green consumption through diverse channels

Management Organization

To implement the policy, CAL established the Corporate Environmental Committee in 2011. The President is the highest management, and the Corporate Safety Office acts as the executive secretary. Five environmental management committees were established under the Corporate Environmental Committee to take charge of environmental risk management pertaining to in-flight, maintenance and freight services as well as the administration and operation of the headquarters and offices. The head of the major business department acts as the management representative, who is responsible to report the performance of environmental and energy management to the highest management every quarter and to report environmental risks and opportunities and corresponding controls and plans to the Board of Directors in routine meetings convened by the Corporate Sustainability Committee and the Board of Directors and its committees. For material issues, functional task forces, including the Carbon Management Task Force and the Sustainable Aviation/Alternative Fuels Task Force, were also set up to discuss the trends of fuels, GHG emissions, plan countermeasures, and review the performance and results in regular meetings.

CAL Environmental Management Operation Logics

Corporate Environmental Committee Organization

As carbon emissions reduction and carbon credits management involve multiple operations and strategic units, China Airlines established the carbon management project team under the corporate environment committee to provide a coordination platform for the company's strategic planning and execution in response to climate change and relevant international regulations on carbon control.

Emission Management

Conduct Monitoring, Reporting, Verification (MRV) operations in accordance with the EU Emissions Trading System (ETS); keep up to date on international carbon reduction developments and regulations.

Carbon Trading

Conduct carbon credit operations in accordance with EU ETS regulations; engage in research and trading of carbon purchasing / offsets.

Fuel - efficient Operations

Continue to improve fuel efficiency through aircraft fuel-savings, dispatching and route planning.

Operating Strategy

Plan European routes and flights. The purchase and study of new, fuel-efficient aircraft.

Technical Analysis

• Analyze financial impact and technical feasibility
• Monitor and review results

Partnership Engagement

• Establish channels of communication and cooperation with equipment and fuel suppliers
• Establish strategic partnership

Strategy Development

• Analyze policies and trends of technological development at home and abroad and plan the development strategies

Note：Established in April 2017, the Sustainable Aviation/Alternative Fuels Task Force is responsible to discuss laws and regulations, airworthiness of aircraft, technology, and procedures for supporting ground handling agencies and develop corresponding strategies.

Concern for Climate Change

Recognizing the direct impact and importance of climate issues on the aviation industry, CAL has set three objectives in flight operations and ground operations in response to the voluntary carbon reduction initiatives of the International Civil Aviation Organization (ICAO), the International Air Transport Association (IATA), and civil aviation associations of the Republic of China. In 2018, CAL further introduced the Task Force on Climate-Related Financial Disclosures (TCFD) and planned to establish the TCFD Task Force, to facilitate early identification of risks and opportunities and improve carbon management and adaptation to the climate. In addition, CAL was invited by TCFD to participate in the TCFD project in September 2018, making it the first airline in Taiwan to support TCFD.

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Annual Goals

Based on the Plan-Do-Check-Act (PDCA) management cycle and the spirit of ongoing improvement, CAL directs each environment management committee each year to inspect environmental risks and energy consumption hotspots each year, to devise various programs for assessing and improving each environmental and energy performance item, and report operations progress during each quarterly environment committee meetings in which, the president or whose agent supervises and controls the environmental and energy risks for all operations items.

2018 Carbon Implementation Performance
2017 Carbon Implementation Performance
2016 Carbon Implementation Performance

Savings

144,882

Carbon reduction
(t CO₂e / year)

Aviation Fuel
Savings

59,940t

144,113,919kg CO₂e

Vehicle Fuel
Savings – Gasoline

18.79kl

44,371kg CO₂e

Vehicle Fuel
Savings – Diesel

106.37kl

281,990kg CO₂e

Electricity
Savings

837,377kWh

442,135kg CO₂e

Water
Savings

3,276kWh

504.5kg CO₂e

Waste Reduction
Savings

149,649kg

Savings

164,343

Carbon reduction
(t CO₂e / year)