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Material Topic Identification Process
Identification of Material Sustainability Topics Process：
STEP1
Master sustainability issues
By understanding the organizational context, 23 material sustainability issues related to Yang Ming's operational activities were derived from the disclosure requirements of international sustainability trends, regulations, and standards (GRI Universal Standards, shipping industry guidance in the SASB Standards, SDGs, TCFD, etc.), sustainability investment ratings (DJSI, MSCI, CDP), the International Maritime Organization (IMO).
STEP2
Identify actual/potential positive and negative impacts
The 23 sustainability issues were compiled into an internal impact questionnaire. The questionnaire was distributed to 34 departments and 8 group heads of the Company to assess and understand the actual and potential positive and negative impacts of each sustainability issue under the Company's operational activities and management on the economy, environment, and society. Each issue was assigned a score from 1 to 5 according to the "scale of impact" and "probability of occurrence" from low to high. A total of 50 valid questionnaires were recovered. After comprehensive assessment and ranking by the total impact score, a bar graph of the materiality of sustainability issues was prepared, and the issues were complied into a list of material topics according to the total impact score.
STEP3
Collect stakeholders' issues of concern
Stakeholders' expectations, needs, and opinions have always been the focus of Yang Ming's attention. To ensure an accurate and inclusive response to various stakeholders, Yang Ming issued an external stakeholder concern questionnaire to understand their focus and level of concern about on the 23 sustainability issues. This year, a total of 397 valid questionnaires were distributed and recovered. They were sorted according to the level of concern and compared with internal impact questionnaires to filter out sustainability issues of greater concern to stakeholders.
STEP4
Determine a list of material topics to be responded to in a prioritized manner
After reviewing the results in Steps 2 and 3, the Sustainable Operation Strategy Team selected a total of nine sustainability issues as material topics for the year, taking into account sustainability trends and the adjustments suggested by external experts. Considering that competent authorities and domestic and foreign peers have been highly concerned about the issue "climate change governance strategies," it was also included as a material topic for this year. This year's results were reported to the Board of Directors as the highest supervisory body for material topics, and the response strategies, short-, medium- and long-term goals, performance results, and management approaches of each topic were described in the Report in accordance with the reporting requirements for each topic.
STEP5
Describe impact boundaries and impacts and set management approaches
Yang Ming is well aware that in making positive contributions to sustainable development, negative impacts may be generated in operating activities and acknowledges that the positive and negative impacts cannot be offset by each other. Hence, in reporting the sustainability topics, relevant responsible units once again reviewed the actual/potential positive or negative impacts of the topics from the perspective of actual implementation to further develop management approaches for the material topics.
MATERIALITY ISSUES
★：Material Topics
★
Corporate governance and ethical management
★
Navigation and transportation safety
★
Climate change governance strategies
Economic performance
Risk management
Customer service quality and satisfaction
Compliance with laws and regulations
Information security and customer privacy protection
Sustainability implementation and performance
Supply chain management
Digital transformation
★
Energy and resource management
★
GHG emissions and air pollution management
★
R&D and investment in low-carbon technologies
Biodiversity
Waste management
Water resource management
★
Employee Compensation and Benefits
★
Talent recruitment and cultivation
★
Occupational safety and health
Labor rights and inclusion
Social welfare
Government-industry-academia collaboration and international participation
MATERIAL ISSUES
Yang Ming is well aware that in making positive contributions to sustainable development, negative impacts may be generated in operating activities and acknowledges that the positive and negative impacts cannot be offset by each other. Hence, in reporting the sustainability topics, relevant responsible units once again reviewed the actual/potential positive or negative impacts of the topics from the perspective of actual implementation to further develop management approaches for the material topics.
01 GHG emissions and air pollution management
GRI Topic
- GRI 305 Emissions
SASB Index
- TR-MT-110a.1
- TR-MT-110a.2
- TR-MT-120a.1
Significance to Yang Ming
- Effectively controlling GHG reduction and air pollution management can help enhance the Company's competitiveness.
- Failure to effectively control GHG and air pollution emissions increases the cost of carbon fees/taxes, resulting in a poor corporate image, and may lead to customer loss.
Potential or Actual Impact
- Actual
Impact Description
- Through carbon reduction actions, we can effectively reduce GHG emissions and lower the carbon fee/tax cost of operating locations. By effectively managing air pollution emissions, we can avoid fines and maintain our corporate image and the ecological environment.
Position of the Impact of Sustainability Issues in the Value Chain
- Upstream (e.g. suppliers, contractors)
- Yang Ming
- Downstream (e.g. customers)
Corresponding Chapter
- 1.4 Material Topic Identification Process
- 3.1 Environmental Management Policy
- 3.3 Greenhouse Gas and Emissions Management
Management Goals for Material Topics
Attained 
Unattained| Policies and commitments | Key performance indicator | 2023 goals and achievements | Short/medium/long-term goals | 2024 action plan or remedial measures |
| We will establish a GHG inventory policy and implement "GHG inventory management" to monitor our own emissions. We will also continue to promote the efficient use of energy resources and energy conservation in the hope of reducing GHG emissions and responding to global efforts to limit temperature rise to 1.5°C, achieving the sustainability goals of net-zero emissions and a friendly environment by 2050. |
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Goal: Have a carbon intensity lower than that in 2022 and reduce it to the target value of 39.88 g/TEU*km. Achievement: 37.90 g/TEU*km. |
2024: Carbon intensity and absolute GHG emissions do not exceed those in 2023 2025: Reduce the carbon intensity by 20% compared to 2020 2030: Reduce absolute GHG emissions from the fleet by 20% compared to 2018; reduce absolute GHG emissions from onshore by 25% compared to 2023 2050: Net-zero emissions |
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| Goal: Make a plan for the signage of the SBTi. Achievement: As the shipping industry guidance announced by the SBTi in 2023 sets a nearly net-zero goal by 2040, we will assess its technical feasibility in the future. |
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2024 new goal | 2024: 27% of company cars are hybrid vehicles, and use electric equipment 2030: 100% of company cars are electric vehicles |
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Goal: Reduce VOC emissions. Achievement: The VOC emissions were 101 tons, about 1,338 tons of VOC less than those from the total use of solvent-based paints. |
2024: Reduce VOC emissions 2030 and 2050: Reduce air pollution |
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02 Navigation and transportation safety
GRI Topic
- GRI 416 Customer Health and Safety
SASB Index
- N/A
Significance to Yang Ming
- Navigation and transportation safety is the Company’s commitment to its employees and customers.
Potential or Actual Impact
- Actual
Impact Description
- We make good use of external resources and expert systems as well as weather routing and regular meetings to improve vessel shipping efficiency and ensure routing safety, creating stable revenue. A new-generation of stowage planning software has also been introduced to enhance hull and cargo safety, which will reduce the costs for cargo re-stow and canal passage. Failure to control navigation and transportation safety may cause great economic losses, loss of customer trust, and other risks.
Position of the Impact of Sustainability Issues in the Value Chain
- Upstream (e.g. suppliers, contractors)
- Yang Ming
- Downstream (e.g. customers)
Corresponding Chapter
- 1.4 Material Topic Identification Process
- 4.1 Navigation and Transportation Safety
Management Goals for Material Topics
Attained Unattained| Policies and commitments | Key performance indicator | 2023 goals and achievements | Short/medium/long-term goals | 2024 action plan or remedial measures |
| Provide safe and reliable transportation services, implement shipping safety, and pass on the three core corporate values, safety and security of vessels, personnel, and cargos. |
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Goal: Provide safe and reliable transportation services. Achievement: No containers were lost at sea or collapsing and special cargo safety control errors. We achieved 7,783 checks for vessel stability, cargo stowage and safety securing (pre-planned), and always take into account the safe route recommendations provided by Weathernews Inc. and held 51 weekly review meetings, and participated in a total of 9 international WSC-TopTier seminars. |
2024: Zero containers lost at sea or collapsing and zero special cargo safety control errors 2030: Enhance cargo transportation safety and special cargo management 2050: Ensure navigation and transportation safety |
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Goal: Reduce the number of ship deficiencies. Achievement: The skip rate of ships inspected by port state control (PSC) increased by 10.78% compared to 2022. In 2023, a total of 49 ships were supervised on board, 123 electricity messages were sent, and 12 monthly inspection drills were conducted per ship.
2. Tighter supervisory standards 3. Aging of ships Relevant remedial measures and action plans have been proposed. Please refer to 2.3.1 Legal Compliance. |
2024&2030: No serious deficiency or detention of PSC-inspected ships 2050: Ensure navigation and transportation safety |
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03 Energy and resource management
GRI Topic
- GRI 302 Energy
SASB Index
- TR-MT-110a.3
- TR-MT-110a.4
Significance to Yang Ming
- Complying with the carbon reduction requirements of international laws and coping with challenges in achieving net-zero emissions in the shipping sector are Yang Ming’s long-term goals.
Potential or Actual Impact
- Actual
Impact Description
- The Company attaches great importance to the strategies for the use of energy, water, resources and materials in the operations in compliance with international environmental protection laws and regulations. The Company is dedicated to promoting an operational model that can facilitate energy efficiency in the hope of attracting green corporate customers or partners and boosting the Company’s reputation. As related laws and regulations become stricter, the high carbon taxes in the international community as well as green ships and fuels may increase operating costs. Failure to comply with international laws and regulations may face the Company with operational disruption or interruption risks.
Position of the Impact of Sustainability Issues in the Value Chain
- Upstream (e.g. suppliers, contractors)
- Yang Ming
Corresponding Chapter
- 1.4 Material Topic Identification Process
- 3.1 Environmental Management Policy
- 3.2 Energy Use and Consumption
Management Goals for Material Topics
Attained Unattained| Policies and commitments | Key performance indicator | 2023 goals and achievements | Short/medium/long-term goals | 2024 action plan or remedial measures |
| Formulate environmental policies and continuously improve the efficiency of using energy, water and other resources in compliance with international environmental protection laws and regulations, endeavor to promote an operational model that uses low-carbon energy and can facilitate energy efficiency in the hope of attracting green corporate customers or partners and boosting the Company’s reputation. |
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Goal: 90% of ships attain a Carbon Intensity Index (CII) rating of C or above. Achievement: 95.74% of ships have attained a CII rating of C or above, with an increase of 5.42% compared to last year. |
2024: CII rating of C or above 2030: Uptake of zero or near-zero GHG emission fuels and/or energy sources to represent at least 5% of the energy used by the fleet; 100% of operating ships are equipped with shore power equipment 2050: Net-zero emissions |
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| Goal: Enhance fleet energy-saving measures, include 13 ships in the fleet’s annual dry dock maintenance plan, and retrofit 37 ships in the ship retrofitting project. Achievement: 12 ships completed regular dry dock maintenance, 1 less than the goal; 40 own ships completed engine power limitation (EPL) modification, 3 more than the goal.
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Goal: Assess renewable energy procurement projects. Achievement: 129,000 kWh of renewable energy and 129 renewable energy certificates were purchased and used, reducing 63.855 tons of CO2e. |
2024: Use of renewable energy achieves RE20 2025: Use of renewable energy achieves RE30 2030: Use of renewable energy achieves RE40 |
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04 R&D and investment in low-carbon technologies
GRI Topic
- Self-defined
SASB Index
- N/A
Significance to Yang Ming
- Performing long-term low-carbon transformation and deployment in response to climate change risks and opportunities is one of Yang Ming’s future major operational policies.
Potential or Actual Impact
- Actual
Impact Description
- In response to the escalated supervisory actions (like the Carbon Intensity Indicator (CII) regulation) taken by authorities such as the International Maritime Organization (IMO), the Company will make any needful adjustment and enhance management platforms for supervision, otherwise penalty or suspension of operation may be imposed, causing serious negative economic impacts on the Company’s operations. The Company has invested resources in the research and evaluation of low-carbon technologies suitable for the Company with various sectors and improved technicians’ knowledge and skills for low-carbon energy for ships and the monitoring of the vessel operation efficiency and carbon intensity. We hope that by doing so, economic and environmental losses can be reduced through the real-time monitoring and analysis of efficiency data for timely warning and improvement, creating positive impacts.
Position of the Impact of Sustainability Issues in the Value Chain
- Yang Ming
- Downstream (e.g. customers)
Corresponding Chapter
- 1.4 Material Topic Identification Process
- 3.1 Environmental Management Policy
- 3.4 R&D and Investment in Low-Carbon Technologies
Management Goals for Material Topics
Attained Unattained| Policies and commitments | Key performance indicator | 2023 goals and achievements | Short/medium/long-term goals | 2024 action plan or remedial measures |
| Yang Ming will actively collaborate with the value chain, promote low-carbon transformation projects, and seek cleaner energy and low-carbon technologies to achieve the goal of net-zero emissions by 2050. |
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Goal: Install renewable energy equipment in offices. Achievement: Completed the installation of an ecological green roof solar photovoltaic system and a rainwater harvesting system, with an expected carbon reduction of about 2.0091 tons CO2e. |
2024: Reduce the average power usage effectiveness (PUE) of server rooms by up to 5% compared to 2023 2030: Reduce the average power usage effectiveness (PUE) of server rooms by up to 15% compared to 2023 |
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2024 new goal | 2024: Plan investment in carbon fixation and carbon reduction-related industrial innovation plans 2030: Initiate a low-carbon transformation investment plan and have 60% of the overall operating fleet eco-friendly and energy-efficient |
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05 Talent recruitment and cultivation
GRI Topic
- GRI 202 Market Presence
- GRI 401 Employment
- GRI 404 Training and Education
- GRI 405 Diversity and Equal Opportunity
SASB Index
- TR-MT-000.A
Significance to Yang Ming
- Employees are the Company's most important asset. By creating a quality working environment, we provide a happy workplace with diversity, equity, and inclusion, thereby enhancing our employer brand.
Potential or Actual Impact
- Actual
Impact Description
- We use diverse talent recruitment plans to attract outstanding talent and enhance the Company's competitiveness through diverse talent recruitment plans. We also offer comprehensive employee education, training and career planning programs to enhance the professional capabilities of employees, enabling them to grow together with the Company. If there is no sound recruitment policy and employee education and training, it is impossible to retain talent, which may cause a manpower shortage and affect the Company's operations.
Position of the Impact of Sustainability Issues in the Value Chain
- Yang Ming
Corresponding Chapter
- 1.4 Material Topic Identification Process
- 2.1 Corporate Governance Blueprint
- 5.2 Talent Recruitment and Cultivation
- (Column) Cultivating Rising Stars in Maritime Transport
Management Goals for Material Topics
Attained Unattained| Policies and commitments | Key performance indicator | 2023 goals and achievements | Short/medium/long-term goals | 2024 action plan or remedial measures |
| We are committed to creating an open, inclusive, diverse and respectful working environment. We formulate talent recruitment strategies in line with the Company's short-, medium- and long-term plans to attract the best talent to our teams. We also provide professional training and implement a comprehensive talent development policy to encourage employees to expand work experience across units through job rotation to develop a diversity of talents and cultivate talent needed by the organization. |
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Goal: Develop talent cultivation courses and diverse learning methods, and plan the cultivation and recruitment of maritime talent. Achievement: 26 courses, totaling about 108 hours were organized for onshore employees. We organized 3 elective courses (approximately 18 hours in total), as well as 50 lectures and briefing sessions each for seafarers, recruited 200 seafarers and held 97 training sessions, and provided 11 education and training sessions for the ESG Sustainability Talent Development Course, with a total of 2,151 participants and 14.5 training hours. |
2024: Strive for happy enterprise and workplace certifications 2030: Increase employee satisfaction 2050: Empower employees and create a happy workplace |
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2024 new goal | 2024: Both genders occupy one-third of employees and managers; 25% of the top management; 20% in STEM fields, and maintain a talent retention rate of 90% or above 2030: Both genders occupy one-third of employees, managers, and the top management and in STEM fields 2050: Diversity and equality |
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06 Corporate governance and ethical management
GRI Topic
- GRI 2 General Disclosures
- GRI 205 Anti-corruption
- GRI 206 Anti-competitive Behavior
SASB Index
- TR-MT-510a.1
- TR-MT-510a.2
Significance to Yang Ming
- Having a sound governance structure and corporate integrity culture is an important management policy of the Company.
Potential or Actual Impact
- Actual
Impact Description
- The Company considers good system operations as the foundation of stable business operations, values ethical management, and complies with laws and regulations. Yang Ming has a good reputation and strives to avoid fraud or competition law violations to prevent the Company from shouldering related responsibilities/suffering reputation damages. The Company’s internal management and business activities strictly comply with the Ethical Corporate Management Best Practice Principles, resulting in positive impacts on governance and economic activities.
Position of the Impact of Sustainability Issues in the Value Chain
- Upstream (e.g. suppliers, contractors)
- Yang Ming
- Downstream (e.g. customers)
Corresponding Chapter
- 1.1 Sustainable Development Policy and Governance Structure
- 1.4 Material Topic Identification Process
- 2.1 Corporate Governance Blueprint
- 2.2 Ethical Management
- 2.3 Compliance Governance and Internal Audit System
Management Goals for Material Topics
Attained Unattained| Policies and commitments | Key performance indicator | 2023 goals and achievements | Short/medium/long-term goals | 2024 action plan or remedial measures |
| In adherence to the principles of fairness, honesty, integrity, and transparency, Yang Ming established the “Ethical Corporate Management Best Practice Principles of Yang Ming Marine Transport Corporation.” Since then, in order to continuously develop a corporate culture of ethical management and ensure sound corporate development, the Company has established rules and regulations such as the "Codes of Ethical Conduct of Yang Ming Group" and "Procedures for Ethical Management and Guidelines for Conduct of Yang Ming Marine Transport Corporation." |
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Goal: Implement policies for diverse board members. Achievement: We have continued to strengthen corporate governance and the functions of the Board of Directors, incorporated the diversity of board composition as an important consideration in director elections, and planned to add at least one female director and two independent directors. |
2024: Have at least one female director, ensure the number of independent directors is no less than one third, and have directors with industry experience 2030: Have two female directors and have directors with industry experience, risk management and information security backgrounds 2050: Both genders represent more than one third of board seats |
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Goal: Goal: Achieve a test pass rate of 93%. Achievement: The test pass rate was 97.89%. |
2024: The participation rate and the pass rate for onshore employees are 100%, and the participation rate and pass rate for seafarers on-board are 90% 2030: Zero incidents of ethical management violations, corruption, conflicts of interest, or insider trading 2050: Strengthen employees' awareness of legal compliance and risk control, and ethical operation management mechanisms |
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07 Employee Compensation and Benefits
GRI Topic
- GRI 201 Economic Performance
- GRI 202 Market Presence
- GRI 401 Employment
- GRI 404 Training and Education
- GRI 405 Diversity and Equal Opportunity
SASB Index
- N/A
Significance to Yang Ming
- Offering competitive employee compensation and benefits is one of the Company’s focuses on talent development and can help sharpen the Company’s competitive edge.
Potential or Actual Impact
- Actual
Impact Description
- Providing comprehensive salary and benefits packages can improve the employer brand, help attract and effectively retain talent, and enhance the Company’s overall competitiveness, thereby creating a positive socioeconomic circle. Employees may fee that their rights and interests have been damaged due to incomplete welfare policies, resulting in increased employee turnover and reduced work efficiency.
Position of the Impact of Sustainability Issues in the Value Chain
- Yang Ming
Corresponding Chapter
- 1.4 Material Topic Identification Process
- 5.3 Employee Compensation and Benefits
Management Goals for Material Topics
Attained Unattained| Policies and commitments | Key performance indicator | 2023 goals and achievements | Short/medium/long-term goals | 2024 action plan or remedial measures |
| Yang Ming has established a competitive remuneration system and offered comprehensive employee benefits, retirement benefits, a complete performance management and promotion system, and a sound training system. |
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Goal: Conduct at least one employee satisfaction survey every two years and achieve an extent of improvement of 2% or higher over the previous survey. Achievement: We completed a VOE survey with a response rate of 94% and an overall employee engagement score of 61.
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2024: Conduct a VOE survey every year 2030: Increase employee satisfaction 2050: Create a happy workplace with diversity and equality |
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08 Occupational safety and health
GRI Topic
- GRI 403 Occupational Health and Safety
SASB Index
- TR-MT-320a.1
- TR-MT-540a.1
Significance to Yang Ming
- Introducing and implementing occupational safety and health management is not only the Company’s commitment to the employees, but also the key for the Company to continue as a going concern.
Potential or Actual Impact
- Actual
Impact Description
- The Company attaches great importance to the occupational safety issues faced by all employees. For safety and occupational accidents in the workplace, hazard identification and risk assessment are carried out to reduce potentially dangerous incidents and create a good and safe employment environment, thereby delivering positive impacts on the employees. Occupational injuries, occupational diseases, and occupational safety accidents caused by improper occupational safety and health management may lead to violations of occupational safety-related laws and regulations and penalties or litigation, resulting in damage to the Company's reputation.
Position of the Impact of Sustainability Issues in the Value Chain
- Upstream (e.g. suppliers, contractors)
- Yang Ming
Corresponding Chapter
- 1.4 Material Topic Identification Process
- 5.4 Occupational Safety and Health
- (Column) Recharge the Mind: Employee Assistance Programs (EAPs)
Management Goals for Material Topics
Attained Unattained| Policies and commitments | Key performance indicator | 2023 goals and achievements | Short/medium/long-term goals | 2024 action plan or remedial measures |
| Develop an occupational safety and health policy |
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Goal: Implement e-health management Achievement: The data of employee health checkup results have been imported to the Company's health management platform for health risk analysis (a comprehensive indicator of metabolic syndrome risk + coronary heart disease risk). A total of 360 employees used the on-site service to seek health guidance and recommendations from physicians. The Company completed an ergonomic hazard questionnaire survey and organized four briefings to promote ergonomic engineering. Our EAPs have been used for 112 times, with an average satisfaction score of 94.4 (out of 100). |
2024: Satisfaction score with EAPs is higher than that in 2023 2030: Optimize the employee health management method |
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Goal: Zero accidents. Achievement: Zero accidents; disabling injury frequency rate (FR): 1.46 ; disabling injury severity rate (SR): 195; Frequency-severity indicator (FSI): 0.53. |
2024&2030: Zero accidents 2050: The occupational injury incidence rate is lower than the average of various industries |
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09 Climate change governance strategies
GRI Topic
- GRI 201 Economic Performance
SASB Index
- N/A
Significance to Yang Ming
- Climate change governance strategies allow the Company to identify possible physical and transition risks in the operations, enabling the Company to give timely responses to changes in external environments.
Potential or Actual Impact
- Actual
Impact Description
- If climate-related risks and opportunities are well-identified, the Company’s ability to identify and control risks and to control potential long-term risks may be improved and enhanced to boost the Company’s operational flexibility and seize the climate-related opportunities, which are expected to benefit the future economy and environment. If the Company fails to identify climate change risks, the possible resulting impact on the Company’s operations may result in negative economic and environmental impacts. Failure to fully disclose climate change-related risks will lead to the incomplete disclosure of the Company’s information, which is non-compliant with the laws and regulations, and affect the Company’s evaluation performance and corporate image.
Position of the Impact of Sustainability Issues in the Value Chain
- Upstream (e.g. suppliers, contractors)
- Yang Ming
- Downstream (e.g. customers)
Corresponding Chapter
- 1.4 Material Topic Identification Process
- 2.5 Climate Change Governance Strategies
Management Goals for Material Topics
Attained Unattained| Policies and commitments | Key performance indicator | 2023 goals and achievements | Short/medium/long-term goals | 2024 action plan or remedial measures |
| As one of the key players in the global shipping industry, Yang Ming will incorporate climate change-related risks into the Company’s risk management policy. The Task Force on Climate-related Financial Disclosures (TCFD) is used as the basis for climate risk management. We will also include climate change factors in the operational planning and decision-making processes to continuously manage and supervise the risks and opportunities brought by climate change to the Company, and will sign and support the TCFD initiative. |
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Goal: Continue disclosures under the Task Force on Climate-Related Financial Disclosures (TCFD). Achievement: We completed the qualitative and quantitative analysis of the Task Force on Climate-related Financial Disclosures (TCFD), and submitted it to the Board of Directors once. |
2024&2030: Include climate risk factors in the risk assessment. |
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