GRI Standards Comparison Table

Letter from the CSR Committee Chairperson

Disclosure Number

Disclosure Title

Report Contents or Explanation

Page

102-1

Name of the organization

About TSMC

6

102-2

Activities, brands, products, and services

About TSMC

6

102-3

Location of headquarters

About TSMC

6

102-4

Location of operations

About TSMC

6

102-5

Ownership and legal form

About TSMC; Please refer to 2020 TSMC Annual Report (II) Financial Statements

6

102-6

Markets served

About TSMC

6

102-7

Scale of the organization

About TSMC; Please refer to 2020 TSMC Annual Report (II) Financial Statements

6

102-8

Information on employees and other workers

An Admired Employer: Talent Attraction and Retention - Shared Visions and Values- Workforce Structure
All employee number has been disclosed in "Workforce Structure", the number of contractors has also disclosed in the note
In 2020, there were 2,605 non-employee workers conducted preventive maintenance tasks for facility systems.

131

102-9

Supply chain

A Responsible Purchaser: Supplier Sustainability Management - Sustainability Risk Management/Local Procurement Optimization
Details please refer to 2020 TSMC Annual Report 5.3.5

83

102-10

Significant changes to the organization and its supply chain

About TSMC; Please refer to 2020 TSMC Annual Report (II) Financial Statements

A Responsible Purchaser: Supplier Sustainability Management

6
73

102-11

Precautionary Principle or approach

The risk management organization regularly briefs the audit committee on the ever-changing risk environment facing TSMC, the focus of the Company’s enterprise risk management, and risk assessment and mitigation efforts. The audit committee’s chairperson also reports on the risk environment and risk mitigation actions to be taken. TSMC and its subsidiaries are committed to proactively and cost effectively integrating and managing strategic, operational, financial and hazardous risks together with potential consequences to operations and financial results. TSMC operates an enterprise risk management (ERM) program and apply a risk map considering likelihood and impact severity to identify and prioritize corporate risks. Various risk treatment strategies are also adopted in response corporate risks as they are identified.

Refer section 6.3 Risk Management of 2020 TSMC Annual Report for details of implementation of ERM (Eneterprise Risk Management)

-

102-12

External initiatives

Responsible Business Alliance (RBA, the previous EICC) and Responsible Minerals Assurance Process (RMAP, the previous Conflict-free Smelter Program); Participated in RE100; TCFD (Task Force on Climate-related Financial Disclosures) Supporter, committed to evaluating and publicly disclosing climate change risks and opportunities

-

102-13

Membership of associations

Appendix: Participation in Industry Associations and Non-profit Organizations

205

102-14

Statement from senior decision-maker

Sustainable Business Practices: ESG Implementation Framework, ESG Management Platform
Letter from the ESG Steering Committee Chairperson, Letter from the ESG Committee Chairperson

17, 4

102-15

Key impacts, risks, and opportunities

Sustainable Business Practices: Materiality Analysis and Stakeholder Communication

21

102-16

Values, principles, standards, and norms of behavior

Operations and Governance: Corporate Governance-Ethics and Regulatory Compliance

Please refer to 2020 TSMC Annual Report:
3.5 Code of Ethics and Business Conduct
3.6 Regulatory Compliance

192

102-17

Mechanisms for advice and concerns about ethics

Operations and Governance: Corporate Governance-Ethics and Regulatory Compliance

Please refer to 2020 TSMC Annual Report:
3.5 Code of Ethics and Business Conduct
3.6 Regulatory Compliance
5.5.6 Employee Engagement/Employee Communication

192

102-18

Governance structure

Sustainable Business Practices: ESG Management Platform
Operations and Governance: Corporate Governance-Ethics and Regulatory Compliance

Please refer to 2020 TSMC Annual Report:
2.3.1 Organization Chart
3 Corporate Governance

18

102-19

Delegating authority

Sustainable Business Practices: ESG Management Platform

18

102-20

Executive-level responsibility for economic, environmental, and social topics

Letter from the ESG Steering Committee Chairperson; Letter from the ESG Committee Chairperson
Sustainable Business Practices: ESG Management Platform

4, 18

102-21

Consulting stakeholders on economic, environmental, and social topics

Sustainable Business Practices: Materiality Analysis and Stakeholder Communication
Operations and Governance: Corporate Governance

Please refer to 2020 TSMC Annual Report:
3.4 Taiwan Corporate Governance Implementation as Required by the Taiwan Financial Supervisory Commission/Assessment Item 5

21
190

102-22

Composition of the highest governance body and its committees

Operations and Governance: Corporate Governance
TSMC’s Board of Directors consists of distinguished members with a great breadth of experience as world-class business leaders or professionals. All of them have management experience and competency in economic, environmental and social topics.
TSMC established its Audit Committee and Compensation Committee in 2002 and 2003, respectively, both of which are now composed entirely of independent directors.

Please refer to 2020 TSMC Annual Report:
2.4.1 Information Regarding Board Members
3 Corporate Governance

21

102-23

Chair of the highest governance body

The Chair of the highest governance body is not an executive officer

-

102-24

Nominating and selecting the highest governance body

In 2019, TSMC established “Guidelines for Nomination of Directors”, which describes the procedures and criteria for the nomination, qualification and evaluation of candidates for Directors. Please refer to our website.

TSMC envisions the membership of its esteemed Board of Directors to be composed of highly ethical professionals with the necessary knowledge, experience and understanding from diverse backgrounds. TSMC envisions its Board to be composed of as many independent directors as possible, and the independence of each independent director candidate is also considered and assessed under relevant laws. Therefore, TSMC composes its Board with world-class candidates who are/were international or local business leaders in the high-tech industry, prestigious academics or other professionals excelling in their chosen field of expertise. All of them have management experience and competency in economic, environmental and social topics.

Directors shall be elected pursuant to the candidate nomination system specified in Article 192-1 of the R.O.C. Company Law. The tenure of office for Directors shall be three years. The independence of each independent director candidate is also considered and assessed under relevant law such as the Taiwan “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies”. Under R.O.C. law, in which TSMC was incorporated, any shareholders holding one percent or more of our total outstanding common shares may nominate their own candidate to stand for election as a Board member. This democratic mechanism allows our shareholders to become involved in the selection and nomination process of Board candidates. The final slate of candidates is put to the shareholders for voting at the relevant annual shareholders' meeting.

There are no limits on the number of terms that a director may serve. We believe the Company benefits from the contributions of directors who have over their years of dedicated service acquired unique insights into the operations and financial developments of the Company. The Company reviews the appropriateness of each director’s continued service to ensure there are new viewpoints available to the Board.

-

102-25

Conflicts of interest

The avoidance of conflicts of interests is governed by several corporate processes. First, any director or executive officer who, for him/herself or on behalf of another, wishes to engage in any business activity that overlaps with TSMC's business must obtain the prior approval of our shareholders' meeting or Board of Directors respectively in accordance with relevant laws. Second, each board member and executive officer must complete an annual declaration on related party transactions which is reviewed by our Audit Committee. Third, we are subject to strenuous reporting requirements on reporting any related party transactions under both R.O.C. and U.S. security rules.

Please refer to 2020 TSMC Annual Report:
2.4.1 Information Regarding Board Members
4.1.4 Major Shareholders
4.1.8 Related Party Relationship among TSMC’s 10 Largest Shareholders
5.3.5 Raw Materials and Supply Chain Management-Suppliers Accounted for at Least 10% of Annual Consolidated Net Procurement
5.4 Customer Trust-Customers Accounted for at Least 10% of Annual Consolidated Net Revenue
8.1 Subsidiaries
Please refer to Consolidated Financial Statements for 2020:
Note 38: Additional Disclosures
Table 6 - Total Purchases from or Sales to Related Parties of at Least NT$100 Million or 20% of the Paid-in Capital

-

102-26

Role of highest governance body in setting purpose, values, and strategy

Sustainable Business Practices: ESG Implementation Framework, ESG Management Platform
TSMC's Chairperson chairs the ESG Steering Committee and the ESG Committee chair acts as the executive secretary. The Chairperson of the ESG Committee reports annually to the Board of Directors on implementation results of the prior year and the work planned for the upcoming year (the report includes economic, environmental and social topics). In addition, the Board of Directors also reviews the annual plan and the donations of the "TSMC Education and Culture Foundation" and "TSMC Charity Foundation".
TSMC's Board of Directors consists of distinguished members with a great breadth of experience as world-class business leaders or professionals. All of them have management experience and competency in economic, environmental and social topics.
TSMC has set an "ESG Policy" and an "ESG Matrix", and the "ESG Matrix" clearly defines the scope of the TSMC's responsibilities.

17

102-27

Collective knowledge of highest governance body

Please refer to 2020 TSMC Annual Report:
3. Corporate Governance “Continuing Education/Training of Directors” in 2020.

Quarterly management reports and semi-annual CSR reports develop and enhance the Board of Directors' collective knowledge of economic, environmental and social topics.

-

102-28

Evaluating the highest governance body's performance

Operations and Governance: Corporate Governance-Board of Directors and Committees-Board and Audit Committee Performance Evaluations

Please refer to 2020 TSMC Annual Report:

3.1 Corporate Governanc/2020 Corporate Governance Awards and Ratings
3.2 Board of Directors/Director's Compensation
3.4 Taiwan Corporate Governance Implementation as Required by Taiwan Financial Supervisory Commission/Assessment Item 3 - (3)
7 Corporate Social Responsibility/2020 ESG Awards and Ratings

190

102-29

Identifying and managing economic, environmental, and social impacts

Please refer to 2020 TSMC Annual Report:
3.2 Board of Directors

  • The Board of Directors considers economic, environmental and social topics and their impact, risks and opportunities, and stakeholder opinions, when resolving important company matters, for example, when approving capital appropriations. The Board will also review the corporate strategies proposed by TSMC management, evaluate the prospects of these strategies, review their progress, and provide guidance to TSMC management when needed.
  • 3.2.1 Audit Committee
  • 3.2.2 Compensation Committee

3.4 Taiwan Corporate Governance Implementation as Required by Taiwan Financial Supervisory Commission/Assessment Item 5

6.3 Risk Management

7 Corporate Social Responsibility/ESG Management/Stakeholder Engagement

-

102-30

Effectiveness of risk management processes

Please refer to 2020 TSMC Annual Report
6.3 Risk Management

-

102-31

Review of economic, environmental, and social topics

Operations and Governance: Corporate Governance-Board of Directors and Committees
Please refer to 2020 TSMC Annual Report:
3. Corporate Governance
6.3 Risk Management

190

102-32

Highest governance body's role in sustainability reporting

Please refer to 2020 TSMC Annual Report:
3 Corporate Governance
(This report is reviewed and approved by the Company's functional heads and Chairperson of the ESG Committee)

-

102-33

Communicating critical concerns

In addition to holding regular meetings, TSMC management will regularly provide to the Board of Directors material company reports and information:

  • Accounting department: monthly financial information and quarterly financial statements;
  • Internal Audit department: quarterly internal audit report
  • Public Relations department: press releases

In addition, the Board maintains a regular line of communication with TSMC management, which will remain open if an event of critical concerns occurs.

Please refer to 2020 TSMC Annual Report:
3.2.4 Director and Committees Members' Attendance/Audit Committee Meeting Status

-

102-34

Nature and total number of critical concerns

Please refer to the material information the Company has disclosed on Market Observation Post System (MOPS), which indicates the total number and nature of critical concerns.

Please refer to 2020 TSMC Annual Report:
6.3 Enterprise Risk Management Framework:
TSMC and its subsidiaries adopt risk management strategies corresponding to risk level through implementing an Enterprise Risk Management (ERM) system that weighs strategic, operational, financial and hazardous risks that may disrupt the Company's operations or financial results. If any events of critical concerns occur, the Company can resolve the event by using existing risk management mechanisms.

-

102-35

Remuneration policies

Please refer to 2020 TSMC Annual Report :The extent and value of the services provided for the management of the Corporation and operating performance includes objectives for economic, environmental, and social topics.
2.4.2 Remuneration Paid to Directors
2.5.2 Compensation Paid to CEO and Vice Presidents
2.5.3 Employees' Profit Sharing Bonus Paid to Management Team
Pension funded according to applicable law and there is no difference with other employees.
And also, 2020 CSR Report :
An Admired Employer: Talent Attraction and Retention-Compensation and Benefits-Benefits Better Than Statutory Regulations, Solid Pension System. Our compensation is above the industry peers, and our benefit program also exceeds statutory requirements

138

102-36

Process for determining remuneration

An Admired Employer: Talent Attraction and Retention-Competitive Compensation Package

Please refer to 2020 TSMC Annual Report :
3.2.2 Compensation Committee
3.2.4Director and Committees Members' Attendance/ Compensation Committee Meeting Status

135

102-37

Stakeholders' involvement in remuneration

Please refer to 2020 TSMC Annual Report4.1.12 Compensation to Directors and Profit Sharing to Employees
Based on TSMC’s Articles of Incorporation, before paying dividends or bonuses to shareholders, TSMC shall set aside not more than 0.3% of its annual profit to directors as compensation and not less than 1% to employees as a profit sharing.
TSMC's Articles of Incorporation shall be approved by the shareholders and the annual employees' profit sharing and directors' compensation will be reported in the next AGM.

-

102-38

Annual total compensation ratio

An Admired Employer: Talent Attraction and Retention-Competitive Compensation Package
Median of global employees annual total compensation
Annual total compensation ratio between CEO and median

135

102-39

Percentage increase in annual total compensation ratio

An Admired Employer: Talent Attraction and Retention-Competitive Compensation Package
Headcount and average annual compensation of non-corporate executive full-time employees, and year-over-year difference.

135

102-40

List of stakeholder groups

Sustainable Business Practices: Materiality Analysis and Stakeholder Communication

21

102-41

Collective bargaining agreements

An Admired Employer: Human Rights-Employee Engagement

TSMC values employee opinions/interests and therefore offers several communication channels. The highest-level executives of the HR organization are responsible for many of the channels, ensuring that matters are handled in an efficient and confidential manner as we continue to strive towards an open and transparent environment for employees/managers and colleagues to communicate. Furthermore, TSMC respects employees' right to take part in collective bargaining and peaceful rallies. In accordance with legal requirements in Taiwan, the Company regularly holds labor-management meetings to brief employees on Company operations and invite employees to engage in discussions on labor conditions and benefits.

148

102-42

Identifying and selecting stakeholders

Sustainable Business Practices: Materiality Analysis and Stakeholder Communication

21

102-43

Approach to stakeholder engagement

Sustainable Business Practices: Materiality Analysis and Stakeholder Communication

21

102-44

Key topics and concerns raised

Sustainable Business Practices: Materiality Analysis and Stakeholder Communication

21

102-45

Entities included in the consolidated financial statements

About TSMC; Please refer to 2020 TSMC Annual Report (II) Financial Statements

6

102-46

Defining report content and topic Boundaries

Sustainable Business Practices: Materiality Analysis and Stakeholder Communication
Appendix: About This Report

21
202

102-47

List of material topics

Sustainable Business Practices: Materiality Analysis and Stakeholder Communication

21

102-48

Restatements of information

TSMC's production is primarly measured in 12-inch wafers. The unit product indicators mentioned in the "A Practitioner of Green Power" are calculated based on 12-inch equivalent wafers.
Only work-related injuries shall be treated as SR/FR, unrelated injuries in the workplace are not considered.

-

102-49

Changes in reporting

Appendix: About This Report

202

102-50

Reporting period

Appendix: About This Report

201

102-51

Date of most recent report

June, 2020

202

102-52

Reporting cycle

Appendix: About This Report

202

102-53

Contact point for questions regarding the report

Appendix: About This Report

202

102-54

Claims of reporting in accordance with the GRI Standards

Appendix: About This Report

202

102-55

GRI content index

Appendix: GRI Standards Comparison Table

208

102-56

External assurance

Appendix: Independent Third Party Assurance Statement

229

103-1

Explanation of the material topic and its Boundary

Sustainable Business Practices: Materiality Analysis and Stakeholder Communication

21

103-2

The management approach and its components

Please refer to the contents of related topics

-

103-3

Evaluation of the management approach

Please refer to the contents of related topics

-

201-1

Direct economic value generated and distributed

Sustainable Business Practices: Sustainability Impact
An Admired Employer: Talent Attraction and Retention - Compensation and Benefits
Operations and Governance: Financial Performance/Tax Policy
Appendix: ESG Performance Summary
Please refer to 2020 TSMC Annual Report (II) Financial Statements for detailed information.

135, 135
196
206

201-2

Financial implications and other risks and opportunities due to climate change

A Practitioner of Green Power: Climate Change and Energy Management-Climate Risks Identification, Climate Risks Matrix, Climate Financial Risk Analysis
Appendix: Climate Change Management Framework

92
225

201-3

Defined benefit plan obligations and other retirement plans

An Admired Employer: Talent Attraction and Retention-Compensation and Benefits-Solid Pension System -Pension Allocation and Preparation
TSMC's defined contribution plan recognized expenses of NT$2,809,484 thousand for the years ended December 31, 2020. TSMC makes monthly contributions equal to 6% of each employee’s monthly salary in Taiwan. TSMC’s oversea subsidiaries also make monthly contributions at certain percentages of the basic salary of their employees in accordance with local practices.

138

201-4

Financial assistance received from government

Financial assistance received from the R.O.C. government: In 2020, TSMC enjoyed a tax benefit of NT$47.1 billion from five-year tax exemption for capital investments made in previous years. (Our wafer fabs in China received subsidies from the local government, but according to the agreement, TSMC can not disclose the content and amount.)

-

202-1

Ratios of standard entry level wage by gender compared to local minimum wage

An Admired Employer: Talent Attraction and Retention - Compensation and Benefits - Competitive Compensation Package
In 2020, the average overall salary of a TSMC new engineer with a master's degree is more than NT$1.8 million. The salary includes 12-month base salary, two-month year-end bonus, cash bonus and profit sharing. The average overall salary of direct employees is higher than NT$1 million, which is 4 times of the minimum wage in Taiwan.
For the non-TSMC employee workers, TSMC requests their companies that the compensation paid to their workers shall comply with all applicable wage laws, including those relating to minimum wages, overtime hours and legally mandated benefits.

135

202-2

Proportion of senior management hired from the local community

In the 2020 TSMC Annual Report, 2.5.1 Information Regarding Management Team, we disclosed that 19 out of 25 members of the management team are local, accounting for 76.0%.
Definition:
Senior management: management team is disclosed in 2020 TSMC Annual Report, 2.5.1 Information Regarding Management Team
Local: defined by nationality
Important base: defined as where the headquarter located and where the majority of employees work.

-

203-1

Infrastructure investments and services supported

Power to Change Society: TSMC Charity Foundation. Contents including donation, in-kind giving, construction services, repair services, volunteers services, etc.

176

203-2

Significant indirect economic impacts

In total, TSMC deployed 281 distinct process technologies, and manufactured 11,617 products for 510 customers in 2020 to continue to bring significant contribution to the advancement of modern society.
Sustainable Business Practices: Sustainability Impact

-

204-1

Proportion of spending on local suppliers

A Responsible Purchaser: Local Procurement Optimization

83

205-1

Operations assessed for risks related to corruption

Operations and Governance: Corporate Governance-Ethics and Regulatory Compliance
TSMC assesses anti-corruption risk by function rather than by geographical region since more than 90% of TSMC employees work in Taiwan. Based on the TSMC core value of Integrity, our anti-corruption risk assessment incorporates applicable regulations, classifies corruption by type, accounts for our business operation procedures and specifications, requires full compliance and implementation by all employees, mandates annual self-assessments and examinations, and establishes open reporting channels (internal and external) and whistleblower protection. An objective of our anti-corruption risk assessment is to detect abnormal incidents early and effectively prevent the occurrence of corruption.
Based on TSMC 2020’s training regimes and awareness campaign, employee ethics survey, annual CSA (Control Self-Assessment) Reports received from each division, and a review of the reported anti-corruption incidents from our reporting channels and the results of subsequent investigations thereto, our corruption risk is appropriately controlled and no significant corruption risk was identified.

Please refer to 2020 TSMC Annual Report:
3.5 Code of Ethics and Business Conduct
3.6 Regulatory Compliance

192

205-2

Communication and training about anti-corruption policies and procedures

Operations and Governance: Corporate Governance-Ethics and Regulatory Compliance
Integrity is the most important value of TSMC's culture. TSMC publises the "TSMC Anti-Corruption Commitment" to reiterate that TSMC take a zero-tolerance approach toward corruption, meanwhile elaborating the regulations regarding avoiding conflicts of interest, political and charitable contributions, and whistleblower channel. Please refer to our website.
TSMC provides anti-corruption and ethics training when each new colleague. For the current colleagues, TSMC provides a variety of training courses in the form of face-to-face courses, communication meetings, online compulsory and elective courses, and provides regulatory compliance guidelines and FAQs through the factory posters, company's internal website, internal e-mails, and education propaganda articles, etc., to ensure colleagues access to new knowledge of regulations and deepen their knowledge of various issues.
In 2020, TSMC provided current colleagues with "Annual Ethics and Compliance Training Course"(mandatory 0.5 hour online course). The completion rate of each operating base is as follows: 99.7% in Taiwan, and Asian regions outside Taiwan (Mainland, Japan, South Korea), North America (U.S., Canada), and Europe are all 100%.

Please refer to 2020 TSMC Annual Report:
3.2.1 Audit Committee
3.5 Code of Ethics and Business Conduct
3.6 Regulatory Compliance

192

205-3

Confirmed incidents of corruption and actions taken

Operations and Governance: Corporate Governance-Ethics and Regulatory Compliance

Please refer to 2020 TSMC Annual Report:
3.5 Code of Ethics and Business Conduct

192

206-1

Legal actions for anti-competitive behavior, anti-trust, and monopoly practices

Please refer to 2020 TSMC Annual Report:
6.3.3 Operational Risks/Risks Associated with Litigious and Non-litigious Matters

-

207-1

Approach to tax

Operations and Governance: Tax Policy

196

207-2

Tax governance, control, and risk management

Operations and Governance: Tax Policy

196

207-3

Stakeholder engagement and management of concerns related to tax

Operations and Governance: Tax Policy

196

207-4

Country-by-country reporting

The Organization for Economic Cooperation and Development (OECD) developed a country-by-country reporting system in which the Taiwan R.O.C. government participates. This reporting process was developed in part to aid tax authorities in their audit selection processes. Under the OECD agreement, this reporting information is kept with tax authorities who have the tax expertise to understand and assess this business-sensitive tax information. TSMC supports the business information provided as part of the country-by-country reporting system remaining exclusively with government tax authorities.

-

302-1

Energy consumption within the organization

Appendix: ESG Performance Summary (Environmental Dimension)

206

302-2

Energy consumption outside of the organization

A Practitioner of Green Power: Climate Change and Energy Management - GHG Emissions Inventory

94

302-3

Energy intensity

Appendix: ESG Performance Summary (Environmental Dimension)

206

302-4

Reduction of energy consumption

A Practitioner of Green Power: Climate Change and Energy Management-Increase Energy Efficiency

97

302-5

Reductions in energy requirements of products and services

A Practitioner of Green Power: Climate Change and Energy Management - Increase Energy Efficiency
Please refer to 2020 TSMC Annual Report: 7.2.2 Sustainable Products

97

303-1

Interactions with water as a shared resource

A Practitioner of Green Power: Water Management-Risk Management of Water Resources

104

303-2

Management of water discharge-related impacts

A Practitioner of Green Power: Water Management-Develop Preventive Measures

109

303-3

Water discharge

A Practitioner of Green Power: Water Management-Risk Management of Water Resources
It is necessary to disclose the proportion of the water withdrawal to the total water withdrawal of the water area in the high or extremely high water stress risk area according to the World Resources Institute (WRI) water stress evaluation. TSMC (China) is a high-risk area of water stress. Its water withdrawal area is the Jinze Reservoir, which supplies 2.56 million tons per day. TSMC (China) uses 0.6 million tons of water per day, accounting for 0.2% of its water withdrawal area.

104

303-4

Water withdrawal

A Practitioner of Green Power: Water Management-Risk Management of Water Resources

104

303-5

Water consumption

A Practitioner of Green Power: Water Management-Risk Management of Water Resources

104

305-1

Direct (Scope 1) GHG emissions

Appendix: ESG Performance Summary (Environmental Dimension)

206

305-2

Energy indirect (Scope 2) GHG emissions

Appendix: ESG Performance Summary (Environmental Dimension)

206

305-3

Other indirect (Scope 3) GHG emissions

Appendix: ESG Performance Summary (Environmental Dimension)

206

305-4

GHG emissions intensity

Appendix: ESG Performance Summary (Environmental Dimension)

206

305-5

Reduction of GHG emissions

A Practitioner of Green Power: Climate Change and Energy Management-GHG Reduction Best Practices, GHG Emissions Inventory
A Practitioner of Green Power: Climate Change and Energy Management-Expanding Usage of Renewable Energies

94, 95

305-6

Emissions of ozone-depleting substances (ODS)

TSMC does not use Motreal Protocol restricted ODS.

-

305-7

Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions

A Practitioner of Green Power: Air Pollution Control
Emissions in 2020:
NOX: 170.36 tons
SOX: 38.13 tons

122

306-1

Waste generation and significant waste-related impacts

A Practitioner of Green Power: Waste Management

112

306-2

Management of significant waste-related impacts

A Practitioner of Green Power: Waste Management

112

306-3

Significant spills

Waste generated

112

306-4

Transport of hazardous waste

Waste diverted from disposal

112

306-5

Disclosure 306-5 Waste directed to disposal

A Practitioner of Green Power: Waste Management

112

307-1

Non-compliance with environmental laws and regulations

Company has no significant fines and non-monetary sanctions for non-compliance of environmental laws and regulations 2020.

-

308-1

New suppliers that were screened using environmental criteria

A Responsible Purchaser: Supplier Sustainability Management-2020 Goals and Achievements
100% new suppliers compliant and signed "TSMC ethics and supplier code of conduct"

73

308-2

Negative environmental impacts in the supply chain and actions taken

A Responsible Purchaser: Supplier Sustainability Management - Sustainability Risk Management
TSMC requires suppliers to meet its sustainability standards through the "TSMC Supplier Code of Conduct", which includes environmental impact issues, and requires Tier 1 suppliers to complete a sustainability self-assessment questionnaire. In 2020, a total of 1,144 responses to the questionnaire (including operating units in Taiwan and China) were collected in the 2020. If the supplier has potential risks, they will be required to follow up with improvement.

81

401-1

New employee hires and employee turnover

An Admired Employer: Talent Attraction and Retention - Shared Visions and Values - Talent Recruitment - Campus Recruitment
Approximately 90% of TSMC employees are located in Taiwan. Overseas employees are mostly located in Asia, which is only 6.9% of all employees; the proportion of other regions is lower.
In 2020, to align with the Company’s growth, TSMC expanded recruitment and introduced 7,322 new hires in Taiwan and 8,193 new hires around the world. Among them, 79.5% of all new hires are below the age of 30.

133

401-2

Benefits provided to full-time employees that are not provided to temporary or part-time employees

An Admired Employer: Talent Attraction and Retention-Compensation and Benefits-Benefits Better Than Statutory Regulations
Note: TSMC provides localized leave and insurance programs to employees in overseas regions. We grant additional days of annual leave to employees in Taiwan, China, North America and Europe. As for insurance programs, the comprehensive life and medical insurance programs are also designed in consideration of local regulations, industry practices and local conditions for each overseas region.

138

401-3

Parental leave

An Admired Employer: Talent Attraction and Retention-Compensation and Benefits-Parental Benefits

137

402-1

Minimum notice periods regarding operational changes

An Admired Employer: Human Rights-Employee Engagement
Any significant issues and changes will be announced in quarterly meetings. Extraordinary meetings may be held when necessary.
If the employment relationship with some employees needs to be terminated due to major operational changes, the Company will notify employees in advance abide by the law.

148

403-1

Occupational safety and health management system

In order to implement occupational safety and health management and control, TSMC established an executive organization with the division of roles and responsibilities. In response to the requirements and expectations of TSMC from internal and external stakeholders, in 2020, in addition to continuing to improve the existing safety culture promotion and risk management measures and in response to expansion plans, the number of contractors entering TSMC has reached 39,470 people per day. TSMC has standardized contractor operational safety and health management procedures, established the "Contractor Environmental Safety and Health Blue Book", strengthened the safety management system, and cooperated with contractors to create a safe and friendly environment. The corporate-level Safety and Health Committee is hosted by the Corporate ESH Director, percentage of total workforce represented is 44%.

-

403-2

Hazard identification, risk assessment, and incident investigation

An Admired Employer: Occupational Safety and Health - Promote Safety Culture - Statistics on Disabling Injuries
The definition for occupational accidents is in accordance with the Occupational Safety and Health Act and important disabling injury indicators issued by the Global Reporting Initiative which uses Disabling Severity Rate (SR) and Disabling Injury Frequency Rate (FR) as primary indicators. In 2020, TSMC reviewed the Occupational Safety and Health Act stipulating that only work-related injuries shall be counted towards SR/ FR. Other non-work injuries such as falling in the cafeteria or parking lot due to other reasons shall not be counted towards occupational injuries but should be investigated and resolved. Employee vacation, medical insurance, and insurance shall remain the same. In 2020, there were 43 disabling injuries among employees with 422 working days lost. Of the 43 disabling injuries, 29 were from men with 308 working days lost and 14 were from women with 114 working days lost. Men suffered from a higher number of work-related disabling injuries and working days lost than women did. Aside from falling, the main causes were crushing injuries, cuts, scrapes, and punctures during maintenance. Improvement measures include: Implemented LOTO (Lock out Tag out) measures that require employees to lock out and tag out all moving parts during maintenance. In 2020, 2,577 operations were completed and added to the Maintenance Procedures. Safety and health training materials now contain chapters on when and how to use protective gear for cuts/scrapes/punctures.

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Occupational health services

TSMC's occupational health risk management plan covers both occupational hazards (Including the five major hazards: chemical, physical, ergonomic, social/ psychological, and biological) and personal health (including pregnancy, poor cerebrovascular/ cardiovascular functions, muscle and bones, stress management, etc.), which need to be improved to protect employees’ health. In accordance with legal regulations on occupational safety and health, all employees involved in operations with special health examination, a total of 4,753 individuals, completed 100% special health examinations.

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Worker participation, consultation, and communication on occupational safety and health

An Admired Employer: Occupational Safety and Health-Promote Safety Culture-Safety and Health Measures

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Worker training on occupational health and safety

An Admired Employer: Occupational Safety and Health-Promote Safety Culture-Safety and Health Measures

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Promotion of worker health

An Admired Employer: Occupational Safety and Health-Comprehensive Health Management-Health Care

160

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Prevention and mitigation of occupational safety and health impacts directly linked by business relationships

An Admired Employer: Occupational Safety and Health-Comprehensive Health Management-Occupational Disease Prevention

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Workers covered by an occupational safety and health management system

Workers include the scope of employees and contractors

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403-9

Work-related injuries

An Admired Employer: Occupational Safety and Health-Promote Safety Culture-Statistics on Disabling Injuries

155

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Work-related ill health

An Admired Employer: Occupational Safety and Health -Comprehensive Health Management-Prevention Measures & Achievements against Occupational Diseases

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Average hours of training per year per employee

An Admired Employer: Talent Development-Fulfill Talent Development-Diverse and Equal Opportunities for Learning and Development
The current design of the training system does not include the average hours of training per employee per year based on gender
Reveal the average hours of training per employee each year
Reveal the average hours of training by different categories of employees per year(manager, non-manager indirector employee, and direct employee)

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Programs for upgrading employee skills and transition assistance programs

An Admired Employer: Talent Development-Fulfill Talent Development
Although it does not provide transition assistance programs for "employees who have ended their careers due to retirement or termination of employment relationships", the company's "talent development" goals have always been focused on ensuring that employees can keep up with the times to support the companie's long-term growth and meeting the needs of employees for lifelong learning. In other words, as long as employees continue to learn step by step under the company’s talent development system, they will be well prepared for their career development after leaving the job.
If employees who are leaving the company have individual needs, they can also get professional counseling services in psychological, legal and financial aspects through "Consultation and Consultation"

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Percentage of employees receiving regular performance and career development reviews

An Admired Employer: Talent Development-Fulfill Talent Development-Diverse and Equal Opportunities for Learning and Development
Based on individual job requirements, performance assessment results (The performance appraisal was conducted in the middle of the year and at the end of the year, and the assessment rate was 100% in 2019), and career development needs, the employees of TSMC set up their own individual development plans (IDP), which are part of the basis of the company's annual training plan.

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Diversity of governance bodies and employees

Operations and Governance: Corporate Governance-Board of Directors and Committees

Please refer to 2020 TSMC Annual Report:
2.4.1 Information Regarding Board Members
TSMC's Board is comprised of a diverse group of professionals from different backgrounds in industries, academia, law, etc. These professionals include citizens from Taiwan, Europe and the U.S. with world-class business operating experience, one of whom is female (the ratio is 10%).
An Admired Employer: Talent Attraction and Retention-Shared Visions and Values-Talent Recruitment
TSMC's Board is comprised of a diverse group of professionals from different backgrounds in industries, academia, law, etc. These professionals include citizens from Taiwan, Europe and the U.S. with world-class business operating experience.
In 2020, a total of 8,193 employees were hired, including members of younger generations, overseas elites, and the physically and mentally handicapped.

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Ratio of basic salary and remuneration of women to men

An Admired Employer: Talent Attraction and Retention - Workforce Structure - TSMC Compensation Ratio by Gender

132

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Incidents of discrimination and corrective actions taken

An Admired Employer: Human Rights
Act in accordance with the TSMC Human Rights Policy and the (RBA) Responsible Business Alliance Code of Conduct
Formulate implementation policies and management methods -Each operating base has a dedicated unit to form a "planning, execution, inspection, and action" cycle
Require employees to participate in human rights protection training

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Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

An Admired Employer: Human Rights
Act in accordance with the TSMC Human Rights Policy and the Responsible Business Alliance (RBA) Code of Conduct
Formulate implementation policies and management methods
Each site of operations has a dedicated unit to form a "planning, execution, inspection, and action" cycle
Require employees to participate in human rights protection training
Establish a number of channels for employees' feedback, many of which are checked by the top human resources organization and handled in a fast and confidential manner. We are committed to providing an open and transparent communication environment for supervisors, colleagues, and peers.
The company respects the rights of all employees to organize and participate in the trade union of their choice, collective bargaining, and participation in peaceful assemblies. It also respects the right of employees to avoid such activities. As of now (including 2020), no employees have come forward to organize trade unions.
A Responsible Purchaser: Supplier Sustainability Management-Sustainability Risk Management
TSMC requires suppliers to meet its sustainability standards through the "TSMC Supplier Code of Conduct", which includes workers freedom of association or group consensus, and requires Tier 1 suppliers to complete a sustainability self-assessment questionnaire. In 2020, a total of 1,144 responses to the questionnaire (including operating units in Taiwan and China) were collected in the 2020. If the supplier has potential risks, they will be required to follow up with improvement.

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Operations and suppliers at significant risk for incidents of child labor

TSMC abides by local laws and regulations, and take actions according to TSMC Human Rights Policy and Responsible Business Alliance Code of Conduct. We treat all workers, including regular, contract, and temporary employees, and interns, with dignity and respect, and reduce every kind of risk to protect our employees. More details on TSMC Human Rights Policy
A Responsible Purchaser: Supplier Sustainability Management - Sustainability Risk Management
TSMC requires suppliers to meet sustainability standards through the "TSMC Supplier Code of Conduct", which includes a no child labor policy, and requires Tier 1 suppliers to complete a sustainability self-assessment questionnaire. In 2020, a total of 1,144 responses to the questionnaire (including operating units in Taiwan and China) were collected in the 2020. If the supplier has potential risks, they will be required to follow up with improvement.

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Operations and suppliers at significant risk for incidents of forced or compulsory labor

An Admired Employer: Human Rights
TSMC abides by local laws and regulations, and take actions according to "TSMC Human Rights Policy" and "Responsible Business Alliance Code of Conduct".
Formulate implementation policies and management methodsEach site of operations has a dedicated unit to form a "planning, execution, inspection, and action" cycle
Each site of operations has a dedicated unit to form a "planning, execution, inspection, and action" cycle
Require employees to participate in human rights protection training
Formulate "Working Hours Management Measures" that comply with laws and regulations. Except for the unanimous agreement of supervisors and colleagues, overtime pay or compensatory time off is required to extend working hours.
In addition to setting up a reminder function for supervisors and employees in the "attendance system and overtime reporting system", and reviewing and controlling them month by month, they also carefully check their opinions and complaints
A Responsible Purchaser: Supplier Sustainability Management-Sustainability Risk Management
TSMC requires suppliers to meet the sustainability standards through the "TSMC Supplier Code of Conduct", which includes a no bonded labor policy, and requires Tier 1 suppliers to complete a sustainability self-assessment questionnaire. In 2020, a total of 1,144 responses to the questionnaire (including operating units in Taiwan and China) were collected in the 2020. If the supplier has potential risks, they will be required to follow up with improvement.

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Operations that have been subject to human rights reviews or impact assessments

An Admired Employer: Human Rights-Human Rights Governance-Human Rights Risk Management
Use the standardized risk assessment template (SAQ) designed by the "Responsible Business Alliance" to identify the highest social, environmental and moral risks in the business
Entrust a third-party organization with special training in social and environmental audits to continuously implement the "Verification Audit Process" (VAP) of the Responsible Business Alliance for all fabs
The results of the evaluation in 2020 are the same as those in the past few years, and both are in a "low risk" state

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Employee training on human rights policies or procedures

An Admired Employer: Human Rights-Human Rights Governance
Disclose the total training hours, total number of employee and employee training percentages related to human rights policies
In 2020, TSMC provided employees with a total of 93,822 hours of human rights protection training. In total, 55,031 employees (107,057 person-time employees) completed the training program, accounting for 96.8% of TSMC's total employees

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Significant investment agreements and contracts that include human rights clauses or that underwent Human Rights screening

In 2020, TSMC continued to construct new facilities in Taiwan. Taiwan has a high evaluation of international human rights appraisal, and has no significant issues on this topic.

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414-1

New suppliers that were screened using social criteria

A Responsible Purchaser: Supplier Sustainability Management - 2020 Goals and Achievements
New suppliers signed the TSMC Supplier Code of Conduct for a completion rate of 100% and conducted risk assessment

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Negative social impacts in the supply chain and actions taken

A Responsible Purchaser: Supplier Sustainability Management - Sustainability Risk Management
Please refer to the "Protection of Labor Rights" action plan in the "Responsible Supply Chain" chapter, TSMC manages supplier employees working in TSMC 's factory sites in Taiwan through reminders, audits, contracts and penalties and related actions to address issues such as working hours/safety/labor

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Assessment of the health and safety impacts of product and service categories

There is no significant safety and health impacts for the products and services that TSMC provided to customers.

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Incidents of non-compliance concerning the health and safety impacts of products and services

Not applicable

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Substantiated complaints concerning breaches of customer privacy and losses of customer data

An Innovation Pioneer: Customer Service-customer's Virtual Fab (no customer complaints regarding information leakage)

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Non-compliance with laws and regulations in the social and economic area

Company has no significant fines and non-monetary sanctions for non-compliance in social and economic areas in 2020

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Assurance Statement

Download Independent Assurance Statement