Global Reporting Initiative Index

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 2021 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 2021 TSMC Annual Report (II) Financial Statements

6

102-8

Information on employees and other workers

Sustainable Business Practices- An Admired Employer- Diversity and Inclusion

Please refer to 2021 TSMC Annual Report 5.6.3 Workforce Structure

132

102-9

Supply chain

Sustainable Business Practices- A Responsible Purchaser- Supplier Sustainability Management

Please refer to 2021 TSMC Annual Report 5.3.5 Raw Materials and Supply Chain Management

77

102-10

Significant changes to the organization and its supply chain

Sustainable Business Practices- A Responsible Purchaser- Supplier Sustainability Management

Please refer to 2021 TSMC Annual Report 1.Letter to Shareholder, 2.Company Profile, 4.Capital and Shares, 5.Operational Highlights

77

102-11

Precautionary Principle or approach

Operations and Governance- Corporate Governance- Risk Management

Please refer to 2021 TSMC Annual Report 6.3 Risk Management

201

102-12

External initiatives

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

-

102-13

Membership of associations

Appendix- Participation in Industry Associations and Non-Profit Organizations

217

102-14

Statement from senior decision-maker

Letter from the ESG Executive Committee Chairperson

Letter from the ESG Committee Chairperson

Sustainable Business Practices- ESG Implementation Framework, ESG Management

4

5

17, 18

102-15

Key impacts, risks, and opportunities

Sustainable Business Practices- Materiality Analysis and Stakeholder Communication

22

102-16

Values, principles, standards, and norms of behavior

Operations and Governance- Corporate Governance- Ethics and Regulatory Compliance

Please refer to 2021 TSMC Annual Report- 3.5 Code of Ethics and Business Conduct, 3.6 Regulatory Compliance

202

102-17

Mechanisms for advice and concerns about ethics

Operations and Governance- Corporate Governance- Ethics and Regulatory Compliance

Please refer to 2021 TSMC Annual Report- 3.5 Code of Ethics and Business Conduct, 3.6 Regulatory Compliance, 5.6.9 Employee Engagement / Employee Communication

202

102-18

Governance structure

Sustainable Business Practices- ESG Management

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

Please refer to 2021 TSMC Annual Report- 2.3.1 Organization Chart, 3 Corporate Governance

18

199

102-19

Delegating authority

Sustainable Business Practices- ESG Management

18

102-20

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

Letter from the ESG Executive Committee Chairperson

Letter from the ESG Committee Chairperson

Sustainable Business Practices- ESG Management

4

5

18

102-21

Consulting stakeholders on economic, environmental, and social topics

Sustainable Business Practices- Materiality Analysis and Stakeholder Engagement

Operations and Governance- Corporate Governance

Please refer to 2021 TSMC Annual Report3.4 Taiwan Corporate Governance Implementation as Required by the Taiwan Financial Supervisory Commission/Assessment Item 5

22

199

102-22

Composition of the highest governance body and its committees

Operations and Governance- Corporate Governance

Please refer to 2021 TSMC Annual Report- 2.4.1 Information Regarding Board Members, 3. Corporate Governance/Implementation of the Diversity Policy for Board Members

199

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

Please refer to TSMC official website
Investors- Corporate Governance- Board of Directors- Election of Directors
Investors- Corporate Governance- Committees- Audit Committees
Investors- Corporate Governance- Committees- Compensation Committees

“Guidelines for Nomination of Directors”

Please refer to 2021 TSMC Annual Report- 3.2 Board of Directors/Nomination and Election of Directors

-

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 2021 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 2021- Note 37- 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

TSMC’s Chairman chairs the ESG Steering Committee, and the Chairperson of the ESG Committee serves as its Executive Secretary and reports quarterly to the Board of Directors on the implementation results and the future work plan. (the report includes economic, environmental and social topics). In addition, the Board of Directors also review the annual plan and the donations of the "TSMC Education and Culture Foundation" and "TSMC Charity Foundation".

TSMC has set "ESG Policy" and "ESG Matrix", and the "ESG Matrix" clearly defines the scope of the TSMC's responsibilities.

17, 18

102-27

Collective knowledge of highest governance body

Please refer to 2021 TSMC Annual Report- 3. Corporate Governance/Continuing Education/Training of Directors” in 2021. Through quarterly ESG report and management report to 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

Please refer to 2021 TSMC Annual Report- 3.1 Corporate Governance/2021 Corporate Governance Awards and Ratings, 3.2 Board of Directors/Directors' Compensation, 3.4 Taiwan Corporate Governance Implementation as Required by Taiwan Financial Supervisory Commission/Assessment Item 3 - (3), 7.1 Environmental Social Governance (ESG) Overview/2021 ESG Awards and Ratings

200

102-29

Identifying and managing economic, environmental, and social impacts

Please refer to 2021 TSMC Annual Report- 3.2 Board of Directors/Board Responsibilities: 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 reviews variety of subjects (including ESG programs) reported by TSMC management quarterly, as well as other proposed corporate strategies. The Board then evaluates the prospects of these strategies, reviews progress, and provide guidance to TSMC management when needed.

Please refer to 2021 TSMC Annual Report for more- 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, 7.1 Environmental Social Governance (ESG) Overview/ESG Management and Stakeholder Engagement

-

102-30

Effectiveness of risk management processes

Operations and Governance- Corporate Governance- Risk Management

Please refer to 2021 TSMC Annual Report- 6.3 Risk Management

201

102-31

Review of economic, environmental, and social topics

Operations and Governance- Corporate Governance- Board of Directors and Committees, Risk Management

Please refer to 2021 TSMC Annual Report- 3. Corporate Governance, 6.3 Risk Management

199

201

102-32

Highest governance body’s role in sustainability reporting

This report is reviewed and approved by the Company's functional heads and Chairperson of the ESG Committee

Please refer to 2021 TSMC Annual Report- 3. Corporate Governance

-

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 release

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 2021 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 2021 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

Sustainable Business Practices- An Admired Employer -Talent attraction and retention- Competitiveness of total compensation, Employee benefit system superior to Statute

Please refer to 2021 TSMC Annual Report- 2.5 Management Team, 5.6.6 Competitiveness of total compensation

136

102-36

Process for determining remuneration

Sustainable Business Practices- An Admired Employer- Talent Attraction and Retention- Competitiveness of Total Compensation

Please refer to 2021 TSMC Annual Report- 2.5 Management Team, 3.2.2 Compensation

Committee, 3.2.4 Director and Committees Members’ Attendance, 5.6.6 Competitiveness of total compensation

136

102-37

Stakeholders’ involvement in remuneration

Please refer to 2021 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

Sustainable Business Practices- An Admired Employer - Talent Attraction and Retention- Competitiveness of Total Compensation

Please refer to 2021 TSMC Annual Report- 2.5 Management Team, 5.6.6 Competitiveness of total compensation

136

102-39

Percentage increase in annual total compensation ratio

Sustainable Business Practices- An Admired Employer - Talent Attraction and Retention- Competitiveness of Total Compensation

Please refer to 2021 TSMC Annual Report- 2.5 Management Team, 5.6.6 Competitiveness of total compensation

136

102-40

List of stakeholder groups

Sustainable Business Practices- Materiality Analysis and Stakeholder Engagement

22

102-41

Collective bargaining agreements

Sustainable Business Practices- An Admired Employer- Human Rights- Respect the right of employees to associate freely and hold labor-management meetings on a regular basis

By end of 2021, no employee has issued a request to form a union or pursued a collective bargaining agreement

146

102-42

Identifying and selecting stakeholders

Sustainable Business Practices- Materiality Analysis and Stakeholder Engagement

22

102-43

Approach to stakeholder engagement

Sustainable Business Practices- Materiality Analysis and Stakeholder Engagement

22

102-44

Key topics and concerns raised

Sustainable Business Practices- Materiality Analysis and Stakeholder Engagement

22

102-45

Entities included in the consolidated financial statements

About TSMC

Please refer to 2021 TSMC Annual Report (II) Financial Statements

6

102-46

Defining report content and topic Boundaries

Sustainable Business Practices- Materiality Analysis and Stakeholder Engagement

Appendix- About This Report

22

212

102-47

List of material topics

Sustainable Business Practices- Materiality Analysis and Stakeholder Engagement

22

102-48

Restatements of information

We adopted “2019 Refinement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories” from 2021. Due to the revision of “2006 IPCC GUIDELINES FOR NATIONAL GREENHOUSE GAS INVENTORIES”, and to keep consistence of 2021 and beyond GHG inventory data with the goal.

-

102-49

Changes in reporting

Appendix- About This Report

212

102-50

Reporting period

Appendix- About This Report

212

102-51

Date of most recent report

June, 2021

-

102-52

Reporting cycle

Appendix- About This Report

212

102-53

Contact point for questions regarding the report

Appendix- About This Report

212

102-54

Claims of reporting in accordance with the GRI Standards

Appendix- About This Report

212

102-55

GRI content index

Please refer to TSMC ESG Website- GRI Standards Comparison Table

-

102-56

External assurance

Appendix- Independent Third Party Assurance Statement

226

103-1

Explanation of the material topic and its Boundary

Sustainable Business Practices- Materiality Analysis and Stakeholder Engagement

22

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- An Admired Employer- Talent attraction and retention- Competitiveness of total compensation

Sustainable Governance-Sustainable Value Creation

Operations and Governance- Financial Performance, Tax Policy

Appendix-ESG Performance Summary

Please refer to 2021 TSMC annual report (II) Financial Statements for detailed information.

136

34

206

201-2

Financial implications and other risks and opportunities due to climate change

Sustainable Business Practices- A Practitioner of Green Power- Climate and Energy- Identify Climate Risks, Task Force on Climate-related Financial Disclosures (TCFD), Climate Risk Adaptive Actions Standards, Climate and Energy Strategies, Goals, and Outcomes

TSMC 2021 TCFD Report

91

201-3

Defined benefit plan obligations and other retirement plans

Sustainable Business Practices- An Admired Employer - Talent Attraction and Retention- Competitiveness of Total Compensation, Employee Benefit System Superior to Statute

Please refer to 2021 TSMC Annual Report- 5.6.6 Competitiveness of total compensation

136

201-4

Financial assistance received from government

Financial assistance received from the R.O.C. government- In 2021, TSMC enjoyed a tax benefit of NT$57.0 billion from five-year tax exemption for capital investments made in previous years.

Financial assistance received from foreign governments- TSMC received grants of NT$2.6 billion in 2021 for acquisition of property, plant, and equipment, etc.

-

202-1

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

Sustainable Business Practices- An Admired Employer -Talent Attraction and Retention- Competitiveness of Total Compensation:
The total compensation of a direct employee would be higher NT$1 million months’ salary and the monthly wage is around 4 times of the monthly “basic wage” in Taiwan.
According to Article 21 of the Labor Standards Law of the Republic of China, a worker shall be paid such wages as determined through negotiations with the employer, provided, however, that such wages shall not fall below the “basic wage” to ensure the basic living of a worker and maintain his/her purchasing power. The current monthly "basic wage" is NT$25,250.

Provide fair living wage and pay in full and on time with pay slips to state legitimate deductions

Human rights policy: Provide fair living wage and pay in full and on time with pay slips to state legitimate deductions

Please refer to 2021 TSMC Annual Report- 5.6.6 Competitiveness of total compensation

136

202-2

Proportion of senior management hired from the local community

Please refer to 2021 TSMC Annual Report- 2.5.1 Information regarding management team

Among the 29 executives in the Management Team, 26 were born in Taiwan or have the legal right to reside indefinitely, accounting for 89.7%

-

203-1

Infrastructure investments and services supported

Sustainable Business Practices- Power to Change Society- TSMC Charity Foundation. Contents including donation, in-kind giving, construction services, repair services, volunteer services, etc.

170

203-2

Significant indirect economic impacts

In total, TSMC deployed 291 distinct process technology, and manufactured 12,302 products for 535 customers in 2021 to continue to bring significant contribution to the advancement of modern society.

Sustainable Business Practices- Sustainability Impact

-

34

204-1

Proportion of spending on local suppliers

Sustainable Business Practices- A Responsible Purchaser - Promoting Green and Low-carbon Supply Chains- Promoting Constant Upgrade of Local Supply Chain.
Sourced 60.4% of indirect raw materials locally
Sourced 46.4 % of spare parts locally

76

205-1

Operations assessed for risks related to corruption

Operations and Governance- Corporate Governance- Ethics and Regulatory Compliance
TSMC assesses anti-corruption mostly risk by function, and secondary 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 procedure 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 2021’s training regimes and awareness campaign, suppliers 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 2021 TSMC Annual Report- 3.5 Code of Ethics and Business Conduct, 3.6 Regulatory Compliance

202

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 publishes 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.

TSMC provides anti-corruption and ethics training to 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 selective courses, and provides regulatory compliance guidelines and FAQs through posters, emails, and internal news articles to ensure colleagues access to new knowledge of regulations and deepen their knowledge of various issues. In 2021, 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: 99.9% in Taiwan, 100% in Asian regions outside Taiwan (Mainland, Japan, South Korea), 99.9% in North America (U.S., Canada), and 100% in Europe.

Please refer to 2021 TSMC Annual Report- 3.2.1 Audit Committee, 3.5 Code of Ethics and Business Conduct,3.6 Regulatory Compliance

202

205-3

Confirmed incidents of corruption and actions taken

Operations and Governance- Corporate Governance- Ethics and Regulatory Compliance

Please refer to 2021 TSMC Annual Report- 3.5 Code of Ethics and Business Conduct

202

206-1

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

TSMC is not involved in any ongoing investigations related to anti-competitive practices.

-

207-1

Approach to tax

Operations and Governance- Tax Policy

206

207-2

Tax governance, control, and risk management

Operations and Governance- Tax Policy

206

207-3

Stakeholder engagement and management of concerns related to tax

Operations and Governance- Tax Policy

206

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 participate. 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

Sustainable Business Practices- A Practitioner of Green Power- Climate and Energy - Improve energy efficiency

91

302-2

Energy consumption outside of the organization

Sustainable Business Practices- A Practitioner of Green Power- Climate and Energy - Greenhouse Gas Inventory (Scope 3)

91

302-3

Energy intensity

Sustainable Business Practices- A Practitioner of Green Power- Climate and Energy - Improve energy efficiency

91

302-4

Reduction of energy consumption

Sustainable Business Practices- A Practitioner of Green Power- Climate and Energy - Improve energy efficiency

The energy consumption reduction calculation is based on the difference in energy consumption before and after the implementation of the energy saving projects

91

302-5

Reductions in energy requirements of products and services

Sustainable Business Practices- A Practitioner of Green Power- Climate and Energy - Improve energy efficiency

Please refer to 2021 TSMC Annual Report- 7.2.2 Sustainable Products

91

303-1

Interactions with water as a shared resource

Sustainable Business Practices- A Practitioner of Green Power- Risk Management of Water Resources

105

303-2

Management of water discharge-related impacts

Sustainable Business Practices- A Practitioner of Green Power- Develop Preventive Measures

105

303-3

Water withdrawal

Sustainable Business Practices- A Practitioner of Green Power- 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 0.8 million tons of water per day, accounting for 0.3% of its water withdrawal area.

105

303-4

Water discharge

Sustainable Business Practices- A Practitioner of Green Power- Risk Management of Water Resources

105

303-5

Water consumption

Sustainable Business Practices- A Practitioner of Green Power- Risk Management of Water Resources

105

305-1

Direct (Scope 1) GHG emissions

Appendix- ESG Performance Summary (A Practitioner of Green Power)

Sustainable Business Practices- A Practitioner of Green Power- Climate and Energy - Drive Low-Carbon Manufacturing- Scope 1 GHG Emissions

The Greenhouse Gas Inventory used the Global Warming Potential (GWP) for the IPCC AR5 report, and the emissions from biogenic sources is 1,635.58 metric tons of CO₂e.

219

91

305-2

Energy indirect (Scope 2) GHG emissions

Appendix- ESG Performance Summary (A Practitioner of Green Power)

219

305-3

Other indirect (Scope 3) GHG emissions

Appendix- ESG Performance Summary (A Practitioner of Green Power)

219

305-4

GHG emissions intensity

Appendix- ESG Performance Summary (A Practitioner of Green Power)

219

305-5

Reduction of GHG emissions

Sustainable Business Practices- A Practitioner of Green Power- Climate and Energy - Best Mitigation Results in the Industry, Use Renewable Energy

91

305-6

Emissions of ozone-depleting substances (ODS)

TSMC doesn't use Motreal Protocol restricted ODS.

-

305-7

Nitrogen oxides (NO_X), sulfur oxides (SO_X), and other significant air emissions

Sustainable Business Practices- A Practitioner of Green Power- Air Pollution Control

Emissions in 2021: NO_X- 205.57 metric tons; SO_X- 39.48 metric tons

124

306-1

Waste generation and significant waste-related impacts

Sustainable Business Practices- A Practitioner of Green Power- Recycling Resources

113

306-2

Management of significant waste-related impacts

Sustainable Business Practices- A Practitioner of Green Power- Recycling Resources

113

306-3

Waste generated

Sustainable Business Practices- A Practitioner of Green Power- Recycling Resources

113

306-4

Waste diverted from disposal

Sustainable Business Practices- A Practitioner of Green Power- Recycling Resources

113

306-5

Waste directed to disposal

Sustainable Business Practices- A Practitioner of Green Power- Recycling Resources

113

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 2021.

-

308-1

New suppliers that were screened using environmental criteria

Sustainable Business Practices- A Responsible Purchaser- Supplier Sustainability Management - 2021 Goals and Achievements: 100% new suppliers compliant and signed “TSMC ethics and supplier code of conduct"

76

308-2

Negative environmental impacts in the supply chain and actions taken

Sustainable Business Practices- A Responsible Purchaser- Improving Sustainability Risk Management
TSMC requires suppliers to meet the sustainability standards through the "TSMC Supplier Code of Conduct", which includes environmental impact issues, and requires Tier 1 suppliers to implement sustainable According to the questionnaire, a total of 1,065 questionnaires were collected in the 2021. If the supplier has potential risks, it will be continuously to request improvement.

76

401-1

New employee hires and employee turnover

Sustainable Business Practices- An Admired Employer -Talent Attraction and Retention: Strong talent pool, maintain health turnover rate

Please refer to 2021 TSMC Annual Report- 5.6.10 Retention

Number of new employees in the past five years

132, 136

401-2

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

Sustainable Business Practices- An Admired Employer -Talent attraction and retention- Competitiveness of total compensation, Exceed the statutory requirements of benefit program

Please refer to 2021 TSMC Annual Report- 5.6.6 Competitiveness of total compensation

136

401-3

Parental leave

Sustainable Business Practices- An Admired Employer -Talent attraction and retention- Parental Benefits

136

402-1

Minimum notice periods regarding operational changes

Sustainable Business Practices- An Admired Employer - Human Rights- Internal Communication Channels for Employees.

The company has major issues and changes will be announced in quarterly meetings.
Hold a "labor-management meeting" every quarter, and also hold a "temporary labor-management meeting" when necessary for real-time communication.

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.

146

403-1

Occupational health and safety management system

In 2021, there were 3 new factories, namely the Fab 12 phase 8, Fab 18B phase 1 to 3, and the Advanced Backend Fab 6. They are planned to obtain ISO 45001 Occupational Safety and Health management system certification in 2022. The remaining existing factories and subsidiaries TSMC (China), TSMC (Nanjing), WaferTech and VisEra have set up safety and health organizations and personnel in accordance with Article 1-1 of the Occupational Safety and Health Management Rules, and established an occupational safety and health management system, achieved safety and health management goals, uplifted safety and health management performances, and passed ISO 45001 certification. Corporate Level Safety and Health Committee is hosted by Corporate ESH Director, the Committee meeting is held by quarterly, percentage of total workforce represented is 44%.

-

403-2

Hazard identification, risk assessment, and incident investigation

Sustainable Business Practices- An Admired Employer- Occupational Safety and Health - Promote Safety Culture:
Explain risk identification and assessment practices in safety and health implementing items, and add encouraging employees to take the initiative to report unsafe environments or behaviors as a safety performance indicator. Those who take the initiative to report will be rewarded and will not be punished. It is clearly stipulated in the safety work code that employees should perform their duties in accordance with the safety work code. When they find that there is a potential of immediate danger, they can stop their work and retreat to a safe place without endangering the safety of other workers, and then report to their supervisor immediately.

152

403-3

Occupational health services

Sustainable Business Practices- An Admired Employer- Occupational Safety and Health - Comprehensive Health Management

152

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

Sustainable Business Practices- An Admired Employer- Occupational Safety and Health - Promote Safety Culture - Safety and Health Measures
Corporate Level Safety and Health Committee is hosted by Corporate ESH Director, the Committee meeting is held by quarterly, reviewing, coordinating and promoting company-wide safety and health tasks, each unit with environment, safety and health related function shall participate the meeting to report the implementation status of environment, safety and health-related tasks within the unit. In addition, the percentage of total workforce represented is 44%.

152

403-5

Worker training on occupational health and safety

Sustainable Business Practices- An Admired Employer- Occupational Safety and Health - Comprehensive Health Management

152

403-6

Promotion of worker health

Sustainable Business Practices- An Admired Employer- Occupational Safety and Health - Promote Safety Culture - Health Care

152

403-7

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

Sustainable Business Practices- An Admired Employer- Occupational Safety and Health- Comprehensive Health Management, Internal-External Alliance

152

403-8

Workers covered by an occupational health and safety management system

Workers include the scope of employees and contractors. Management system, internal and external audit cover a total of 26 factories in domestic, abroad and subsidiaries. In 2021, there were 3 new factories, namely the Fab 12 phase 8, Fab 18B phase 1 to 3, and the Advanced Backend Fab 6. They are planned to obtain ISO 45001 Occupational Safety and Health management system certification in 2022. The remaining 23 existing factories and subsidiaries TSMC (China), TSMC (Nanjing), WaferTech and VisEra have obtained ISO 45001 certification. The total certification rate of management system is 88.5%.

-

403-9

Work-related injuries

Sustainable Business Practices- An Admired Employer- Occupational Safety and Health - Promote Safety Culture, Work with External Parties to Optimize Work Environment

152

403-10

Work-related ill health

Sustainable Business Practices- An Admired Employer- Occupational Safety and Health - Promote Safety Culture - Occupational Disease Prevention Related Measures and Performances

152

404-1

Average hours of training per year per employee

Sustainable Business Practices- An Admired Employer - Talent Development

142

404-2

Programs for upgrading employee skills and transition assistance programs

Sustainable Business Practices- An Admired Employer - 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 company Long-term growth and meeting the needs of employees for lifelong learning.
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"

142

404-3

Percentage of employees receiving regular performance and career development reviews

Sustainable Business Practices- An Admired Employer - Talent Development

Based on the "TSMC Capability Model" as the basis for talent development, from "experience learning (70%)", "feedback and guidance (20%)" and "education and training (10%)" Provide the specific developmental needs required by employees. One of the aspects of "feedback and guidance" is for all supervisors and employees to regularly implement mid-year and year-end performance feedback and discussions; "education and training" is also implemented according to the "personal development plan."

142

405-1

Diversity of governance bodies and employees

Sustainable Business Practices- An Admired Employer –Diversity and Inclusion

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

Please refer to 2021 TSMC Annual Report- 2.4.1 Information Regarding Board Members, 3.2 Board of Directors
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%).

132

200

405-2

Ratio of basic salary and remuneration of women to men

Sustainable Business Practices- An Admired Employer - Diversity and inclusion- The Ratio of total compensation between Male and Female

132

406-1

Incidents of discrimination and corrective actions taken

Sustainable Business Practices- An Admired Employer - Human Rights

146

407-1

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

Sustainable Business Practices- An Admired Employer - Human Rights:
The company respects the right of employees to freedom of association and collective bargaining, and regularly holds labor-management meetings to promote harmonious employee relations

Sustainable Business Practices- A Responsible Purchaser- Improving Sustainability Risk Management:
TSMC requires suppliers to meet the sustainability standards through the "TSMC Supplier Code of Conduct", which includes no child labor policy, and requires Tier 1 suppliers to implement sustainable According to the questionnaire, a total of 1,065 questionnaires were collected in the 2021. If the supplier has potential risks, it will be continuously to request improvement.

146

408-1

Operations and suppliers at significant risk for incidents of child labor

Sustainable Business Practices- An Admired Employer - Human Rights:
The risk of using child labor at the company is quite low

Sustainable Business Practices- A Responsible Purchaser- Improving Sustainability Risk Management:
TSMC requires suppliers to meet the sustainability standards through the "TSMC Supplier Code of Conduct", which includes no child labor policy, and requires Tier 1 suppliers to implement sustainable According to the questionnaire, a total of 1,065 questionnaires were collected in the 2021. If the supplier has potential risks, it will be continuously to request improvement.

146

409-1

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

Sustainable Business Practices- An Admired Employer - Human Rights:
The risk of forced and compulsory labor incidents occurring in the company is quite low

A Responsible Purchaser- Improving Sustainability Risk Management:
TSMC requires suppliers to meet the sustainability standards through the "TSMC Supplier Code of Conduct", which includes no bonded labor policy, and requires Tier 1 suppliers to implement sustainable According to the questionnaire, a total of 1,065 questionnaires were collected in the 2021. If the supplier has potential risks, it will be continuously to request improvement.

146

412-1

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

Sustainable Business Practices- An Admired Employer - Human Rights:
The company adopts the Self-Assessment Questionnaires (SAQ) designed by RBA every year to identify the four aspects of the highest "labor, health and safety, environment, and ethics" in the business of substantial behavior, risk and management system. The SAQ self-scoring scores of all Taiwan factories reached 88 points or more, which met the "low risk" range in 2021.

146

412-2

Employee training on human rights policies or procedures

Sustainable Business Practices- An Admired Employer - Human Rights- Implement the –“Human Rights Policy”, Human rights protection training

146

412-3

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

In 2021, TSMC expanded its new facilities to locations outside of Taiwan, including in the U.S. and Japan. In TSMC’s Request for Quotation (RFQ), we request contractors’ adherence to TSMC Supplier Code of Conduct, in which we pledge to honor internal human rights.

Please refer to 2021 TSMC Annual Report- 5.6.1 Human Rights Policy and Specific Actions

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414-1

New suppliers that were screened using social criteria

Sustainable Business Practices- A Responsible Purchaser- Improving Sustainability Risk Management:
100% new suppliers have signed "TSMC Supplier Code of Conduct" and conducted risk assessment

76

414-2

Negative social impacts in the supply chain and actions taken

Sustainable Business Practices- A Responsible Purchaser- Improving Sustainability Risk Management:
TSMC take actions to supplier employees working in TSMC 's factory area in Taiwan, through reminders, audits, contracts and penalties related actions to guard aspects such as working hours/safety/labor.

76

416-1

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

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

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416-2

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

Not applicable

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418-1

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

Sustainable Business Practices- Customer Relationship Management - customer's Virtual Fab (no customer complains in information leakage)

71

419-1

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

Company has no significant fines and non-monetary sanctions for non-compliance of social and economic area in 2021.

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