2016 TSMC Annual Report

TSMC Annual Report > 2016 > Corporate Social Responsibility > Overview

Overview

TSMC believes a company’s corporate social responsibility is to uplift society. As a result, in addition to actively strengthening TSMC’s competitiveness in its core business of dedicated IC foundries, the Company is also continuously active in the economic, environmental and social dimensions of corporate responsibility and attends to the rights of all stakeholders including employees, shareholders/investors, customers, suppliers, and local communities to serve as a positive force in society.

The Scope of Corporate Social Responsibility

TSMC has declared “Uplifting Society” as the Company vision and identified three primary missions: “Acting with Integrity,” “Strengthening Environmental Protection,” and “Caring for the Disadvantaged” in its Corporate Social Responsibility Policy. The CSR matrix below, set by Chairman Dr. Morris Chang, clearly defines the scope of that responsibility. The horizontal axis shows the seven areas where TSMC aims to set an example: morality, business ethics, economy, rule of law, sustainability, work/life balance and happiness, and philanthropy. On the vertical axis are actions that TSMC has taken to fulfill its responsibilities.

TSMC CSR Matrix

Society TSMC	Morality	Business Ethics	Economy	Rule of Law	Sustainability	Work/Life Balance Happiness	Philanthropy
Integrity	V	V
Law Compliance				V
Anti-Corruption Anti-Bribery Anti-Cronyism	V	V		V
Environmental 　Protection Climate Control Energy Conservation				V	V
Corporate Governance		V	V	V
Provide Well-Paying 　Jobs			V			V
Good Shareholder 　Return			V
Employees’ Work/Life 　Balance						V
Encourage Innovation		V	V
Good Work 　Environment						V
Volunteers Organization					V	V	V
Education and Culture 　Foundation							V

CSR Management

As the TSMC’s top-level group for corporate social responsibility, the CSR committee acts as a center for decision-making and platform for coordination throughout the Company. TSMC’s CFO (chief financial officer) serves as chairperson of the CSR committee, which is comprised of representatives from each functional organization. The committee meets each quarter to discuss developments and future directions of CSR operations. It also coordinates across all organizations based on the type and nature of issues addressed and monitors the progress and effectiveness of CSR projects.

Functions related to CSR include legal, customer service, materials management, quality and reliability, research and development, risk management, finance, investor relations, operations, human resources, the TSMC Foundation, the TSMC Volunteer Program, public relations and environment, health, and safety. These functions are responsible for addressing CSR issues of interest to employees, shareholders/investors, customers, suppliers, governments, communities, and other stakeholders to systematically and effectively fulfill the Company’s corporate social responsibilities. The CSR committee chairperson leads committee to jointly set the Company’s CSR strategy, identify key issues for the year and monitor the execution of related projects and budgets by each organization to ensure they are effectively carried out. The CSR committee chairperson also annually reports the current year’s results and submits plans for the upcoming year to the board of directors.

Stakeholder Engagement

TSMC’s approach to stakeholder relations is divided into four stages: identification, analysis, planning and engagement. In order to pursue sustainable operations, TSMC not only performs direct communications with each of its stakeholders through multiple channels established by CSR-related units but also maintains a ”Stakeholder Engagement” section on the corporate website, as well as a CSR mailbox to gather a broad range of views from the public. The CSR mailbox, set up in 2011, is managed by dedicated public relations staff, and submissions are sent to relevant departments according to the nature and range of issues addressed. In 2016, the TSMC CSR mailbox received 472 submissions, including requests for surveys, studies and visits, inquiries about daily operations, recruiting and CSR-related experience sharing, suggestions and complaints from the public, and requests for endorsement, donation and collaboration as well as event invitations. All received timely responses from the Company’s dedicated personnel.

Stakeholders and Communication Channels in 2016

Stakeholders	Communication Channels
Employees	Corporate intranet, internal emails and other announcement channels (such as promotion posters at facilities) Human resource representatives Regular and ad-hoc communication meetings Employee voice channels, such as immediate response system, employee opinion box, wellness center, wellness website, etc. Ombudsman System Audit Committee Whistleblower System
Shareholders & Investors	Annual shareholder meeting Quarterly earnings conference call Investor conferences and meetings Telephone and email responses to investors' questions and feedback collection Annual reports, CSR reports, 20-F filings to US SEC, material announcements to Taiwan Stock Exchange, and corporate news on the Company's website
Customers	Annual customer satisfaction survey Customer quarterly business review meetings Customer audits
Suppliers	Supplier quarterly business review meetings Supplier questionnaire survey Supplier onsite audits Annual supply chain management forum Supplier ethics code awareness training
Government	Official correspondence Meetings (such as communication meetings or public hearings) Communication with government authorities through industry organizations, including the Association of Science Park Industries, Taiwan Semiconductor Industry Association, World Semiconductor Council, and Chinese National Federation of Industries
Society	Arts events in the communities Sponsorship of non-profit organizations to support educational projects Professorship endowments and student scholarships at universities Support of non-profit organizations and institutions via monetary and in-kind donation, as well as providing necessary manpower for a good cause Regular visits to National Museum of Science, Hsinchu Veterans Home, St. Teresa Children Center, Hsinchu Gaofeng Botanical Garden, Jacana Ecology Education Park, and other remote schools to provide volunteer services Annual volunteer activities in collaboration with TSMC fabs and divisions

In April, 2016, the Company launched its first Facebook fan page, a newly established two-way communication channel to introduce a variety of CSR activities provided by the TSMC Education and Culture Foundation, TSMC Volunteer Program and 17 fab/division volunteer initiatives on a weekly basis. This enables further understanding of the Company's social contribution to society.

TSMC believes that maintaining good communication with stakeholders not only helps the Company better understand economic, social and environmental challenges, but also creates value for the Company and society and promotes sustainable growth.

Responsibilities of TSMC CSR Committee Members

Committee Members	Responsibilities	Stakeholders
Legal	Corporate Governance, Code of Conduct, Legal Compliance, Intellectual Property, Protection of Confidential Information	Government Employees Society
Customer Service	Customers Service and Satisfaction, Customer Trust, Customer Confidentiality	Customers
Materials Management	Materials and Supply Chain Risk Management, Supplier Management, Conflict Minerals, EICC	Suppliers
Quality and Reliability	Product Quality and Reliability, Product Recall Mechanism.	Customers
Research and Development	Innovation Management, Green Products	Employees Customers
Risk Management	Risk Management, Crisis Management, Emergency Response and Action Plan	Customers Employees Government Society Investors
Finance	Financial Disclosure, Dividend Policy, Tax Strategy	Government Investors
Investor Relations	Resolving Issues of Stakeholder Concern, Establishing Trusting Long-term Relationships, Effective Two-way Communication, Annual Report Production	Investors
Operations	Operational Eco-efficiency, Pollution Prevention, Water Resource Risk Management, Green Manufacturing	Customers Investors
Environment, Health, and Safety	Environmental Policy and Management System, Climate Change Mitigation and Adaption, Pollution Prevention, Energy Consumption Efficiency, Carbon Emissions and Carbon Rights Management, Product Environmental Responsibility, Response Mechanism for Environmental Issues, Environmental Spending, Green Supply Chain, Policy and Management Systems for Occupational Health and Safety, Workplace Health and Safety, Occupational Disease Prevention and Health Promotion, Communication of ESH Regulations	Employees Customers Government Society Suppliers Investors
Human Resources	Talent Recruitment and Retention, Employee Health and Safety, Employee Training and Development, Compensation and Benefits, Freedom of Association and Collective Bargaining, Labor Relations and Whistleblower Procedures, Labor Rights Violations and Reporting Procedures, Management of Working Hours, Child Labor	Employees
TSMC Education and Culture Foundation, TSMC Volunteer Society	Corporate Citizenship, Philanthropy, Community Relations	Society
Public Relations	Stakeholder Engagement, Mechanism for Reflecting Issues of Social Concern, Media Relations	Society

As the only semiconductor company chosen for the Dow Jones Sustainability World Indices for the past 16 consecutive years, TSMC believes that integrity is fundamental to any company’s sustainability. From a CSR perspective, TSMC also believes that customer trust is enhanced if the Company follows the law, insists on transparency and shows good corporate governance. These practices, along with outstanding business results, mean investors will be more willing to invest in the Company over the long term and employees will be more likely to make a mutual commitment to the Company to fulfill its core values, leading to stronger coherence within the Company. At TSMC’s urging, suppliers – both upstream and downstream – have been working together to strengthen environmental protection by building a green supply chain. With the engagement of all stakeholders, the Company’s resources can be amplified to create even more value for society. In summary, carrying out TSMC’s social responsibilities gives the Company greater competitive advantage and benefits all stakeholders.

2016 CSR Awards and Recognitions

Category	Organization	Awards and Recognitions
Overall CSR	Dow Jones 　Sustainability Indices 　(DJSI)	Membership in the Dow Jones Sustainability World Index for the 16th consecutive year RobecoSAM Sustainability Award - Gold Class
	MSCI Global 　Sustainability Indexes	Selected as MSCI Global Sustainability Indexes component
	FTSE4Good Index	Selected as FTSE4Good Emerging Index component
	Goldman Sachs, GS 　Sustain	Selected as GS SUSTAIN Focus List companies, which incorporates global industry leaders
	R.O.C. Presidential 　Office	R.O.C. Presidential Innovation Award
	Taiwan Institute of 　Sustainable Energy	Taiwan Corporate Sustainability Awards： Taiwan Corporate Sustainability Awards No.1 for Domestic Corporates Taiwan Top 50 Corporate Responsibility Report Awards – Electronics Industry – Gold Class Sustainable Water Management Award Climate Leader Award
	Barron's	Selected as Top100 World’s Most Admired Companies
	FORTUNE	Selected as one of The World’s Most Admired Companies
	Newsweek	Selected as Newsweek Green Rankings Top Green Companies in the World
	Channel NewsAsia	Selected as one of the most sustainable corporations in Channel NewsAsia Sustainability Ranking
	CommonWealth 　Magazine	Excellence in Corporate Social Responsibility Award – Large cap – 2nd Place Most Admired Company in Taiwan for the 21st consecutive year Most admired entrepreneur in Taiwan
	Global Views Magazine	Corporate Social Responsibility Award: Technology Industry Group- Model Award
	Cheers Magazine	Most Admired Company for the New Generation
Economy, Governance	Taiwan Stock Exchange	Ranked in top 5% in Second Corporate Governance Evaluation of Listed Companies
	R.O.C. Ministry of 　Economic Affairs Bureau of Foreign Trade	Outstanding Trade Contribution Award
	R.O.C. Ministry of 　Economic Affairs Intellectual Property 　Office	Ranked No. 1 in Top 100 Patent Filers
	PricewaterhouseCoopers	Ranked No. 1 in Taiwan by PricewaterhouseCoopers Global Innovation 1000 Study
	China Credit Information 　Service	Ranked No. 1 in Profitability of large Taiwan Companies
	Institutional Investor 　Magazine	Best CEO (Technology/Semiconductor) - 1st Place (buy-side and sell-side)- All-Asia Best CEO (Technology/Semiconductor) - 1st Place (buy-side)- All-Asia Best CEO (Technology/Semiconductor) - 1st Place (sell-side)- All-Asia Best CFO (Technology/Semiconductor) - 1st Place (buy-side and sell-side)- All-Asia Best CFO (Technology/Semiconductor) - 1st Place (buy-side)- All-Asia Best CFO (Technology/Semiconductor) - 2nd Place (sell-side)- All-Asia Best Investor Relations (Technology/Semiconductor) - 1st Place (buy-side and sell-side)- All-Asia Best Investor Relations (Technology/Semiconductor) - 1st Place (buy-side)- All-Asia Best Investor Relations (Technology/Semiconductor) - 1st Place (sell-side)- All-Asia Best Investor Relations Professional (Technology/Semiconductor) - 1st Place (buy-side and sell-side)- All-Asia Best Investor Relations Professional (Technology/Semiconductor) - 1st Place (buy-side)- All-Asia Best Investor Relations Professional (Technology/Semiconductor) - 1st Place (sell-side)- All-Asia Best Analyst Days (Technology/Semiconductor) - 1st Place (buy-side and sell-side)- All-Asia Best Website (Technology/Semiconductor) - 1st Place (buy-side and sell-side)- All-Asia
	IR Magazine	Global Top 50 Gold Rank No. 1 Global Top IRO - Five Winning IROs Global Top Corporate Governance - Five Winning Companies Best Use of Technology - Greater Asia Best Corporate Governance - Greater Asia Best in Sector: Technology - Greater Asia
	Asiamoney	Best Managed Company Large Cap in Taiwan
	FinanceAsia	FinanceAsia20th Anniversary Platinum Awards: Best Company – in Taiwan
	FORTUNE	Selected as member of Fortune Global 500
	Forbes	Forbes Global 2000
	Forbes Asia	Fabulous 50
	Nikkei	Nikkei Asia 300 Indexes
	World Export Controls 　Review (WorldECR 　Journal)	Best Export Controls Compliance Team of the Year - Rest of the World
Environment, 　Safety and 　Health	U.S. Green Building 　Council Leadership in 　Energy and 　Environmental Design 　(LEED) certification	"Gold" class certification–Fab 14B Manufacturing Facility and Office Building
	R.O.C. Ministry of the 　Interior “Ecology, 　Energy Saving, Waste 　Reduction and Health 　(EEWH)” certification	"Diamond" class certification–Fab 12A Manufacturing Facility, Fab 12 Phase 6 Manufacturing Facility, Fab 14B Manufacturing Facility
	R.O.C. Environmental 　Protection 　Administration	Excellence in Toxic Substance Management Award–Fab 2 and Fab 5 Enterprise Green Procurement Award–Fab 2 and Fab 5, Fab 3, Fab 8, Fab 12A, Fab 14A, Fab 14B Environmental Education Award–Fab 6、Fab 15A
	R.O.C. Ministry of 　Economic Affairs	Excellence in Energy Conservation–Fab 12 Phase 6 Excellence in Carbon Reduction Award–Fab 2 and Fab 5, Fab 8 Green Factory Label–Fab 15A Water Conservation Award–Fab 14B for two consecutive years
	R.O.C. Ministry of Labor	Excellence in Labor Safety and Hygiene Award–Fab 12A
	Hsinchu Science Park 　Administration	Water Conservation Award–Fab 2 and Fab 5 Excellence in Energy Conservation–Fab 2 and Fab 5, Fab 3 Excellence in Labor Safety and Hygiene Award–Fab 2 and Fab 5 Excellence in Ammonia Nitrogen Reduction in Wastewater–Fab 12A, Fab 12 Phase 7
	Central Taiwan Science 　Park Administration	Excellence in Labor Safety and Hygiene Award–Fab 15A
	Southern Taiwan 　Science Park 　Administration	Excellence in Environmental Protection–Fab 6
	Hsinchu County 　Environmental 　Protection Bureau	Enterprise Environmental Protection Evaluation–Fab 12 Phase 6
	Hsinchu City 　Environmental 　Protection Bureau	Enterprise Green Procurement Award– Fab8, Fab 12A
	Tainan City 　Environmental 　Protection Bureau	Enterprise Green Procurement Award– Fab 14A