TSMC's ESG Points Incentive System: Creating a New Model for Sustainability Engagement

Sustainable competitiveness is pivotal for enterprises to maintain operational resilience in a rapidly evolving world. In line with its five ESG Directions, TSMC has adopted three major strategies—Knowledge Construction, Innovation Cultivation, and Responsive Action—to foster an internal culture of sustainability. To leverage the core strength of full employee participation, the ESG Points incentive system was launched in 2024. This program integrates six ESG-themed actions, motivating employees to practice sustainability by scoring points while competing for annual honors and sustainability rewards. As of March 2026, 55,951 TSMCers have enthusiastically responded, cumulatively completing 197,161 sustainability actions and receiving 37.7 million ESG Points. To further recognize these achievements, TSMC hosted the inaugural "ESG Points Annual Gala" honoring 21 Sustainability Stars at an award ceremony. Additionally, a new sustainability lifestyle lucky draw was introduced, allowing employees to exchange 100 ESG Points for one entry. This initiative encourages broader employee engagement in sustainability practices, fostering a positive cycle of "Response, Engagement, and Recognition".

The ESG Points incentive system aims to encourage long-term and steady commitment to ESG among employees. By gathering feedback through surveys and focus groups from ESG coordinators and employees across global organizations, TSMC defined six ESG-themed actions to guide staff in integrating sustainability into their daily work and lives. To diversify participation and add an element of fun, the program also features time-limited challenge “Bonus Tasks” tied to specific holidays or company-wide ESG events. Employees who complete these within the timeframe receive additional rewards, adding energy and creativity into sustainable action.

To heighten motivation, ESG Points are calculated once a year. Employees reaching cumulative milestones of 500, 2,000, and 5,000 ESG Points are awarded digital badges: "Sustainability Rookie," "Sustainability Seed," and "Sustainability Ambassador," respectively. These badges mark significant milestones in their sustainability journey. By providing visible and achievable tiered goals, the system shortens the psychological distance between employees and recognition, encouraging self-efficacy and driving continuous action. Furthermore, the top 20 employees with the highest annual ESG Points company-wide receive the highest honor—the "Sustainability Star" digital badge—along with a physical certificate, a digital certificate, and a sustainability gift package, deepening their commitment and sense of mission toward sustainable action.

To further deepen TSMC’s sustainable culture and expand participation, TSMC simultaneously launched the ESG Calendar. This platform provides a one-stop resource for employees to stay informed about all company-wide ESG activities, lowering the barrier to entry. The ESG Points incentive system also continues to evolve; in the second quarter of 2026, new action items such as "using eco-friendly tableware" are scheduled to be added. These initiatives encourage more employees to integrate sustainability thinking into their daily lives, working together to become active participants and drivers of sustainable development. For more information about TSMC's ESG initiatives, please refer to the ESG website, Sustainability Report, ESG newsletter, and TSMC LinkedIn Social Platform.