關於台新金控

Sustainable Finance

TCFD framework implementation

Taishin's ongoing attention to global trends and challenges presented to the financial service industry due to climate change has enabled the organization to identify 3 main challenges relating to this framework: enhanced governance and disclosure support from the management, amendment of risk assessment procedures, and applying scenario analysis and associating financial impacts with climate change. Despite the challenges involved, Taishin Financial Holdings still decided to adopt the TCFD framework and associate financial impacts of climate change with all boundaries, products, services and customers in Taishin's operations in 2018.

Taishin became a signed supporter of TCFD in January 2019: By adopting the TCFD framework, Taishin hopes to improve its response and adaptability with respect to climate change, and continually assess and identify the risks and opportunities associated with changing climates. In the future, Taishin will aim to strengthen its relationship with investors, stakeholders and the general public, and make better business decisions while at the same time support development of a fair, orderly market as well as a sustainable low-carbon economy.

Taishin FHC Implemented TCFD framework for Climate Change Governance, Climate Change Strategies, Management of Risks and Opportunities:

Governance

Board of Directors, Risk Management Committee, Monthly Risk Management Meetings, CSR Committee, “Green Operations” Team and “Environmental Sustainability Committee”

Strategies

With respect to climate change strategy, Taishin is adopting more efficient ways of measuring and calculating short/medium/long-term risks that the organization, the suppliers and customers are facing, so that investment decisions can be adjusted accordingly.

Management of Risks and Opportunities

In 2016, Taishin revised its “Risk Management Policy” and introduced a new management goal that “… take into consideration all economic, social and environmental risks associated with climate change and corporate sustainability…” in an attempt to address the rise in climate change risk. In 2018, the policy was further revised to include sustainability factors such as climate change risk in the risk management process, in addition to credit, market, operational and liquidity risks, and thereby minimize risk impacts to the Group.

Responsible Investments and Products

Taishin supports the United Nation's "Sustainable Development Goals" (SDGs) to the ongoing decommissioning of nuclear power, energy transformation, and carbon reduction policies in Taiwan. Taishin contributes to the above initiatives by providing active financial support to businesses involved in renewable energy, energy conservation technology, and environmental protection. By directing capital towards green energy and related technologies, we hope to lead businesses in a pursuit for low-carbon economy and sustainable growth.

Establishment of "Green Finance Principles": As green finance emerged to become a prominent trend in the world's financial industry, Taishin FHC established "Green Finance Principles" in 2018 by referencing some important global principles, such as the International Finance Corporation (IFC) exclusion list and the UN Global Compact. This principle applies to all subsidiaries within the group for governing commercial activities. The Principle clearly outlines which businesses to actively support and what controversial corporates to be avoided, and emphasize the importance of incorporating ESG risks into transaction review and post-transaction management. The Company and subsidiaries have adjusted policies or procedures in accordance with the Green Finance Principles, which covered 8 policies and 13 business review processes involving retail banking, wholesale banking, securities, venture capital and investment trust. In the future, Taishin will strive to increase the ratio for ESG products and services as a response to investors' and customers' expectation.

Taishin offers products with sustainable finance and responsible investment themes in three different categories: “Investment/Wholesale Banking”, “Asset Management” and “Retail Banking Service.” According to “Taishin Financial Holdings Green Finance Principles”, 100% of transaction activities and financial products are subject to ESG risk assessment, whereas all subsidiaries are required to incorporate environmental and social risk evaluations as part of their financing and investment policies.

Green Credit Action

Taishin Bank has been adopting the spirit of Equator Principles since 2015. All new loan applications and all existing credit cases requesting for limit increase or change of terms are required to complete a "Project Financing Application Social/Environmental Risk Investigation and Disclosure Worksheet" (also known as “CSR Worksheet”) to check if the application satisfies the criteria. For loans that satisfy the criteria of project financing, Taishin Bank will also investigate and ask to disclose possible exposure on environmental and social risks, including pollution, use of raw materials, false advertising, and violation against labor regulations, given the applicant's status or the location of the financed project.

Financing of Green Energy and Environmental Protection Industries

Taishin Bank has been supporting the government's "5+2 Industry Project" since 2016 by actively lending to the 7 highlighted industries. In 2018, credit outstanding from the above industries amounted to TWD 116.3 billion. The Bank made a total of 1,756 loans to the green energy and environmental protection industry, representing a growth of 7%. Such margin trading as solar power plants and green energy businesses make up a significant percentage of the overall credit balance, and the Bank offers additional performance scores as a means to encourage the business unit in sourcing such cases.

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