Taishin FHC Corporate Social Responsibility Report 2019

61 Sustainable Finance 3-1 Strategies for Responding to Climate Change Climate Change Governance Global climate change issues continue to grow in importance and urgency. Extreme weath- er, natural disasters, the energy crisis, and the transition to a low-carbon economy all present various risks and opportunities. As consumers and investors become increasingly aware of corporate social responsibility, the demand for environmentally friendly goods and services and scrutiny of companies’ responses to environmental, social, and governance risks are also on the rise. In particular, every company in the financial services industry must pay heed to the question: Do the identified risks and opportunities of climate change have financial impacts? Positively monitoring the climate change and implementing the Task Force on Climate-related Financial Disclosures (TCFD): Globally, the companies increasingly pay attention to their capabilities to assess and understand climate-related risks and opportu- nities to make better decisions about their business as they move forward. In this context, the Financial Stability Board (FSB) published the Task Force on Climate-related Financial Disclosures (TCFD) in 2017, which offers suggestions for a risk management framework to expose how companies identify and manage climate factors as well as assess the financial impacts of those factors. Taishin closely follows the international trends and recognizes the challenges that climate change presents to the financial services industry, and these include three major challeng - es: ensuring that governance and leadership support enhances disclosure, revising risk assessment processes, and applying scenario analysis of financial relationships to climate change. In view of this, Taishin Financial Holdings initiated its first step for Task Force on Climate-related Financial Disclosures (TCFD) in 2018 and gradually integrated the financial connection ethos of climate change into its operating boundaries and clients of its financial commodity services in accordance with its structure and content. In 2019, we followed the TCFD strategy recommendations and gave priority to a 2°C climate change scenario simu- lation to see its impacts on the real estate industry and assess the financial impacts for Taishin Bank. The results of this quantitative financial analysis will form the foundation that informs our future climate thinking and operations on financial business and product services. We became a supporter of the Task Force on Climate-related Financial Disclosures (TCFD) in 2019: Taishin hopes to improve its capabilities to respond to climate change-re- lated physical and transitional risks by leveraging the TCFD architecture and continuously assessing climate-related risks and opportunities. In the future, Taishin will continue to strengthen its good relations with investors, stakeholders, and the general public and look forward to making better business decisions as a company moving forward to support the sustainable low-carbon economy. Actively participating in and responding to the Carbon Disclosure Project (CDP): Amid the challenges of global climate change and the clear goals of the Paris Agreement, Taishin has signed and pledged its support since 2015 to support the CDP and abides by the climate ques- tionnaire disclosure requirements to comply with the international trends of mitigation and adaptation. The disclosure rating for our 2019 questionnaire received a B score. The Board of Directors, Risk Management Committee, and Monthly Risk Management Meetings: The Board of Directors has ultimate responsibility for the company’s overall risk management. To manage risk-related issues effectively, Risk Management Committee, which shall have at least 2 independent directors, is set up under the Board of Directors. The Commit- tee is responsible for supervising the operations of the market, credit, and operational risk management mechanism, reviewing the risk management system, and mastering risk measurement methods and large risk exposure. Duties of the Committee mainly include the reviews of risk management policies, annual risk appetites or limits, periodic risk management integration reports, and the review or review of major risk management matters stipulated by other companies or competent authorities. Also, the Committee it convenes at least 2 meetings each year to discuss improving corporate governance effectiveness, risk management, and to assist the Board of Directors in reporting, controlling, and recommending risk management. Besides, Monthly Risk Management Meetings, held once a month, convened by the Chief Risk Officer. Corporate Social Responsibility Committee (CSR Committee): For the sustainable risk evaluation by top management, President of Taishin FHC serves as Chairman of the CSR Committee while CFO and the President of Taishin Bank both serve as the Vice Chairman. The annual CSR Report or major plans, including issues related to climate change, is executed to report to the Board of Directors. The executive committee members are also invited to partici- pate in regular Board Meetings, during which they may communicate with the board on CSR related issues. “Green Operations Team” and “Environmental Sustainability Committee”: In addition to creating a “Green Operations Team” under the CSR Committee, Taishin also assembled an “Environmental Sustainability Committee” in accordance with ISO 14001 and ISO 50001 that the head of Administration & Services Division serves as the convener. Responsibilities of the Committee are to assess and manage climate-related issues and provide resources relevant to maintaining the environment and energy management systems. The Environmental Sustain- ability Committee regularly reviews the appropriateness of existing environmental sustainability policies and monitors changes in environmental/energy performance and relevant indicators. Moreover, we are well-prepared to respond to potential emergency situations or climate-related issues through implementing action plans to manage our energy and the environment perfor- mances.