台新金控

Taishin’s responsible investment and lending in sustainable finance are implemented mainly in six pillars: “Corporate Banking”, “Consumer Banking”, “Project Finance”, “Advisory Business”, “Asset Management”, and “Insurance”. By these pillars, we disclosed the ESG-related products/services and the performances for each category are listed. All related businesses are assessed the ESG risks in terms of 100% of transaction activities and financial products. Assessment of environmental and social risks is incorporated in each financing and investment policy, which applies to all subsidiaries.

Revenue breakdown for each business category (Unit: %)

In the evaluation and review of wholesale banking loans, all applied loans are checked against the ESG Checklist and against the business driving rules listed in our Sustainable Finance Policy to determine whether the applicant’s business is associated with industries that can be actively supported, trading partners or contents that are prohibited or high carbon emission industries with whom direct cooperation should be avoided or that require prudent assessment. In addition, our credit review takes into consideration whether the applicant’s company has addressed environmental and social issues by setting goals and conducting follow-up management. For climate or socially/environmentally sensitive industries (six industries: Real-Estate Development Activities, Electronic Parts and Components Manufacturing, Electricity Supply, Manufacture of Electrical Equipment, Manufacture of Basic Metals, and Manufacture of Chemical Material), a review of specific social and environmental issues is required. Given the decarbonization strategy developed in response to climate change trends, prudent assessment must be conducted on businesses involving specific coal-related business and unconventional oil & gas.

Process of Wholesale Banking Loan Application

With respect to sustainable financing and lending, Taishin is committed to strengthening the application of all aspects in response to environmental concerns (climate change and sustainability), and actively supports international trends and government policies. With reference to international ESG regulations, Taishin has developed sustainability-linked loan schemes, worked with clients to set sustainability-related indicators, and adopted market mechanisms to direct funds into sustainable development. Clients who meet the relevant criteria are offered special interest rates. This incentive helps clients to achieve sustainability transition and become more aware of their responsibilities toward sustainability. In 2023, we approved 75 applications for sustainability-linked loans. Other ESG products available to corporate clients include loans for electricity generation from renewable energy, loans for sustainable infrastructure, and loans for ESG industries, all of which support green and sustainability-related industries. By offering ESG-related products, we hope to exert the influence of the financial industry and contribute to sustainability.

Retail banking services related to ESG include loans for low-carbon transportation, personal online loans, and investment products that meet the spirit of ESG such as funds, stocks and offshore ETF. When processing personal loan applications, Taishin Bank conducts detailed assessments on the needs and financial capabilities of each applicant and approves credit limits accordingly. In engaging with customers on ESG related risks and opportunities, 100% of borrowers must be subject to credit check and review to ascertain their financial status. Environmental and social-related factors are incorporated and considered in the review of loan applications, for example the business involving in following activities will be denied: those included in the AML/CFT sanction lists, sale and manufacturing of illegal weapons, illegal gambling, pornography, narcotics, or environmentally/ecologically destructive activities that refuse to undergo environmental impact assessment, or illegal poaching of animals. Therefore, in the process of understanding ESG-related risks and opportunities with customers, all financing customers are required to conduct personal credit reports and guarantees to fully understand the customer's financial status.

Process for Retail Consumer Lending

Taishin Bank actively promotes its diversified retail banking businesses with the aim for green lifestyle.

Taishin Bank has been adopting the spirit of the Equator Principles since 2015. When an applicant applies for a loan for a project, we conduct an investigation into the applicant or the project location and disclose the social/environmental risk investigation results. Our findings also serve as the basis for our decision-making. In 2019, Taishin Bank became a signatory to the Equator Principles, becoming an official member of the Equator Principles Association. A task force was established by our Wholesale Credit Administration Division, an external professional consultant was hired to assist with interviews and inspections, and the “Directions for Financing Cases under Equator Principles” and the “Environmental and Social Risk Assessment Form” for project evaluation were implemented and adopted after our sales and review units were trained on it multiple times.

Projects to be financed under the Equator Principles are evaluated as follows: Risk factors related to environmental sensitivity, ecology, environmental pollution, community, labor, regulations and management mechanisms are rated and classified. If a loan application is classified as A or B as defined by the Equator Principles, we ensure compliance through independent, third-party experts for environmental and social risk assessment report provided to Wholesale Credit Administration Division for review. If a loan has been approved for a project, items requiring follow-up and monitoring must be examined regularly. When non-compliance is detected, the client shall provide an improvement plan, otherwise Taishin Bank can request the client to repay the loan in full. The evaluation procedures are adopted after the sales and review units have been trained on it a number of times.

In 2023, there will be a total of 9 project finance or project-related credit cases that are 100% in line with the definition of the Equator Principles, with a total loan application amount of NT$8.4 billion. Review results: 5 cases were approved, 2 cases were conditionally approved, and 2 cases were rejected. The rejected cases were from the power supply industry, with a total application amount of NT$1.8 billion. The reason for rejection was that the risk of undertaking the work was too high after assessment.

The sustainable advisory business of Taishin is focused on underwriting ESG bonds issued by financial industry and enterprises.

Taishin also assists with raising capital for companies in the ESG sector (e.g., sustainable manufacturing, environmental protection). Since 2020, we have assisted 78 companies (48 companies in total between 2022 and 2023) and raised a cumulative capital of NT$24.928 billion. In 2023, we assisted with raising capital for 19 companies.

As an asset manager, Taishin Securities Investment Trust reduces the ESG risks of all its investments by responsibly using the “TSIT Green Finance Assessment Form”, and created documents for risk review for various categories of assets and industries. The following industries are completely excluded from investments by Taishin: (1) Industries associated with tobacco, alcoholic beverages, gambling (including unlicensed and online operators), or confirmed to have caused harm to human health as a result of food safety incident, radioactive substance, or genetic engineering; (2) generating high levels of pollution, failure to comply with local environmental regulations, and are unable to propose feasible improvements solutions; (3) illegal activities; (4) violations of human rights; and (5) controversial nature, which we will avoid direct investment.

Taishin Securities Investment Trust complies with the principles for Socially Responsible Investment (SRI). When managing discretionary accounts for Taiwan equity funds and state funds, Taishin Securities Investment Trust includes ESG compliant businesses on the main list (stock pool) and gives priority to choosing ESG compliant businesses in the stock pool to invest in. The Main List is reviewed and updated on a quarterly basis. Taishin has incorporated ESG screening into its fund portfolio to strengthen the impact of investing, thus enabling citizens to invest their wealth while supporting global climate actions and ESG-conforming companies.

Taishin Life Insurance has adjusted its ESG review procedures to align with the ESG rules prescribed in the Taishin FHC Sustainable Finance Policy. In planning investment-lined insurance products (including discretionary investment account and mutual funds), all products have been reviewed through pre-sale procedures before launch for sale, with ESG practices being one of the items reviewed. Meanwhile, information from independent, third-party sources such as Morningstar as well as ESG scores are referenced to perform product screening and evaluation. In 2023, Taishin Life Insurance has launched 179 mutual funds in total. ESG policies for each fund have been certified and explained by their respective fund management company, and reviewed and approved by Taishin Life Insurance’s Product Evaluation Team (PET).