台新金控

Development of Related Rules for Principles of Responsible Investment

To fulfill requirements for responsible investment, Taishin FHC actively complies with the six major principles of Principles for Responsible Investment (PRI) initiated from United Nations as the basis for operations and disclosure to ensure that investees implement environmental protection, corporate social responsibility, and corporate governance. Taishin Bank established the "Stewardship Principles for Institutional Investors" in accordance with the PRI to create voting policies for the management. Taishin Bank discloses its participation and votes in the shareholders' meeting of investees and the Stewardship Report each year. Taishin FHC continues to monitor news regarding investees as well as their financial performance, environmental protection practices, social responsibility, labor rights, and corporate governance issues. We also engage them in dialogue and interactions through appropriate channels. Taishin Securities Investment Trust published the Statement of Compliance with Stewardship Principles for Institutional Investors in 2016 and Taishin Securities also established the "Stewardship Policy" in 2018. They disclose their stewardship implementation status to customers or beneficiaries on a regular or ad hoc basis (e.g., participation in votes of shareholders' meetings of investees and the Stewardship Report). They also continue to pay close attention to the communication and management of investees and disclosure of stewardship reports.

Establishment of Green Finance Principles

Taishin FHC established the "Green Finance Principles" in 2018 in accordance with important international norms such as the exclusion list of the International Finance Corporation (IFC) and the UN Global Compact. The Principles apply to all subsidiaries and business operations of the Group. They specify the targets that should be supported or avoided, and emphasized that ESG risk management must be included in transaction reviews and post-transaction management. Taishin and its subsidiaries have adjusted related business rules or procedures in accordance with the Green Finance Principles including adjustments of 13 rules for retail banking, wholesale banking, securities, venture capital, and investment trust, and 17 business review procedures based on business requirements.

Taishin promotes and continues to implement sustainable finance in accordance with the Taishin FHC “Green Finance Principles”, encompassing all subsidiaries. The Company also conducts ESG risk assessments on 100% of the transactions and financial products. In 2022, the Green Finance Assessment Worksheet or ESG evaluation/review covers 100% of financial products and services.

Signed and Adopted the Equator Principles

Taishin Bank has implemented reviews on new, existing credit cases requesting for limit increase or change of terms loan applications based on the Equator Principles (EPs) since 2015. When the Bank reviews an application that meets requirements for project financing, the Bank is required to investigate and disclose environmental and social risks of the applicant or the place of the project as the basis for evaluating the application. Taishin Bank officially signed the Equator Principles and joined the Equator Principles Association in 2019. The Wholesale Credit Administration Division established a specific team and appointed an external professional institution to serve as a consultant for interviews and reviews of the credit extension process. We formulated the "Guidelines for Loan Applications Applicable to the Equator Principles" and the "Environmental and Social Risk Assessment Form " for evaluating cases. The evaluation of financing projects based on Equator Principles include risk ratings for environmental sensitivity, ecology, environmental pollution, communities, labor, regulations, and management mechanisms. We also implement the Principles through multiple rounds of education and awareness campaigns for the business and review units.

The Announcement of Environmental and Social Risk Management Sector Guidelines

Taishin FHC conducted a comprehensive evaluation of the environmental and social risk ratings of the industries in investment and loans and identified five major industries including the "Manufacture of Basic Metals", "Power Supply", "Chemical Materials Manufacturing", "Manufacture of Electronic Parts and Components", and "Manufacture of Electric Equipment" in 2019. Taishin then announced the "Environmental and Social Risk Management Sector Guidelines" (hereinafter referred to as the "Guidelines") in 2020. The contents of the Guidelines were an expansion of the "Green Finance Principles" established in 2018 and included Taishin FHC's expectations and requirements on human rights protection and climate change. We identified significant environmental and social risks by industry-specific and provided an assessment framework with best practices to to evaluate the structures. By understanding the appropriateness of our partner's management of major environmental and social issues to improve our decision-making foundation.