Sustainable Finance Aim for Net-Zero Economy
CDF has adopted five main ESG strategies, namely, Corporate Governance, Intelligent Finance, Elite Talent Development, Low-Carbon Economy, and Co-Creation of Society, in response to the Sustainable Development Goals (SDGs) released by the United Nations in 2015. In 2020, CDF's total assets reached NT$3.4 trillion with a consolidated profit of NT$12.55 billion and earnings per share (EPS) of NT$0.86. To make the idea of sustainable development a reality, CDF completed the second public acquisition of China Life Insurance Company Limited (China Life Insurance) in early February 2021. Now, CDF has a majority equity interest in China Life Insurance (56%). CDF is also aware that the young generation pays much attention to sustainable development issues. In recent years, young people have been active in expressing their ideas through startups or social enterprises. With more than 60 years of investment experience, CDF is poised to provide a full range of consulting and financial services for startups and social enterprises as part of our goal to achieve sustainable development.
In recognition of CDF's excellent performance in ESG projects in 2020, CDF was selected as a constituent of both DJSI World and DJSI Emerging Markets for the first time; CDF was also selected as a constituent of FTSE4Good Emerging Index and FTSE4Good TIP Taiwan ESG Index for a fourth consecutive year, of TWSE Corporate Governance 100 Index by TWSE, and of both TWSE RAFI® Taiwan High Compensation 100 Index and TWSE RA Taiwan Employment Creation 99 Index for a seventh consecutive year; it also ranked in the top 5% of TWSE/TPEx listed companies in the 6th Corporate Governance Evaluation Awards. In the 2020 Taiwan Corporate Sustainability Awards (TCSA), CDF was promoted to top 50 companies in the Corporate Comprehensive Performance Award and won the Growth through Innovation Awards and the Climate Leadership Awards for a second consecutive year.
According to the 2021 Global Risk Report released by the World Economic Forum (WEF) at the beginning of 2021, extreme weather and climate change remain the first and the second highest likelihood risks, respectively. Among the highest impact risks, infectious diseases are unsurprisingly in the top spot. A whirlwind of uncertainty landed on us in 2020 as the COVID-19 pandemic raged across the globe, coupled with political and economic turmoil and a worsening climate crisis. Businesses will be facing a multitude of challenges arising in the new normal after the pandemic.
To understand the impacts of climate change, it is imperative to keep track of international management trends and the accuracy of relevant analyses and to lower the threshold of risk assessment. In mid-2020, CDF worked with National Taiwan University, Chunghwa Telecom Company, Ltd., and Ernst & Young to forge the Resilience of Industries on Climate Change Enhancement (RICE), which aims to promote a four-party collaboration program using expertise and practice across the industry, finance, and academia. With Taiwan's most scientifically based and credible platform climate risk management database set up by National Taiwan University, Chunghwa Telecom Company, Ltd. is responsible for turning the platform into the cloud with state-of-the-art digital technologies; through the platform, CDF and Ernst & Young are able to share their financial and industrial experience with other companies in the industries. This can free the industries from investing resources repeatedly and also connect to the existing risk management framework more accurately and effectively. Responding to the Green Finance Action Plan 2.0 launched by the Financial Supervisory Commission, the Climate Resilience Practice Alliance is tasked to improve the financial industry's resilience and ability to manage the risks and opportunities of climate change. It also helps the industry exert its influence to push low-carbon transformation forward.
As the COVID-19 pandemic still casting a shadow over the world, it can be a catalyst for the growth of the biomedicine industry. Seeing the importance of the biomedicine industry and its potential for growth in the post-pandemic era, CDIB Capital Group launched the second NTD-denominated healthcare fund with the assets under management totaling NT$3.11 billion in 2020. As a domestic large-scale healthcare venture capital fund, CDIB Capital Healthcare Ventures II will exert its financial influence, with a focus on biotech and pharmaceuticals (including cell and gene therapy), med-tech and digital healthcare, along with broader biomedical and healthcare service sectors. The COVID-19 pandemic has brought severe challenges for the world society and economy. Whether it can recover from the pandemic in 2021 hinges on more investments in the biomedicine industry's R&D for breakthroughs.
CDF also attended the 2020 Taipei FinExpo. At the CDF Sustainability Pavilion, CDF focused on climate change issues and explained how the financial industry should do to tackle extreme weather; it also presented the results of its subsidiaries' business such as green finance, green investment, and inclusive finance. CDF worked with Pili, an investor of CDIB Capital Creative Industries Fund, to present the ESG results. Chen-Jung Chen, the winner of the Little Flying Elephant Project and the scholarship for skilled vocational high school students under China Development Foundation (now a student at Chaoyang University of Technology), drew a large six-frame comic, "Pili-endorsed ESG," featuring Su Huan-Jen. The comic was well received by the visitors at the exhibition.
CDF acknowledges that environmental, social, and corporate governance (ESG) are three central factors in measuring sustainability. CDF's business activities, whether the Climate Resilience Practice Alliance, subsidiaries' business or social welfare events, are all centered on sustainable development. CDF will strengthen the horizontal cooperation across subsidiaries to achieve synergy in the group. It will also step up the pace of digital transformation in hopes of becoming the most admired company and the ESG leader in the industry.