Green Finance

To respond to climate change and strengthen organisational resilience, we implement sustainable financial development strategies.

Green Finance Products

Green Investment

The general public is increasingly concerned with economic activities and the associated risks on the environment and natural resources as global climate change intensifies, giving rise to the concept of a low-carbon economy, which is considered to play a key role in maximizing long-term economic growth. Meanwhile, green investment has also emerged as a popular theme. CDF mainly invests in green industries with its two major subsidiaries, CDIB Capital and China Life, and actively responds to government policies. The total investment in 5+2 industrial transformation planamounted to NT$156.7 billion, of which nearly 80% of the investments are in green energy technology plus circular economy.

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The general public is increasingly concerned with economic activities and the associated risks on the environment and natural resources as global climate change intensifies, giving rise to the concept of a low-carbon economy, which is considered to play a key role in maximizing long-term economic growth. Meanwhile, green investment has also emerged as a popular theme. CDF mainly invests in green industries with its two major subsidiaries, CDIB Capital and China Life, and actively responds to government policies. The total investment in 5+2 industrial transformation plan amounted to NT$156.7 billion, of which nearly 80% of the investments are in green energy technology plus circular economy.

KGI Securities organized 41 equity capital raising cases in the capital market in 2021, raising around NT$35 billion. These included 15 environmental protection and green energy cases, accounting for about 36.5% of the number of cases organized in the year. The environmental protection and green energy funds raised more than NT$18 billion, accounting for about 52% of the funds raised in the current year.

KGI Securities participated in 7 domestic ESG-related underwriting or guidance cases in 2021 (including 5 green bonds, 1 sustainable bond and 1 social bond), with a total of NT$14.5 billion issued. China Life responded to the government’s green finance action plan 2.0 policy to promote green financial product development and invested in green bonds issued by TSMC and Ørsted to support the development of clean energy in Taiwan, with an investment amount of NT$2.3 billion. A total of NT$2.3 billion was investment to implement the ESG investment spirit through action. Apart from investing in domestic green bonds, China Life has invested NT$12.8 billion in foreign green bonds and Peruvian sustainable bonds

In 2020, KGI Securities managed 29 equity financing cases, raising over NT$ 22 billion, of which 12 were for environmental protection and green-energy companies, representing 41% of the total cases. The amount of equity fundraising for environmental protection and green-energy companies surpassed NT$ 9.8 billion or 45% of the total finance managed by KGI Securities; underwriting income from green-energy cases surpassed NT$ 80 million, accounting for approximately 31% of total underwriting income in 2020.

Green Credit

While considering large credit applications of over US$10 million in water-intensive and highly polluting industries, credit analysis has to consider various aspects of technology, market, finance, and environmental protection. Depending upon individual cases, additional conditions will be laid for loan sanction.

Incorporating the Equator Principle into "Credit Rating Checklist." If there is any dispute regarding environmental and labor-management issues, etc., the applicants will be deducted points under the operations/management categories, such as risk management, corporate governance, etc., in the Credit Rating Checklist, so as to reflect the operating risks involved.

Loans will not be granted to applicants who do not comply with environmental protection guidelines and have no concrete plans for making improvements. For existing clients, corrective actions are required to undertake. To help and encourage enterprises to strengthen environmental initiatives and fulfill their corporate social responsibilities, non-compliant companies deemed to have a serious impact on company operations and KGI Bank’s obligations will have their credit capped or progressively reduced.

Policy and Goal

To ensure that the organizational goals and key decisions in terms of environmental, social, and governance (ESG) practices are consistent with the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement, CDF adopts a top-down corporate governance structure. With effective policies, management systems, and controls in place, CDF integrates SDGs into the decision-making process to create a responsible banking business model in line with the Principles for Responsible Banking (PRB). CDF is also committed to promoting green finance through green project financing, green lending, and green bond underwriting in hopes of speeding up the transformation and sustainable development of the renewable energy industry in Taiwan.

Performance and Goal 2021

Action plan	Performance	Goal
Implement responsible investment and green finance, and incorporate ESG into investment decision actions.	China Life’s 100% of relevant investment decision research reports have included ESG assessments. China Life organized 2 internal ESG investment education and training events. China Life’s 81% of startup funds have signed PRI. China Life participated in the shareholders' meetings of listed investee companies, with a participation rate of more than 100%. China Life participated in 35 ESG investment related forums. KGI Securities participated in 7 domestic ESG-related underwriting or guidance cases, with a total of NT$14.5 billion issued. KGI Securities organized 41 equity capital raising cases, raising around NT$35 billion. These included 15 environmental protection and green energy cases, accounting for about 36.5% of the number of cases organized in the year. The environmental protection and green energy funds raised more than NT$18.0 billion, accounting for about 52% of the funds raised in the current year. Included Taiwan Corporate Governance 100 Index constituent stocks in the domestic stock and asset pool Factor pool entry assessment procedure incorporates ESG scores. According to the target of factor model entry, factor models are reviewed quarterly, and due diligence scores provided by professional institutions are included to evaluate the business operations of investee companies that violate ESG or those with unfavorable sustainable operation risks. We use the ESG database to regularly review the disputed event scores and ESG issues of Taiwanese stocks. When the disputed event scores of Taiwanese stocks decrease or are lower than a certain standard, the related matters shall be tracked and monitored.	Deepen sustainable investment management, regularly carry out carbon inventory of investment portfolios and formulate carbon reduction targets, and deepen discussions with investment targets Establish an ESG watch list for investee companies that involve environmental pollution, social disputes and corporate governance concerns, etc., and evaluate the relevant risks before investing in the targets on the watch list
Promote investments in the green industry	Nearly 80% of the investment in principal investments is invested in green energy technologies and circular economy of 5+2 industrial transformation plan China Life invested in green bonds issued by TSMC and Ørsted to support the development of clean energy in Taiwan, with an investment amount of NT$2.3 billion. China Life invested NT$12.8 billion in foreign green bonds and Peruvian sustainable bonds	Establishing climate response strategies and decarbonization strategy
Nurture businesses in smart technology or environmental innovations Aging population problem Support the development of the cultural & creative industry Foster innovating industries	OUR FUNDS CDIB Capital Growth Partners closed at NT$4.54 billion CDIB Capital Healthcare Ventures raised two health care funds in Taiwan with a total amount of NT$4.86 billion and CDIB Yida Healthcare Private Equity Enterprise with a total amount of RMB730 million CDIB Capital Creative Industries closed at NT$1.5 billion CDIB Capital Innovation Accelerator funding scale reached NT$1.29 billion.	Continue to explore investment projects in AI technology, environmental innovation, potential medicine, cultural and creative industries.
Promote green-energy upgrades and help raise funds for the green-energy-technology industry with compounded annual growth rate of 8%~10% for the next three years.	KGI Bank's 2021 green energy technology industry credit balance was NT$20,579 million. On May 18, 2021, KGI Bank issued Social Bond totaling NT$700 million. All the funds raised were used for the five types of social welfare plans to promote sustainable social development through our core competencies.	Inventory of ESG risks in credit facilities, deepen the introduction of the spirit of the Equator Principles, evaluate the establishment of exclusion industries , and strengthen negotiation with customers.

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Society

Whether it is charity programs, emergency aid, industry-academia cooperation, or talent cultivation, the core we focus on most will never change: the positive driving force that education brings to society.