China Development Financial (hereinafter CDF) announced today, April 21, that it has joined SBTi, the Science Based Target initiative. Under the SBTi framework, CDF will follow a scientific process in order to implement a carbon reduction plan while adapting to finance business practices, and take measures towards sustainability in line with international standards.
CDF is the first financial holding company in Taiwan to make a formal commitment to reach net zero carbon emissions for its entire asset portfolio by 2045. CDF has established five key strategies and set quantitative targets following the direction established by the Net-Zero Banking Alliance, including a low-carbon transition roadmap following the U.N.-Convened Net Zero Asset Owner Alliance; establishing annual engagement targets and coverage ratios; establishing industry and sector objectives; establishing investment portfolio objectives, and also establishing transition objectives for CDF’s own operations. CDF has developed the Credible Net-zero Commitments under the United Nations Environment Program - Finance Initiative, and also taken measures and incorporated relevant strategies into the internal decision-making process to further integrate its net zero transition efforts and business development.
To track its carbon reduction progress more systematically, CDF has joined the SBTi, which is endorsed by the Carbon Disclosure Project, the United Nations Global Compact, the World Resources Institute, and the World Wide Fund for Nature, with the aim of supporting enterprises in reducing carbon emissions using scientific tools and methods. CDF and all subsidiaries will continue to work towards the carbon reduction targets at various stages, including refusal to provide new financing or investment to businesses in expanding coal mining, coal-fired power plants and coal infrastructure. CDF also plans to gradually decrease and eventually phase out in the investment and financing in the coal mining and unconventional oil and gas industries.
CDF's all subsidiaries have also established short-term carbon reduction targets and de-carbonization timeline, including starting a green power purchase plan and continuous increase in the percentage of green investment. CDF has completed the 2021 carbon inventory of 100% investment and financing positions of equity, debts, and corporate loans. For high-carbon business clients, CDF’s subsidiaries will proactively engage them for a low-carbon transition strategy via investment and financing plans. The subsidiary CDIB Capital Group took the lead by committing to exclude coal-fired and coal mining businesses from its own capital investment positions by the end of 2022. KGI Bank expects that its branches' electricity consumption will decrease by 10% by the end of 2022 (compared to 2020), with around five branches achieving carbon neutrality. China Life Insurance has incorporated TCFD framework to manage climate-related risks and took action to implement carbon reduction for its investment portfolios. It has also become the first company in the world to be certified with the "ISO 14097".
Richard Chang, CDF spokesperson, added that CDF has been included in the Dow Jones Sustainability Indices (DJSI) for two consecutive years and won the Bronze Award of the S&P Global Sustainability Yearbook 2022. This demonstrates CDF's net-zero transition efforts have been recognized by the international community. In the future, CDF will continue to improve its social influence as a financial institution, accelerate the low-carbon transition, and deepen its commitment to sustainability.