Responsible Investment
ESG and sustainability are central to our selection of investment prospects. Our execution with the highest integrity in governance ensures profitability and development of the target business.
Principles and Policies
CDF aligns with the UN Principals for Responsible Investment (UN PRI). Our major subsidiaries, including KGI Life Insurance, CDIB Capital Group, KGI Bank, KGI Securities, and KGI SITE are signatories to the "Stewardship Principles" of the Taiwan Stock Exchange Corporation and comply with its six main principles. We pursue ESG protocols and Stewardship Principles to motivate and encourage enterprises to fulfill their fair obligations of CSR. Put simply, an investment portfolio built on the PRI is not only potentially beneficial, but also offers a triple-win opportunity for the good of the environment, society, and corporate governance. In the meantime, to deepen the internal ESG core values, a new "Responsible Finance" working group was established in August 2020, responsible for planning the Group's sustainable financial blueprint and overseeing the implementation of responsible investment strategies and policy directions.
In order to implement the "Sustainable Development Goals" (SDGs) of the United Nations, CDF's subsidiaries, KGI Life, CDIB Capital, KGI Bank and KGI Securities, have stipulated their "Responsible Investment Policy," promulgated and implemented after the adoption by the Board of Directors in 2020 and 2021 (The highest governance unit for responsible investment policy is the board of directors). The ESG is incorporated as an important consideration in investment evaluation and management.
UN PRI CDF's Implementation
Incorporate ESG issues into investment analysis and decision-making processes
All major subsidiaries of CDF have established responsible investment policies, and ESG review conditions and standards (including Exclusion and Sector-Specific Standards), and ESG issues are taken into consideration in investment decisions.

Be active owners and incorporate ESG issues into our ownership policies and practices
All the major subsidiaries of CDF have signed the “Stewardship Principles” issued by the Taiwan Stock Exchange Corporation, and have formulated relevant protocols and voting policies to actively engage in ESG-themed conversations with investee companies, guiding them to reduce negative environmental and social impacts and explore opportunities for sustainable development.

Seek appropriate disclosure on ESG issues by the entities in which we invest
We review and pay attention to the material ESG issues of investee companies in accordance with local authorities' requirements for the disclosure on ESG issues, including but not limited to ESG reports and ethical corporate management best practice principles.

Promote acceptance and implementation of the PRI within the investment industry
For private equity funds yet to be the signatories of the Principles for Responsible Investment (PRI), investment teams shall indicate in the side letter that they are advised to refer to the PRI when evaluating potential deals.

Work together to enhance our effectiveness in implementing the PRI
In order to assist the financial industry to strengthen the risks brought about by climate change, CDF joined the Partnership for Carbon Accounting Financials (PCAF) in June 2023 to apply its financial asset carbon emission calculation methodology and database and assist corporate clients to promote low carbon transformation, in line with the “Green Finance Action Plan 3.0” proposed by the FSC and is committed to exerting financial influence.

Each report on our activities and progress towards implementing the PRI
In addition to regular disclosures on compliance with stewardship in accordance with “Stewardship Principles,” CDF and KGI Life Insurance share in ESG reports the implementation of responsible investment.


Assets managed by third parties CDF and its subsidiaries requires outsourcing institutions to follow the guidelines framework of each subsidiary's responsible investment policy, and to provide a complete description on the principles and implementation status of important ESG items such as environmental, social and corporate governance, and to regularly disclose the fulfillment of stewardship governance. In the meantime, confirm whether the companies of the invested bond funds and ETFs in which the subsidiaries invest are PRI signatories, or confirm their execution in ESG.

CDF's Responsible Investment Policies
We have integrated ESG issues with the Group's investment stewardship governance framework to form a responsible investment risk management framework at CDF. It establishes the six principals of responsible investment, " ESG Inclusion Principle ESG Integration Principles," "Conflict of Interest Management," " Specific Industry Policy Sector Specific RI Guidelines," " Negative Exclusion Policy Exclusion Policy," "Engagement Policy" and "Voting Policy." Further, the principals are launched for responsible investment in four subsidiaries, namely CDIB Capital Group, KGI Life Insurance, KGI Bank and KGI Securities. In accordance with the asset attributes and investment process of the four subsidiaries, each of them has formulated its own responsible investment policy to directly guide risk management and asset allocation. For different types of assets such as equity, fixed income, and private equity within the Group, shaping the overall process risk control before, during and after investment that suits its business characteristics.
UN PRI RI Guidelines Listed Equity Fixed Income Private Equity Derivative & Alternatives Property
Conflict of Interest Management
Establish mechanisms for information control, firewall design, segregation of duties, supervision and management, and reasonable remuneration to prevent conflicts of interest
Engagement Policy
  1. Target companies / projects with better performance in the ESG appraisal are included in the "Encourage-ment List" and can be given priority for investment under the same financial evaluation.
  2. Actively engage in ESG dialogues with investee companies, and through communica-tion with them, guide them to reduce their negative environmental and social impacts and identify opportunities for sustainable development. Investment teams shall ask the portfolio companies or deals for the cause, development and handling of incidents, if any, where they breach laws, undermine the Company's ESG policy, or damage the Company's long-term investment value.
ESG Incorporation Principles
Subsidiaries all formulate responsible investment policies, incorporating the investment-making decision procedures in ESG (environmental, social and corporate governance) sustainable management evaluation factors, and fulfill stewardship actions. Moreover, CDF and its subsidiaries have adopted via the Board of Directors in June 2022 and formulated the “Sustainable Finance Commitment”. The ESG issues have been incorporated as the key consideration factors of operations, evaluation and management. These consideration factors include:
  1. Environmental Factor: In principle, avoid investment engaging in high-pollution and high-carbon emission industries and draw attention to the energy and resource consumption of investment and GHG emission as well as other environmental issues.
  2. Social Factor: Avoid investment with controversial industries or products and services with negative impact on social welfare, in addition to drawing attention on the social issues such as the supply chain management, labor human rights, and labor relations.
  3. Corporate Governance Factor: Avoid incidents with specific evidence showing that the operations executed by the Board of the Directors in violation of the law, articles of incorporation, and resolutions made by the shareholders’ meetings, and those with material impact on shareholders or investors. Draw attention on corporate governance issues such as governance performance, reputation and legal compliance.
Exclusion Policy
  1. There are specific evidence to prove that industries involving pornography, drugs, money laundering, financing of terrorist activities, slave labor, child labor, or human rights violations
  2. Specific evidence to prove that the Board of Directors has violated laws, articles of association, resolutions of the shareholders' meeting and those who have a significant influence on the rights and interests of shareholders or investors.
Sector Specific RI Guidelines
Coal-mining or coal/thermal power plants that have been punished by competent authorities in the previous year for environmental pollution penalties should propose plans or improvement proofs
Voting Policy
In-principle disapproval for the proposals that impede the portfolio companies' sustainable development or corporate governance or violate ESG standards.
Assets Managed By Third Parties: Responsible Investment Approach
CDF requires outsourcing institutions to follow the guidelines framework of each subsidiary's responsible investment policy, and to provide a complete description on the principles and implementation status of important ESG items such as environmental, social and corporate governance, and to regularly disclose the fulfillment of stewardship governance. In the meantime, confirm whether the companies of the invested bond funds and ETFs in which the subsidiaries invest are PRI signatories, or confirm their execution in ESG.
KGI Life Insurance asks third-party asset owners to comply with the Company’s responsible investment policies and confirm if the bond funds and ETF constituents are signatories to PRI or consider ESG principles in managing assets among investment companies.
CDIB Capital Group Policy for Responsible Investment
KGI Bank Policy for Responsible Investment
KGI Life Insurance Policy for Responsible Investment
KGI Securities Policy for Responsible Investment
Process and Mechanism
Incorporating ESG criteria into investment analysis and decision-making processes
While investing, the Group takes into account ESG factors in target selection for management to make decisions and takes over stewardship to improve investment value and for sound development of both the Group and investee companies.
Responsible Investment Process
Steps and Process
Step 1-Screening
• Comply with the Principles for Responsible Investment (PRI) as the Group's responsible investment policy framework
• Create an exclusion list
• Review and assess sector-specific requirements
Step 2-Examination
• Incorporate financial and ESG criteria into the examination
• Conduct ESG due diligence on investment targets in dispute
• Hold investment review meetings
• Decide on the investment amount
Step 3-Management
• Analyze/review the gap during the investment
• Keep track of proposals that could adversely affect the sustainable development of investment targets or ESG principles
• Exercise the right to vote and disclose the votes at a shareholders' meeting
Step 4-Engagement
• Communicate with investment targets to assist them in reducing negative impacts on the environment and society and exploring opportunities for sustainable development
ESG Activity
Upholding transparent and honest two way communication, we immediately post ESG related activities on the website for all our stakeholders.