NT$ Billion Growth in Green Investment and Lending, Participants Engaged in Sustainable Finance Related Activities in 2023
Sustainable Finance Policy and Practices
Sustainable Finance
Taipei Fubon Commercial Bank Co., Ltd. (hereinafter referred to as Taipei Fubon Bank or the Bank) aims to become a pioneer in sustainable finance. Internally, it continues to cultivate talent in sustainable finance, while externally leveraging the financial sector's capital influence to develop diverse sustainable financial products. The Bank actively collaborates with clients, encouraging businesses to pursue sustainable transformation.
Top in Taiwan's Market for Lead Underwriting of Green Energy Projects Syndicated Loans in 2022-2023
Green Investment Hits NT$ Billion in 2023
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Sustainable Finance
Sustainable FinanceSustainable Finance Policy and Commitment
Taipei Fubon Bank promotes sustainable development through its core business and consider sustainable finance as its long-term development. In line with the policies of Fubon Financial Holdings and international and industry trends, the Bank adheres to the Principles for Responsible Investment (PRI), Principles for Responsible Banking (PRB), Equator Principles (EP), and Stewardship Principles for Institutional Investors. The Bank has established the "Sustainable Loan and Investment Guidelines" and related operating procedures. Sustainability risk assessments are conducted before making investment and financing decisions, with considerations for environmental, social, and corporate governance issues. Additionally, the Bank has implemented comprehensive post-loan and post-investment management practices to support low-carbon transition and sustainable development.
Promotion of Sustainable Finance Business
The Responsible Finance Group within the Bank's Sustainability Task Force is responsible for implementing plans and goals related to sustainable finance and climate change response. To achieve the goals of sustainable finance, Taipei Fubon Bank integrates ESG risk management into the three lines of defense of internal control. The lending and investment units serve as the first line of defense, conducting analysis and assessment of ESG issues and credit. The risk management and legal compliance units, as the second line of defense, perform monitoring. Finally, the Board of Directors' auditing department, as the third line of defense, examine the analysis conducted by the first and second lines of defense.
Green Investment and Lending
In addition to strengthening ESG risk control, Taipei Fubon Bank also continues to use funds to support enterprises' green projects, assisting industry transformation. In 2023, the amount of green investment and lending increased by NT$87.2 billion.
Moreover, green investment and lending projects--such as green energy technology investment, low-carbon investment, green financing, green bonds--the Bank refers to ESG-related international ratings, regulatory requirements, industry characteristics and other indicators to establish clear definition standards. The Bank has formulated the "Institutional Banking Sustainable Development Credit Product Operation Guideline" to set norms and mechanisms for sustainable measurement indicators, review conditions and the use of fund, both the pre-lending and post-lending review, thereby avoiding greenwashing.
Green Investment and Financing Definitions
| Green Investment | Low-Carbon Investment, Green Energy Technology Investment, Green Bond Investment |
|---|---|
| Low-Carbon Investment | Foreign stock/bond investments in constituents of the MSCI ACWI Low Carbon Target Index |
| Green Energy Technology Investment | Domestic stock investments in solar photovoltaic industry, LED lighting industry, energy technology industry (hydrogen energy and fuel cells, energy ICT, biofuels, wind power, and electric vehicles) |
| Green Bonds | Domestic and foreign bonds that are qualified and approved as green bonds by the Taipei Exchange or comply with the Green Bond Principles (GBP) set by the International Capital Market Association (ICMA) |
| Green Financing | Sustainability-linked loans, green expenditure lending, and the "green electricity and renewable energy industry" among the six core strategic industries |
|---|---|
| Sustainability-Linked Loans | Through prior agreement with enterprises on the sustainability goals they must achieve (relevant sustainability goal measurement indicators should be set in accordance with relevant lending regulations), after enterprises meet the agreed conditions, they are given loan preferential treatment to encourage enterprises to implement sustainable development |
| Green Expenditures | The fund should be used for green expenditures that make a substantial contribution to environmental protection. Related documents, such as orders, invoices, contracts and other supporting documents, and fund flow controls (such as limiting the disbursed funds to be remitted to the corresponding seller's account) should be reviewed |
Sustainable Finance Promotion
Since 2022, the "Think ESG Master Forum" has been held, inviting experts from industry, government and academia to introduce important ESG trends and issues. Customers, the Bank's employees, and the Directors to participate online. This forum not only strengthens Taipei Fubon Bank's own ESG culture but also helps customers accumulate ESG-related knowledge and building capacity for sustainable transformation.
In 2023, a total of 1,405 participants took part in sustainable finance-related activities. Specifically for SMEs, the Bank collaborated with external sustainability consultants to hold 9 online lectures covering topics such as net-zero transition, supply chain transition, low-carbon, TCFD, etc., with Taipei Fubon Bank's relevant field professional colleagues serving as co-lecturers.
| Topic | Content | Target Audience | Number of Participants |
|---|---|---|---|
| Think ESG Team Meetings | 2050 Net-Zero Emissions Pathway Key Strategies - Vehicle Electrification and Decarbonization, Resource Recycling, and Zero Waste | Employees | 203 |
| 2050 Net-Zero Emissions Pathway Key Strategies - Hydrogen Industry Development and Business Opportunities, Carbon Capture Utilization and Storage | 164 | ||
| 2050 Net-Zero Emissions Pathway Key Strategies - Natural Carbon Sinks | 55 | ||
| Transition Finance - What to Do: Slight Green Commit, or Just Greenwashing? | 223 | ||
| Think ESG Master Forum | June - Welcoming the New Era of Net-Zero, Analyzing Carbon Management in Supply Chains (>>Learn more) | Corporate Customers and Employees | 364 |
| Pioneers in Building Sustainable Roads | March - Sustainability Reports; ESG and Net-Zero Carbon Emissions Trends Across Countries and Supply Chains | SMEs | 23 |
| April - Net Zero and Carbon Rights | 16 | ||
| May - Energy Saving Planning; Concrete Practices in Environmental and Social Responsibilities - Healthy Green Buildings | 16 | ||
| June - Energy Internet of Things and Virtual Power Plant Structure and Development; Global ESG Rating System Indicators | 10 | ||
| Sustainability Online Sharing Lectures for SMEs | August - How the Financial Industry Leads the Net-Zero Trend - Finding the Next Step for Enterprises from TCFD Reports | 127 | |
| September - How to Respond to the Net-Zero Transformation of Core Enterprise Supply Chains - Sustainable Business Opportunities and Challenges | 87 | ||
| October - In Addition to Products, Carbon is Also Needed - The Role of Carbon in Energy and Carbon Trading Trends | 53 | ||
| November - Sustainable Lending Mechanism Promotes Low - Carbon and Net-Zero Transformation | 28 | ||
| December - The Wave of Carbon Reduction is Coming - Analyzing International and Taiwan's Carbon Regulatory Trends | 36 | ||
| Total | 1,405 | ||
Corporate Customer ESG Survey
Since 2022, Taipei Fubon Bank has conducted ESG surveys for SMEs for two consecutive years, using quantitative analysis to accurately identify the sustainability issues that matter to them. The 2023 survey received responses from 1,158 companies. The results showed that as high as 62% of the respondent companies were most concerned about "Taiwan's sustainable development related policies," followed by issues such as "net-zero emissions" and "carbon border adjustment tax/carbon fee/carbon rights," "impact of climate change on enterprises," "corporate green transformation," and "green energy and renewable energy." The relevant survey results will be used to build an internal ESG database and serve as a reference for Taipei Fubon Bank to develop sustainable financial products and services.
Responsible Lending
Taipei Fubon Bank conducts its lending business based on the five principles of safety, liquidity, public interest, profitability and growth. Under the existing credit risk assessment mechanism and loan control mechanism, sustainability risks are incorporated into the overall credit review and assessment process.
Sustainable Lending Credit Review Process
In 2023, Taipei Fubon Bank established the "Sustainable Loan Management Program." All corporate banking credit cases (including those required to comply with the Equator Principles and other project financing cases) must undergo sustainable lending ESG inspections. Cases that meet the requirements of Equator Principles will be assessed for project environmental and social risk levels by the Bank's Equator Principles Project Assessment Team.
To integrate sustainable lending related regulations and optimize sustainable lending assessment forms, the Bank has also updated the "Sustainable Loan and Investment Guidelines." This revision implements sustainability risk assessment for lending business, analyzing the potential impacts on the Bank and its subsidiaries in terms of environmental sustainability, social responsibility, and corporate governance (ESG) risks. It incorporates climate change impact factors into daily operations, strategic planning, and decision-making processes, while regularly reviewing risk response mechanisms and developing risk management measures.
Compliance with the Equator Principles
In December 2017, Taipei Fubon Bank became a member bank of the Equator Principles Association, assessing the impact of large project financing cases on the environment and society with reference to the Equator Principles guidelines and the International Finance Corporation (IFC) Performance Standards. For cases subject to the Equator Principles, the business unit should provide relevant explanations regarding applicability in the "ESG Assessment Checklist." Before applying to related business, the business unit is also required to explain the content and regulations of the Equator Principles to the customer, confirm their willingness to comply, and provide corresponding assistance to ensure they meet the requirements both before applying for business and during the business relationship. In 2023, Taipei Fubon Bank undertook a total of ten Equator Principles cases.
Learn morePersonal Credit
For personal credit, Taipei Fubon Bank has established ESG risk factor control mechanisms for environmental and social aspects. Money laundering and terrorist financing risk assessments are conducted for all personal credit cases, while climate risk assessments are conducted for personal mortgage credit cases. To strengthen the prevention of nominee accounts and real estate speculation, the borrower's identity background and financial information are reviewed before credit approval, and the flow of loan funds is monitored after credit approval. Transaction records of third parties making payments for multiple borrowers using the same mortgage account are regularly reviewed.
Sustainable Related Corporate Financial Products and Services
Taipei Fubon Bank continues to launch diverse sustainable financial products and services. In the area of green financing, since 2018, the Bank has provided projects for renewable energy financing exceeding 5,800MW. The Bank also achieved the distinction of being the leading Taiwanese bank in both the number and amount of offshore wind power credit cases. In 2022, the Bank became the first Taiwanese bank to undertake third-party certified syndicated Green Loan, syndicated Social Loan, and Sustainability-linked Loans (SLL). The Bank also launched Taiwan's first Sustainable Supply Chain Finance (SSCF) collaboration project.
Sustainable Use-of-Proceeds (UoP) Bonds
Since issuing its first green bond in 2018, Taipei Fubon Bank issued its first sustainability bond and social responsibility bond in 2021, committed to supporting enterprises that aim for sustainable transformation and net-zero carbon emissions, and continues to use funds to create positive influence for society.
In 2023, Taipei Fubon Bank issued NT$2.3 billion in social responsibility bonds. Funds are provided for SMEs, micro-enterprises and enterprises experiencing operational difficulties due to the pandemic, with the aim of stabilizing employment and promoting economic development A total of 687 SMEs and micro-enterprises benefited, while 6,487 individuals received support from the relief project.
Green Energy Project Financing
Taipei Fubon Bank's green energy project financing strategy focuses on various types of renewable energy, including solar photovoltaics (both ground-mounted and fishery-electricity symbiosis), onshore wind power, offshore wind power, as well as energy storage fields. In 2023, the Bank led ten green energy projects for financing syndicated loans, with a total financing amount of NT$155.1 billion and an installed capacity of 1,914MW at the project sites. It further achieved the distinction of being the leading Taiwanese bank in terms of syndicated loan amount in the Taiwan green energy project financing market in 2022 and 2023.
Taipei Fubon Bank led the way among Taiwanese banks and entered the Taiwan offshore wind power financing market in 2018. As of the end of 2023, Taipei Fubon Bank has completed seven projects with a cumulative installed capacity of 3.69GW for offshore wind power financing, contributing to a reduction in carbon emissions by approximately 6.47 million metric tons per year. In 2023, the Bank further coordinated and led the financing of the Hai Long offshore wind power project, ranking first among domestic banks in both the financing amount and number of cases undertaken. Among Taiwanese banks, the Bank's market share exceeded 20%. It also played key roles such as a financial advisor, coordinating lead bank, limit management agent, and lead bank for foreign exchange hedging, securing a leading position in Taiwan's offshore wind power financing market.
Sustainability-Linked Loans
To support corporate sustainable transformation, Taipei Fubon Bank actively signs sustainability-linked loans with enterprises, evaluating their ESG performance of the applicant enterprises based on sustainability performance. The Bank also incorporates industry features to formulate loan indicators, encouraging enterprises to establish long-term sustainable management policies. Sustainability-linked loans use indicators such as carbon emissions, air pollutant control, waste intensity, renewable energy installed capacity to measure sustainability. If enterprises meet the targets, they can obtain preferential interest rate reductions, thereby encouraging corporate customers to further refine their sustainability practices. In 2023, Taipei Fubon Bank signed sustainability-linked loans with multiple companies such as Wistron Corporation, Innolux Corporation, and Chailease International Leasing Co., Ltd (Vietnam), continuing to expand the co-prosperity ecosystem of sustainable finance.
Sustainable Supply Chain Finance
To achieve the net-zero carbon emissions target, large enterprises in various countries are not only actively reducing their operational carbon emissions (Scope 1 and Scope 2) but are also successively planning green supply chains to lower carbon emissions across their upstream and downstream value chains (Scope 3).
To help enterprises increase supplier participation and encourage the implementation of sustainable practices, Taipei Fubon Bank actively develops sustainable supply chain finance, providing clear sustainability indicators and corresponding financial incentive measures. Through financing products linked to sustainability indicators, suppliers who meet these criteria can enjoy preferential interest rates. This approach motivates suppliers to adopt more proactive sustainable practices, thereby enhancing the long-term competitiveness of the industry.
Green Financial Advisory Services
In addition to launching green finance-related financial products, Taipei Fubon Bank also actively develops green financial advisory services. With extensive experience in project financing and structured financing, the Bank provides customers with multi-faceted services including M&A consulting, valuation, transaction structure design, and financing. It offers ESG strategies and sustainable transformation solutions, working hand in hand with customers toward low-carbon development. For example, in the NT$15.8 billion syndicated loan case for SunnyRich Multifunction Solar Power Co., Ltd. in January 2024, Taipei Fubon Bank not only served as a co-coordinating lead bank but also acted as a financial advisor. The Bank assisted the Sunny Rich Group in structuring syndicated loan conditions and coordinating discussions with the bank, successfully completing this major milestone, achieving a win-win outcome for financial, corporate, and social sustainable development.
Responsible Investment
Taipei Fubon Bank includes ESG factors to the investment decision-making process, fulfilling the responsibilities of institutional investors and practicing sustainable finance through the influence of funds. Before making an investment, an inspection must be conducted on the investment targets in accordance with the Bank's “Sustainable Loan and Investment Guidelines.” At the same time, according to the Bank's "Securities Responsible Investment and Transaction Sustainability Risk Assessment Operating Guidelines," an evaluation must be conducted to ensure that the target enterprise's ESG rating by an external professional organization meets the Bank's standards, that it participates in international initiatives, and that it is included in sustainability-related indices, before submitting an investment application.
For portfolio positions with ESG ratings that do not meet the established standards, the Bank conducts annual ESG risk assessments. Based on the assessment results, the Bank decides on actions such as continued observation and monitoring, position reduction, temporary suspension of engagement, or active engagement to strengthen the sustainable risk management of securities investments.
Responsible Investment Assessment Process
Responsible Investment Performance
Following the "Decarbonization" climate change action strategy, Taipei Fubon Bank supports green energy development and invest in low-carbon index constituent stocks, green energy technology and alternative energy related industries, and green bonds. The Bank seeks companies with emerging development potential or successful transformation to enhance investment returns while supporting corporate sustainable transformation. In 2023, the Bank's green investment amount was NT$321.3 billion (an increase of NT$6.8 billion compared to NT$314.5 billion in 2022).
