Sustainability Risk Management

The Equator Principles
The Equator Principles
The Equator Principles
  • Equator Principles Compliance
    Equator Principles Compliance

    •The Equator Principles

    The Equator Principles (EPs) is a risk management framework, issued by the Equator Principles Association and adopted by financial institutions, as a standard for determining, assessing and managing environmental and social risk in projects to be financed. The EPs apply globally to all industry sectors.

    •Equator Principles Adoption

    Adopting the EPs has been an important element of the ESG (Environment, Social and Governance) policy formulated by Taipei Fubon Commercial Bank (TFB), and joining the Equator Principles Association, planned in July 2015 and completed in December 2017, embodies TFB’s commitments in environmental protection and corporate social responsibility.

    http://equator-principles.com/

    •Requirements for the EPs Compliance

    TFB has amended the credit policies and the related operating procedures to incorporate the EPs into the credit risk management framework, and the required procedures for the EPs compliance are presented below:
    Step1 Categorization
    Each credit application to which the EPs apply should be classified into one of the following categories:
    • Category A:projects with potential significant adverse environmental
      and social risks and/or impacts that are diverse, irreversible or
      unprecedented;
    • Category B:projects with potential limited adverse environmental and
      social risks and/or impacts that are few in number, generally
      site-specific, largely reversible and readily addressed through mitigation measures;
    • Category C:projects with minimal or no adverse environmental and
      social risks and/or impacts.
    The additional procedures listed below are required for the Category A and Category B, and may be waived for the Category C.
    Step2 Additional Requirements for Credit Assessment
    For the Category A and Category B, the additional requirements for due
    diligence and document reviews to comply with the EPs include:
    • Assessments for environmental and social risks and/or impacts
      conducted by an independent third party acceptable to TFB;
    • Site Visits;
    • Covenants to comply with the EPs included in the loan related
      agreements;
    • Monitoring and reporting for the required environmental and social risk
      items according to the approved terms and conditions.
    Step3 Credit Approval
    The results of the environmental and social risk assessment for each credit application are included in the consideration for approval.
    Step4 Additional Requirements for Loan Agreements
    For the Category A and Category B, covenants to comply with the EPs are required to be included in the loan related agreements for the EPs
    compliance.
    Step5 Additional Requirements for Credit Reviews
    For the Category A and Category B, monitoring and reporting procedures
    for the required environmental and social risk items should be performed
    to comply with the EPs, and clients should provide the related information
    according to the EPs transparency requirements.


    •Roles and Responsibilities in the Required Procedures for the EPs
    Compliance

    To implement guidelines established for the EPs compliance, roles and
    responsibilities in the required procedures are presented as follows:



    •Training for the EPs

    In July 2017, TFB engaged external consultants for joining the Equator
    Principles Association,an important goal under the ESG policy,and the kick-off
    meeting was held accordingly to provide an introduction of the EPs and the
    timeline for the EPs implementation to the institutional banking marketing
    units, credit officers, and other related departments. In the process of
    incorporating the EPs into TFB’s credit policies, 6 special meetings for cross
    department communication were arranged to evaluate the impact of the EPs
    implementation. According to the credit policies and operating procedures
    amended for the EPs compliance in April 2018, the applications to which the
    EPs apply are required to identify, evaluate, and categorize the environmental
    and social risks for approval, and the monitoring and reporting procedures
    should be performed based on the approved terms and conditions.
    Furthermore, 2 large-scale internal training courses were available to all
    domestic and overseas institutional banking marketing units, credit officers,
    and other related departments in May 2018 to provide detailed explanations to the EPs requirements and the amended policies. More training programs for
    the EPs would be developed in order to mitigate the impact of the projects on
    environment and society, and to promote the importance of environment
    protection and corporate social responsibility to our clients.

  • EPs Transaction Statistics
    EPs Transaction Statistics

    •Project Finance Advisory Services

    Total number mandated in 2017 2017
    0
    • By Sector
    Mining 0
    Infrastructure 0
    Oil & Gas 0
    Power 0
    Others 0
    • By Region
    Americas 0
    Europe, Middle East and Africa 0
    Asia Pacific 0


    •Project Finance

    Total number closed in 2017 2017
    Category
    A
    Category
    B
    Category
    C
    000
    •By Sector
    Mining 0 0 0
    Infrastructure 0 0 0
    Oil & Gas 0 0 0
    Power 0 0 0
    Others 0 0 0
    •By Region
    Americas 0 0 0
    Europe, Middle East and Africa 0 0 0
    Asia Pacific 0 0 0
    •By Country Designation
    Designated Country 0 0 0
    Non-designated Country 0 0 0
    •Independent Review
    Required 0 0 -
    Not-required - - 0

    Project Name/Code Sector Host Country
    N/A N/A N/A

    •Project-related Corporate Loans

    Total number closed in 2017 2017
    Category
    A
    Category
    B
    Category
    C
    000
    •By Sector
    Mining 0 0 0
    Infrastructure 0 0 0
    Oil & Gas 0 0 0
    Power 0 0 0
    Others 0 0 0
    •By Region
    Americas 0 0 0
    Europe, Middle East and Africa 0 0 0
    Asia Pacific 0 0 0
    •By Country Designation
    Designated Country 0 0 0
    Non-designated Country 0 0 0
    •Independent Review
    Required 0 0 -
    Not-required - - 0