Achieving The Principles for Responsible Investment
In response to the UN’s Principles for Responsible Investment, the company has continued to strengthen relevant responsible investment mechanisms from the three perspectives of policy, product, and individual investments, in order to maintain long-term and stable investment performance.
An overview of our three-pronged approach, including progress achieved as of 2018, is presented below.
ESG Investment Mechanism
ESG action plans continued to be strengthened and integrated in 2018. Once this was done, ESG investment mechanisms were established in hopes of fulfilling the goal of promoting sustainable development for investments and peers in the financial industry, through use of ESG evaluation mechanisms and theme-based investment.More About ESG Investment Mechanism >
Three major aspects of the investment mechanism
In 2018, Fubon Financial Holdings continued to implement ESG action plans and pay attention to whether investments fulfill social responsibility. This included whether there are environmental pollution incidents, food safety issues, or labor disputes, as well as evaluating these issues when making investments. The Company also established a Blacklist through external resources and, following procedural evaluation, added countries that violate human rights, fund terrorism, or have serious AML issues onto the ESG Blacklist.
Furthermore, Fubon Life, Taipei Fubon Bank, Fubon Insurance, Fubon Securities and Fubon Asset Management have signed the Stewardship Principles for Institutional Investors. These subsidiaries will continue to pay attention to relevant news, environmental protection efforts, corporate responsibility, labor rights, and corporate governance of invested companies; they will also continue to strengthen negotiations and exercise of active ownership, to protect the interests of customers and shareholders.
Outsourcing Institutions and Peers in The Financial Industry
We require that outsourcing institutions also follow the Company’s Blacklist. We also ensure that the corporations behind bonds and the ETFs the Company invests in are PRI signatories, or ensure that they implement ESG, in order to facilitate the acceptance and implementation of PRI principles in the investment industry.
ESG Theme-Based Investments
In response to the UN’s sustainable development goals (SDGs), the Company adheres to the Leading Investment strategy. This strategy not only strengthens ESG investment evaluation mechanisms, but also continues to seek out ESG theme-based industries to invest in, such as investments that promote health and well-being, advance the development of green energy and infrastructure projects, and have good ESG performance. The Company is dedicated to promoting inclusive and sustainable economic growth.More About Details concerning the actual conditions of sector-based investments in 2018 are as follows >
Fubon Life, Fubon Insurance and Fubon Financial Holding Venture Capital’s investments in theme-based investments accounted for 15% of total investment assets. Within these, investments in biotechnology and pharmaceutical industries, solar energy plants, the alternative energy industries, green bonds, and infrastructures increased by NT$44.1billion. This is a growth rate of 73% compared with 2017. The percentage of these investments as a portion of total investment assets increased by 1% over 2017. (Note: The investment of Fubon Securities and Taipei Fubon Bank are excluded.)
In view of the increasing impact climate change has had on enterprises' sustainable operations around the world, the international community is paying more and more attention to the risks and opportunities associated with extreme climates. The Investment Management Headquarters not only conducts emerging market and climate risk assessments with Fubon Financial Holdings, but also supports TCFD projects related to climate change. The Company also invests in industries that help to slow down global warming. In addition to current investments in green bonds and green energy-related industries, plus the addition of green architectural design into real estate development investment contracts, the Company will also continue to carry out low-carbon investments and add low-carbon investment tallying results in the future. Doing so will help to manifest the Company's implementation of responsible investment strategies, in hopes of gradually increasing the responsible investment ratio.
Launching ESG Products
In May of 2017, Fubon Asset Management issued the "Fubon TWSE Corporate Governance 100 ETF, which has an investment management objective of tracking the performance of the TWSE Corporate Governance 100 Index, making it the first ETF in the nation to have an investment theme based on the concept of corporate governance. By choosing to invest in this Corporate Governance ETF, investors are supporting enterprises with good corporate governance practices and helping to power a positive cycle in the capital market.
Performance Period: 2018/1/1-2018/12/31
Actively Exercise Shareholder Ownership
As a shareholder in numerous companies, Fubon Asset Management makes prudent assessments and informed decisions, which take into account the best interests of clients or beneficiaries in order to effectively execute its voting rights at annual shareholders’ meetings. In 2018, Fubon FHC cast votes at the annual shareholders’meetings of 234 companies. Fubon achieved an attendance rate of 100%.
When exercising voting rights, Fubon Asset Management is prohibited from supporting proposals which would violate ESG principles. Our hope is to have a positive impact on the actions taken by companies in which we invested in, encourage investee companies to place greater emphasis on ESG issues, and help more companies introduce improvements into their enterprise management procedures.