Fubon Financial

Green finance assists in low-carbon transformation of supply chains

Taipei Fubon Bank announced today (1st) that it will carry out the first sustainable supply chain finance (SSCF) collaboration project with AUO in Taiwan. Connecting Taiwan's technology supply chain and the financial industry, Taipei Fubon Bank will take the lead in establishing a cross-sector cooperation model. Taipei Fubon Bank will promote AUO’s supply chain partners to achieve the carbon reduction goal by linking financing products with sustainability indicators. By reducing greenhouse gas emissions in scope 3, we will achieve the goal of 20% carbon reduction by 2030 with key suppliers and make joint efforts to move towards green transformation.

In response to the trend of net zero carbon emission by 2050, many large global brands not only declare their net zero carbon emission goals, but also require their supply chain and value chain partners to follow. According to the research report, more than 80% of most companies’ carbon emissions come from scope 3, and the supply chain’s carbon emissions are 11 times more than the company’s. Therefore, the supply chain’s carbon emissions are the key factor to achieve the goal of net zero.

In this SSCF project, AUO will select suitable suppliers to work together to develop sustainability indicators. Taipei Fubon Bank will design corresponding financial products for these suppliers and link financing products with sustainability indicators. If the suppliers meet the targets, they will enjoy preferential interest rates. This is to encourage suppliers to take more positive sustainable actions and make joint efforts to achieve net zero across industries.

On June 30, Taipei Fubon Bank participated in the “2022 CSR Co-Prosperity Conference” held by AUO to initiate and communicate with AUO and its suppliers on the important ESG issues. Zhuang Hui-Mei, executive vice president of Taipei Fubon Bank, delivered a speech named “green finance promotes corporate sustainable transformation”, sharing Taipei Fubon Bank’s three strategies of green finance, including encouraging transformation of ESG high impact industries, actively investing and financing green transformations, and carrying out green due diligence and completing post-loan and post-investment management, to assist the industry to promote green transformation with its diversified practical financial experiences, improve the corporate sustainable thinking and competitiveness, and integrate with the international ESG trend to create a sustainable ecosystem.

Sustainable supply chain finance has received a lot of international attention in recent years. According to the assessment of Facts & Factors Marketing Research, the global sustainable supply chain financial market will grow to US$2.9tn in 2027 and has become an important business model for companies to join hands with the supply chain to achieve sustainable operations.

Zhuang indicated that in response to the trend and carbon reduction standard, it is imperative for companies to implement the inventory and emission reduction of scope 3. Through sustainable supply chain finance, banks will be able to bring clear sustainability indicators and corresponding incentive measures to the corporate supply chains. Sustainable supply chain finance can be extended from customers to their suppliers, and it is one of the accelerators for Taipei Fubon Bank to expand its sustainable impact. As the leader of sustainable finance, Taipei Fubon Bank will use diversified solutions to support corporate customers to achieve sustainable goals. It will also design more pragmatic and efficient green credit and e-banking system modules, assist customers to guide their upstream and downstream partners to work together in carbon reduction, and build sustainable strength of the corporate value chain.

In addition to being the first Taiwan-funded bank to undertake third-party certified green loan, social loan and sustainability-linked loan, Taipei Fubon Bank’s total credit value of offshore wind power project financing ranked first among Taiwan-funded banks in 2021. Since 2018, Taipei Fubon Bank has undertaken financing for more than 4GW renewable energy projects, which can generate about 10.7bn kwh of green energy and reduce 5.4mn tons of carbon emissions each year, equivalent to the carbon sequestration of 13,800 Daan Forest Parks. Taipei Fubon Bank continues to exert its financial influence to protect the environment and is convinced that companies are the key to low-carbon transformation. If companies can work together to reduce carbon in the supply chain, it will help Taiwan achieve the goal of net zero carbon emission by 2050 as soon as possible.


Note 1: source: https://taise.org.tw/post-view.php?ID=300

Note 2: source: Reaching net zero: incentives for supply chain decarbonization P.6