Fubon Financial

Three major actions to enhance climate risk management and carbon reduction efforts will assist Taiwan's industries in achieving sustainability transformation

In response to the challenges of climate change, Fubon Financial Holdings has implemented sustainable actions. Following its pioneering release of the first Task Force on Climate-related Financial Disclosures (TCFD) report in Taiwan's financial industry in 2021, the company has now published its fifth TCFD report this year. It has also received the highest compliance rating, “Level 5+: Excellence”, from the British Standards Institution (BSI) for three consecutive years. This demonstrates that Fubon Financial Holdings has achieved a high level of maturity in task force on climate-related financial disclosures.

Richard M. Tsai, Chairman of Fubon Financial Holdings, pointed out that the global climate crisis is intensifying, with extreme disasters caused by climate change occurring with increasing frequency. Events such as the California wildfires and the collapse of Swiss glaciers underscore the urgent need for climate action. Last year’s United Nations Climate Change Conference (COP29) also centered on climate finance as a core issue, driving forward global efforts to reduce carbon emissions. In response to this trend, Fubon Financial Holdings has been planning its four sustainable strategies of “decarbonization, digitalization, empowerment, and connection” since 2021. Starting with the “decarbonization” strategy, the company assists customers in their sustainability transformation and promotes the “Run For Green™” initiative, exerting influence in both financial and non-financial aspects. By collaborating with stakeholders, the company drives Taiwan's industries toward sustainability transformation.

In its 2024 TCFD report, Fubon Financial Holdings presents its commitment to climate risk management and carbon reduction and demonstrates sustained efforts and significant progress through three major actions.

1. Enhance quantitative analysis of climate risks: In terms of climate change scenario analysis, we will further expand into the field of life insurance and conduct quantitative assessments of the impact of climate risk factors on expected claims payments for death and hospitalization, thereby strengthening risk identification and management capabilities.

2. Establish a more proactive timeline for investment and underwriting strategies for decarbonization: Since 2021, Fubon Financial Holdings has established the criteria for entering and exiting credit business that target five industries known for high carbon emissions (coal-fired power plants, coal mines, cement, petrochemicals, and steel). In 2023, it expanded these criteria to include investment and underwriting strategies for decarbonization. This year, a more proactive decarbonization timeline has been proposed, with plans to completely exit the coal-related industry by the end of 2030 and to fully withdraw from investments and underwriting in the non-conventional oil and gas industry by the end of 2040 (excluding cases where companies have proposed carbon reduction transformation plans aligned with the Paris Agreement targets). This demonstrates the company's leading commitment to carbon reduction in the industry.

3. Strengthen the engagement actions: Fubon Financial Holdings recognizes that the financial industry is a key driver in Taiwan's transformation to net-zero emissions and continues to deepen the integration of sustainability strategies with its core financial operations. Through green finance initiatives, the company fully supports industrial transformation and leads the capital market toward achieving net-zero goals. In the past two years, we have collaborated with our main subsidiaries to conduct engagement workshops on the "Science-Based Targets (SBT) for Carbon Reduction" and the "Guidelines for Recognizing Sustainable Economic Activities." These workshops assist corporate customers in understanding and implementing carbon reduction strategies and facilitating alignment with international carbon reduction standards. This enables them to meet the carbon reduction requirements of major international companies, reduces communication costs with stakeholders, and enhances their advantages in fundraising.
Fubon Financial Holdings has not only taken the lead in the industry by being the first in Taiwan to publish a TCFD report, but it is also the earliest financial and insurance entity in Taiwan to submit a commitment letter for Science-Based Targets (SBT). Furthermore, it actively participates in international sustainability initiatives, becoming a member of RE100 and joining the Partnership for Carbon Accounting Financials (PCAF) and the Asia Investor Group on Climate Change (AIGCC). This allows the company to continuously stay attuned to global trends and to advance steadily in the fields of sustainable operations and responsible finance.
With the vision of becoming "one of Asia's first-class financial institutions," Fubon Financial Holdings adheres to the brand spirit of "Be positive All possible" and is committed to helping Taiwanese industries confront the challenges posed by climate change. Looking ahead, Fubon Financial Holdings will continue to enhance its management of climate change risks, improve the climate resilience of its value chain, and assist clients in their low-carbon transformation while strictly implementing risk control and strengthening mitigation and adaptation capabilities. The company aims to support the development of the green energy industry and hopes to collaborate with Taiwan's industries and society towards a net-zero future.

Fubon Financial Holdings 2024 TCFD Report Link:
https://www.fubon.com/financialholdings/citizenship/downloadlist/downloadlist_report/2024_Fubon_FHC_TCFD_Report_CH.pdf