As Taiwan's leading international financial institution, CTBC Holding actively engages in international sustainable financing initiatives to ensure interests of shareholders as well as to create positive impacts for society and the environment. By aligning our efforts with global sustainability best practices, we continue to innovate financial products and services and to assist customers in their sustainable transformations. In addition, we also provide diverse inclusive financing products and services in Taiwan and abroad to support financial inclusiveness.

Our ultimate aim is to use financing in order to promote low-carbon transitions and help underprivileged groups. As well as reducing negative environmental and social impacts, we also aim to further create positive impacts and to build a better, more sustainable society through impact finance.

CTBC Holding's Sustainable Finance Policy stipulates the four implementation principles of "Actively support and advocate for sustainable finance," "Focus on creating positive impacts related to the SDGs and the climate," "Drive the low-carbon economy and work toward net-zero emissions by 2050," and "Integrating enterprise resources to expand business synergies" as the guiding principles for the Company and its subsidiaries in promoting sustainable development and finance related-business. All subsidiaries have since dictated in relevant risk, investment, and financing-related policies and regulations that their financing business shall fulfill ESG management obligations and continue to be optimized in the future. Sustainable finance management objectives from CTBC Holding and major subsidiaries:

In 2021, CTBC Bank established the Guideline for Sustainable Finance in Institutional Banking. The guideline prohibits the Bank from granting credit to companies in industries that adversely impact social or public safety, including through crime, terrorism, arms, and pornography. Regarding ESG Sensitive Sector involving material environmental and social issues (i.e., thermal coal extraction, thermal coal power generation, tobacco production, and oil sands), we have pledged not to grant credit to new companies belonging to such industries unless (1) the funding purposes of the facilities are used for sustainable development or (2) the company is either a state-owned enterprise or has more than a 50% of its shares held by local governments, and on the condition that the company can provide evidence of sustainable transitions; this ensures that we can encourage customers to undertake sustainable transition. Companies classified as ESG high-risk companies or categorized into ESG Sensitive Sector are subject to regular monitoring and controlling. Moreover, in order to promote the development of a low-carbon economy, the Bank has inventoried the status of clients in carbon-intensive industries. For borrowers belong to ESG high-risk, ESG sensitive sector and carbon-intensive industries, the Bank conducts proactive engagement and provides ESG related products and services to encourage these companies to invest in sustainable transition.

Engagement topics

• GHG inventories and setting reduction goals
• International ESG trends and sustainable transition strategies
• Practices and case studies of using science-based data to realize a circular economy
• Commercial implications of ESG information disclosure
• Sustainability-related financial solutions

CTBC Holding's subsidiaries are prohibited from engaging in investment activities involving criminal or terrorist activity, arms, or pornography; our definition of ESG Sensitive Sector is consistent with sustainable financing norms. Furthermore, at Taiwan Life, the ESG performance of an investment subject is evaluated using an external ESG rating system, and the investment subject is reviewed using an ESG risk assessment form. For enterprises that have failed to meet the standards, further engagement and communications are deemed necessary in order to reduce the possibility of investing in high-ESG risk enterprises. Investment amounts or the number of collaboration opportunities may be increased if improvements are observed after the engagement. Regular post-investment management is conducted to ensure that investment subjects regularly monitor their respective levels of involvement and ESG risk-related matters.

Engagement actions of responsible investment aligns with which of sustainable financing. Please refer to our 2021/2022 CTBC Impact Investment Report.

CTBC Bank partners with international microfinance organizations to provide microloan services overseas, drive inclusive finance, and eradicate poverty through a multifaceted partnership that echoes SDG 1: No poverty and SDG 17: Partnerships for the goals.