Climate Action

Climate Actions

The impact of climate change has become a common global risk and connected with capital flows in the capital market. In order to enhance climate resilience, SKFH has introduced Task Force on Climate-Related Financial Disclosures (TCFD) framework suggested by the Financial Stability Board (FSB) to issue the report to regularly review and demonstrate SKFH's resilience and risk opportunities under climate change challenges, with a view to further reducing the possible operational impact of disasters.

SKFH periodically reviews climate strategy, has reached a consensus on the short-, medium-, and long-term impact timelines with its subsidiaries, and conducts annual assessments to identify climate-related risks and opportunities. This process involves researching domestic and international climate-related literature and reports and integrating them with the business model of SKFH to establish a climate issue database. The risk dimension encompasses transition risks (policy and regulation (current policies, emerging regulations, legal), technology, market, reputation) and physical risks (acute, chronic), totaling 14 climate risk items; the opportunity dimension includes product and service, market opportunities, resource efficiency, resilience, and energy sources, totaling 9 climate opportunity items. Subsequently, each material issue undergoes a sequence of business activity connections to identify the impact and level of influence of each climate factor on the Company's operations so that response strategies can be formulated accordingly. 

At the same time, we also conducted analysis on physical risks and transition risks to understand the potential financial risks associated with our operational sites, suppliers, and investment and lending portfolios. The detailed analysis results can be found in the Climate-related Financial Disclosure Report.

• 【Physical Risk Scenario Analysis】As Taiwan is an island nation in a subtropical monsoon region with complex terrain, weather changes occur frequently in different areas, and natural disasters occur from time to time. During typhoon season, Taiwan often suffers from heavy rainfall and flooding in low-lying and urban areas. Bridges and embankments can be destroyed by rising river waters. To understand the potential operational impacts under different climate scenarios, We require all subsidiaries to immediately implement physical risk adaptation plans in all existing and new operations within five years based on the analysis results and use them as a reference for future operational planning.
• 【Transition Risk Scenario Analysis】SKFH applied the climate change scenario framework and parameters released by the Network for Greening the Financial System (NGFS) and selected three scenarios, Current Policies, Delayed Transition, and Net Zero 2050, to conduct the company's climate transition risk scenario analysis and stress test to assess the potential impact.

In response to the trend of net-zero decarbonization of countries around the world after COP26, SKFH also inventoried the GHG emissions and intensity of investment and lending portfolios to understand the indirect carbon emissions we financed, and established high carbon-intensive industry management guidelines and monitoring mechanism to help the investment and lending department of the subsidiaries to manage climate risks and effectively achieve the goal of financial decarbonization.


 

SKFH Climate-Related Financial Disclosure Report