Responsible Investment and Lending

Responsible Investment

SKFH and its subsidiaries, SKL, SKB, MLS, SKIT, follow SKFH's sustainable finance policy to formulate relevant sustainable investment policies to put responsible investment into practice.

After the investment, in order to reduce climate-related risks and improve post-investment ESG management, we are actively involved in post-investment due diligence management, monitor the investee companies’ operating and financial performance as well as ESG risk events dynamically. Regarding high ESG risks and carbon-intensive companies, we proactively engage and encourage them to strive for transition and achieving net-zero emission.

Responsible Lending

The SKB aligns with international sustainability frameworks by not only adhering to SKFH's "Sustainable Finance Policy," but also formulating its own "Sustainable Lending Policy" based on relevant international standards such as the United Nations SDGs, PRB, and the EPs. The Bank conducts due diligence and Know Your Customer (KYC) procedures for borrower companies to fully assess the potential impact in every ESG aspect.

In addition, the SKB signed the Equator Principles on October 1, 2021. In 2022, the Bank established and implemented the "Equator Principles Lending Guidelines" in its internal lending procedures. For all new or renewed lending cases, the "Equator Principles and ESG Lending Checklist" must be filled out during the credit application process. By incorporating the Equator Principles into the lending review process, the Bank can effectively manage the environmental and social risks in actual operations and promote green finance.




 

Sustainable Stewardship

One of the important spirits of responsible investment and responsible lending is, based on the overall interests of fund providers (shareholders, customers), to safeguard shareholders, employees and customers’ long-term value, reduce sustainability-related risks, and seize opportunities through stewardship actions such as engagement and voting action.

To effectively promote sustainable finance and drive industry transition towards net zero emissions, and fulfill its duty of sustainable stewardship, SKFH has implemented three main strategies:
 

Strategy.

01

Engagement Action

Subsidiaries should follow the corporate engagement policy and prioritize engagement actions on ESG issues of concern to the Company in investment and lending activities. Based on the engagement results, they should develop subsequent business decisions and assess whether to take escalating actions. If the counterparty does not make improvements, no new transaction can be made, and if the situation continues to deteriorate, reduction or disinvestment should be taken to ensure improvement.

Strategy.

02

Shareholder Action

Subsidiaries should follow the corporate voting policy, actively attend annual general meeting, exercise voting rights, and engage and interact with investee companies. If necessary, the subsidiary shall gain a deeper understanding and communication with the management of the investee before the annual general meeting, hoping to drive the investee companies to pay attention to the international net-zero trend, publicly disclose their operational and environmental performance, and promote the transition to net-zero emissions.

Strategy.

03

Sustainability Initiatives in Taiwan and Abroad

The Company shall actively participate in domestic and international sustainability initiative organizations and activities, gather the power of people to achieve sustainable transition, and attract both public and private sectors to join the net-zero movement.

Sustainability initiatives in Taiwan and Abroad

Sighed a support for Task Force on Climate-related Financial Disclosures

In 2018, SKFH officially signed a support for Task Force on Climate-related Financial Disclosures (TCFD) and began to introduce the climate-related financial disclosure framework into our business strategy and risk management, expecting to assess and management the potential impact of climate change on our operation and value chain through qualitative and quantitative analysis. By establishing a climate governance structure at the board level, formulating climate response strategies, and formulating risk management measures through scenario analysis results, setting metrics and implementing goals to strengthen corporate climate resilience, to control climate-related risks, grasp climate-related opportunities, and maximize shareholders benefit.

Joined Asia Investor Group on Climate Change

In 2021, SKFH’s subsidiary, SKL, joined the Asia Investor Group on Climate Change as its second member from Taiwan. Through collective advocacy, we aim to collaborate with international investors in studying climate change risks and opportunities. We hope to expand and leverage the influence of
institutional investors to create social value through sustainable investment.

Cofounded Taiwan Alliance for Net Zero Emission

In 2021, SKFH joined forces with the Taiwan Institute for Sustainable Energy (TAISE) and 12 other Taiwanese companies and founded the "Taiwan Alliance for Net Zero Emission" on World Environment Day committed to promoting the "Net Zero 2030/2050 Initiative." As a founding member, we call on Taiwanese companies to achieve their carbon neutrality goals in two stage—"commitment" and "achievement", verified by independent third-party auditor—to contributes to climate change and sustainable development for the planet.