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Sustainable Finance

As a trusted brand that grows with our customers, Yuanta Group has been paying attention to international sustainability trends, following the United Nations Principles for Responsible Investment (PRI), signing up to the Equator Principles and disclosing sustainability-oriented indicators that have a significant financial impact in accordance with the SASB standards issued by the Sustainability Accounting Standards Board, highlighting industry risks and opportunities, and effectively communicating sustainability information that has a significant financial impact. As a financial institution that society relies on, we manage our capital to exert a positive influence, allocate capital resources to support sustainable industries, introduce diversified and differentiated products and services according to different businesses, and actively develop ESG innovative businesses, leading our clients to support sustainable financial development together.

Sustainable Financial Management Structure

The Company established “Sustainable Finance Guidelines” to formulate a green policy for investment and financing at the financial holding company level. Through a principled framework and guidelines, the Company incorporated ESG factors into its daily operations and decision making, regulated ESG issues of concern (such as: climate change, human rights, and board performance, etc.), instituted a list of industries to be actively supported, standardized the list of companies to be avoided, strengthened due diligence and prudent evaluation of ESG high-risk targets, and guided companies to pay attention to governance, environmental, and social risks and to fulfill their responsibilities as global citizens.

In order to further strengthen the ESG screening mechanism in the Group's investment and lending business, the Company set up the “Industry-Specific Environmental and Social Risk Management Rules” this year stipulating that when performing business with companies engaged in environmental and socially risky industries, such as steel manufacturing, semiconductor manufacturing and plastic material manufacturing, case processers are to fill out the “Industry-Specific Environmental and Social Risk Management Checklist"applicable to their subsidiary to understand the social and environmental risk management measures of the business counterparties, examine the potential social and environmental risk impact of the customers and their ability to adjust to environmental and social risks, and ensure risk control of the transactions.

Sustainable Finance Guidelines Industry-specific Environmental and Social Risk Management Rules

As of the end of the year, Yuanta Funds has eighteen funds rated by Morningstar, Inc. with the highest rating of five Globes, including Yuanta Taiwan High-Yield Leading Company Fund (the source of dividend distribution of the Fund may be the income equalization), Yuanta Taiwan Top 50 ETF, Yuanta Taiwan High Dividend Fund, and Yuanta FTSE4Good TIP Taiwan ESG ETF (the source of dividend distribution of the Fund may be the income equalization). This year, the size of five Globes funds reached NT$512.506 billion, indicating that sustainability investment is gradually gaining market attention.

Sustainable Goods and Services - Investment Products
Proprietary Sustainable Investment Products
Categories
2021 2022
Asset Size
(NT$ thousand)
Total Assets
(NT$ thousand)
Proportion of Total Assets
(%)
Asset Size
(NT$ thousand)
Total Assets
(NT$ thousand)
Proportion of Total Assets
(%)
ESG Integratio *Note1 $28,715,830 $815,767,928 3.52 $28,588,551 $968,355,952 2.95
Best in Class *Note2 $11,094,953 1.36 $9,818,078 1.01
Thematic *Note3 $14,573,596 1.79 $10,760,868 1.11
Impact Investing *Note4 $325,989,117 39.96 $474,726,250 49.02
Other *Note5 $46,679,828 5.72 $42,983,646 4.44
Total $427,053,324 52.35 $566,877,393 58.53

Third-Party Sustainable Investment Products
Categories
2021 2022
Asset Size
(NT$ thousand)
Total Assets
(NT$ thousand)
Proportion of Total Assets
(%)
Asset Size
(NT$ thousand)
Total Assets
(NT$ thousand)
Proportion of Total Assets
(%)
ESG Integration *Note1 $1,947,956 $52,656,743 3.7 $1,771,236 $72,015,620 2.46
Best in Class *Note2 $77,134 0.15 $145,579 0.2
Thematic *Note3 $770,835 1.46 $787,264 1.09
Impact Investing *Note4 $16,170 0.03 $64,317 0.09
Total $2,812,095 5.34 $2,768,396 3.84
Note:
  1. Incorporate the ESG model into the design of financial products or set up relevant selection principles to systematically integrate ESG factors into investment analyses and decision-making.
  2. Select industries, companies, or projects with relatively more favorable ESG performance when designing financial products.
  3. Invest in a single or multiple thematic sustainability-related targets (e.g., climate change or clean energy) when designing financial products.
  4. Have measurable social and environmental impact and financial returns when designing financial products.
  5. Other: Funds with the highest rating of five Globes on Morningstar and those that have not been classified into the above categories.

ISO 14067: 2018 Product Carbon Footprint Verification

Yuanta Bank's all series of credit card carbon footprint had obtained the certification from the British Standards Institution (BSI) in 2021, with a carbon footprint of approximately 850g per credit card in November this year. Compared with the carbon reduction baseline in 2018, the carbon reduction of credit card products has successfully reached more than 3% in 5 years. Moreover, Yuanta Bank gained dual certification of "Product Carbon Footprint Label" and "Product Footprint Reduction Label" from Taiwan’s Environmental Protection Administration (EPA) in September 2022, and has pledged to continue to improve the digital connection with the client side to jointly reduce greenhouse gas emissions during credit card use.

On the basis of digital operations, Yuanta Bank took the lead this year in focusing on the applied services of the Mobile Banking APP and verifying the carbon footprint of the APP. In addition, the bank implemented a carbon neutrality project: Choosing a wind power project that meets the sustainable development goals of the United Nations from the Gold Standard to conduct carbon offset and achieve carbon neutrality. The carbon offset will go to social welfare and be used to reduce poverty, improve healthcare and public health education, and create job opportunities. The bank obtained certification from the BSI and became the first financial institution in Taiwan to obtain both ISO 14067 Carbon Footprint verification and PAS 2060 Carbon Neutrality verification.

Yuanta Securities responds to the UN’s net-zero carbon emission target, the Taiwan Financial Supervisory Commission's green finance, and the Group’s sustainable development policy, and has integrated the ESG concept into its operation strategy. Yuanta Securities is actively researching carbon reduction practices and promoting carbon neutrality plans. After becoming the first securities company in Taiwan to pass the BSI ISO 14067 Carbon Footprint verification with the "Mr. Investor APP" mobile application in March this year, in June of the same year, it successively passed the PAS 2060 Carbon Neutrality verification of the BSI, officially declaring that it has achieved carbon neutrality. Mr. Investor APP as a result became the first zero-carbon APP in Taiwan’s securities industry. In response to climate change, we will develop sustainable commodities and green financial service processes continuously in the future to reduce the impact on the environment during the operation process. Strengthen the important role of financial institutions in the transformation of global low-carbon , and drive clients towards the life of low carbon.

Going Paperless Promotes Green Living

Yuanta Bank hopes to raise the public awareness of environmental protection via the disclosure of carbon emissions reduced by implementing electronic transactions. This year, Yuanta Bank presented the Diamond-Gold Carbon Lucky Account, allowing customers to obtain information about the total number of sheets of paper they saved by adopting electronic transactions simply by logging into their accounts via Yuanta Mobile Banking APP or Yuanta Bank Official Website and go to the My Carbon Account section. With this new feature, the customers can see that over time, the accumulated carbon reduction result may be impressive; they will then be motivated to make electronic transactions part of their lives. Moreover, to incentivize customers to participate in carbon reduction movement with simple clicks, Yuanta Bank offers various green discounts including an exchange rate discount for online currency exchange, online applications for regular investing, and zero subscription fee for designated fund/ETF. This year, Yuanta Bank saved 177 million pieces of A4 paper from encouraging its customers to adopt online applications for various tasks; the results are beneficial for saving resources and reducing overall energy consumption.

In addition, Yuanta Bank included an introduction of the Mobile Banking APP in the My Carbon Account section, describing how the APP becomes a zero-carbon emission APP by obtaining ISO 14067 Carbon Footprint verification and PAS 2060 Carbon Neutrality verification and how Yuanta Bank attains other sustainability achievements such as officially adopting green power in 2021. The section also includes a column for articles related to daily climate, food and drinks, ecological issues, and carbon reduction issues to bring such discussions close to the customers’ lives. By inviting the customers to join the carbon reduction movement, Yuanta Bank encourages them to change their behaviors, promotes green financial services, and enhances the impact of digital finance.

Yuanta Funds comprehensively implemented the digital bank statement service. Yuanta Taiwan Top 50 ETF Feeder Fund and Yuanta Taiwan Dividend Plus ETF (the source of dividend distribution of the Fund may be the income equalization) alone have more than 1.3 million investors; if all of them opt for digital bank statements, a total of 19.5 tons of paper may be saved each year, which equals to around 500 trees saved each year. Since the implementation of digital bank statements on June 28, 2022, a total of 43,000 customers have adopted this service by the end of that year.