元大金控 元大金控 元大金控

In order to implement sustainable financial risk management, Yuanta Bank follows the “Sustainable Finance Guidelines＂to incorporate sustainable financial risk management into the lending business review and decision making process. It also requires the completion of sustainable financial assessment for its lending business, stipulating that the lending business should carefully assess whether there are potential risks of environmental and social hazards in the counterparty or transaction content, and should incorporate ESG factors into KYC (know your customer) and CDD (customer due diligence) investigation processes to understand the regulatory compliance of the lending counterparty, international sustainability index scores, and the presence of negative ESG issues to ensure risk control.

Yuanta Bank signed the Equator Principles and became a member bank of the Equator Principles Association in 2020. Yuanta Bank completed the formulation of the “Guidelines for Managing Equator Principles Financing Cases” and related operational procedures in the same year. The Equator Principles were officially implemented on June 1 ,2021.

When providing customer credit or related financial advisory services, if the transactions meet the conditions for applying the Equator Principles and are assessed as cases with medium to high environmental and social risks, the credit counterparties will be required to commission an independent third-party organization to conduct environmental and social risk assessments, and issue an assessment report as a reference basis for the environmental and social risk assessment of the case.

The "Task Force on Environmental and Social Risk" was established by Yuanta Bank to evaluate, review, and monitor the environmental and social risks of lending cases. A classification is employed to manage environmental and social risks of large-scale project financing cases. The environmental and social impacts that the projects may cause in terms of climate change, greenhouse gas emissions, and important stakeholders are carefully evaluated under the framework of Equator Principles 4.0. At the environmental and social risk assessment stage, for credit cases rated as Category A or B, an environmental and social risk assessment report shall be completed. If the report lists post-loan monitoring conditions, the borrower shall, as required, commission an independent third-party organization to conduct environmental and social risk monitoring on a regular basis (at least once a year) and issue an "Environmental and Social Risk Monitoring Report." Adequate environmental and social risk monitoring reports and improvement action plans should be obtained when relevant conditions apply to ensure compliance with the Equator Principles and to raise the awareness of environmental protection and social responsibility among our customers.

Four project financing cases were reviewed according to the Equator Principles. However, all cases were declined, totaling NT$1.2 billion of the rejected cases. Two cases were respectfully declined during the initial assessment stage, and therefore no related documentation was collected. Assessment summaries for the remaining two cases are as follows:

Yuanta Bank is committed to adhering to the United Nations Principles for Responsible Banking (PRB). Through the implementation of responsible lending processes, it actively supports projects and enterprises that have a positive impact on ESG issues. Additionally, by offering sustainable financial products and services, Yuanta Bank leads its borrowers in generating positive environmental and social outcomes. Yuanta Bank's compliance with the Responsible Banking Principles in 2024 is as follows:

Yuanta Bank's compliance with the Responsible Banking Principles in 2024
Principle 1: Alignment We will align our business strategy to be consistent with and contribute to individuals' needs and society's goals, as expressed in the Sustainable Development Goals, the Paris Climate Agreement and relevant national and regional frameworks.	Yuanta Bank, a wholly owned subsidiary of Yuanta Financial Holdings, was established with the approval of the Ministry of Finance on January 14, 1992. Over the decades, it has grown into a regional bank in the Asia-Pacific region, committed to providing comprehensive financial services. As of December 31, 2024, Yuanta Bank has 4,852 employees and a capital of approximately NT$79.953 billion with 149 branch locations in Taiwan and three overseas branches—bank branch in Hong Kong, bank subsidiary in the Philippines, and bank subsidiary in South Korea. Through cooperation among its domestic and overseas locations, the bank offers customers diverse and cross-border financial services. Yuanta Bank upholds the Group's commitment to incorporate the spirit of corporate sustainable development into business planning and operations. In support of the United Nations' Sustainable Development Goals (SDGs), the bank is dedicated to raising clients' awareness of climate change in hope of collaborating with partner enterprises in fulfilling social responsibilities. While pursuing business growth and profitability, the bank remains focused on environmental protection, social welfare, and corporate governance. It also supports green industries and low-carbon transitions, and promotes human rights protection, and sustainable supply chains. To realize the Group's net-zero pledge, Yuanta Bank aligns itself with the international Paris Agreement and the blueprint for Taiwan's Pathway to Net-Zero Emissions in 2050. The bank is fully committed to achieving the regulatory goal of net-zero emissions by 2050 as a long-term sustainability objective. It has established emissions reduction pathways and is actively adjusting its business strategies to reinforce its net-zero commitments.
Principle 2: Impact & Target Setting We will continuously increase our positive impacts while reducing the negative impacts on, and managing the risks to, people and environment resulting from our activities, products and services. To this end, we will set and publish targets where we can have the most significant impacts.	In response to international sustainability trends and in alignment with government policies on net-zero transition and energy transition, Yuanta Bank is channeling funds into the development of green technology and innovation, guiding enterprises toward a low-carbon economy and sustainable development. In 2024, the balance of green loans and sustainability-linked loans reached NT$89.212 billion, accounting for 13.37% of the bank's total credit portfolio. Yuanta Bank is committed to fitting its financing activities with the goals and timeline of the Paris Agreement. By measuring the carbon emissions of its asset portfolio and investing in sustainable and green industries, the bank is working together in the efforts to keep global warming at 1.5° C. In 2024, following the Global GHG Accounting and Reporting Standard for the Financial Industry published by PCAF, Yuanta Bank conducted an emissions audit across asset classes covering corporate loans, equity and corporate bonds, and project finance for power generation. The total financed emissions amounted to 13,102,322.93 tCO2e. In addition, based on the Total Impact Measurement and Management (TIMM) methodology, the carbon reduction benefits of its low-carbon financing were calculated, with a performance result of 13,396.72 thousand NT dollars. Yuanta Bank continues to align with sustainability trends in the market, and the KPI criteria of the sustainable development strategy blueprint set by Yuanta Financial Holdings, actively developing ESG-related products and services and setting targets for sustainable lending balances.
Principle 3: Clients & Customers We will work responsibly with our clients and our customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.	Yuanta Bank offers diverse and professional sustainable financial services, dedicated to helping clients transition to a low-carbon economy and navigate this extraordinary period of transformation. Yuanta Bank also participates in the Group's joint engagement efforts, practicing engagement actions concerning stewardship for sustainable finance. As a founding member of the "Coalition of Movers and Shakers on Sustainable Finance," Yuanta Financial Holdings, along with Yuanta Bank, works to guide clients and leverage peer influence. By the end of 2025, the bank aims to engage with more than half of the Taiwan enterprises in its major financing and investment portfolios which are in high carbon emissions industries. The major goal of these engagements is to encourage the enterprises to set targets for achieving net-zero emissions by 2050. Yuanta Bank offers a variety of sustainability-themed products for consumers to select from to promote green consumption and, prior to granting credit, reviews whether collateral properties are located in areas with high environmental risk— demonstrating the bank's financial influence to drive industries and society toward sustainable development. Corporate Financial Services: To fulfill its emission reduction commitments and strategies, Yuanta Bank helps companies identify low-carbon economic activities through the "Reference Guidelines for Identifying Sustainable Economic Activities". Companies engaging in these activities are priority financing customer with the bank. Yuanta Bank also actively supports companies transitioning to a circular economy and industries related to renewable energy infrastructure by providing financing. Consumer Financial Services: For loan applications, the bank proactively inquires consumers about whether the property is a certified green building with supporting documentation, or directly verifies the building grade (Qualified, Bronze, Silver, Gold, Diamond levels) via online information. If the collateral comes with a certified green building label, the bank offers preferential mortgage rates and terms. Preferential rates are also provided for auto loans of new energy vehicles, encouraging consumers to turn to more energy-efficient options. Inclusive Financial Services: Yuanta Bank offers a wide array of inclusive finance and social-impact financial products and services. These products and services include loans for small and medium-sized enterprises (SMEs), micro-businesses, small businesses, and startup SMEs, along with trust services for disadvantaged groups (e.g., eldercare trusts, trusts for individuals with disabilities, and charitable trusts). Products and services are tailored to meet the diverse needs of different customer groups.
Principle 4: Stakeholders We will proactively and responsibly consult, engage and partner with relevant stakeholders to achieve society's goals.	Yuanta Bank, in line with Yuanta Financial Holdings' adoption of the AA1000 Stakeholder Engagement Standard (AA1000 SES), has identified eight major categories of stakeholders, including shareholders/investors/creditors, government agencies, current employees, potential employees, customers and debtors, media, communities, and suppliers. By building various communication channels, the bank engages in dialogue with stakeholders to understand their concerns. These insights are then analyzed, so adjustments to relevant measures can be made to better match stakeholder expectations. To implement the Group's sustainable development policies and strategies, Yuanta Financial Holdings has established the Corporate Sustainability Office under its Sustainable Development Committee. Composed of senior executives and staff from relevant departments of Yuanta Financial Holdings and the Group's subsidiaries, this office also includes participation from independent directors. In addition to driving and coordinating daily sustainability initiatives, quarterly meetings are held to build consensus and review progress around key issues, such as the Group's sustainability strategy blueprint and goals, implementation status at each subsidiary, and stakeholder concerns. Furthermore, suggestions provided by independent directors during meetings help subsidiaries examine and improve their current ESG practices. This collaborative effort aims to enhance recognition from reputable domestic and international rating agencies and stakeholders, while also laying a solid foundation for future sustainable developments
Principle 5: Governance & Culture We will implement our commitment to these Principles through effective governance and a culture of responsible banking.	Establishing a Transparent and Effective Governance Structure The Sustainable Development Committee set up by Yuanta Financial Holdings under the Board of Directors is a functional committee composed of the Chairman and four independent directors. It is responsible for integrating the value of corporate sustainable development into business strategies, implementing related measures for corporate sustainable development, overseeing and ensuring the execution of sustainable development policies while reviewing their effectiveness, as well as formulating and supervising the implementation of corporate sustainable development policies. To further facilitate these policies, the Corporate Sustainability Office has been set up under the Sustainable Development Committee, along with the establishment of six specialized functional groups of the office. Senior executives from relevant departments of the subsidiaries are included, enabling the Group to pool efforts from all subsidiaries to drive ESG-related operations, products, business activities, and services. Fostering a Responsible Banking Culture Guided by the principles of "Integrity, Prudence, Service, Innovation, and Care," Yuanta Bank, led by its Board of Directors and supported by its management and employees, incorporates the spirit of the United Nations' Sustainable Development Goals (SDGs) into all aspects of its operations and business activities through establishment of rules and regulations. Employee training also ensures that every staff member understands their role in sustainable development, embedding the concept deeply within the organization and its culture. The bank is fully committed to Yuanta Financial Holdings' sustainability strategy and objectives, centered around the "D.R.E.A.M." framework, while extending its positive influence on all stakeholders and fulfilling its social responsibility as a responsible bank.
Principle 6: Transparency & Accountability We will periodically review our individual and collective implementation of these Principles and be transparent about and accountable for our positive and negative impacts and our contribution to society's goals.	Yuanta Bank evidences its commitment to the Principles for Responsible Banking (PRB) and its influence by regularly evaluating the implementation of these principles and disclosing relevant information publicly. This report summarizes the bank's spirit and impact in the management of financial products and services with a sustainability focus. Key execution progress is outlined as follows: Progress in adhering to the PRB is publicly disclosed starting from the 2024 Yuanta Financial Holdings Sustainability Report, for the public and investors to know. Yuanta Bank regularly discloses the assessments, which were based on the Group's "Sustainable Finance Guidelines", the progress and status of Equator Principles cases, and the ESG review and control status of corporate lending in the sustainability reports of Yuanta Financial Holdings. Additionally, the bank provides regular updates on its website to disclose its actions in the area of institutional investor stewardships. The bank continues to improve internal ESG-related regulations. In 2024, it completed a revision of the "Guidelines for Managing Equator Principles Financing Cases", incorporating the assessment of Nature Related risks in line with the Taskforce on Nature-Related Financial Disclosures (TNFD). It also strengthened the oversight and tracking of climate-related risks as well as management mechanisms. Furthermore, the "Corporate Finance Credit Operations Manual" was revised to enhance the understanding of borrowers' ESG performance. All corporate credit cases now include the requirement to check the loan applicants' status in Joint Credit Information Center's data base on "Information of Material Corporate Pollution Penalty and Fines" and an ESG due diligence report, ensuring a thorough assessment of whether applicants are fulfilling responsibilities regarding environmental protection, business integrity management, and social responsibility.

Yuanta Bank follows the spirit of the "Sustainable Finance Guidelines" and provides sustainable products and services to corporate clients, aligning with both domestic and international advocacy principles and guidelines through a rolling review mechanism. The bank evaluates the achievement of ESG indicators and refines its business processes to better meet clients’ operational goals and transformation plans, catering to their needs for green and transition financing.

In response to the goal of net zero transition set by the government, Yuanta Bank has been actively promoting Six Core Strategic Industries by approving loans for green power and renewable energy industries and supporting relevant industries that endeavor to fulfill environmental protection and pollution control requirements through resource integration and green innovative material research and development. With such actions, Yuanta Bank receives the "Excellent Bank for Offering Loans to Six Core Strategic Industries" award.

Unit：NT$ thousand

Categories	2023			2024
	Loan Amount	Total Lending Amount(Note)	Proportion of Total Lending (%)	Loan Amount	Total Lending Amount(Note)	Proportion of Total Lending (%)
Sustainable lending*Note1	$200,709,500	$904,895,894	22.18	$238,825,248	$1,004,878,844	23.77
Sustainability-Linked loan*Note2	$51,980,335		5.74	$580,859,840		8.05
Sustainable SME loansN*Note2	$25,449,903		2.81	$48,576,239		4.83
Total	278,139,738		30.73	368,261,327		36.65

Note:

1. Sustainable lending includes green loans, social loans, and sustainable loans. The industries or projects financed include: the green power and renewable energy industry as well as related infrastructure, and uses resource integration and innovative green material related R&D to increase industries’ demands for environmental protection equipment, lower water consumption, diminish the harmful impact of waste on the environment, prevent pollution and engage in related construction, build low-carbon buildings, and develop/carry out transportation-related industries and projects.
2. Taking reference from the GLPs issued by the LMA, LSTA, and APLMA, we engage in industry specialization discussions with businesses to establish sustainability performance targets (SPTs). These targets are then measured using pre-defined KPIs, and we subsequently track whether the business achieve these goals. If the targets are met, predetermined interest rate discounts are provided.
3. The loan programs are designed based on the Sustainable Linked Loan (SLL) principles, as we consistently negotiate sustainability-related indicators with clients. If the relevant conditions are met, the preferential interest rates will be provided as an incentive.
4. Companies that use the loans for "green expenditure" and those that engage in renewable energy power generation, cleaning technology, and energy efficiency are companies belonging to the ESG industry.
5. In this table, the total lending amount and loan amount are defined as the amount of money from newly approved cases in the current year.

Each subsidiary of Yuanta Financial Holdings incorporates ESG-related screening criteria into investment-related regulations according to its business type and establishes internal mechanisms to implement the spirit of responsible investment. Yuanta Securities, Yuanta Bank, and Yuanta Life, in order to make the best use of the sustainable development of the financial industry, incorporates the assessment of ESG factors into the selection of medium- and long-term investment targets, and considers the environmental and social performance when selecting investment targets, so as to reduce environmental or social risks caused by the investment and support the development of sustainable enterprises with capital.

Yuanta Securities selects investment targets in proprietary trading, and if the target is a medium- to long-term securities investment, the trading staff of the Securities and Investment Department should fill out the ESG checklist, perform the ESG audit operation process, and have the ESG assessment report approved by the department head of the Securities and Investment Department before executing the transaction. If the target is a bond, an ESG checklist is completed by the bond trader and signed by the senior executive of the bond department to ensure the quality of ESG audit operations. In addition, the Group follows the "Guidelines for Sustainable Economic Activities Recognition" issued by the Financial Supervisory Commission, incorporating relevant industries into investment decisions or target selections.

The ESG audit criteria is formulated with reference to ESG-related indicators from domestic and international databases. The audit process is then conducted by Yuanta Securities’ internal staff through the evaluation of relevant indicators and information including Bloomberg ESG indicator scores of investees, listed company websites, exchange websites, TDCC website and Bloomberg information. Furthermore, in the business of regular fixed-amount purchases of Taiwan stocks, Yuanta Securities selects investment targets based on a medium- to long-term investment principle, while also considering whether the targets are constituent stocks of the Taiwan Sustainability Index, in the hope of guiding customers to select companies with good ESG performance.

The Company has established engagement and voting guidelines this year. The goal is to prompt the invested companies to improve their corporate governance quality and promote overall positive development towards society and the industry through credit issuing and other lending interactions. Crucial ESG issues such as climate change and biodiversity have been listed, so that all subsidiaries can establish relevant evaluation mechanisms or indicators. Companies with low ESG indicator scores will be engaged first. If these companies do not address or improve issues in question, the Group may limit the amount of funds available for them. Moreover, the Group does not rule out the possibility of expressing its appeal jointly with other financial institutions, industry associations, and/or government organizations. The Group has established a decision-making process in favor of the shareholder resolutions that allows us to participate in the invested company’s decision making through voting. If the discussion topic involves a major ESG issue or an ESG issue with potential major risks, the Group may discuss the topic with the invested company’s management before shareholder meetings; if necessary, the Group may vote against the topic or waive the right to vote.

The Group also communicates with invested companies through telephone calls, e-mails, or meetings (such as institutional investors conferences and shareholders meetings). When an invested company violates ESG principles on specific issues and damages the rights of the Company’s customers or beneficiaries, the Company will exercise its voting rights or other shareholders’ rights to express its demands to the management of the invested company and further influence the conduct of the invested company. The total responsible investments of Yuanta Securities, Yuanta Bank, and Yuanta Life for the year 2023 were NT$66.77 billion.

Yuanta Financial Holdings spares no effort in supporting the sustainable transformation of industries, continuously monitoring the actions and progress of invested companies in topics such as climate change, low-carbon transition, supply chain management, and corporate sustainability policies. We aim to promote concrete climate response actions and enhance climate resilience through interaction with investee companies. The Company has engaged with sixteen key invested companies in 2024. Industries involved include domestic semiconductors, electronic components, and textiles. Among them, five companies undertook specific improvement actions following engagement. These actions are: proactively piloting IFRS Sustainability Disclosure Standards S1 "General Requirements for Disclosure of Sustainability-related Financial Information" and S2 "Climate-related Disclosures"; actively responding to the International Union for Conservation of Nature (IUCN); establishing biodiversity conservation guidelines; and evaluating the setting of net-zero targets, serving as successful engagement cases for the Group. Every year, Yuanta Bank engages in ESG-focused dialogue and interaction with investee companies through questionnaires. These questionnaires primarily inquire whether the companies are continuously investing in energy saving or green energy-related sustainable equipment, engaging in nature and ecological conservation efforts, addressing the impact of their operations on biodiversity, and participating in positive-impact initiatives such as supply chain engagement—all of which are considered in investment decisions.

Yuanta Securities, Yuanta Bank, Yuanta Life, and Yuanta Funds have conducted engagements as institutional investors with invested companies and relevant partners to help them establish relevant response strategies, improvement plans, and future goals on major environmental issues. Examples of such engagements are as follows:

The Group also voluntarily adheres to the United Nations Principles for Responsible Investing, aiming to integrate ESG topics into investment decisions while enhancing the long term value of assets. This approach positions the Group as a stabilizing force in promoting sustainable development across industries and society as a whole. The Group compliance with the Responsible Banking Principles in 2024 is as follows:

The Group compliance with the Responsible Banking Principles in 2024
Principle 1:We will incorporate ESG issues into investment analysis and decision-making processes.	The Group's subsidiaries implement investment decisions in accordance with the Principles for Responsible Investment (PRI) and its spirit. Based on the Group's "Sustainable Finance Guidelines" and "Industry-Specific Environmental and Social Risk Management Rules", ESG risk factors are considered in relevant business activities. Additionally, for industries specified by the Group, an "Industry-Specific Environmental, Social, and Governance Risk and Opportunity Management Checklist" is used to assess and identify potential ESG risks in investment targets. Each subsidiary refers to ESG indicators such as ESG constituent stocks, corporate websites of TWSE- and TPEx-listed companies, exchange websites, the Taiwan Depository & Clearing Corporation (TDCC) website, Bloomberg, MSCI, Sustainalytics, and S&P Global to use the ESG performance of investee companies as a reference in investment decisions. Employees are encouraged to participate in internal and external ESG training courses to enhance the knowledge of investment staff on responsible investment. Yuanta Bank has established investment guidelines, such as the "Financial Markets Division's Guidelines Governing Medium- and Long-Term Investment Evaluation Committee Establishment and Review" and the "Operational Guidelines for Funds Utilization and Transactions of Banking Book", which include sustainable finance evaluation forms. These forms are used to assess whether investment targets are controversial or prohibited companies under the Group's criteria. In cases involving controversial companies or companies in high ESG risk and sensitive sectors, enhanced due diligence is to be conducted. Yuanta Life has formulated the Investment Policy and the "Procedures for Utilization of Investment-related Funds" as guiding principles for capital utilization, accompanied by periodic reviews of existing investment targets. Yuanta Funds integrates external ESG databases into its internal investment decision-making systems and tracks ESG risk events related to its investment portfolios, thereby strengthening pre-, during-, and post-investment ESG risk management for its funds.
Principle 2:We will be active owners and incorporate ESG issues into our ownership policies and practices.	Subsidiaries engage in dialogue and interaction with investee companies through various means such as exercising shareholder voting rights, on-site visits, emails, phone calls, and participation in investor conferences with the aim of learning and getting a full picture on the investee's current situation, risks, and future development strategies as well as striving to build a mutual consensus on long-term value creation and bring positive impact. In accordance with the "Key Points of Engagement and Voting Operations" of Yuanta Financial Holdings, a joint assessment list for engagement is selected. Investment targets are prioritized for engagement based on their ESG-related data and ratings, with those ranking lower on ESG indicators receiving higher priority. Joint engagement is also considered as a strategy to improve ESG performance metrics of the investee companies.
Principle 3:We will seek appropriate disclosure on ESG issues by the entities in which we invest	Each year, as an institutional investor, subsidiaries engage with investee companies in Taiwan and abroad. Engagement topics include encouraging participation in climate-related organizations, setting netzero targets, formulating carbon reduction strategies, actively responding to the International Union for Conservation of Nature (IUCN), and establishing biodiversity protection standards. The investee companies have been guided to align with the IFRS Sustainability Disclosure Standards S1 "General Requirements for Disclosure of Sustainability-related Financial Information" and S2 "Climate-related Disclosures," actively encouraging companies to improve their ESG disclosure practices. The Group supports international initiatives such as SBT (Science Based Targets), PCAF (Partnership for Carbon Accounting Financials), TCFD (Taskforce on Climate-related Financial Disclosures), TNFD (Taskforce on Nature Related Financial Disclosures), and PBAF (Partnership for Biodiversity Accounting Financials), advocating for a culture of sustainability disclosure among financial institutions and corporations.
Principle 4:We will promote acceptance and implementation of the Principles within the investment industry.	Yuanta Life has established the "Procedures for Managing Discretionary Investment", which clearly stipulates the inclusion of responsible investment considerations when signing contracts with external institutions. The adherence to the PRI in the assessment management policies of entrusted institutions can be verified through, but not limited to, the following: these institutions' signing of the PRI, compliance with the Taiwan Stock Exchange Corporation's Stewardship Principles for Institutional Investors, or the establishment of internal sustainable finance-related policies. Yuanta Funds, in collaboration with National Taiwan Normal University, pioneered the establishment of the "Research Center for Artificial Intelligence in Investment and Asset Management," integrating University Social Responsibility (USR) with sustainable (ESG) index investing.
Principle 5:We will work together to enhance our effectiveness in implementing the Principles.	In accordance with the policy on Taiwan's Pathway to Net-Zero Emissions in 2050, the Group's subsidiaries jointly support the "Coalition of Movers and Shakers on Sustainable Finance" pledge by taking more proactive actions in areas such as investment and engagement, information disclosure, support and promotion, and alignment with international standards. Furthermore, the Group encourages corporate participation in green supply chains, invests in zero-carbon technologies, and leads the financial industry in leveraging its influence to drive sustainable development. Yuanta Securities, referencing the ESG IR Platform established by the TDCC, utilizes both domestic and international sustainability ratings disclosed on the platform to engage with and provide guidance to companies to help them make the sustainability transition.
Principle 6:We will each report on our activities and progress towards implementing the Principles	The Company publishes a sustainability report annually, disclosing its sustainable development strategies, management systems, goals, and progress. Yuanta Securities, Yuanta Bank, Yuanta Life, and Yuanta Funds each publish an annual stewardship report, disclosing their practices in responsible investment and stewardship.