Green Finance
The risk posed by climate change demands resilience and adaptability in our responses. To actualize our sustainable development strategy, we support net-zero initiatives and direct funding towards investment in green industries.
Green Finance Products
Green Investment
The general public is increasingly concerned with economic activities and the associated risks on the environment and natural resources as global climate change intensifies, giving rise to the concept of a low-carbon economy, which is considered to play a key role in maximizing long-term economic growth. Meanwhile, green investment has also emerged as a popular theme. KGI Financial mainly invests in green industries with its two major subsidiaries, CDIB Capital and KGI Life, and actively responds to government policies. The total investment of KGI Financial assets in the six core strategic industries of National Development Council amounted to NT$153.0 billion, of which more 70% of the investments are in green power and renewable energy.(Note: KGI Life's proprietary investments are calculated based on the market value or book value after investment evaluation, while CDIB Capital's proprietary investments are calculated based on the investment cost.)
Green Investment
The general public is increasingly concerned with economic activities and the associated risks on the environment and natural resources as global climate change intensifies, giving rise to the concept of a low-carbon economy, which is considered to play a key role in maximizing long-term economic growth. Meanwhile, green investment has also emerged as a popular theme. KGI Financial mainly invests in green industries with its two major subsidiaries, CDIB Capital and KGI Life, and actively responds to government policies. The total investment of KGI Financial assets in the six core strategic industries of National Development Council amounted to NT$153.0 billion, of which more 70% of the investments are in green power and renewable energy.(Note: KGI Life's proprietary investments are calculated based on the market value or book value after investment evaluation, while CDIB Capital's proprietary investments are calculated based on the investment cost.)
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Green Credit
In commitment to pursuing a balanced development of environmental sustainability, social participation, and corporate governance, KGI Bank creates positive sustainable impacts through funding and financial services, integrating ESG-related aspects into risk assessment and credit decision-making processes. Specifically, in accordance with KGI Financial's "Sustainable Finance Commitment" and the bank's "Credit Policy", the "Sustainable Credit Guidelines" have been established. When conducting corporate credit reviews, KGI Bank adheres to the "Sustainable Credit Guidelines" and establishes sustainable credit review principles under these guidelines, thoroughly considering whether borrowers fulfill their obligations in terms of environmental protection, social responsibility, and corporate integrity, and incorporating ESG-related issues into credit decision-making, credit evaluation items, and post-loan management mechanisms.
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Green Bond Underwriting
According to the provisions outlined in Taipei Exchange Operation Directions for Sustainable Bonds, the scopes for sustainable bonds include the green bonds, social responsibility bonds and sustainability bonds accredited by Taiwan Exchange. KGI Securities acted as the underwriter (as well as financial advisor) for a total of 19 sustainable bonds in 2024, including 16 green bonds, 1 social bond, 2 sustainability bonds, with a total of NT$19.578 billion.
Green Financing
KGI Securities organized equity related capital raising cases in the capital market in 2024. These included 33 environmental protection and green energy cases, accounting for about 58.93% of the number of cases organized in the year. The environmental protection and green energy funds raised NT$33.408 billion, accounting for about 63.68% of the funds raised in the current year.
[{"name":"Green and renewable energy industries","y":71.9},{"name":"Information and digital industries","y":22.3},{"name":"Strategic stockpile industries ","y":3.5},{"name":"Cybersecurity industry","y":1.3},{"name":"Precision health industry ","y":0.9},{"name":"National defense and strategic industries","y":0.1}]
Six Core Strategic Industries of National Development Council
Green Credit
When applying for credit cases, all are in accordance with the "Operational Guidelines for Credit Information Reporting by Financial Institutions" of the Joint Credit Information Center (JCIC), which defines green credit and sustainable performance-linked credit. Each case discloses in the credit review report relevant information such as green credit, sustainable performance-linked credit, ESG rating, corporate carbon emissions and carbon intensity, and the amount of carbon emissions avoided by renewable energy project financing. If the counterparties or group members are involved in high carbon-emitting industries, have been involved in highly sensitive industries and climate change-related issues in the past three years, or have had negative incidents related to environmental protection, corporate social responsibility and corporate governance, the results should be listed in the "Sustainability Risk Assessment Checklist", and it should be explained whether there are plans for improvement or transition.
For the handling of project financing cases with high water consumption and high pollution industries reaching more than US$10 million, various feasibility analyses are required in the credit report, including analysis of technology, market, finance and environmental protection, and are listed on a case-by-case basis. Entry conditions are standardized to increase its operational responsibilities.
Post-loan management continuously monitors the dynamics of borrowers, reviewing whether borrowers fulfill their obligations in environmental protection, social responsibility, and corporate integrity. If there are related negative events, it should understand the borrower's improvement or transition plans, and continuously track and evaluate the extent of the impact and take appropriate response measures.
In principle, companies that do not comply with environmental protection standards, are involved in labor disputes or have corporate governance issues, and have no specific improvement plan will not undertake the contract. Those with significant influence on the operation and KGI Bank's creditor's rights will not increase the loan or withdraw the loan gradually, in order to assist and encourage the enterprise to strengthen the implementation of environmental protection and fulfill its corporate social responsibility.
Policy and Goal
To ensure that the organizational goals and key decisions in terms of environmental, social, and governance (ESG) practices are consistent with the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement, KGI Financial adopts a top-down corporate governance structure. With effective policies, management systems, and controls in place, KGI Financial integrates SDGs into the decision-making process to create a responsible banking business model in line with the Principles for Responsible Banking (PRB). KGI Financial is also committed to promoting green finance through green project financing, green lending, and green bond underwriting in hopes of speeding up the transformation and sustainable development of the renewable energy industry in Taiwan.
Key Strategy, Targets and Progress
| Strategy/Relevant Material Topics | Asset/Methodology(Note 1) and 2024 Progress | Short-term Goals 2025 |
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| 【Strategy】Engagement Targets 【Relevant Material Topics】ESG risks and opportunities in investment and financing |
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| 【Strategy】Engagement Targets 【Relevant Material Topics】ESG risks and opportunities in investment and financing |
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【Strategy】Sector Targets 【Relevant Material Topics】Climate/Nature Opportunity and Risk Management |
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| 【Strategy】Sector Targets 【Relevant Material Topics】Climate/Nature Opportunity and Risk Management |
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| 【Strategy】Portfolio Emission Targets 【Relevant Material Topics】Climate/Nature Opportunity and Risk Management |
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| 【Strategy】Transitions Targets 【Relevant Material Topics】ESG risks and opportunities in investment and financing, Climate/Nature Opportunity and Risk Management |
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| 【Strategy】IFRS S2/TCFD 【Relevant Material Topics】Climate/Nature Opportunity and Risk Management |
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Note 1: Portfolio Coverage (PC); Sectoral Decarbonization Approach (SDA). Note 2: Effective January 1, 2025, no new direct project financing or investment positions shall be added by this commitment. Note 3: The percentage of revenue from related businesses is expected to grow. Note 4: A business deriving more than 30% of their revenue or generated power from thermal coal and unconventional oil and gas related industries, without putting forth a low-carbon transition project in alignment with the targets under the Paris Agreement. Note 5: Direct investment refers to the allocation of capital into an investment target where more than 10% of common shares are held. Direct financing refers to the provision of capital directly to enterprises or institutional entities in need of funding, including granting loans and purchasing more than 10% of a corporate bond issuance in the primary market. |
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Society
Whether it is charity programs, emergency aid, industry-academia cooperation, or talent cultivation, the core we focus on most will never change: the positive driving force that education brings to society.