Responsible Investment
ESG and sustainability are central to our selection of investment prospects. Our execution with the highest integrity in governance ensures profitability and development of the target business.
Principles and Policies
To implement the United Nations Sustainable Development Goals (SDGs) and align with the UN Principles for Responsible Investment (UN PRI) and the UN Principles for Responsible Banking (UN PRB), KGI Financial and its subsidiaries have instituted the “Sustainable Finance Commitment,” which has been formally approved by their respective Boards of Directors. Under the Board-level Sustainability and Ethical Management Committee, the Company has established a “Responsible Finance” working group tasked with formulating the sustainable finance blueprint. This working group convenes at least three times annually to deliberate on and develop sustainable development plans, while overseeing the implementation of responsible investment strategies and policy directions.
To implement the United Nations Principles for Responsible Investment (UN PRI), the Company’s subsidiaries—KGI Life Insurance, KGI Bank, KGI Securities, KGI SITE, and CDIB Capital—have all signed the “Stewardship Principles for Institutional Investors” released by the Corporate Governance Center of the Taiwan Stock Exchange, adhering to its six major principles. By incorporating ESG management procedures into investment decisions and establishing a “Responsible Investment Policy” or “Stewardship Policy” approved and issued by the Board of Directors, ESG is integrated as a material factor in investment evaluation and management. Each has established a "responsible finance" or "responsible investment" working group, which is responsible for planning its sustainable development plan and for overseeing the implementation of reducing investment and financing in high-carbon-emitting industries, as well as increasing green/sustainable investment and financing and seeking green investment opportunities.
The Sustainable Finance Commitment applies to the Company and its major subsidiaries, including KGI Life, KGI Bank, KGI Securities, KGI SITE, and CDIB Capital. This commitment covers all domestic and international business operations and investment activities. Investment and financing activities encompass proprietary positions in active investments, passive investments, and outsourced externally managed investments in proprietary positions, as well as credit business; whereas asset types classes include listed equity, fixed-income securities, private equity, real estate investments, and financing.
To implement the United Nations Principles for Responsible Investment (UN PRI), the Company’s subsidiaries—KGI Life Insurance, KGI Bank, KGI Securities, KGI SITE, and CDIB Capital—have all signed the “Stewardship Principles for Institutional Investors” released by the Corporate Governance Center of the Taiwan Stock Exchange, adhering to its six major principles. By incorporating ESG management procedures into investment decisions and establishing a “Responsible Investment Policy” or “Stewardship Policy” approved and issued by the Board of Directors, ESG is integrated as a material factor in investment evaluation and management. Each has established a "responsible finance" or "responsible investment" working group, which is responsible for planning its sustainable development plan and for overseeing the implementation of reducing investment and financing in high-carbon-emitting industries, as well as increasing green/sustainable investment and financing and seeking green investment opportunities.
The Sustainable Finance Commitment applies to the Company and its major subsidiaries, including KGI Life, KGI Bank, KGI Securities, KGI SITE, and CDIB Capital. This commitment covers all domestic and international business operations and investment activities. Investment and financing activities encompass proprietary positions in active investments, passive investments, and outsourced externally managed investments in proprietary positions, as well as credit business; whereas asset types classes include listed equity, fixed-income securities, private equity, real estate investments, and financing.
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Incorporate ESG issues into investment analysis and decision-making processes |
All major subsidiaries of KGI Financial have established responsible investment policies, and ESG review conditions and standards (including Exclusion and Sector-Specific Standards), and ESG issues are taken into consideration in investment decisions.
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Be active owners and incorporate ESG issues into our ownership policies and practices |
All the major subsidiaries of KGI Financial have signed the “Stewardship Principles” issued by the Taiwan Stock Exchange Corporation, and have formulated relevant protocols and voting policies to actively engage in ESG-themed conversations with investee companies, guiding them to reduce negative environmental and social impacts and explore opportunities for sustainable development.
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Seek appropriate disclosure on ESG issues by the entities in which we invest |
We review and pay attention to the material ESG issues of investee companies in accordance with local authorities' requirements for the disclosure on ESG issues, including but not limited to ESG reports and ethical corporate management best practice principles. |
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Promote acceptance and implementation of the PRI within the investment industry |
KGI Financial places importance on Corporate Social Responsibility and, at the 2025 Taipei International Financial Expo, brought together its four major subsidiaries – KGI Life, KGI Securities, KGI Bank, and KGI SITE to present the theme of “KGI Financial Express,” inviting the public to board the ride and set off on a one-stop financial journey spanning asset accumulation, risk transfer, and wealth succession. With the integrated energy of “ONE KGI” and a comprehensive wealth management perspective, it showcased its dedicated innovative thinking. At the same time, it began with digital innovation and User Experience, not only safeguarding the security of every customer’s financial transactions, but also taking it as its responsibility to lead customers toward a better future. |
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Work together to enhance our effectiveness in implementing the PRI |
In order to assist the financial industry to strengthen the risks brought about by climate change, KGI Financial joined the Partnership for Carbon Accounting Financials (PCAF) in June 2023 to apply its financial asset carbon emission calculation methodology and database and assist corporate clients to promote low carbon transformation, in line with the “Green Finance and Transition Finance Action Plan” proposed by the FSC and is committed to exerting financial influence. |
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Each report on our activities and progress towards implementing the PRI |
In addition to regular disclosures on compliance with stewardship in accordance with “Stewardship Principles“, KGI Financial, KGI Life, and KGI Securities have publicly disclosed the implementation of responsible investment in the respective ESG reports.
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Responsible Investment Management Framework
We have integrated ESG issues with the Group‘s investment stewardship governance framework to form a responsible investment management framework at KGI Financial. It establishes the six principals of responsible investment, “ESG Incorporation Principles” “Conflict of Interest Management,” “Sector Management Principles," "Negative Exclusion Principles," "Engagement Policy" and "Voting Policy." Further, the principals are launched for responsible investment in four subsidiaries, namely CDIB Capital, KGI Life, KGI Bank, and KGI Securities. In accordance with the asset attributes and investment process of the four subsidiaries, each of them has formulated its own responsible investment policy to directly guide risk management and asset allocation. For different types of assets such as equity, fixed income, and private equity within the Group, shaping the overall process risk control, before, during and after investment, that suits its business characteristics.
Process and Mechanism
Incorporating ESG criteria into investment analysis and decision-making processes
While investing, the Group takes into account ESG factors in target selection for management to make decisions and takes over stewardship to improve investment value and for sound development of both the Group and investee companies.
While investing, the Group takes into account ESG factors in target selection for management to make decisions and takes over stewardship to improve investment value and for sound development of both the Group and investee companies.
Responsible Investment Process
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Steps and Process
Process
Step 1-Screening
Screening
• Comply with the Principles for Responsible Investment (PRI) as the Group's responsible investment policy framework
• Create an exclusion list
• Review and assess sector-specific requirements
• Create an exclusion list
• Review and assess sector-specific requirements
Step 2-Examination
Examination
• Incorporate financial and ESG criteria into the examination
• Conduct ESG due diligence on investment targets in dispute
• Hold investment review meetings
• Decide on the investment amount
• Conduct ESG due diligence on investment targets in dispute
• Hold investment review meetings
• Decide on the investment amount
Step 3-Management
Management
• Analyze/review the gap during the investment
• Keep track of proposals that could adversely affect the sustainable development of investment targets or ESG principles
• Exercise the right to vote and disclose the votes at a shareholders' meeting
• Keep track of proposals that could adversely affect the sustainable development of investment targets or ESG principles
• Exercise the right to vote and disclose the votes at a shareholders' meeting
Step 4-Engagement
Engagement
• Communicate with investment targets to assist them in reducing negative impacts on the environment and society and exploring opportunities for sustainable development
Establish KGI Financial Responsibility Finance Working Group
KGI Financial values sustainable governance to achieve the Sustainable Development Goals (SDGs). KGI Financial and its main subsidiaries have all established Sustainability and Ethical Management Committees under the board of directors, or Sustainability working group. Each of them has established a Responsible Finance/Responsible Investment working group. We are committed to following the United Nations Principles for Responsible Investment (PRI), Principles for Responsible Banking (PRB), and Principles for Sustainable Insurance (PSI), and support sustainable economic activities. The composition and main responsibilities of the responsible finance working group are as follows：
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ESG Activity
Upholding transparent and honest two way communication, we immediately post ESG related activities on the website for all our stakeholders.