In 2022, while the COVID-19 pandemic began to ease, the world had just entered a “new normal” in the post-pandemic period. However, the outbreak of the Russo-Ukrainian War has led to a new cycle of food and energy crises. Nevertheless, the “Global Risks Report 2023” released by the World Economic Forum points out that the environmental and social crises will be the biggest challenges in the next decade. The top three risks are “failure to mitigate climate change”, “failure of climate change adaptation”, and “natural disasters and extreme weather events.” This shows that the challenges of sustainability remain arduous.

In the face of the irreversible trend of sustainability, we fully understand that resilience and management in sustainability are two sides of the same coin. In particular, corporate governance is crucial, and the Board of Directors must take on a heavy responsibility of supervising and leading TCFHC toward sustainability. With the support of the Board of Directors, TCFHC has established the “Sustainability Office” in 2021. By taking such a precedent action among Taiwan's state-owned financial institutions, the office aims to formulate the Group’s sustainability strategy blueprint. In March 2022, TCFHC became the first financial institution in Taiwan to be a signatory of the Equator Principles under the name of a financial holding company. In addition, TCFHC joined the Science Based Targets initiative (SBTi) in July of the same year to align with Taiwan’s Pathway to Net-Zero Emissions in 2050. TCFHC also became the first state-owned financial holding company that commits to setting carbon reduction targets using the SBTi methodology. TCFHC is now proactively preparing its medium- and long-term carbon reduction targets for review. In addition, as of the end of 2022, TCB has invested NT$65.5 billion in green energy projects and issued sustainable finance bonds. The outstanding balance of the “Sustainability-Linked Loan Project” has reached NT$12.053 billion. These endeavors demonstrate TCFHC's extension of its financial influence and collaboration with its customers to strive to limit global warming to less than 1.5°C by the end of the century.

When facing complex ESG issues, TCFHC has always maintained a resolute attitude and joined hands with stakeholders to tackle difficult challenges. Internally, we have strengthened information security and improved risk management. In 2022, we obtained the “ISO 22301 Business Continuity Management” and established emergency responses and business continuity capabilities. In terms of climate change governance, we have demonstrated high resilience, as our “Task Force on Climate-related Financial Disclosures (TCFD)” was conferred the highest level of certification, “Level-5: Excellence,” by the British Standards Institution (BSI). Meanwhile, we also focus on sustainable finance and accelerate the integration of financial business and technology. To encourage innovation, TCB continues to hold the “Innovation Brainstorming Camp” every year to encourage innovation. In 2022, TCB officially designated the Electronic Banking Department to oversee its CoLAB. Through close collaboration across departments, TCB aims to stimulate innovative thinking in FinTech. In 2022, it rose to 11th place in the Top 100 of Patent Application Filed by Domestic Institutions, making it the top financial institution in Taiwan. Externally, we proactively assist our customers in facing the challenges of carbon-induced anxiety and carbon tariffs. We held the “Sustainable Finance Transformation Consensus Camp” to call on more than 1,500 enterprises from various industries, including manufacturing industries, engineering and construction industries, wholesale and retail industries, transportation and warehouse industries, and service industries. They participated enthusiastically by brainstorming solutions for reducing carbon emissions in enterprises, and preparing for early transformation.

In addition, TCFHC fully understands the competitive landscape we face has changed, and ESG is redefining the value of enterprises. In terms of implementing low-carbon operations, conducting a greenhouse gas inventory has been defined as a key for enterprises to keep abreast of climate issues. Therefore, in 2022, TCFHC accelerated to complete greenhouse gas inventories at all domestic and overseas branches to set up its own carbon reduction goals. Moreover, it continues to promote energy resource management measures, install self-sufficient solar power generation equipment and has procured 3.6 million kWh of renewable energy for 3 years. TCFHC subsequently plans to introduce an internal carbon pricing mechanism to “internalize the external costs” of greenhouse gas emissions to strengthen the low-carbon awareness of its employees and external stakeholders. In addition, to unite and build consensus, besides holding various ESG seminars to enhance employees' knowledge on sustainability, TCFHC also links stakeholders concerning material ESG topics with subsidiaries’ KPIs. TCFHC also connects work performance to the incentive system by holding power-saving competitions between departments and promoting incentive measures for green finance. This allows TCFHC, its subsidiaries, and employees at different levels to stand united and work for the sustainable development goals.

On the path towards sustainability, our care for employees is consistent. TCFHC provides a well-established remuneration system for developing and retaining talent. In addition to launching the employee stock ownership trust, TCFHC made an average pay rise of 6.6% or higher since January 2022. Meanwhile, TCHFC provides paid parental care leave, general and special health examinations subsidies for employees and a range of benefits which surpass regulatory requirements or industry average. During the severe outbreak of the pandemic, TCFHC took the initiative to purchase COVID-19 vaccination insurance for employees in Taiwan and also implemented quarantine care leave, paid vaccination leave, and vaccination and screening test subsidies. On the other hand, we are also pay close attention to gender equality in the workplace and strive to build a gender-friendly workplace. In 2023, TCFHC receiving international recognition when it participated in the Bloomberg Gender Equality Index (GEI) evaluation for the first time and was selected for ranking.

Due to the impact of the pandemic, whether the United Nations Sustainable Development Goals (SDGs) can be achieved by 2030 is filled with uncertainties. However, in terms of social participation, TCFHC is always present. In responding to the national security crisis caused by the aging population and low birth rate, and following the first-of-its-kind "Seed Staff of Long-term Care" program, TCFHC makes investment in training “Eldercare Financial Planning Consultants.” As of the end of 2022, TCFHC has 290 “Eldercare Financial Planning Consultants”, ranking first in the industry in providing customers with professional trust planning, and happy living and secure caring consultation services. By upholding core values that are people-centric and pursuing social wellbeing, TCB has rolled out a variety of financial products and services. It offers different project loans for SMEs, innovative industries, local creative industries, agricultural and fishery industries, and youth and long-term care institutions. The promotion of Loans for Start-up Assistance for the Unemployed of Employment Insurance, Loans for Start-up Assistance for Unemployed Middle-aged Persons and Elderly Persons, and Micro/Women Start-up Loans received recognition from the Ministry of Labor for their outstanding performance. They had an industry-leading market share of 28.73% at the end of 2022.

TCFHC's efforts in ESG have been widely recognized by domestic and foreign institutions. In 2022, TCFHC was conferred the National Sustainable Development Awards of the National Council for Sustainable Development; the Corporate Sustainability Report Award, and Innovation and Growth Leadership Award of the Taiwan Corporate Sustainability Awards (TCSA); the BSI Resilience Award of Excellence for the 3rd consecutive year; inclusion as one of the Common Wealth Top 100 Citizens of Sustainability; Gold Award for Taiwan Sustainability Action Awards (TSAA); Taiwan Sustainable Investment Awards - Gold Award for Sustainable Thematic Investment of Case Impact, Best ESG Award and Best Performance of Social Inclusion Award. Meanwhile, TCFHC has been included in multiple ESG indexes such as the MSCI ESG Indexes, FTSE4Good Emerging Index, FTSE4Good TIP Taiwan ESG Index, and TWSE Corporate Governance 100 Index.

The United Nations defined “sustainable development” as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” To practice sustainability, no one can remain indifferent, and although we may be facing a lot of uncertainties, now is full of opportunities. We should face and seize these opportunities proactively, and take action immediately. Looking forward, TCFHC will continue to adopt international initiatives, fulfill SDGs, and take forward-looking action to achieve sustainability. TCFHC will also extend its financial influence to collaborate with stakeholders to implement ESG, and create value in sustainability while benefiting the Earth.