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Climate Risks and Opportunities

The Bank follows the Task Force on Climate-related Financial Disclosures (TCFD) framework to disclose the 11 suggested disclosure items related to the Bank's governance, strategies, risk management, and indicators and goals of the climate risks and opportunities. The descriptions are as follows: (For details, please refer to the "Task Force on Climaterelated Financial Disclosures (TCFD) Report" published by the Bank.)

  1. (For details, please refer to the "Task Force on Climate-related Financial Disclosures (TCFD) Report" published by the Bank.)
  2. TCFD Report

Climate Governance

Climate Governance
  1. The Bank's Board of Directors serves as the highest t governing body for climate issues, guiding, supervising and managing the Bank's exposure to climate risks and to ensure that the Bank's qualitative and quantitative measures align with our risk appetite. The TCFD task force was established at the end of 2021 to identify and assess climate risks and opportunities. The TCFD task force develops the action plans based on the Bank's Climate Risk Management Policy and provisions on climate issues and supervises the implementation of the action plans and reports to the Risk Management Committee, Audit Committee, and the Board of Directors on a quarterly basis.
  2. Additionally, the ESG Task Force provides regular and ad hoc reports to the Sustainable Development Committee on the progress of greenhouse gas inventory, verification, achievements in greenhouse gas reduction, and key climate-related decision-making. Additionally, overseas branches/subsidiaries in Mainland China are gradually establishing climate governance frameworks compliant with local regulatory requirements. They report climate-related opportunities, risks, and relevant management measures back to the Head Office in Taiwan.

Climate Strategy

  1. The Bank identifies and assesses factors of climate risks, encompassing the risk types suggested by TCFD, such as immediate and long-term physical risks, policy and regulatory risks (including current regulations and potential emerging norms), technological risks, market risks, and reputational risks associated with transition. To identify and assess climate opportunities, factors such as resource efficiency, energy sources, products and services, markets, and resilience are taken into account. 
  2. For the top three identified climate-related risk/climate-related opportunities factors, their impact on operations and business areas the following table:
  3. Climate-Related Risk / Climate-Related Opportunity

Climate Risk Management

  1. The Bank integrates climate risk into "The Integrated Risk Management Policy for Chang Hwa Bank". In order to establish a climate risk management mechanism, the "Climate Risk Management Policy of Chang Hwa Bank " is formulated to clearly divide the management responsibilities of each line of defense and formulate the Bank's climate risk assessment methods and processes. The TCFD Task Force is led by the Risk Management Division. It convenes and coordinates various units within the Head Office to set targets with regularly monitor and track and propose implementation plans for the TCFD related policy modification and climate-related risk and opportunity impacts.
  2. The Bank assesses the impacts of physical risks for operation and financing on net worth under the model of RCP2.6 and RCP8.5 scenarios of the United Nations Intergovernmental Panel on Climate Change (IPCC). The Bank assesses the impacts of Transition Risk for financing on net worth by the three scenarios of the Network for Greening the Financial System (NGFS): Global Net Zero by 2050, Delayed Transition, and Nationally Determined Contributions (NDC).
    1. 2023 Scenario Analysis
      2023 Scenario Analysis

Climate Metrics and Targets

  1. To align with the Paris Agreement and toward 2050 Net Zero, the Bank pledges to restrict temperature rise within 1.5℃ with Category 1 and Category 2 emissions and restrict temperature rise below 2℃ with investment and financing portfolio's carbon emissions by setting the targets and has passed the SBTi target review.
    Climate Metrics and Targets
  2. To facilitate the low-carbon transformation of enterprises, specific target indicators have been set for green loans and credit, green financial products and services, and green industrial investment. These indicators focus on expanding business scale, continuously developing products and services, and increasing investment amounts. The goal is to gradually increase the overall green-related business activities each year.