SinoPac Subsidiaries

Responsible Investment

As an institutional investor, SinoPac Securities leverages its expertise and influence to implement various stewardship actions that aim to enhance investment value. The company incorporates Environmental, Social, and Governance (ESG) sustainability issues into its considerations, with the goal of promoting the long-term interests of clients and shareholders.

On July 16, 2018, SinoPac Securities signed the "Statement of Compliance with the Stewardship Principles for Institutional Investors." Following the signing, the company publishes an annual stewardship report, referencing the "Stewardship Principles for Institutional Investors" and the United Nations' "Principles for Responsible Investment." Additionally, based on the parent company SinoPac Holdings' "Sustainable Finance Policy," "Responsible Investment Management Guidelines," and "Climate-Related Risk and Opportunity Management Guidelines," SinoPac Securities has established its own "Responsible Investment Management Guidelines." These guidelines provide the framework for the company's investment and asset management operations, integrating ESG issues and related risks into the decision-making process. The company has developed tools and regulations for assessing ESG risks to facilitate responsible investment practices.

Since 2022, SinoPac Holdings has gradually phased out financing and investment activities related to thermal coal and unconventional oil and gas. In alignment with the Group’s policy, SinoPac Securities revised its Responsible Investment Management Guidelines to incorporate ESG issues and related risks into business decision-making processes, establish methodologies and tools for ESG risk assessment, and strengthen relevant internal regulations and procedures.

Beginning in 2025, the Company no longer differentiates between domestic and overseas thermal coal and unconventional oil and gas companies when applying business restrictions to its investment activities and fixed-income underwriting businesses. Consistent criteria have been established for both domestic and overseas transactions to specify the circumstances under which such business activities may be conducted, further refining the Company's decarbonization policy.

Responsible Investment Process

SinoPac Securities adheres to the United Nations' "Six Principles for Responsible Investment" and refers to the "Responsible Investment Management Guidelines" of its parent company, SinoPac Holdings, as well as its own "Responsible Investment Management Guidelines." In known situations, it prohibits engaging in investments in controversial industries and carefully evaluates sensitive industries and economic activities.

SinoPac Securities has incorporated sustainability-related considerations into its Internal Control System and Internal Audit Implementation Rules. Relevant provisions have been incorporated into the Internal Control System, including “CA-12110 Centralized Proprietary Trading Decision-Making” under Proprietary Trading Business and “CA-22110 Proprietary Futures Trading Decision-Making” under Concurrent Futures Business, as well as the Internal Audit Implementation Rules, including “AA-12110 Centralized Proprietary Trading Decision-Making” under Proprietary Trading Business and “AA-22110 Concurrent Proprietary Futures Trading Decision-Making” under Concurrent Futures Business. ESG and sustainability risk factors have been integrated into the trading decision-making process. The relevant amendments were approved by the Board of Directors and are subject to annual reviews in accordance with internal audit procedures.

During investment evaluations, SinoPac Securities refers to the guidelines and standards of international organizations and professional institutions, including the International Finance Corporation (IFC), the World Bank, and the United Nations. The Company incorporates ESG factors, such as negative news, climate change, human rights, and corporate governance issues, into its risk assessment process. It also maintains a list of prohibited industries for investment, conducts prudent assessments of sensitive industries, manages investment limits based on risk ratings, and requires material ESG-related incidents to be reported to the Board of Directors. Through these measures, SinoPac Securities seeks to enhance its positive impact on society and the environment.

In addition, through company visits and by referencing information from the Taiwan Stock Exchange (TWSE), Taipei Exchange (TPEx), the Securities and Futures Institute's “Corporate Governance Evaluation,” and the Taiwan Depository & Clearing Corporation's “Integrated Investor Relations Platform,” SinoPac Securities conducts ESG risk assessments across different asset classes and strengthens its comprehensive evaluation of investee company risks.

Incorporating ESG Factors into the Wealth Management Product Review Process

The wealth management product review process includes ESG principles in the evaluation items for product issuers, and also incorporates ESG factors into the product review process. After comprehensively evaluating other items, the Company prioritize products with ESG-related investment concepts or with relatively positive impact, in order to fully implement the spirit of responsible investment and stewardship. ESG funds are promoted and available on the ESG fund section of SinoPac Securities.

In response to the spirit of ESG investments, all of the 30 domestic securities investment trust companies that SinoPac Securities work with, respectively, have signed the statement of compliance with the "Stewardship Principles for Institutional Investors" In 2025. Furthermore, all 7 of the offshore fund asset management institutions that SinoPac Securities are working with are in compliance with the “Principles for Responsible Investment (PRI).”

Engagement with investees

SinoPac Securities continuously monitors significant news regarding investee companies, quarterly financial performance, future industry outlook, medium- to long-term operational strategies, major environmental protection initiatives, social responsibility, labor rights, and corporate governance. The company maintains appropriate dialogue and interaction with investee companies through various means, including conference calls, face-to-face meetings, participation in earnings calls, conducting training sessions, and sending representatives to annual shareholder meetings or extraordinary meetings with significant proposals. By attending shareholder meetings, actively exercising ownership rights (such as voting rights), and communicating with the management of investee companies, SinoPac Securities integrates ESG issues into its ownership policies and practices. This approach aims to further understand and communicate the risks and strategies faced by the industry, striving to reach a consensus with investee companies on long-term value creation. If necessary, SinoPac Securities will collaborate with third parties to encourage or assist investee companies in prioritizing sustainability issues. If the ESG performance of the engagement targets does not show positive improvement over the long term, the company will exercise shareholder activism, gradually reduce investment positions, or assess whether to continue the relationship.

In 2025, SinoPac Securities attended a total of 1,371 shareholder meetings (6 in-person and 1,365 via electronic voting), participated in 115 earnings calls, visited 6 companies (including joint engagements), and received responses from 26 companies to the sustainability issues survey.

Summary of the 2025 Sustainability Issues Survey Results

Since 2020, SinoPac Securities has distributed Environmental, Social and Governance (ESG) sustainability questionnaires to investee companies as one of its engagement approaches. The questionnaire is developed with reference to the Sustainable Economic Activities Reference Guidelines and covers key topics, including ESG issues incorporated into operational and business decision-making, whether companies assess their sustainability performance based on sustainability taxonomies such as the Sustainable Economic Activities Reference Guidelines and the EU Taxonomy, as well as net-zero commitments and greenhouse gas emissions disclosures. Through the survey, the Company seeks to gain a better understanding of the sustainability practices of its investee companies.

The survey results indicate that most companies have implemented energy management measures and undertaken actions in response to sustainable development and climate change mitigation initiatives. More than 70% of surveyed companies have adopted low-carbon emission reduction measures, published Sustainability Reports, established greenhouse gas reduction targets, and formulated human rights policies. With respect to biodiversity conservation, although most companies have invested in marine and terrestrial ecosystem conservation and related public welfare activities, fewer than 30% have established specific biodiversity-related targets and performance indicators. Similarly, only approximately 30% of companies have assessed their sustainability performance using sustainability taxonomies such as the Sustainable Economic Activities Reference Guidelines and the EU Taxonomy. These findings suggest that Taiwanese companies still have room for improvement in biodiversity management and the adoption of sustainability classification frameworks.

For SinoPac Securities' "Stewardship Principles for Institutional Investors" compliance statement and "Stewardship Policy," visit the Corporate Governance session on the company website：Stewardship Principles.