SinoPac Securities, in accordance with the action plan and timeline developed by the TCFD group of its parent company, SinoPac Financial Holdings, has incorporated climate governance, strategy, risk management, and related indicators and targets into its short-, medium-, and long-term priorities. The company's Sustainability Promotion Group and Risk Management Committee regularly review and track the achievement of these indicators and targets, adjusting them on a rolling basis based on actual development trends. SinoPac Securities primarily uses indicators and targets to identify and manage physical and transition risks. The 2024 implementation status and future short-, medium-, and long-term indicators and targets are detailed below:
2024 Implementation Status of Indicators and Targets for Physical and Transition Risks:
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Climate-Related Indicators
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Entity Risk Indicators |
| Indicator Description |
Proportion of high-risk investment targets (Note 1) to total authorized investment positions
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Short-Term Target (2024)
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Stock Proprietary Trading
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Drought risk assessments for investment targets are conducted in conjunction with the company's procurement database, and climate risk assessments are conducted based on the information provided.
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For high-risk targets, total investment limits and upper limits on the proportion of individual targets in OCI's overall portfolio are established.
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The proportion of high-risk positions in the OCI portfolio is reviewed annually.
Bond Proprietary Trading
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In accordance with the "Key Points for Responsible Investment Management," climate risk assessments are added to the bond ESG risk assessment form. OCI investment targets whose bonds do not meet ESG rating criteria are required to complete the bond ESG risk assessment form and undergo tiered management.
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Regular ESG risk reviews are conducted before and after new OCI investment positions to identify the ESG risk level of OCI investment targets.
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Investment in high-risk targets is prohibited, and a set investment percentage for medium- and low-risk targets is set (the investment amount cannot exceed 30% of the total authorized amount).
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The ESG risk level of OCI investment positions is regularly reviewed. If any OCI investment targets are reclassified as high-risk, or if the medium- and low-risk investment amount exceeds the aforementioned 30% investment percentage of the total authorized amount, a resolution plan will be developed within three months and implemented within six months.
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Work Plan Implementation Status
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Stock Proprietary Trading
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Once the FCS database goes live, drought risk for target companies will be included in investment analysis reports.
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For high-risk targets (including sea level rise, heavy rainfall flooding, and drought risks), the total OCI investment amount is capped at 40% of the total authorized limit, while the investment amount for individual targets is capped at 10% of the total authorized limit.
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Currently, the company's registered location's latitude and longitude and the NCDR website's scenario temperature of 1°C and 2°C serve as the base period and mid-century/end-of-century classification criteria. By the end of 2024, the proportion of OCI positions classified as high risk will be 1.6% of the total authorized limit.
Bond Proprietary Trading
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In accordance with the "Key Points for Responsible Investment Management," OCI reviews the ESG risks of investment targets before adding new bond investment positions. The issuers of newly added targets are not from controversial or sensitive industries.
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As of December 2024, 34% of OCI's portfolio was allocated to targets with medium-to-low risk according to ESG risk assessments, within the 30% investment limit.
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Climate-Related Indicators
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Transition Risk Indicators |
| Indicator Description |
Proportion of High-Carbon Emission Industries (Note 2) and Enterprises Regulated by the Ministry of Environment in Total Authorized Investment Portfolios
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Short-Term Target (2024)
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Stock Proprietary Trading
If an investee company is classified as a high-carbon emission industry, we will examine whether it has a plan to reduce carbon emissions annually and has committed to or set a SBT carbon reduction target.
Bond Proprietary Trading
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The BICS codes for controversial and sensitive industries as defined in the "Key Points for Responsible Investment Management" have been updated to the investment decision evaluation form.
- OCI prohibits investments in controversial industries. However, sensitive industries are subject to the same key requirements and undergo ESG risk reviews for new investments, including regular post-investment reviews.
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Work Plan Implementation Status
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Stock Proprietary Trading
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At the end of 2024, the proportion of the OCI portfolio consisting of investees in high-carbon emission industries (including enterprises regulated by the Ministry of Environment and nine other high-carbon emission industries) will be 1.2% of the total authorized quota. This is because two of the investees were listed as high-carbon emission enterprises by the Ministry of Environment in 2023, one of which has already set an SBT carbon reduction target.
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The proposed maximum limits for the total investment amount and individual investments in high-carbon emission industries as a percentage of the total authorized OCI quota are 40% and 10%, respectively. The OCI investment risk management guidelines are expected to be revised.
Bond Proprietary Trading
In accordance with the "Key Points for Responsible Investment Management," OCI reviews the ESG risks of new bond investments before adding them to its portfolio. The issuers of newly added bonds are not in controversial or sensitive industries.
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Note 1: This refers to investment and financing targets operating in locations that are considered high-risk under any of the following scenarios: sea level rise, flooding due to heavy rainfall, or drought.
Note 2: High-carbon-emitting industries include the oil and gas industry, metal mining, power generation, chemical materials manufacturing, agriculture, forestry, fishery, and animal husbandry, traditional manufacturing industries such as automobiles and motorcycles, traditional manufacturing industries such as metal and its products manufacturing, cement, shipping, and aviation.
Future short-, medium- and long-term goals and indicators:
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Climate-Related
Indicators |
Physical Risk Indicator |
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Indicator Description
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Ratio of High-Risk Investment Targets (Note 1) to Total Authorized Investment Portfolios |
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Short-Term Goal (2025)
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Stock Proprietary Trading
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In line with the FCS database development schedule, the drought risk associated with target companies will be added to investment analysis reports to enhance physical risk assessment.
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Using the FCS physical risk database, annually review the proportion of investee companies in high-risk industries relative to the total authorized OCI quota.
Bond Proprietary Trading
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In accordance with the "Key Points for Responsible Investment Management," climate risk assessments will be added to the bond ESG risk assessment form. OCI investment targets whose bonds do not meet ESG rating criteria will be required to complete the bond ESG risk assessment form and undergo tiered management.
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Regular ESG risk reviews will be conducted before and after the addition of new OCI investment positions to identify the ESG risk level of OCI investment targets. In addition to prohibiting investments in high-risk targets, the investment ratio for medium- and low-risk targets will be strengthened (currently, the investment amount is limited to 30% of the total authorized OCI limit, and this will be adjusted on a rolling basis based on updates to the key points).
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The ESG risk level of OCI investment positions will be regularly reviewed. If any OCI investment position is reclassified as high-risk, or if the investment amount for medium- and low-risk exceeds the previously established investment ratio (30%) of the total authorized limit, a resolution plan will be developed within three months and implemented within six months.
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Medium-Term Goal (2026-2027)
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Stock Proprietary Trading
High-Risk Target Management: Quarterly review the proportion of high-risk OCI portfolios. If the target is exceeded, adjustments will be made within three months.
Bond Proprietary Trading
Continuing with the 2025 ESG risk review process, we will adjust ESG risk assessment content and risk assessment categorization in accordance with the financial holding company's or our company's "Key Points for Responsible Investment Management," or gradually reduce the proportion of low- and medium-risk investments in the total authorized amount.
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Long-Term Goal (2027-2029)
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Stock Proprietary Trading
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For high-risk targets, set annual targets to reduce exposure to risk.
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Post-event Control: Annually review exposure to risk balances to see if they exceed established targets. If so, adjustments will be made within three months.
Bond Proprietary Trading
Further reduce the proportion of low- and medium-risk investments in the total authorized amount in accordance with the financial holding company's or our company's ESG responsible investment mission.
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Climate-Related
Indicators |
Transition Risk Indicators |
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Indicator Description
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Proportion of high-carbon emission industries (Note 2) and high-carbon emission enterprises listed by the Ministry of Environment in total authorized investment positions
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Short-Term Goal (2025)
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Stock Proprietary Trading
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Annually review the proportion of investee companies in high-carbon emission industries in the total authorized OCI quota and examine whether the target companies have established SBT carbon reduction targets.
- Determine the total investment amount in high-carbon emission industries and the upper limit of individual targets in the total authorized OCI quota.
Bond Proprietary Trading
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Integrate the investment restrictions on fuel coal mining, power generation, and unconventional oil and gas industries as outlined in the Company's "Key Points for Responsible Investment Management" into the investment decision-making and evaluation process.
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OCI investment targets are prohibited from investing in controversial industries. Sensitive industries are subject to the same key regulations and ESG risk audits are conducted on newly added investment targets, along with regular post-investment audits.
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Medium-Term Goal (2026-2027)
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Stock Proprietary Trading
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Understand and manage the transformation risk response measures and low-carbon transition strategy planning of investment targets.
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Track the carbon neutrality/zero carbon emission targets of high-carbon emission investment targets annually.
Bond Proprietary Trading
In accordance with the responsible investment management guidelines of the financial holding company or our company, investment restrictions, ESG risk assessment content, and risk assessment categorization indicators for fuel coal mining, power generation, and unconventional oil and gas industries will be reviewed and adjusted, or the proportion of medium- and low-risk investments in the total authorized amount will be gradually reduced.
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Long-Term Goal (2027-2029)
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Stock Proprietary Trading
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Reducing the proportion of high-carbon emission industry investments in the total OCI headquarters position annually.
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Post-event control: Annually review whether the risk balance of existing OCI positions exceeds the established limit. If so, adjust within three months.
Bond Proprietary Trading
In accordance with the ESG responsible investment objectives of the financial holding company or our company, investment restrictions for fuel coal mining, power generation, and unconventional oil and gas industries will be adjusted, and the proportion of medium- and low-risk investments in the total authorized amount will be reduced.
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Note 1: This refers to investment and financing targets operating in locations that are considered high-risk under any of the following scenarios: sea level rise, flooding due to heavy rainfall, or drought.
Note 2: High-carbon-emitting industries include the oil and gas industry, metal mining, power generation, chemical materials manufacturing, agriculture, forestry, fishery, and animal husbandry, traditional manufacturing industries such as automobiles and motorcycles, traditional manufacturing industries such as metal and its products manufacturing, cement, shipping, and aviation.