Following the action plans and timelines set by the parent SinoPac Holdings' TCFD task force, SinoPac Securities incorporates climate governance, strategy, risk management, and related metrics and targets into its short-, medium-, and long-term key work. The Sustainability Promotion Group and Risk Management Committee regularly review and track achievement, with rolling adjustments according to actual trends. Beyond serving as internal management and tracking tools, the climate metrics and targets give the Board and senior management a reference for assessing climate risk's impact on medium- and long-term development when reviewing financial planning, business strategy, and investment and business allocation.
For metrics and targets on the Company's GHG emissions and energy/resource management, see 5.1.2 Energy and Resource Management. The main metrics for identifying and managing physical and transition risks are set to match the parent's SBTi targets and net-zero statement: gradually reducing the share of high-carbon-emitting industries in OCI positions to reduce Scope 3 financed emissions, and regularly checking whether investees have set SBT reduction targets, to meet the Holdings' 2027 target for SBTi-validated investment balances. 2025 progress and future targets are described below.
2025 implementation of physical and transition risk metrics and targets
| Metric | Business | 2025 target | Implementation |
|---|---|---|---|
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Physical risk share of high-risk investees (Note 1) in total authorized investment positions |
Equity proprietary trading |
In line with the FCS database build schedule, add investee drought risk to investment analysis reports to complete physical risk checks. Use the FCS physical risk database to review annually the share of OCI total authorized limit held in investees in high-risk industries. |
The Guidelines for Investment and Risk Management of Non-Trading Positions in Proprietary Trading were amended and approved on January 2, 2026, adding that non-trading positions must assess each target's physical risks (heavy rainfall, drought, slope disasters) before investing, applicable to new investment analysis reports from 2026. At the end of 2025, no OCI position was in a company with high physical risk. |
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Bond proprietary trading |
Follow the ESG risk check process for bond investment under the Responsible Investment Management Guidelines. OCI bonds that do not meet ESG rating standards must complete a bond ESG risk assessment form and be managed by tier: run ESG risk checks before adding OCI positions and periodically afterward to identify ESG risk levels; prohibit high-risk targets under the same guidelines; and cap medium-low risk targets as a share of the OCI total authorized limit (currently planned at no more than 30%, adjusted on a rolling basis as the guidelines are updated). If a position is reclassified as high risk, or the medium-low risk share exceeds the cap (currently 30%), draft a disposal plan within three months and complete it within six months. |
Followed the guidelines: ESG risk was checked before adding OCI bond positions; all new issuers are non-controversial, non-sensitive industries. At end-December 2025, two bonds meeting ESG rating standards were added; the Q4 assessment showed 0% in medium-low risk targets, below the 30% cap. |
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Transition risk share of high-carbon industries (Note 2) and Ministry of Environment-regulated high-emitting enterprises in total authorized investment positions
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Equity proprietary trading |
Review annually the share of OCI total authorized limit in investees in high-carbon industries and whether they have set SBT targets. Draft caps on total investment in high-carbon industries and on individual investees as a share of the OCI authorized limit. |
At 2025/12/31, two OCI investees were in high-carbon industries (including Ministry of Environment-regulated high emitters and nine high-carbon industries), together 3% of the authorized limit. Uni-President and Quanta are both regulated high emitters, at 2.7% and 0.6% respectively. Quanta has set SBT targets (Targets Set). The Guidelines, amended January 2, 2026, add a cap of 40% (inclusive) of the authorized limit for total investment in high-carbon industries and 10% (inclusive) for any single target, effective from 2026. |
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Bond proprietary trading |
Build the Responsible Investment Management Guidelines' investment restrictions on fuel coal mining, power generation, and unconventional oil and gas into the investment decision process. Controversial industries are prohibited for OCI investments; sensitive industries follow the same guidelines, with ESG risk checks alongside physical risk checks for new investments and periodic post-investment checks. |
Followed the guidelines: ESG risk was checked before adding OCI bond positions; all are non-controversial, non-sensitive industries. |
Note 1: Investees whose operating location is high risk under any of the sea level rise, heavy rainfall flooding, or drought scenarios.
Note 2: High-carbon industries: oil and gas, metal mining, power generation, chemical materials manufacturing, traditional manufacturing (automobiles and motorcycles; metal and metal products), cement, shipping, aviation, etc.
Future short-, medium-, and long-term targets and metrics
Physical risk: share of high-risk investees in total authorized investment positions
| Business | Short term (2026) | Medium term (2027–2028) | Long term (2028–2030) |
|---|---|---|---|
|
Equity proprietary trading |
Using the AR6 domestic physical risk database, review semiannually the share of OCI authorized limit in investees with high physical risk (heavy rainfall, drought, slope disasters). |
Control high-physical-risk targets: review the high-risk share of the OCI portfolio semiannually. If it exceeds the target, adjust within three months. |
Set targets to reduce exposure to high-risk targets year by year. Post-investment control: review semiannually whether exposure balances exceed targets; if so, adjust within three months. |
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Bond proprietary trading |
Follow the ESG risk check process (same rules as the 2025 target: pre- and post-investment checks, prohibition of high-risk targets, 30% cap on medium-low risk, disposal plan within three months and completion within six). After the Holdings' project "Build overseas climate physical risk database and risk grading" goes live with overseas physical risk data, consider adding items to the bond ESG risk assessment form. |
Continue the 2026 ESG risk checks; in line with the Responsible Investment Management Guidelines, adjust ESG assessment content and risk-tier indicators, or gradually lower the medium-low risk share of the total authorized limit. |
Following the ESG responsible investment mission, further lower the medium-low risk share of the total authorized limit. |
Note 1: Investees whose operating location is high risk under any of the sea level rise, heavy rainfall flooding, or drought scenarios.
Note 2: High-carbon industries: oil and gas, metal mining, power generation, chemical materials manufacturing, traditional manufacturing (automobiles and motorcycles; metal and metal products), cement, shipping, aviation, etc.
Transition risk: share of high-carbon industries and regulated high-emitting enterprises in total authorized investment positions
| Business | Short term (2026) | Medium term (2027–2028) | Long term (2028–2030) |
|---|---|---|---|
|
Equity proprietary trading |
Review semiannually the share of OCI authorized limit in high-carbon industry investees and whether they have set SBT targets. |
Understand investees' transition risk responses and low-carbon transition strategies. Track high-carbon investees' carbon neutrality/zero-carbon targets and reduction results yearly. |
Reduce the share of high-carbon industries in total OCI positions year by year. Post-investment control: review semiannually whether existing OCI exposure exceeds limits; if so, adjust within three months. |
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Bond proprietary trading |
Build the restrictions on fuel coal mining, power generation, and unconventional oil and gas into decisions; prohibit controversial industries; apply the guidelines to sensitive industries. Once the Holdings' overseas physical risk data goes live, consider improving physical risk checks of investment targets; same for post-investment checks. |
Build the restrictions on fuel coal mining, power generation, and unconventional oil and gas into decisions; prohibit controversial industries; apply the guidelines to sensitive industries. Once the Holdings' overseas physical risk data goes live, consider improving physical risk checks of investment targets; same for post-investment checks. |
In line with net-zero ESG responsible investment goals, adjust those restrictions and lower the medium-low risk share of the total authorized limit.
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Note 1: Investees whose operating location is high risk under any of the sea level rise, heavy rainfall flooding, or drought scenarios.
Note 2: High-carbon industries: oil and gas, metal mining, power generation, chemical materials manufacturing, traditional manufacturing (automobiles and motorcycles; metal and metal products), cement, shipping, aviation, etc.