Incorporate ESG Factors into Fixed Income Underwriting
According to the "Principles for Responsible Investment Management," SinoPac Securities incorporates ESG issues into the investment analysis and decision-making process for bond underwriting. Through the KYC process, we understand the background of the issuer and evaluate their performance across various ESG dimensions. We prohibit underwriting for controversial industries, such as pornography and controversial arms manufacturing. Additionally, we review for any negative news related to ESG factors, including climate change, human rights, and corporate governance. For sensitive industries, such as oil and gas, thermal power generation, cement and concrete manufacturing, iron, steel, and other metal manufacturing, as well as high carbon-emission industries, oil and gas, metal mining, power generation, chemical manufacturing, agriculture, forestry, fishing, traditional manufacturing (automobile manufacturing), traditional manufacturing (metal and metal products), cement, shipping, other public utilities, and aviation, we conduct careful assessments. We may adopt enhanced analytical explanations, raise approval levels, and control position ratios as response measures, establishing exception management processes to avoid significant adverse impacts on the external environment or society.
SinoPac Securities adheres to the "Sustainable Development Bond Operating Guidelines" published by the TPEx. Regarding special funds, we negotiate with bond issuers to ensure that their fundraising complies with the specified fund usage regulations. For non-special funds, we assist issuers in setting sustainable development performance targets (SPTs). We encourage issuers to directly invest in ESG investment projects or achieve energy savings and carbon reduction through setting SBTi, thereby contributing positively to environmental purposes. All sustainable development bonds underwritten by SinoPac Securities have obtained qualification recognition issued by the TPEx.
In 2024, all Sustainable Bonds underwritten by SinoPac Securities have obtained qualification approval from the Taipei Exchange. SinoPac Securities served as the lead arranger for the sustainability bond issued by Bank SinoPac and underwrote four green bonds issued by Taipower, BNP Paribas Taipei Branch, Crédit Agricole Corporate and Investment Bank, and Natixis, totaling NT$3.4 billion. Additionally, SinoPac Securities assisted in underwriting 13 Sustainable Bonds, which include 12 green bonds issued by Taipower (7 bonds), TSMC, Far Eastern New Century, Nanya Technology, China Steel Corporation, and Crédit Agricole Corporate and Investment Bank, along with 1 social bond issued by Taiwan Mobile. The total amount reached NT$2.99 billion, with the funds raised primarily allocated for greenhouse gas reduction, renewable energy, and energy efficiency technology development.
Incorporating ESG Factors into Securities Listing Underwriting / Consultation and Capital Raising Services
SinoPac Securities conducts customer due diligence (CDD/KYC) in accordance with the listing and OTC review criteria and assessment procedures established by regulatory authorities when assisting clients with public listings and fundraising activities. The company guides issuing companies to promote and emphasize sustainable development, ensuring that the public offering prospectus appropriately reflects their implementation of sustainable development in accordance with the "Guidelines for Items to be Recorded in the Prospectus for Initial Public Offerings of Securities."
Additionally, the evaluation process incorporates aspects of corporate governance operations, significant labor disputes, and major environmental pollution into the guidance and review assessment process. This includes investigating the "implementation of sustainable development and the differences and reasons compared to the sustainable development practices code for listed companies," whether a governance structure for sustainable development has been established, and conducting risk assessments related to environmental, social, and governance issues pertinent to company operations based on materiality principles. In terms of environmental issues, further investigation is conducted to determine whether the company has recorded greenhouse gas emissions, water usage, and total waste generation over the past two years, and to establish policies for energy conservation, greenhouse gas reduction, and waste management.
Moreover, the challenges, difficulties, and response plans faced during the carbon reduction process are included in the due diligence scope, covering aspects such as technology and funding needs. For example, regarding clients' challenges in carbon reduction technology, an assessment is made to evaluate whether there are plans to adopt innovative technologies or seek external technical support. The funding needs are examined to see if there are relevant funding plans or strategies to apply for subsidies to ensure the feasibility and execution of carbon reduction goals. Through due diligence, SinoPac Securities assists clients in meeting relevant regulations and market expectations across environmental, social, and governance aspects.
In 2024, SinoPac Securities continued to focus its consultation and underwriting businesses on ESG and sustainable development as its strategic priorities, which included the underwriting for 7 environmental protection and green energy companies, with a total amount of NT$6.191 billion. SinoPac Securities served as the lead arranger in four cases, including capital increases for Leader Electronics Inc. and Yeong Guan Energy Technology Group Co., Ltd., as well as convertible and green convertible corporate bonds for Century Iron and Steel Industrial Co., Ltd. It also acted as co-arranger in three cases, including the listing of Ping Ho Environmental Technology Co., Ltd., convertible corporate bonds for Gigasolar Materials Corp., and sustainability-linked convertible corporate bonds for Taiwan Cement Corp. These companies specialize in areas such as energy storage system site construction, water resource treatment engineering, solar power plant development and construction services, wind power equipment applications, and cement products.
Additionally, SinoPac Securities continued to provide consultation services for the public listing of eco-friendly and green energy companies. As of the end of 2024, the Company had assisted a total of 19 companies, including HuiMin Environmental Tech Corporation, Revivegen Co., Ltd., IOVTEC Co., Ltd., Sun Rise E&T Corporation, Techzone Technology Materials Co., Ltd., Techzone Plum-Monix Industry Co., Ltd., Century Wind Power Co., Ltd., Yuh Shan Environmental Engineering Co., Ltd., Seetel New Energy Co., Ltd., and Giant Heavy Machinery Service Co., Ltd. These companies focus on offshore wind farm marine engineering and equipment operation and maintenance, solar power plant development, construction and services, energy storage system solutions, environmental protection technology and renewable energy, circular economy of waste materials, water resource treatment engineering and operations and maintenance, energy storage site engineering, and wind turbine transportation and installation.