SinoPac Subsidiaries

Transition Risk

Changes in nature-related regulations or policies, leading to increased compliance costs.

Increased costs to take responsive measures to comply with regulatory requirements; potential penalties for regulatory violations. May cause intensified fluctuations in corporate revenues, asset impairment, and uncertainty in debt service and profitability, impacting the prices of investment targets.

SinoPac Securities, SinoPac Futures, and SinoPac Venture Capital have established the "Responsible Investment Management Principles," and SinoPac Securities Investment Trust has established the "Risk Management Guidelines for Self-Owned Capital Subscription and Redemption of Funds" as guiding policies to promote and execute responsible investment. ESG issues are integrated into investment analysis and decision-making processes, ESG disclosures of investee entities are reviewed, and key nature-related policy and regulatory developments in Taiwan are continuously monitored.

Operating locations prioritize urban areas with complete drainage systems, focusing on buildings with a short age, modern facilities and materials, high seismic coefficients, and non-low-lying areas to minimize the impact when disasters occur.

Development of environmentally friendly new technologies leading to increased costs.

Developing new technologies or equipment to mitigate environmental damage increases R&D expenditure and operational costs of investee entities, affecting their profitability. This may increase costs for investee companies, impact their profitability, and affect the prices of investment targets.

Long-term

SinoPac Securities, SinoPac Futures, and SinoPac Venture Capital have established the "Responsible Investment Management Principles," and SinoPac Securities Investment Trust has established the "Risk Management Guidelines for Self-Owned Capital Subscription and Redemption of Funds" as guiding policies. ESG issues are integrated into investment analysis and decision-making processes, ESG disclosures of investee entities are reviewed, and key nature-related policy and regulatory developments in Taiwan are continuously monitored.

Shifts in consumer preferences, or price increases in natural resources or raw materials.

Operational activities of the Company or its investees cause impacts on the natural environment; failure to provide nature-related products; or failure to actively engage in nature-related issues of concern to stakeholders, resulting in damage to corporate image and subsequently affecting company value.

Long-term

1. Alternative suppliers are maintained for all procurement items to ensure supply continuity. By enhancing product environmental performance, optimizing supply chain management, improving resource efficiency, and adjusting operational strategies, the Company proactively responds to raw material price increases caused by natural resource scarcity.

2.  Responsible Investment policies serve as guidelines to integrate ESG issues into decision-making, review investee disclosures, and support company initiatives that strengthen natural resource protection, biodiversity maintenance, and ecosystem preservation.

Increased stakeholder focus on nature-related issues.

Nature-related issues are a key focus for stakeholders. Insufficient commitment will negatively impact corporate image.

Long-term

1. Continuously monitor domestic and international sustainable development topics and climate change trends. The Sustainability Taskforce under the General Manager serves as the responsible unit to advance action plans across five core sustainability pillars, reviewing execution results periodically.

    

    

2. Establish regular communication mechanisms with stakeholders to understand and effectively respond to their focus areas and needs.

3. Incorporate nature risks into investment decisions to avoid supporting or funding environmentally harmful entities. Participate in and promote ecological protection activities to enhance brand image and include natural capital topics in regular climate reports to improve transparency and credibility.

Physical Risk

Shifts in precipitation patterns affecting the abundance and stability of water resources.

Long-term changes in precipitation patterns may alter water resource distribution, increasing operating water costs for highly water-dependent industries (such as agriculture, food, or semiconductors). This leads to decreased revenue, affects investee profitability, and impacts the prices of investment targets.

Long-term

1. Responsible Investment policies serve as guiding principles to integrate ESG issues into investment analysis and decision-making processes and review investee ESG disclosures.

2.  First-line personnel collect and identify impact drivers (including water usage and water pollution) on industry operations and production processes during business execution, serving as a basis for future adaptation and mitigation (e.g., monitoring clients' investment in reclaimed water, desalinated water, and water-saving technologies).

3. Physical risks are incorporated into credit and lending reviews on a case-by-case basis, utilizing reputable external databases to provide objective physical risk assessment information for business and review personnel.

Specific short-term events altering the state of nature (e.g., oil spills, forest fires, or pests affecting harvests).

Natural events such as water pollution, flow rate changes, wildfires, or pests impact water-dependent or nature-dependent enterprises. Corporate operational activities damaging natural ecosystems (e.g., overexploitation, oil spills, forest fires) may lead to increased costs, asset impairment, and operational disruptions, affecting profitability and investment target prices.

Long-term

1. First-line personnel evaluate environmental risks during business execution, especially for industries significantly impacted by natural environmental risks, assessing response measures taken by these clients.

2. Responsible Investment management policies serve as guidelines to incorporate ESG issues into investment analysis, review investee ESG disclosures, and support company plans that strengthen natural resource protection and biodiversity maintenance.

Products and Services

Developing or increasing nature-positive financial products and services.

Providing financial solutions that generate positive impacts on nature or reduce negative impacts (including ecosystem-service-friendly financial solutions and green products like green credit and green investment), thereby increasing revenue streams and competitiveness.

Short-term

The Customer Relations Working Group of the Sustainability Taskforce is responsible for promoting responsible investment and sustainable financial products/services, staying attuned to market conditions to provide adaptable products based on the market environment.

Developing or increasing nature-positive financial products and services.

Providing financial solutions that generate positive impacts on nature or reduce negative impacts (including ecosystem-service-friendly financial solutions and green products like green credit and green investment), thereby increasing revenue streams and competitiveness.

Medium-term

1. The Customer Relations Working Group promotes responsible investment and sustainable financial products/services in alignment with government policies and regulations, expanding investments in sustainable financial products, renewable energy, or green industries.

2.  Strengthen collaboration with governments, NGOs, and environmental organizations to ensure products align with market demands and regulatory requirements. Continuously develop and promote nature-related financial products while enhancing internal training to elevate employee knowledge and expertise in green finance.

Capital Flows and Financing

Providing funds to assist corporate transition and promote nature- or green-related investments.

Providing investment tools (including bonds, funds, etc.) for funding demands that increase positive impacts or mitigate negative impacts on nature, thereby increasing operating revenue and guiding capital to support nature-friendly or green activities and industries.

Medium-term

1. Actively promote strategic green energy investment positions (key technologies, renewable energy, circular economy, low carbon, etc.) and underwriting businesses. Incorporate ESG issues into capital allocation to direct funding toward nature-friendly/green activities and raise client acceptance of green products through market promotion.

2. Seize new market opportunities, understand investor and consumer preferences regarding nature issues and green financial products, and continuously develop green/ESG financial products centered on sustainable development.

Reputational Capital

Aligning with nature-related policies and initiatives; actively participating in and supporting nature-related activities.

Complying with government and international nature-related policies and initiatives, actively engaging in activities related to environmental assets and ecosystem services, and participating in sustainability ratings to positively impact society and local economic development, thereby elevating corporate image and brand value.

Short-term

1. The Sustainability Taskforce continuously monitors global and domestic sustainability issues, formulates action plans and short-, medium-, and long-term targets across five working groups, echoing the holding company's commitment to "Climate Change Mitigation and Adaptation," adjusted annually on a rolling basis.

2. Increase media exposure frequency to advocate for sustainability-related topics.

Ecosystem Protection, Restoration, and Regeneration

Supporting natural ecosystem protection activities such as habitat and ecosystem protection, regeneration, or restoration.

Actively participating in ecological protection activities to improve ecosystems through direct/indirect restoration, conservation, or protection of ecosystems/habitats, while enhancing resilience against natural disasters.

Medium-term

Execute biodiversity-related projects and respond to Business Today's "Ocean Action 2.0" initiative under the theme "Smart Ocean Travel: Creating Sustainability Together." Invited over a hundred children and parents from TFCF Yunlin Branch to experience smart fisheries, financial literacy games, creative DIY courses, and sustainable ocean dramas, enabling children to learn about marine tech and sustainable fisheries while understanding environmental sustainability.