Climate Metrics and Targets | Strengthening Climate Resilience | Low Carbon | Shin Kong Life Sustainability
Climate Metrics and Targets
The climate issue has attracted great international attention. In response to the global net-zero trend, the National Development Council of Taiwan has announced the "Taiwan's 2050 Net-Zero Emissions Pathway". In order to uphold the spirit of sustainable finance and respond to Taiwan's net-zero strategy, SKFH, our parent company, officially signed the Science Based Targets initiative (SBTi) in 2022 to join the international decarbonization efforts. Following the SBTi guidance for financial institutions, we have developed decarbonization strategies and set Science-Based Targets (SBTs) specifically for Scope 3 investment and financing activities, and obtained SBTi approval in 2024. SKL has set its own operational carbon reduction goals and taken inventory of the carbon emissions of our investment portfolios. Furthermore, it has established climate-related indicators and identified climate opportunities, aiming to leverage our core competencies in the financial industry to promote the low-carbon transition.
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| Strategic Direction | Indicator | Base year | Short-term Targets | Medium/Long-Term Targets | Execution Status in 2024 |
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| Actions for climate change | Scopes 1 and 2 reduction | 2022 |
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| Decarbonization of investment portfolios | - |
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| Green operations | Electricity consumption reduction | 2023 |
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| Obtain green building certification for new construction projects | - |
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Carbon Asset Risk Exposure
Net zero emissions have become a global trend, and countries worldwide are progressively implementing carbon pricing mechanisms such as carbon taxes and carbon trading. The European Union is also planning to launch the Carbon Border Adjustment Mechanism (CBAM) in 2023. These new policies and trade rules will reshape the market, and governments around the world will introduce relevant policies to drive industrial and energy transformations. It is foreseeable that carbon-intensive industries heavily reliant on fossil fuels and electricity consumption will be most affected, and this will also have significant impacts on the capital market.
In response to this trend, SKL based on the SKFH Sustainable Finance Policy definition, developed lists of carbon-intensive industries and factored them into climate-related risks analyses for investment and finance decisions. As of 2024, carbon-intensive industries accounted for 10.52% of the SKL's portfolio, of which bonds are the main form (about 99%), and mainly comes from” Electric Utilities & Power Generators” and “Oil & Gas - Exploration & Production” industry. However, under the trend of carbon reduction in the investment and financing portfolio, we will continue to pay attention to the transformation of the industry and monitor the risk exposure.
Commitment to phase out coal and unconventional oil and gas-related industries
SKL carefully evaluates the use of funds in coal-related high-carbon emitting industries, and follows SKFH' commitment to set a phase-out schedule for coal and unconventional oil and gas-related industries. The scope includes: listed / OTC-traded equity and debt, project financing, credit lines and loans, fixed income product underwriting service, and all active, passive and third-party managed investment positions. Our by-stage commitments are:
- Direct investment and financing support for coal and unconventional oil and gas-related projects, as well as projects for companies that continue to expand coal and unconventional oil and gas-related businesses, will be suspended from now on.
- By 2030, we will completely end investment and financing support for global coal-related industries.
- By 2040, we will completely end investment and financing support for unconventional oil and gas-related industries.
The above-mentioned related industries may be excluded if they have specific carbon reduction actions or specific transition plans including adopting science-based carbon reduction targets (SBT), using carbon capture technology to remove carbon emissions, or other carbon reduction actions recognized by third-party organizations. etc., or those that are state-owned enterprises / where local government holds more than 50% of the shares, and the local government has announced a net-zero pathway and net-zero targets consistent with the goals of the Paris Agreement, in such instances, case evaluation can be conducted, and the head of each unit is authorized to maintain business relationships with his / her consent.
SDGs
