Public Welfare Strategy 1 | Climate
Cathay is not only committed to carbon reduction in its own operations, but also uses its core competencies to incorporate risks and opportunities related to climate change and ESG into its core businesses, including investment, lending, products, insurance, and services. Through multifaceted and diverse campaigns and engagements, we invite customers, the public, and students to pay attention to and engage in environmental issues, thereby raising their awareness for environmental protection and exerting our environmental influence.
Developed Green Insurance
Cathay Century is responding to climate initiatives through its insurance business. It has created green insurance products so that industries and members of the public who need such insurance will be able to be suitably protected.
Renewable Energy Industry Insurance
Cathay Century has been offering insurance products targeting the development and operations of green industries since 2010. In 2016, Cathay Century became the first company of its kind in Taiwan to offer insurance for offshore wind turbines. Cathay Century remains dedicated to enhancing the competitiveness and professionalism of renewable energy industries and founded the Energy Infrastructure Team in 2020 to develop potential business opportunities in renewable energies through risk identification. In 2022, Cathay Century increased insurance coverage for solar power and offshore/onshore wind farms, underwriting an additional NT$34.19 billion.
Green Vehicle Insurance
With the growing awareness around environmental protection, car drivers and motorcyclists are now opting for eco-friendly electric vehicles (EVs) when purchasing new vehicles. In 2013, Cathay Century launched the "Green Vehicle Insurance," the first green energy product of its kind in Taiwan, to support government directives aiding green energy industries, encourage and support eco-friendly drivers and motorcyclists, and help transition transportation modes in Taiwan. As of the end of 2022, a total of 54,593 eco-friendly vehicles are insured under the "Green Vehicle Insurance."
Bicycle Insurance
Cathay Century launched bicycle rider insurance in 2014 and has insured 10,093 cases as of the end of 2022.urance coverage, and satisfies the wide range of needs of green consumers. In June 2018, Cathay Century launched Taiwan's first "Public Bicycle Accident Insurance" and "Public Bicycle Third-party Liability Insurance" policies to encourage more people to start biking. As of 2022, ten cities and counties across Taiwan - Kaohsiung, Tainan, Taipei, New Taipei, Taoyuan, Miaoli, Pingtung, Hsinchu, Kinmen, and Chiayi - have enrolled in the "Public Bicycle Accident Insurance," providing coverage for over 118 million people and mitigating risks for public bicycle riders to fulfill the diverse demands of green consumers.
Carbon footprint of products
Cathay strives to lessen the carbon footprint of insurance products, engage in green procurement upstream, and develop low carbon products midstream through mobile insurance services.
Carbon Reduction Label, Carbon Label
Cathay FHC is urging subsidiaries to reduce the carbon footprint of their products and services through digitalized operating procedures, and to review direct and indirect GHG emissions in the product or service life cycle via Life Cycle Assessment (LCA) according to the industry classification standards of the Environmental Protection Administration. We manage upstream products and engage in green procurement, developed a mid-stream low carbon product and service process, and actively obtain product carbon footprint and carbon reduction certificates and labels from the government, showing Cathay's determination to reduce carbon emissions. Cathay Life and Cathay Century are the first in Taiwan obtain the ISO14067 Insurance Carbon Footprint Certification and Carbon Reduction Label, respectively. Cathay Century also established the compliance standard for property insurance carbon footprint inventory: PCR for the carbon footprint of property insurance services, which is a paradigm that can be adopted by peers in the industry in the future.
To comply with EPA's changes to product category rules, CUB helped compile the "Off-line financial services CFP-PCR" for industry peers to refer to in the future. CUB also conducted carbon footprint verification for residential mortgage services and small deposits/payments via ATMs. The carbon footprints of small deposits/payments via ATMS and residential mortgage services were verified under ISO 14067 in January and February 2023, respectively. CUB also obtained Carbon Labels and started the application for Carbon Reduction Labels for both services.
International Initiatives and Engagements
Advocate and Engagement are Cathay FHC’s core strategies when carrying out the climate actions. Cathay FHC actively communicates and collaborates with stakeholders along the financial value chain to help companies engaged by Cathay FHC take action against climate change and strengthen climate resilience. Cathay FHC’s action on company engagement and policy advocacy has received wide recognition. Cathay FHC was one of global investors featured in the "Investor Climate Action Plans" (ICAPs) published by "The Investor Agenda" as a case study on leading best practices. Cathay FHC was the only Asian asset owner to be featured in ICAPs.
CDP Non-Disclosure Campaign
The CDP's "Non-Disclosure Campaign" invited investors to ask investees to disclose environmental information. Cathay has participated in the initiative for four consecutive years since 2017 and was the only financial institution in Taiwan to have participated in the campaign. Cathay uses one-on-one communication to explain the material impact of climate change, forest, and water resource issues on companies and encourages them to disclose related data and management measures for investors to evaluate related risks
In 2022, the engagement success rate reached new record highs: Of the 41 companies that Cathay FHC engaged, 25 companies responded to CDP questionnaires, which is a 61% engagement success rate and higher than the global average Since 2017, Cathay FHC has successfully engaged 60 companies and 57% of these companies improved their CDP scores in the following year, indicating that successful engagement can generate long-term positive impacts.
Climate Action 100+
Cathay FHC urges focus companies to take actions for improvements but also help them to address their challenges. We have been engaging with all three Taiwanese companies among the 166 focus companies under CA100+ initiatives. Cathay FHC conducted in-depth research into the three Taiwanese companies on their climate management and the best practices performed by their peers. Then, communicated directly with company executives about global trends and investor expectations such as companies should proactively integrate TCFD as their climate management framework. By communicating with companies, Cathay FHC was able to gain in-depth insight into the company's actual management and challenges the companies faced when improving climate management.
In addition to company engagement, Cathay FHC also actively participates in CA100+ events and meetings, provides feedbacks on CA100+ reports and guidelines, and proofreads Chinese versions to help the Taiwanese focus companies easily understand the information and progress from CA100+. Chief Investment Officer of Cathay FHC, Sophia Cheng, has been invited as the member of CA100+ Asia Advisory Group since 2018. Cheng attends quarterly meetings to offer suggestions on strategies and plans for the initiative's campaigns.
All three companies that Cathay FHC engaged with committed to net zero carbon emission or carbon neutrality goals and set short- and mid-term carbon reduction goals. One of these three companies have set validated SBT target. Companies engaged by Cathay FHC were recognized by international organizations: one of the companies was selected for the initiative's "Progress Update 2022" as a global case study and another one was selected for "Down to Earth: Climate governance case studies in Asia Pacific" published by Asian Corporate Governance Association (ACGA) and CLSA as a case study as well.
Cathay Sustainable Finance and Climate Change Summit
The world has collectively turned its focus to climate issues. Embracing the value of “lead Taiwan into the world and bring the world to Taiwan,” Cathay FHC has held the Climate Change Summit for six consecutive years, inviting leaders and experts from the government, industries, and academia to share their insights on global climate change and net zero transformations with the companies. By exerting the finance industry's influence, we expect to lead the companies adopting aggressive action against climate change to ultimately create a "win-win-win" situation for financial institutions, industries, and society. In 2022, Cathay FHC hosted Cathay Sustainable Finance and Climate Change Summit, and was named a Strategic Partner of the World Climate Foundation and brought Taiwan to a COP side event, increasing the influence and globalization of forum activities.
Highlights of the 2022 Cathay Sustainable Finance and Climate Change Summit
1.In 2022, 2,459 people signed up to attend the Cathay Sustainable Finance and Climate Change Summit. Listed companies in attendance accounted for over 70% of Taiwan's total market capitalization, and over 46% of Taiwan's total carbon emissions
2.During the summit, Cathay FHC provided an exclusive livestream of the World Climate Summit (WCS), a side event of COP27 held in Egypt, where Cathay FHC Chairman Hong- Tu Tsai and President Chang-Ken Lee were invited to serve as keynote speaker and panelist, respectively.
3.Chief Investment Officer Sophia Cheng was the only speaker from Taiwan invited to the "2022 World Biodiversity Summit" (WBS) to share Cathay FHC's views on biodiversity and experiences of successfully promoting company engagement in Asia.
Plant Saplings of Hope and Create Shades for Future Generations
Countries have taken climate change and ecological conservation issues seriously in recent years. Cathay Charity Foundation upholds the Group's spirit in practices for corporate and social sustainability, and has dedicated long-term efforts into environmental care activities for greening communities. The foundation also responded to the government policy of energy conservation and carbon reduction, promoting the Group’s mobile insurance service process during activities.
