One of the key spirits of responsible investment is to accompany the investee companies toward sustainable growth. Cathay therefore actively takes investor engagement actions and expect ourselves being the engagement leader in Taiwan. Cathay is the only one Taiwanese financial institution participating in the CDP Non-Disclosure Campaign and Climate Action 100+ initiative and also one of the founding member of AIGCC. Cathay’s active efforts in responsible investment has received international recognition. Sophia Cheng, Chief Investment Officer of Cathay FHC, was appointed Chair of AIGCC in 2018 and a member of Climate Action 100+ Asia Advisory Group in 2019. Cathay also collaborate with global investors to urge world government leaders to limit average global temperature rise to no more than 1.5 degrees Celsius. To deepen the engagement with investee companies, Cathay has set up the Engagement Policy in 2018 and defined “climate change” and “ESG” as the main engagement strategy in 2019.
CDP Non-Disclosure Campaign
CDP Non-Disclosure Campaign is an investor-led engagement initiative with the aim of urging the companies to disclose environmental information on climate change, deforestation and water security. Cathay FHC has been participating in the CDP Non-Disclosure Campaign for three consecutive years since 2017, and is the only one Taiwanese financial institution joining the campaign. In 2019, Cathay engaged with 50 Taiwanese companies who have never responded to CDP questionnaires. Cathay respectively communicated with these companies by emphasizing the issues such as climate change, deforestation and water security may bring significant impact to the business operation. Cathay also urge the companies to publicly disclose related information and management measures so the investors can assess aforementioned risks.
Climate Action 100+
Cathay Life and Cathay SITE are the only two Taiwanese financial institutions participating in the Climate Action 100+ initiative since 2017. The initiative identified 161 focus companies of high carbon emitters and we have been respectively engaging with all three Taiwanese focus companies since December 2017. We met the top management of these three companies and have been collaborating with international investors to urge the companies integrate climate risks into business strategy. We also detail the investor expectations on climate reduction and the carbon actions their peers have been taken. Ultimately, we are aiming to urge the companies to reduce the carbon emission align with Paris Agreement.
Climate Change Forum
Cathay FHC has organized the Taiwan Climate Change Forum for three consecutive years aiming to urge investee companies to take actions against climate impact. We invited, Mr. Al Gore, former U.S. Vice President in 2017 to discuss climate change issues with more than 20 Taiwanese business leaders. In 2018, we also invited the international organization such as CDP and PwC to share the practices of climate actions in the form of workshops. A total of 86 individuals and 55 companies participated in the event in 2018.
Cathay FHC hosted the 2019 Climate Change Forum in co-organized with TWSE and AIGCC, and we broadened the target audience to all the listed companies besides our investee companies. We invited the Director of AIGCC to share the progress of TCFD implementation in Asian countries and other regions. We also hosted two parallel panel discussions which invited the leaders from the corporates, government and academia to share their observations on implementation of TCFD and carbon reduction. Besides the insightful forum, we simultaneously organized the exhibition to showcase the feasible solutions on renewable energy and circular economy. The number of participants in 2019 jumped significantly with a total of 154 participants from 91 companies joined the event. More than half of the companies in the FTSE TWSE Taiwan 50 Index took part in the event.
Taiwan Stewardship Principles for Institutional Investors
Five subsidiaries (Cathay Life, Cathay Century, CUB, Cathay SITE and Cathay Securities) have been signatories to the Taiwan Stewardship Principles for Institutional Investors. In particular, Cathay Life has published the first stewardship report among Taiwanese financial institutions. In 2019, Cathay Life, Cathay SITE and Cathay Century were selected by TWSE as “Signatories with better practices and compliances “. Cathay accounted for 3 out of 5 selected domestic investors.
In 2019, Cathay attended a total of 1,437 shareholders meetings and voted on 9,997 proposals. Cathay voted in support for 9,495 proposals and against 51 proposals. Cathay abstained from voting on 451 proposals due to the compliance with government regulations (Note).
Cathay also communicates with the top management of investee companies in the forms of telephone conferences, forums, investor meetings, or attending shareholders' meetings. In 2019, a total of 6,581 delegates from Cathay Life, Cathay Century and Cathay SITE visited 1,982 companies.
For details on number of proposals and votes, please see:
Cathay United Bank
Note: According to Articles 146-2 and 146-5 of the Insurance Act, Insurance companies may not vote in director and supervisor elections of domestic companies and public utilities and social welfare enterprises they have invested in, hence the abstention votes for proposals related to the appointment of directors and supervisors.