Chairman's Message


Postponed by one year due to the pandemic, the highly anticipated COP26 summit concluded on November 12, 2021. The event highlighted pledges by more than 130 countries to achieve net zero emissions by mid-century. COP26 birthed numerous initiatives with specific goals, including accelerating the phase-out of thermal-coal power, protecting the natural environment, and leveraging the power of finance to support the zero-carbon transition forward. During COP26, several international forums highlighted the need for corpo¬rate boards to align their business strategies with ESG initiatives, an area of great importance to me.

The Board must take on a supervisory role to attain sustainability

Since the outbreak of COVID-19 in 2019, the pandemic and extreme weather events have been the two big­gest challenges for humanity in the 21st century. Considering the implications for the global economy and wellbeing, corporate stakeholders (investors, employees, customers, suppliers, and the public) take stock of a firms resilience to these external influences. Instead of waiting for upper management to act on these is­sues, company boards must oversee sustainability issues like climate change and orchestrate the companys strategic and philosophical shift from shareholder capitalism to a broader vision of stakeholder capitalism.

In response to international trends and the national goal to achieve net zero emissions by 2050, the Board of Directors of SinoPac Holdings officially approved the Company’s net zero commitment on March 15, 2022, pledging to achieve net zero emissions in our operations by 2030 and the entirety of our financial portfolios by 2050. We have established a Project Management Office (PMO) for all subsidiaries and departments to implement SinoPac's sustainability strategies for net zero emissions based on "compliance," "optimization," "reinventing," and "leadership." This is the highest level of practice among our peers, and it demonstrates our strong commitment to leading the industry toward net zero.

Compliance: Support sustainability, meet supervisory requirements

"Compliance" is our way to support sustainability and meet supervisory requirements. It is undeniable that government policies and investor demand for attaining net zero emissions have become powerful driving forces. All companies must prepare for and comply with sustainability rules and regulations of the supervisory authority. Companies must understand that the competitive landscape has completely changed and that ESG metrics are redefining the value of companies.

SinoPac Holdings therefore seeks to build a consensus and set key performance indicators (KPIs) and incen­tives to achieve the goals. This is the first step of the net zero emissions strategy that we recommend. This requires high-level, mid-level, and junior-level teams to be aligned in their goals, form a consensus between the management of SinoPac Holdings and subsidiaries, and raise the climate awareness and professional knowledge of all employees.

Optimization: Establish carbon emissions reduction targets and management mechanisms

SinoPac has joined the ranks of companies that pledged to achieve net zero emissions by 2050. However, if we rely solely on 30-year targets, there is a risk that we will do too little, too late. Therefore, SinoPac is also setting clear goals for the next 3-5 years and acting to achieve the targets, including setting electricity use guidelines and upping our use of renewable energy. For example, Bank SinoPac set a target for renewable energy to account for 10% of the electricity it consumes starting this year.

With new legislation on the books, GHG emissions inventory and verification have become key climate is­sues for companies. And with capital markets becoming laser-focused on sustainability issues, companies are well-advised to outperform the regulatory requirements. The financial sector does not generate significant emissions, and SinoPac Holdings has already completed an inventory of its emissions with verification. Next, we will inventory our financial portfolios, look for potential emissions reductions, set intermediate targets for emissions reductions, and establish management mechanisms to achieve our emissions objectives. We will help lead the global transition to net zero emissions.

We recognized that the most crucial step is to include financed emissions into the emissions reduction KPI of financial institutions, which will take financial institutions to the heart of emissions reductions. It is a difficult challenge that financial institutions will soon face.

Reinventing: Develop products and services to create net zero business opportunities

The Net Zero by 2050: A Roadmap for the Global Energy Sector report published by the International Energy Agency last May advocated implementing emissions reduction in phases. In the first phase, existing technologies would be used to reduce emissions before 2030. In the second phase, from 2030 to 2050, new technologies that havent been introduced yet or are still in the prototype stage must be commercialized to achieve net zero emissions. Hence, net zero emissions isnt just a cost item; its a business opportunity.

The energy sector is Taiwan's most significant source of direct GHG emissions. It accounts for 70% of all GHG emissions, and electricity supply to households and industries accounts for the largest share. As a result, developing alternative energies is critical for Taiwan, which has incorporated the low carbon transition into national policy. For SinoPac, the best way to support the policy is to include net zero targets in our business strategies and provide funds and assistance to alternative energy and climate-related startups.

Leadership: Raise climate awareness, empower low-carbon transition

Another way for the financial sector to exert its influence is to utilize its advantages in capital by, for example, issuing green bonds. Since Bank SinoPac issued the first green bond with a value of US$45 million in 2017, it has played a leading role in the issuance of GSS/green bonds promoted by the Taipei Exchange. Bank SinoPac has the highest market share in the solar PV equipment financing business, with a loan balance exceeding NT$63 billion, a market share of 25%. We will continue to issue green bonds that help finance alternative energy projects. Our goal is to issue green bonds totaling NT$10 billion.

We believe that the best way to attain net zero emissions is to set short and medium-term goals for the next 30 years and provide clear directions for achieving our mission. Doing so will boost transparency and ensure accountability while pursuing the goals.

As a financial institution committed to global sustainability, we must exert influence and provide customers with the funding for their low carbon transition. We must also withdraw funding from carbon-intensive investees and borrowers that shirk their responsibility in this area. We must create green business opportunities and fulfill our commitment to sustainability. We will shoulder this responsibility to establish the Group as a leading brand for net zero emissions.

Creating a greener world for posterity

The impact of climate governance on businesses has intensified. To be effective in sustainability, companies must devise strategies that engage all of the company's resources, from the executive office at the top down to the rank and file. Accordingly, the Board of Directors of SinoPac Holdings has taken on a supervisory role. It will act as the decision-maker on sustainability issues along with the Sustainable Development Committee and executives of SinoPac Holdings and its subsidiaries.

Sustainable development requires sustainable communication. Therefore, after formulating our strategies, we will invite relevant stakeholders, including our employees, clients, investors, and the public, to join us on our journey. Achieving net zero emissions is a prerequisite for creating a greener world for posterity, and SinoPac’s dedication to this mission is unshakeable.

SinoPac Holdings, Chairman