Economic Factors  ＞
Responsible Banking and Decarbonization Strategies for Investment & Financing
 
 
Responsible Banking and Decarbonization Strategies for Investment & Financing
 
● - Responsible Finance
 
 
To fulfill the net-zero commitment of limiting the increase in global average temperature to no more than 1.5°C, financial institutions have implemented net-zero transition plans, strategies, and governance frameworks, and require their financing and investment clients to pursue the same net-zero transition objectives. In line with the Group's "Sustainable Development Policy," the Group has established policies for sustainable credit, sustainable investment, and sustainable insurance, and has applied ESG due diligence procedures across all businesses, including investment, financing, advisory, and insurance activities. The Group continues to enhance its ESG factor review mechanisms by not only assessing whether investee and financed companies breach screening criteria relating to product sustainability, human rights, environmental protection, and major social controversies, but also incorporating coal-related and unconventional oil and gas sectors into its review scope. In addition, the Group, together with five peer financial holding companies, has formed the "Coalition of Movers and Shakers on Sustainable Finance" to strengthen engagement mechanisms with investee and financed companies. Where an investee or financed company is involved in material non-compliance and fails to propose an improvement plan after engagement, the Group will progressively reduce related investment and financing exposures, actively guiding clients to place greater emphasis on sustainability issues, with the aim of jointly achieving the 2050 net-zero emissions goal.
 
In keeping with its sustainability commitments, all domestic and offshore fund management companies whose products are made available on the Group's platform have each (100%) signed a compliance statement for the Stewardship Principles for Institutional Investors and the United Nations-supported Principles for Responsible Investment (PRI). In addition, all insurance companies whose products are made available on the Group's platform have each (100%) prepared a sustainability report or issued a sustainability development commitment letter, in order to safeguard the rights and interests of customers and beneficiaries.
 
 
Corporate Banking/Investment Business
 
● - Equator Principles
The subsidiary First Commercial Bank has also signed up to official join the Equator Principles Association on December 21, 2020, becoming its 114th member bank globally. It also promulgated and enforced the "Operation Directions on Credit Cases Applicable to the Equator Principles" on January 6, 2021. In compliance with the Equator Principles, the Bank must determine the applicability of the Equator Principles based on the amount and purpose of each case before accepting financing applications from all corporates. For applicable cases, a dedicated "Environmental and Social Risk Project Team" would be formed by the business, review, post-loan management and other units, which are put in charge of risk classification. In addition, based on the "Environmental and Social Risk Assessment Report" and "Environmental and Social Monitoring Report" issued by an independent and qualified third-party institution, First Commercial Bank will conduct environmental and social risk reviews and post-loan monitoring to confirm that undertaken cases align with the guidelines of the Equator Principles. In doing so, we could adequately reduce potential credit risks and leverage the financial industry's influence to support sustainable development for environment and society.
 
 
First Commercial Bank approved a total of 40 credit cases applicable to the Equator Principles between 2021 and 2025. Locations of these cases were mostly the Asia-Pacific region (Taiwan), with energy, electricity and oil and gas being the predominant industries.
 
● - Number of Financing Cases Approved Under the Equator Principles from 2021 to 2025Unit: Case
 
 
● - Types of Financing Cases Approved Under the Equator Principles from 2021 to 2025Unit: Case
 
 
 
 
 
Case Study：
Third-Party Institution for Power Supply/Ground-Mounted Solar PV Syndicated Loan: TÜV Rheinland (Germany)
In 2025, First Bank acted as a joint lead arranger for a ground-mounted solar photovoltaic (PV) syndicated loan project. The project's planned installed capacity is 86 MW and is located in Linbian Township, Pingtung County, within an area designated by the Pingtung County Government as a severe land subsidence zone. The site is not classified as an ecologically sensitive area, nor is it within any cultural property/heritage protection zone or indigenous reserve. The project has obtained approval from the Ministry of Environment for an exemption from conducting an Environmental Impact Assessment (EIA), and an independent third-party institution has issued an Environmental and Social Due Diligence (ESDD) Report. The ESDD concludes that the project’s environmental impacts are limited, largely reversible, and can be readily addressed through mitigation measures. The third-party institution has therefore categorized the project as Category B.

To manage potential environmental pollution impacts, the borrower has established dedicated units during both the construction and operational phases in accordance with applicable regulations to implement occupational safety and health (OSH) measures. Such measures include: strict traffic control for personnel and vehicles during construction; installation of fencing and hazard warning signage upon completion to prevent inadvertent public entry; minimizing the use of large machinery and avoiding simultaneous operation of multiple machines during construction to reduce noise; and centralized collection of construction waste and other waste materials for removal and proper handling by the contractors. In addition, to safeguard the rights and interests of all stakeholders, the borrower has held local briefings to explain the construction scope, schedule, project planning, construction methods, and road access/traffic arrangements, and has also provided points of contact and established a grievance mechanism to ensure effective and accessible communication channels.

In the syndicated loan agreement, in addition to requiring the borrower to submit an annual Equator Principles (EP) report issued by a third-party institution, the borrower is also required to ensure ongoing compliance with all applicable legal requirements related to environmental protection, pollution prevention, and waste management. The borrower must duly and timely implement all environmental protection measures and plans required by the competent authorities, as well as fulfill the commitments made under the project's Equator Principles commitment letter. These commitments include meeting public information disclosure requirements; disclosing information during the project's operational phase if Scope 1 and Scope 2 greenhouse gas (GHG) emissions exceed 100,000 metric tons per year; and maintaining, updating, and complying with all relevant environmental and social permits and approvals.
 
● - Responsible Lending
First Commercial Bank practices responsible finance to evaluate whether enterprise borrowers fulfill their responsibilities in environmental protection, social responsibility, and ethical management as key criteria of financing. We continue to advocate ESG review mechanisms to credit examiners through meetings related to risk management; the three stages of reviewing applications for line of credit, commitments prior to credit allocation, and post-loan management are as follows:
 
 
＊1：Applicable to cases at the level of the Executive Board and above.
 
 
＊2：Credit extended to these industries shall not exceed 13% of the Bank's total credit extension in 2025.
 
Practice procedures such as Client Due Diligence (CDD) and Know Your Customer (KYC) in business dealings and utilize the "ESG Factor Checklist" to separately review borrowers for their ESG related risks, conduct scoring and grading, and incorporate them into credit risk assessment. If customers have previously engaged in environmental pollution, infringement of human rights/labor rights, suffered negative allegations within the company, and other ESG controversies, negotiations shall be conducted with the customer immediately to clearly state their current handling or improvement plan during credit limit application. The credit examining unit shall modify restrictive conditions based on the severity assessment of hazards; if involvement in ESG risk factors cannot be eliminated or improved, the loan should be refused to fulfill the finance industry's social responsibility.

As of 2025, ESG has been included in the loan decision review process for 100% of enterprise credit loans with a total of 15 cases that received "conditional approval" (e.g.: loan amount decrease or increased interest rates) or "rejected" due to ESG risk factors as described in the following:
 
 Unit: Cases / NT$ million
 
 
 
Cases that were conditional approved or not approved due to ESG risk factors identified by the reviewers, the following are the top three borrowers based on the amount:
 
 Unit: NT$ million
 
 
To guide our borrowers to implement sustainable development, we actively urge our domestic customers to value sustainable development, and ask our borrowers to present their letters of commitment for sustainable development. We also urge our overseas customers to abide by local environmental laws and human rights regulations.
 
● - Sustainable Development Commitment Signed by Domestic and Foreign Borrowers over Recent YearsUnit: Number of Borrowers
＊：Includes the Declaration of Sustainable Development obtained by First Bank, FCB Leasing, and First AMC.
 
In 2025, to realize the investment/financing negotiation commitments of the Coalition of Movers and Shakers on Sustainable Finance, the Group even compiled a list of the top 60% financial carbon emitters from all of its domestic investment/financing positions by the end of 2024. For the financing part, First Commercial Bank prioritized negotiations with potential borrowers willing to sign letters of commitment for sustainable development (Engagement version). As of the end of 2025, 78.26% of potential borrowers had completed their negotiations.

For the purpose of strengthening the post-loan management and fulfilling the responsibility of being a financial institution for environmental protection and social sustainability, First Commercial Bank finds out whether the operations of early warning cases of borrowers who have been punished by government environmental protection agencies for violating environmental protection laws violate ESG principles and proposes improvement measures to these borrowers. In 2025, there were no cases that met the early warning signal of "those who violated environmental protection laws and regulations were punished by government environmental protection agencies", and the borrowers have been continuously tracked to determine if they have complied with the environmental protection authority's request to obtain a permit for waste disposal. In addition, if the borrower's loan is suitable for the purpose of green financing, the verification of the actual use of the fund after the review operation will be strengthened. If it is discovered that circumstances of environmental pollution are in violation of ESG principles, it shall be stated in the review opinion as a reference for future credit limit review. After review conducted by reviewers in 2025, no such matters have occurred.
 
● - Responsible Investment
First Financial Group establishes standard evaluation procedures for responsible investment, abides by the Stewardship Principles, complies with related regulations, and fulfills fiduciary duties as an asset manager to maximize interests for beneficiaries and shareholders.
 
 
First Capital Management has revised and updated the "Do-Not-Invest List for Sustainable Development Violations" every month. It continuously reviews investees based on product sustainability, governance, social, and environmental criteria. Any company that is found to have engaged in conduct which is not in the spirit of sustainable development is added to the do-not-invest list. We fine-tuned our screening guidelines for social factors to better safeguard human rights based on the content and spirit of the "Universal Declaration of Human Rights," with particular emphasis on Articles 6, 7, and 8 of the "International Covenant on Economic, Social and Cultural Rights." The number of companies included in the do-not-invest list from 2023 to 2025 were 15, 13, and 13 companies, respectively. The list was provided for reference purposes to 6 entities, including First Financial Holding, First Bank, First Securities, First Securities Investment Trust, First Life Insurance, and First Venture Capital. In 2025, the invested stock pool of the 6 domestic funds (small, innovative trends, electronics, core strategic, OTC, and balanced China) of FSITC did not include stocks from the "non-investment list of companies that violate sustainable development". Additionally, 94.9% of companies in the stock pool of domestic funds compiled their own sustainability reports.
 
 
To better fulfill the responsibilities of an asset owner or manager, and to increase long-term value for the Group and fund providers, the subsidiary bank, securities company, investment trust company and life insurance company have all signed the "Stewardship Principles for Institutional Investors" compliance statement, and the status of their stewardship fulfillment is disclosed on each company's website. In 2025, First Commercial Bank, First Securities, and First Securities Investment Trust were all included in the TWSE’s "List of Institutional Investors with Better Stewardship Information Disclosure." With respect to investment targets identified as being in the top 60% for financial carbon emissions among the Group's domestic investment/financing positions at the end of 2024, First Commercial Bank inquired these investment targets about their action plans for climate change risks, net zero emissions and concrete carbon reduction goals through prompting them to sign a letter of commitment for sustainable development, distributing questionnaires, giving speeches at shareholders' meetings, as well as letter correspondence with them. We have already obtained their commitment. Furthermore, FFHC has also actively participated in the CDP's engagement programs. With the help of the international advocacy organization, we can jointly distribute questionnaires on climate change, forests, and water, thereby encouraging companies to disclose relevant information and enhancing engagement effectiveness. As of the end of 2025, the engagement completion rate for investment business had reached 100%, living up to our commitment to the “Coalition of Movers and Shakers on Sustainable Finance” in terms of investment engagement targets.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Banking / Individual Finance
 
● - CDD / KYC Review Procedures
In order to improve the quality and resilience of credit assets, we incorporate ESG risk factors into the review process of our retail bank business for small and medium enterprises (including sole proprietorship and partnerships) and personal finance. Customers must pass 100% of the financial assessment and ESG risk review procedure to ensure their financial sustainability and resilience against unforeseen risk events.
 
 
When new accounts are opened, or if existing customers add projects to their businesses Customer Due Diligence (CDD) and Know Your Customer (KYC) are diligently conducted. This includes checklists for anti-money laundering (AML) and countering the financing of terrorism (CFT) for individuals and persons in charge of small and medium enterprises (SMEs); high risk customers must undergo Enhanced Due Diligence (EDD). Additionally, investigations are conducted into whether customers have been involved in ESG risks and transactions are refused and customers declined if their ESG risks are deemed excessive. This reduces the negative social and environmental impact caused by their products and services. The financing business for SMEs incorporates similar credit limitations comparable to those imposed on high pollution (carbon emissions) industries as well as restrictions on undertaking controversial and environmentally sensitive industries based on an assessment of their impact on environmental and social sustainability.

In order to incorporate the risks of value loss of collateral into appraisal considerations, information for "geologically sensitive areas" and "potential areas of soil liquefaction" must be obtained from the website of the "Geological Survey and Mining Management Agency, Ministry of Economic Affairs" on a case by case basis and disclosed in the appraisal report. This allows auditors to comprehensively consider climate change risks of collateral; if the real estate collateral is building on a type C construction site Note and is a new or loan increase case, it must be appraised by the management department of First Commercial Bank headquarters, regional center, or independently appraised on its own.
 
＊：This refers to land lots zoned for type C construction use (for users of buildings in forest zones, slope land conservation zones, scenic zones, and slope agricultural zones) in the land registration transcript.
 
● - 2025 ESG Review Results of Retail Banking and Credit Business
 
● - Retail Banking Credit Review and ESG Engagement
To strengthen the communication with retail banking customers and identify ESG related risks and opportunities, First Bank interacts with customers and conveys ESG information from time to time through face-to-face conversations, lectures, dynamic/ static publicity and community interaction before engaging with customers, and also collaborates with the reinvestment East Asia Real Estate Management Company and government agencies to provide customers with ESG related consulting services so as to comprehensively enhance customer's ESG awareness; potential ESG risks and opportunities will be identified by integrating ESG risk factors audit mechanism when establishing business relationship, and more active actions will be taken in customers communication and the invitation of using perpetual financial products and services, including Green Industry/Enterprise Loan, Green Consumption Loan, Green Credit Card and relevant consulting services, in order to enable customers to actually participate in ESG actions through every financial behavior; it will continue to monitor whether customers are in violation of ESG, and take corrective measures to reduce the negative impact of goods and services on the environment and society after the establishment of business relationship.
 
● - Percentage of Customers Invited to Interact or Participate in ESG Engagement in 2025
＊1：Two ESG funds that complied with domestic regulatory requirements were selected in 2025.
＊2：Number of housing loan, credit loan, and credit card loan customers in 2025.
 
Since 2023, First Commercial Bank has added the credit card "Carbon Calculator" function to its iLEO app, with which cardholders can understand the amount of carbon emissions generated from their credit card transactions each month. This is the first such function offered by a state-owned bank. As of the end of 2025, a total of 40,278 customers had activated it.
 
● - Product Review：Include ESG Risks and Opportunities into the Evaluation Items for Product Launch Reviews
In order to prevent our provided financial products and services from causing negative environmental and social impact, subsidiaries in banking, securities, securities investment trust, and life insurance have incorporated ESG factors in the selection criteria for the release of financial products. Rigorous product review that caters to risk controls and sustainable social and environmental development provides customers and investors the ability to pursue sustainable and long-term rewards. To fully understand product suitability, the financial products released by First Commercial Bank must utilize an evaluation chart to review whether ESG criteria are involved in significant negative ESG issues (such as air pollution, water pollution, violation of human rights and labor rights, poor internal control and unethical employee behavior, etc.) in combination with the competent authority's standards for ESG funds. The listing of ESG funds must pass review by the Financial Supervisory Commission and be listed in the dedicated ESG fund area on FundClear to prevent the act of greenwashing for listed products. After passing review by the proposing unit, relevant information is submitted to the "Financial Product Review Committee" for further review. Review items include at least the investment targets, ESG management guidelines, operating strategy, risks return and past performance, reasonableness of related fees, and suitable customer categories. The product risk ratings are established based on product characteristics and the product must obtain the approval of more than 2/3 of members in attendance before it can be launched and sold. In 2025 a total of 98 products were reviewed before launching, a total of 14 products were recalled and 100% of the launched products passed ESG review. The Bank must also implement anti-money laundering and counter terrorism financing regulations in the sales process and evaluate the compatibility of product risks and customer risks to ensure that the risks of the products sold are commensurate to the customers' risk tolerance to protect the interests of the customers and investors.
 
 
Decarbonization Strategy for Investment / Financing
To echo the government's goal of 2050 net-zero emissions, First Financial Holding has established a decarbonization mechanism for its investment/financing operations since 2023, and all of its banks, securities, life insurance, securities investment trust and venture capital subsidiaries have included related regulations in their sustainable credit/investment policies, as carbon reduction strategies are implemented from top to bottom. We encourage companies to embark on the transition to energy conservation, and direct their funds to projects with lower environmental impact.
 
● - Financing Decarbonization
Since February 2023, First Commercial Bank has established a financed emissions reduction mechanism for its financing business. The Bank has committed to no longer undertaking new financing or additional lending for existing cases involving corporate financing for coal mining, project financing for the construction of coal-fired power plants (except for decarbonization transition projects), and corporate financing cases where non-conventional oil and gas revenues exceed a certain proportion. Existing credit exposures will be gradually reduced upon maturity, with the goal of fully phasing them out by 2030.
 
＊：Exceptions may be made to those who meet the following conditions: (1) The purpose of the loan is for carbon reduction transformation.(2) The borrower or the group to which it belongs has publicly announced net-zero or carbon reduction commitments, or has proposed specific carbon reduction targets or transformation plans.(3) The borrower is a government agency or state-owned enterprise affiliated to the government which has committed to net-zero emissions or has proposed carbon reduction targets.
 
● - Investment Decarbonization
Investment exclusion policies have been formulated for sensitive industries such as coal and energy sectors, primarily covering active investments and third-party managed investment businesses. We also actively engage with clients to encourage them to establish transition plans and carbon reduction targets. If clients do not present concrete transition plans, we will evaluate the gradual reduction of investment positions in order to promote corporate sustainable development. To take advantage of its influence as an institutional investor, and to accelerate the decarbonization progress for its investment operations, First Commercial Bank further enhanced its decarbonization commitment in 2024, as it reduced the share of its related operations, publicly pledged not to make new investment in high carbon-emitting enterprises with no plan for low-carbon transition. Unless funds can be definitively confirmed to be used on low-carbon transition, or unless the borrower is a state-owned enterprise with net-zero commitments and carbon reduction goals already made and set by local government, the Bank will make no more new investment in "enterprises whose coal operations account for more than 25% of revenue" and "enterprises whose atypical oil & gas operations account for more than 10% of revenue". In 2024, the Bank eliminated its positions on all such enterprises altogether. In addition, the investment limits for highly polluting and high-carbon-emission industries were gradually reduced year by year from 2020 to 2025 in order to enhance the climate change risk management mechanism for investment operations. The Bank also stipulates that, if invested companies fall into the category of high-polluting and high carbon-emitting industries, they must regularly examine the effectiveness of their mitigating measures for transition risks based on the frequency of inspection, in addition to conducting regular assessment in accordance with the investment risk rating derived from their ESG implementations. The Bank would use those data to follow and negotiate their implementation of decarbonization strategies.
 
 
 
 
Investment / Financing Strategies Catering to Biodiversity
To leverage the influence of the financial industry through financing and investment activities and promote biodiversity and a sustainable environment through its core functions, FFHC continuously enhances its Sustainable Lending Policy with reference to domestic and international guidelines, including those issued by CDP and sustainable finance evaluation. Within the "ESG Risk Factor Checklist" included in credit application forms, additional review items have been introduced to assess whether borrowers are involved in issues related to biodiversity, energy use, forests, and water issues. Natural risks such as forest- and water-related issues are incorporated into the credit review and evaluation process. When conducting investment business, if the investment target is a domestic enterprise, the Company checks whether the registered business address is located within environmentally sensitive areas in Taiwan. In addition, the Company conducts nature-related financial disclosures with reference to the recommendations issued by the Taskforce on Nature-related Financial Disclosures (TNFD), thereby reducing nature-related risks and directing capital toward nature-positive activities. Meanwhile, in accordance with the TNFD's LEAP (Locate, Evaluate, Assess, Prepare) approach, the Company conducted significance analyses on the nature and biodiversity reliance and impact of our own operating locations, suppliers and investment/financing targets and disclosed our findings, in hopes of achieving the objective of communicating with stakeholders. The execution structure of the LEAP approach is as follows:
 
 
Locate the sites of value chain activities
・Use the map overlay analysis approach: To identify the impact of the activities of the Company, our investment/financing targets and suppliers in the value chain on nature and biodiversity, we use location map overlay to analyze overlaps with biodiversity areas within a 2,000-meter buffer zone radius of various locations.
 
 
＊：Maps and information about nature and biodiversity were collected and sourced from the National Park Service, Ministry of the Interior and Ministry of Agriculture.
 
・Exposure-biodiversity hotspot analysis: First Financial Holding conducted nature and biodiversity impact assessments with respect to the locations of 53,663 sites on its value chain in Taiwan (including 206 of our operating locations, 137 suppliers' locations, and 53,320 locations of investment/financing targets). The analysis results indicated that there were 28,283 locations on the First Financial Holding value chain that had nature and biodiversity impact potential, including our own operating locations, suppliers' locations, and investment/financing targets' locations.
 
Biodiversity assessment & analysis report
Name of analysis object: Operating location - Head office building
Location of analysis object: No. 30, Section 1, Chongqing South Road, Zhongzheng District, Taipei City (Latitude:25.045751，Longitude:121.513087)
 
 
● - Is it located in an area with impact on biodiversity
 
● - Location
 
 
Significance analysis on value chain reliance & impact
With respect to the significance analysis of our value chain's reliance & impact on nature and biodiversity, First Financial Holding conducted a survey on the level of concern and risks via internal assessment, or by distributing the "Identifying the significance of investment/financing targets' biodiversity and natural environments" questionnaires. By aggregating the numbers of stakeholders' responses to a particular environmental issue, we were able to decide the level of concern for that issue. When more companies reply that they are confronted with a particular issue, the level of concern would be higher in terms of percentage points, which means that the level of exposure to this issue is likely to be higher among the stakeholders. With respect to environmental issues that the stakeholders were concerned about and the level of theses issues' impact on their companies, we prepared different topics out of consideration for differences in reliance and impact. There were four major categories, including the level of concern, the degree of risks, risk calculation based on the types of reliance, and the level of mitigation achieved by management measures.
 
● - Identification & assessment of suppliers' nature-related reliance and impact
Based on the analysis of the Company's survey results about our suppliers nature-related risks, we have concluded that they rely on the ecosystem to provide water resources and disease control; they also have relatively higher impact on natural environments with the greenhouse gases generated from the fossil fuel and electricity that they use. Therefore, the Company will focus on our suppliers' management of water resources, air pollution and disease control and prevention. We plan to incorporate their performance in the aforementioned prevention and management into our pre-procurement "vendor data checklist" and the "supplier grading assessment" in 2024. With the "pre-audit" mechanism, we seek to strengthen suppliers' natural risk management as well as the "post-management" mechanism, in addition to encouraging them to take more active actions in terms of natural risk management.
 
 
 
Identification of suppliers' nature-related reliance:
・To understand our suppliers' degree of reliance on nature and biodiversity, First Financial Holding conducted industry-specific reliance and impact analyses through the distribution of questionnaires.
・Risks are classified into various degrees. When the degree of risk is higher than 60%, it is considered high-risk. When it is 20% to 60%, it is considered medium-risk. When it is below 20%, it is deemed low-risk.
・For this survey, we only chose high-risk issues and those with a level of concern 20% or higher, and considered them to be high degree of reliance. In particular, the risk of droughts was the highest, with a level of concern of around 25%; Torridness and high temperatures drew the highest level of concern at 57%, and the degree of risk was medium.
 
 
 
 
 
 
Identification of suppliers' nature-related impact:
・We only chose medium-risk reliance issues with a level of concern 10% or higher.
・Supplier activities generating obvious pollution include: There are four types, including the use of fossil fuel and electricity, the emission of greenhouse gases, air pollution, and waste discharge.
・The higher the degree of risk for an item, the more evident it became that the supplier's management measures and goal setting remained inadequate even after its own assessment of that item. With regard to the identification results of the impact of supply chain management, First Financial Holding has established corresponding investigation indicators and measurement units for subsequent risk management.
 
 
 
 
 
● - Identification & assessment of domestic investment/financing targets' nature-related reliance and impact
 
 
 
Investment and financing targets are key to assessing the financial industry's related impact on nature and biodiversity. First Financial Holding has conducted assessments of 54 industries via survey by distributing questionnaires to its internal business units.
 
 
 
 
 
Identification of investment/financing targets' nature-related reliance:
During the course of identifying our investment/financing targets' nature-related reliance and biodiversity, we only chose items with a level of concern 10% or higher, or industries with a high degree of risk for assessment. Nature-related reliance items that drew a level of concern higher than 40% included: Air quality, torridness and high temperature, as well as fossil fuel. Items with a relatively high degree of risk -- and thereby falling into the high-risk category -- included wind disasters, noise and vibration, and extreme rainfall. However, the level of concern was lower.
 
 
 
 
 
 
投Identification of investment/financing targets' nature-related impact:
The top 3 nature-related impact items with a high level of concern included: Greenhouse gases, energy use and air pollutants. High-risk items with a degree of risk 60% or higher included surrounding disruptions to operations and changes in the land system. The main reason that some items were determined to be high-risk items is due to the questionnaire respondents' self-assessment results of these disasters. The higher the level of concern, the more management measures are put in place. Therefore, issues with a degree of risk lower than their concern level is relatively low-risk.
 
 
 
 
● - Risk and opportunity management that investment/financing targets rely upon
 
 
Assessment of biodiversity impact regarding the locations of overseas investment/financing targets
The Company has conducted assessments of biodiversity impact regarding the locations of its 941 overseas investment/financing targets. Referencing the DJSI index, the analysis designates a buffer zone within a radius of 2 kilometers from the operating location as the potential impact area. Maps and information about protected areas from around the world as recorded by the International Union for Conservation of Nature (IUCN) are also used for overlay analysis. The IUCN divides the world's protected areas into 8 categories (strict nature reserve, wilderness area, national park, natural monument or feature, habitat or species management area, protected landscape or seascape, protected area with sustainable use of natural resources, and the unclassified category). The analysis result indicates that (as shown in the illustration below) a total of 176 locations have touched on the IUCN's scopes of protected areas, including 61 locations in Asia (34.66%); 27 locations in Europe (15.34%); 44 locations in America (25.0%); 19 locations in Australia (10.80%) and 25 Oceanic locations (14.20%).
 
● - Locations of overseas financing targets & distribution of the IUCN's scopes of protected areas
 
＊：Maps and information are sourced from the World Database on Protected Areas established by the IUCN.